Sitting of 7 December 1976

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

    Higher Education (Tuition Fees)
    Mr. Bryan Daviesasked the Secretary of State for Education and Science whether she has reached a decision on the level of tuition fees for advanced courses for the next academic year.
    Mr. Beithasked the Secretary of State for Education and Science when she will announce the level of higher education tuition fees for 1977–78 and 1978–79.
    The Minister of State, Department of Education and Science (Mr. Gordon Oakes): My right hon. Friend announced the recommended levels of tuition fees in higher education for 1977–78 on 25th November during the debate on the Address. An announcement for 1978–79 will be made in due course.
    Mr. Davies: Is my hon. Friend aware that the substantial increase in fees is a source of great concern to many people, both in its impact on overseas students in the form of discrimination between two groups and in terms of the discretionary grant with regard to 16- to 19-year-olds? Ought not the Government to be seeking to reduce the impact of fees on educational policies rather than perpetuating it?
    Mr. Oakes: As my hon. Friend knows, this originated from proposals put to the House as long ago as last July by my right hon. Friend the present Secretary of State for Defence. This is a downward modification of that package for some undergraduates. I agree that in an ideal world it would be desirable to be able to reduce fees or, indeed, to have free educa-
    208
    tion, but we must bear in mind the present economic situation of the country and ask those who can afford to do so to pay their proportion.
    Mr. Beith: Does the hon. Gentleman recognise that students, from home and overseas, who are able to embark on courses for 1977–78 need some assurance that there will not be a further massive disproportionate increase in 1978–79? Does he recognise that, improved though these proposals are on his right hon. Friend's original proposals, among their many disadvantages is the fear that many charities, colleges and even industrial organisations will have to reduce the total number of awards that they give because of the high fees element?
    Mr. Oakes: On the latter point, I should point out that for home graduates these proposals involve a reduction from £650 to £500 on the original proposed fees. On the first part of the question, it is too early to say what the level of fees will be for the following year, but, on the total that we are asked to save, I should not expect any substantial increase in fees for that year.
    Mr. Canavan: Is my hon. Friend aware that many students doing Open University courses will find it difficult, if not impossible, to pay the fees if their local authorities withdraw their discretionary grant? Unless such grants for students of the Open University are made compulsory there is a real risk that students will have to discontinue their studies, and the door of the Open University will be closed in the face of many people who see it as one of the finest achievements of the previous Labour Government.
    Mr. Oakes: I agree with my hon. Friend about that achievement, and I assure him that the fees for Open University students are excluded from these provisions.
    Dr. Hampson: How does the hon. Gentleman square his statement that there will be no substantial extra amounts for 1978–79 with the commitment by the Government in July to find an extra £14 million at 1975 prices? Does that extra total stand? Clearly, to reach that total individual fees will be affected by the number of students falling off, not coming into courses, as the result of next year's

    209
    high fees. What estimate does the hon. Gentleman have of the fall-off that will take place?
    Mr. Oakes: I cannot give the House any figures at the moment, but the recommended fee levels for 1977–78 are for the academic year. Some of the resulting savings will accrue in the financial year 1978–79, and they will go to meet that £14 million commitment.

    Standards in Schools
    Mr. George Gardinerasked the Secretary of State for Education and Science what progress she has made with her consultations designed to raise standards in schools.
    The Secretary of State for Education and Science and Paymaster-General (Mrs. Shirley Williams): My speech on 25th November 1976 in the debate on the Address outlined the progress made and my plans for the future.
    Mr. Gardiner: Will the right hon. Lady accept that there is some disturbing evidence that the attainments of our school leavers compare badly in many respects with those of equivalent age groups in some Continental countries? Will the right hon. Lady extend the scope of her inquiry to see what it is in their systems that makes them apparently better able than we are to bring out the best in children?
    Mrs. Williams: I shall be interested to see the evidence that the hon. Gentleman has for his statement, but as a fairly extensive reader of the international education Press I can tell him that, among other things, the United States, France and Germany have all recently expressed concern about literacy and numeracy. This is nothing to do uniquely with this country.
    Mr. Flannery: Does my right hon. Friend agree that there is always room for improvement in any education system but that it does not do the cause of the so-called improvers any good grossly to exaggerate things which are wrong within an education system which honourable people are trying to set right? It is a grave disservice to the British education system to noise it abroad that all kinds of things are wrong with it when it is going through a natural process of growth
    210
    and has improved on a grand scale during the time we have been alive.
    Mrs. Williams: I am grateful to my hon. Friend for his statement and in particular for his reminder that the demands upon education constantly grow very rapidly. I think I can also point out that a number of the stories that appear in the newspapers deal with people who must have left school between 10 and 15 years ago, at a time when there was virtually no comprehensive education of any sort.
    Mr. St. John-Stevas: As the right hon. Lady is rightly conducting widespread consultations and discussions on the question of standards, would it not be appropriate if she included in her list of people to be consulted the official Opposition, who have done pioneering work in this field for nearly three years? If she extended such an invitation, it would certainly be favourably received.
    Mrs. Williams: I am sure the hon. Gentleman will appreciate that, since the purpose of the consultation is to include representatives of the local authorities, teachers' organisations, parents and both sides of industry, there will be many occasions for those who do not share my political views to be represented. I take note, however, of what the hon. Gentleman said.

    Departmental Priorities
    Mr. Moateasked the Secretary of State for Education and Science which has priority under her policies, nursery schools or public lending rights for authors.
    The Under-Secretary of State for Education and Science (Miss Margaret Jackson): It is Government policy to promote nursery education, especially in areas of social disadvantage. We are considering how best we may proceed in making progress towards putting the PLR principle on the statute book.
    Mr. Moate: Will the Under-Secretary confirm that during the last year the taxpayer and the ratepayer have contributed about £82 million—namely, 45 per cent.—of the total United Kingdom turnover of British publishers? If authors are inadequately rewarded for their work, would it not be better for

    211
    them to look to the publishers for redress of their grievances and not to the taxpayer?
    Miss Jackson: I have never based my argument about a public lending right on the assumption that authors are essentially deprived of income. That would be very difficult to assess. I have based my argument on the premise that there is a right of authors to benefit from the use of their books in public lending libraries.
    Mrs. Renée Short: Is my hon. Friend aware that the nursery school expansion programme no longer exists and that nursery education is rapidly disintegrating? Does she agree that it will continue to do so for parents who want it unless it becomes part of the State system?
    Miss Jackson: I do not accept that the expansion of nursery education is not continuing, nor do I accept that nursery education is disintegrating. I agree, however, that it would be desirable if we were able to expand it far more than we are doing at present.

    Victoria and Albert Museum (Regional Service)
    Mr. Hannamasked the Secretary of State for Education and Science what action she is taking to maintain the Regional Services Department of the Victoria and Albert Museum.
    Mr. Oakes: My right hon. Friend has not yet received the director's detailed proposals for achieving savings in the museum's staff.
    Mr. Hannam: Is it fair to apply a higher level of cuts to the Victoria and Albert Museum than is being applied to the Minister's Department? In view of the importance of maintaining this last remaining link between our national museums and galleries and the provinces, will the hon. Gentleman ensure that it is not broken?
    Mr. Oakes: The staff complement has to be reduced by 81. On the hon. Gentleman's latter point, I can assure him, as I did in the Adjournment debate on this subject, that his remarks about the importance of the regional services of the museum will be borne in mind by my right hon. Friend the Secretary of State
    212
    and by my noble Friend who is responsible for the arts when they receive the report proposals.
    Mr. Stan Crowther: In view of the information that I was given in a Written Answer on the scope of the service, would it not be a national disaster for it to be discontinued? Will my hon. Friend accept that the Victoria and Albert should be regarded as a national institution and not merely as a London museum?
    Mr. Oakes: As a regional Member, I have a great deal of sympathy with what my hon. Friend has said. Perhaps I should say something about the work of the Regional Services Department. I can tell my hon. Friend that 69 exhibitions have been sent out to 279 presentations in 119 towns during the past year alone.

    Disabled Children
    Mr. Ashleyasked the Secretary of State for Education and Science if she is satisfied with the educational provisions for disabled children.
    Mrs. Shirley Williams: I am pleased at recent improvements in the scale and quality of provision, of which my hon. Friend is aware, and look forward to further progress as resources allow. I know that my hon. Friend welcomes the new provisions in the Education Act 1976 which establish the principle that, so far as possible, handicapped and non-handicapped children should be educated together.
    Mr. Ashley: Has my right hon. Friend begun consultations yet with the local education authorities about the amendment of the Education Act? When does she hope to bring into effect the section which would be of great benefit to disabled children?
    Mrs. Williams: We shall shortly be discussing with local education authorities the activation of that section, and in the light of that discussion I shall declare the appointed day.
    Mr. Luce: Does the Secretary of State realise that there are a great number of hearing-impaired and deaf children who, perhaps due to poor regional co-ordination, find themselves in special boarding schools situated a great distance from their homes, so that they do

    213
    not have access to their homes at weekends? Is this not unsatisfactory, and will the Secretary of State look at it?
    Mrs. Williams: Yes. There has been a rather remarkable increase in the last three years, from 11,000 to more than 18,000 places for handicapped children in classes in ordinary schools. However, as the hon. Member for Shoreham (Mr. Luce) implies, there is a particular problem about deaf children. They need special equipment as well as special teaching. I shall bear in mind what the hon. Gentleman said when I activate the new section.
    Mr. Loyden: Will my right hon. Friend consider the problem facing vaccine-damaged children in education? Although there are very few of them, they face unique educational difficulties.
    Mrs. Williams: I shall bear in mind what my hon. Friend said. Some children, including some vaccine-damaged children, are so substantially handicapped that special schools will have to be retained for them. As I understand the wish of the House, however, it is that as far as possible handicapped children should be educated in ordinary schools. We shall be awaiting the report of the Warnock Committee about the education of handicapped children in general.
    Mr. St. John-Stevas: Would not the best help that the Government could give to handicapped children be to amend the school and further education building regulations so that new schools, when they are built, take full account of the needs of the disabled?
    Mrs. Williams: Yes, that matter is being considered, just as at the higher education level the recent study by the National Union of Students about handicapped students is being considered. I am sure that the whole House wants to take a constructive view of this matter.

    Vandalism
    Mr. Greville Jannerasked the Secretary of State for Education and Science whether she will issue a circular dealing with vandalism in schools.
    Miss Margaret Jackson: I share the concern and sense of outrage felt by people whose schools are damaged or destroyed by vandals. What evidence
    214
    the Department has suggests that such vandalism is a local problem best tackled locally. My Department's advice is available in particular instances and more generally through publications. My right hon. Friend is not planning to publish a circular but will keep the possibility in mind.
    Mr. Janner: Is my hon. Friend aware that this so-called local problem stretches throughout the country? Is she also aware that there has been a vast and disgraceful growth in this sort of vandalism throughout the United Kingdom? In the circumstances, does she agree that, first, the details of this vandalism should be published and its extent accepted and, second, that there is need for a change in the law to make parents responsible for the vandalism of their children?
    Miss Jackson: I am not aware that that is the case. It is my understanding that vandalism can arise in particular circumstances at particular times and tends to be locally concentrated. It is true that national statistics are not widely available. My hon. and learned Friend's comment about the responsibility of parents in a particular case of vandalism is not a matter for my Department. It is the responsibility of the Home Department. I understand that there is no evidence to show that there is a wave of vandalism in schools or anywhere else.
    Mr. Rathbone: Does the Minister accept that the problem is widespread enough to go all the way from Leicester, West to Lewes in Sussex?
    Mr. Janner: It started in Lewes.
    Mr. Rathbone: There is no answer I can give to the hon. and learned Gentleman. Is the Minister aware that there is an urgent need to consult the Law Officers to see where the law can be amended in order to establish parental responsibility for the vandalism?
    Miss Jackson: It is not for my Department to consider where the responsibility lies. However, if the hon. Member for Lewes (Mr. Rathbone) and my hon. and learned Friend the Member for Leicester, West (Mr. Janner) assume that because they see the problem in their constituencies it automatically stretches in a wide band between the two constituencies, I must tell them that their contention is

    215
    not borne out by the facts. What is borne out by the facts is that there are local problems which are concentrated not only in particular localities but which arise at particular times and that the problem dies away in one locality but reappears in some entirely separate and unconnected locality. There is no evidence to suggest that there is a nation-wide, easily-definable, easily-dealt-with range of vandalism. If there were, proposals to deal with it would have been before the House a long time ago.

    Teacher Training Colleges
    Mrs. Renèe Shortasked the Secretary of State for Education and Science what use will be made of the residential and teaching facilities, including libraries, classrooms, sports facilities, student unions and halls of residence, of all the teacher training colleges she has ordered to be closed.
    Mr. Oakes: The colleges which are being closed will only become vacant for other purposes over the next few years, and their future use or disposal is the responsibility of the maintaining authority or trustees. In the circumstances, the information requested is not available.
    Mrs. Short: Is my hon. Friend aware that the best engineering departments in universities and polytechnics are generally over-subscribed and need room for expansion? Is he aware that there is thought to be a need for boarding-school accommodation within the State system? Will he give thought to this proposal and have broad consultations with as many interested people as possible, and make sure that this considerable capital investment is used to the best educational advantage?
    Mr. Oakes: My hon. Friend is quite right. Primarily where premises are to become vacant, we try to find whether there is an alternative educational use. Failing this, we see whether the Property Services Agency has any use for the property. But we are concerned that as far as practicable alternative use within the education sector is fully considered.
    Mr. Peter Bottomley: Is the Minister aware that Avery Hill College in my constituency is threatened and could be
    216
    taken over by the PSA? This college has seven out of 12 courses in shortage subjects such as science, mathematics and the training of teachers for the physically handicapped and disabled. Will the Minister tell us whether the Department is neutral or, at least, whether it is supposed to be supporting diversified independent teacher training colleges?
    Mr. Oakes: Primarily we look to the education sector, as I told my hon. Friend. This applies to all the matters mentioned by the hon. Member for Woolwich, West (Mr. Bottomley), including his reference to the shortage subjects. As far as general closures of some teacher training colleges are concerned, an announcement will be made in the near future.
    Mr. Weetch: Is my hon. Friend aware that Hockerill College of Education completed a students' union building at great expense in the very week when it was announced that the college would be closed? This deplorable set of circumstances was not based on any coherent long-term view of training facilities. The closure of small colleges of education is a retrograde step. I hope that my hon. Friend will look at it again.
    Mr. Oakes: This particular college of education was the responsibility of my predecessor in office, but the closure was necessary at the time. We have a number of criteria which we look at when considering closures. The programme which we are trying to achieve is to have sufficient colleges to satisfy the likely demand for teachers in the 1980s with a capability of expansion if the figures of the demographers are proved wrong.

    National Union of Students
    Mr. Canavanasked the Secretary of State for Education and Science when she next intends to meet representatives of the National Union of Students.
    Mrs. Shirley Williams: My hon. Friend the Minister of State will be meeting the President of the National Union of Students on 14th December. My Department has frequent meetings with the NUS on a number of questions, notably those relating to student grants.
    Mr. Canavan: Is my right hon. Friend aware of the concern of the NUS about

    217
    the proposal to deprive students of social security benefits during the Christmas and Easter holidays? In view of the statement of my right hon. Friend when she was Shadow Minister for social services in 1971 that benefits should be regarded not as a charity or a donation but as an entitlement, will she approach the Secretary of State for Social Services with a view to rejecting these mean proposals, which will cause hardship to thousands of students and may cause some of them to discontinue their studies?
    Mrs. Williams: I am sure my hon. Friend is aware that my predecessor, the present Secretary of State for Defence, increased the grants for short vacations up to £11·35 per week, which is the equivalent of a single non-householder's level of supplementary benefit. My right hon. Friend the Secretary of State for Social Services is considering whether students with dependants and those responsible for rents should be provided with additional benefits. The withdrawal is related to the increase in student grants for short vacations.
    Mr. Forman: Will the Secretary of State impress upon the NUS the importance that the Government apparently attach to having a higher education system which meets the needs of British industry? What action is she taking to redress the difficult situation whereby fewer than 25 per cent. of university graduates find their way into industry and commerce?
    Mrs. Williams: The situation has already begun to improve markedly. The current number of applications for full-time courses in engineering and technology in higher education has increased by 17 per cent. and the number accepted has increased by 8 per cent., showing an improvement in standards as well as in numbers. We are considering whether additional incentives should be given for engineering and technology courses, and we are studying the possibility of additional help to retrain teachers in subjects such as mathematics and science.
    Mr. Ovenden: When my right hon. Friend meets the President of the NUS, will she give an assurance that the Government's hardship scheme for students in the short vacations will not mean that
    218
    benefits will be below those for students with dependants under the social security system?
    Mrs. Williams: I cannot go beyond what I have said, because it is the Secretary of State for Social Services who must consider these matters in the light of the recent debate.
    Mr. Beith: Why was it that no Minister from the Deartment of Education and Science took part in the Social Security (Miscellaneous Provisions) Bill debate to explain how these proposals affected general education grant finances?
    Mrs. Williams: This matter was announced in detail in July. It was discussed with the NUS, and we were involved in other consultations on education matters. We felt that the advice already given had sufficed in this case.

    Maintenance Allowances
    Mr. Andrew F. Bennettasked the Secretary of State for Education and Science what is her policy towards educational maintenance allowances.
    Miss Margaret Jackson: This matter is still under review. My right hon. Friend is aware of the deficiencies in the existing arrangements.
    Mr. Bennett: Does not my hon. Friend agree that it is rather unsatisfactory that this matter has been under review for some months? It is an absurd situation when 16- to 18-year-olds stay at school and get no help unless their parents are close to the poverty line but those who leave school and do nothing receive £7 a week supplementary benefit.
    Miss Jackson: We are aware of the deficiencies in the existing arrangements and we are also aware of the need to encourage more children to stay on at school. These matters are under consideration with the recognition of all the problems involved, both to children and to public expenditure by local authorities and the central Government.
    Miss Fookes: How many years does the Department of Education and Science require to come to a decision? The Expenditure Committee came forward with a report on this matter some years ago.
    Miss Jackson: With respect, the Expenditure Committee makes recommendations but it does not have to find the money to implement them.

    Tameside Legal Proceedings (Costs)
    Mr. Gowasked the Secretary of State for Education and Science what was the total cost to public funds of the legal proceedings in which her Department was involved in connection with secondary education in Tameside; and what was the breakdown of the costs involved in: (a) the High Court, (b) the Court of Appeal and (c) the House of Lords.
    Mrs. Shirley Williams: The matter has not yet been settled.
    Mr. Gow: Is the Secretary of State aware that the likely figure for legal costs in this matter is in excess of £20,000? Since the House of Lords decided unanimously that her predecessor was fundamentally misguided and misdirected in this matter, does she not think that her predecessor should make some contribution towards the legal costs?
    Mrs. Williams: Perhaps my right hon. Friend would consider this if there was a major contribution from the local authority which brought the case.
    Mr. Gow: But it won.
    Mr. Christopher Price: Is my right hon. Friend aware that, if it did cost £20,000, some of us who sat through all three cases are convinced that the Government did not get the value for money from the legal profession which they should have received? Is she further aware that 30 years ago, when Section 68 of the Education Act was introduced by Lord Simon in the House of Lords, he said that it was quite inappropriate for judges to interfere at all with that section? Now that the House of Lords Judicial Committee has had its go at legislating, will my right hon. Friend bring forward legislation to put the matter right?
    Mrs. Williams: My hon. Friend is probably aware that something called the Education Bill was enacted recently. I cannot comment on the costs of the Tameside action. I am not as well informed as the hon. Member for Eastbourne (Mr. Gow) on that matter. I understand that it is still under considera-
    220
    tion by the Treasury Solicitor's Department. Perhaps the hon. Gentleman has heard a leak.
    Dr. Boyson: Does the right hon. Lady agree that there are two lessons to be drawn from Tameside? Does she agree that, first, there is the point made by the hon. Member for Lewisham, West (Mr. Price) that it is advisable for the Government to get good legal advice before tangling with a democratically elected local authority and, secondly, that if the Government want the advance of comprehensive education because of a genuine belief and not for reasons of political dogma they are more likely to get it by winning the approval of local authorities and not threatening them with legal force, as in the new 1976 Education Act?
    Mrs. Williams: It is not for me to comment on the House of Lords decision. However, I must point out to the hon. Gentleman that the original decision to go for comprehensive education was made by a duly elected House. Secondly, many of us feel that the children in Tame-side are not well served by this sort of battle.

    Direct Grant Schools
    Mr. Simsasked the Secretary of State for Education and Science how many former direct grant schools have become independent; and how many have opted to take part in the State system.
    Mrs. Shirley Williams: Since the 1975 regulations were made 51 of the 170 direct grant grammar schools have opted to seek entry to the maintained system. None of the others has yet become independent; they will continue to be direct grant schools so long as any grant is being paid to them in respect of pupils previously admitted.
    Mr. Sims: I am grateful to the right hon. Lady for those figures. Does she agree that they indicate that whereas in the past a wide variety of children have been able to benefit from the high standard of education offered in direct grant schools, in future the benefit will be confined to the children of wealthy families, including the children of certain of her right hon. and hon. Friends?
    Mrs. Williams: I do not agree with that. The direct grant schools that have

    221
    opted to go into the maintained system, which constitute about one-third of the total, will make a considerable contribution to the education of our children in the maintained sector.
    Mr. Spearing: Will my right hon. Friend tell the House whether she was approached by any direct grant school inquiring whether she would consider allowing direct grant schools to remain as long as they went comprehensive and not into the maintained sector?
    Mrs. Williams: I cannot reply positively to my hon. Friend in respect of my time at the Department. If my hon. Friend cares to write to me, I shall make investigations.

    Comprehensive Education
    Mr. Nicholas Wintertonasked the Secretary of State for Education and Science if she will issue any guidelines to local authorities which have yet to submit plans for comprehensive education regarding the suggested number of pupils for comprehensive schools.
    Mrs. Shirley Williams: No, Sir. It is a question for local education authorities to consider in the light of local circumstances, local preferences and the disposition of existing buildings.
    Mr. Winterton: I am grateful to the right hon. Lady for that reply, but is she not aware that much evidence has come to light to show that the large comprehensive school produces more problems than it solves? Will she give the House an assurance that she will not insist upon local education authorities producing a comprehensive scheme unless she can assure those authorities that the necessary money will be forthcoming to enable them to do it properly, and that there will be sufficient skilled and qualified teachers in each school to provide the wide range of courses that are necessary?
    Mrs. Williams: I have indicated publicly that I think there are certain problems for very large comprehensive schools, including that of adequately training head teachers for the management task involved. It would be unwise for the hon. Gentleman to make a generalisation in a situation in which the largest independent HMC school has 2,400
    222
    pupils, followed by schools with 1,800 or more pupils, and when well-known schools like Manchester Grammar and Eton have more than 1,200 pupils apiece.
    Mrs. Ann Taylor: When does my right hon. Friend expect to use her powers under the Education Act 1976 to compel local authorities such as Bolton to go comprehensive? My right hon. Friend has already said that local authorities that have said they will not go comprehensive under any circumstances must do so within six months. Surely she must be aware that many authorities that are saying they will go comprehensive at some time are using delaying tactics to prevent that happening. Will she use her powers as soon as possible to set a six-months' deadline for authorities such as Bolton, as she has done in the other eight cases?
    Mrs. Williams: The six-months' period applies overall. I shall be writing to the other authorities very shortly.
    Dr. Boyson: I agree with my hon. Friend the Member for Macclesfield (Mr. Winterton) about the danger of large comprehensive schools, but is the Secretary of State aware of the risk of too small comprehensive schools being created in certain authorities such as London, where there are now suggestions for two- and three-stream schools, which means no choice of subjects, no foreign language, and no mathematics and physics within them?
    Mrs. Williams: There are few proposals for very small comprehensive schools, which encounter substantial difficulties. I have already made it clear that one of the areas in which we can make sensible economies in education is in achieving much closer links between schools and FE colleges.

    Social Priority Allowance Scheme
    Mr. Silvesterasked the Secretary of State for Education and Science whether she will abolish the special teacher's allowances for educational priority schools.
    Mrs. Shirley Williams: The social priority allowance scheme is currently under review by the Burnham Primary and Secondary Committee.
    Mr. Silvester: As more than half of the children who suffer and do not have the advantage of this scheme are outside these schools, is it not high time that we diverted the £11 million to a more precise method of assisting these children?
    Mrs. Williams: The scheme was introduced in 1974, when it was important to recruit teachers to the inner-urban area schools. It is now under consideration by the Burnham Committee. I have no doubt that it will take into account considerations such as those advanced by the hon. Gentleman. We wanted to ensure that the staffing of inner-urban area schools was adequate for the substantial demands placed upon them.

    Teacher Training Colleges (Closure)
    Mr. Spearingasked the Secretary of State for Education and Science what factors she takes into account in deciding closure of teachers' training establishments.
    Mr. Oakes: My right hon. Friend's proposals for the future reorganisation including closures, will be designed to create a minimum size of system capable of expansion, so structured and located as to best serve the needs of the schools in relation to both in-service and initial training. They will also take into account possible alternative uses for surplus premises.
    I will send my hon. Friend a copy of a paper on this subject, which my Department will shortly be circulating to ACSTT.
    Mr. Spearing: I thank my hon. Friend for that reply. Is he aware that the reports that have been published in the Press on the criteria for closure do not include the practical quality of some of the courses that are being conducted? Is he aware that a major need of schools is well-founded and practical courses of teacher training, which were all too few in the mid-sixties and are not found in all colleges? Will he assure the House that the quality of the course provided, especially in inner-urban areas, to which the Secretary of State has recently referred, will be borne very much in mind?
    Mr. Oakes: The criteria have not yet been decided. This is still a matter of
    224
    consultation between the bodies concerned. As for the lists of colleges that were published recently in a newspaper that I have been brought up to respect, I was disgusted by the irresponsibility of that newspaper, in that the lists that it published bore no relation to what is being discussed in the Department. I refer, of course, to The Guardian. I shall take my hon. Friend's last point into account.
    Mr. Hal Miller: What consideration will be given to institutions such as the North Worcestershire colleges where colleges of education have been combined with colleges of further education? What is to happen to further education in areas where colleges of education apparently are marked for closure?
    Mr. Oakes: As the whole question is now being considered, I should prefer not to discuss in the House any individual college.

    16-plus Assessment
    Mr. Christopher Priceasked the Secretary of State for Education and Science whether she will now accept the principle of a common system of assessment at 16-plus.
    Mrs. Shirley Williams: The Schools Council has proposed a common system of examining at 16-plus. I have told the Council that a common system is in my view desirable, but I need further evidence as to its educational feasibility and agreement on a new administrative structure before taking a final decision. I am therefore arranging for an intensive and systematic study of the outstanding problems.
    Mr. Price: Is my right hon. Friend aware that the way in which she phrased that answer will cause considerable disappointment on the Labour Benches? Is she further aware that we shall never reach the aim of a truly comprehensive system as long as there is a division right down the middle of secondary schools between O-levels and CSE? Does not this make it essential to bring in a common system of assessment? Furthermore, does not my right hon. Friend appreciate that the one aim of many of the bodies which she consults is to delay the process in such a way that we shall never have a common system of assessment? What target date has she set herself for the

    225
    announcement of the acceptance of that principle?
    Mrs. Williams: On the first point, I should be thanked by nobody if I were to replace the present examination system by a set of examinations that were not widely recognised and respected. On the second point mentioned by my hon. Friend, the answer is that this matter has already been discussed with the Chairman of the Schools Council, who has indicated the willingness of the Council to co-operate fully in the programme of work which will take place shortly
    Mr. Swain: On a point of order, Mr. Speaker, I have stood up exactly 10 times during this Question Time—[Interruption.] Tell me outside that I am drunk, and I will punch your bloody head in, mate.
    Mr. Speaker: Order.
    Mr. Swain: The hon. Member for Chingford (Mr. Tebbit) has just accused me of being drunk.
    Mr. Speaker: Order. I hope that my eyesight will improve.
    Mr. Swain: On a point of order, Mr. Speaker—
    Mr. Speaker: Points of order make Question Time that much shorter.
    Mr. Swain: Am I allowed to raise a legitimate point of order?
    Mr. Speaker: Yes, but would the hon. Gentleman be kind enough to raise his point of order immediately at the end of Questions?
    Mr. Peter Bottomley: Will the right hon. Lady help the House to understand the examination system—[Interruption.]—by placing in the Library a sample syllabus of assessment sheets so that hon. Members can see what the Department has in mind?
    Mrs. Williams: If I were able to hear the hon. Gentleman's question I would give him a reasonably rational answer, but I was unable to do so.
    Later—
    Mr. Speaker: Does the hon. Member for Derbyshire, North-East (Mr. Swain) wish to pursue his point of order?
    Mr. Swain: I do, Mr. Speaker. In 17 years in the House, I have always respected the Chair. If I have respected no one else, I have always respected the Chair. On this occasion, there is a shadow of doubt in my mind.
    Mr. Speaker: Order. The hon. Gentleman knows that if he wishes to criticise the Chair there is a procedure open to him. I am not content to sit here and listen to him without a substantive motion.
    Mr. Swain: Perhaps I may proceed, Mr. Speaker. I have never known a judge in a court to give a ruling without hearing the case. Apparently you have done so on this point.
    Mr. Speaker: Order. The hon. Gentleman began by saying that he had doubt on this occasion. I must tell him, and the House, that if he wishes to criticise Mr. Speaker he must do it by a substantive motion and not by way of questions.
    Mr. Swain: I am terribly sorry, Mr. Speaker, but again you have misinterpreted me. I was not about to criticise the Chair. I was about to say that certain hon. Members on both sides of the House have been called during Question Time on three or four occasions when they do not have a Question on the Order Paper. I rose 10 times to ask a supplementary question that was pertinent to my constituency, and I was not called at all. I feel very aggrieved by the fact that some hon. Members can be called whenever they arise. Apparently the infiltration below the Gangway is taking place.
    Mr. Speaker: I am sorry if I misunderstood what the hon. Gentleman was saying at the beginning. With regard to hon. Members being called during Question Time, no one was called four times today without having a Question on the Order Paper. Indeed, no one was called four times at all. All I can do is to do my best. At the end of every Question Time there are many frustrated Members who feel indignation that they have not been called.

    Nursery Education
    Mr. Richard Wainwrightasked the Secretary of State for Education and Science if she intends seeking powers to

    227
    encourage local authorities to extend nursery provisions.
    Miss Margaret Jackson: My right hon. Friend is continuing to make resources available through the nursery education building programme, but the rate of expansion must depend on the willingness of local education authorities to take up their allocations.
    Mr. Wainwright: Will the hon. Lady assure the House that she is providing local authorities with the best and most up-to-date advice on the extent to which well-directed expenditure on nursery education may avoid expenditure in later years on remedial education?
    Miss Jackson: We are all convinced of the value of nursery education, but all we can do is to make the resources available to local education authorities since it is in their discretion how they spend money allotted to them.
    Mr. Nicholas Winterton: What is the Minister's definition of "socially deprived"? I agree with the comments made by the hon. Member for Colne Valley (Mr. Wainwright), but is it not true that socially-deprived areas are those mainly controlled by Socialists and that this might be a form of election engineering?
    Miss Jackson: It is more a realisation on the part of those who live in socially-deprived areas as to where their interests lie rather than any question of social engineering. Members of the Labour Party believe that in every part of the country there are children who will benefit from nursery education and that children in socially-deprived areas are likely to benefit the more where the need is greatest. If that was what the hon. Gentleman was trying to say, I agree with him.

    Rate Support Grant
    Mr. Maddenasked the Secretary of State for Education and Science if she will make a statement about the effects of the reduction of the education element within the rate support grant.
    Mr. Oakes: The level of expenditure on education which the Government propose for the 1977–78 rate support grant settlement represents a reduction of about
    228
    1½ per cent. in real terms compared with the estimated outturn for 1976–77. For further details. I would refer my hon. Friend to the report on the Rate Support Grant Order 1976 which was laid before the House yesterday.
    Mr. Madden: Will my hon. Friend accept that, at a time when many Labour Members believe that public expenditure on education has already been savagely cut, this reduction in the education element is particularly unfair? In what sectors of education will this reduced demand have an effect?
    Mr. Oakes: I do not agree with my hon. Friend that what is being done in terms of rate support grant in the education sector is unfair. We in education, as those in other local government spheres, have to bear a fair proportion of the burden, but we have not borne any undue proportions beyond that.

  HAYES AND HARLINGTON
  Mr. Lawrenceasked the Prime Minister whether he will visit Hayes and Harlington.
  Mr. Ridleyasked the Prime Minister if he will pay an official visit to Hayes and Harlington.
  The Prime Minister (Mr. James Callaghan): I have at present no plans to do so.
  Mr. Lawrence: Will the Prime Minister say quite simply whose side he is on?
  The Prime Minister: Yes, Sir—mine.
  Mr. Ridley: Now that the Reds have come out of their beds and are getting into Labour beds, will the Prime Minister say why he has shelved the Underhill Report? Is it a correct impression that the right hon. Gentleman is no longer in control of his own party?
  The Prime Minister: Mr. Underhill is a very good friend of mine, but I have no ministerial responsibility for anything he does or says—and I do not think that the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) has any particular responsibility in that direction either. If we are talking about infiltration, let me

  229
  make clear that I am horrified at the degree of hard-faced extremists who are infiltrating the Tory Front Bench.
  Mr. Bidwell: If my right hon. Friend cannot make the long journey to Hayes and Harlington, will he take a shorter journey to my constituency of Ealing, Southall, where he will soon be able to take part in the rejoicing among the Sikh community, which has triumphed over Labour and Tory bureaucrats on the subject of the wearing of crash helmets on motor cycles?
  The Prime Minister: I should be pleased to consider an invitation to my hon. Friend's constituency. Ever since I took part in the Immigration Bill debates in Committee in 1971, when the right hon. Member for Chipping Barnet (Mr. Maudling) was an ornament of the then Government, I have been aware that my hon. Friend takes the side of the Sikhs in these matters. I congratulate him on his victory.
  Mr. Anthony Grant: Will the Prime Minister accept from me, as one who fought the Hayes and Harlington constituency, that the hon. Member for Hayes and Harlington (Mr. Sandelson) is a worthy successor to the late Arthur Skeffington but that he is guilty of only one offence, which is the serious offence of being a strong supporter of the Labour Government?
  The Prime Minister: I am sure that the electors of Hayes and Harlington will in future, as in the past, always produce the correct result.
  Mr. Ashley: Disregarding the incipient authoritarianism that is inherent in Conservatism, may I ask whether my right hon. Friend is aware that nobody in the Labour Party would ever stand for a witch hunt of any kind? Does he not agree that if these matters are manipulated in any way they will damage not only the right wing and the moderates but also the left wing, because all those wings of the Labour Party are democratic? The issue is not between Left and Right in the party. It is between what is democratic and what is anti-democratic. If there are anti-democratic forces at work, they should be strongly resisted by all wings of the Labour Party.
  The Prime Minister: My hon. Friend expresses the matter admirably, but I do not think that the hon. Member for Burton (Mr. Lawrence) or the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) was approaching these considerations with the same degree of dedication as was my hon. Friend.
  Mr. Aitken: Why have the Government decided in principle that they are willing to spend taxpayers' money on placing Government advertising in the Communist-owned Morning Star? Whose side is the Prime Minister really on?
  The Prime Minister: That question has already been answered, and the hon. Gentleman should know that the answer has appeared in Hansard. The Morning Star, as every other newspaper, is judged on whether it produces audited evidence of its circulation. It has done so, and that qualifies it in these circumstances. The fact that Government advertising appears in that newspaper does not mean to say that I have to agree with its opinions, any more than that I have to agree with the opinions of the Daily Telegraph on the same grounds.
  Mr. Sandelson: If my right hon. Friend should change his mind and decide to visit my constituency—where he is assured of a warm welcome—will he bear in mind the need to regenerate industry in the Greater London area as part of the Government's programme for the country as a whole? I am sure that my right hon. Friend is aware that this is a matter of the deepest concern to the people I represent.
  The Prime Minister: Yes, Sir. My hon. Friend is quite correct in his concern about the decline in manufacturing industry in Greater London. The investigations that have taken place into this show that it has a variety of causes, into which I certainly cannot go this afternoon—like transport difficulties, traffic congestions and high rents—but the Government are reviewing the policy for urban areas and I believe that those areas will be helped by the industrial strategy generally. But certainly Hayes and Harlington needs the continuous attention, and will get the continuous attention, of my hon. Friend.

  CHANCELLOR OF THE EXCHEQUER
  Mr. George Gardinerasked the Prime Minister, if he will relieve the Chancellor of the Exchequer of his duties.
  The Prime Minister: I refer the hon. Member to the reply which I gave to the hon. Member for Caernarvon (Mr. Wigley) on 29th November.
  Mr. Gardiner: Has the Prime Minister sufficient remaining confidence in his Chancellor of the Exchequer to endorse his statement to the House last week that no proposals for a wealth tax will be brought before this Parliament, or is this again a case of the Government's saying one thing to Parliament and another thing to the TUC?
  The Prime Minister: If there is any change in policy it will be announced to the House. In the meantime, I suggest that the hon. Member keeps his comments to himself.
  Mr. Frank Allaun: Will my right hon. Friend reject punitive terms from the IMF and tell it instead that as a first act we shall withdraw the British Army of the Rhine and thereby save £600 million a year? Will he explain to the IMF that British working people cannot tolerate further cuts in housing, health, education and social services which would further add to unemployment and actually increase the deficit on public spending?
  The Prime Minister: I recognise that the House has a genuine interest in the discussions that are taking place. The Government will reach their own conclusions on these matters and will place them before the House in due course. In the meantime, I give no undertakings on any of the points raised by my hon. Friend.
  Mrs. Thatcher: Does the Prime Minister recollect that in October 1974, after six months of Labour government, the Chancellor of the Exchequer claimed that the rate of inflation was 8·4 per cent.? Since, on the same basis it is now 19·7 per cent., is it not time that he changed either the Chancellor of the Exchequer or the strategy?
  Mr. Nicholas Winterton: Resign.
  Mr. John Ellis: Infiltrator.
  The Prime Minister: Order, order. In that statement the Chancellor of the Exchequer made it clear that he was referring to the position over the previous quarter. Since then the position has changed. It got worse and then became better. It is now at the stage where, having been brought down from a high level, it is on a plateau—too high a plateau—despite unprecedented restraints by trade unions in their attitude to wage settlements and despite the fact that even this year trade unionists are accepting wholly the agreement entered into by the TUC. I hope that the Opposition will recognise, when considering these matters, that in getting inflation down a national effort is needed. There is not much party advantage in a high rate of inflation.
  Mr. Rathbone: On a point of order, Mr. Speaker. Is it correct parliamentary practice to—
  Mr. Speaker: Order. Will the hon. Member please raise that point of order at the end of Question Time?
  Mr. Rathbone: On a point of order—
  Mr. Speaker: Order. The hon. Member is only taking up time from Prime Minister's Questions. I shall deal with his point of order at the end of Question Time.
  Later—
  Mr. Rathbone: On a point of order, Mr. Speaker. I wish to ask for your guidance whether it was in order for the Prime Minister to deceive the House when referring to inflation by describing a steep incline of 1 in 4 as a "plateau".
  Mr. Speaker: Perhaps I may tell the hon. Gentleman and the House again that the word "deceive" when applied to any right hon. or hon. Member is an unparliamentary expression, because it implies a deliberate act of deceit. The hon. Gentleman will know that the English language is rich enough for him to be able to express himself equally colourfully and yet to be in order.
  Hon. Members: Withdraw.
  Mr. Speaker: Does the hon. Member wish to catch my eye?
  Mr. Rathbone: I am sure, Mr. Speaker, that the Prime Minister wished only to mislead.
  Hon. Members: Oh.

  MINISTERIAL BROADCASTS
  Mr. Maddenasked the Prime Minister when he next intends to make a ministerial broadcast.
  The Prime Minister: I will do so at an appropriate time.
  Mr. Madden: When my right hon. Friend next broadcasts will he confirm that all Labour Members of Parliament were elected on a promise to secure a fundamental and irreversible shift in the balance of wealth and power in favour of working people and their families? Will he further tell his audience, which will doubtless include millions of people on or below the poverty line, that that promise is incompatible with savagely deflationary economic policies?
  The Prime Minister: There is no prospect of savage deflationary economic policies. The definition of the word "savage" is important, and that is what will count in the end. I shall tell the country, as I have before, that there is no soft option and that I do not promise any real easement in standards of living for some time to come. I said that within hours of being elected, and I stand by it.
  Mr. David Steel: When he next makes a broadcast will the Prime Minister clarify whether it is Government policy to try to unite the nation or to stir up envy, greed and class conflict in the manner of the previous Labour Government?
  The Prime Minister: I did not see the last party political broadcast, but I read the script and I was not over-impressed by it.
  Mr. Kinnock: I hope that this does not sound too unctuous, but is my right hon. Friend aware that we are all against greed, envy and conflict and that there is no monopoly, even in the Liberal Party, of such virtue? Is my right hon. Friend aware that, while we on this side of the House agree that there are no soft options, there are certainly some Socialist options available including raising pro-
  234
  duction and returning to proper collective bargaining rather than cutting the social wage of the worker. Such a policy would ensure the economic prosperity that we need, not on the terms of the people who dictate but on the terms of those who produce.
  Mr. Nicholas Winterton: Go back to the valleys.
  The Prime Minister: My hon. Friend is right to emphasise the importance of the industrial strategy and of continuing a policy to ensure that there is a higher rate of investment and a concentration on exports. In the short run I am not sure that we can link together all the alternatives that my hon. Friend put forward. Until the country is living more nearly within its own means and not borrowing so much, I am not sure that we can always preserve the standards that we want to see.
  Mr. Baker: Before he makes his next broadcast, will the Prime Minister look at the Houghton proposals on Cabinet secrecy which recommend that members of the Cabinet should be more discreet and not talk about Cabinet discussions outside the Cabinet? How does he think that the world will be able to recognise the moment when those proposals are implemented?
  The Prime Minister: A statement will be made from the Dispatch Box.
  Mr. Ford: In his next broadcast will my right hon. Friend explain what aid the Goverment have given to the textile industry and in measures announced by the Secretary of State for Industry in connection with aid for the clothing industry?
  The Prime Minister: I should be glad to do that. My hon. Friend has pinpointed an important matter—selective assistance to industry. The Government have given assistance to the ferrous foundry, machine tool, paper and board, printing machinery, wool textile, and clothing industries. There is no doubt that our industrial strategy is working well in those directions. It is important that we should continue to stick at it. We shall win through.
  Mr. Rost: Will the Prime Minister explain to the nation why he intends to lumber the British people with still more foreign debt so that he can continue his Socialist extravagance?
  The Prime Minister: That is a total misrepresentation of the position. When I recall how we have controlled the money supply by comparison with spendthrifts on the Opposition Front Bench—
  Mr. Nicholas Winterton: That is not true.
  The Prime Minister: —and the fact that we have cut back—I regret to say it—the local authorities' rate support grant, I believe that there is no doubt that public expenditure, as is openly acknowledged, and was acknowledged by the right hon. Member for Down, South (Mr. Powell) in his speech last week, is under more severe and complete control than it has been for many years. That is what we intend to continue.

AIRCRAFT AND SHIPBUILDING INDUSTRIES BILL (BUSINESS MOTION)
Motion made, and Question proposed,
That, at this day's sitting, when the Aircraft and Shipbuilding Industries Bill has been reported from the Committee on the Bill, no order for Third Reading shall be made; at the conclusion of the proceedings on the suggested Amendments to the Bill or after the interruption of business under Standing Order No. 1, whichever is the earlier, a Minister of the Crown may move, That the Bill be now read the third time; and the Third Reading of the Bill may be proceeded with, though opposed, until Twelve o'clock.—[Mr. Coleman.]
3.35 p.m.
Mr. Nicholas Ridley: I do not believe that the House should allow the Lord President to have this motion without a rapid and, I hope, mild protest. Once again, business of the House is being truncated. Once again, the Bill concerned is being rammed through on a timetable motion, irrespective of the rights of Parliament.
I wonder whether the Government feel that they have the moral authority to put down the motion to force the Bill through the whole of its remaining stages so that business on it is concluded by midnight. I wonder whether the Prime Minister really feels that he has his heart and soul in this particular project sufficiently to thwart Parliament of its rights to discuss the Bill in Committee and on Third Reading.
The Bill has been before the House for some time, but this is a new Session. Today at Question Time the Prime Minister admitted, first, that his party is penetrated from the Left, that many of the constituencies have been overtaken by Trotskyites and others and that the propaganda put out by the Government in their recent party political broadcast was not to his liking. He has a majority of one in this House. Indeed, last night he had to rely on the right hon. Member for Down, South (Mr. Powell) to bail him out in the Division Lobbies. On whom will he rely tonight on this Bill? He will not find it easy to get support from the right hon. Member for Down, South again, on a measure such as this.
Does the Prime Minister realise that he has forfeited the confidence of the people of Britain, that he has no mandate any

237
longer, that he has no right to go on insisting on this Bill or to truncate the right of the House to debate it, and that he has no authority left whatsoever, either in the country or in his own party? I know that he is a clinger and that he thinks that if he sits there long enough the problems will go away. But the problems will not go away, because the basic fact is that his Government and he himself have lost the confidence of the people.
I do not blame the Prime Minister for leaving the Chamber now. He has every right to seek to avoid hearing what I have to say. He is welcome to go. When he has gone, I shall vent the same views upon the Lord President, who is the architect of the motion—he who in the past years has so often masqueraded as the champion of Parliament.
Perhaps my right hon. and hon. Friends have grown so used to starting each day's debate with a guillotine motion on the Order Paper that they cannot feel quite as strongly as I do that we should once again be asked to limit our debate before we start. It is a sorry state to which the Lord President has reduced Parliament, that state in which before each debate starts he puts down a motion limiting the extent of the debate and trying to curtail a free expression of opinion, all in his unseemly rush to get the Bill through.
Although I do not believe that the time of the House should be wasted by dividing on the motion, in view of the acute shortness of time that the Lord President has allowed, I hope that some nights, when the right hon. Gentleman goes home, he feels a twinge of conscience. I hope that the Government will eventually begin to realise that the will of the people will prevail despite the Government's attempt to suppress parliamentary debate.
3.40 p.m.
Mr. Ian Gow: I wish to draw the attention of the House to what I regard as a thoroughly regrettable practice to which we have become accustomed since the Lord President of the Council became Leader of the House. It is that when motions of this kind appear on the Order Paper they are moved on the nod by the Leader of the House without his doing us the courtesy of explaining why
238
the Government think that it is desirable to curtail debate on a Bill which in the Government's own view is of fundamental importance for the future of Britain and of our industry.
I believe that for the Government Front Bench simply to put a motion of this kind on the Order Paper and then to invite the House to agree to it without any justification from the Leader of the House is just another sign of that arrogance of the Executive to which my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) referred.
I find myself, very unusually, in respectful disagreement with my hon. Friend, to this extent: I think it is time that the House asserted its contempt of and resistance to the increasing practice of the Government Front Bench of tabling motions of this kind and inviting the House to agree to them without debate. I hope that my hon. Friends will register their objection to this practice, particularly when it comes from the right hon. Member for Ebbw Vale (Mr. Foot). If he had been sitting, as shortly he will be, on this side of the House and one of my right hon Friends had introduced a motion of this kind, there would have been no more fervent critic of that motion than the right hon. Gentleman. In a few months' time when my hon. Friend the Member for Cirencester and Tewkesbury and I will be sitting on the Government side of the House, if one of our right hon. Friends who is then Leader of the House should persist in moving motions of this kind I hope that my hon. Friend and I will make exactly the same protest as we are making today.
I certainly intend, provided that I can find one of my hon. Friends to act as a Teller, to divide the House against the motion upon the sole principle that it is time that the House asserted its supremacy over an increasingly arrogant and dictatorial Executive.
3.43 p.m.
Mr. Robert Adley: I support my hon. Friends the Members for Cirencester and Tewkesbury (Mr. Ridley) and for Eastbourne (Mr. Gow), in spite of the jeers of Labour Members. This motion is an insult not only to Parliament but to Her Majesty the Queen, whose speech was recently read and approved reluctantly by the

239
House of Commons. That speech referred to the reintroduction of the Aircraft and Shipbuilding Industries Bill. It is unthinkable that the House of Commons is capable of dealing adequately with that item of the Gracious Speech in the way proposed by the Lord President.
We are dealing with a Business Motion which relates to the first Order of the day. The paraphrase of the Business Motion is that there should be no order for Third Reading at the end of our debate but that there should be a Third Reading at 12 o'clock. In other words, no matter how far we have proceeded with the Bill, at 12 o'clock the debate will end. That is my reading of the motion.
There are important suggested amendments in the names of a number of my right hon. and hon. Friends, but there is nothing on the Order Paper to indicate which of those amendments you have selected for debate, Mr. Speaker, and whether the timetable motion will apply to all or any of them.
Therefore, Mr. Speaker, I hope that I am in order in drawing your attention briefly to two points. The first refers to Item No. 4—the suggested amendment with reference to warships and to Item No. 5—the suggested amendment with reference to guided weapons.
At Prime Minister's Questions just now the hon. Member for Salford, East (Mr. Allaun) called for the withdrawal of NATO forces from Germany. It is clear that there is a faction within the Labour Party that takes a diametrically opposed view of our defence commitments to that which was ennunciated by the Prime Minister earlier and which will be affected by this Bill as it deals with our capacity to build warships and guided weapons.
Are we to have adequate time to debate these matters today? Are we to have adequate time to debate Item No. 6, the first suggested amendment in which states:
"all employees have the right to participate"
in decisions taken by the nationalised aircraft and shipbuilding companies?
It would be inappropriate to debate this issue at this moment, but I should appreciate your guidance, Mr. Speaker, on whether we are to have time today
240
to discuss this issue which vitally affects the individual rights and freedom of hundreds, nay thousands, of workers; or whether the rights of the House of Commons and of those individuals are to be trampled upon tonight.
3.46 p.m.
Mr. Nicholas Fairbairn: I am disturbed about the principle raised by the motion—[Laughter.] I am disturbed about this principle which I do not think that Labour Members, in the present state of their party, should be too quick to laugh about. The principle is whether the House remains an instrument of democracy or whether it has become merely the imprimatur of authoritarianism.
Mr. J. W. Rooker: What about the conscience clause?
Mr. Fairbairn: Such frivolous remarks coming from frivolous Members who remain seated on their frivolous bottoms are not impressive.
It is important to remember that Parliament is a serious legislative body which promotes the laws of the land which each of us is presumed to know and to understand. Yet the Lord President probably does not know what the Bill does and has no intention of reading it but is determined to ensure that he gets the Reichstag votes, his attitude being "Get the Bill through. Discussion is irrelevant. Amendment is irrelevant. Just get it through."
Mr. Norman Buchan: The hon. and learned Member is irrelevant.
Mr. Fairbairn: That is exactly what I am saying. I am delighted that the hon. Gentleman said that, even though he did not have the courtesy, because I do not suppose he has manners, to stand and say it. Labour Members regard free discussion and the widely held opinion of democracy as irrelevant. For many years the right hon. Member for Ebbw Vale (Mr. Foot) pretended that he cared about the right of people to say what they wanted to say whether or not he agreed with it and in the democratic process. He does not care about that

241
now. All lie cares about is that the increase in the authoritarian machine shall be advanced by whatever process.
According to the right hon. Gentleman's view, one can wound, cut, destroy the House—that matters not, as long as it can be used to destroy the democratic process. That is what the right hon. Gentleman is doing successfully, as is demonstrated by the contemptuous remarks of Labour Members. They are not interested in genuinely held opinion. They want to destroy everything that stands in their path.
I find the motion abhorrent. It is an example of the authoritarian process to which the country is being subjected.
3.50 p.m.
Mr. Marcus Lipton: Conservative Members who have spoken on the motion are being rather stupid. They are denying to the House an opportunity of discussing the Bill of which many of my hon. Friends wish to take advantage. Conservative Members are taking away valuable time which would be better devoted to discussing the Bill than to listening to this high-falutin' nonsense about democracy.
Mr. Fairbairn: Let me be clear what the hon. Gentleman is saying. Is he saying that a person who has only 10 hours before he is to die at the gallows is depriving himself of the right to die quicker by taking up two hours to say that he is innocent?
Mr. Lipton: Without going into all the horrible details, my view is that the hon. and learned Gentleman has totally misconceived the position. All I am saying is that the House should be given the opportunity to debate the Bill. That opportunity is being denied to us because of the filibustering tactics of Conservative Members. I hope that we shall get on with the business, because many of my hon. Friends wish to discuss the Bill.
3.51 p.m.
Mr. E. Fernyhough: Not during all the years I have been in the House has any Bill had so much time devoted to it as the Bill we are discussing again today. It holds the record.
It is significant that the hon. Members who have taken part in this early discussion about the motion are compara-
242
tively new Members. They are pretending that this is the most fundamental Bill ever discussed by the House. Any hon. Member who has been here for any length of time knows that, if the same amount of time had been allocated to the European Communities Bill by the Conservative Government, we on this side of the House would have been very happy, but clause after clause went through the House without any opportunity for a word of discussion.
The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) is the only hon. Member who was here at that time. He was prepared to railroad through that fundamental Bill which completely changed 300 years of history. He did not say a word to the leaders of the steamrollers who represented him. He did not mind the lack of democracy. He did not mind gagging people and shoving the Bill through irrespective of what people thought about it. It is nonsense, humbug and hypocrisy to criticise the Government when the House has had the opportunity to discuss every detail, every clause and every sentence of this Bill for far longer than we were able to discuss the European Communities Bill.
Mr. Fairbairn Mr. Fairbairn rose—
Mr. Fernyhough: I shall give way in a moment. I am a tolerant, compassionate and patient man. I fear for my health. I wonder how much humbug it is possible for an ordinary individual to put up with before suffering as a consequence an injurious effect upon his health. It puts a great strain on me to have to listen to undiluted humbug from men who did not mind when the whole of the British constitution was being changed and when our power to make law and to control our people was being given away. They uttered not a word of criticism. They went through the Lobbies marshalled as tightly as guardsmen. There were few protestors, no rebels then.
Mr. Fairbairn Mr. Fairbairn rose—
Mr. Fernyhough: I am a patient man and if the hon. and learned Gentleman will also have that virtue I shall give way to him. I hope that the hon. and learned Gentleman will read his piece tomorrow and compare it with the speeches of his predecessor, who was a

243
great crusader and did not want any delay. He wanted us to get into Europe as quickly as we could to solve our unemployment, economic and trade problems. We did get into Europe, quickly, and I hope that the hon. and learned Gentleman knows with what result. If we could have had the time on that great constitutional measure which we have given to Conservative Members on this Bill, we would not have complained.
Mr. Fairbairn: I am most impressed by the right hon. Gentleman's principles. He is saying "You did wrong, and that entitles us to do wrong". I cannot think of a more evil and wrong argument than that. If the Conservatives were wrong, the right hon. Gentleman should be the first to say "You were wrong and we shall not be wrong". He should not say "You sinned and, therefore, we are entitled to sin".
Mr. Fernyhough: The hon. and learned Gentleman is a typical lawyer. [Interruption.] He said that we did wrong and that they did wrong. But we did wrong once and they did wrong twice. We remember what happened to the Industial Relations Bill. [Interruption.] The more the hon. Member for Macclesfield (Mr. Winterton) interrupts, the less will the people of Macclesfield think of him.
Mr. Adley Mr. Adley rose—
Mr. Fernyhough: Let me answer one intervention at a time. I am not a ventriloquist; it would be easier if I were. If I could answer two interventions at once I should not have to take up so much time. I shall let the hon. Member for Christchurch and Lymington (Mr. Adley) have his turn, as I did last week. My motto is to keep open the doors so that all those who want to be saved may enter.
The hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) seemed to think that the only Bill we discussed when the Conservatives were in office was the European Communities Bill and that, even though the Conservatives tried to stifle democracy and were not prepared to listen to criticism of that Bill, they are fully justified in saying to us that we are mean and
244
contemptible and destroying democracy, and a lot of other silly nonsense.
We have been far more liberal and generous on this Bill than the Tories ever were on the EEC Bill which I should have thought was a far more important than this Bill because of the powers it contained. The hon. and learned Member complained that his party had done it only once. That is the tragedy of being young. He cannot look back because he has been here only a little time. Of course the hon. and learned Gentleman has some time in which to learn and when he has been here as long as I have he will never make a speech of that kind. It was not only the debate on the EEC Bill which the Tories decided to strangle it was also the debate on the Industrial Relations Bill.
I do not mind telling some of the inner secrets of our party meetings. I was the man who proposed at our party meetings that we should oppose every dot, line and comma of that Bill. I was the man who said that if we had to go through the Lobby until 11 or 12 o'clock the next day, we should do it because the trades unions were being hanged, drawn and quartered by men who did not understand the consequences of their acts.
I can take some comfort from a speech made by the Leader of the Opposition 10 days ago when she said that they would "never, never" repeat that performance. I did not take this from the Press. I have had sent to me a copy of the tape recording of the speech. I do not know whether tape recorders can be manipulated better than the Press. It was sent to me, and I know what the right hon. Lady said. I know that the right hon. Lady, who trooped through the Lobby to stop every argument, every minute of discussion, on the Industrial Relations Bill, has now changed her tune. She says that never again will she act in the future as she acted in the past. We know that she is never likely to be given the opportunity again to act in the future as she has acted in the past.
Mr. Nicholas Winterton: I will take a fiver on that.
Mr. Fernyhough: The hon. Member had better save his money. He should go to Ladbroke's.
Mr. Speaker: Order. The right hon. Gentleman must come back to the motion. The point about the right hon. Lady's opinions on something else is not likely to affect our attitude on this Question.
Mr. Fernyhough: With every respect to you, Mr. Speaker, if I have in any way strayed from the motion, every speech made from the Opposition Benches was equally straying from the motion.
Mr. Speaker: I disagree with the right hon. Gentleman. I have been listening very carefully. I am only asking the right hon. Gentleman to come to the motion before the House.
Mr. Fernyhough: I am quite prepared to come to it. But there are some hon. Members who want to interrupt me. Far be it from me to be so lacking in compassion as not to give way. I know that we have roughly until midnight to talk sense or nonsense. So far I have been listening to nonsense. But if people at a party decide to talk nonsense, I am not so stupid as to pretend that I cannot join in with them. That is precisely what I am doing, because the Bill means more to me than to any other Member of this House.
I have seen the filibustering, the attempt to throttle, thwart and crucify this Bill. When I listen to the nonsense which has been spoken by the first two or three speakers from the Tory Benches I am not prepared to let that go on without having my share of the time. We have between now and midnight to discuss it and that is all I am doing.
Mr. Adley: May I take the right hon. Gentleman back to his point about the timetable motion on the European Communities Bill and the procedures adopted then which he has related to the present motion? The votes cast for the Labour Party which is supporting the Aircraft and Shipbuilding Industries Bill were about 11 million, while the votes cast for all the parties represented on the Opposition side of the Chamber, who are opposed to the Bill, were about 17 million. Does the right hon. Gentleman not accept, therefore, that this is relevant to the discussion of this Bill? Furthermore, since he is advocating that we follow the procedure which was used for the EEC
246
Bill, is he now recommending to the House that we have a referendum to see whether the people want this Bill?
Mr. Speaker: Order. I hope that the right hon. Gentleman will not respond to the hon. Member because we are discussing a timetable motion.
Mr. Fernyhough: Out of respect for our very long friendship over very many years, Mr. Speaker, I would be the last person in the world to put up a barrier to our friendship at this stage in my life. If you feel that I ought not to answer the stupid silly questions put to me, of course I shall save the time of the House and bow to your ruling on this matter.
I beg all hon. Members who have objected to this timetable motion to remember that at least 90 per cent. of the men in industry, for most of my life, have wanted a measure of this kind introduced. I met a few score of them last weekend—I do not want to put the figure any higher because I do not wish to exaggerate—in a club in Jarrow. The men were terribly upset at what had happened, particularly to the ship repairing yards. There must be at least 30 clubs in my constituency. There are three Labour clubs and ex-Service men's Clubs. I spoke in an ex-Service men's club last Saturday, in the bar. I do not know whether that pleases hon. Members opposite, but I am acceptable in every club in Jarrow, except the Tory club, and I have never tried to get in there so I do not know whether I would be kicked out.
The men who have devoted their working lives to this industry, those who are still working there and those young people who still hope that a career may be found for them there, all believe that this Bill is necessary. I could have brought cuttings from the local Press reporting that management is as disturbed as the men about the uncertainty of the future. They do not know what will happen. The men know what a terrible position the ship repairing and shipbuilding industry is in at present—irrespective of whether it is nationalised or privately owned—because of the substantial reduction in demand due to over-capacity throughout the world. It is very natural for people, whether they are top managers or just

247
ordinary casual workers in the yard, to be concerned about their future.
Mr. Nicholas Winterton: I can follow the right hon. Gentleman's argument in favour of the motion, but I remind him that Opposition Members also have constituency interests. Several hundred Hawker Siddeley Aviation workers living in my constituency are deeply concerned about the present problems of the industry and do not necessarily share the right hon. Gentleman's view that nationalisation will solve those problems. But, taking his argument a stage further and basing it on what happened with the EEC, is he suggesting that the next Conservative Government should hold a referendum to ascertain whether people have agreed with what the Government are about to do?
Mr. Fernyhough: Of course I do not. I can appreciate the natural concern of workers in the aircraft industry living in the hon. Gentleman's constituency. But if we had been satisfied merely to nationalise the aircraft and shipbuilding industries, we should not have heard a word from him this afternoon. He was prepared to let them go.
Mr. Nicholas Winterton: I was not.
Mr. Fernyhough: The hon. Gentleman's party was, and so was the other place. The workers in his constituency would eventually have been part of a nationalised undertaking. If he wishes to have a nice public debate, I am prepared to debate with him in Macclesfield, and he can debate with me in Jarrow. The workers in our respective constituencies can then decide whose case is stronger and better in relation to the Aircraft and Shipbuilding Industries Bill.
Mr. Nicholas Winterton: I am grateful to the right hon. Gentleman for giving way again. I remind him of my other question. He will recall what happened in regard to the EEC. His Government proposed that a referendum be held. This was carried through, and in the referendum the people of this country gave an overwhelming "Yes". I remind the right hon. Gentleman that my constituency had the biggest turnout in Cheshire and contributed to the very big "Yes" vote in that area. Does he suggest that we should do the same thing in regard to
248
the Aircraft and Shipbuilding Industries Bill?
Mr. Speaker: Order. We are all grateful to receive that information but it has nothing to do with the timetable motion before the House.
Mr. Fernyhough: I am quite sure that if we had a referendum among the people who are directly affected by the Bill—
Mr. Adley: The taxpayer.
Mr. Fernyhough: Do not aircraft workers pay tax? Do not shipbuilding workers pay tax? Do not ship repairing workers pay tax? I am prepared to have not a national referendum but a referendum among the workers, the technicians, the designers and the bosses in the industries concerned—the people who are most vitally affected. I would gladly be prepared to give to the workers and the management in the industries covered by the Bill the right to demand a referendum, and I have no doubt at all that the answer would not be what the hon. Member for Macclesfield would like.
I have tried your patience, Mr. Speaker. I did not come here to speak. I was prompted by the unnecessary remarks of hon. Members who seem to forget that history did not start today. There was history yesterday and history the day before. That is what made me feel that I ought to remind them of their inconsistency.
This Bill is really wanted. It is wanted by the workers in the industry. It is wanted by the vast majority of the employers in the industry. It is necessary for the nation. For these reasons I hope that we shall get this Bill by midnight.
4.15 p.m.
Mr. J. Grimond: I have no doubt that the right hon. Member for Jarrow (Mr. Fernyhough) most sincerely wants the Bill, but it is clear that the majority of the people in this country do not want it. It is at least very doubtful by any constitutional practice whether it is right for a minority Government, with a majority of only one in this House—and that from an area which is perhaps not deeply concerned with these matters—to force it through.

249
Two points have arisen during the whole passage of the Bill. The first is the growing danger of each party drawing up an enormous manifesto for the General Election and then arguing that, whatever may have happened in the meantime, it must force through this House—and indeed the other House—the central parts of the manifesto. The world changes very fast and this country has to keep up with the changing world. It is often severely damaged by being saddled with propositions that may have looked all right a year or two ago but that make no sense in the present economic climate.
The second point concerns our relations with the second Chamber. I have long advocated that the second Chamber should be elected. I am no defender of the Lords with its present constitution. I do not defend the hereditary principle, nor, indeed, do I defend the principle of appointing members. This argument was dealt with very adequately in a previous debate by the hon. Member for Birmingham, Handsworth (Mr. Lee).
The growth of patronage is highly undesirable. It has been shown by the small number of Labour peers who turn up that it is not the ideal way of appointing a second Chamber. But let us remember that the House of Lords is acting under the Labour Government's Act of 1949 and not simply under an earlier Liberal Act.
If we have a second Chamber, one of its duties must be to suggest that we think again about legislation such as that which is before us—legislation which is not popular in the country and is certainly not essential to the present economic state of the country. The other House sent it back, as, indeed, it is bound to do if it thinks that a Bill is undesirable. It asks that we reconsider it. In point of fact, we have hardly reconsidered it at all. It is assumed that all the arguments that were deployed at great length during the past year are just as valid now, and that therefore this whole procedure of referring to a second Chamber is rendered absolutely futile.
There may be an argument for not having a second Chamber. I personally think on balance that we need one at present, although I shall be very much
250
against it if we have a proper Parliament in Scotland and in Wales as well. We should then be in great danger of being severely over-governed. At the moment we have a second Chamber, and there are strong arguments for a revising Chamber, but we are making an absolute mockery of a revising Chamber by the way in which we are treating its revisions.
Mr. Fernyhough: When the right hon. Gentleman talks about a second or revising Chamber, will he explain how it is that that dead body seems to come alive only when there is either a Liberal Government, as in generations past, or when there is a post-war Labour Government?
Mr. Grimond: I have already said that I am in favour of abolishing the House of Lords and of having a different one. But I reiterate that the second Chamber in its present form was not created by the Conservatives. It was given its powers by a Labour Government—by the party of which the right hon. Gentleman is a member. It is simply exercising its powers as it is bound to do.
In justice, it must be said about any revising Chamber that it is likely, however its members are elected or appointed, to be rather more conservative than this Chamber. I do not think we can seriously object to that up to a point. But if the right hon. Gentleman is saying that if we have a second Chamber it should be entirely different I remind him once more that I have already said that and wholly agree with him in that respect.
It is wholly wrong to have a semi-hereditary and semi-appointed body of the nature that we have at present. But I reiterate that it is there as a result of Labour legislation. It is doing what it is supposed to do. Instead of considering what it has said, we are simply being asked to act as though we had no second Chamber at all.
I do not know whether, in relation to the constitutional changes which are going forward, we shall be able to debate these matters more fully, but I think that at the moment this House is not doing its reputation much good by simply pretending that it is right at all costs, when we know full well that the Government represent at most 35 per cent. of the people.
4.20 p.m.
Mr. William Craig: The right hon. Member for Orkney and Shetland (Mr. Grimond) has very largely expressed my own sentiments. There is a place in government for the use of timetable motions, but it is a very special case in which such a step can be justified, because it means the curtailment of the elected representative in the performance of his duty.
In this instance Parliament is evenly divided on a controversial proposal. I should have thought that those who wanted to uphold parliamentary democracy would in such circumstances pay extra special attention to the views of the Opposition. Parliamentary democracy will fail if the Government are totally arrogant in the face of Opposition viewpoints.
The hon. Member for Jarrow (Mr. Fernyhough) said that the Government could have got their Bill in the last Session if they had been a little more accommodating of the views expressed from the Opposition Benches, but that they chose not to be accommodating by dropping the proposals for aircraft and ship repairing.
Mr. Fernyhough: I am sure that the right hon. Gentleman does not want to misrepresent what I said. I did not say that we could have got the Bill if we had been a little more accommodating to the Opposition. We could have had the Bill if we had been a little more accommodating to an unelected Chamber, and I said that I was not prepared to be accommodating to an unelected Chamber.
Mr. Craig: I find that argument very difficult to follow. The right hon. Gentleman is saying that he will not be accommodating to a lawfully constituted part of this Parliament whose Members are merely defending an interest which was expressed forcibly and substantially supported in this House in the Division Lobbies.
The point is that the Bill could have been law by now if the Government had been more tolerant of the views expressed by Opposition Members. Today we find ourselves being further denied the opportunity to explain our opposition to this
252
proposal not just because of pressure of time on Government business but because the Government have decided to get this Bill through Parliament by invoking the Parliament Act. That means that they cannot accept views expressed from the Opposition Benches and that they are riding roughshod over the whole Parliamentary process. I object strongly to that.
4.23 p.m.
Mr. John Lee: I do not want to go over with the right hon. Member for Orkney and Shetland (Mr. Grimond) the ground that I went over the other day. But there is an inevitable degree of repetition in some of the matters that we are discussing today.
I begin by reminding the right hon. Gentleman that it is only Labour and Liberal Governments who are the victims of situations of this kind, as my right hon. Friend the Member for Jarrow (Mr. Fernyhough) pointed out. However, the right hon. Member for Orkney and Shetland should be a little hesitant about suggesting spurious forms of reform of the second Chamber. He may find that he produces a situation that in a sense is far worse than now.
I mention as an example the recent fate of the Australian Labour Government when the elected second Chamber deliberately set out and, having that much more authority, was able to stultify completely a Government who had taken office after a period of some 23 years in opposition, thereby flying in the face of any principle of fairness that we would all recognise. I think that the right hon. Gentleman will realise that the arguments in favour of an elected second Chamber are deceptively over-simple when considered against a background of that kind.
Mr. Adley: As the hon. Member for Birmingham, Handsworth (Mr. Lee) has been defending the views of his right hon. Friend the Member for Jarrow (Mr. Fernyhough), perhaps he could supply another piece of information to the House. Bearing in mind that his right hon. Friend was first elected to this House following a by-election in 1947, can the hon. Gentleman say whether his right hon. Friend supported or opposed his own Government's Bill in 1949 about the other place?
Mr. Fernyhough: I shall look it up in the Library and write to the hon. Gentleman.
Mr. Lee: My right hon. Friend has answered the hon. Gentleman's question. I do not think that I would have given way to the hon. Gentleman if I had realised that he would be as characteristically irrelevant as he has shown himself to be so far in this debate.
Let us remind ourselves how the present situation arose. It arose because, although the House of Lords had the power to reject—up to the 1911 Act and as abridged by the 1949 Act—the convention had grown up over the years that it used its powers merely to revise and to provide opportunities for second thoughts. But now, under the guise of the use of those revising processes, a situation of constitutional impasse has been created that produces the same effect as if the House of Lords has rejected legislation that had passed through this House.
Until the Felixstowe Bill, the House of Lords had not rejected or even attempted to reject any piece of legislation since the 1949 Parliament Act. Although even that might have been regarded as objectionable, one can understand the argument for saying that a power that affected the very character of the other Chamber was about the one exception when it would have been reasonable for that Chamber to exercise its powers. But by no stretch of the imagination can this be said to be a constitutional Bill. It is a very important Bill concerned with our economic affairs.
It is worth reminding ourselves that both the major industries with which the Bill is concerned have been spoon fed by Government money and dependent on Government procurement for many years. Without Government aid there would be no aircraft industry, shipbuilding industry or, for that matter, ship-repairing industry.
The principal justification for the somewhat drastically abridged procedure which my right hon. Friend the Leader of the House has proposed is that, under the guise of an amending process, the House of Lords has rejected a piece of legislation, so flying in the face of the convention that it does not undertake that kind of operation.
Mr. Donald Stewart: Is not the hon. Gentleman saying that the House of Lords possesses these powers but that it should not exercise them? Is not that rather like the type of Conservative who always approves of the strike weapon but who never finds a strike of which he can approve?
Mr. Lee: In his usual charming way, the hon. Member for Western Isles (Mr. Stewart) has introduced a false argument. There is a valid distinction between legislation in which it is reasonable for the House of Lords to intervene and use its powers and legislation in which it is not. I have already referred to one example and I shall refer to another.
One of my hon. Friends mentioned the Common Market legislation as a piece of legislation when the House of Lords might have used its powers but failed to do so. We know why, of course. It is because the Lords are so overwhelmingly Conservative that the last thing that they want to do is to embarrass Conservative Governments, however badly they govern, however unrepresentative they are, or however constitutionally outrageously they may behave.
But, even supposing that we were able to withdraw from the political battle and approach these matters from the judicial point of view—
Mr. Speaker: May I ask the hon. Member for Birmingham, Handsworth (Mr. Lee) to confine himself to the timetable motion? At the same time, I give notice to the House that I shall expect any other hon. Member whom I call to speak to the motion and not to discuss the general issue of the House of Lords, or any other matter which is not in the motion.
Mr. Lee: In common with my right hon. Friend the Member for Jarrow and my hon. Friend the Member for Derbyshire, North-East (Mr. Swain), the one institution with which I do not argue is the Chair.
Perhaps I shall be in order if I say that what distinguishes the European Communities Act from this legislation is its irreversibility. It is open to a subsequent Government, if, unhappily, one should be so minded, to repeal this legislation. Unfortunately, it would be very difficult constitutionally to repeal the European Communities Act.

255
But this motion is abundantly justified both by the procedures of this House and morally. We have been over this ground again and again. What has been done has not been done because of an ostensibly solicitous attitude towards ship repairers. What has been done has been done as an act of destructive political mischief. That is why we have to go through this Bill again.
Members of the other place have played their cards very cleverly. The Government have landed themselves in this situation partly because they have not created a sufficient number of Labour peers to attend and to vote down the Conservative majority. Some of the deadbeats do not vote anyway. I suppose that we are to blame to some extent for that.
That is the justification for the motion. I hope that it will be carried by a substantial majority. I hope that the radical-minded Members on the third row below the Gangway on the Opposition side will realise not only the importance of the Bill to their country, but that, if they vote for the motion, they will be voting against a preposterous political anachronism for which they surely have no sympathy any more than we have.
4.31 p.m.
Mr. J. W. Rooker: I shall confine myself to the motion. I was going to say that anyway, irrespective of your earlier comment, Mr. Speaker.
The motion is that we should knock off at 12 o'clock tonight following today's proceedings. The proceedings relate almost wholly to the ship-repairing part of the Bill. My right hon. Friend the Member for Jarrow (Mr. Fernyhough) made a telling point when he said that, except for the ship-repairing part, the Bill could have been passed long ago. The Opposition and the Lords were prepared to give the Government the Bill except for ship repairing. In view of the number of times that we have discussed ship repairing, it is not unreasonable to expect that in the seven and a half hours left, if the motion is carried, we can adequately cover and repeat everything that has been said about ship repairing.
I believe that the intransigence on the part of the Opposition and the Lords—we know what will happen when the Bill goes there—
Mr. Norman Tebbit: What?
Mr. Rooker: I should be out of order if I responded to that sedentary interjection.
I believe that all the wining and dining that has been done on behalf of the ship repairers is having its toll in this House and in the other House. Members of both Houses are being pressured by outside forces—no one gets up and complains about breaches of privilege; it may or may not be that money changes hands—to oppose the Government lock, stock and barrel on the issue concerning the ship-repairing industry. I believe that the arguments can be adequately covered in seven and a half hours. That is all that the Government are asking for. Must we sit and listen for seven and a half hours?
Mr. Tebbit: The hon. Gentleman should notice that there are matters other than ship repairing. We should like to discuss the position of guided weapons manufacturers, because that issue has not yet been discussed. [Interruption.] Perhaps the right hon. Member for Jarrow (Mr. Fernyhough), who spoke for quite long enough, will restrain himself for a few moments. We have not discussed on the Floor of the House the position of guided weapons manufacturers.
Mr. Rooker: The Bill has had the longest procedure of any Bill in Parliament. It has had more than adequate time for all the issues to be raised. All that we expect is constant repetition paid for by outside forces concerned with the ship-repairing industry. I do not think that seven and a half hours is unreasonable for listening to these arguments again.
Question put and agreed to.
Ordered,
That, at this day's sitting, when the Aircraft and Shipbuildng Industries Bill has been reported from the Committee on the Bill, no order for Third Reading shall be made; at the conclusion of the proceedings on the suggested Amendments to the Bill or after the interruption of business under Standing Order No. 1, whichever is the earlier, a Minister of the Crown may move, That the Bill be now read the third time; and the Third Reading of the Bill may be proceeded with, though opposed, until Twelve o'clock.

AIRCRAFT AND SHIPBUILDING INDUSTRIES BILL (BUSINESS MOTION)

  STATUTORY INSTRUMENTS, ETC.
  Ordered,
  That the Herring Industry Board (Exchequer Loans) (No. 2) Order 1976 be referred to a Standing Committee on Statutory Instruments, etc.—[Mr. Tinn.]

ORDERS OF THE DAY
  AIRCRAFT AND SHIPBUILDING INDUSTRIES BILL
  Considered in Committee; reported forthwith without amendment, pursuant to the Order of the House [1st December].

  Suggested Amendments
  Mr. Speaker: I should explain that I gave notice in the Lobby that Items Nos. 2 and 3 could be discussed together. Apparently, that has not met with the unanimous wish of the House. Therefore, they must be discussed separately.
  4.36 p.m.
  Mr. Robin Maxwell-Hyslop: I beg to move, Item No. 2:
  That, pursuant to the Parliament Acts 1911 and 1949, the House suggests to the Lords the following Amendments to the Aircraft and Shipbuilding Industries Bill:
  Clause 30, page 42, line 33, after 'if', insert—
  '(a) it is a transaction the effect of which is to transfer or grant to any person any property or rights belonging to the company effecting the transfer, being property or rights used by the company in connection with the business of repairing, refitting or maintaining ships carried on by it at a place which is not a shipyard or other works in which the company had an interest in the possession on the initial date, or
  (b)'.
  Clause 31, page 44, line 46, at end insert—
  "(dd) it is a transaction the effect of which is to transfer or grant to any person any property or rights belonging to the company effecting the transfer, being property or rights used by the company in connection with the business of repairing, refitting or maintaining ships carried on by it at a place which is not a shipyard or other works in which the company had an interest in the possession on the initial date; or'.
  Clause 38, page 54, line 7, at end insert—
  '( ) If, pursuant to a transaction falling within section 30(2)(a) or section 31(2)(dd) above, any property or rights such as are therein mentioned have been transferred by the company in question, then, for the purpose of determining, in accordance with subsection (1) above, the base value of the securities of the company, it shall be assumed that, immediately before each of the relevant days,—

  (a) the property, rights or liabilities so transferred were not vested in the company, and

  (b) in place of that property, those rights or liabilities, there were vested in the company funds equal to any consideration which passed to the company as a result of the property, rights or liabilities being so transferred.'

  Clause 56, page 79, line 44, at end insert 'or any factory, dry-dock, graving dock, or other premises or land situated in the United Kingdom in which an acquired company was entitled to an interest in possession or a licence to occupy and which on or at any time after the initial date was being used for repairing, refitting or maintaining ships unless—

  (i) that factory, dry dock, graving dock, those premises or that land is or are wholly appurtenant to the ship-building undertaking carried on at a shipyard or other works in which the acquired company had an interest in possession on 31st July 1974 or is or are mainly appurtenant to property or rights which are wholly appurtenant to that undertaking; or

  (ii) that factory, dry-dock, graving dock, those premises, that land, that property or those rights, as the case may be, cannot reasonably be severed from the ship-building undertaking.'

  Schedule 2, page 82, leave out lines 19 to 30.
  Schedule 2, page 83, line 8, leave out 'a ship repairing company'.
  Schedule 2, page 83, line 38, leave out paragraph 3.
  The amendments which fall within Item No. 2 are naturally divided into two classes. The first four suggested amendments—the three on page 599 and the first one on page 600 of the Order Paper—deal with the transfer of assets between one firm and another or different parts of the same firm. My hon. Friend the Member for Tynemouth (Mr. Trotter) will be speaking to those if he has the good fortune to catch your eye, Mr. Deputy Speaker. I shall address myself particularly to the remaining parts of Item No. 2 appearing on page 600.
  Originally it was thought that it might be for the convenience of the House to discuss Item No. 3 with Item No. 2, because the last three parts of Item No. 2 work, as it were, in parallel with Item No. 3. Perhaps I may allude in passing to the reason for that. If, when the time comes, the House should see fit to pass Item No. 3, the effect would be to remove all ship repairing firms from the Bill since there were no ship repairing firms which, at the last annual general meeting before 31st July 1974, presented accounts which showed that they, or the individual firms plus firms associated with them, had a turnover of at least £3,400 million. However, as Mr. Speaker said, that is a matter to which we shall return when we come to Item No. 3.
  The suggested amendment in Schedule 2, page 82, to leave out lines 19 to 30,
  260
  would leave us with a vacant list of ship repairing companies. It is entirely in line with the wish expressed in many parts of the House that ship repairing should be excludeed from the scope of the Bill.
  The Leader of the House endeavoured to seduce our Liberal colleagues by raising the ghost of Mr. Asquith, who many of us thought was sleeping peacefully in his grave. It occurred to me that a further visitation of the ghost of Mr. Asquith might be entirely appropriate in the course of this debate. Therefore, I am inviting the ghost of Mr. Asquith to put the House in mind of what the real live Mr. Asquith said in Vol. 62 of the Fifth Series of Parliamentary Debates on 12th May 1914, when as Prime Minister, he was addressing the House concerning the nuts and bolts of the suggested amendment stage. He said:
  "What is called the Suggestion stage is not really a stage at all, but it is a power which is reserved to this House by the proviso in the Sub-section, the effect of which I have already stated. The suggestion of Amendments was intended to deal, and to deal only, with exceptional cases. What are those exceptional cases? In the first place, there might be possibly, there may be, cases in which subsequent consideration of the Bill, as originally passed by this House and rejected by the House of Lords, shows some patent mistake or error. Of course it would be absurd that this House should be required to pass, over the Veto of the House of Lords, a Bill in which such an error appears, on the face of it, without the opportunity of correcting it. That is a possible case, and the case which was intended to be provided for. But there is another case in which, I think, the proviso with regard to Suggestions was intended to apply. It was intended, I think, to apply to Amendments suggested here consistent with the principle and the governing purpose of the Bill, having regard to which time and discussion have shown that there was something, at any rate, in the nature of general agreement."
  He then went on to quote from himself speaking earlier, as reported on 23rd June 1913, when he said:
  "This Suggestion Clause was intended to provide an opportunity, if the House desired, both in the second and in the third Session for submitting and discussing, and it might be for Divisions, in the House of Commons, changes in the Bill consistent with its governing purpose, and seen upon reflection to be improvements, either as correcting inadvertencies and mistakes, or as mollifying and making more acceptable its substantial provision."—[Official Report, 12th May 1914; Vol. 62, c. 952–3.]
  The ghost of Mr. Asquith may now retire in peace.
  What are the governing provisions of the Bill? First, its name is the Aircraft and Shipbuilding Industries Bill, not the Aircraft and Shipbuilding, Ship Repairing, Warship Construction, Missile Construction and Marine Engine Industries Bill. It is quite clear, as indeed the Long Title says, what it had in mind. However, as some time has now effluxed since the House considered the Long Title, it might be reasonable to put hon. Members in mind of it. It says that this is a Bill to
  "Provide for the establishment of two bodies corporate to be called British Aerospace and British Shipbuilders, and to make provision with respect to their functions; to provide for the vesting in British Aerospace of the securities of certain companies engaged in manufacturing aircraft and guided weapons and the vesting in British Shipbuilders of the securities of certain companies engaged in shipbuilding and allied industries; to make provision for the vesting in those companies of certain property, rights and liabilities; to provide for payments to British Aerospace and its wholly owned subsidiaries, for the purpose of promoting the design, development and production of civil aircraft; and for connected Purposes."
  By the end of the prolonged last Session, which most of us were glad to see end—some of us began to wonder whether it ever would end—the Government had passed through the House by one vote, however much disputed, and had got through the other place a Bill to bring into public ownership the aircraft manufacturing and shipbuilding industries. I do not think that that will be in dispute. What was in dispute between the two Houses was whether ship-repairing in particular should be brought in as well.
  The House will remember the engaging occasion when the hon. Member for Liverpool, Walton (Mr. Heffer) told us of his professional experiences as a joiner, when he said that he was equally capable of practising those skills in joinery in shipbuilding or ship repairing. Quite so, and we do not doubt that he would also be able to earn his living, were he ever in need of doing so, by making G-Plan furniture in High Wycombe.
  4.45 p.m.
  But the Government have not considered that the furniture and cabinetmaking industries should also be encompassed in the Bill because the hon. Member for Walton possesses skills, hypothetically, which are equally useful in
  262
  making G-Plan furniture, in making furniture or adornments or fittings inside a ship under construction or in altering a ship in the course of repair or refitting. Therefore, although his contribution may have been a true account to the House of his particular skills, it advanced no further the case for including ship repairing within the compass of a Bill which, according to its own Title, is concerned with the aircraft and shipbuilding industries.
  There are many parts of Britain where firms in these two types of industry are not only clearly distinguishable but uniquely situated. For instance, in Falmouth one finds ship repairing rather than ship construction, and this is so in many other areas. They are distinct industries. I do not doubt that, if he is called, my hon. Friend the Member for Tynemouth will be drawing attention to the fact that if the House decides to excise ship repairing from the Bill by way of suggested amendments to their Lordships, we should have some confidence that their Lordships of all parties would not treat such suggestions with any hostility but would welcome them.
  What we would want to leave in the Bill is a viable ship building industry and not an overlap and confusion between shipbuilding and ship repairing. The first four parts of this widespread Item No. 2 would have just that effect, so that firms which will fall to be brought into public ownership as shipbuilders may nevertheless hive off parts which can stand on their own feet as ship repairers, so that they can remain as ship repairers within the private sector should this Bill as a whole pass into law, nationalising shipbuilding and aircraft construction.
  The suggested amendments to Schedule 2 included in this Item first of all suggest to their Lordships that they should leave the Bill vacant on page 82 of the names of any ship repairing companies. That is a reasonable and sensible step if it is intended not to nationalise any. The second amendment to Schedule 2, in page 83, line 8, is to do with the categories to be brought into public ownership, as will be seen. By leaving out the words "a ship repairing company", it would then make sense of Schedule 1, which would otherwise be nonsense, since it would not include any ship repairing

  263
  companies after they had all been left out pursuant to the first suggestion of leaving out lines 19 to 30 on page 82.
  The third suggestion relating to Schedule 2, in page 83, line 38, to leave out paragraph 3, would remove the definition of ship repairing. If ship repairing is being taken out of the qualifying conditions in which a firm is to be taken into public ownership, it would be redundant, and indeed otiose, to leave in a definition of ship repairing to no effect.
  Therefore, those suggested amendments stand together as a cohesive and sensible means of removing ship repairing from the Bill. What they do not do is to wreck the Bill or leave the rest of the Bill unworkable. It is important to stress this because the amendments would not have the effect of blocking the operation of the Parliament Act on the remainder of the Bill. If any hon. Member who has not grasped this point claims that these are wrecking amendments, it can only be because he or she has read neither the Bill nor the suggested amendments taken together. Whether Labour Members approve of taking shopbuilding out of the compass of the Bill, they cannot claim that to do so would wreck the Bill. It would not.
  Some hon. Members may wonder, even at this stage, why ship repairing should be taken out of the Bill when shipbuilding is to remain in it. Far be it from me to justify leaving shipbuilding in the Bill. That is no task of mine, nor is it, an action that I support. My task is to justify removing ship repairing from the Bill, even though the Government are determined to use a majority—if they can find one—to enact, under the terms of the Parliament Act 1911, as amended by the Parliament Act 1949, their proposals to nationalise the shipbuilding industry.
  The Government claim that ship repairing cannot be separated from shipbuilding. That is manifestly not the case because there are many examples of its being physically separated. If I may take an analogy: when selective employment tax was introduced by a previous Labour Government there were some interesting crossovers and anomalies in it. A task performed by a car manufacturer did not attract selective employment tax, but exactly the same task performed by a garage did.
  That was not considered by the then Labour Government as a reason for putting both services in the same tax category. If an engine was reconditioned by the British Motor Corporation no selective employment tax was payable by BMC. But if the identical operation was performed by a local garage—the crank reground, the camshaft possibly reground, the bearings replaced, the timing chain replaced, the valves replaced, and the valve seats recut—tax was payable.
  The previous Labour Government never accepted as an argument for treating both services in the same way in tax law the fact that identical operations were performed. Therefore, it ill behoves the present Labour Government to claim that because the hon. Member for Walton can put up a cupboard in a new ship or install a cupboard in a ship that is being refitted, both shipbuilding and ship repairing should be placed in the same category and taken into public ownership. Yet that is the case that was made so eloquently, although so irrelevantly, by the hon. Gentleman, who has, alas, deserted the House today.
  What, then, do the Government claim? Whatever they may claim, it is clear what they really mean. Even the Economist has discovered that Ministers are cross. I quote from page 22 of the issue of the Economist of 4th December:
  "Ministers are cross. They regard complaints about hybridity as a nitpicking tactic and they are very critical of the advice which the Speaker has received. They privately admit that there are elements of hybridity in the Bill, as there have been in most nationalisation measures. They feel that there might be a more genuine hybridity point to be made on the marine engine manufacturing clauses than on the ship repairing."
  If Ministers have told the Economist that they believe that there might be a more genuine hybridity point to be made on the marine engine manufacturing clauses than on ship repairing, why have they not told the Clerks of the House?
  The Minister of State, Department of Industry (Mr. Gerald Kaufman): We have not told the Clerks of the House because we did not tell it to the Economist, and it is not true.
  Mr. Maxwell-Hyslop: I would think it highly improbable that the hon. Member for Manchester, Ardwick (Mr. Kaufman) would know what his fellow Ministers

  265
  have been saying to the Press. There have been so many leaks to the Press which have caused great embarrasment to the Government that if he does know which of his colleagues make a practice of leaking to the Press, he should rush to the Prime Minister and tell the right hon. Gentleman. He might be promoted for his pains.
  It has been a standing complaint of the Government that issues of hybridity have been raised too late. Yet here are Ministers intimating to the Economist that they are aware of hybridities in the marine engine manufacturing clauses of which I am certainly unaware and of which I suspect the House is unaware. It is quite possible that the Public Bill Office is also unaware of them.
  Ministers cannot, with any degree of sincerity, complain to the House about late disclosure of aspects of hybridity when they prefer to communicate their fears on this subject to the Economist rather than to the House of Commons or to the authorities of the House. I make no complaint that Ministers have communicated their fears on that matter to the Economist. That, at least, was a very sensible thing to do. But in their sudden assumption of truthfulness and frankness, they should have extended the same courtesy both to the House of Commons and to Officers of the House.
  That, of course, was one of the major reasons why the House of Lords decided to remove, by amendment, the ship repairing clauses. In view of this revelation in the Economist perhaps the Lords should look closely at the marine engine manufacturing clauses also.
  The Leader of the House complained with considerable emotion last Wednesday about a large number of things. One of them was that the Lords had not subjected the Bill to the hybridity procedure, which would mean examination by a Select Committee, when they went through the Bill during the last Session. Yet we can be entirely certain what would have happened if their Lordships had subjected the Bill to weeks of examination by a Select Committee, and had then, by amendment, taken out ship repairing. The Leader of the House, who is not with us today—perhaps he is somewhere with the hon. Member for Walton—would then have complained
  266
  that their Lordships had used a device to waste many weeks of time when progress might have been made on the Bill, already knowing in their hearts that they intended to take out ship repairing by amendment.
  We can be morally certain that the Leader of the House would have criticised the Lords equally on that account if they had taken the action which he now criticises them for not having taken. That is humbug personified. However, I hope that their Lordships will read our Hansard, just as we read theirs, and notice what the Leader of the House took the trouble to put on record—that he thought the Lords ought to subject the Bill to the full rigours of the procedure laid down by Standing Orders for dealing with Bills which are prima facie hybrid, if there are reasonable grounds for supposing that.
  In the last Session, Mr. Speaker announced that the Bill was prima facie hybrid, but the Government refused to allow it to go to the Examiners, the Standing Orders Committee or a Select Committee. They passed some amendments on Report, but, as the Bill did not go to the Examiners after that, it left this House, by form, if not by content, the same in respect of the item on which Mr. Speaker had ruled. It was still a Bill which was prima facie hybrid. However, the Government believed that they had removed the hybridity, on which Mr. Speaker had ruled, with their amendments on Report.
  5.0 p.m.
  On this occasion, if the Bill goes to their Lordships without amendment by this House, it will, since the Public Bill Office has found it to be prima facie hybrid, enter the House of Lords in the same condition as well as with the same form and status as it left this House—as a Bill which has been found by the Public Bill Office to be prima facie hybrid but which, unlike last time, has not been altered since that finding. Presumably, another place will, when their Public Bill Office looks at this measure, with exactly the same evidence before it, come to the same conclusion arrived at by the Commons Public Bill Office.
  How can we save them from putting themselves to that great labour? One thing of which we can be entirely certain

  267
  is that if the Bill goes through the hybridity procedure in another place it will take a certain amount of time; and we can also be certain that, whatever comes out at the other end, a number of greatly-enriched lawyers will emerge from the procedure.
  Leaving aside for a moment the question of the potential hybridity in the marine engine part of the Bill, about which one or more Ministers have communicated their anxiety to the Economist, if my proposed amendments are suggested to and accepted by another place, the entire hybridity procedure could be cut out in good faith and the Bill could reach the statute book by agreement between the two Houses instead of as a result of the Parliament Act.
  It goes without saying that if the Bill is to be subjected to the hybridity procedures because of the intransigence of the Government—nothing else will force this action—in refusing the suggested amendments, it may be October or November of next year before the Bill receives the Royal Assent, if it does, because the Parliament Act works only when another place has rejected the Bill or when this Session comes to an end, the Bill having passed through this House the second time in a second consecutive Session more than one year after 2nd December, the date on which it was originally introduced here. If their Lordships are forced by the Government—and no one else will force them—to refer the Bill to a Select Committee for the examination of petitions, the Government will, once again, have delayed the passage of the Bill on to the statute book.
  There has been an avalanche of humbug from the Government Front Bench in the last Session and in this. Ministers have talked about jobs being at risk. If the delay in the Bill reaching the statute book has put jobs at risk, it is the Government who are deliberately doing this because they have deliberately delayed the passage of the Bill.
  I do not assert that the delay has put any jobs at risk. That is the Government's assertion, but it is they who have caused the major delays in the passage of the Bill. They withdrew it in the Session before last; they allowed between five and six weeks to elapse between 7th June and when they tried to make further
  268
  progress in this House; they refused to allow it to go to a Select Committee of this House which could have got the whole thing over with in about three weeks. These deliberate delays are wholly attributable to the Government. They refused to accede to the amendments upon which their Lordships insisted. Had these amendments been accepted, the Bill would have been on the statute book by now.
  From all this, we can conclude only that the Government wish to delay the Bill—and we know why. They wish to make certain firms uncreditworthy by threatening them with nationalisation in the hope that they will collapse so that British Aerospace and British Shipbuilders are not encumbered with firms by which they do not want them to be encumbered. That is the tactic, and it is totally dishonest for the Government to accuse opposition parties of being callous about jobs.
  The Government, with quite unprecedented cynicism, are deliberately delaying their own legislation, deliberately to create unemployment. This must be said and repeated because it is possible that there are still some employees in the aircraft and shipbuilding industries who are not aware of the ride for which they are being taken. It is to be hoped that they will be made aware of the situation so that they can contact their Labour Members and Ministers and tell them "We do not care about nationalisation. We care about our jobs, and the Labour Government, which many of us helped to elect, are deliberately and cynically sacrificing our jobs for purely political reasons".
  The amendments concern the removal of ship repairing without wrecking the Bill. This is an action in good faith rather than in bad faith. There has never been any pretence by this side of the House that we did not want to take out ship repairing from the ambit of the Bill if it did not lie within our power to prevent the enactment of the Bill as a whole.
  It is an undeniable fact of public life that in the by-elections which have taken place since this matter became a major issue of public policy a large proportion of the electorate has deserted the Government. The Government's best course, having reached this stage, would be to announce that they will accept the suggested amendments.
  Mr. Kenneth Warren: I support the eloquent and well-prepared speech of my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop). I shall be brief in support of the suggested amendments, because he has made a sound and cogent case for them, well illustrated by the way in which the Government have defined ship-repairing companies. Through that definition the Government have led themselves and the House into the problems of hybridity that we have repeatedly brought to their attention but to which they have repeatedly turned blind eyes and deaf ears though not, unfortunately, shut mouths: they have simply kept on talking.
  The Government continually represent themselves as supporting the cause of the workers in defending their reasons for promoting the Bill, but, to my great dismay, they have turned away from the workers in their hour of need. They are doing so in wanting to grab all three industries—industries which they have so inadequately defined that in another place the Bill must merely plough back into trouble again.
  I am sure that my hon. Friend is right, for all the reasons he has advanced, in saying that the Government do not really want the Bill. I go further. I do not believe that they have the opportunity to get it as an Act because the voting of this House is no longer relevant to its progress. It is the IMF which rules at Westminster now. If it says "Thou shall not have this Bill", there will be no Bill. The Government are being pushed into a corner in which they have no option but to repeat previous errors. They have advisers who, I am told, are capable men. Surely they cannot have failed to notice these problems between February 1974 and now. Yet over and over again the same errors are repeated in legislation.
  The hybridity situation caused by the Government could not only block the passage of the Bill but do tremendous damage to companies both within and outside the scope of the Bill, particularly those outside it, because the world markets in which they have to trade will ask "What is your future? There was doubt about you in the House of Commons. Why were you not included in the Bill? Why was such a strange net
  270
  thrown across the activities of ship-repairing companies? Why were some included and others excluded?"
  The people who will suffer are not just the investors, about whom the Government talk so much, but the workers and their families and the communities in which they live. It is extraordinary that this Socialist Government, who always claim to speak for the workers, refuse to do what is necessary to help them.
  These straightforward amendments would preserve the Bill, and on this side of the House we would, historically, accept that as the will of the House. The votes having been recorded, we sought to preserve the Bill, but when the crunch came we found that the workers involved did not really matter to the Government.
  I remind the House of the historic words of the Minister of State at the Second Sitting of the Standing Committee. He told the truth when he said that the Bill was about the advancement of Socialism.
  5.15 p.m.
  Mr. Neville Trotter: I wish to address my remarks to the whole subject of ship repairing, but will start with the particular case of Vosper. The technical amendments I support would remove from the nationalisation net the Southampton shipyard operated by Vosper. They are needed as there is no mention in Schedule 2 of Vosper among the ship-repairing companies, because its repair yard is organised as part of the main Vosper Thornycroft group, which is included in the nationalisation as a shipbuilder.
  What are the Government's plans for the industry? Indeed, what are their plans for all the industries to be nationalised? I have repeatedly asked this question over the past year but without any answer. If I repeat the question today, perhaps Ministers will feel a degree of shame that they have never answered it. Therefore, again I ask what are the Government's plans for the ship-repairing industry apart from changing its ownership. I shall be happy to give way at once if a Minister feels able to answer.
  The nationalisation of ship repairing appears to be based on the report by PA Management Consultants in December 1973 to the then Secretary of State

  271
  for Trade and Industry. It was the result of an inquiry established in February 1973. It was published only on 17th June 1974. That date is relevant because at the time the then Secretary of State for Industry said that discussion was called for, and on 3rd July he wrote to the shipbuilders' national association saying that he would appreciate its written views on this important matter.
  But on 31st July, before anyone had time to consider the report adequately and to submit views, he announced that he intended to nationalise the ship-repairing industry. That is what the Government call "consultation". They approached it with a closed mind. Nationalisation is based on their manifestos in two General Elections. I am sick of hearing that argument as an excuse for taking industries into public ownership.
  If the Government will not accept that they are a minority Government in terms of the electorate—and I can understand their argument because, as they have said, there have been such instances with other parties in the past—they nevertheless cannot avoid the fact that the Workington and Walsall, North by-elections have proved just how out of touch are their policies with the present thinking of the electorate. They have no moral mandate for their dogmatic plans.
  The PA report presented an image of a declining ship-repairing industry. But it did not spell out the reasons for that decline. First, there are almost no liners left. At one time a great deal of repair work was brought to our yards by the huge fleet of British liners, but now one can count our liners on one's fingers. Secondly, the coastal traffic has practically ceased. I was born in the North-East port of Blyth. In my youth there were probably 60 or even 70 coastal vessels in harbour there at any one time waiting to load coal for Europe or the South of England. Now there may be only two or three. It is the same story on the Tyne and at other ports. Hundreds of coastal vessels have gone.
  Thirdly, the long-distance cargo traffic has more and more gone to the large container ships, and the rôle of the tramp steamer has been reduced in importance. We have larger and fewer ships for the long-distance trade. While world trade
  272
  as a whole has increased, there has been a particularly large increase in the trade which does not involve Europe.
  Again, a ship owner wanting a new ship to be built can go almost anywhere in the world for it, but the ship-repair yards need to be near where the vessels in need of repair find themselves. If, however, a ship needs repairs, common sense obviously says that those repairs must be carried out somewhere close to where the ship is operating. As the Third World has developed, more and more of that world trade is carried on between countries far distant from Europe.
  One's own everyday knowledge of cars suggests that these have tended to get more reliable, at least in theory. The same has happened in shipping. We now find that a modern ship requires far less maintenance and there is a longer interval between regular maintenances. That has led to a reduction in the work load of the ship-repair industry not just in this country but in the whole of North-East Europe. The United Kingdom repair of ships has sadly declined for the sort of reasons that I have outlined. Furthermore, the United Kingdom fleet of ships has fallen from two-thirds of the world tonnage to only one-tenth. That in itself is a major factor affecting the work load for our repair yards.
  One conclusion of the report by PA Management Consultants which has been overlooked by the Government—I have not heard anyone on the Government Benches refer to it—is that, relative to our competitors in Northern Europe, we are doing better. Everyone in Europe is having a difficult situation with a decline in the number of vessels, but Britain has actually done better than our competitors. We have obtained a higher percentage of the work load. The Government have not mentioned that statistic from the report.
  The industry is attacked for being fragmented. Of course it is fragmented. Simple geography requires that the yards should be spread around our extensive coastline. The coastline of Britain measures 3,000 miles. By contrast the coastline of Germany, Holland and Belgium—three countries together—is only 1,000 miles. This naturally leads to a fragmentation of the ship-repair industry, because the repair yards are

  273
  located where the ships are and the ships go all around our 3,000-mile coast.
  The PA report says that this is an industry dependent on casual labour. That accusation has been most emphatically denied by the ship repairers who assure me that this has not been the case for quite a number of years.
  There has been a suggestion that there has not been enough capital invested in the ship-repair yards. It is hardly surprising that in the past two years there has been little or no investment. It seemed reasonable to suppose that under the disgraceful compensation terms proposed by the Government one would lose one's money if one put any more investment into plant in a ship-repair yard at this time.
  Let me warn the House against being led astray by thinking that if one spent enough capital in a ship-repair or shipbuilding yard, one could solve the problem. In shipbuilding Harland and Wolff is an example of the folly of that argument. It has had drastically increased overheads to service the enormous capital debt that has been incurred and full advantage of that investment has not been obtained.
  I suggest that often the local garage man, with a limited amount of capital, can carry out better repairs to one's car than the large city centre garage with tens of thousands of pounds available for plant. Something similar is the case in many of the repair jobs carried out by the ship-repairing industry. The relatively small man, with substantially less capital, is often best fitted to carry out the repairs.
  I do not believe that there is a salvation for this sector of British industry through massive capital injection. Indeed, it could be that the burden of debt could substantially worsen the prospects of that industry which, I believe, are not nearly as bad as has been made out by Ministers. Fundamentally, as Conservatives have repeatedly said, this is a service industry which is different from shipbuilding. The simile between the garage and the car manufacturer is very appropriate.
  In my own constituency we have Swan Hunter Ship Repairers and last year that one company alone repaired 306 vessels. But in contrast further up the river Swan
  274
  Hunter Shipbuilders built six vessels. That gives the relationship between the two industries. One has massive orders fairly well spaced out in terms of time and the other is a very active day-to-day business depending entirely on the service that it gives to the individual shipowner.
  The managements of ship-repair yards are thinking in terms of days and not years. In that respect they are in a different situation from shipbuilders. Efficiency in terms of cost and speed of delivery are the essential factors if the ship-repair yards are to continue to have a future.
  I fail to see how anyone can suggest that nationalisation will lead to greater efficiency. The United Kingdom customers are appalled by the idea. The General Council of British Shipping has made quite clear that while it is not taking a line on the nationalisation of shipbuilders, it is appalled by the suggestion that the repair yards should come into the nationalised industry.
  The image of nationalisation abroad is understandably dreadful and the recent NEDO report reinforced that image abroad. I shall not detain the House by going through that report, but we all know that the NEDO report was absolutely right about the nationalised industries. Their giant bureaucracy with constant arguing and change to their system of management is absolutely the worst form of organisation for a highly skilled, fragmented industry like ship repairing. There could not be a worse form of organisation for that industry.
  I have heard it suggested that one reason for the nationalisation of ship-repair yards is that they are profitable. It seems that once one is on the dogmatic list for State ownership nothing one does will make one escape. If one is not profitable one is letting the nation down and if one is profitable one is behaving immorally. There is a third category—that one is owned by the Americans. My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) argued in an excellent speech that Marathon had been excluded from nationalisation because it was American owned.
  My hon. Friend the Member for Hastings (Mr. Warren) put his finger on it when he talked about the future and the continued employment for the people

  275
  in those yards. Some of them have been deluded by Ministers into believing that nationalisation will provide a security of job for the rest of their lives.
  All one need do is refer to the case of Greenwells. As a result of the Court Line collapse, quite a number of ship-repair yards in the North-East are now State owned. But what has happened? We have seen Greenwells close and several hundred men lost their jobs. The shop stewards' representative there said:
  "If private enterprise had tried to perpetrate some of the evils that this present Government have done on the members employed in this industry, probably the whole river would have been out on strike, let alone just Greenwalls. They would never have dared to attempt to get away with the skullduggery".
  I hope that this message will be taken to heart by anyone in the other yards now threatened by nationalisation who thinks that by passing into public ownership their future is assured.
  I believe that there is a considerable degree of ignorance among Ministers about the real nature of ship repairing. The Minister of State referred to how he walked from the Wallsend slipway into Swan Hunter ship repairers. It is about a one-mile walk. Probably he did not walk to that particular repair yard at all but went to the small Swan Hunter repair yard next to its main building yard at Wallsend.
  Mr. Maxwell-Hyslop: The Minister is indicating that that is right.
  Mr. Trotter: I am sure that the Minisster is capable of walking a mile, but he is such a busy man that he has not got the time to do it. It is a situation which many of us in the House fact. If one reads back through Hansard and the comments of various Ministers about ship repairing, there seems to have been a fundamental ignorance of the nature of this industry.
  The Secretary of State referred to the ship-repair industry being closely integrated with shipbuilding. Nine out of the 12 repairing companies listed for nationalisation are quite separate and the other three are separately managed. Ministers referred to the exchange of labour, and to repairs being done by those otherwise engaged in the building of ships. But it is only in one case—in
  276
  Scott Lithgow on the Clyde—that this is practised. In the other cases this is not so.
  5.30 p.m.
  A more enlightened and knowledgeable member of the Labour Party is Lord Shinwell, and I remind hon. Members that at one time Lord Shinwell was chairman of his party's shipbuilding and ship repairing committee in this House. He speaks, therefore, with a great deal of knowledge and expertise on these matters, and, although I must not quote from the Official Report of the other House, I draw attention to the fact that he is on record as saying that he believes that it would be a disaster for the ship-repairing industry if it were taken into public ownership. He believes that there would be great harm to the nation, and that it would do no good either to the industry itself or to the workers in it.
  I believe that that knowledgeable and experienced member of the Labour Party is more in tune with reality than Ministers are, and I am therefore pleased to have an opportunity once again to speak in favour of the exclusion of ship repairing.
  Mr. Robin Hodgson: I am grateful for this opportunity to speak, because my constituents have been in a peculiar situation throughout the discussions on the Bill thus far. During the past Session they were effectively disfranchised and had little opportunity to express an opinion to their Member of Parliament, which was to their disadvantage, but, on the other hand, they have had one great advantage, which has come to few British citizens recently, in that they had an opportunity to vote directly on the Labour Government's programme and to express their opinion in a by-election. My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) has already referred to the results of that by-election.
  The citizens of Walsall, taking a broad view of the world shipbuilding trade and of United Kingdom shipbuilding in particular, are concerned because they feel that substantial sums of taxpayers' money are to be devoted to the preservation of the industry, and they wish to see precisely what impact the expenditure of their money through taxes will have of their money through taxes will have,

  277
  and they want to know how the money will be spent.
  First, I ask the House to look at the broad picture of world shipbuilding since the war. In 1949 world launchings were 3·1 million tons, and they rose to 21·7 million tons by 1970—a sevenfold increase over 21 years. But this substantial increase concealed significant changes in the pattern of world production. Historically, the main maritime Powers were also the major shipbuilding nations, and there were relatively few exports from one maritime nation or shipbuilding nation to another. There was relatively little world trade in ships.
  In recent years, however, there has been a dramatic change, with the result that in 1970 of British-registered ships 74 per cent. were launched in foreign yards, and the British share of world trade had declined from 74 per cent. in 1947 to 6 per cent. in 1970.
  Why did the British industry fail to expand its production in post-war years in line with growing world production? Second, will the implementation of the Government's proposals in the Bill have any effect on the factors involved?
  There are four main reasons why British shipbuilding has had its difficulties in the post-war period. First, there has been a shift in world demand away from sectors in which the United Kingdom has specialised—that is, warships, passenger liners and specialised vessels generally—towards large tankers and dry cargo ships. As a result, United Kingdom production facilities have been left under-utilised.
  Second, there has been insufficient technological progress in construction methods in British yards, and British firms have undertaken insufficient capital investment to produce ships of over 200,000 tons, for which world demand has grown the fastest. Thus, the number of man-hours per ton of output in Sweden and Japan is now 20 to 30, whereas in British yards the figure is 70 to 80 man-hours.
  If we are to achieve reductions of labour input of that magnitude in British yards, we can do it only by massive capital investment to achieve flow-line production from the steel stockyard at one end of the yard, through fabrication and to final construction. This will take place
  278
  only if there are huge—I mean huge—rebuilding and capital investment programmes in British yards.
  Third, there is the multiplicity of unions within the industry, a factor which has led to frequent demarcation disputes and excessive wage claims. The Trade Policy Research Centre estimates that throughout the late 1960s and the early 1970s wages rose by 10 per cent. per annum while the fixed prices contracted for by the shipyards allowed for only 3 per cent. or 4 per cent. per annum.
  Fourth, and even more important than the other factors to which I have referred, there is the impact of the protection given to their own domestic shipbuilding industries by other Governments. Even if we were able to make labour relations in our yards better, if we were able to achieve high capital investment and if our shipyards were better placed to build the ships for which world demand is growing, such is the protection given to their own industry by many major maritime nations that we should not be able to compete effectively.
  Against that background the Bill is irrelevant, and the Government have not shown how their proposals will solve the problems which I have outlined. As I say, there has been a shift in world demand for ships. How will the Government's proposals change that? There has been a lack of technological progress and investment in British yards. How much money do the Government propose to spend to change that?
  Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. I hope that the hon. Gentleman will in due course relate what he is saying to ship repairing.
  Mr. Hodgson: Certainly, Mr. Deputy Speaker. I have referred to the multiplicity of trade unions. How will the Government ensure that there are guarantees of behaviour and fewer union disputes within the yards?
  How will the major requirements to which I have referred be tackled by the Government through their proposals in the Bill? The citizens of Walsall, North have demonstrated that there is little or no popular support for the Bill. Apart from my hon. Friend the Member for Cambridge (Mr. James), I have most recently

  279
  been on the hustings. I have talked to many people in Walsall, North, and they have made plain to me that they see the Bill as irrelevant and damaging, as well as potentially hugely expensive for the taxpayer. They showed what they thought in the by-election on 4th November, just as the electors of Cambridge showed their opinion on 2nd December.
  Mr. Dafydd Wigley: It is my pleasure to congratulate the hon. Member for Walsall, North (Mr. Hodgson) on his maiden speech. [HON. MEMBERS: "No, his second speech."] At any rate, it is the first speech which I have heard him make, and it was certainly his maiden speech on this Bill. Since the hon. Gentleman has obviously done some very detailed research into the subject, I am sure that he would have found an admirable slot in the debates we have had about these industries over the past year or so.
  The nationalisation of the aircraft and shipbuilding industries, together with as many associated industries as can possibly be dragged in under the same umbrella, is becoming the longest running farce in Whitehall and Westminster and, whatever happens—whether these industries are or are not to be nationalised—it is essential that a decision be reached as quickly as possible. The greatest danger to the industries is that the uncertainty of the past six months in particular will be prolonged for another six or nine months if, as the hon. Member for Tiverton (Mr. Maxwell-Hyslop) suggested, delays may take place in the House of Lords. If these uncertainties continue, only one set of people will be the losers, and they will be the employees.
  We cannot expect the industries to live with uncertainty. We cannot expect their customers to place orders with this uncertainty hanging over them. The uncertainty applies not just to the ship repairing industry but also to the much larger aircraft and shipbuilding industries.
  As the House knows, we on this Bench have taken the line that the Bill is very much a curate's egg. There are some parts of it which are worth while, there are some parts which are necessary and there are some parts which we might not have liked to start with but with which we are now willing to live. It was for
  280
  that reason that my hon. Friends and I abstained on the Second Reading second time round, taking the view that it was essential to get an answer as quickly as possible. Having done that in order to facilitate the progress of the Bill, I come back to the same arguments as I made during our debates in the last Session concerning the total irrelevance of nationalisation of the ship repairing industry.
  Pertinent points have been made already by many hon. Members, and I underline them. There is a need for speedy reaction in the ship repairing industry, which is a service-based industry, and a need to take instant decisions on whether to go ahead. These are not the sort of decisions that will come from centralised bureaucratic State corporations. Swift movement is so necessary to enable us to compete effectively with our overseas competitors in this industry.
  The nature of the ship repairing industry itself and the problems facing it are very different from those facing the shipbuilding industry. I accept that there is a certain amount of logic in State participation in the aircraft industry. I see dangers in it—dangers are inherent in any nationalisation—but I also see the logic. I see the crisis facing shipbuilding, and believe that there will be closures of yards whether there is nationalisation or not. What I cannot see is the need or the relevance to nationalise the ship repairing industry. It can have no possible relevance whatever.
  If the Government are determined to press ahead and insist on this small 5 per cent. of the Bill and jeopardise the other 95 per cent. relating to the aircraft and shipbuilding industries which they have very fixed, firm and commendable reasons for nationalising, it strikes one as a very odd situation. If it is a decision of the Government's own making and not one which has been imposed from outside, we must question the Government's reasoning. The only conclusion we can arrive at is that the Government want to see the Bill go forward in full to show up another Chamber, and to have a reason for constitutional changes for the other place in their next election manifesto. Also the Government want to show that it is the failure of the

  281
  capitalist system which has led to the closure of shipbuilding yards, even though this is inevitable anyway with or without nationalisation, so that they can then take over the rump of the industry at a lower price in the hope of doing something with it later.
  None of those reasons is good enough to enable the Government to look into the eyes of the employees in these industries. The Government are writing off the employees in order to make spurious political capital. The only option open to Back Benchers on the Government side is to pass the amendment cutting out ship repairing, in order to see their objectives in relation to the shipbuilding and aircraft industries, with which I do not agree entirely but which I recognise, come forward as quickly as possible.
  The alternative is for the Government to withdraw the whole Bill immediately and say that they will not go ahead. One way or the other, the result is an immediate decision which will allow the companies concerned to know exactly what they face in the next 12 months.
  The worst of all possible worlds is the possibility of the Bill going to another place without this suggested amendment, going on for discussion on hybridity in the House of Lords—taking another six to nine months—and then perhaps losing it altogether at the end of the day. That is the worst possible disservice that the Government can do to the employees of all the industries involved in the Bill. If the Government will not face up to this situation, the onus is on Back Benchers to take the decision for them.
  5.45 p.m.
  Mr. Donald Anderson: We have heard that speech from the hon. Member for Caernarvon (Mr. Wigley) many times. In fact, this whole debate is rather like a re-run of a bad film.
  The hon. Member for Caernarvon suggested that the Government's unwillingness to yield the ship repairing part of the Bill was a sinister plot designed to enable them to go to the country and call for the reform of the House of Lords. He suggested that it would give the Government an opportunity to say that the House of Lords, having done this to the Bill, was irresponsible and unrepresentative. In my view, reform of the House
  282
  of Lords can stand on its own feet, and is justified in any event. I would give far greater weight to the reform of the House of Lords than to the devolution measure which the hon. Member for Caernarvon and many of his friends are urging forward.
  The hon. Member also suggested that there was a danger of nationalising an industry which required speed of decision and turnaround. He suggested that a vast bureaucratic structure would stifle enterprise and turn away business which would have otherwise come to this country. That argument may have had some justification before the Government amendment to Clause 5 at the start of the long march on this measure. Following that amendment to Clause 5, there is no possible justification for his comments. That amendment, with its decentralisation—which I should have hoped would have attracted some response from the hon. Member—will provide separate profit centres, and it is a recognition by the Government that the monolithic structure was inappropriate to the operation of this industry.
  The amendment allayed my own concern about ship repairing and the future employment prospects in the Bristol Channel. Had the headquarters of the corporation been sited in the North-East, and given the relatively small work force in the Bristol Channel compared with the greater ship repairing capacity in the North-East and other centres, I feared that there would be strong political pressure which might have led to the closure of yards in the Bristol Channel. But the Government recognised the case and made a substantial concession. I cannot see how the picture of a monolithic structure stifling democracy which the hon. Member has painted has any relevance to the Bill as it is now compared with as it was at the start of the process.
  The hon. Member made a number of other points, including a suggestion that the type of business done in ship repairing is so fundamentally different from shipbuilding that there is no conceivable case for putting the two elements together in the same Bill. This has been canvassed on many occasions, but the fact is that in many yards there is an interchange of personnel in refitting and repairing and this argument has been met by arguments advanced by Government spokesmen.

  283
  Finally, the hon. Member made the point that this measure cannot be justified to the work force. I do not wish to be unfair to him, but it is clear that he has drawn most of his inspiration and example from Bristol Channel Ship Repairers, and no doubt from his own constant relationship with that concern. I wonder whether he has visited my yard in Swansea, which employs more than a quarter of the work force of the Bristol Channel, and asked the men there for their views on nationalisation.
  Although they have been subjected to the same blandishments as men in other yards, and given the same encouragement to come to London and meet hon. Members, they have steadfastly refused to jump at the bait. Indeed, they sent a message to the Government, signed by abour four-fifths of the work force at Swansea—a brave gesture in view of what has happened since—saying that they were convinced that nationalisation of their own yard was very much in their interests and in the interests of the ship repairing capacity in South Wales. They have argued that point to me strenuously. There have been a number of unfortunate repercussions—I say no more than that—since then, and there have been a number of restrictions and reactions by the company which perhaps the hon. Member for Caernarvon was not told about during his rather partial collection of facts about the ship repair facilities in our part of the world.
  We have talked sufficiently long about this subject. I think that the arguments have been canvassed at extreme length. Certainly my hon. Friends who, like myself, represent ship repairing interests want the industry to be nationalised as speedily as possible.
  Mr. Wigley: Let me take up the point about the wishes of the employees in the hon. Gentleman's constituency and in other companies involved in ship repair. Given the hon. Member's own extreme enthusiasm for referenda, why did he refuse to support the amendment which would have allowed employees to take a vote on whether they wanted to be nationalised?
  Mr. Anderson: I do not know the views of workers in other yards, but I have been in close contact with the men
  284
  in my yard, and I know that four-fifths of them support nationalisation of their industry. The men have shown me a number of planted dummy letters which were drafted for them by the company. I could show the hon. Member a dossier of them to prove that a large part of the protest is highly spurious and is fomented and encouraged by the company and is ghosted for individuals. I fear that in spite of his normally reasonable approach the hon. Member for Caernarvon has been taken in by this publicity campaign. I am disappointed in him for being so taken in.
  It is clear that the Bill should get through, not only in the national interest, but in the local interest of areas such as mine. The other place should have no rôle in matters such as this. It is wholly unrepresentative and is thwarting the will of the majority of the elected Commons. I and, I am sure, all other hon. Members with ship repairing interests will fully support the Government in this matter.
  Mr. Michael McNair-Wilson: First, I declare an interest. A company of which I am a director has an association with a company in the ship repairing industry.
  I entirely support the suggested amendment so ably moved by my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop). I have listened to all the speeches this evening, but I am still brought back to admiring his great grasp of parliamentary procedure in this complicated matter of hybridity.
  I was interested in the answer of the hon. Member for Swansea. East (Mr. Anderson) to the hon. Member for Caernarvon (Mr. Wigley) when he was asked why he did not support a referendum of workers in the ship repair industry. The hon. Member for Swansea, East seemed to suggest that while he did not know what the workers wanted, he had guessed at a figure of four-fifths of the work force in favour of nationalisation which he felt would get him by in case anybody pressed him further.
  Mr. Anderson: I replied that I did not know what areas other than my own were feeling about the matter. However, I do know what my constituents who work in the industry believe. I have been in constant contact with the shop stewards

  285
  and the men there. The Swansea yard sent a letter to the Minister, signed by 78 per cent. of the work force, supporting the Bill.
  Mr. McNair-Wilson: I am grateful for that clarification. Nevertheless, I suspect that the Government and most hon. Members do not know what those who work in the ship repair industry want. I am not prepared to accept that everything that emanates from British Channel Ship Repairers is necessarily tainted, false or inaccurate. Nor do I see any reason to suppose that Mr. Christopher Bailey is an evil man who is seeking to do down those who work for him. I believe that he is concerned about his business, which has proved extremely successful, and that he wants to continue with it.
  Let us consider the document which we received from the other place on 22nd November setting out the reasons why their Lordships were insisting upon their amendments relating to ship repairing. In setting out those reasons they said that
  "The Lords insist on their amendments in lieu of certain of their amendments … to which the Commons have disagreed … Because the ship repairing companies named in the Bill are likely to be less competitive and less successful and to be able to provide less employment if they are nationalised."
  This gives rise to three questions that the Minister must answer. He must say that he believes that the ship repair companies will be as competitive or more so, as successful or more so, and will provide as much employment or more than at present. If he cannot give those three answers he should adopt a different attitude towards what the other place has said to the House of Commons. It is conceivable that their Lordships are not quite so coloured by party prejudice or by a belief in sticking to some so-called mandate given to them at a General Election which returned a Government with the smallest total of votes ever in our history. Perhaps they can look at the arguments objectively and can advise the House of Commons that if it pursues the Government's policy it will damage, not help, part of the shipbuilding industry—and I include ship repairing in that term—and harm the chances of prosperity both for the country and for those who work in the industry.
  286
  My hon. Friend the Member for Tiverton has explained that the hybridity which may or may not be in the Bill, but which is clearly a source of doubt, could require the Bill to go to Examiners and then to a Select Committee. I was a member of such a Select Committee which dealt with the Maplin Development Bill. I believe its procedure was very similar to that which will apply to this Bill when it returns to the other place. It was a long-winded and painstaking procedure, as it should have been.
  The Minister of State, however, knows perfectly well that such a procedure will cause a great measure of uncertainty about the date upon which this Bill can finally become law. He well knows that uncertainty exists in the shipbuilding and particularly the ship repairing companies which will be left in a state of limbo. That can only harm their chances at a time when any work they can find is crucial to the employment and prosperity of their yards.
  Therefore, the argument has been advanced that the other place are responsible for creating that uncertainty, and possibly the catastrophe, which I think was once referred to by a Minister, if the Bill were not passed. In fact, the responsibility lies firmly and squarely upon the Government. They should not try in any sense to suggest otherwise.
  6.0 p.m.
  Various arguments have been advanced by the Government to support their contention that the whole of the shipbuilding industry must be taken into public ownership. We have had the argument about the party programme. It is suggested that it is written on a tablet of stone and everyone in the nation is waiting to see the Government honour every pledge, the promise of "Back to Work with Labour", although unemployment is running at record levels.
  We have had the arguments that shipbuilders often carry out ship repairing, that we should not make a fuss, and that there is great commonality between the two parts of the industry. We have had the argument about accountability. That was totally and utterly destroyed by the NEDO study on the nationalised industries.
  We have also had the argument about protecting jobs. However, at the end of

  287
  the day the Government know as well as I do that the damning study from NEDO makes the accountability argument a non-starter. They also know that the nation is not hanging on every promise in the Labour Party's programme. If it were, it would not have returned to this place my hon. Friend the Member for Walsall, North (Mr. Hodgson); it would have returned a Member to sit on the Labour Benches.
  If the Government consider those facts and say that they are not real, they are not living in a world of reality. The Government are considering the party programme not in contemporary terms but on the basis of old-fashioned Socialist halcyon days. Those days have long since passed to be replaced by an appalling nemesis when the next General Election is called.
  Members of another place have laid great stress on jobs, and that is the central argument tonight. There is only one place in the Bill where there is a suggestion that there may be an increase in employment in these industries. Admittedly it does not say that there will be a long-term increase. In page xii we are told that
  "There is unlikely to be any net long term increase in the staff of the Department of Industry or any other Government Department in consequence of the Bill."
  Presumably if there is not to be any net long-term increase there will be a short-term increase. I say "Good luck" to those who hope to find work as a result of the Bill.
  Mr. Maxwell-Hyslop: Has my hon. Friend noticed, that, despite what the Government have said about putting jobs at risk, they still make the same estimate of the number of people who will become employees of British Shipbuilders and British Aerospace as they made two years ago when they first introduced the Bill.
  Mr. McNair-Wilson: I am grateful to my hon. Friend for pointing out that fact. I was about to touch on it myself. That fact seems to demonstrate the unworldly nature of those who drafted the Bill and their inability to recognise that circumstances have changed since the Bill was first debated by the House. They have shown their short-sightedness. I believe that there is an exact optical word for
  288
  "short-sightedness", but it is clear that the Government have shown shortsightedness.
  The employment figures are unlikely to be the same in these industries today as when this Bill was first presented but the Government choose to live with the original estimate. I suggest that they have chosen to mislead ever so slightly anyone who may wonder about employment prospects in these industries. Of course, they tell us that, of the 95,000 people who are likely to go into the shipbuilding corporation, 20,000 are already in State companies. I am concerned about the 75,000 who are not. I want to know what guarantee the Minister of State can give, if the Government defeat the amendment and the ship repairing companies finally find their way into British Shipbuilders, that the work force will stay at exactly the same level. If he cannot give that guarantee, what on earth is he doing asking the House and another place to nationalise the industries? Why is he taking this course when those in another place have warned us of the danger?
  The Minister of State is like a motorist who sees the lights turn to red in front of his face but puts his foot on the accelerator on the offchance that he will get across. He is not only playing with his reputation and with his words at the Dispatch Box. This is not a question of turning another place into some sort of mausoleum of fuddy-duddies. The hon. Gentleman is refusing to recognise that there might be more wisdom along the corridor than in this Chamber. There is certainly a good deal less bigotry along the corridor. Above all, the hon. Gentleman is refusing to recognise that their Lordships might be more concerned about the future of those who work in the industries than party politicians who clutch a piece of paper and say that it is their mandate for doing anything that they like, and that if others do not like it it is just too bad.
  The ship repairing companies are fighting for their lives but they are successful. They have been built up by the hard work of their managements and workers. Most of the companies are profitable. They are living in a world of international competition. They are meeting that competition successfully and giving employment to many

  289
  people. If we do something tonight that reduces that employment or damages the companies' profitability, all of those who vote against the amendment must feel guilty.
  As I feel that it is my duty to do so, I shall read two or three sentences from the NEDO study on the nationalised industries for the Minister of State to digest and absorb, I hope, before he replies. The study reads:
  "The system by which Government seeks to influence or control the nationalised industries is characterised by a lack of incentives for adequate or improved performance."
  It also states:
  "The twists and turns of interventions give ample opportunity for management alibis. The result is what can be called a 'minimising environment', with few rewards for real success and negligible sanctions for failure."
  I hope that the Minister of State has found time in his conversation with his colleague the Under-Secretary of State to listen to those words. If that is what he is bringing to the ship repairing industry, all I can say is Lord help those who work in the yards.
  Miss Harvie Anderson: I support the suggested amendment. That will not surprise those who have heard me speak on these matters on previous occasions. I give the amendment my support for simple reasons. First, throughout our debates it has been emphasised that the nature of the Bill was the advancement of Socialism. Some of us on the Conservative Benches still believe—we shall long continue to do so—that we are here to preserve good employment where that can be done, even in the face of the dogmatism of Socialism.
  The hon. Member for Caernarvon (Mr. Wigley) said that we are dealing with a small section of those who will be affected by the Bill. We are discussing a suggested amendment concerning only a small section of British industry—namely, 5 per cent. of the total work force of the industry with which we are dealing. It is a successful section, which in our view is in no way related to the other units that we shall be discussing.
  When we began discussion on the Bill about a year ago many hon. Members, particularly those who represent industrial areas, were sincerely and anxiously concerned about the employment situation and the direction in which we were
  290
  heading. We knew from experience in our areas that there was no alternative work available for those whose jobs were likely to be put at risk through the passage of the Bill. At no time during the discussions on the Bill has there been any question other than that the ship repairing companies with which we are concerned in this amendment have supplied, and continue to supply, very good employment and have every prospect of continuing to do so. If that is the case, I find it extremely difficult to accept that the Government are serious in their alleged intention of securing, and indeed increasing, employment. Labour Members from industrial constituencies must know, as Conservative Members certainly know, that in the majority of those areas there is no alternative work available for those who find themselves out of work today or who will face that situation tomorrow. It must be hard for those concerned to recognise that their elected Members are not prepared to give every support to the units of industry which are successful.
  In the ship repairing battle over a period of a year there has been a great deal of unnecessary acrimony. If it is the purpose to advance Socialism by putting this Bill on the statute book, the delay occasioned by this small part of the Bill could not justify the uncertainties which inevitably have arisen in all other sections of the industry in this long and protracted debate. Therefore, it does not seem realistic that this has been done in the best interests of the ship repairing industry as such, of those employed in the industry or in the national interest. It must be clear by now that we should seek to secure employment without the help of vast hand-outs from those who lend money from abroad. That must be our prime concern.
  I have expressed my point of view many times, but I make no apology for so doing again tonight because we have at no stage heard one reason which is industrially acceptable for the inclusion of those concerns that we seek to exclude from the Bill. We have heard only that this will extend the dogma of Socialism to an area where, in my view, it can only do increasing damage. Therefore in supporting the suggested amendment I ask the Minister to give, for the first time, one good reason for saying that benefit

  291
  will accrue to the industry, to the people employed in this part of the industry or to the nation.
  Mr. David Mudd (Falmouth and Camborne): In these lengthy proceedings, which have now occupied this House for a year and a week, it appears that the ship repairing industry has for some strange reason constantly been overlooked in terms of justification from the Government. It is a most unfortunate fact that in recent weeks there appears to have been a vendetta of spite from the Government Benches against the attitudes taken by one small independent ship repairing yard. I refer specifically to Bristol Channel Ship Repairers.
  Mr. Kaufman: Then will the hon. Gentleman explain why he wrote to me, towards the end of last Session, asking me to ensure that that company was nationalised?
  Mr. Mudd: I shall gladly reply to the Minister. He will recall exactly the nature of the conversation I had with him. I put to him in respect of certain sections of the industry it was due for nationalisation for purposes of political motivation that on a technicality the Government might have the intention of dropping the Bristol Channel Ship Repairers from the Bill. I hope he will accept my recollection of that correspondence as being correct.
  Mr. Kaufman: The hon. Gentleman wrote to me and asked me to ensure that Bristol Channel Ship Repairers was not removed from the Bill. It was not just a conversation; the hon. Gentleman wrote to me on the subject and we discussed the matter. It ill becomes him at this stage to say that we have a vendetta by seeking to retain in the Bill a company which he demanded should be retained in the Bill.
  6.15 p.m.
  Mr. Mudd: The Minister has made a typically spirited reply. I trust that he will refresh his mind, as I shall, on that correspondence, and I hope he will agree that we have a point of compromise regarding our specific recollections. I see the Under-Secretary of State for Industry nodding his head, but since, with the greatest respect, he must be unaware of the purpose of this exchange, I should be grateful if he would not make any
  292
  further sedentary contributions. If the Under-Secretary of State wishes to make a contribution, I shall be willing to give way to him. Clearly he has nothing to add to this debate—which is hardly surprising.
  I was about to point out that one of the great problems in the last few weeks has been the hostility from the Government to Bristol Channel Ship Repairers. This has created a massive red herring over the entire length and breadth of the ship repairing industry. The great irrelevancy seems to have become, by default, the great debating issue. I recall a situation in the West Country 16 years ago when various groups of business men were after the franchise to set up independent television. One group went rushing off and signed up all the bishops and the lord lieutenant, while another group went off and signed up the high sheriffs and chairmen of county councils. It was only when they reached the stage of putting in their tenders that they realised they were totally out of balance. Some horse-trading followed in which, I gather, two bishops were worth one lord lieutenant.
  It seems that at present Bristol Channel Ship Repairers faces the same situation. The Opposition say that 200 letters have been written saying that, according to the work force, nationalisation is wrong. Then up get the Government and say that 250 letters have been received by them stating that the work force wants nationalisation. The Opposition, not to be outdone, then instance 300 letters against nationalisation, and the Government counter with 350 letters in favour of such a move. Although I recognise the problems, feelings and wishes of those who are employed and involved in the future of Bristol Channel Ship Repairers, I believe it must be accepted that the majority of yards in the ship repairing industry have treated the matter fairly and properly and have not sought to encourage workers to go into a great debate, nor have they sought to suppress the right of workers to express their feelings on the future of their yards.
  It should go on record that the majority of men in the ship repairing industry have behaved creditably and have not sought to influence any hon. Member one way or the other. It is true that at Falmouth Docks the joint yard committee has rightly dealt with issues of

  293
  concern rather than entered into a great vendetta for or against the case for nationalisation. Its fears and reservations on matters which it would like to see sorted out are as vivid and as realistic now as they were a year ago. Unless there is a definite statement of intent, it feels that the headquarters of the British Shipbuilders Corporation will be placed so far from the West of England as to put Falmouth in a position of being out of sight and, therefore, out of mind.
  The people in the ship repairing industry at Falmouth have been reassured that there will be no direction of work away from existing yards, but time and again we are told that it is possible for shipbuilders to undertake ship repairing work and that interchangeability of skills is acceptable. Such an interchangeability of skills is acceptable if the shipbuilding yard is next to the ship repair yard. If, however, the shipbuilding yard happens to be 300 miles away from the repair yard, that interchangeability is irrelevant. The shipbuilding yard can be used for repair work when the order book is low, but one cannot say the same in reverse because a ship repair yard cannot be used for shipbuilding.
  We are also worried by the constant reassurances by the Government that they will do all they can to create full employment in the ship repair industry. I do not doubt the Government's willingness to do that, but it is not in the gift of the Government to provide work for ship repair yards. The only people who can do that are the shipowners. Unless there is to be a direction to specific yards—and the Minister has said that there will not—the small, independent ship repair yards such as Falmouth are out on a limb, and that must cause great concern to the people who work in the industry.
  I hope that this will be my last contribution in the series of debates that we have had on this issue. Personally I do not care who owns Falmouth Docks at the end of the day. The only thing that matters to me and to the people who work there is that there should be 1,500 reasonably secure jobs and a sustained and maintained programme of investment, and that its strategic importance to NATO and European shipping should not be undermined, diminished or lost
  294
  to world shipping, the people of Britain or those who work there.
  Mr. Ian Gow: I have not had the pleasure of corresponding with the Minister of State, or perhaps I should say that I have denied him that pleasure. If I had written to him on the subject, I should have written in terms different from those of my hon. Friend the Member for Falmouth and Camborne (Mr. Mudd). I should have made clear to the Minister that it does matter to me in whom the ship repairing industry is vested. It matters to me in whom the docks in my hon. Friend's constituency are vested. If one examines the history of the 14 years of Socialist Government since the war—two periods of six years, from 1945 to 1951, and from 1964 to 1970, and the two years since 28th February 1974—one finds that the appetite of the Government to vest more of the nation's assets in themselves and to concentrate more of the financial and commercial decision-making in themselves has grown.
  If at some later date there should be another Labour Government, they will move on from the stage in which we find ourselves tonight. It is one of the inevitable consequences, as we have seen in each of the three periods of Socialist Government since the war, that they are never satisfied. A Socialist Government resemble an insatiable lion which must go on devouring whatever meat it can find. That analogy is not false, and that is why my hon. Friends and I are anxious to exclude from the Bill the ship repair element—an important, though small, element which is the subject of the Bill.
  We do that for reasons which not only involve employment, important though that is. We do not have confidence in the wisdom of politicians. The economic decisions that are likely to be made by the Treasury Bench and the decisions about the future levels of employment in the industry and about the levels of investment will be worse if made by the Government than if left to those in the industry.
  The issue is one of principle, and it is here that I part company with my hon. Friend the Member for Falmouth and Camborne. He said that ownership did not matter, but I disagree with him. Ownership is everything. If we concen-

  295
  trate more of the nation's assets in the State, if we concentrate decision-making in this small group of politically-motivated men and women in Whitehall, we shall have political rather than economic decisions. The screws will be put on the ship repair industry in a way that would not happen if the industry were still in private ownership.
  It is becoming increasingly difficult for the Government to borrow money. Once they have taken over the ship repair companies—12 are listed in the schedule—the Government will have to provide the finance ncessary for the ship repair industry either through the National Enterprise Board or by some other means. Will the Government be able to find the money in the climate that they have created? I doubt it. The level of employment in the industry will be put grievously at risk if ship repair is not taken out of the Bill.
  I hope that, when we come to divide on the suggested amendments and on whether the other place is right, we shall carry the amendments and save ship repairing for the free enterprise system, which has served it and its employees well.
  Mr. W. E. Garrett: From the tone of the debate one would think that Bristol Channel Ship Repairers Limited was the only ship repair company of any merit in the United Kingdom, but on the North-East Coast there are more ship repair workers than in the whole of the Bailey organisation.
  I am disturbed at the gay manner in which the Lords bandied strong language about the industry. How many noble Lords have actually been in a ship repair establishment, let alone worked in the industry? I have never worked in the ship repair industry, but I have worked in its shadow all my life. I urge hon. Members to cast back their minds to the precarious position of ship repair workers only a few years ago. Then it was a casual job in which workers traded for a post in a manner resembling a slave market. But as a result of union influence, the position has improved. The equipment in the yards is still the old-fashioned equipment that was used when labour was cheap and dehumanised.
  296
  Most ship repair yards in the North-East are in desperate need of capital. The hon. Member for Eastbourne (Mr. Gow) should remember that at the end of the day the State will have to provide the money to maintain the efficiency and competitiveness of the yards, even when they are nationalised. That is a very important point to bear in mind.
  6.30 p.m.
  I have never been in any of the ship repair establishments owned by the Bailey organisation, but I have seen aerial pictures of them. Some proud boasts are made about those yards and their size and capacity. However, one could put them in one corner of some of the yards that operate in the North-East. It is a very modest effort of ship repair—I say this with respect to those who have them in their constituency, such as the hon. Member for Falmouth and Camborne (Mr. Mudd), who would probably agree—compared with the main efforts of ship repair in the United Kingdom.
  It is for that reason that I shall be supporting the Government tonight concerning ship repairing, because, unless the new equipment is put in and unless the new layout and design of these ship repair establishments is completed very quickly, the position concerning further ship repair orders will worsen.
  Hon. Members who, with me, sat in on the long, weary debates on the Bill a long time ago—we have had a new Prime Minister since then—will recall that we became very friendly in spite of our differences about the issues involved. We had long, weary debates on all the aspects—perhaps not as long as some would have liked. There were strong differences of opinion which have been expressed again by members of the Committee, such as the hon. Member for Tiverton (Mr. Maxwell-Hyslop) and the right hon. Member for Renfrewshire, East (Miss Harvie Anderson). However, we should try to look at the United Kingdom as a whole and recognise that ship repair and shipbuilding are desperately in need of capital.
  Our differing ideologies must be forgotten now. It is a question not of Socialism or capitalism but of reality. The reality at present is that only the State is prepared to push in the capital required. The sooner we set about preparing the ground so that capital investment can

  297
  start, the sooner our aircraft, shipbuilding and ship repairing industries can be put in a position of competitiveness in a very competitive world.
  Mr. Ian Lloyd: I have not so far intervened in the debate on the Bill on the Floor of the House. However, I should like to do so briefly, simply to follow up something that was said by the hon. Member for Wallsend (Mr. Garrett) and to make a fairly general point.
  The argument has been put forward with great conviction that the future will depend on the amount of capital that the State is prepared to put into the shipbuilding and aerospace industries. I should like to throw a little cold water perhaps on that concept.
  The Swedish yards really set the technological pace for the development of the Japanese shipbuilding industry. The Swedish yards had a great deal of both private and, eventually, public capital put into them. When one looks at them now, one sees a virtually nationalised industry into which the Swedish Government have been pouring capital by the million krone for a considerable time. The net result on the capacity, output and employment in those yards has been simply to stabilise a situation which I am convinced the Swedish Government will not be able to sustain. Precisely the identical position will arise in the United Kingdom.
  The key to the whole situation is not whether the Government will pour capital into the shipbuilding industry. It is whether the world shipping industry will supply a market that the British shipbuilding industry will be able to meet at a competitive cost level.
  As far as I can see and judge, the evidence is that that will not be achieved necessarily or even inevitably, no matter how much capital the British Government pour into the shipbuilding and ship repairing industries. Even if they were to pour in the capital, that would be no guarantee that the only kind of employment that matters in the United Kingdom today, which is employment with the highest productivity in activities which are economically viable, would be maintained or necessarily preserved.
  The real danger is that precisely the opposite will happen and that by pouring
  298
  capital into what is a sector of the United Kingdom economy which, over the secular term—which we should be examining—should be declining or changing, all that the Government will be doing will be turning more of British industry into an industrial museum.
  I happen to have seen recently a very small device, which the Minister of State will doubtless know when I describe it as a micro-processer—something as small as my thumb—which can now supply any industrialist anywhere in the United Kingdom with what I am told is the computing power that the whole of the United States enjoyed in 1939. This will have the most dramatic effect on the whole British industrial system, by comparison with which anything that the Secretary of State or the Minister of State may be discussing or legislating about now will be minimal in effect.
  These are the things that really decide whether employment is maintained in the only type of industry in which it must be maintained in the future—the type of industry which has the highest effective technological and productive output. The micro-processer may not have a great influence on shipbuilding. It is unlikely to do so. However, it may have a great influence on the devices that are put into ships. Certainly the British shipbuilding industry and its component suppliers should be looking at that.
  If we are looking at where capital should be invested in the shipbuilding and ship repairing industries, we should be looking very carefully at the whole of the component structure of the industry. From one end of these debates to the other, we have hardly heard this subject mentioned. Why does not the Minister of State give us a constructive, active and relevant discussion of the real industrial problems in the shipbuilding and aerospace industries? Why does he come here with this antiquated quackery of nationalisation in the face of probably the most dramatic, critical and damning report, referred to a few moments ago, on nationalised industries that has ever been published?
  How the Government can have the sheer brazen effrontery to say that this is the view of a major sector of British industry, that these are the techniques that will help us through and produce real wealth and guarantee markets and,

  299
  by guaranteeing markets, produce employment, and how the Minister of State can expect serious people in the House and in the country to listen to all that claptrap and be in the least convinced, leaves me absolutely astonished. The relevance is so far from the realities that we should be discussing that the House is absolutely justified in rejecting what the Government say.
  Mr. Gordon A. T. Bagier: I have been trying to follow the hon. Gentleman's argument closely. Is he arguing that the capital investment to which my hon. Friend the Member for Wallsend (Mr. Garrett) was referring is not necessary in British shipbuilding and repairing? Is he arguing that the capital investment that has taken place in the past under private ownership is equal to that which has been put in by the Japanese, the Koreans and others?
  Mr. Lloyd: I am not attempting necessarily to justify what may have been a partial failure to invest by the British shipbuilding industry. I have always admitted that. However, there is an enormous investment in the Japanese shipbuilding industry. It is clear from OECD discussions that the Japanese will not wind down their industry to satisfy the United Kingdom or Europe.
  Surely logically what we should be doing now is to say "Capital is very scarce in the United Kingdom. Where shall we put it so that there is a reasonable possibility of creating industries of the highest technologies which will command the world markets?" That is what the Japanese are doing. From the document recently made available to the Select Committee on Science and Technology it is clear that the equivalent of £6,000 million will be spent on research and development next year in Japan. The vast proportion of it is going into electronics, because the Japanese realise that that is where the future lies.
  I hear all the discussion about capital and employment, but what I want to hear from the Government is whether they have made this kind of appraisal, whether they have looked across the spectrum of British industry and whether they have made the judgment that capital should now be concentrated above all else in shipbuilding so that we shall have a little
  300
  more of the industrial museum preserved in the United Kingdom, at the expense of employment and industrial development elsewhere and a continuing decline in the British standard of living and British standards of performance.
  Those are the questions that we should be asking, and we have utterly and singularly failed to ask them.
  Mr. E. Fernyhough: The hon. Member for Havant and Waterloo (Mr. Lloyd) was living in a fantastic world. If we were to accept his philosophy, we should close every shipyard and every ship repair yard in Great Britain. Britain is a maritime nation. It will be a sorry day for Britain when it is not a maritime nation, because then it will be at the mercy of the world.
  I wonder whether the hon. Member would agree with the Government giving to British Channel Ship Repairers Limited the £20 million that the firm has been seeking. I shall give the hon. Gentleman the chance to answer.
  Mr. Ian Lloyd: The answer is that I should look at such a proposition on its merits. The right hon. Gentleman said that my point of view was that there should not be a British shipbuilding industry. I did not argue that. There may be a case for a highly selective investment in a very highly selective area of shipbuilding. In that direction lies the future. I believe that disaster will result from trying to keep the whole of the existing pattern of shipbuilding alive by pouring money simultaneously into every yard.
  Mr. Fernyhough: The hon. Gentleman is saying that the Government would do the overall sanctioning and would say "This yard could be made viable, but that yard could not be made viable." Irrespective of whether it was British Channel Ship Repairers Limited or a ship repair yard in my constituency, the decision would be made by the Government and not by those who at present control the yards.
  I wonder whether the hon. Gentleman would accept the situation in which those who own and control a yard would be denied the right to say whether they should continue, and whether he would agree to transfer to the Government the power to say that a yard should close

  301
  because it was not thought to be worth investing capital in it whereas another yard should be kept open because it was worthy of investment.
  I want to put to the hon. Gentleman a point which is a reflection on the private ship repair industry. We can build tankers of 250,000 tons. They sail from British shipyards for their trials, but they do not return to be repaired because we do not have big enough yards to repair them. If the industry had been run as a successful nationalised industry, as we made provision for building bigger ships we should have made similar provision for repairing bigger ships. Half the tonnage which leaves British shipyards can never return because we do not have the capacity to do the pob.
  We know that private enterprise will not provide the necessary capital. That is why it is so essential that the Bill goes through. We are a martitime nation depending upon ships for our imports and our exports. No matter how large and successful the aircraft industry becomes, no one can imagine that we shall ever be able to manage without ships. If they are not built and repaired here, we shall be at the mercy of those who make them and repair them.
  For every historical reason, leaving aside two world wars, it is necessary for us to have viable shipbuilding and ship repairing industries. The post-war years have shown that, given all the desire and good will in the world, private enterprise has not been able to do the job; it has fallen down upon it. I repeat that as a maritime nation we cannot do without shipping. It is therefore time that the Government stepped in and did the job.
  6.45 p.m.
  Mr. Kaufman: The speeches of my right hon. Friend the Member for Jarrow (Mr. Fernyhough) and of my hon. Friends the Members for Wallsend (Mr. Garrett) and for Swansea, East (Mr. Anderson) have brought a much-needed breath of reality to our debate, because they represent ship repair workers and they actually have something relevant and valid to say about this subject. That is in contrast to the arid technicalities that Conservative Members, who do not represent ship repair workers and who have never been into a ship repair yard, introduced into our debate.
  302
  The hon. Member for Eastbourne (Mr. Gow), speaking for all the ship repair workers and shipyards in his constituency, and other hon. Members who have made speeches of that kind regard today's proceedings as some frivolous interlude in which they can participate because the Opposition Whips have invited them to fill up time. My right hon. and hon. Friends speak for workers who are keenly interested in the future of these industries.
  The hon. Member for Tiverton (Mr. Maxwell-Hyslop), who moved the item which we are discussing and who has been intermittently present for a fragment of the debate, has a lately-found interest in the whole subject of ship repair. During the 58 sittings of the Standing Committee, which again he attended intermittently, his voice was not heard very often on this subject, nor did he in any way make an issue of the matters he raised today.
  The hon. Member raised these matters in recent weeks only because he has been briefed to raise them. As I shall have to point out, either the hon. Gentleman has been briefed badly or he has been invalidly briefed, or he himself has deliberately sought to present to the House only part of his brief, and a part of it which misrepresents fact in a most disgraceful way. The hon. Member for Tiverton, who, as I say, has shown at best only an intermittent interest in the proceedings on the Bill and in ship repairing as a whole, is the last hon. Member to raise these matters. He started out as a good joke. He developed into a bad joke. Now, on this Bill, he is simply a sick joke.
  The hon. Gentleman said that the Government wished to delay the Bill. He was supported by his hon. Friend the Member for Hastings (Mr. Warren). The hon. Member for Caernarvon (Mr. Wigley) said that the Government wanted to see the Bill fall. Hon. Gentlemen have a very simple way of calling our bluff—by assisting the passage of the Bill. They can assist the passage of the Bill as it was introduced and passed intact by the House of Commons after the most prolonged consideration of any Bill in the history of Parliament. If they wish to see the Bill enacted, they can assist by voting for the Government for the rest of today.
  When hon. Gentlemen somehow imply that all will be set at naught because the House of Lords may take further

  303
  action, they speak as though it is a remorseless fate that will drive the House of Lords to take such action. The House of Lords can refrain from taking such action. Indeed, the House of Lords did refrain from taking such action, because the Bill as we are debating it today went to the House of Lords. This Bill, with all the suspicions of hybridity which the hon. Member for Tiverton has been briefed to raise in the House, was before the House of Lords for two solid months. Noble Lords tabled Questions to my right hon. and noble Friends who are the Ministers in the House of Lords. The information that is available now was made available then.
  Nobody in the House of Lords moved that the Bill should undergo the hybrid procedure, and there is no reason whatever why the House of Lords should submit the Bill to the hybrid procedure when, if this House passes it tonight, it goes there later this week. Therefore, it is completely wrong for hon. Members to imply that blind fate will drive the Bill to the Examiners when it goes to the House of Lords. These are human acts which can be changed by other human acts, and hon. Gentlemen who use that threat are using a threat that is not valid.
  The hon. Member for Hastings, in speaking of the speech made by his hon. Friend the Member for Tiverton, said that it was well prepared. Not only was it well prepared: it was over-prepared. In introducing these matters during the debate on the procedural motion last week, the hon. Member for Tiverton treated the House to a great deal of information that had been fed to him, and he accused the Government of a deliberate attempt to conceal relevant information from Parliament and to mislead the House of Lords in Written Answers. It is as well that I take the opportunity of a debate on a suggested amendment introduced by the hon. Gentleman, and on which he spoke before leaving the House and coming back for the winding-up speeches, to deal with some of the matters which he presented to the House so that the House can know how the hon. Gentleman sought to mislead it last week.
  As the hon. Gentleman made allegations about misleading Parliament, it is my duty to draw to the attention of the
  304
  House the full correspondence between the London Graving Dock Company Limited and the Department of Industry, from part of which the hon. Gentleman quoted in some detail in an attempt to demonstrate that the company did not meet the definition contained in the Bill.
  The hon. Member for Tiverton quoted only selected letters from a series. The first letter, it is true, indicated that in the view of the company it was a subsidiary and not the parent which met the definition, but, after further correspondence and two meetings with the Department of Industry, the managing director of the company, Mr. Donald S. Crighton—whom the hon. Gentleman gravely insulted—came to the conclusion, when all the facts had been thoroughly gone into that the parent company was the company that met the definition.
  That was confirmed without any doubt in a letter from the company secretary to Mr. A. McDonald of the Department dated 10th April 1975, which I quote in full:
  "Further to our letter of 8 inst. and our meeting of today with Mr. Marchant and your goodself, together with Messrs. Evans and Walker, we are now able to reply to your letter of 26th March. We would confirm that the company named in the statements made on March 17, 1975 of the Secretary of State for Industry for public ownership of the shipbuilding, ship repair and slow diesel marine engine industries, that is, the London Graving Dock Co. Ltd., meets the appropriate definitions, and that no other companies in our group which meet any of the definitions and which are not subsidiaries of companies already on the lists are omitted fom the lists."
  The hon. Member for Tiverton, in quoting from an earlier letter, drew false conclusions from it. He said:
  "A company does not say that it most nearly meets the criteria if it meets them. Clearly, the managing director"—
  these are grave accusations made by the hon. Gentleman that I am about to repeat—
  "having been forbidden by his board to communicate truth to the Department, and the secretary of the Company having been given the job of trying to accommodate the Department to back up this untruthful representation to Parliament—"
  this was the slur that the hon. Gentleman was casting on a member of the public who had no opportunity of answering back, a slur that he made deliberately,

  305
  wantonly and disgracefully. The hon. Gentleman said:
  "the secretary of the Company, having been given the job of trying to accommodate the Department to back up this untruthful representation to Parliament, we get this unhappy situation that, even when given that task"—
  that is, the task of lying—
  "the secretary has to say not that the company has met the conditions laid down in the Bill but that it is the company which most clearly meets the criteria set down."—[Official Report, 1st December, 1976; Vol. 921, c. 948.]
  That was what the hon. Member for Tiverton said in a deliberate slur on two people outside the House who had no power to reply to him. The hon. Gentleman did not mention that in a later letter the company specifically confirmed that it met the definition. The hon. Gentleman's limited reference to the correspondence left a completely false impression.
  It could be that the hon. Gentleman did not have access to all the correspondence between the company and the Department and, therefore, did not know of that letter. Let us give him the benefit of the doubt on that, but there can be no doubt about the use of a partial quotation which the hon. Gentleman made from the letter in his possession. His quotation from the third paragraph ends at the point which best suits his case. The rest of the paragraph reads as follows:
  "2a. After careful consideration we have now concluded that on 31/7/74 the London Graving Dock Co. Ltd. was engaged in the business of ship repair in that it employed staff who were so specifically engaged in the management and support of ship repairs.
  b. The London Graving Dock Co. Ltd. was at 31/7/74 entitled to an interest in possession in a dry dock or graving dock.
  c. The turnover of the London Graving Dock Co. Ltd. when aggregated with the turnover of the year ended 31/3/73 (the relevant year) of all of the group companies engaged in ship repairing, did exceed £3·4 million.
  5. As mentioned above, changes in the group's structure have made it very difficult to compare present activities with those relevant prior to 31/3/73 but we would be pleased to attend on you or welcome your representative, to supply you with the information you require."
  The letter concludes:
  "In order to come to an early conclusion to this rather complicated matter, we would suggest a meeting with you, representatives of this board and such other advisers as it is mutually agreed would be desirable."
  That meeting took place on 10th April 1975 and is fully recorded in the Depart-
  306
  ment's files. In the course of the meeting Mr. Donald Crighton, the company's managing director—the gentleman of whom the hon. Member for Tiverton said that he had been forbidden by his board to communicate truth to the Department—explained that in recent correspondence he had not taken fully on board the fact that the definition related to a past period, and that further consideration showed to his satisfaction that the parent company was at the relevant date engaged in the business of ship repair in that it had contracts with certain shipping firms and Trinity House, and that the company had on the relevant date employed certain staff in the higher grades engaged in ship repair work, although the contracts had been sub-contracted to a subsidiary.
  So much for the completely false assertion made by the hon. Member for Tiverton that Mr. Crighton was not himself prepared to pull the wool over the eyes of Parliament and had left the correspondence to the company secretary. That is the kind of stuff that the hon. Gentleman is feeding to the House in his endeavours to frustrate the Bill.
  For the correspondence to be pursued by the company secretary was natural, as the initial correspondence from the Department on the definition was addressed to the company secretary. Here again the hon. Member for Tiverton misled the House by making a false inference and presenting it to the House as a fact, a fact which, I repeat, is an unwarranted slur on the officers of the company concerned.
  I very much hope that the hon. Gentleman, who has taken it upon himself to be a spokesman on this matter, whatever he says about the Government, will at least withdraw his slur on those two officials of the company. He raised the matter, he pushed it forward. It is not true, and it is disgraceful that he should have done so.
  The meeting between the company and the Department on 10th April, at which the Department's solicitor was present, established beyond any doubt that the London Graving Dock was the company which met the definition. This was confirmed by the letter from the company to this Department on 10th April which I previously mentioned but of which the hon. Member for Tiverton has apparently

  307
  no knowledge since he did not inform the House that it existed.
  7.0 p.m.
  I hope I have said enough to show that the question whether the London Graving Dock Company met the definition in the Bill was explored with extreme thoroughness by the Department of Industry. I felt it necessary to put all this information before the House because it is entirely wrong that the hon. Member for Tiverton, by not choosing his words in any careful way, should cast a slur on those two men.
  Mr. Maxwell-Hyslop: The Minister of State has proved the case for allowing this matter to be examined by the Examiners rather than by reading letters across the Floor of the House. He has entirely proved the case for matters of this kind to be examined by Officers of the House—the Examiners—and by a Select Committee. He has destroyed his own case.
  Mr. Kaufman: The hon. Gentleman did himself no credit by his speech last week, and he does himself less credit by that intervention. The hon. Member read the letters to the House, and now he says that I must not read letters to the House and neither should other hon. Members. I read the letters to the House because the hon. Gentleman chose to give a partial, incomplete, false and insulting version of those letters. The hon. Gentleman sought deliberately to mislead the House—
  Mr. Peter Hordern: On a point of order, Mr. Deputy Speaker. Is the Minister using parliamentary language? Surely he should not be allowed to use expressions such as "false" and "deceitful". He should be asked to withdraw.
  Mr. Deputy Speaker (Sir Myer Galpern): I happened to be in the Chair last week when the hon. Member for Tiverton (Mr. Maxwell-Hyslop) read this lengthy correspondence, and I was almost led to say at the time that it proved that the art of letter-writing was not dead. The Minister is now replying, perhaps a little belatedly, to the speech made by the hon. Member for Tiverton last week.
  Mr. Hordern: Further to that point of order, Mr. Deputy Speaker. With the greatest respect, that was not the point I made. The Minister was saying that my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) was guilty of misleading the House and that he sought to do so by quoting letters. That is not the point. Surely, for the Minister to accuse my hon. Friend of deliberately misleading the House is to use unparliamentary language.
  Mr. Deputy Speaker: We had the word "misleading" used by another hon. Member this afternoon. The original wording used was that the House had been "deceived". This was during Mr. Speaker's occupancy of the Chair. When the hon. Member was asked to withdraw, Mr. Speaker allowed the word "mislead" to be substituted.
  Mr. Gow: Further to that point of order, Mr. Deputy Speaker. It was within your hearing that the Minister accused my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) of deliberately misleading the House. Are not those words out of order and unparliamentary? Should not the Minister withdraw them?
  Mr. Deputy Speaker: In my view, the Minister is not guilty of using any unparliamentary language.
  Mr. Kaufman: I said that the hon. Member for Tiverton sought to mislead the House. He did not mislead the House, because he was beaten by 18 votes in the Division. Therefore, he failed in his attempt to mislead the House.
  It was my duty to inform the House of these matters. The hon. Member says that because he read part of a letter, which I have now been able to refute and because there has been an exchange, the Bill must be examined for hybridity. The fact that the hon. Member makes a bogus point on the Bill does not mean prima facie that it is hybrid. If that was so, any Bill on which the hon. Member spoke would be prima facie hybrid.
  Mr. Michael McNair-Wilson: My hon. Friend did not read out the letter dated 14th April from the Minister of State to Lord Beswick. If he had, he would have given the House a clearer impression that Mr. Crighton was in some difficulty as to which of his companies met the definition. He clearly makes the point,

  309
  made by my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop), that until the Bill goes to the Examiners no one will be sure about the matter.
  Mr. Kaufman: I am glad that the briefing has been spread around a bit. I do not think that this expensive material should be confined in its circulation to the hon. Member for Tiverton, who seems to have been favoured a little more than some of his right hon. and hon. Friends by those who have been involving themselves in this activity.
  Mr. Norman Tebbit: Smear.
  Mr. Kaufman: The hon. Member for Chingford (Mr. Tebbit) is a connoisseur at smears.
  The hon. Member for Tynemouth (Mr. Trotter), who is a representative of an area which includes both shipbuilding and ship repairing and with whom I had the pleasure of attending meetings on Tyneside when I paid visits to various Swan Hunter establishments on Tyneside, claimed that ship repairing was different from shipbuilding. If that is so, I am still awaiting an answer to the question I have put on many occasions: why is there a Shipbuilders' and Repairers' National Association? Why have the shipbuilders and repairers joined together in an association jointly to represent their interests? I have also asked why it is that one of the leading shipbuilding companies—I see that the hon. Member for Tiverton is now feeding some of his briefing material to the hon. Member for Oswestry (Mr. Biffen). The outside interests which gain access to our Galleries so easily have managed to pass a note down. No doubt the hon. Hember for Oswestry, after his display of last week, is ready to sink as low as is necessary to repeat that performance.
  Mr. Tebbit rose—
  Mr. Kaufman: I will not give way to the hon. Gentleman under any circumstances whatever. I can tell the hon. Member for Tynemouth that I have spoken to a leading shipbuilder who also has ship repairing interests, both of which are liable to be nationalised, who has told me that it would be absurd not to nationalise his ship repairing interests
  310
  together with his shipbuilding interests because the two are so congruent.
  Mr. Trotter: Surely one trade association can represent two trades. Obviously there is some contact between shipbuilding and ship repairing, but it is not fundamental.
  Will the Minister deal with my question about plans for this industry? In every debate in which I have asked him about the plans, he has always got away from that point by talking about other subjects.
  Mr. Kaufman: I shall come to the hon. Member's question later. I was seeking to reply to points made in the debate before making a general case. I assure the hon. Member for Tynemouth that I shall come to his point.
  My hon. Friend the Member for Walls-end represents both shipbuilding and ship repairing workers. The House will be aware that the ship repairing workers in his area have sent telegrams to the Department of Industry through their trade union representatives demanding that the ship repairing yards in the North-East, on the Tyne and elsewhere in that area be retained in the Bill because of the urgency of the situation. When hon. Members ask what is the urgency, I refer them to the situation on Merseyside.
  When I visited Western Shiprepairers on Merseyside earlier this year, I had a meeting with the workers' representatives and discussed the redundancies which were then taking place and which we were unable to avoid. In recent weeks there have been more redundancies on Merseyside. The hon. Member for Newbury (Mr. McNair-Wilson) asks whether we can guarantee jobs in the ship repair industry when it comes into public ownership. If we do not get the ship repairing industry into public ownership pretty quickly, there may not be all that many jobs to protect because the number of redundancies which have taken place recently on Merseyside among Western Shiprepairers is extremely disturbing. My hon. Friend the Member for Swansea, East knows of the threat hanging over the ship repair yard in his constituency and the great dangers to that yard if it is not taken into public ownership quickly.
  Mr. Eddie Loyden: My hon. Friend will be aware that not only in Western Shiprepairers Limited but in the Merseyside industry generally there is great anxiety about the future. As to the comments made by my hon. Friend the Member for Swansea, East (Mr. Anderson) about redundancies, Western Shiprepairers Limited now faces further redundancies and the loss of 8,000 jobs in the near future. Both the Confederation of Shipbuilding and Engineering Unions and management have shown real anxiety about the future of their industry. They are not too pleased about the length of time it has taken this House to deal with the Bill and about the frustrations that the Government have faced in both this House and the Lords.
  Mr. Kaufman: I am aware of that. When I visited Western Shiprepairers Limited earlier this year and discussed public ownership with the shop stewards, it was at the request of my hon. Friend the Member for Liverpool, Garton (Mr. Loyden) as well as his Merseyside constituents.
  Mr. Ian Lloyd: Can the hon. Gentleman be clearer about nationalisation guaranteeing employment? There are only three possibilities: that the voluntary shipbuilding or ship repair purchase market will increase by a measurable amount, that British shipowners can be compelled to buy more ships than they would normally buy, or that the Government will build for stock There are no other ways in which employment can be maintained. To which of the three was the Minister referring?
  Mr. Kaufman: The hon. Member for Newbury asked a specific question on this. I shall answer both questions soon.
  The hon. Member for Tynemouth (Mr. Trotter) asked why ship repairing should be nationalised in this country when our industry seemed, in his view, to compare favourably with the ship repairing industry abroad. The PA report, which has often been mentioned in the House, said a number of things on this. It said:
  "Whilst we visited some of the leading companies in Europe, we also met port management and discussed their attitudes to the repair activities in their ports. In summary, the visits, which were to eight companies, have produced a formidable picture of competitive strength in relation to the industry
  312
  in the United Kingdom. In terms of size of turnover, quality of facilities, operating expertise, labour relations and breadth of economic support from local ports, State, area or Government, they are considerably in advance of their United Kingdom counterparts."
  It also said:
  "In general, the leading European companies are better equipped, usually larger, and probably better managed than their United Kingdom counterparts. Their strength is founded not only on a past level of capital investment several times larger than the United Kingdom's but also on a continuation of this investment programme."
  That is on pages 27 to 29 of the report.
  Mr. Trotter: The report also pointed out that a particular problem of the industry in this country was that so many of the docks that it used were publicly owned. Public ownership there has not helped one jot. Where are the ships coming from for repair at Western Shiprepairers Limited? Will ships on the Tyne be directed there?
  Mr. Kaufman: Of course there is to be no direction. I have made that clear many times. As my right hon. Friend the Member for Jarrow said, ships will come to be repaired in British shipyards only if we can offer the right facilities. But investment in this industry has been so scandalously inadequate that only with proper capital investment can we hope to attract customers. The hon. Member for Havant and Waterloo (Mr. Lloyd) was right in saying that one cannot force people to have ships repaired in our yards. One can only attract them and hope that it will come to be accepted that our yards are good places to use.
  The hon. Member for Walsall, North (Mr. Hodgson) made a formidable case for the nationalisation of shipbuilding. He spoke of the problems which affect shipbuilding in this country and of the inadequacies of the shipbuilding industry. In capsule form, he made a very satisfactory case for public ownership. But the hon. Gentleman implied that, because he had been elected to this House last month, this Government in some way no longer had any mandate to proceed with the legislation which they promised to the electorate at the last General Election.
  It may be that I did not study the election campaign of the hon. Gentleman as closely as I should have done. I do not know whether he made nationalisation

  313
  of shipbuilding a major issue at the by-election. If so, no doubt he can speak with some authority about the issue. But my hon. Friend the Member for Newcastle-upon-Tyne, Central (Mr. Cowans) certainly made the Bill an issue in his election campaign, when, as I have said before, the Tory candidate was hard put to retain his deposit.
  The hon. Member for Walsall, North has come here, very understandably, flushed with a victory in which he overturned a Labour majority and won a considerable majority of his own. Mr. Terry Davis, whom I hope we shall soon see in the House as my hon. Friend the Member for Birmingham, Stechford, won a by-election at Bromsgrove and Redditch—a seat as safe for the Tories as Walsall, North was for the Labour Party. During the April when that by-election at Bromsgrove and Redditch took place, the Tories lost many seats. The hon. Member for Isle of Ely (Mr. Freud) is here because of a by-election at that time, and he had hon. Friends here representing Sutton and Cheam and Ripon. But the Tory Government did not say that because they had lost seats in by-elections their mandate was removed and that they would not proceed with the Industrial Relations Bill, the European Communities Bill or the Housing Finance Bill. Far from doing that, they slapped the guillotine on all Bills and pushed them through this House in much shorter order than the 58 sittings that we have had to endure on this Bill.
  7.15 p.m.
  Mr. Clement Freud: When those momentous events took place, the Tory Government had a sizeable majority—something which this Government do not have.
  Mr. Kaufman: It was a sadly reduced majority. Had it not been for the Liberal vote, that Tory Government would not have been able to carry the European Communities Bill through the House. The Tory Government won the Second Reading of that Bill by a majority of eight votes and they would have been beaten had the Liberals abstained, let alone voted against it. Majorities vary from Bill to Bill, as we find under this Government, with its present majority.
  The hon. Member for Caernarvon implied that if we brought ship repair
  314
  into public ownership there would be centralisation. My hon. Friend the Member for Swansea, East referred to that point in his speech and said that our amendment to Clause 5 provided for a greater degree of decentralisation than had ever been provided in any previous public ownership Bill. That also answers the question of the hon. Member for Falmouth and Camborne. The centralisation provisions in the Bill were inserted to meet the needs and aspirations of areas such as his constituency.
  The hon. Member for Newbury asked me whether the Government would guarantee jobs in the industry if the Bill was passed. The answer is "No". I have said, not just in the House but on visits to shipyards, aircraft factories and ship repair yards, that this Government will not guarantee one job in any of these industries. The Bill cannot do that. What it does is to provide a framework within which it will be possible to maintain the maximum level of employment. Without the Bill, shipyards will fall down like dominoes and so will ship repair yards, while the aircraft industry will be in very great trouble indeed.
  The hon. Gentleman asked for a guarantee which the previous Tory Government were unable to provide. With his vote, as I recall, that Government sensibly nationalised Rolls-Royce, although the hon. Member for Oswestry did not agree that it was sensible. The then Government did not guarantee that every job in Rolls-Royce would be maintained, and that did not happen. But Rolls-Royce survived to provide opportunities for employment which would not have been there if the Government had not sensibly nationalised the company.
  Mr. Bagier: Will my hon. Friend remind the Opposition of what happened in Sunderland Shipbuilders and the gratitude felt by the workers in that firm towards the Labour Government who took it into public ownership when it crashed along with Court Line?
  Mr. Kaufman: Since Sunderland Shipbuilders was taken into public ownership, we have seen the development of the Pallion yard, which offers probably the most modern facilities in Europe and maybe the world. That is one of the benefits of nationalisation for the constituents of my hon. Friends the Member

  315
  for Sunderland, South (Mr. Bagier) and the right hon. Member for Sunderland, North (Mr. Willey).
  Mr. Ian Lloyd: The Minister now says that it is not the Bill but the framework which it creates that will help the industry. What are the characteristics of the framework which enable him not to ask which part of the market will provide employment? Will it be the free market? If so, how will it be induced? Will it be the domestic market, and, if so, what incentives will be given? Or will the Government subsidise shipbuilding by building for stock or in some other way?
  Mr. Kaufman: We have been holding talks with the Organising Committee and the Confederation of Shipbuilding and Engineering Unions, and a report is to be produced which will make proposals on these matters. I advise the hon. Gentleman to await that report.
  These experienced and responsible people have been trying to work out the first policy ever drawn up for British shipbuilding. It is difficult in the present international climate, but the effort is being made. The report is confidential, so I cannot give the hon. Gentleman specific information at present.
  We have never pretended that it will be easy—it will not. My right hon. Friend the Secretary of State said this on the Second Reading of the Bill on 2nd December last year. My noble Friend Lord Melchett said in another place that the industry faces grave problems but that nationalisation gives it hope and prospects. We have never said more than that. We have never offered guarantees, despite the pressure from hon. Members who have said that they would support us if we did so. We cannot be dishonest about this matter.
  Mr. Fernyhough: Will my hon. Friend remind the Opposition that in April 1970 Vickers decided to close the Palmer ship repair yard in my constituency which was then employing 800 people? The then Labour Government decided that it should not be closed and provision was made to keep it open, but one of the first decisions of the right hon. Member for Knutsford (Mr. Davies), within a month of being made Secretary of State,
  316
  was to close that yard and to put the workers on the dole.
  Mr. Kaufman: Yes, indeed. I visited that yard with my right hon. Friend earlier this year.
  A number of hon. Members have asked about our general approach to the ship repair industry. We have put forward many times, both here and in another place, the logical industrial case for taking ship repairing into public ownership along with shipbuilding. Nothing that has been said in these debates has altered our belief that the ship repairing companies in Schedule 2 of the Bill should vest in British Shipbuilders.
  We have a clear mandate for nationalising ship repair. It is there in black and white in both our 1974 election manifestos. This is a firm commitment that we are determined to fulfil. This commitment followed an earlier recommendation by a Labour Party-TUC-CSEU working party 1973 that all significant companies in the shipbuilding and ship repair industries should be acquired by a national shipbuilding corporation.
  The working party's report was unanimously endorsed by the annual conferences of all those bodies in the autumn of 1973. The working party identified what was wrong with the industry and came to conclusions almost identical with those later reached by PA Management Consultants, which was commissioned by the previous Conservative Administration.
  Naturally enough, in view of the Government by whom they were commissioned, PA did not advocate public ownership as the remedy for the industry's problems. The PA report showed that the ship repair industry in this country had consistently declined over the last decade, during which employment in the industry had halved. I have been asked about guarantees under public ownership. There are certainly no guarantees under private ownership.
  PA identified a number of major obstacles to growth, including the existence in some cases of several ship repairers on one estuary competing against each other instead of concentrating on overseas competition; the outdated facilities of many ship repairers—which I have discussed with the hon. Member for Tynemouth—which do not compare with those of their rivals on the Continent and which

  317
  will become even more unsatisfactory in the longer term; and unsatisfactory labour relations and their impact upon international competitiveness. My hon. Friend the Member for Swansea, East mentioned the problem of labour relations in his area.
  The industrial case for nationalising ship repairing is that the badly-needed improvements in investment, productivity and industrial relations are unlikely to come about otherwise. Under private ownership, it has been an industry generally noted for outdated, run-down facilities and poor working conditions.
  In competitive world conditions, the industry must now pursue an active marketing policy at home and abroad. It can best do this under a unified organisation. Our proposals for the ship repair industry are clearly part of a logical industrial strategy for this sector.
  But ship repairing's close integration in many cases with shipbuilding is another reason for its inclusion in the Bill. Many shipbuilding firms in the Bill also carry out considerable ship repair work, including Swan Hunter, Hall Russell, Robb Caledon, Smith's Dock, Vosper Thorny-croft and the Goole Shipbuilding and Repairing Company.
  It would be impossible in most of those cases to split the two activities. In many cases there is an interchange of labour and common facilities are used. It would be wrong to break up the company structure in these cases in the way envisaged in the suggested amendments. Shipbuilding groups like Swan Hunter and Scott Lithgow also have separate ship repairing subsidiaries. Here also, shipbuilding and ship repairing complement each other to a great extent. There is an interchange of facilities and, at Scott Lithgow at least, there has been an interchange of labour. Unless ship repairing companies in these groups come into British Shipbuilders, there will be a loss of flexibility and an inefficient use of resources.
  Of course there are independent ship repairing companies named in the Bill, but the case for nationalising these is no less clear than that for the other companies. These are major companies with significant dry dock facilities which carry out large repair jobs, not just voyaging repairs and maintenance.
  Mr. Kenneth Lewis: Can the Minister confirm that he has been speaking for such a long time because of the rumour that the hon. Member for Fermanagh and South Tyrone (Mr. Maguire) has been lost?
  Mr. Kaufman: I have been speaking for a long time because a remarkably large number of the hon. Gentlemen's hon. Friends have sought enlightenment from me during my speech. I have done my best in the difficult task of enlightening Members of the Conservative Party.
  Mr. Donald Stewart: A number of the Minister's hon. Friends have made the point that the Bill has already been discussed for longer than any other measure in history. Will he note that a number of us on this Bench would be glad if the debate were now brought to a close?
  Mr. Kaufman: While the hon. Member for Western Isles (Mr. Stewart) has had dubious views on the Bill as a whole and I wish, even tonight, that he would attempt to reform them, I admit that with one rather sad exception his party has been very sensible in speeding up our debates and in voting. I shall do my best to accede to the hon. Gentleman's wishes. I have one or two more remarks which will take me three or four minutes, unless there are other dark patches in the minds of hon. Gentlemen opposite which require enlightenment.
  7.30 p.m.
  So we have good industrial reasons for taking into public ownership the ship repair companies named in the Bill. A great deal has been said about the definitions of ship repair companies used in Schedue 2. The criteria in Schedule 2 were drawn up with one objective in mind—to nationalise the major ship repair companies situated on the major estuaries. The public ownership proposals embraced these major companies because they were the companies essential to the plan for a coherent strategy for the industry.
  The selection of the companies listed in the schedule was therefore made for good industrial reasons, and the definitions were framed to include these companies and to omit others which were not as relevant to the Government's proposals because they were too small or

  319
  because they carried out ship repairing only as a sideline. For example, the ship-repairing companies of British United Trawlers Group were mainly engaged in carrying out repairs to the group's own trawler fleet and their facilities consisted of slipways used for this purpose. It was decided that public ownership of these companies would not be relevant to the Government's plan for a coherent strategy for the industry. [Interruption.] The hon. Member for Kingston upon Thames (Mr. Lamont) apparently does not find this interesting, but it is interesting to the workers involved, who want the Bill.
  Although those companies met the turnover criterion, they were excluded from the Bill as they did not meet the dry dock criterion. On the other hand, it was decided that Scott Lithgow Dry Docks Ltd., which owns an important dry dock facility on the Clyde and which is closely integrated with the shipbuilding activities of the Scott Lithgow Group, should, for reasons I have already explained, logically be taken into public ownership with the group's shipbuilding activities. The turnover definition was therefore set to include this company.
  Another example is given by the two Merseyside companies, J. B. Howie Ltd. and Western Shiprepairers. These companies own and operate major dry dock facilities on Merseyside, and together with other associated ship repairing companies in the Laird Group they constitute a major ship repairing activity. But because neither company on its own met the turnover definition, the concept of aggregation of turnover with associated companies was brought into include these companies within the scope of the Bill.
  The Government remain convinced of the strength of their case for nationalising the major companies in the ship repairing industry. I urge the House, therefore, not to support the motion to suggest these amendments to the other place.
  Mr. John Biffen: Just over three and a half hours ago the House began this debate on a most important matter, but I sense that throughout the House there is a feeling that we might now reasonably proceed to a Division, so I shall not try to match the Minister of State's speech with one of correspond-
  320
  ing length. I hope that he will acquit me of any discourtesy in the brevity with which I shall address myself to these suggested amendments.
  I want to underline the significance of the hybridity issue, mentioned by my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop), but would prefer to do so on Third Reading. But it seems to me that in the exchanges between the Minister of State and my hon. Friend it clearly emerged that there was a whole tangle of correspondence which might appropriately be considered by the Examiners.
  The whole House will have been touched by the consideration that the Minister of State's last words are uttered about those outside who might bear resentment against them and have no recourse. He has been zealous in his anxiety never to say anything offensive about anyone outside the House, or to use the privileges of the House to make and advance his argument in fairly rough and personal terms about his adversaries. If there was a mark of conversion in what he said this evening, that at least will be welcomed.
  My right hon. Friend the Member for Renfrewshire, East (Miss Harvie Anderson) commented that what was so much at stake was little more than perhaps 5 per cent. of the whole Bill. A great deal of this turns upon the robust and flamboyant way in which the opposition to the Bill has been conducted in certain quarters, but let us always remember that liberty traditionally has been entrusted to the hands of people who are awkward, flamboyant and do not fit the generally acceptable pattern. I dare say that a good deal of the opposition which has been conducted is as unacceptable to the trade associations as it is to some of the politicians. So I do not think that the House need be intimidated by some of the ways in which the opposition to the proposals on ship repairing has been conducted.
  The burden of our case is that ship repairing is a service industry and that it has, broadly speaking, a different strategic direction and thrust from shipbuilding. The Minister in Korea found evidence of shipbuilding and ship repairing as an integrated activity, and one can find that also in this country. But there is also

  321
  developing evidence of ship repairing proceeding distinctively in nearby shipbuilding countries, such as Sweden, Spain and Italy.
  The hon. Member for Caernarvon (Mr. Wigley) had it right when we last debated this subject on 11th November. He said then:
  "The people in the ship repairing industry may have the same skills as those working in the yards but it is the marketing that is the critical factor for the repairing sector."
  It is clear that hon. Members on this side of the House developed an anxiety that that marketing facility, that marketing capability, might be affected by the process of nationalisation. There is a feeling that the commercial criteria might be infringed—a point made by my hon. Friend the Member for Newbury (Mr. McNair-Wilson). There is an anxiety—expressed at the outset and still not removed by amendments to Clause 5—that public ownership will confer the dead hand of centralisation, of politically rather than economically determined decisions, on the ship-repairing industry. That point exercised my hon. Friend the Member for Falmouth and Camborne (Mr. Mudd).
  This is not a new consideration or a new dimension to the debate. I think that I can carry the Minister of State with me in saying that there is not a great deal to be said on this occasion that is striking, original or new. When the matter was debated on 11th November, the hon. Member for Newton (Mr. Evans) tried to counter these anxieties. He said:
  "The shipowner has the final power to send his ship to be repaired where he thinks he will get the best deal and where he will get the job done at the time he requires it."—[Official Report, 11th November 1976; Vol. 919, c. 743–7.]
  That is a very reasonable proposition, but I think that in the argument that took place between the hon. Member for Swansea, East (Mr. Anderson) and the hon. Member for Caernarvon about the commercial sensitivity of ship repairing under nationalisation the laurels undoubtedly went to the hon. Member for Caernarvon. For there is already sign that some political authority will be
  322
  exercised in what properly should be a commercial judgment.
  If there is one factor that is additional to the debate we had on 11th November it is the debate on 1st December, on Second Reading. It was on that occasion that the Secretary of State said:
  "We have to make every effort to persuade British shipowners to place orders in British yards."
  Later, he said:
  "But the key in the future depends on persuading British shipowners to place many more orders in British yards than they have done in the past."—[Official Report, 1st December 1976; Vol. 921, c. 1018–19.]
  One does not need to be an acute judge of distance to see that one is already moving to a state where there is interplay between political and the managerial execution of ship repairing which will tend precisely in the direction feared by the hon. Member for Caernarvon. I think that it will be tried pre-eminently in respect of shipbuilding, but we shall be foolish to suppose that it will stop there.
  The danger also exists in respect of ship repairing, even if it is to a lesser extent. We have only to think of the way in which the National Coal Board tries to persuade the Government to require the Central Electricity Generating Board not to import coal to realise that once one creates this political framework one has these political pressures as a consequence.
  There is anxiety that the ship-repairing business could become at least an attempted quasi-captive business for British ship owners, in order to contrive some enforced profitability to deal with the considerable investment sums which would admittedly be necessary for the re-equipment of British ship-repairing yards.
  I would say to all parties that not only on the issue of hybridity, which casts an uncertain shadow over the whole progress of the Bill, but on our experience of political intervention in publicly owned industries we have every right to believe that the Bill will not be ruined by the successful passing of this amendment, but that it will be immeasurably improved.
  Question put:—
  The House divided: Ayes 279, Noes 281.

  Division No.13.]

  AYES

  [7.41 p.m.

  Adley, Robert

  Fox, Marcus

  MacGregor, John

  Aitken, Jonathan

  Fraser, Rt Hon H.(Stafford & St)

  Macmillan, Rt Hon M.(Farnham)

  Alison, Michael

  Freud, Clement

  McNair-Wilson, M.(Newbury)

  Amery, Rt Hon Julian

  Fry, Peter

  Madel, David

  Arnold, Tom

  Galbraith, Hon T. G. D.

  Marshall, Michael (Arundel)

  Atkins, Rt Hon H.(Speithorne)

  Gardiner, George (Reigate)

  Marten, Neil

  Awdry, Daniel

  Gardner, Edward (S Fylde)

  Mates, Michael

  Bain, Mrs Margaret

  Gilmour, Rt Hon Ian (Chesham)

  Maude, Angus

  Baker, Kenneth

  Gilmour, Sir John (East Fife)

  Maudling, Rt Hon Reginald

  Banks, Robert

  Glyn, Dr Alan

  Mawby, Ray

  Beith, A. J.

  Godber, Rt Hon Joseph

  Maxwell-Hyslop, Robin

  Bell, Ronald

  Goodhart, Philip

  Mayhew, Patrick

  Bennett, Dr Reginald (Fareham)

  Goodhew, Victor

  Meyer, Sir Anthony

  Benyon, W.

  Goodlad, Alastair

  Miller, Hal (Bromsgrove)

  Berry, Hon Anthony

  Gorst, John

  Mills, Peter

  Biffen, John

  Gow, Ian (Eastbourne)

  Miscampbell, Norman

  Biggs-Davison, John

  Gower, Sir Raymond (Barry)

  Mitchell, David (Basingstoke)

  Blaker, Peter

  Grant, Anthony (Harrow C)

  Moate, Roger

  Body, Richard

  Gray, Hamish

  Molyneaux, James

  Boscawen, Hon Robert

  Griffiths, Eldon

  Monro, Hector

  Bottomley, Peter

  Grimond, Rt Hon J.

  Montgomery, Fergus

  Bowden, A. (Brighton, Kemptown)

  Grist, Ian

  Moore, John (Croydon C)

  Boyson, Dr Rhodes (Brent)

  Hall, sir John

  More, Jasper (Ludlow)

  Bradford, Rev Robert

  Hall-Davis, A. G. F.

  Morgan, Geraint

  Braine, Sir Bernard

  Hamilton, Michael (Salisbury)

  Morgan-Giles, Rear-Admiral

  Brittan, Leon

  Hampson, Dr Keith

  Morris, Michael (Northampton S)

  Brocklebank-Fowler, C.

  Hannam, John

  Morrison, Hon Peter (Chester)

  Brotherton, Michael

  Harrison, Col Sir Harwood (Eye)

  Mudd, David

  Brown, Sir Edward (Bath)

  Harvie Anderson, Rt Hon Miss

  Neave, Airey

  Bryan, Sir Paul

  Hastings, Stephen

  Nelson, Anthony

  Buchanan-Smith, Alick

  Havers, Sir Michael

  Neubert, Michael

  Budgen, Nick

  Hayhoe, Barney

  Newton, Tony

  Bulmer, Esmond

  Heath, Rt Hon Edward

  Normanton, Tom

  Burden, F. A.

  Henderson, Douglas

  Nott, John

  Butler, Adam (Bosworth)

  Heseltine, Michael

  Onslow, Cranley

  Carlisle, Mark

  Hicks, Robert

  Oppenheim, Mrs Sally

  Carson, John

  Higgins, Terence L.

  Page, Rt Hon R. Graham (Crosby)

  Chalker, Mrs Lynda

  Hodgson, Robin

  Page, Richard (Workington)

  Churchill, W. S.

  Holland, Philip

  Paisley, Rev Ian

  Clark, Alan (Plymouth, Sutton)

  Hooson, Emlyn

  Pardoe, John

  Clark, William (Croydon S)

  Hordern, Peter

  Parkinson, Cecil

  Clegg, walter

  Howe, Rt Hon Sir Geoffrey

  Pattie, Geoffrey

  Cockcroft, John

  Howell, David (Guildford)

  Penhaligon, David

  Cooke, Robert (Bristol W)

  Howells, Geraint (Cardigan)

  Percival, Ian

  Cope, John

  Hunt, David (Wirral)

  Peyton, Rt Hon John

  Cormack, Patrick

  Hurd, Douglas

  Pink, R. Bonner

  Corrie, John

  Hutchison, Michael Clark

  Powell, Rt Hon J. Enoch

  Costain, A. P.

  Irving, Charles (Cheltenham)

  Price, David (Eastleigh)

  Craig, Rt Hon W.(Belfast E)

  James, David

  Prior, Rt Hon James

  Crawford, Douglas

  James, R. Rhodes (Cambridge)

  Pym, Rt Hon Francis

  Crilchley, Julian

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

  Raison, Timothy

  Crouch, David

  Jessel, Toby

  Rathbone, Tim

  Crowder, F. P.

  Johnson Smith, G.(E Grinstead)

  Rawlinson, Rt Hon Sir Peter

  Davies, Rt Hon J.(Knutsford)

  Jones, Arthur (Daventry)

  Rees, Peter (Dover & Deal)

  Dean, Paul (N Somerset)

  Jopling, Michael

  Rees-Davies, W. R.

  Dodsworth, Geoffrey

  Joseph, Rt Hon Sir Keith

  Reid, George

  Douglas-Hamilton, Lord James

  Kaberry, Sir Donald

  Renton, Rt Hon Sir D. (Hunts)

  Drayson, Burnaby

  Kershaw, Anthony

  Renton, Tim (Mid-Sussex)

  du Cann, Rt Hon Edward

  Kilfedder, James

  Ridley, Hon Nicholas

  Dunlop, John

  Kimball, Marcus

  Ridsdale, Julian

  Durant, Tony

  King, Tom (Bridgwater)

  Rifkind, Malcolm

  Eden, Rt Hon Sir John

  Kitson, Sir Timothy

  Roberts, Wyn (Conway)

  Edwards, Nicholas (Pembroke)

  Knight, Mrs Jill

  Ross, Stephen (Isle of Wight)

  Elliott, Sir William

  Knox, David

  Ross, William (Londonderry)

  Emery, Peter

  Lamont, Norman

  Rossi, Hugh (Hornsey)

  Evans, Gwynfor (Carmarthen)

  Langford-Holt, Sir John

  Rost, Peter (SE Derbyshire)

  Ewing, Mrs Winifred (Moray)

  Latham, Michael (Melton)

  Sainsbury, Tim

  Eyre, Reginald

  Lawrence, Ivan

  Shaw, Giles (Pudsey)

  Fairbairn, Nicholas

  Lawson, Nigel

  Shaw, Michael (Scarborough)

  Fairgrieve, Russell

  Lester, Jim (Beeston)

  Shelton, William (Streatham)

  Farr, John

  Lewis, Kenneth (Rutland)

  Shepherd, Colin

  Fell, Anthony

  Lloyd, Ian

  Shersby, Michael

  Finsberg, Geoffrey

  Loveridge, John

  Silvester, Fred

  Fisher, Sir Nigel

  Luce, Richard

  Sims, Roger

  Fletcher, Alex (Edinburgh N)

  McAdden, Sir Stephen

  Skeet, T. H. H.

  Fletcher-Cooke, Charles

  MacCormick, Iain

  Smith, Dudley (Warwick)

  Fookes, Miss Janet

  McCrindle, Robert

  Speed, Keith

  Forman, Nigel

  McCusker, H.

  Spence, John

  Fowler, Norman (Sutton C'f'd)

  Macfarlane, Nell

  Spicer, Michael (S Worcester)

  Sproat, Iain

  Thomas, Rt Hon P.(Hendon S)

  Weatherill, Bernard

  Stainton, Keith

  Thompson, George

  Wells, John

  Stanbrook, Ivor

  Townsend, Cyril D

  Welsh, Andrew

  Stanley, John

  Trotter, Neville

  Whitelaw, Rt Hon William

  Steel, David (Roxburgh)

  van Straubenzee, W.R.

  Wiggin, Jerry

  Steen, Anthony (Wavertree)

  Vaughan, Dr Gerald

  Wigiey, Dafydd

  Stewart, Donald (Western Isles)

  Viggers, Peter

  Wilson, Gordon (Dundee E)

  Stewart, Ian (Hitchin)

  Wainwright, Richard (Colne V)

  Winterton, Nicholas

  Stokes, John

  Wakeham, John

  Wood, Rt Hon Richard

  Stradling Thomas, J.

  Walder, David (Clitheroe)

  Young, Sir G. (Ealing, Acton)

  Tapsell, Peter

  Walker, Rt Hon P.(Worcester)

  Younger, Hon George

  Taylor, R.(Croydon NW)

  Wall, Patrick

  Taylor, Teddy (Cathcart)

  Walters, Dennis

  TELLERS FOR THE AYES:

  Tebbit, Norman

  Warren, Kenneth

  Mr. Spencer Le Marchant and

  Thatcher, Rt Hon Margaret

  Watt, Hamish

  Mr. Michael Roberts.

  Thomas, Dafydd (Merioneth)

  NOES

  Abse, Leo

  Dormand, J. D.

  Jones, Barry (East Flint)

  Allaun, Frank

  Douglas-Mann, Bruce

  Jones, Dan (Burnley)

  Anderson, Donald

  Duffy, A. E. P.

  Judd, Frank

  Archer, Peter

  Dunn, James A.

  Kaufman, Gerald

  Armstrong, Ernest

  Dunnett, Jack

  Kelley, Richard

  Ashley, Jack

  Eadie, Alex

  Kerr, Russell

  Ashton, Joe

  Edge, Geoff

  Kilroy-Silk, Robert

  Atkins, Ronald (Preston N)

  Edwards, Robert (Wolv SE)

  Kinnock, Nell

  Atkinson, Norman

  Ellis, John (Brigg & Scun)

  Lambie, David

  Bagier, Gordon A. T.

  English, Michael

  Lamborn, Harry

  Barnett, Guy (Greenwich)

  Ennals, David

  Lamond, James

  Barnett, Rt Hon Joel (Heywood)

  Evans, Fred (Caerphilly)

  Latham, Arthur (Paddington)

  Bates, Alf

  Evans, Ioan (Aberdare)

  Leadbitter, Ted

  Bean, R. E.

  Ewing, Harry (Stirling)

  Lee, John

  Benn, Rt Hon Anthony Wedgwood

  Faulds, Andrew

  Lestor, Miss Joan (Eton & Slough)

  Bennett, Andrew (Stockport N)

  Fernyhough, Rt Hon E.

  Lever, Rt Hon Harold

  Bidwell, Sydney

  Fitch, Alan (Wlgan)

  Lewis, Ron (Carlisle)

  Bishop, E. S.

  Fitt, Gerard (Belfast W)

  Lipton, Marcus

  Blenkinsop, Arthur

  Flannery, Martin

  Litterick, Tom

  Boardman, H.

  Fletcher, Alex (Edinburgh N)

  Loyden, Eddie

  Booth, Rt Hon Albert

  Fletcher, L. R. (Ilkeston)

  Luard, Evan

  Bottomley, Rt Hon Arthur

  Fletcher, Ted (Darlington)

  Lyon, Alexander (York)

  Boyden, James (Bish Auck)

  Foot, Rt Hon Michael

  Lyons, Edward (Bradford W)

  Bradley, Tom

  Ford, Ben

  Mabon, Dr J. Dickson

  Bray, Dr Jeremy

  Forrester, John

  McCartney, Hugh

  Broughton, Sir Alfred

  Fowler, Gerald (The Wrekin)

  McDonald, Dr Oonagh

  Brown, Hugh D. (Provan)

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

  McElhone, Frank

  Buchan, Norman

  Freeson, Reginald

  MacFarquhar, Roderick

  Buchanan, Richard

  Garrett, John (Norwich S)

  McGuire, Michael (Ince)

  Butler, Mrs Joyce (Wood Green)

  Garrett, W.E. (Wallsend)

  MacKenzie, Gregor

  Callaghan, Rt Hon J. (Cardiff SE)

  George, Bruce

  Mackintosh, John P.

  Callaghan, Jim (Middleton & P)

  Gilbert, Dr John

  Maclennan, Robert

  Campbell, Ian

  Ginsburg, David

  McMillan, Tom (Glasgow C)

  Canavan, Dennis

  Golding, John

  Madden, Max

  Cant, R.B.

  Gould, Bryan

  Magee, Bryan

  Carmichael, Neil

  Gourlay, Harry

  Maguire, Frank (Fermanagh)

  Carter, Ray

  Grant, George (Morpeth)

  Mahon, Simon

  Cartwright, John

  Grant, John (Islington C)

  Mallalieu, J. P. W.

  Castle, Rt Hon Barbara

  Grocott, Bruce

  Marks, Kenneth

  Clemitson, Ivor

  Harrison, Walter (Wakefield)

  Marquand, David

  Cocks, Rt Hon Michael

  Hart, Rt Hon Judith

  Marshall, Dr Edmund (Goole)

  Cohen, Stanley

  Hattersley, Rt Hon Roy

  Marshall, Jim (Leicester S)

  Coleman, Donald

  Hatton, Frank

  Mason, Rt Hon Roy

  Colquhoun, Ms Maureen

  Hayman, Mrs Helene

  Maynard, Miss Joan

  Conlan, Bernard

  Healey, Rt Hon Denis

  Meacher, Michael

  Cook, Robin F. (Edin C)

  Heffer, Eric S.

  Mellish, Rt Hon Robert

  Corbett, Robin

  Hooley, Frank

  Mikardo, Ian

  Cowans, Harry

  Horam, John

  Millan, Rt Hon Bruce

  Cox, Thomas (Tooting)

  Howell, Rt Hon Denis (B'ham, Sm H)

  Miller, Dr M. S. (E Kilbride)

  Craigen, Jim (Maryhill)

  Hoyle, Doug (Nelson)

  Miller, Mrs Millie (Ilford N)

  Cronin, John

  Huckfield, Les

  Moonman, Eric

  Crosland, Rt Hon Anthony

  Hughes, Rt Hon C. (Anglesey)

  Morris, Alfred (Wythenshawe)

  Crowther, Stan (Rotherham)

  Hughes, Robert (Aberdeen N)

  Morris, Charles R. (Openshaw)

  Cryer, Bob

  Hughes, Roy (Newport)

  Morris, Rt Hon J. (Aberavon)

  Cunningham, G. (Islington S)

  Irvine, Rt Hon Sir A. (Edge Hill)

  Moyle, Roland

  Cunningham, Dr J. (Whiteh)

  Irving, Rt Hon S. (Dartford)

  Murray, Rt Hon Ronald King

  Davidson, Arthur

  Jackson, Colin (Brighouse)

  Newens, Stanley

  Davies, Bryan (Enfield N)

  Jackson, Miss Margaret (Lincoln)

  Noble, Mike

  Davies, Denzil (Llanelli)

  Janner, Greville

  Oakes, Gordon

  Davies, Ifor (Gower)

  Jay, Rt Hon Douglas

  Ogden, Eric

  Davis, Clinton (Hackney C)

  Jeger, Mrs Lena

  O'Halloran, Michael

  Deakins, Eric

  Jenkins, Hugh (Putney)

  Orme, Rt Hon Stanley

  Dean, Joseph (Leeds West)

  John, Brynmor

  Ovenden, John

  Dell, Rt Hon Edmund

  Johnson, James (Hull West)

  Padley, Walter

  Dempsey, James

  Johnson, Walter (Derby S)

  Palmer, Arthur

  Doig, Peter

  Jones, Alec (Rhondda)

  Park, George

  326

  327

  Parker, John

  Silkin, Rt Hon John (Deptford)

  Wainwright, Edwin (Dearne V)

  Parry, Robert

  Silkin, Rt Hon S. C. (Dulwich)

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

  Pendry, Tom

  Sillars, James

  Walker, Harold (Doncaster)

  Perry, Ernest

  Silverman, Julius

  Walker, Terry (Kingswood)

  Phipps, Dr Colin

  Skinner, Dennis

  Ward, Michael

  Prentice, Rt Hon Reg

  Small, William

  Watkins, David

  Price, C. (Lewisham W)

  Smith, John (N Lanarkshire)

  Watkinson, John

  Price, William (Rugby)

  Snape, Peter

  Weetch, Ken

  Rees, Rt Hon Merlyn (Leeds S)

  Spearing, Nigel

  Weitzman, David

  Richardson, Miss Jo

  Spriggs, Leslie

  Wellbeloved, James

  Roberts, Albert (Normanton)

  Stallard, A. W.

  White, Frank R. (Bury)

  Roberts, Gwilym (Cannock)

  Stewart, Rt Hon M. (Fulham)

  Whitlock, William

  Robertson, John (Paisley)

  Stoddart, David

  Willey, Rt Hon Frederick

  Robinson, Geoffrey

  Stott, Roger

  Williams, Alan (Swansea W)

  Roderick, Caerwyn

  Strang, Gavin

  Williams, Alan Lee (Hornch'ch)

  Rodgers, George (Chorley)

  Strauss, Rt Hon G. R.

  Williams, Rt Hon Shirley (Hertford)

  Rodgers, Rt Hon William (Stockton)

  Summerskill, Hon Dr Shirley

  Williams, Sir Thomas (Warrington)

  Rooker, J. W.

  Swain, Thomas

  Wilson, Alexander (Hamilton)

  Rose, Paul B.

  Taylor, Mrs Ann (Bolton W)

  Wilson, Rt Hon Sir Harold (Huyton)

  Ross, Rt Hon W. (Kilmarnock)

  Thomas, Jeffrey (Abertillery)

  Wilson, William (Coventry SE)

  Rowlands, Ted

  Thomas, Mike (Newcastle E)

  Wise, Mrs Audrey

  Ryman, John

  Thomas, Ron (Bristol NW)

  Woodall, Alec

  Sandelson, Neville

  Thorne, Stan (Preston South)

  Woof, Robert

  Sedgemore, Brian

  Tierney, Sydney

  Wrigglesworth, Ian

  Selby, Harry

  Tinn, James

  Young, David (Bolton E)

  Shaw, Arnold (Ilford South)

  Tomlinson, John

  Sheldon, Robert (Ashton-u-Lyne)

  Torney, Tom

  TELLERS FOR THE NOES:

  Shore, Rt Hon Peter

  Tuck, Raphael

  Mr. Joseph Harper and

  Short, Mrs Renée (Wolv NE)

  Varley, Rt Hon Eric G.

  Mr. James Hamilton.

  Question accordingly negatived.
  Mr. Deputy Speaker: We come now to Item 3.
  Motion made, and Question put,
  That, pursuant to the Parliament Acts 1911 and 1949, the House suggests to the Lords
  the following Amendment to the Aircraft and Shipbuilding Industries Bill:
  Schedule 2, page 84, line 4, leave out '£3·4' and insert '£3,400'.—[Mr. Maxwell-Hyslop.]
  The House divided: Ayes 279, Noes 283.

  Division No.14.]

  AYES

  [7.57 p.m.

  Adley, Robert

  Clark, Alan (Plymouth, Sutton)

  Fox, Marcus

  Aitken, Jonathan

  Clark, William (Croydon S)

  Fraser, Rt Hon H. (Stafford & St)

  Alison, Michael

  Clegg, Walter

  Freud, Clement

  Amery, Rt Hon Julian

  Cockcroft, John

  Fry, Peter

  Arnold, Tom

  Cooke, Robert (Bristol W)

  Galbraith, Hon T. G. D.

  Atkins, Rt Hon H. (Spelthorne)

  Cope, John

  Gardiner, George (Reigate)

  Awdry, Daniel

  Cormack, Patrick

  Gardner, Edward (S Fylde)

  Bain, Mrs Margaret

  Corrie, John

  Gilmour, Rt Hon Ian (Chesham)

  Baker, Kenneth

  Costain, A. P.

  Gilmour, Sir John (East Fife)

  Banks, Robert

  Craig, Rt Hon W. (Belfast E)

  Glyn, Dr Alan

  Beith, A. J.

  Crawford, Douglas

  Godber, Rt Hon Joseph

  Bell, Ronald

  Critchley, Ju'ian

  Goodhart, Philip

  Bennett, Dr Reginald (Fareham)

  Crouch, David

  Goodhew, Victor

  Benyon, W.

  Crowder, F. P.

  Goodlad, Alastair

  Berry, Hon Anthony

  Davies, Rt Hon J. (Knutsford)

  Gorst, John

  Biffen, John

  Dean, Paul (N Somerset)

  Gow, Ian (Eastbourne)

  Biggs-Davison, John

  Dodsworth, Geoffrey

  Gower, Sir Raymond (Barry)

  Blaker, Peter

  Douglas-Hamilton, Lord James

  Grant, Anthony (Harrow C)

  Body, Richard

  Drayson, Burnaby

  Gray, Hamish

  Boscawen, Hon Robert

  du Cann, Rt Hon Edward

  Griffiths, Eldon

  Bottomley, Peter

  Dunlop, John

  Grimond, Rt Hon J.

  Bowden, A. (Brighton, Kemptown)

  Durant, Tony

  Grist, Ian

  Boyson, Dr Rhodes (Brent)

  Eden, Rt Hon Sir John

  Hall, Sir John

  Bradford, Rev Robert

  Edwards, Nicholas (Pembroke)

  Hall-Davis, A. G. F.

  Braine, Sir Bernard

  Elliott, Sir William

  Hamilton, Michael (Salisbury)

  Brittan, Leon

  Emery, Peter

  Hampson, Dr Keith

  Brocklebank-Fowler, C.

  Evans, Gwynfor (Carmarthen)

  Hannam, John

  Brotherton, Michael

  Ewing, Mrs Winifred (Moray)

  Harrison, Col Sir Harwood (Eye)

  Brown, Sir Edward (Bath)

  Eyre, Reginald

  Harvle Anderson, Rt Hon Miss

  Bryan, Sir Paul

  Fairbairn, Nicholas

  Hastings, Stephen

  Buchanan-Smith, Alick

  Fairgrieve, Russell

  Havers, Sir Michael

  Budgen, Nick

  Farr, John

  Hayhoe, Barney

  Bulmer, Esmond

  Fell, Anthony

  Heath, Rt Hon Edward

  Burden, F. A.

  Finsberg, Geoffrey

  Henderson, Douglas

  Butler, Adam (Bosworth)

  Fisher, Sir Nigel

  Heseltine, Michael

  Carlisle, Mark

  Fletcher-Cooke, Charles

  Hicks, Robert

  Carson, John

  Fookes, Miss Janet

  Higglns, Terence L.

  Chalker, Mrs Lynda

  Forman, Nigel

  Hodgson, Robin

  Churchill, W. S.

  Fowler, Norman (Sutton C'f'd)

  Holland, Philip

  Hooson, Emlyn

  Mitchell, David (Basingstoke)

  Shepherd, Colin

  Hordern, Peter

  Moate, Roger

  Shersby, Michael

  Howe, Rt Hon Sir Geoffrey

  Molyneaux, James

  Silvester, Fred

  Howell, David (Guildford)

  Monro, Hector

  Sims, Roger

  Howells, Geraint (Cardigan)

  Montgomery, Fergus

  Skeet, T. H. H.

  Hunt, David (Wirral)

  Moore, John (Croydon C)

  Smith, Dudley (Warwick)

  Hurd, Douglas

  More, Jasper (Ludlow)

  Speed, Keith

  Hutchison, Michael Clark

  Morgan, Geraint

  Spence, John

  Irving, Charles (Cheltenham)

  Morgan-Giles, Rear-Admiral

  Spicer, Michael (S Worcester)

  James, David

  Morris, Michael (Northampton S)

  Sproat, Iain

  James, R. Rhodes (Cambridge)

  Morrison, Hon Peter (Chester)

  Stainton, Keith

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

  Mudd, David

  Stanbrook, Ivor

  Jessel, Toby

  Neave, Airey

  Stanley, John

  Johnson Smith, G. (E Grinstead)

  Nelson, Anthony

  Steel, David (Roxburgh)

  Jones, Arthur (Daventry)

  Neubert, Michael

  Steen, Anthony (Wavertree)

  Jopling, Michael

  Newton, Tony

  Stewart, Donald (Western Isles)

  Joseph, Rt Hon Sir Keith

  Normanton, Tom

  Stewart, Ian (Hitchin)

  Kaberry, Sir Donald

  Nott, John

  Stokes, John

  Kershaw, Anthony

  Onslow, Cranley

  Stradling Thomas, J.

  Kilfedder, James

  Oppenheim, Mrs Sally

  Tapsell, Peter

  Kimball, Marcus

  Page, Rt Hon R. Graham (Crosby)

  Taylor, R. (Croydon NW)

  King, Tom (Bridgwater)

  Page, Richard (Workington)

  Taylor, Teddy (Cathcart)

  Kitson, Sir Timothy

  Paisley, Rev Ian

  Tebbit, Norman

  Knight, Mrs Jill

  Pardoe, John

  Thatcher, Rt Hon Margaret

  Knox, David

  Parkinson, Cecil

  Thomas, Dafydd (Merioneth)

  Lamont, Norman

  Pattie, Geoffrey

  Thomas, Rt Hon P. (Hendon S)

  Langford-Holt, Sir John

  Penhaligon, David

  Thompson, George

  Latham, Michael (Melton)

  Percival, Ian

  Townsend, Cyril D

  Lawrence, Ivan

  Peyton, Rt Hon John

  Trotter, Neville

  Lawson, Nigel

  pink, R. Bonner

  van Straubenzee, W. R.

  Lester, Jim (Beeston)

  Powell, Rt Hon J. Enoch

  Vaughan, Dr Gerard

  Lewis, Kenneth (Rutland)

  Price, David (Eastleigh)

  Viggers, Peter

  Lloyd, Ian

  Prior, Rt Hon James

  Wainwright, Richard (Colne V)

  Loveridge, John

  Pym, Rt Hon Francis

  Wakeham, John

  Luce, Richard

  Raison, Timothy

  Walder, David (Clitheroe)

  McAdden, Sir Stephen

  Rathbone, Tim

  Walker, Rt Hon P. (Worcester)

  MacCormick, Iain

  Rawlinson, Rt Hon Sir Peter

  Wall, Patrick

  McCrindle, Robert

  Rees, Peter (Dover & Deal)

  Walters, Dennis

  McCusker, H.

  Rees-Davies, W. R.

  Warren, Kenneth

  Macfarlane, Neil

  Reid, George

  Watt, Hamish

  MacGregor, John

  Renton, Rt Hon Sir D.(Hunts)

  Weatherill, Bernard

  Macmillan, Rt Hon M. (Farnham)

  Renton, Tim (Mid-Sussex)

  Wells, John

  McNair-Wilson, M.(Newbury)

  Ridley, Hon Nicholas

  Welsh, Andrew

  Madel, David

  Ridsdale, Julian

  Whitelaw, Rt Hon William

  Marshall, Michael (Arundel)

  Rifkind, Malcolm

  Wiggin, Jerry

  Marten, Neil

  Roberts, Wyn (Conway)

  Wigley, Dafydd

  Mates, Michael

  Ross, Stephen (Isle of Wight)

  Wilson, Gordon (Dundee E)

  Maude, Angus

  Ross, William (Londonderry)

  Winterton, Nicholas

  Maudling, Rt Hon Reginald

  Rossi, Hugh (Hornsey)

  Wood, Rt Hon Richard

  Mawby, Ray

  Rost, Peter (SE Derbyshire)

  Young, Sir G. (Ealing, Acton)

  Maxwell-Hyslop, Robin

  Sainsbury, Tim

  Younger, Hon George

  Mayhew, Patrick

  St. John-Stevas, Norman

  Meyer, Sir Anthony

  Shaw, Giles (Pudsey)

  TELLERS FOR THE AYES:

  Miller, Hal (Bromsgrove)

  Shaw, Michael (Scarborough)

  Mr. Spencer Le Marchant and

  Mills, Peter

  Shelton, William (Streatham)

  Mr. Michael Roberts.

  Miscampbell, Norman

  NOES

  Abse, Leo

  Buchan, Norman

  Cryer, Bob

  Allaun, Frank

  Buchanan, Richard

  Cunningham, G. (Islington S)

  Anderson, Donald

  Butler, Mrs Joyce (Wood Green)

  Cunningham, Dr J. (Whiten)

  Archer, Peter

  Callaghan, Rt Hon J.(Cardiff SE)

  Davidson, Arthur

  Armstrong, Ernest

  Callaghan, Jim (Middleton & P)

  Davies, Bryan (Enfield N)

  Ashley, Jack

  Campbell, Ian

  Davies, Denzil (Llanelli)

  Atkins, Ronald (Preston N)

  Canavan, Dennis

  Davies, Ifor (Gower)

  Atkinson, Norman

  Cant, R. B.

  Davis, Clinton (Hackney C)

  Bagier, Gordon A. T.

  Carmichael, Neil

  Deakins, Eric

  Barnett, Guy (Greenwich)

  Carter, Ray

  Dean, Joseph (Leeds West)

  Barnett, Rt Hon Joel (Heywood)

  Cartwright, John

  Dell, Rt Hon Edmund

  Bates, Aif

  Castle, Rt Hon Barbara

  Dempsey, James

  Bean, R. E.

  Clemitson, Ivor

  Doig, Peter

  Benn, Rt Hon Anthony Wedgwood

  Cocks, Rt Hon Michael

  Dormand, J. D.

  Bennett, Andrew(Stockport N)

  Cohen, Stanley

  Douglas-Mann, Bruce

  Bidwell, Sydney

  Coleman, Donald

  Duffy, A. E. P.

  Bishop, E. S.

  Colquhoun, Ms Maureen

  Dunn, James A.

  Blenkinsop, Arthur

  Conlan, Bernard

  Dunnett, Jack

  Boardman, H.

  Cook, Robin F.(Edin C)

  Eadie, Alex

  Booth, Rt Hon Albert

  Corbett, Robin

  Edge, Geoff

  Bottomley, Rt Hon Arthur

  Cowans, Harry

  Edwards, Robert (Wolv SE)

  Boyden, James (Bish Auck)

  Craigen, Jim (Maryhill)

  Ellis, John (Brigg & Scun)

  Bradley, Tom

  Crawshaw, Richard

  English, Michael

  Bray, Dr Jeremy

  Cronin, John

  Ennals, David

  Broughton, Sir Alfred

  Crosland, Rt Hon Anthony

  Evans, Fred (Caerphilly)

  Brown, Hugh D.(Provan)

  Crowther, Stan (Rotherham)

  Evans, loan (Aberdare)

  330

  331

  Ewing, Harry (Stirling)

  Lever, Rt Hon Harold

  Rose, Paul B.

  Faulds, Andrew

  Lewis, Ron (Carlisle)

  Ross, Rt Hon W.(Kilmarnock)

  Fernyhough, Rt Hon E.

  Lipton, Marcus

  Rowlands, Ted

  Fitch, Alan (Wigan)

  Litterick, Tom

  Ryman, John

  Fitt, Gerard (Belfast W)

  Loyden, Eddie

  Sandelson, Neville

  Flannery, Martin

  Luard, Evan

  Sedgemore, Brian

  Fletcher, L. R. (Ilkeston)

  Lyon, Alexander (York)

  Selby, Harry

  Fletcher, Ted (Darlington)

  Lyons, Edward (Bradford W)

  Shaw, Arnold (Ilford South)

  Foot, Rt Hon Michael

  Mabon, Dr J. Dickson

  Sheldon, Robert (Ashton-u-Lyne)

  Ford, Ben

  McCartney, Hugh

  Shore, Rt Hon Peter

  Forrester, John

  McDonald, Dr Oonagh

  Short, Mrs Renée (Wolv NE)

  Fowler, Gerald (The Wrekin)

  McElhone, Frank

  Silkin, Rt Hon John (Deptford)

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

  MacFarquhar, Roderick

  Silkin, Rt Hon S. C. (Dulwich)

  Freeson, Reginald

  McGuire, Michael (Ince)

  Sillars, James

  Garrett, John (Norwich S)

  MacKenzie, Gregor

  Silverman, Julius

  Garrett, W. E. (Wallsend)

  Mackintosh, John P.

  Skinner, Dennis

  George, Bruce

  Maclennan, Robert

  Small, William

  Gilbert, Dr John

  McMillan, Tom (Glasgow C)

  Smith, John (N Lanarkshire)

  Ginsburg, David

  Madden, Max

  Snape, Peter

  Golding, John

  Magee, Bryan

  Spearing, Nigel

  Gould, Bryan

  Maguire, Frank (Fermanagh)

  Spriggs, Leslie

  Gourlay, Harry

  Mahon, Simon

  Stallard, A. W.

  Graham, Ted

  Mallalieu, J. P. W.

  Stewart, Rt Hon M. (Fulham)

  Grant, George (Morpeth)

  Marks, Kenneth

  Stoddart, David

  Grant, John (Islington C)

  Marquand, David

  Stott, Roger

  Grocott, Bruce

  Marshall, Dr Edmund (Goole)

  Strang, Gavin

  Hamilton, James (Bothwell)

  Marshall, Jim (Leicester S)

  Strauss, Rt Hon G. R.

  Harper, Joseph

  Mason, Rt Hon Roy

  Summerskill, Hon Dr Shirley

  Harrison, Walter (Wakefield)

  Maynard, Miss Joan

  Swain, Thomas

  Hart, Rt Hon Judith

  Meacher, Michael

  Taylor, Mrs Ann (Bolton W)

  Hattersley, Rt Hon Roy

  Mellish, Rt Hon Robert

  Thomas, Jeffrey (Abertillery)

  Hatton, Frank

  Mikardo, Ian

  Thomas, Mike (Newcastle E)

  Hayman, Mrs Helene

  Millan, Rt Hon Bruce

  Thomas, Ron (Bristol NW)

  Healey, Rt Hon Denis

  Miller, Dr M. S. (E Kilbride)

  Thorne, Stan (Preston South)

  Heffer, Eric S.

  Miller, Mrs Millie (Ilford N)

  Tierney, Sydney

  Hooley, Frank

  Moonman, Eric

  Tinn, James

  Horam, John

  Morris, Alfred (Wythenshawe)

  Tomlinson, John

  Howell, Rt Hon Denis (B'ham, Sm H)

  Morris, Charles R. (Openshaw)

  Torney, Tom

  Hoyle, Doug (Nelson)

  Morris, Rt Hon J. (Aberavon)

  Tuck, Raphael

  Huckfield, Les

  Moyle, Roland

  Varley, Rt Hon Eric G.

  Hughes, Rt Hon C. (Anglesey)

  Murray, Rt Hon Ronald King

  Wainwright, Edwin (Dearne V)

  Hughes, Robert (Aberdeen N)

  Newens, Stanley

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

  Hughes, Roy (Newport)

  Noble, Mike

  Walker, Harold (Doncaster)

  Irvine, Rt Hon Sir A. (Edge Hill)

  Normanton, Tom

  Walker, Terry (Kingswood)

  Irving, Rt Hon S. (Dartford)

  Oakes, Gordon

  Ward, Michael

  Jackson, Colin (Brighouse)

  Ogden, Eric

  Watkins, David

  Jackson, Miss Margaret (Lincoln)

  O'Halloran, Michael

  Watkinson, John

  Janner, Greville

  Orme, Rt Hon Stanley

  Weetch, Ken

  Jay, Rt Hon Douglas

  Ovenden, John

  Weitzman, David

  Jeger, Mrs Lena

  Padley, Walter

  Wellbeloved, James

  Jenkins, Hugh (Putney)

  Palmer, Arthur

  White, Frank R. (Bury)

  John, Brynmor

  Park, George

  Whitlock, William

  Johnson, James (Hull West)

  Parker, John

  Willey, Rt Hon Frederick

  Johnson, Walter (Derby S)

  Parry, Robert

  Williams, Alan (Swansea W)

  Jones, Alec (Rhondda)

  Pendry, Tom

  Williams, Alan Lee (Hornch'ch)

  Jones, Barry (East Flint)

  Perry, Ernest

  Williams, Rt Hon Shirley (Hertford)

  Jones, Dan (Burnley)

  Phipps, Dr Colin

  Williams, Sir Thomas (Warrington)

  Judd, Frank

  Prentice, Rt Hon Reg

  Wilson, Alexander (Hamilton)

  Kaufman, Gerald

  Price, C. (Lewisham W)

  Wilson, Rt Hon Sir Harold (Huyton)

  Kelley, Richard

  Price, William (Rugby)

  Wilson, William (Coventry SE)

  Kerr, Russell

  Rees, Rt Hon Merlyn (Leeds S)

  Wise, Mrs Audrey

  Kilroy-Silk, Robert

  Richardson, Miss Jo

  Woodall, Alec

  Kinnock, Neil

  Roberts, Albert (Normanton)

  Woof, Robert

  Lambie, David

  Roberts, Gwilym (Cannock)

  Wrigglesworth, Ian

  Lamborn, Harry

  Robertson, John (Paisley)

  Young, David (Bolton E)

  Lamond, James

  Robinson, Geoffrey

  Latham, Arthur (Paddington)

  Roderick, Caerwyn

  TELLERS FOR THE NOES:

  Leadbitter, Ted

  Rodgers, George (Chorley)

  Mr. Joseph Ashton and

  Lee, John

  Rodgers, Rt Hon William (Stockton)

  Mr. Thomas Cox.

  Lestor, Miss Joan (Eton & Slough)

  Rooker, J. W.

  Question accordingly negatived.
  Mr. Anthony Nelson: I beg to move,
  That, pursuant to the Parliament Acts 1911 and 1949, the House suggests to the Lords the following Amendments to the Aircraft and Shipbuilding Industries Bill:
  Schedule 2, page 82, leave out lines 15 to 17.
  Schedule 2, page 83, leave out lines 26 to 29 and insert '15,000 gross tons'.
  Schedule 2, page 84, line 38, leave out 'except in the case of a warship'.
  Schedule 2, page 84, leave out lines 45 to 49.
  The effect of the amendments would be to exclude the specialist warship builders from Schedule 2. Those companies are the Vickers Shipbuilding

  333
  Group Limited, Vosper Thornycroft Limited and Yarrow (Shipbuilders) Limited. The arguments for the exclusion of these companies have been well rehearsed in Committee and on the Floor of the House. However, I do not believe that the answers to the many questions asked or about the suggested positive advantages of exclusion have been sufficiently well taken up by the Government Front Bench.
  There are powerful and persuasive arguments for the exclusion of the warship manufacturers. Let me first, however, express my small constituency interest in the matter in that quite a large number of my constituents are employed by Vosper Thornycroft, particularly at the Cosham division which is just outside my constituency nearby in Portsmouth, North. I am sure that the hon. Member for Portsmouth, North (Mr. Judd), the Parliamentary Secretary to the Ministry for Overseas Development, would join me, if he were here, in paying tribute to the dynamic performance of the company in recent years, and to the way in which its export growth has provided a good example not only for the shipbuilding industry but for other companies of what can be done with a high level of reinvestment of profits and an adequate and growing level of orders.
  There are three fundamental reasons which make it desirable for these companies to be excluded. The reasons are somewhat different from those expressed in support of the exclusion of ship repairing. They are also quite different from the reasons why the Opposition oppose the Bill in its entirety. Without creating a value judgment on ship repairers or the Bill generally, there are powerful arguments for excluding the warship builders.
  By definition, Government funds are limited, and it should therefore be a prime purpose, certainly of the most ardent Socialist to ensure that they are used to the best possible advantage. Government and public funds will always be limited, and I believe, therefore, that in the first place they should be used for optimum benefit and in the most effective way. There is what the economists call the element of opportunity cost which involves judging the use of public funds or investment by what can be done with
  334
  those funds if they are not applied in that particular way. Therefore, if these companies were excluded from the Bill, that would free substantial resources for investment in the rest of the merchant shipbuilding industry and would enable the profitable performance of the warship builders to continue in the private sector.
  8.15 p.m.
  The Bill provides for a total of £550 million to be drawn down on the transfer of ownership from private to Government hands, but this very high price will not in itself provide a single extra job. Simply transferring ownership from one hand to another will not of itself increase jobs or improve performance. The only factor which will provide jobs and enable reinvestment and investment in the shipbuilding industry is orders. Only orders will enable the industry to survive, no matter how much one may invest or spend on transferring ownership.
  There is therefore a fundamental misconception about the way in which Socialist policy and philosophy are being reflected in the proposals in the Bill. The money the Government have available for nationalisation should go to where it is most needed. I should have thought that Socialists would be the first to support that. They do not want to support those who are able to help themselves when there are other desperate areas of social and industrial need to which the money could be far better applied. That view ought to be the basis of concession on both sides. We should all agree with that concept across the party lines.
  The three companies I am describing have been tremendously profitable. We have been told by Ministers that their exports have been at the rate of £15 million to £40 million a year. They employ more than 20,000 people, and over the past five years have contributed about £273 million to the balance of payments. All this points to an industry that has been highly successful in regenerating itself with a high level of reinvestment, which undoubtedly displays its ability to continue the performance that it has produced in the past.
  Nevertheless, both the Under-Secretary and the Minister of State have been at pains in Committee and in the House to put forward a fundamental point of view.

  335
  Earlier this year the Under-Secretary, in considering these factors, said:
  "Those seem all very good reasons for including within the nationalisation proposals the yards and the companies which these amendments seek to exclude."—[Official Report, Standing Committee D, 11th May 1976; c. 3070.]
  It is this fundamental view on which both sides of the House are at variance.
  If a sector of industry is to be nationalised it seems that there can be two reasons for so doing. It can be said that the industry is not at present providing jobs, investment, profitability, or a contribution to the balance of payments—in global terms the performance that it should have. If it is providing them but it is being given substantial Government orders so to do, the only other reason might be that the margin it is making and is not distributing is unacceptable and the Government feel that they must vertically integrate into that company to strip out the wastage of the money it is expending by way of orders.
  In other words, if the company is not doing well enough, there might be a case for nationalising it. On the other hand, if it is doing well but is not reinvesting its profits, there might equally be a case for nationalisation. However, these companies have all provided outstanding examples of profitability, job security, contributions to the balance of payments and reinvestment. Vosper Thornycroft has been of prime importance in this respect.
  The second reason it is important to consider excluding these companies concerns the need to increase their exports. Of the 20,000 people employed in them Vickers employs 13,000. Half of this number are engaged in submarine construction, and a large proportion of the balance are concerned with surface vessels and cruisers.
  With the defence cuts we have been told that we must look forward to the prospect of a reduction of jobs amounting to about 11,000 across the whole warship industry. I have not been able to understand why job losses should be as large as the Government have said. A high proportion of the production of the three companies is exported—an average of between 60 per cent. and 70 per cent. As I have said, a large portion of the
  336
  employees at Vickers are engaged on United Kingdom maritime defence projects.
  The job losses do not seem to amount to 11,000, unless figures have been put forward by the companies because in some way they want to hold out for larger orders from the Ministry of Defence, or unless they are figures that the Government have deduced on false information. I do not know the origin of the figures, but they are extremely important because of their great significance both to the future industry and to the attitude that the House will adopt.
  As for the amendment, we have seen some substantiation of the figure that the Government have given us, but at present some 60 per cent. of total foreign orders for warships are directed to this country. That is a reflection of the outstanding marketing success of the three companies and other companies. If that is to be maintained along with jobs, new investment and profitability, it will be necessary substantially to increase the export performance of the companies. How do the Government propose to do that?
  We have no indication that the Government will facilitate a substantial export drive in the three companies. There would be a substantially better chance of a successful export drive if the companies were allowed to remain in the private sector. There are powerful reasons for that argument. First, there is the good will, the personal relationship, the confidentiality and the secrecy between manufacturers and foreign customers. That is a prerequisite to the placing of any orders and the future profitability of the companies. That is tremendously important. My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) said that it is the golden thread that links manufacturers to foreign customers. Surely it is something that we should be careful to note.
  With nationalisation and the degree of decentralisation of British Shipbuilders that we have been promised, there will be fear on the part of foreign customers and Governments on the one hand and a lack of confidentiality vis-à-vis British Shipbuilders and the Government on the other. Secondly, a good deal of the good will and personal relationships that have

  337
  been built up with particular yards will be destroyed, orders placed with British Shipbuilders being transferred to other yards where there are political pressures.
  I know that we have had some reassurance from the Government but I express the same fears that were put to the House by my hon. Friend the Member for Oswestry (Mr. Biffen) about ship repairers. It is clear that political pressures are strong. We must recognise that there will be pressures for certain orders to be transferred within British Shipbuilders if the three companies are brought within one national umbrella.
  The Under-Secretary of State for Industry (Mr. Les Huckfield): In his usual way the hon. Gentleman has tried to lead the House astray in what he has said about confidentiality. Has he any reason or evidence for making that accusation?
  Mr. Nelson: The evidence is that at present foreign Governments and customers are able to order British warships either directly with a yard or company or through the Ministry of Defence. In the overwhelming majority of cases where orders have been made they have been made directly with the yard. That indicates clearly that foreign customers wish to deal directly with the company or yard where they have an ongoing relationship and a presence during the period of design and construction rather than to deal with a governmental bureaucracy. The hon. Gentleman asked for an example and that is my answer. I believe that it is a real answer.
  Secondly, I believe that there would be less political intervention in the completion of orders if the three companies were to remain in the private sector. I put forward the view that there is probably a degree of acceptance on both sides of the House that there has to be some governmental scrutiny of the acceptance of defence contracts by British manufacturers. However, once orders and contracts have been placed and investments made, I am against situations or foreign relationships changing substantially so that the progress of a contract for a warship may be disrupted.
  That is a situation which may be allowed to happen—with political pressures being exercised to a much greater extent throughout the nationalised Indus-
  338
  tries, such as British Shipbuilders—if these three companies are drawn into the net. I believe that there would be more incentive for the so-called lead yards to succeed in undertaking the specialised design, research and development of new models in export markets if they were allowed to do so independently. It would certainly be highly undesirable if the research and development work were to be transferred to other yards.
  The performance of companies such as Vosper Thornycroft, which has built up 60 orders for 29 companies, points to the way in which private enterprise has been highly successful and dynamic in earning its keep. Export earnings of £300 million since 1960 are not to be sniffed at. I emphasise that there is a distinct possibility that orders might be transferred to other yards.
  I shall not repeat all the arguments that I have expressed on other occasions, but I wish to emphasise that there will be a danger of contracts being placed elsewhere. Since the Booz-Allen Report and the Carrington policy of concentrating production on these three yards, these concerns are well suited to the areas of work in which they specialise. If we allow a situation in which some merchant ship manufacturers can undertake production work on warships, I believe that this would act to the detriment of these three companies in terms of the contribution which they make to our national economy and to our security.
  It makes sound financial sense for the Government to be sympathetic to this amendment. We hear a great deal from Labour about the amount of money which the Government are pumping into this and other industries by way of grants and other assistance. The shipbuilding industry has been a substantial recipient of Government aid and funds under a variety of legislation. This is true of the warship manufacturers. This aid has been made available only for export production and also by way of regional aid, for Yarrow. Vosper has not benefited in the latter respect.
  One cannot look simply at Government grants without taking into account the net return to the Government by way of taxation. Let me give figures in respect of the two companies about which I have information. In the past six years Vosper has received grants of

  339
  £2 million, but it has paid tax of £6 million. Yarrow has received grants of £4·6 million by way of direct shipbuilding grant and regional aid, but has paid tax of £6·34 million. If we take into account the one figure as against the other, we see that there is a net credit to the Government of £6 million in respect of the two companies. That may not appear to be a great deal of money in Government terms, but even that contribution to Treasury funds may be prejudiced by the action which the Government now propose to take.
  The companies have shown themselves willing to undertake a high degree of reinvestment. They have good relations with their employees, and I know from my constituency work that they are highly regarded by the community in which they operate. When we add to this situation the contribution which these companies made to the national economy and to governmental coffers, I believe that it is the height of ill-will that the Government should now extend to them the clammy hand of nationalisation.
  The nationalisation of warship builders cannot be justified in terms of jobs, profitability or an increased contribution to the balance of payments. We can only guess at the Government's reasons for including these three companies. Is it because of their doctrinaire policy to extend State ownership regardless of its contribution to the welfare or finances of our national economy? Is it because it is convenient to throw in warship manufacturers since the Government are nationalising the rest of the industry? Or is it because they feel the need for a profitable element in British shipbuilders to cover up some of the less profitable areas. We can only guess at their reasons.
  8.30 p.m.
  With these provisions the Government are playing with the jobs of thousands of skilled workers and with an invaluable contribution to our defence and balance of payments. If the Government decide to oppose the motion, they will be indulging not in pragmatic Socialism but in doctrinaire folly.
  Mr. Neil Kinnock: I was interested in the approach taken by the hon. Member for Chichester (Mr. Nelson). I understand his constituency interest, which he has a right and duty to defend.
  340
  There is a wider application which manifests a general Conservative attitude to the relationship between defence industries and the responsibility of the Government. An appropriate shorthand term is the warfare State.
  The debate and some of the reports of the multiple stages of this Bill indicate that the Opposition are exercising dual standards in their approach to this matter. The hon. Member for Chichester disingenuously said that we should operate a Socialist analysis of public expenditure so that we can relieve ourselves of the necessity of paying to the shipbuilders involved—Vickers, Yarrow and Vosper—and so make available to ourselves money for other purposes. There was a re-jigging of Nye Bevan's famous aphorism about religion and priorities.
  The hon. Member gave us a mini-lecture on opportunity costs. But the idea of a reallocation of priorities on the basis of calculating which opportunity costs are the most expensive in the whole process reveals a belief that, no matter what the input by the taxpayer to these industries, no matter what the commitment to public expenditure and no matter what proportion of total output is purchased by the State in a monopsonistic fashion, the industries should not be subject to the action or control that is a direct consequence of nationalisation.
  Hon. Members on this side and many taxpayers feel that the time is long past when we can keep on pumping out substantial sums of money without the accountability and control that would go with it if the industry was in the private sector—for instance, in the form of purchase of stock. There is a similarity between the money that the State pays into enterprises of this type and the money that people on the open market would put into such an enterprise if they were willing. The least one can demand for this contribution is some type of control, participation and management supervision which, because it involves the State, amounts to nationalisation. Therefore, there is every justification for bringing these substantial providers of shipping to the Government, because the Government are the only institution in Britain buying for the Merchant Navy and keeping them in the general ambit of the Bill.
  The hon. Member for Chichester said that he would use powerful arguments for

  341
  excusing and excluding the warship builders. There was, first, the question of opportunity cost, the optimum use of public funds. There was then the argument about freeing the cost resources for investment in the rest of the merchant shipbuilding industry. The fact is that, as these yards are substantially dependent upon Government purchase, all we are doing is following up the monopsonistic purchase of the ships with the control that should go with it.
  The hon. Gentleman gave us a lecture on Socialism. He is a Conservative. The Conservatives uphold the general principles of consumerism. Perhaps I may give him a slight lecture on consumerism. The finest assertion of power that the consumer could have is to make the provider dependent on his consumption. Indeed, that is the relationship that the State has with these yards, which provide substantially for the Royal Navy and, therefore, are substantially within the custom of the Government.
  Mr. Peter Viggers: The hon. Gentleman's arguments are always respected by the Opposition. I am as anxious as he is that he should remain accurate in his assessment. Is he aware that Vosper Thornycroft, for instance, exports more than 70 per cent. of its products?
  Mr. Kinnock: On that subject the Opposition—or, at least, Opposition Back Benchers—are not guilty of dual standards. However, I shall come to the matter of exports shortly.
  I think that we have had a fair definition of the Conservative attitude towards the whole question of nationalisation. Again, it was either innocence or disingenuity, but the hon. Member for Chichester said "If the company is not doing well, that is a good reason for nationalisation, or if it is not maximising its use of resources, that is a good reason for nationalisation." I am surprised, therefore, to note that on other substantial parts of the Bill he has been notably absent from the Division Lobbies. I suppose that on other proposals that we have made—and many more that I hope we shall make—for nationalisation in the two areas in which the hon. Gentleman is prepared to operate these criteria—a company not doing well or not
  342
  maximising its use of resources—he will be prepared to support the taking of such companies into public ownership.
  On the first criterion of a company not doing to well, that is a justification for much of the nationalisation that we have had up to now. Indeed, the greatest complaint of major enthusiasts for nationalisation in the Labour Party—and there are many—is the fact that we have successively and traditionally nationalised the loss-makers. We consider that in many cases this has crippled our whole ideology of nationalisation before we have started, and in some cases it has necessitated decades of reinvestment and development, and cutting. paring, courageous management decisions and the closest trade union co-operation, to overcome the fact that we were taking over the cripples of British industry. Nevertheless, it has been done.
  On the other criterion, the company that is not maximising its use of resources, according to the hon. Gentleman that is a justification for nationalisation. I am very glad about that, although unhappy in one way. It is a justification for nationalising just about everything short of a fish and chip shop on the corner of my street in the constituency of Bedwellty. What is significant in British industry—indeed, almost congenital—is the fact that it does not maximise its use of resources. That is one of the reasons for our having to try, for four decades under Governments of both major parties, to induce, cajole, assist and attract industries to what at various times we have called development areas, deprived areas or assisted areas, or whatever description various areas have been given. We have done that to try to stimulate the use of manpower and capital resources, and resources of good will and skill, which are invaluable.
  If the hon. Gentleman is prepared to use that criterion—I hope he will write it into the next Conservative manifesto—that where companies are not maximising the use of their resources there is a significant and acceptable reason for taking them into public ownership, I shall even be tempted to vote Conservative at the next General Election. It is by a strange and weird stretch of the imagination that I see that possibility occurring. Probably the commitment is at least as determined as it will be in our manifesto for

  343
  the next election. I am sure that the hon. Gentleman knows what I mean.
  The question of exports must exercise our minds. There is an important division of opinion between the two sides. There is even a division of opinion on these matters, strange though it may sound, within the Labour Party. It may well come as something of a surprise to Conservative Members to learn that there should be a division of opinion on such matters within the Labour Party.
  The general philosophy of the Conservative Party on these matters is, always has been and, I expect, always will be that there is no particular moral assessment to be applied to the sale of arms, that it is a fairly straightforward matter of trade, and that the judgment is exercised within a general ambit of strategic necessity.
  It is only for that reason that we do not sell, say, submarines or tanks or warships to Iron Curtain countries, because they are about the only dictatorships that within the general and generous Conservative criteria are excluded from being prospective customers. The Conservative Party's policy is that we should sell to any Government as long as they will pay, or at any rate will make a promise to pay, because there are frequent occasions on which the less stable dictatorships do not pay. Indeed, there have been occasions when even stable dictatorships such as the Chilean junta have not paid or even honoured their commitment to pay an instalment on a certain date.
  The Conservative Party's attitude is that whether such dictatorships honour their commitments in relation to the payment for certain arms and the circumstances in which they may be killing fellow human beings by the use of those arms are not matters for Conservative consideration. Conservative Members argue that in making that general moral point we should not discriminate as to whom we sell armaments to without asking workers on the shop floor what they think of the prospect of becoming unemployed if we do not sell to the sheikh of one country or the dictator of another.
  I know what the response of the shop floor workers would be. Generally speaking, though far from always, the shop floor response understandably would be "If the difference between supplying the
  344
  dictator with his guns and not supplying him with his guns is my job, the dictator shall, regrettably, have his guns". That is because of the whole preoccupation with the idea that we should sustain the rôle of being a major international arms selling economy. There has been no serious investigation of the alternative uses of the manpower and the capital skills and resources.
  It is a matter of serious complaint that there has not been such an investigation, because it would be to the great advantage of all parties and to the whole of Britain if we dismantled our commitment to the warfare international State and replaced that commitment with a commitment to the production of consumer goods, investment goods and all the things that are much more needed throughout the world than guns, bombs, warplanes and other weapons of death. That is not a simplistic point. I do not expect it to happen tomorrow.
  8.45 p.m.
  Apart from the moral question, there will be a great deal of money to be made by this country throughout the world if we use the finely developed and honed skills required to make the weapons of death in making articles of peace. There is a broad request to all parties—we all have a vested interest in it—to turn our swords into ploughshares. The British worker and British management are at least as capable of doing that on a large scale as are any other country's workers and management. With the cushion removed, with the relatively protected market of arms sales removed, managerial, investment and governmental minds might be concentrated on alternative production from these highly skilled and well developed engineering enterprises.
  Mr. Bernard Conlan: Before my hon. Friend leaves that extremely interesting and important point about arms sales abroad, particularly to dictatorships, will he comment on arms sales to South Africa?
  Mr. Kinnock: South Africa is a white racialist dictatorship. The only reason why South Africa needs arms is the suppression of its own people. There is a myth abroad—it has been shown to be a myth by a significant number of independent strategic observers—that South

  345
  Africa is required as an essential link in the Western Alliance chain that prevents the Indian Ocean from being carpeted wall to wall with Russian submarines. That has been demonstrated to be nonsense by people who have no axe to grind over South Africa and no desire to sustain the Soviet interest there or anywhere else in the world. South Africa needs to maintain a virile defence posture to give it all the seal-studded importance of the dictatorship that it is.
  Yes, South Africa definitely is a dictatorship. Any country that will, as is reported in the latest Sunday Times, incarcerate the journalist Abraham—an intelligent 24-year-old man—and pressurise him to the point of suicide, any State that will throw out Dennis Herbstein, is as much a dictatorship as any squalid—
  Mr. Deputy Speaker (Mr. Oscar Murton): Order. The hon. Gentleman is going rather wide of the mark. We are getting involved in detail other than the principle of the motion.
  Mr. Kinnock: I quite understand, Mr. Deputy Speaker. I was in danger of being carried away.
  It would be useful to enter a moral consideration into the general criteria that are employed in deciding to whom we should sell arms, the products that the hon. Member for Chichester wishes to remain under private production. The hon. Gentleman readily acknowledged the need for the Government to supervise defence contracts as being only sensible. Indeed it is a treaty requirement for any prospective sales to Soviet countries or Soviet satellites. I would not sell so much as a spur or a button to them. I think they are lunatic in making the commitment to the weapons of death which they do. I only wish that we had more influence in getting them to dismantle their stupid structure of war. The fact is that we have not.
  This requirement is necessary because of general strategic and moral questions and because there is always a distant prospect of any country in the world, especially the more unstable system of government, using these weapons against our own armed forces. Obviously, we have systematically to overlook them. That function could be more satisfactorily
  346
  performed by a corporation under national ownership than by any other system. Of course the hon. Member for Chichester fears that, because of the prospects he feels of there not being the same level of good will or the guarantee of secrecy in the event of these yards becoming publicly owned.
  I know the hon. Member will understand that we can accept absolutely that those who run nationalised industries are at least as scrupulous and delicate in their concern for secrecy and the maintenance of good will as anybody in private enterprise. I go so far as to say that the development of business espionage is probably the highest form of private enterprise. The fact is that it is only the same temptations of financial gain or of treachery that could persuade a nationalised company employee as could persuade a private company employee to break a code of secrecy.
  I do not think that there is any danger, if secrecy is necessary, that the people managing and working in those yards will change in their general disposition towards the need for secrecy and the maintenance of good will simply because they become publicly owned. Anybody would think, from what the hon. Member for Chichester says, that on vesting day all workers and managers who have previously worked in the yards and built up an enormous reputation throughout the world will be shipped off by the lorry load and the yards will then be occupied by people whose trustworthiness is, to say the least, in question. That will not happen. The same people will be there the day after.
  I hope that there will be changes in attitude, but we cannot legislate for it nor can we dictate it. The main complaint has been that in nationalised industries, on the day after vesting day, nothing has changed. This is the broad complaint from generations of miners—including my own family—and generations of steel workers that the industry is being run by the same team as before but in different jerseys. I hope that it will mean more than a mere change of ownership. There is every prospect that it will not mean a great deal more. In one way that is disappointing. But it should be a reassurance to the hon. Member that there will not therefore be any breach of the best

  347
  traditions of secrecy and good will which have been built up in the past.
  There is also the question of a nationalised industry being more prone to political intervention than is a private industry. In practice, this is highly unlikely. Because of the procedure for granting exporting licences the Government can in any case intervene, and that procedure will not change substantially. If the hon. Member is worried about political intervention, I share his worry. The kind of political intervention we have had in nationalised industries, from Governments of both parties has resulted in their being used as a means of policing a deflationary policy which the Government could not police in the private sector.
  My major worry is in terms of the flow of investment cost structure, pricing opportunities and the employment policy of those industries. But I do not think that that is what the hon. Gentleman meant by speaking of political intervention. Political intervention can be used as a malevolent description. My description would be in the carrying out by a democratically-elected Government of the will of the people. A Tory Government have just as much right, in those terms, to expand our commitment to armament as a Labour Government have to bring about breaches of contractual agreements with dictatorships with which they are in the most profound disagreement.
  That is a considered opinion, after two years' experience, during the term of the Labour Government, of dealing with dictatorships—for example, in Chile. I have spent many hours with Ministers trying to persuade them to break contractual relationships. It was not until the Chilean junta in its incompetence—its Friedmanite incompetence—played into our hands by defaulting on staged payments on the debt it owed for ships being built in this country that there was an opportunity to persuade Ministers that therefore we had no obligation at all.
  It would amaze the hon. Member for Chichester to learn how doughty the members of a Labour Government are in defending contractual obligations to the most hideous régimes, which would shock even the hon. Gentlemen with their bestiality, their treatment of citizens
  348
  and their abuse of democratic rights. Therefore, the hon. Gentleman should not worry too much about this point until the day when I become Minister of Defence, or one of my hon. Friends with similar views hold that office. On that day there will be a great deal of worry, not only in the Tory Party but among the dictatorships of the world, because all deals will be off.
  As to the financial sense of not taking these industries into public ownership, the hon. Gentleman put forward the proposition that these were profit-making companies, paying taxes, and that the total amount of tax they had paid had exceeded the amount of aid granted to them by the Government through various assistance schemes, such as regional or investment assistance. But would those companies have been in a position to produce and to make profits without the pump-priming, the assistance and the subsidy? Would those profits have been as considerable, or are we just talking about the financial net difference between the taxes paid and the amount of grant paid out?
  If the hon. Gentleman thinks that there is an equation between the two, that is an extremely simplistic attitude from someone who has a professional connection with the world of finance, let alone a public duty to represent companies in Parliament. That is a perfectly honourable duty which we all carry out for companies in our constituencies. We obviously try to get the best deal we can for anyone we represent. But if the hon. Gentleman thinks that there is some kind of systematic relationship between the tax paid by a company, which can be offset, and grants paid to that company, that is not realistic. We are talking about dynamic, developing companies that live from year to year, not a still photograph of relationships between taxation and public funding of various kinds.
  Mr. Trotter: Is it not a feature of existing nationalised industries that they do not pay tax because they do not make any profit, so that the problem does not arise?
  Mr. Kinnock: If the hon. Member for Tynemouth (Mr. Trotter) thinks it is a fact that nationalised companies do not make profits, I suggest that he pops

  349
  along to the Library and goes through the annual accounts of nationalised industries over the last 30 years. In fact, he should examine the accounts for the last 50 years for the various nationalised industries—ever since we started the whole idea back in the 1920s. He could even go back before that, to the odd exercises in nationalisation carried out by Liberal and Tory Governments. He would find that in most years most of the nationalised industries made working surpluses. In most years, the reinvestment of these industries has been substantially higher than that of comparable industries in the private sector and higher than the investment of similar industries in other countries, their productivity levels have gained at a faster and more profitable rate and their labour costs have been reduced at a more significant and substantial rate than those of comparable industries.
  9.0 p.m.
  If the hon. Gentleman wants to study these matters, I can refer him to several articles which boil down the wisdom of the annual reports into a more digestible form and show that, far from being unprofitable, nationalised industries, even in the most unfortunate and counter-productive economic circumstances and against the most crippling policies of Governments of both parties, have in the main continued to make surpluses.
  Mr. Norman Lamont: Would not the hon. Gentleman agree that the quantity of investment has nothing to do with this matter? The fact that the quantity of investment in nationalised industries has been higher than in the private sector is neither here nor there. What matters is whether the investment makes a profit, and the public sector cumulatively has made a loss since the war.
  Mr. Kinnock: The hon. Gentleman should recognise that it is the rate of investment and the proportion of investment to other sums such as total sales, turnover and capital value which really matters. If he studies any independent analysis using all these criteria, he will find that nationalised industries at least match, and in many cases are superior to, comparable industries in the private sector in their investment record.
  Mr. Warren: Might I suggest that an appropriate measure would be the amount of tax paid by nationalised industries and private enterprise companies? Between 1962 and 1972—years in which the Labour and Conservative Parties spent an equal time in government—the taxation contribution of nationalised industries was £81 million while the contribution of the private sector was more than £13,700 million.
  Mr. Deputy Speaker: Order. The Chair must intervene at this stage. The debate is becoming extremely wide and is dealing with issues that are not strictly concerned with warships.
  Mr. Kinnock: If a company in the warship-building industry—to take an example which is entirely relevant to the Bill—prefers to be absolved from taxation in return for an undertaking to invest any surpluses, which is the obligation of nationalised industries, that is fair exchange and no robbery to anyone.
  The prospect in the warship-building industry is that instead of the incubus of taxation—as Conservative Members seek to represent it—and avoiding silly transfer payments which would otherwise be involved, there is immediately available an additional liquid source of finance or a means to cut the selling price. Surely that is to the general advantage of this country and customers throughout the world, provided we want to continue selling to some of the people who insist on providing us with their custom.
  All I hope is that this aspect of the new nationalised industries will not suffer from the same constraints and vagaries of Government policy as other nationalised industries have had to suffer. We have better guarantees in the Bill than in any previous nationalisation Bill that there will be substantial autonomy of management and that industrial democracy will be developed. These disciplines and supervisions, taken together with necessities of the market—which, regrettably, not even nationalisation can insulate us against—will mean that we have a productive, secure warship-building industry. That very security and excellence of production will encourage the industry to transfer itself gradually from weapons of death into the means

  351
  and necessities of peace, because the skills are there.
  I know that the hon. Gentleman's attitude will not change once the industry is nationalised. He will still want to visit the yards and to keep in the closest association with the workers and management, and he will still seek to represent the best interests of the workers in them. He will find ready allies for the protection of nationalisation and for the sustenance of the yards and the development of those skills on this side of the House. That is an advantage that he would not have enjoyed otherwise. He will have an authority of supervision which he cannot have now. That is why I hope that the proposition in the Bill and in what my hon. Friend the Minister has said will entice him to withdraw the suggested amendment, because it would be counter-productive to the interests of the workers he represents.
  Mr. Viggers: I greatly admire the talent of the hon. Member for Bedwellty (Mr. Kinnock). He always reminds me of Caruso singing nursery rhymes. I seek to make my remarks at least half an hour more briefly than his, and I am aided in doing so because my hon. Friend the Member for Chichester (Mr. Nelson) has deployed the arguments so powerfully already.
  Warship manufacturers are completely different from other shipbuilders. They are highly technical and highly skilled specialist manufacturers who have their own teams of specialists. This is recognised by the nomination of the three principal companies, Vickers, Vosper and Yarrow, as leading manufacturers of warships.
  The export potential of these companies has been recognised. Vosper, for example, exports more than 70 per cent. of its order book. Foreign Governments can already order either direct from the warship manufacturers or through the British Government. The point about secrecy and confidentiality is not that when these companies are nationalised the controllers or managing directors, or whatever they may be called, will immediately start to breach confidentiality, but that overseas purchasers will see that others are placing orders through British Shipbuilders.
  352
  I take an extreme example. At the moment, the Israeli Government can order one warship through one of the three designated manufacturers and the Arab countries can order products from one of the other British manufacturers without either feeling that there is any centre where information may be given from one to the other. Because each is ordering through one company, they have no risk or fear that the information will be passed on to one of the other companies. That is the real strength of this particular industry at the moment. If the industry were to be nationalised I am sure that, rightly or wrongly, foreign Governments would feel that information would be given to other manufacturers.
  Mr. Conlan: If Vickers, Vospers and Yarrow are specialists in their own fields, how does the hon. Gentleman explain that a ship has recently been taken from Vickers to be completed on Tyneside by Swan Hunter?
  Mr. Viggers: I am grateful to the hon. Gentleman for that illuminating point. But I do not think it is relevant to the point that I am making, which is that there is a risk that foreign Governments will feel that there is a loss of confidentiality if all warship manufacturers come under one control.
  The next point is that some of the better initiatives in warship construction have been taken by one of the three yards and not by the Admiralty giving the direction. The three yards have their own local initiative which they can exercise. If the whole of the industry were under central control those yards would need to get central clearance before they could go off on a foray or a design of their own. I feel that local initiative would be stifled.
  A further point is that foreign Governments can place orders at the moment with one of the three yards and the orders stay there. Assurances can be and have been given that there will be no direction of orders within the United Kingdom. But I simply do not believe that if an order is given to, say, Vosper Thornycroft in Southampton—where there is a lesser unemployment problem than elsewhere in the United Kingdom—central pressure will not be exerted to divert that order from Vosper to another part of the United Kingdom. Perhaps I am cynical but I

  353
  simply do not believe that the Government would not seek to use this pressure.
  All the arguments are against including warship manufacturers in the Bill. All the arguments deployed by the Government to maintain the Bill during its long months of passage through both Houses had nothing to do with warship builders.
  The hon. Member for Bedwellty made some cogent points and said—it is a point of view that one respects—that we should not be producing items in this country which are capable of killing people. In a perfect world who could disagree with that entirely valid point? But that is not what we are discussing. We are discussing whether warship manufacturers should be natioalised.
  If the hon. Gentleman wishes to run down the construction of warships in this country, he is entirely justified in pushing his party to bring forward legislation to diminish the amount of warship manufacture in this country. What the hon. Gentleman should not do is hide behind the Bill and suggest that nationalisation will in some way enable the Government to run down warship manufacture. I hope that the points the hon. Gentleman has made will be noted by those who are responsible for the manufacture of warships.
  Mr. Kinnock: If the hon. Gentleman reads Hansard tomorrow he will find that I regretted that the rundown in our commitment to the arms industry is no more likely under nationalisation than it has been under private enterprise, despite the fact that we have a Labour Government. I was not so much talking about the desirability of simply running down the warship industry but of transferring the skills, manpower and managerial expertise from that industry into producing for peace instead of prodncing for other people's wars.
  Mr. Viggers: The broad point which the hon. Gentleman made was that he would be prepared, indeed willing, to see a diminution of the amount of all warship manufacture in this country. If the three nominated warship manufacturers are under national control, it is more likely that this will happen than if they are not under national control. It is for the employees of the companies to judge for themselves whether that is true.
  354
  The final point is how we are to pay for the nationalisation of warship manufacturers and others. These days we have come to believe that leaks are quite reliable. There have been leaks that the Government are contemplating the sale of shares in British Petroleum in order to pay for their current programme. Are we really contemplating a situation in which the Government are selling shares in one company in order to buy shares in another? It simply does not make sense. It is far mor logical for the Government at least to accept that in respect of this narrow sector nationalisation should not take place.
  If logic had any place here, warship manufacturers would be excluded from the Bill. I urge the Government to forget their manifesto and simply look at the common sense of the situation and to accept the amendment.
  9.15 p.m.
  Mr. Harry Selby: I represent an area which is known worldwide for its shipbuilding industry. All the world knows of Govan Shipbuilders, formerly Upper Clyde Shipbuilders. Everyone knows the story of UCS and how the workers held out and fought to retain their jobs. They will continue to do so. In the meantime, I am receiving delegations from Yarrows, another shipyard on the Clyde, which makes gunboats, and those delegations request me to press for the inclusion of Yarrows in the nationalised industry and to fight to the bitter end for its nationalisation.
  During the war, every shipyard on the Clyde was capable of building warships and ships of every kind. The workers say that if a man can read one blueprint, he can read any blueprint, so why can we not have shipbuilding as a viable integrated industry in this country?
  I have here the bulletin of the Shipbuilders and Repairers National Association. A new president has been appointed. The headline on the front page is
  "Shipbuilding policy needed now."
  The new president calls for an integrated shipbuilding, ship repairing and marine engine industry. The theme the whole way through is "no separation". The new president represents a ship-repairing company, and he is calling for integration of the industry. If firms make tables or

  355
  chairs, they can be integrated, and the same applies to the making of ships for cargo or ships for war.
  One message given to me by the Yarrow shop stewards was "Congratulations, Harry, on your stand against the building of those ships for Chile. We would rather build other ships than ships for Chile." They take a stand and recognise a capitalist dictatorship or Fascist dictatorship for what it is.
  Miss Harvie Anderson: Perhaps the hon. Gentleman will enlighten the House further about the representations made to him regarding ships built for Chile. My clear understanding—I am sure that he will confirm that I am right—is that there was no dispute whatever in the yard about the completion of those ships.
  Mr. Selby: I agree that at that time there was no dispute in the yard. But three weeks ago the workers came down here and said that they were concerned. Workers usually carry on in the normal way when there is no crisis and they are not concerned in those circumstances, but they become concerned when their daily lives are affected. We are discussing the whole of the shipbuilding industry, and their daily lives are affected.
  We receive all manner of delegations and deputations. I received a deputation in this building from Stephens Engineering. The firm was in financial trouble. Our assistance was refused. The firm was likely to declare itself bankrupt—and I can understand why, because the SNP did not help. All the way through the shipbuilding industry we find these problems.
  I have here one of the reports of the Public Accounts Committee. A little time ago, I interrupted the hon. Member for Tynemouth (Mr. Trotter) on the subject of Govan Shipbuilders and the PAC report and the statement that the Govan yard was not financially successful. Govan Shipbuilders has not spent all the money allocated to it. The hon. Member for Tynemouth visited Govan the same day as I did and he saw the most modern shipyard in Britain. We can build a ship on the Clyde every six weeks. Our problem is that we cannot cell them. As this report says, there is a diminution in the world market.
  I ask the hon. Member for Tynemouth why we are 30 years late in modernising
  356
  our yards. Why has Japan stolen the march on us? We built ships during the war, at cost plus 10 per cent., which were very often sunk the day after they were fitted out. Where did this 10 per cent. go? It went into the pockets of the shipyard owners, not into modernising the yards. Japan came on the scene late and built the most modern shipyards in the world. Now 75 to 80 per cent. of the world's shipbuilding industry is in that country. We are competing with that, and also with South Korea which has hidden subsidies—
  Mr. Nicholas Fairbairn: We have a situation now in the constituency of the hon. Member for Glasgow, Govan (Mr. Selby) where £60 million of the taxpayers' money has been given in unhidden subsidy. What modernisation has been done to these yards?
  Mr. Selby: If the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) had joined the delegation which visited Govan he would have seen the modernisation which has taken place there. I give them credit for that. When Stephens Engineering closed down, Govan took on all its apprentices. Hon. Members opposite should not forget that Govan belongs to the country already. These shipyards, given guaranteed orders and subsidies from the Government and building battleships, were late on delivery and very often incompetent when privately owned, run and managed.
  It is time the Opposition realised that one of our basic industries cannot be run when it is broken up into small parts. Therefore, we must have planning ahead and orders ahead and we must be prepared to repair ships which have accidents. There is no difference between building a ship and repairing a ship. Hon. Members should remember while they are still shedding crocodile tears over this that at least the other place was in favour of part of the Bill.
  If we are to survive in a capitalist world we must compete with the capitalist and the only way we can do this is by having the most efficient and most progressive industry. We can do this only by public ownership.
  Mr. Trotter: I return to the subject of plans. Have the Government any plans

  357
  for the warship builders? We have asked them whether they have any plans for the repair yards, the shipbuilding industry in general or the aircraft industry, and we have had no answers. Now I ask them whether they have any plans for warship builders.
  The history of the warship builders in this country is a success story. The Government are proposing to put these three successful companies at risk through their insistence on the dogma of public ownership. We have heard how the work is divided between Royal Navy orders and export orders. The world's warships—whether or not we like the Governments who purchase them—from Argentina to Zanibar are the products of these three companies. Ships from these yards are to be found all over the world.
  Labour Members refer with all sincerity to the way of life in other countries. They refer to democracy but they should reflect on how few democracies there are. I believe that almost the only ones are in Western Europe, the countries which originated from Western Europe, and Japan. There are very few others. This is a moral problem, but I do not believe that warships can be used to repress people in countries which do not have democracy.
  Mr. Kinnock: I can give one example, but there are many more. We are talking about guns that can fire 30 or 40 miles and about missiles which can move from sea to land over extensive distances. At its widest point Chile is 104 miles across. Half the population of that country is within reach not just of an 8 in. gun from a battle cruiser—if such things are still used—but within reach of quite light armament which was pointed directly at towns as a means of securing the junta in power in 1973.
  Mr. Trotter: I think that in the case of Chile the vessels in question are submarines, and I think that even the most modern submarines will encounter difficulty in trying to keep down a population ashore. I do not think one can quote an instance when warships have been used in that way. I cannot remember ever hearing of one.
  Let us consider the Royal Navy side of the programme. Public money is used to purchase these ships, but it is strange to advance the argument that because
  358
  public money is being spent in these yards, they must be taken into public ownership. The logical conclusion of that argument is that the manufacturers of chalk and blackboards should be taken into public ownership.
  Mr. Kinnock: A very good idea.
  Mr. Trotter: We are now getting proof that many Labour Members do not believe in the private ownership of industry and the mixed economy. If the State spends 60 per cent. of GNP, one can see how easily the remaining 40 per cent. could be gobbled up. Let us consider the amount of paper used in this place and throughout our bureaucracy. It leads me to wonder whether the paper industry should be one of the first to be nationalised.
  Mr. Kinnock: This is getting better and better.
  Mr. Trotter: We are now hearing the real beliefs of many Labour Members. They may be genuine in their beliefs, but they are mistaken.
  There is also the question of cuts in the Royal Navy. One of the Defence Ministers told me that 11,000 men would lose their jobs as a result of the cutbacks. My hon. Friend the Member for Chichester (Mr. Nelson) queried the figure because he said it seemed a very large reduction. We are, however, facing very large reductions in the Royal Navy and thus in the level of orders for these yards. There will be a cut of one-seventh in destroyers and frigates, of one-third in Royal Fleet auxiliaries, of one-seventh in minesweepers, with no more amphibious ships and no new depot ships. There will not only be a reduction in the number of ships, but ships will be retained in service for longer and this will cut down the amount of work. Because of this the dependence of these yards on foreign orders will be more important than ever before.
  I agree with a good deal of what the hon. Member for Glasgow, Govan (Mr. Selby) said about Korea and the Govan yard. I regret that the hon. Gentleman has had to leave the Chamber. I draw different conclusions from some of his, but some of the facts that he put forward are correct and should be acceptable to both sides of the House. It is clear that if the Koreans are subsidising

  359
  their shipbuilding it is by underpaying the work force. That is a fact of life and it is difficult to see what we can do about correcting the situation. Korea is in direct competition with Govan. It is building the same type of ship as Govan and is able to do it reasonably satisfactory. The Korean ships are sold and they sail away and do not break in two.
  9.30 p.m.
  When we turn to warships, that sort of competitor is not able to enter into the game. We have the advantage. We have the edge in higher technology in comparison with our cheap labour competitors in the developing countries. It would be a tragedy if Britain, which is now all too short of success in industry, were to throw away one of its few successful industries.
  I suspect that there is a great deal of disagreement across the Chamber about the likely degree of political interference. However, the remarks that have come from the Labour Benches must give some strength to the fears of foreign buyers of our warships—namely, that for moral or political reasons there might be interference in future with the delivery of vessels to foreign Governments.
  Mr. Fernyhough: Surely the hon. Gentleman should know that in every post-war year there has been political interference by Government. Under the first Labour Government two tankers were built in my constituency for Poland, but they were not allowed to be delivered. Orders from Russia and Bulgaria were refused. That was not because the yards refused to take the orders but for political reasons advanced by Government. Throughout my political life there has been interference by Government in deciding whether private shipyards should take foreign orders, whether military or commercial.
  Mr. Trotter: The difference is that in the examples that the right hon. Gentleman has given we are talking about a potential enemy. That is not the case with the Third World. I think on the last occasion that we debated these matters it was suggested that we might build ships for the Warsaw Pact.
  Mr. Fernyhough: The hon. Gentleman knows that the yard in which he is
  360
  interested has recently built three tankers for Russia.
  Mr. Trotter: I think that the right hon. Gentleman is talking about the yard that is represented by the hon. Member for Wallsend (Mr. Garrett). In fact they were merchant tankers, not warships. I do not think that there is any point in taking the line that we might sell warships to the Soviet Union because the Russians do not need any more warships. They have a navy of their own and are building new warships very satisfactorily in their own yards. There is no hope of even a Left-wing Government in Britain obtaining such business from that side of the Iron Curtain.
  I cannot accept that the Government's argument about the Royal Navy makes sense. We know that public accountability is a sham when it comes to existing nationalised industries. Does anyone really think that our naval vessels would be cheaper as a result of the yards passing into State ownership? I believe that costs will rise as a result of State ownership.
  Reference has been made to the record of nationalised industries. In a brief visit to the Library I was not able to obtain a great deal of information and I had to add up the figures for myself while sitting in the Chamber. It seems that during the 30 years up to 1975 the losses amount to over £1,000 million. The sums written off amount, according to my arithmetic, to £3,700 million. Surely that money could have been better spent in other directions.
  Mr. Kinnock: Perhaps the hon. Gentleman will get some more figures to take into account the compensation that has been paid, the interest that has been paid and the way in which the nationalised industries, because of enforced cheap pricing policies, have indirectly subsidised the rest of British society to the tune of billions of pounds over all those years. Those figures must be taken into account.
  Mr. Trotter: I cannot accept the compensation argument. Let us consider the possible compensation for the shipyards that we are talking about—namely, Vospers and Yarrow. They will be paid one year's profit. That would be regarded as theft if carried out by an individual.

  361
  As for pricing policies, I go along with the hon. Gentleman in as much as part of the losses are due to those policies, but that is not the only reason. These losses are due partly to pricing policies but also to the inefficiency that is built into the bureaucracy of the system. So far as this relates to pricing policy, it results from political interference.
  That is one of the arguments that we have been advancing against any further expansion of State ownership. If Labour Members say that they dislike profits so much that they would rather see naval ships costing more to prevent profits, that surely is a stupid argument.
  To return to the subject of foreign customers, under State ownership I can see it being argued that new orders should be placed with the Govan yards which are desperate for work rather than with the well-known, established, profitable yards at Yarrow down river. There was an unfortunate experience at Yarrow a few years ago when it was amalgamated with Govan, but fortunately Yarrow managed to escape that mess.
  But if rush orders are to be placed at Govan because it is felt that that is where the jobs are needed most rather than from considerations of which is the best yard, that will lead to extra costs for Royal Navy ships and put off foreign customers.
  I turn to the subject of plans. We had the first sign of an admission from the Minister of State, who said that a plan had been delivered by the Organising Committee and that it would eventually be published. Why is it so secret? We are talking about the future of this vital industry and there is it seems a plan, but we do not know what it contains. Why can we not have this debate in the light of the knowledge of what that plan contains? I see the Under-Secretary of State shaking his head, and perhaps there is no plan. However, I understood the Minister of State to say that there was a plan. I thought he said earlier that a plan had been delivered and that he hoped it would be published in due course.
  It is hard to get Ministers to intervene on the subject of plans. They do not want to know about this subject. They are concerned only with taking the industry into public ownership. The only sensible thing for the Government to do
  362
  about the building of warships is to leave well alone and to accept the amendment.
  Mr. Les Huckfield: I must tell the hon. Member for Tynemouth (Mr. Trotter), who has been reading Scottish newspapers, that no plan has been delivered from the Organising Committee for British Shipbuilders to my Department.
  Mr. Trotter: Why not?
  Mr. Huckfield: The hon. Gentleman does himself, his constituency or the shipbuilding industry no credit with the kind of speech he made this evening.
  Mr. TrotterWill the Minister give way?
  Mr. Huckfield: I am willing to concede that the hon. Gentleman probably knows a fair amount about the shipbuilding industry. I wish he would place some of that knowledge at the disposal of the House rather than pursue the arguments we heard in his speech.
  We have made the position of my right hon. Friend the Secretary of State for Industry absolutely clear time and again, and I stress that position once more. We believe that we must take warship builders into public ownership. They are successful companies mainly because they are contractors for the Government. It is the height of illogicality to omit from the provisions of the Bill the companies that are most dependent for their existence on Government orders, but that is the kind of doctrine that is propagated by Conservatives. Furthermore, the main purpose of British shipbuilders will be to look at the whole shipbuilding industry, from which it must be apparent that other yards build warships. The Opposition spoke of only three yards that build warships, but eight build for the Royal Navy. Cammell Laird and Swan Hunter are two of the yards to which the Opposition have failed to refer.
  Mr. Trotter: Will the Minister give way?
  Mr. Huckfield: I prefer to make my own speech.
  The hon. Member for Chichester (Mr. Nelson), with his vast repository of shipyard experience, made an incredibly doctrinaire speech which was exposed for what it was by my hon. Friend the Member for Bedwellty (Mr. Kinnock). The

  363
  hon. Member for Chichester wondered why we need to take such successful companies into public ownership. I do not decry the record of success of the warship builders, but over the past 10 years the successful warship builders have received no less than £12·4 million in special assistance. When the hon. Member for Chichester refers to their success, I hope he will bear in mind that on at least one occasion one of those successful warship builders would have been in severe financial difficulties if it had not been for Government assistance.
  Mr. Nelson: The Minister has borne out the point I made towards the end of my speech. How can he give figures for the grants made available without also mentioning the contribution that those companies have made by means of paying tax? Will he give us those figures for the same period? Of course companies will not invest unless they have incentives, but repayment by way of taxation is a reflection of the use that companies make of grants.
  Mr. Huckfield: The figures for investment and other grants are on top of the figures I have already given. I wish that the hon. Member for Chichester would listen to me. Despite the success of these companies, on one occasion one of them would have been in severe financial difficulties without Government assistance. When it comes to experience of the difficulties in the shipyards, I would rather listen to the authentic voice of the Govan yard than the unauthentic voice that we have heard from the Conservatives.
  The hon. Member for Chichester expounded an incredible doctrine, particularly for a member of his party, although it is perhaps not so incredible bearing in mind the company with which the hon. Member was and still is connected. He said that Government policy should be to put public money only into less successful companies, not where it will produce greater efficiency or where the Government place their own orders. If that is an enunciation of new Conservative policy, it is another about-turn. We all know of the trench warfare within certain sections of that party, and perhaps we have uncovered yet another trench. We often hear speeches about the divi-
  364
  sions within the ranks of my party, but if hon. Members penetrated deeper the feelings on the Opposition Benches they would find fundamental divisions on policy.
  9.45 p.m.
  The hon. Member for Chichester put forward a quite fallacious doctrine of putting money where it will produce the lowest return and, perhaps, less efficiency. That has been comprehensively exposed and denounced by my hon. Friend the Member for Bedwellty. However, the hon. Member for Chichester was not satisfied with that. Again with his vast wealth of shipyard experience, he produced the hoary old myth of the run-down in shipyard jobs because of the defence review.
  The hon. Gentleman does not know the shipyard industry very well. He ought to know that, as a result of orders placed and being placed by the Royal Navy, employment in this kind of yard is expected to increase over the next few years by from 20,000 to 24,000. Of the 24,000 jobs, about 18,000 are expected to be in development areas. I hope that the next time the hon. Gentleman comes along with a prepared speech he will at least have it prepared by someone apart from himself. I am informed that there are in the House tonight expert preparers of speeches. We could even send them to the hon. Gentleman. [Interruption.] I only wish that all the preparers of speeches could be accounted for on the Floor of the House tonight.
  The Royal Navy orders and buys many of the ships which are produced in these yards. Once the ships are built, that automatically gives some kind of seal of approval for other navies. We have to bear in mind that the warship-building yards are major Ministry of Defence contractors. It is the Ministry of Defence sales team that procures many of the orders for these yards.
  I say to Opposition Members, particularly the hon. Member for Gosport (Mr. Viggers), that when the Ministry of Defence procures these orders it is already accustomed to procuring them, and overseas Governments are already accustomed to dealing with the Ministry of Defence procurement team. I cannot see any reason why there will be less security of information. As my hon. Friend the

  365
  Member for Bedwellty said, Government Departments have a good record in confidentiality. I should like to think that the prospects and success of confidentiality will be increased even more. I see no reason at all, from anything that Opposition Members have said, to think that overseas navies will be less willing to place their orders in British yards once those yards are part of British Shipbuilders.
  We have heard the doctrine that the Government are entitled to do everything for the warship builders except to own them. That is what has been enunciated. It does not matter if the warship builders provide ships for the Royal Navy. We can again use the Ministry of Defence sales team for procuring overseas orders for these yards. If they get into difficulties, we can even use public money for helping the yards. We can do all that for these warship builders—place more orders, help them out in times of difficulty and help them to get overseas orders—yet we must not, apparently, own them.
  I reject that doctrine, as do my right hon. and hon. Friends. What Opposition Members are really saying is that they do not like the fact that the Government will be taking into public ownership a section of the shipbuilding industry which has a taste of success. They do not mind the Government taking over the loss-makers or putting public money into them. We believe that we must look at the totality of British shipbuilding and at the whole potential of the yards in Britain. Above all, many of us believe that one of the tasks and one of the possibilities that now lie before the Government is a shift of public ownership not into loss-making public industry but into profit-making public industry.
  It is for those reasons that I urge my hon. Friends to reject the suggested amendment and to ensure that the Bill goes forward to another place with warship builders included.
  Mr. Norman Lamont: Before I comment on what the Under-Secretary said and on some of the other points raised in the debate, I want to refer to one matter which by itself would have been sufficient reason for excluding the Navy shipbuilders from the Bill. That is the
  366
  basis on which compensation is being offered.
  As we shall be unable to reach our amendment on compensation later, I wish to place it on record that we regard the terms of compensation, such as they are—they are very badly and unclearly defined—as unsatisfactory. It is essentially unfair, when all the companies being nationalised by the Bill except one are unquoted companies, that the basis of compensation should be calculated by reference to share prices.
  It also seems to us to be unfair that it should be done on the basis of share prices when what is being talked about is getting control of a company. As Opposition Members at least know, ordinarily even in stock market takeovers when the whole of a company is bought one has to pay a substantial premium on the price of the shares.
  I emphasise this point. It is not here a question of compensating some rich private shareholders. The companies we are talking about are unquoted companies owned by other companies. The basis of compensation, whether or not it is fair, will have a profound effect upon the overall position of the parent companies.
  To quote but one example, Yarrow (Shipbuilders) Limited in its most recent year to June 1976 made a pre-tax profit of £4·9 million. On the basis of the compensation as far as one can work it out the parent company above the shipbuilding company, if nationalised in toto, would get compensation of only £4·6 million.
  Therefore, we believe that the compensation could be extremely unfair and I hope that the Government will give further consideration to this matter. I hope that they will give further consideration to the whole way in which the arbitration tribunal operates and consider whether it could go beyond the rather narrowly defined criteria laid down in the legislation.
  My hon. Friends have developed the argument that the naval shipbuilders fall into an entirely different category from the other shipbuilding companies that are being nationalised by this legislation. As my hon. Friend the Member for Gosport

  367
  (Mr. Viggers) said, we are talking about very specialised companies, companies with very specialised design teams and very complicated projects which often have to be altered substantially during the course of construction.
  One of our fears is that in the mammoth corporation that is being created there will be too much decision-taking at the centre. I know that the Under-Secretary will say that provision has been made for decentralisation, but all the history of nationalised industries is against such decentralisation occurring. We think that the bureaucratic practice of nationalised industries in the past will will be entirely unsuited to this industry.
  Then there is the point made by my hon. Friend the Member for Chichester (Mr. Nelson). We are dealing with very successful companies. There are so few successful companies in Britain and we have such tremendous economic problems that it seems crazy, when there are first-rate internationally competitive companies, that the Government should decide to take them into State ownership for very insubstantial reasons. The Government cannot advance the usual arguments about a declining industry, a declining share of the market, and inadequate returns. Those arguments do not apply. As my hon. Friend the Member for Chichester said, they make a contribution to society through the corporation taxes that they have paid on their profits in the past.
  The hon. Member for Bedwellty (Mr. Kinnock) argued that we could not add up the corporation taxes paid and offset them against the grants made because profits were created on more than a one for one basis. All I can say to him is that I only wish that the nationalised industries had achieved some of that dynamic out of the substantial grants they have reecived.
  In the corporation that is being established for the shipbuilding industry we are putting—
  Mr. Kinnock: Why is it a grant when a nationally-owned industry gets the necessary finance from the owning concern and an investment when a privately-owned industry raises finance from the
  368
  people who own it? What is the difference between the two?
  Mr. Lamont: The nationalised industries have received enormous subsidies and enormous write-offs, but that has not prevented them from having a total net accumulated loss since their establishment.
  In this corporation we are putting together a series of disparate interests. I hope that no one in the House would wish to repeat the arguments that led to so many different interests going into British Leyland. With hindsight, many people would argue now that it would have been better to have several corporations instead of putting into one mammoth corporation a series of firms making various products that were unsuitable for collective management in one firm. That is one fear we have about the way in which the Government are proposing to organise the industry.
  Another fear we have that Labour Members might take into account is that nationalisation will not save jobs in the shipbuilding industry. It so happens that in the naval shipbuilding yards there are secure jobs and employment has been expanded. Those are the only jobs that count. They are sound, unsubsidised jobs, established by firms that sell goods that customers want to buy on world markets.
  If Labour Members were really concerned about the employment prospects, they would not go on about private profit. They would realise that private profit is essentially the basis on which jobs are secured. That is why employment has expanded in this industry and why Labour Members, if they had any logic, should have some fear that this doctrinal, irrelevant measure will in the long term undermine employment in the industry.
  We fear that politics increasingly will enter into the award of defence contracts. What was said by the hon. Member for bedwellty confirmed our fears. He thought that politics should enter more into defence contracts. So Ministers cannot dispense with the argument in that way.
  For all those reasons we argue that the industry is totally unsuited to nationalisation. I commend the motion to my hon. and right hon. Friends.
  Question put:—
  The House divided: Ayes 279, Noes 282.

  Division No. 15.]

  AYES

  [9.59 p.m.

  Adley, Robert

  Fox, Marcus

  McCusker, H.

  Aitken, Jonathan

  Fraser, Rt Hon H. (Stafford & St)

  Macfarlane, Neil

  Alison, Michael

  Freud, Clement

  MacGregor, John

  Amery, Rt Hon Julian

  Fry, Peter

  Macmillan, Rt Hon M. (Farnham)

  Arnold, Tom

  Galbraith, Hon T. G. D.

  McNair-Wilson, M. (Newbury)

  Atkins, Rt Hon H. (Spelthorne)

  Gardiner, George (Reigate)

  Madel, David

  Awdry, Daniel

  Gardner, Edward (S Fylde)

  Marshall, Michael (Arundel)

  Bain, Mrs Margaret

  Gilmour, Rt Hon Ian (Chesham)

  Marten, Neil

  Baker, Kenneth

  Gilmour, Sir John (East Fife)

  Mates, Michael

  Banks, Robert

  Glyn, Dr Alan

  Maude, Angus

  Beith, A. J.

  Godber, Rt Hon Joseph

  Maudling, Rt Hon Reginald

  Bell, Ronald

  Goodhart, Philip

  Mawby, Ray

  Bennett, Dr Reginald (Fareham)

  Goodhew, Victor

  Maxwell-Hyslop, Robin

  Benyon, W.

  Goodlad, Alastair

  Mayhew, Patrick

  Berry, Hon Anthony

  Gorst, John

  Meyer, Sir Anthony

  Biffen, John

  Gow, Ian (Eastbourne)

  Miller, Hal (Bromsgrove)

  Biggs-Davison, John

  Gower, Sir Raymond (Barry)

  Mills, Peter

  Blaker, Peter

  Grant, Anthony (Harrow C)

  Miscampbell, Norman

  Body, Richard

  Gray, Hamish

  Mitchell, David (Basingstoke)

  Boscawen, Hon Robert

  Griffiths, Eldon

  Moate, Roger

  Bottomley, Peter

  Grimond, Rt Hon J.

  Molyneaux, James

  Bowden, A. (Brighton, Kemptown)

  Grist, Ian

  Monro, Hector

  Boyson, Dr Rhodes (Brent)

  Hall, Sir John

  Montgomery, Fergus

  Bradford, Rev Robert

  Hall-Davis, A. G. F.

  Moore, John (Croydon C)

  Braine, Sir Bernard

  Hamilton, Michael (Salisbury)

  More, Jasper (Ludlow)

  Brittan, Leon

  Hampson, Dr Keith

  Morgan, Geraint

  Brocklebank-Fowler, C.

  Hannam, John

  Morgan-Giles, Rear-Admiral

  Brotherton, Michael

  Harrison, Col Sir Harwood (Eye)

  Morris, Michael (Northampton S)

  Brown, Sir Edward (Bath)

  Harvie Anderson, Rt Hon Miss

  Morrison, Hon Peter (Chester)

  Bryan, Sir Paul

  Hastings, Stephen

  Mudd, David

  Buchanan-Smith, Alick

  Havers, Sir Michael

  Neave, Airey

  Budgen, Nick

  Hayhoe, Barney

  Nelson, Anthony

  Bulmer, Esmond

  Heath, Rt Hon Edward

  Neubert, Michael

  Burden, F. A.

  Henderson, Douglas

  Newton, Tony

  Butler, Adam (Bosworth)

  Heseltine, Michael

  Nott, John

  Carlisle, Mark

  Hicks, Robert

  Onslow, Cranley

  Carson, John

  Higgins, Terence L.

  Oppenheim, Mrs Sally

  Chalker, Mrs Lynda

  Hodgson, Robin

  Page, Rt Hon R. Graham (Crosby)

  Churchill, W. S.

  Holland, Philip

  Page, Richard (Workington)

  Clark, Alan (Plymouth, Sutton)

  Hooson, Emlyn

  Paisley, Rev Ian

  Clark, William (Croydon S)

  Hordern, Peter

  Pardoe, John

  Clegg, Walter

  Howe, Rt Hon Sir Geoffrey

  Parkinson, Cecil

  Cockcroft, John

  Howell, David (Guildford)

  Penhaligon, David

  Cooke, Robert (Bristol W)

  Howells, Geraint (Cardigan)

  Percival, Ian

  Cope, John

  Hunt, David (Wirral)

  Peyton, Rt Hon John

  Cormack, Patrick

  Hurd, Douglas

  Pink, R. Bonner

  Corrie, John

  Hutchison, Michael Clark

  Powell, Rt Hon J. Enoch

  Costain, A. P.

  Irving, Charles (Cheltenham)

  Price, David (Eastleigh)

  Craig, Rt Hon W. (Belfast E)

  James, David

  Prior, Rt Hon James

  Crawford, Douglas

  James, R. Rhodes (Cambridge)

  Pym, Rt Hon Francis

  Critchley, Julian

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

  Raison, Timothy

  Crouch, David

  Jessel, Toby

  Rathbone, Tim

  Crowder, F. P.

  Johnson Smith, G. (E Grinstead)

  Rawlinson, Rt Hon Sir Peter

  Davies, Rt Hon J. (Knutsford)

  Johnston, Russell (Inverness)

  Rees, Peter (Dover & Deal)

  Dean, Paul (N Somerset)

  Jones, Arthur (Daventry)

  Rees-Davies, W. R.

  Dodsworth, Geoffrey

  Jopling, Michael

  Reid, George

  Douglas-Hamilton, Lord James

  Joseph, Rt Hon Sir Keith

  Renton, Rt Hon Sir D. (Hunts)

  Drayson, Burnaby

  Kaberry, Sir Donald

  Renton, Tim (Mid-Sussex)

  du Cann, Rt Hon Edward

  Kershaw, Anthony

  Ridley, Hon Nicholas

  Dunlop, John

  Kilfedder, James

  Ridsdale, Julian

  Durant, Tony

  Kimball, Marcus

  Rifkind, Malcolm

  Eden, Rt Hon Sir John

  King, Tom (Bridgwater)

  Roberts, Wyn (Conway)

  Edwards, Nicholas (Pembroke)

  Kitson, Sir Timothy

  Ross, Stephen (Isle of Wight)

  Elliott, Sir William

  Knight, Mrs Jill

  Ross, William (Londonderry)

  Emery, Peter

  Knox, David

  Rossi, Hugh (Hornsey)

  Evans, Gwynfor (Carmarthen)

  Lamont, Norman

  Rost, Peter (SE Derbyshire)

  Ewing, Mrs Winifred (Moray)

  Langford-Holt, Sir John

  Sainsbury, Tim

  Eyre, Reginald

  Latham, Michael (Melton)

  St. John-Stevas, Norman

  Fairbairn, Nicholas

  Lawrence, Ivan

  Shaw, Giles (Pudsey)

  Fairgrieve, Russell

  Lawson, Nigel

  Shaw, Michael (Scarborough)

  Farr, John

  Lester, Jim (Beeston)

  Shelton, William (Streatham)

  Fell, Anthony

  Lewis, Kenneth (Rutland)

  Shepherd, Colin

  Finsberg, Geoffrey

  Lloyd, Ian

  Shersby, Michael

  Fisher, Sir Nigel

  Loveridge, John

  Silvester, Fred

  Fletcher-Cooke, Charles

  Luce, Richard

  Sims, Roger

  Fookes, Miss Janet

  McAdden, Sir Stephen

  Skeet, T. H. H.

  Forman, Nigel

  MacCormick, Iain

  Smith, Cyril (Rochdale)

  Fowler, Norman (Sutton C'f'd)

  McCrindle, Robert

  Smith, Dudley (Warwick)

  Speed, Keith

  Tebbit, Norman

  Warren, Kenneth

  Spence, John

  Thatcher, Rt Hon Margaret

  Watt, Hamish

  Spicer, Michael (S Worcester)

  Thomas, Dafydd (Merioneth)

  Weatherill, Bernard

  Sproat, Iain

  Thomas, Rt Hon P.(Hendon S)

  Wells, John

  Stainton, Keith

  Thompson, George

  Welsh, Andrew

  Stanbrook, Ivor

  Townsend, Cyril D

  Whitelaw, Rt Hon William

  Stanley, John

  Trotter, Neville

  Wiggin, Jerry

  Steel, David (Roxburgh)

  van Straubenzee, W. R.

  Wilson, Gordon (Dundee E

  Steen, Anthony (Wavertree)

  Vaughan, Dr Gerard

  Winterton, Nicholas

  Stewart, Donald (Western lsles)

  Viggers, Peter

  Wood, Rt Hon Richard

  Stewart, Ian (Hitchin)

  Wainwright, Richard (Colne V)

  Young, Sir G. (Ealing, Acton)

  Stokes, John

  Wakeham, John

  Younger, Hon George

  Stradling Thomas, J.

  Walder, David (Clitheroe)

  Tapsell, Peter

  Walker, Rt Hon P. (Worcester)

  TELLERS FOR THE AYES:

  Taylor, R. (Croydon NW)

  Wall, Patrick

  Mr. Spencer Le Marchant and

  Taylor, Teddy (Cathcart)

  Walters, Dennis

  Mr. Michael Roberts.

  NOES

  Abse, Leo

  Doig, Peter

  John, Brynmor

  Allaun, Frank

  Dormand, J. D.

  Johnson, James (Hull West)

  Anderson, Donald

  Douglas-Mann, Bruce

  Johnson, Walter (Derby S)

  Archer, Peter

  Duffy, A. E. P.

  Jones, Alec (Rhondda)

  Armstrong, Ernest

  Dunn, James A.

  Jones, Barry (East Flint)

  Ashley, Jack

  Dunnett, Jack

  Jones, Dan (Burnley)

  Atkins, Ronald (Preston N)

  Eadle, Alex

  Judd, Frank

  Atkinson, Norman

  Edge, Geoff

  Kaufman, Gerald

  Bagier, Gordon A. T.

  Edwards, Robert (Wolv SE)

  Kelley, Richard

  Barnett, Guy (Greenwich)

  Ellis, John (Brigg & Scun)

  Kerr, Russell

  Barnett, Rt Hon Joel (Heywood)

  English, Michael

  Kilroy-Silk, Robert

  Bates, Alf

  Ennals, David

  Kinnock, Neil

  Bean, R. E.

  Evans, Fred (Caerphilly)

  Lambie, David

  Benn, Rt Hon Anthony Wedgwood

  Evans, Ioan (Aberdare)

  Lamborn, Harry

  Bennett, Andrew (Stockport N)

  Ewing, Harry (Stirling)

  Lamond, James

  Bidwell, Sydney

  Faulds, Andrew

  Latham, Arthur (Paddington)

  Bishop, E. S.

  Fernyhough, Rt Hon E.

  Leadbitter, Ted

  Blenkinsop, Arthur

  Fitch, Alan (Wigan)

  Lee, John

  Boardman, H.

  Fitt, Gerard (Belfast W)

  Lestor, Miss Joan (Eton & Slough)

  Booth, Rt Hon Albert

  Flannery, Martin

  Lever, Rt Hon Harold

  Bottomley, Rt Hon Arthur

  Fletcher, L. R. (Ilkeston)

  Lewis, Ron (Carlisle)

  Boyden, James (Bish Auck)

  Fletcher, Ted (Darlington)

  Lipton, Marcus

  Bradley, Tom

  Foot, Rt Hon Michael

  Litterick, Tom

  Bray, Dr Jeremy

  Ford, Ben

  Loyden, Eddie

  Broughton, Sir Alfred

  Forrester, John

  Luard, Evan

  Brown, Hugh D. (Provan)

  Fowler, Gerald (The Wrekin)

  Lyon, Alexander (York)

  Buchan, Norman

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

  Lyons, Edward (Bradford W)

  Buchanan, Richard

  Freeson, Reginald

  Mabon, Dr J. Dickson

  Butler, Mrs Joyce (Wood Green)

  Garrett, John (Norwich S)

  McCartney, Hugh

  Callaghan, Rt Hon J. (Cardiff SE)

  Garrett, W. E. (Wallsend)

  McDonald, Dr Oonagh

  Callaghan,Jim (Middleton & P)

  George, Bruce

  McElhone, Frank

  Campbell, Ian

  Gilbert, Dr John

  MacFarquhar, Roderick

  Canavan, Dennis

  Ginsburg, David

  McGuire, Michael (Ince)

  Cant, R. B.

  Golding, John

  MacKenzie, Gregor

  Carmichael, Neil

  Gould, Bryan

  Mackintosh, John P.

  Carter, Ray

  Gourlay, Harry

  Maclennan, Robert

  Cartwright, John

  Graham, Ted

  McMillan, Tom (Glasgow C)

  Castle, Rt Hon Barbara

  Grant, George (Morpeth)

  Madden, Max

  Clemitson, Ivor

  Grant, John (Islington C)

  Magee, Bryan

  Cocks, Rt Hon Michael

  Grocott, Bruce

  Maguire, Frank (Fermanagh)

  Cohen, Stanley

  Hamilton, James (Bothwell)

  Mahon, Simon

  Coleman, Donald

  Harper, Joseph

  Mallalieu, J. P. W.

  Colquhoun, Ms Maureen

  Harrison, Walter (Wakefield)

  Marks, Kenneth

  Conlan, Bernard

  Hart, Rt Hon Judith

  Marquand, David

  Cook, Robin F. (Edin C)

  Harrersley, Rt Hon Roy

  Marshall, Dr Edmund (Goole)

  Corbett, Robin

  Hatton, Frank

  Marshall, Jim (Leicester S)

  Cowans, Harry

  Hayman, Mrs Helene

  Mason, Rt Hon Roy

  Cox, Thomas (Tooting)

  Healey, Rt Hon Denis

  Maynard, Miss Joan

  Craigen, Jim (Maryhill)

  Heffer, Eric S.

  Meacher, Michael

  Crawshaw, Richard

  Hooley, Frank

  Mellish, Rt Hon Robert

  Cronin, John

  Horam, John

  Mikardo, Ian

  Crosland, Rt Hon Anthony

  Howell, Rt Hon Denis (B'ham, Sm H)

  Millan, Rt Hon Bruce

  Crowther, Stan (Rotherham)

  Hoyle, Doug (Nelson)

  Miller, Dr M. S. (E Kilbride)

  Cryer, Bob

  Huckfield, Les

  Miller, Mrs Millie (Ilford N)

  Cunningham, G. (Islington S)

  Hughes, Rt Hon C. (Anglesey)

  Moonman, Eric

  Cunningham, Dr J. (Whiteh)

  Hughes, Robert (Aberdeen N)

  Morris, Alfred (Wythenshawe)

  Davidson, Arthur

  Hughes, Roy (Newport)

  Morris, Charles R. (Openshaw)

  Davies, Bryan (Enfield N)

  Irvine, Rt Hon Sir A. (Edge Hill)

  Morris, Rt Hon J. (Aberavon)

  Davies, Denzil (Llanelli)

  Irving, Rt Hon S. (Dartford)

  Moyle, Roland

  Davies, Ifor (Gower)

  Jackson, Colin (Brighouse)

  Murray, Rt Hon Ronald King

  Davis, Clinton (Hackney C)

  Jackson, Miss Margaret (Lincoln)

  Newens, Stanley

  Deakins, Eric

  Janner, Greville

  Noble, Mike

  Dean, Joseph (Leeds West)

  Jay, Rt Hon Douglas

  Oakes, Gordon

  Dell, Rt Hon Edmund

  Jeger, Mrs Lena

  Ogden, Eric

  Dempsey, James

  Jenkins, Hugh (Putney)

  O'Halloran, Michael

  372

  373

  Orme, Rt Hon Stanley

  Shaw, Arnold (Ilford South)

  Varley, Rt Hon Eric G.

  Ovenden, John

  Sheldon, Robert (Ashton-u-Lyne)

  Wainwright, Edwin (Dearne V)

  Padley, Walter

  Shore, Rt Hon Peter

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

  Palmer, Arthur

  Short, Mrs Renée (Wolv NE)

  Walker, Harold (Doncaster)

  Park, George

  Silkin, Rt Hon John (Deptford)

  Walker, Terry (Kingswood)

  Parker, John

  Silkin, Rt Hon S. C. (Dulwich)

  Ward, Michael

  Parry, Robert

  Sillars, James

  Watkins, David

  Pattie, Geoffrey

  Silverman, Julius

  Watkinson, John

  Pendry, Tom

  Skinner, Dennis

  Weetch, Ken

  Perry, Ernest

  Small, William

  Weitzman, David

  Phipps, Dr Colin

  Smith, John (N Lanarkshire)

  Wellbeloved, James

  Prentice, Rt Hon Reg

  Snape, Peter

  White, Frank R. (Bury)

  Price, C. (Lewisham W)

  Spearing, Nigel

  Whitlock, William

  Price, William (Rugby)

  Spriggs, Leslie

  Willey, Rt Hon Frederick

  Rees, Rt Hon Merlyn (Leeds S)

  Stewart, Rt Hon M. (Fulham)

  Williams, Alan (Swansea W)

  Richardson, Miss Jo

  Stoddart, David

  Williams, Alan Lee (Hornch'ch)

  Roberts, Albert (Normanton)

  Stott, Roger

  Williams, Rt Hon Shirley (Hertford)

  Roberts, Gwilym (Cannock)

  Strang, Gavin

  Williams, Sir Thomas (Warrington)

  Robertson, John (Paisley)

  Strauss, Rt Hon G. R.

  Wilson, Alexander (Hamilton)

  Robinson, Geoffrey

  Summerskill, Hon Dr Shirley

  Wilson, Rt Hon Sir Harold (Huyton)

  Roderick, Caerwyn

  Swain, Thomas

  Wilson, William (Coventry SE)

  Rodgers, George (Chorley)

  Taylor, Mrs Ann (Bolton W)

  Wise, Mrs Audrey

  Rodgers, Rt Hon William (Stockton)

  Thomas, Jeffrey (Abertillery)

  Woodall, Alec

  Rooker, J. W.

  Thomas, Mike (Newcastle E)

  Woof, Robert

  Rose, Paul B.

  Thomas, Ron (Bristol NW)

  Wrigglesworth, Ian

  Ross, Rt Hon W. (Kilmarnock)

  Thorne, Stan (Preston South)

  Young, David (Bolton E)

  Rowlands, Ted

  Tierney, Sydney

  Ryman, John

  Tinn, James

  TELLERS FOR THE NOES:

  Sandelson, Neville

  Tomlinson, John

  Mr. A. W. Stallard and

  Sedgemore, Brian

  Torney, Tom

  Mr. Joseph Ashton.

  Selby, Harry

  Tuck, Raphael

  Question accordingly negatived.

  Mr. Speaker: Third Reading.
  Sir Michael Havers: On a point of order, Mr. Speaker. I give you notice that tomorrow, at a time convenient to you, I would like to raise a substantive point of order under the Parliament Act 1911 relating to the Bill. I give you notice tonight merely to warn you and to invite you to refrain from signing any certificate under subsection (2) of Section 4 of the Act until you have heard my point of order.
  Mr. Speaker: I am obliged to the hon. and learned Gentleman, and I take note of what he has said.
  10.16 p.m.
  Mr. Kaufman: I beg to move, That the Bill be now read the Third time.
  This measure has been under consideration here and in the House of Lords for some 300 hours. Whenever we have considered it on the Floor of this House, our proposals have been fully endorsed. The elected Chamber has repeatedly given its support for the public ownership of these industries as embodied in the Bill.
  During the passage of the Bill, the Tory Opposition have forced 139 Divisions and have been defeated on every occasion. Once it has been given its Third Reading tonight, the Bill will have been passed in the same form by this House in two successive Sessions. I hope that the House of Lords will observe this and draw the necessary conclusion from it. The House of Commons has once again debated ship repair, the issue on which the Bill fell in the last Session, and for the thirteenth time has voted to include ship repair in the Bill.
  The hon. Member for Oswestry (Mr. Biffen) has said that he will discuss hybridity in his speech on Third Reading. The question of hybridity has been deliberately deployed by the opponents of the Bill—opponents who have never once been able to defeat us by fair debate and fair vote—by a fall-back technical device. There is no excuse for the House of Lords to delay the Bill on alleged grounds of hybridity. Hybridity will not be accepted as an excuse by the tens of thousands of workers in these industries who are
  376
  desperately anxious for the urgent passage of this vital measure. The notice that we have been given by the hon. and learned Member for Wimbledon (Sir M. Havers) of yet another legal device that the Opposition are to attempt to deploy will be treated with the same scorn by the aircraft and shipyard workers who are anxious for the Bill to be passed.
  We want this Bill not just to resist the encroachment of another place on the supremacy of this House, not just because it is in the manifesto, but because it is the right policy for these two particular industries. The Bill aims to help workers make their full contribution to the aircraft and shipbuilding industries through the industrial democracy provisions. These provisions will provide a favourable climate within which industrial democracy will grow and develop naturally from the wishes and aspirations of those in the industries.
  This will not take place overnight, but I am convinced that in due course the development of industrial democracy will yield substantial and important benefits. It will contribute to the well-being of those who work in the industries by allowing them to make their full contribution to their success. In turn, the performance of each industry will improve immeasurably if the skills, energies and enthusiasm of those who work in it are fully harnessed. As a result, our industrial wealth will be increased. Efficiency follows consent—[Interruption.] The hon. Member for St. Albans (Mr. Goodhew) has scarcely taken part in these proceedings, and when he has done so he has scarcely improved them.
  Mr. Victor Goodhew (St. Albans)Mr. Victor Goodhew (St. Albans) rose—
  Mr. Kaufman: No.
  Mr. Goodhew Mr. Goodhew rose—
  Mr. Speaker: Order. If the Minister of State is not giving way, the hon. Member for St. Albans (Mr. Goodhew) knows that he must resume his seat.
  Mr. Goodhew: He is a coward.
  Mr. Kaufman: I shall not ask you, Mr. Speaker, to call the hon. Gentleman to order. I do not mind what he calls me. Any insult from him is a compliment.
  Mr. Speaker: Order. We have had enough in this place today. Did the hon. Member for St. Albans call the Minister a coward?
  Mr. Goodhew: I did indeed, Mr. Speaker, because I thought that he, having attacked me, was not prepared to face what I had to say to him. If you wish me to withdraw the word, I will do so with pleasure, but the hon. Gentleman might give way.
  Mr. Speaker: I am obliged.
  Mr. Kaufman: The hon. Gentleman has taken no part in today's proceedings.
  Mr. Nicholas Winterton: What does that matter?
  Mr. Kaufman: The participation of the hon. Member for Macclesfield (Mr. Winterton) today has been to fail to help the aircraft workers in his constituency who want the industry nationalised.
  As I have said, efficiency follows consent, and participation and consent are at the heart of our strategy for the regeneration of industry. But public ownership also has other advantages for both industries. It combines public accountability—important in industries which depend to an unusual extent on Government support—with the necessary independence and flexibility which the industries must have if they are to operate successfully as commercial concerns.
  Public ownership has another vital advantage. It will make it possible to take key strategic decisions on a coherent basis. The need to combine the resources of the two main airframe companies is widely accepted. For 10 years after the Plowden Committee's report, private ownership has failed to bring this about. For the first time in the history of this great industry, the companies are beginning to work together instead of in competition. This is because of the lead given by the Organising Committee under Lord Beswick.
  Within the framework of the Organising Committee the industry is considering all the available options and is discussing them with prospective collaborative partners. The momentum of these studies is being stepped up and significant progress is being made. For example, our industry is working with the German industry on a joint approach to the
  378
  French on the advanced short-medium range aircraft in which McDonnell Douglas is involved.
  A team is visiting Boeing later this month to evaluate United Kingdom participation in the proposed 7N7. The prospect of public ownership has made this promising position possible. It is essential that the industry should now move forward and play its proper part in any future collaborative projects. This is what will determine the size and shape of the industry and the prospects for those who work in it.
  The proposals in the Bill offer the only hope of achieving a stable and effective national policy for shipbuilding—a policy which must be established urgently. The Government are determined to maintain a viable merchant shipbuilding industry in this country. That is why we have had intensive discussions over the past year with the Organising Committee and with both sides of the industry on steps to help the industry. I pay tribute to the Organising Committee for British Shipbuilders under Admiral Sir Anthony Griffin for the fine work that it too has done.
  But it is essential to tackle these problems within the framework of public ownership under a corporate strategy provided by British Shipbuilders. Without this there is little hope of achieving what we want—a stable long-term policy for this industry as opposed to the ineffective stopgap measures.
  The Organising Committee has gone a long way in preparing plans for vesting. It has been actively exploring many possible ways of helping the industry to get work. And it has established a high reputation both in this country and overseas among those associated with shipbuilding, not least the industry's customers
  In the ship repairing industry, modernisation is essential to avoid further decline. For this, Government funds will be needed. Here again the Government are determined that such public investment must be carried out within the framework of public ownership and under a corporate strategy provided by the new corporation. That is why the Bill lists all the most significant ship repairing companies which own or operate large facilities in the main port areas. This

  379
  will provide the new Corporation with a sound industrial base from which to develop a coherent strategy for these major companies as a whole. But this strategy will be combined with effective decentralisation as specified in Clause 5.
  I urge the House to give the Bill a Third Reading to enable these important industries to secure the benefits which public ownership should provide. I hope that on this occasion the other place will read the clear message from this House and end uncertainty by allowing the Bill to pass quickly on to the statute book.
  10.24 p.m.
  Mr. Biffen: The Minister of State has commended the Bill for Third Reading with a speech that blended ideological zeal and a certain touching hope about the prospective benefits of public ownership. I shall be immensely traditional and confine myself to the strict interpretation of what a Third Reading necessitates—which is merely what is in the Bill. Therefore, I shall not follow the wider considerations of the Minister of State, although I think he would agree with me that those wider considerations have been given fairly considerable debate over the weeks and months, if not years, that have preceded this evening.
  I shall recommend to my right hon. and hon. Friends that the Bill should not go forward for Third Reading. I say that it should not go forward because I believe that its status is suspect, and the suspect nature of its status turns on Schedule 2.
  My observations here are in no way connected with the comments of my hon. and learned Friend the Member for Wimbledon (Sir M. Havers), who makes an entirely different point in respect of the Parliament Act, as the Minister understands. But the whole question of the part of the Bill relating to ship repairing has raised the controversy about hybridity. The Minister of State has occasionally reacted with a little emotion on this subject, and I feel that his reaction is almost that of a great art connoisseur who, having regarded the Bill as the finest Constable in his collection, now discovers that my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) is nudging his elbow to suggest that perhaps Tom Keating was behind the brushwork after all.
  380
  The Minister of State has got himself into a great state of excitement at times, and the phrase which I particularly recall came in what he said on 11th November, when he referred to.
  "the tired and tattered issue of hybridity."
  Let us pause for a moment and consider the position in which the House finds itself, through no choice of mine and no choice of the Treasury Bench. The Public Bill Office has ruled that there was a prima facie case for considering hybridity, and in so doing, it seems to me, the Public Bill Office has neatly underlined the point which was at least hinted at by the hon. Member for Caernarvon (Mr. Wigley) on 11th November, when, in respect of the ship repairing provisions, he said:
  "it is important to draw the attention of the House to the grave difficulties that the Bill will face in another place unless the amendment is accepted."—[Official Report, 11th November 1976; Vol. 919, c. 748.]
  In my view, if the Bill gets its Third Reading—again, I take no view on the point raised by my hon. and learned Friend the Member for Wimbledon—and it goes to the House of Lords with Schedule 2 in its present form, a certain sequence of events is likely to follow. I put this before the House merely because I think that one has an obligation to do so, and I am not seeking to engage in controversy about it. I am merely trying to establish what I believe to be the inevitable course of events.
  When the Bill reaches the other place, it will, I believe, automatically be referred by the Table to the Examiners, who will report to the House on whether the Bill is, in their view, hybrid. If the Examiners find the Bill hybrid, they are likely so to report to the House, which may on a motion refer it to the Standing Orders Committee on Private Bills. That Committee will then have to decide whether the Standing Orders for Private Business, which, in the view of the Examiners, ought to apply to the Bill, should so apply.
  Under guidance from the Clerks, it is my belief that the Standing Orders Committee will make its recommendation to the other House, and it is important for this House and for Parliament to realise that that Committee is not a political committee. I cannot imagine that any member of the Treasury Bench would gainsay that.

  381
  In my judgment, a Select Committee is then likely to be appointed by the Committee of Selection, and the Select Committee will sit each day until all petitions are heard. On referral to the Select Committee, a terminal date will be fixed by which petitions must be submitted. After hearing petitions, the Select Committee will make any amendments that it deems necessary and will report to the whole House. The Bill will be recommitted to a Committee of the whole House, and normal procedure will be followed thereafter. That is my belief of what is likely to happen to this piece of legislation when it proceeds to the other place. That will happen automatically and inevitably, flowing directly from the judgment of the Public Bill Office about the prima facie hybridity.
  I hope that all hon. Members will accept that if this process is followed there is no need for a single Tory backwoodsman to lay aside his rural sports. There will be no respite for the partridge, the fox or the pheasant. This will all happen automatically, and to pretend that this is a Commons versus Lords clash is to be totally misleading. The mechanism is already in train as a result of the judgment of the Public Bill Office.
  A number of Labour Members seem to have cast themselves in the role of the reincarnation of the young David Lloyd George in a peers versus people drama. They should be told that that particular play will not be staged this season, and the hon. Member for Feltham and Heston (Mr. Kerr) is not even on the short list for the young David Lloyd George.
  The very circumstance with which we have been confronted over the past few months, particularly since the prima facie ruling on hybridity by the Public Bill Office, was anticipated to some extent by Mr. Asquith in the debates which took place in this House in May 1914. As the Leader of the House was very anxious, when we debated the procedural motion which governed the Second Reading earlier today, to call in aid the late Lord Salisbury, I shall make it equitable by calling in aid Mr. Asquith. He said:
  "What is called the Suggestion stage is not really a stage at all, but it is a power which is reserved to this House by the proviso in the Sub-section, the effect of which I have already stated. The suggestion of Amendments
  382
  was intended to deal, and to deal only, with exceptional cases. In the first place, there may be cases in which subsequent consideration of the Bill, as originally passed by this House and rejected by the House of Lords, shows some patent mistake or error. Of course it would be absurd that this House should be required to pass over the Veto of the House of Lords, a Bill in which such an error appears, on the face of it, without the opportunity of correcting it."—[Official Report, 12th May 1914; vol. 62, c. 952.]
  The Public Bill Office ruling on hybridity has offered this House a chance of making that correction. It was the judgment of the Leader of the House, supported by his right hon. Friends, that the House should be deprived of that opportunity. We would be foolish to suppose that the story can rest there. I believe that the Leader of the House will bear a fairly heavy responsibility when the full story of the Bill is told. [Interruption.] I heard the word "bribes" mentioned by the hon. Member for Birmingham, Perry Barr (Mr. Rooker), I think—
  Mr. J. W. Rooker (Birmingham, Perry Barr)Mr. J. W. Rooker (Birmingham, Perry Barr) indicated assent.
  Mr. Biffen: I think we would all feel that this debate would be elevated if those who make such accusations from a sedentary position, and in the security of the House, would say who was doing the bribing and who was in receipt of such bribes. Having said this inside the House, they should say it outside as well, as this would lead to a better level of public debate.
  I quote from an editorial in The Times—[Interruption.] I hope that it will be fully accepted by those below the Gangway that, whatever else may be said about the Editor of The Times, he is unlikely to have his judgment suborned by the sort of hospitality that the hon. Member for Perry Barr has in mind.
  The Editor of The Times said:
  "The Government knew the Bill was hybrid from the beginning this time, but they have still denied the complainants the protection of the customary procedures."
  He also said:
  "The question of principle is that the Government are using their slim and fragile majority in the Commons to bypass established procedures, and with it one of the safeguards for individuals and organizations against arbitrary legislation."
  I do not know by what code they now play rugby football in Ebbw Vale, but

  383
  the House would be justified in concluding that when an infringement has been detected there the player promptly books the referee and confiscates the whistle. That is about the level at which the Leader of the House conducts himself in protecting what ought to be his prime consideration, namely, the legitimate rights and considerations of minorities.
  Parliament has the obligation to remedy the defect of drafting in the Bill as contained in Schedule 2, and I predict that the refusal of the Treasury Bench to fulfil that obligation will redound, and properly, to the discredit of the Government.
  10.36 p.m.
  Mr. Cyril Smith: I hesitate to intervene at length in this second Third Reading debate on the Bill because I played virtually no part in the debates in the earlier stages. The Minister repeated again this evening the idea that all the workers in the shipbuilding industry are head over heels in love with the Bill and the principle behind it. That must be nailed and refuted before the Bill leaves this House.
  The House will remember the exchanges which took place between the right hon. Member for Sunderland, North (Mr. Willey) and myself last week. I feel that I should now try to get certain points on the record. I have no personal quarrel with the right hon. Member. If I may say so without causing him undue embarrassment, I find him to be a very charming and reasonable individual, and certainly not the nasty, vindictive type with whom I would be particularly anxious to have an argument with.
  I must refer to columns 1087–89 of the Official Report of 1st December. As reported in those columns, I alleged that the shop stewards at Austin and Pickers-gill, whom I had met the previous day, had told me that neither of their Members of Parliament had asked them for their views on the Bill and that they, the shop stewards, were totally opposed to the Bill. The right hon. Member for Sunderland, North twice stated that what I had said was a lie. After I tried to help the right hon. Member by suggesting that what he meant was that I had been told a lie, the right hon. Member specifically said:
  384
  "He says that what he was told may be a lie. I am saying that what he has stated in the House is a lie."
  When pressed by Mr. Deputy Speaker, the right hon. Member withdrew "the word." He said:
  "I shall withdraw the word."—[Official Report, 1st December 1976; Vol. 921, c. 1089.]
  I feel that my honesty was questioned, and I therefore wish to acquaint the House with the content of a letter which has been received by me in the last 24 hours from the shop stewards of Austin and Pickersgill, photostat copies of which I have supplied to the Minister and to the right hon. Member for Sunderland, North.
  With permission, I shall read the letter in full. It states:
  "Dear Mr. C. Smith, Liberal M.P., 3rd December 1976. We the undersigned endorse the statement made in the House of Commons by yourself, which referred to the lack of consultation between Sunderland Labour M.Ps Mr. Fred Willey and Mr. Gordon Bagier, on the important issue of 'Nationalisation of the Shipbuilding Industry'.
  We at the Southwick Shipyard of Austin & Pickersgills, being the representatives of the employees in the Southwick Yard, firmly believe that it is to our advantage if we were not nationalised, based on the information we have at hand.
  The representatives of the employees met our local M.P. Mr. Fred Willey, at 11.15 a.m. this morning Friday 3rd December 1976. Mr. Willey could not give us any valid reason why we should change our opinion."
  That is signed by the following representatives: welders' shop stewards—P. Tweddle, a name I cannot read, and A. K. Downes; shipwright shop stewards—I. Hall and I. Querry; platers' shop stewards—I. Armstrong and C. Paget; drillers' shop steward—J. H. McCabe; caulkers' shop stewards—R. Hutchinson and F. A. Russell.
  It continues:
  "Above signatures are representatives of the Boilermakers Society Outfit and GMWV Shop Stewards."
  At the meeting to which I referred there was present a journalist employed by the newspaper called Echo, of Sunderland. On the front page of that newspaper, dated 30th November, there was a headline which stated
  "'Drop the Bill' plea from A. & P."
  It then states:
  "'Hands off our shipyard.' That was the message to Liberal M.P. Mr Cyril Smith

  385
  from workers at Sunderland's Austin and Pickersgill today."
  The article continued:
  "Most of the men came out strongly against nationalisation proposals aimed at a State take-over of the privately-owned yard."
  Whatever may or may not be the merits of the Bill, I hope the House will be satisfied that I did not tell a lie. I believe that I have provided ample evidence to prove that I did not do so.
  As I have said, the right hon. Member for Sunderland, North is not normally an individual with whom I should seek a quarrel, but as the previous exchange is on the record I was anxious to get this correspondence on the record.
  In fact, there is a second shipyard at Sunderland. Although I do not make the same allegation in respect of that yard, I understand that the shop stewards there also are unhappy about the Bill. They have telephoned me during the week to ask me to go to see them to discuss the matter. Until I have seen them I am not alleging that they have the same view, except to say that there is clearly some unhappiness about the situation. I do not allege that they are opposed to the Bill because, frankly, I do not know, having obtained the information through a third party.
  I hope that the letter I have read and the evidence I have been able to produce—I have provided the right hon. Member for Sunderland, North and the Minister with copies—prove conclusively that there is at least one shipyard where the workers are opposed to the Bill.
  10.45 p.m.
  Mr. Frederick Willey: I bear the hon. Member for Rochdale (Mr. Smith) no ill will and I am sure that, with the best will in the world, he visited my constituency to soap the stairs for me. I have been in the rough-and-tumble of political life long enough to avoid falling down even well-greased stairs.
  The hon. Gentleman came to Sunderland as Liberal Party spokesman on social affairs. We, with our usual generosity and hospitality, honoured him with a civic reception. Let me correct that statement. We would have honoured the hon. Gentleman with a reception, if he had turned up. But he did not do so.
  386
  He snubbed the mayor, and instead of being at the town hall—
  Mr. Cyril Smith: If the right hon. Gentleman had told me that he intended to mention this matter, I would have produced—and will produce tomorrow—a letter from the Mayor of Sunderland accepting my explanation for non-arrival at the town hall, saying that he accepted my apologies.
  Mr. Willey: The hon. Gentleman intervened at a point in my speech when I was about to cite in aid a headline in the Sunderland Echo:
  "Humble Cyril apologises to a Furious Mayor."
  Therefore, I was not the only person who was made furious by his visit. It was not only the mayor and I who complained. The management of Austin and Pickersgill has also complained. The management has not emulated Bristol Channel, but it has publicly, persistently and stridently spoken out against nationalisation. I do not complain, although I have had complaints from the men in the yards of statements made by the management at ceremonies in the yards supposed to be non-political.
  The hon. Member for Rochdale arrived at the yard with a Liberal shop steward from another yard and with somebody who was assumed to be the hon. Gentleman's personal assistant.
  Mr. Cyril Smith: I have no personal assistant.
  Mr. Willey: It was later discovered that the man in question was a journalist. The management had not invited the Press, and when management representatives held discussions with the hon. Gentleman they understood that those discussions were confidential. When the management discovered this, it immediately and effectively made a complaint.
  I myself felt that the hon. Gentleman added to his discourtesies by waiting until the end of the Second Reading debate to intervene, when he knew that it was difficult to reply, and he did so without giving me the slightest intimation that he intended to raise this matter affecting my constituents. What he told the House was that he had met all of the shop stewards at Austin and Pickersgill, that they told him that neither of their Members of Parliament had ever asked them

  387
  for their views on the Bill and that they were totally opposed to the Bill.
  I have no wish to cast any personal reflection on the hon. Member for Rochdale, but he was wrongly informed. The letter to which he referred appeared in the northern Press on Saturday. I claim that neither the hon. Gentleman nor the journalist with whom he worked sought to become properly informed. Following an intervention in the House last week, the hon. Member said he would confirm the matter in writing, and, as we know, there was a round-robin letter at the yard.
  The hon. Member told the House that he met 30 shop stewards. Of course, I accept what he said. Last Friday I met the same group, but I made it plain that I was not having consultations. I said that I called only to inquire what was going on and whether they wanted a meeting with my hon. Friend and myself. They said that they did, and I assured them that I would put their request through the trade union usual channels.
  In fact we discussed many matters, but we did not discuss nationalisation. [Hon. Members: "Why not?"] Because that was to be discussed later. I act according to the usual procedures immediately, but the trade unions were not informed of the hon. Member's visit to the yard.
  As for the hon. Gentleman's letter, it was signed by 18 persons from five trades and from two trade unions. This accounts for 10 of those signatures. If he vouches that the others are stewards, I accept it. The hon. Gentleman made his final score 18, not 30, but that difference is of no undue significance. I have been informed by the district secretaries as the hon. Member and his journalist would also have been informed—that there are more than 100 shop stewards at Austin and Pickersgill.
  This, then is the relevant portion. I do not want to push my luck, and I am content. Support for the hon. Gentleman roughly corresponds with the Liberal vote in the town. I am in enough trouble already and I do not wish to imply that the signatories are Liberals. Clearly, the hon. Gentleman cannot claim to have met all the shop stewards at Austin and Pickersgill.
  I return to the letter of which the hon. Gentleman has kindly given me a copy. It
  388
  is written with the caution of a Queen's Counsel and not the usual shipyard phraseology with which I am familiar. The hon. Gentleman quoted fully from the letter, which was not fully quoted in the Press. The letter states that they:
  "firmly believe it is to our advantage if we were not nationalised based on the information that we have at hand".
  That is a cagey expression of belief. It has an important qualification, particularly as it appears that the main complaint is about a lack of information at hand.
  That is the position, and I should have thought that we would do better to await a more definitive expression of opinion, when the 18 have had an opportunity of discussing this matter further with my hon. Friend the Member for Sunderland, South (Mr. Bagier) and myself. However, certainly on these facts, which the hon. Member for Rochdale has not disclosed but which were available to him, the hon. Member cannot claim that all of the shop stewards at Austin and Pickersgill are totally opposed to the Bill.
  Now let us deal with the allegation of lack of consultation. I put it as an allegation because the hon. Member puts it to the House.
  Mr. Cyril Smith: Does the right hon. Gentleman accept that there is such a thing as a shop stewards' committee at Austin and Pickersgill and that the people I met and the signatures on the letter are members of that committee?
  Mr. Willey: I do not accept that the hon. Gentleman met the shop stewards' committee. The hon. Gentleman has no right to say that in the House. He did not meet the unions. He did not get in touch with the unions. He did not have the decency to do that when he was claiming that he had the support of all of their shop stewards.
  Mr. Michael McNair-Wilson: On a point of order, Mr. Deputy Speaker. This is a Third Reading debate about a crucially important issue. All that we are being treated to is a wrangle between two hon. Members. I cannot see what it has to do with the Third Reading of the Bill.
  Mr. Deputy Speaker (Mr. Oscar Murton): The Chair is hopeful that the explanations which are being given on

  389
  both sides of the House in respect to this particular incident will very shortly come to a close.
  Mr. Willey: I will deal with the lack of consulation in the context of this Third Reading. When the Labour Party manifesto in 1974 proposed the nationalisation of shipbuilding, in spite of the fact that nationalisation was demanded by the shipbuilding unions there was a good deal of opposition from Austin and Pickersgill. It is not a matter that I have kept secret. If the hon. Member for Rochdale goes to the Library, for instance, and reads the book that I wrote about Parliament which was published late in 1974, he will see this fully set out.
  Mr. Bagier: That was a nice "plug".
  Mr. Willey: In the February 1974 General Election a good number of shop stewards at Austin and Pickersgill opopsed nationalisation. My hon. Friend the Member for Sunderland, South and I intervened over their heads and addressed meetings of the workers at the yards. The main arguments—again I warn my hon. Friend the Minister of State—were about decentralisation and participation. Again I warn my hon. Friend that these are real issues now. They are real issues because under the present yard agreements the workers at Austin and Pickersgill are far and away the highest paid workers in the industry. [Interruption.] As the hon. Member for Rochdale is jeering let me say that Liberal trade unionists are dissociating themselves from him.
  I put myself at some personal risk because I said that we would get nationalisation without an expressed provision for decentralisation and participation only over my dead body. That is something that I have repeated in Standing Committee.
  At the October General Election, my hon. Friend the Member for Sunderland, South and I had the full support of the stewards. We held meetings in the yards. This was a major issue in the town. For what it was worth, there seems to have been a general acceptance of nationalisation. My hon. Friend and I both increased our majorities substantially at those elections. Therefore, if there is any evidence, there is certainly no evi-
  390
  dence indicating that there had been a boycott at Austin and Pickersgill Ltd. or, as the hon. Member for Rochdale claimed, that 90 per cent, of the workers at the yard were against nationalisation.
  Mr. David Steel: The right hon. Gentleman said that my hon. Friend the Member for Rochdale (Mr. Smith) had been repudiated by the Liberal trade unionists. He did not specify what he meant.
  Mr. Willey: I said that they dissociated themselves from what the hon. Gentleman had said.
  Mr. David Steel: The right hon. Gentleman must not say things like that to the House unless he has evidence. The Association of Liberal Trade Unionists has fully supported the line taken by my party throughout the proceedings on the Bill.
  Mr. Willey: It was only because I was provoked by the hon. Member for Berwick-upon-Tweed (Mr. Beith) that I revealed that I have been so informed. It was not a point that I wished to make against the hon. Member for Rochdale.
  During the passage of the Bill, in Standing Committee and in discussions with the Government, I have continually pressed for decentralisation and participation. At the same time, my hon. Friend and I have been in constant touch with the unions at all levels in our constituencies. This has been greatly intensified, because we have had issues such as the Greenwell yard and threats to shipbuilding orders. Until the hon. Gentleman's intervention there were no representations against nationalisation at district, branch or any other level. Indeed, as late as Saturday last, when my hon. Friend the Member for Sunderland, South and my hon. Friend the Member for Houghton-le-Spring (Mr. Urwin) and I had a meeting with the shipbuilding shop stewards, a meeting which was arranged some time ago—
  Mr. Goodhew: On a point of order, Mr. Deputy Speaker. Surely the debate on the Third Reading of a Bill is restricted to the Bill as it stands.
  Mr. Deputy Speaker: The Chair has already expressed the hope that it will be possible to draw this argument to a close shortly.
  Mr. Willey: As I have explained to the House, those amendments are now in the Bill.
  I was explaining that at the civic centre we met the shipbuilding shop stewards. There were stewards there from Austin and Pickersgill Ltd. If the hon. Gentleman wants me to quote from the Press handout this time, it said:
  "Unions back MPs in yard takeover talks."
  The Liberal steward whom I mentioned was at the meeting. The Austin and Pickersgill stewards were invited. Some were there. If those who met the hon. Gentleman were not there, that was their affair. They had been invited through union channels.
  As I have said, the Bill has been amended. It now expressly and explicitly provides for decentralisation at separate profit-making centres. I would call the amendment that achieved this "the Austin and Pickersgill amendment". The Bill also provides for participation. As we are parting with the Bill, I hope for the last time, I express on behalf of the Sunderland unions their appreciation of the work of my hon. Friend the Minister of State in drafting and dealing with amendments.
  I was upset, as was obvious, by the intervention of the hon. Member for Rochdale. I was upset because I do not want Austin and Pickersgill to fall into the troublesome situation which is now obtaining in the Bristol Channel yards.
  The Austin and Pickersgill management has opposed nationalisation, as it is entitled to do. But its view is that if, in spite of its opposition, the industry is nationalised, it should not be left out. If its yards are nationalised, its objective is to maintain its efficiency and productivity. Everyone knows what the difficulties are. The outlook for world shipbuilding is catastrophic. It is threatened by the over-capacity of Japan. If we in Europe talk about the efficiency of the Swedish yards, we should remember that three of the four major yards there are being nationalised, and—I warn the House—not on economic grounds but on social grounds.
  In world shipbuilding we have had cancellations totalling 61 million tons. I know that the oil tankers have taken the brunt of this. Austin and Pickersgill has been sheltered. But the Japanese and
  392
  Far East yards, with their empty berths, are turning to dry cargo carriers. Now Austin and Pickersgill is facing unprecedented competition in the "'tween deck" market. In the past 12 months, the Japanese yards have been tendering for SD-14 type carriers and offering a cut of 20 per cent. in the cost. It is in these desperate circumstances that, whatever the political differences may be in the yards, the managers and men have to pull together. In these circumstances, and having heard what the hon. Member for Oswestry (Mr. Biffen) had to say, it can been seen that the delay and confusion caused by the Lords is nothing short of scandalous—
  Mr. Biffen Mr. Biffen rose—
  Mr. Willey: Now it is threatening even Austin and Pickersgill.
  11.7 p.m.
  Mr. Tebbit: I do not want to get involved in another grudge fight, so I am cautious about intervening in the dispute between the hon. Member for Rochdale (Mr. Smith) and Labour Members.
  For the first time this evening we have had a chink of light cast on what the supporters of the Bill envisage when they talk about industrial democracy. It seems that their view of industrial democracy does not run to going to a workplace and asking the workers or their locally-elected representatives what they think. It consists of going to an entirely separate entity called "the unions" and asking them what they think.
  Under no circumstances must the ordinary fellows at work disagree. If there is a hint that they might disagree, they are told "I am interested in your views, and I will come back and hear them after I have voted in the House of Commons on the issue on which we disagree." This is the new-style industrial democracy.
  We have had a fascinating time on the Bill, which will doubtless continue for a long period ahead. There are one or two matters to which we might refer now. One or two questions are still wide open. In particular there are the plans that Ministers and the Organising Committees—rather expensive Organising Committees—are making. Earlier the Minister suggested that he did not know anything about these plans and that as

  393
  far as he was aware there were no plans, but that they were terribly good Organising Committees, they were planning terribly hard and they had been at it for only a year and they cost only one-third of a million pounds or so and no doubt they had come along very well. That adds to the uncertainty.
  That is not improved when on 8th November the Minister of State—he appears to be going to look for some plans somewhere—said:
  "We are saying to Opposition Members that there will be no new civil aircraft projects of any major size in this country unless the Bill goes through".—[Official Report, 8th November 1976; Vol. 919, c. 116.]
  That was pretty clear. But when I asked the Secretary of State for Industry whether it remained his determination to refuse launching aid to civil aircraft projects advanced by Hawker Siddeley or BAC while those companies remained in the private sector of the economy, the same Minister of State replied:
  "No such policy has been announced."—[Official Report, 6th December 1976; Vol. 922, c. 18.]
  Therefore, between 8th November and 6th December he had forgotten that he had made that announcement. Such vagaries continually affect these industries and, most of all, affect the customers.
  It might be a new dictum in these debates that, having been over all the ground so often in the past, one should seek to introduce some new and previously unused matter. It seems that everybody today has produced his own letter, and I intend to produce mine.
  Mr. Bruce Grocott: It is not permitted to quote.
  Mr. Tebbit: One can quote if the quotation is related to the Bill. I think that the Minister will be interested in this letter, which I happened to find blowing down Whitehall one evening, it having fallen off the back of a lorry somewhere. I will give the Minister reference to it and the name of the business involved privately later this evening. I will not give them in public.
  The document is an internal memorandum of one of the aircraft companies which will be nationalised by the Bill,
  394
  and it refers to the loss of an order in the Middle East earlier this year. It says:
  "You asked for a resumé of the reasons for our failure. These fall into two categories".
  One category concerns the particular product, and I shall not go into that for the obvious reason that it would harm the product, which we hope to continue selling even if the industry is nationalised. The other category is defined thus:
  "a general anti-British attitude coupled with distrust of the present British Government. … These attitudes stem from some or all of the following".
  I remind the House that this is a company's assessment.
  Mr. Tom Litterick: We do not believe it. Let the hon. Gentleman tell us the company's name.
  Mr. Tebbit: I am protecting the industry. I will show this to the Minister later on. The document continues:

  "(i) The British Government (and a Labour one at that) breaking its word … about continuing support, particularly military, for the Gulf States.

  (ii) A fear of unions and of their increasing hold over the British Government, leading to genuine fear for the latter's stability."

  [Interruption]. I do not know whether this was the way in which democratic industrial consultations were conducted at Austin and Pickersgill Ltd., but perhaps that was why it was so difficult for a Member of Parliament to hear anything except a jabber.
  I continue my quotation:
  "(iii) A limited understanding of democratic processes and of the changes that are taking place in the UK—"
  [Interruption.]
  Mr. Deputy Speaker: Hon. Gentlemen must allow the speech of the hon. Member for Chingford (Mr. Tebbit) to be heard.
  Mr. Norman Buchan: On a point of order, Mr. Deputy Speaker. Can you tell us where the Gulf States appear in the Bill?
  Mr. Deputy Speaker: The hon. Gentleman should be allowed to develop his argument.
  Mr. Tebbit: The Gulf States are among the customers to which the Bill refers from time to time.

  395
  I continue to quote from the document, which is dated 19th May 1976. It says:
  "(iii) A limited understanding of democratic processes and of the changes that are taking place in the UK, especially since the demise of the British Empire—".
  The Under-Secretary is giggling, but this is an assessment of why sales are lost. The hon. Gentleman is giggling about the loss of an order which will mean the loss of jobs. He may go down well at an idiotic Left-wing rally, but not here. [Interruption.]
  Mr. Deputy Speaker: Order. Remarks must be addressed to the Chair.
  Mr. Tebbit: The document continues:
  "(iv) Even less understanding of the British media which leads to far too much significance being attached to the news and views purveyed by the Press and the BBC Arabic Services.
  (v) Disillusionment with British economic policies—as witnessed by the fall in the value of the pound (which realy hurts) and the excessive inflation.
  (vi) A naive acceptance of American views that the UK is a 'write-off ' and that all new and worthwhile inventions/innovations/developments stem from the USA."
  [Interruption.] Hon. Members will find that I get through this much quicker if they stop interrupting.
  Mr. Buchan: We finish at 12 o'clock anyway.
  Mr. Tebbit: The next point is:
  "(vii) Fear of the effects of nationalisation on the British Aircraft Industry".
  The company, whose name is given,
  "would be less to be trusted then and would probably be less viable, witness other nationalised industries in the UK."
  The remainder of the memorandum is concerned entirely—
  Mr. Rooker: What is the second category?
  Mr. Tebbit: I have already explained the second category.
  The remainder of the memorandum refers entirely to the particular product—
  Mr. Ted Leadbitter: On a point of order, Mr. Deputy Speaker. I do not question the hon. Gentleman's right to quote from a document, but is it in order for him to do so without divulging the source? My understanding of our
  396
  practice and procedure is that the source of quotations should be made known so that they may be considered seriously by the House.
  Mr. Deputy Speaker: The hon. Gentleman is in order, because they are not official dispatches or official documents.
  Mr. Eric S. Heffer: The hon. Gentleman told us that they fell off the back of a lorry.
  Mr. Tebbit: As I was telling the hon. Member for Birmingham, Perry Barr (Mr. Rooker) before the irrelevant and time-wasting intervention of the hon. Member for Hartlepool (Mr. Leadbitter), the remainder of the memorandum concerns a complex series of comparisons between the products of the company concerned and those of rivals. That is why I do not wish to quote the memorandum in full. Those comparisons are not relevant to this argument. [AN HON. MEMBER: "How do we know?"] The hon. Gentleman will be able to discover that from Ministers when I have given them the references to the memorandum and told them whence it came. Ministers can make their inquiries of the company and tell their hon. Friends if they think it is fit for them to hand out such commercial information. [Interruption.]
  Mr. Marcus Lipton: The hon. Gentleman is keeping us in the dark.
  Mr. Tebbit: The noise which Labour Members are making and their eagerness to prevent other hon. Members from hearing arguments which conflict with theirs show exactly the same technique whether their noses are being rubbed in unpalatable facts by me or by the hon. Member for Rochdale. These are the same yah-boo tactics which preceded the takeover by nasty people in other countries in Europe in the past.
  The Bill has been defective in its technical form ever since it was first brought to the House. It clearly does not have the support of the people of this country. [HON. MEMBERS: "How does the hon. Gentleman know?"] I know because a great many more people voted in the last General Election for parties which oppose the Bill than for parties which support it. If I did not know on that basis, I should know on the basis that when hon. Members opposite are

  397
  bereft of ideas and arguments they are reduced to trying to shout down another hon. Member.
  Mr. Leadbitter: Will the hon. Gentleman give way?
  Mr. Tebbit: No, I am not giving way.
  Mr. Leadbitter: Let the hon. Gentleman have the guts to name his source.
  Mr. Deputy Speaker: Order. I think that good temper on both sides is called for.
  Mr. Tebbit: As I was saying, when hon. Members opposite are bereft of arguments they descend to caterwauling, yelling and trying to drown the evidence which is put before them.
  The Bill did not have the support of the British people in either of the 1974 General Elections.
  Mr. Leadbitter: On a point of order, Mr. Deputy Speaker. I ask you to protect the interests of the House. We have had to listen to a number of quotations by the hon. Member for Chingford (Mr. Tebbit) from a memorandum. May I ask the hon. Gentleman, through you, if he will be courteous enough to give the document to the Minister before the end of the debate? He has said that he will give the document to my hon. Friend.
  Mr. Deputy Speaker: That is entirely a matter for the hon. Member for Chingford (Mr. Tebbit). It is perhaps a matter of good taste.
  Mr. Tebbit: Not only will I not give the document to the hon. Gentleman—
  Mr. Leadbitter: I shall come across to the hon. Gentleman. Let him give me the document now.
  Mr. Deputy Speaker: Order. The hon. Member for Hartlepool (Mr. Leadbitter) must resume his seat.
  Mr. Tebbit: Not only did I say that I would not give over this document—
  Mr. Leadbitter: Let the hon. Gentleman give it to the Minister now.
  Mr. Tebbit: If the hon. Member for Hartlepool will close his mouth and open his ears, we may get on. I did not say that I would give this document to the Minister. I said that I would give him
  398
  its reference so that he could obtain it from the company concerned and decide whether it would be proper for the commercial information in the document to be given to his hon. Friends below the Gangway.
  I am having a little trouble making myself heard, Mr. Deputy Speaker. The yah-boos opposite do not like the arguments and insist on shouting them down.
  This Bill has never had the assent of the people and it does not have it now. It is doubtful whether the Government will have sufficient money, even when they have gone grovelling on their bellies to every capitalist country to raise loans for Socialist schemes, adequately to finance these industries which they propose to take over. The House would be wise to reject the Bill tonight for that reason and to avoid the humiliation of finding that the independent Clerks of this Parliament wreck the Bill in a few days' time at the other end of the corridor.
  11.26 p.m.
  Mr. Conlan: If I had been following the hon. Member for Rochdale (Mr. Smith), I might have said of his speech that is was a "nasty one, Cyril". But having listened to the hon. Member for Chingford (Mr. Tebbit), I recognise that he has no peer in the House for nastiness and irrationality. I was a member of the Labour Party before the hon. Member for Rochdale was twice a member of it, and, if today's account is true, he is to reapply for membership of the party. We had better await events.
  I declare an interest. For many years I worked in the aircraft industry. I represent a constituency where there is a substantial interest in shipbuilding. I am sponsored by the AUEW, which has a substantial membership in both industries. But I have no financial interest in either industry. I doubt whether any hon. Member opposite can make a similar declaration.
  Mr. Cyril Smith: I cannot speak for others on this side of the House, but I certainly have no financial interest in these industries, and I suspect that that applies to about 98 per cent. of hon. Members on this side. If the hon. Gentleman must make silly statements like that, he should now give us something worth listening to, if we have to listen to him.
  Mr. Conlan: I pointed out that my interest was cumulative. I worked in the aircraft industry, I represent a shipbuilding constituency, and I am sponsored by the AUEW, which represents members in both industries, but I have no financial interest. Who among hon. Members opposite can say the same? I am sure that the hon. Member for Rochdale cannot.
  Having declared my interest, I feel that it is high time we got rid of this ritual, this synthetic opposition, the collusion with another place, in order to oppose a measure that is the declared intention of the unions concerned in these two industries. It has been the policy of the Confederation of Shipbuilding and Engineering Unions for nigh on 25 years that shipbuilding and ship repairing should be taken into public ownership. It has been the declared policy of the unions concerned that these two vital industries should be publicly owned. There has been no ambiguity about this over the years. Hon. Gentlemen opposite should not be surprised if, as a result of the evolution of policy between trade unions and the Labour Party, and the commitment of the Labour Party in two General Elections in 1974, the Government carry this policy into effect.
  It is not our responsibility if Conservative Members do not believe their own policies. They do one thing when in Opposition and another when in government. But the Labour Party has declared itself clearly and unequivocally to take these industries into public ownership. That is what we are doing in the Bill. If we are determined to do what we said in 1974, we should not let the nonsense from the Opposition deter us.
  11.32 p.m.
  Mr. Warren: I shall try to be brief. I hope that I shall not give other hon. Members longer to speak. With respect, Mr. Speaker, we have been progressing slowly during the course of the Third Reading.
  I shall try to talk about the Bill. With respect to that part of the Bill devoted to the aircraft industry we have heard nothing tonight which would cause those who have listened to the many debates, not only in Committee but also on the Floor of the House, to change their minds about the case that the Government have made.
  400
  This is an industry which over a period of about 10 years has produced about £6,000 million's worth of goods, more than two-thirds of it for export. Less than one-third has been procured by government. That industry has never failed this country except when projects have been cancelled by Government. None has been more guilty with respect to cancellations than successive Labour Governments.
  We have heard from the Minister of State—he departed hurriedly when I rose to speak—that he will send a team from the British Aerospace Organising Committee across to France to negotiate with the French. I must tell the Minister that the French have already gone to America and that the French Government have before them a proposal that they will have to subsidise every one of the aircraft that the Minister wants to talk about as a project to the tune of £1 million dollars for the first 350 aircraft off the line. The only way they will get that subsidy is to take the money earmarked in the Bill that we thought would go to the workers in the British aircraft industry. Boeing has already given the Minister an answer. Boeing will be the boss. There is no chance of design leadership in any of the projects which the Minister deployed as his so-called plans to the House.
  In the plans he has given us there have been varying degrees of information about the amount of consultation that has taken place. It was said that consultation with trade unions was certainly important. I would quote from some research work done by a gentleman who said that the potency of the unions has outstripped their methods and that as a result trade union leaders should realise that there is growing hostility among the public towards them and a feeling that some have grown too big for their boots.
  They were flaunting the mood "We are the masters now". Those words came from a document published by the Daily Mirror called "Spotlight on Trade Unions" and the researcher at that time was Mr. Gerald Kaufman, who is now Minister of State in this House. It is amazing how the process of consultation is totally different from the Minister of State's writings before he came to this House, totally different for those who have to work in the industry.

  401
  We have heard the Minister of State ridicule what he called the "sweetheart" unions—the people who are the research workers and the test pilots in the industries who have much more courage than many Hon. Members in this House, perhaps far more than the Minister of State himself. It is a failure to acknowledge the strength of this one industry that worries me more than anything else. If the process of consultation has been in the hands of the Minister of State he has failed to use it to defend the industry during the whole of the period since 1974 since the Bill has been before this House.
  What consultation has there been with the workers at Woodford or Chester whom he so cleverly ridiculed recently? There are people looking forward to the chance of selling aircraft to another Department, the Ministry of Defence. Yet the Minister is to go to Europe shortly to negotiate the purchase of American aircraft.
  What consultations has the Minister had with the workers at Weybridge about his proposal to sponsor the Hawker Siddeley 146? What consultations has he had with the workers at Hurn and Filton about the Government's failure to sponsor their pet project, the X11? We have a Government and a Minister who completely fail to understand the problems of this modern industry and the way in which it must compete in world markets.
  It is not a question whether nationalisation will make it better. The question is how to help the industry to do better in world markets. At no point throughout these long debates have the Government told those who work in the industry that their first interest is in the politics of ownership.
  I conclude by making three points. First, there is the Government's complete failure to understand that the industry must compete in world markets, that jobs cannot be bought, that only customers can provide them. Secondly, that the failure by the Minister to tell the workers that the Bill is about politics, not about jobs. Thirdly, the Bill is not only inadequate; it will prove unworkable.
  11.37 p.m.
  Mr. Bagier: The hon. Member for Hastings (Mr. Warren) has dealt mainly with the aircraft industry and has argued
  402
  that the Government are prepared to do this, that and the other about it. All I shall say at this late stage on that score is that the other place and the hon. Member's colleagues were prepared to give away shipbuilding and the aircraft industry provided that ship repairing was taken out of the Bill. However deeply the hon. Member may feel on this issue, the other place took the view that the Government could have shipbuilding and the aircraft industry so long as ship repairing was not included. That is the main reason for our debating the subject again tonight.
  I am sorry that the hon. Member for Rochdale (Mr. Smith) has left the Chamber. I was one of the much-maligned Members whom he mentioned when in Sunderland he referred to the lack of consultation between my right hon. Friend the Member for Sunderland, North (Mr. Willey), myself and the shop stewards of Austin & Pickersgill. I should like to give the hon. Member for Rochdale a lesson in consultation. It is a process that takes place within the relevant procedures.
  Mr. Freud: Is the hon. Member aware that a substantial number of shop stewards totally support what my hon. Friend said?
  Mr. Bagier: The hon. Member for Rochdale mentioned a letter signed by 18 shop stewards, but there are 104 shop stewards in the yard concerned.
  I do not want to make a big issue of this. All I am saying is that, with his usual discourtesy, the hon. Member for Rochdale failed to advise either my right hon. Friend or myself that he was in the Sunderland area. He then went to one of the best shipyards in the country, second to none in output rate or profit rate.
  Of course there are anxieties there and of course the management has doubts about going into public ownership, but all the hon. Member for Rochdale succeeded in doing was getting a few signatures of shop stewards in what until now has been a very happy shipyard. But the management of Austin & Pickersgill will not want to be left out if the Bill goes on the statute book, as it will, even though it may be opposed to nationalisation in general. The hon. Member for Rochdale has done nothing

  403
  but cause mischief by his activities in the yard.
  This Bill is important to my constituency, and my region. We have about 35,000 shipyard workers directly involved in shipbuilding. Each and every one of them is being hurt by the uncertainty on this issue. Each and every one of them is worried by the activities of the other place, and each and every one of them wants a settled procedure My shipyard workers are intelligent men, and they are well aware of the severe cut-back in the demand for shipbuilding throughout the world. They are also aware of the cutback in ship repairing and they know that if our industry is to survive, the argument is not between individual yards but between Governments. How much protection are the Government prepared to give to our industry?
  There is Japan, of course, and I am aware of the OECD talks taking place. But we cannot just ask the Japanese to be good lads. They will protect their industry, and it is important that our Government should be batting from first base. It is important that there should not be a long period of uncertainty.
  The hon. Member for Oswestry (Mr. Biffen) said that the other place would bring to bear the full force of the procedures. The Conservatives and the House of Lords must have decided between themselves that they would make these difficulties—
  Mr. Biffen: The burden of my case is that the procedures would flow automatically from the judgment of the Public Bill Office on the prima facie hybridity of this Bill. I am sure that the hon. Member for Sunderland, South (Mr. Bagier) would agree that no one would doubt the total impartiality of the Public Bill Office.
  Mr. Bagier: I am not talking about the Public Bill Office. For two months this Bill was in another place, and the question of hybridity was not challenged them and was not brought forward on to the Floor of the House. If it is brought on now, it will just be a last ditch stand by Tories in another place.
  Mr. Biffen: I ask the hon. Member to appreciate that the ruling of the Public
  404
  Bill Office is respect of the prima facie hybridity of the Bill will automatically transfer itself to the other place. That is the burden of my proposition.
  Mr. Bagier: We can make a judgment of what happens in another place.
  I see that the hon. Member for Rochdale is back in his place. He said of my right hon. Friend for Sunderland, North "Who is he?". I ask the hon. Member to come to Sunderland, not in secret as he did before—[Interruption.] The hon. Member scoffs. I remind him of the general courtesies of this place which are extended by a Member who visits another's constituency. I know that the hon. Member for Rochdale does not bother about things like that. He has a thing about this place. I am surprised that he is accepted on that Bench. He has been twice in my party, twice in the Liberals, and now he wants to form a party of his own. He is a complete individual, and he knows nothing about the democratic processes of this place. As long as he prefers to act like a buffoon, and to get up on the stage, let him enjoy it, but what I do hold against him is the fact that he has set in motion an attempt to turn shop steward against shop steward in one of the happiest shipyards in this country. The responsibility is on his shoulders. He did this in a completely dishonest manner. He has read out a letter which he claimed was signed by a majority of shop stewards in Austin & Pickersgill—a letter with 18 signatures.
  Mr. Cyril Smith: It was a majority of the shop stewards committee, which totals 30 people. However much of a buffoon or however insignificant the hon. Member may think me, I have clearly got under the hon. Member's skin. If my remarks and actions are so utterly irrelevant, what is the hon. Member getting his knickers into a twist about?
  Mr. Speaker: Order. I must remind hon. Members that we are hoping to begin the winding-up speeches soon.
  Mr. Bagier: Thank you, Mr. Speaker. I will give the hon. Member for Rochdale the reason. The hon. Member used his usual music hall tactics to come into my constituency and to get the Tory-controlled Press to give publicity to his statements. He has the signatures of 18

  405
  shop stewards out of a total of well over 100. If he can make political capital out of that, good luck to him.
  11.4 p.m.
  Mr. Norman Lamont: The Minister of State has constantly reminded us that the Bill has had more time in this House and more sittings in Standing Committee than any other previous measure. It is most surprising that at the end of the day he has not been able to come forward with a single coherent convincing reason why these industries should be nationalised.
  We heard a lot of talk today about harnessing energies to give strategic decisions within a coherent framework combined with effective decentralisation. All the reasons had a certain familiarity, a certain sameness of the rhetoric of the early 1960s. But there was not a single hard-headed tactical reason why these industries should be brought within the public sector.
  We are often told by the Government that the management of these industries needs improving. What did the Government do in that direction? Their first action in the aerospace industry was to ask existing management if it would stay on. When it would not do so, they looked around for a lot of retired politicians to run the industry for them. That is hardly the way to break into overseas markets.
  The facts are that the problems of these industries will in no way be helped by nationalisation. The future for the aircraft industry lies, of course, in co-operation between us and the French and the other European industries. But that will not be affected by nationalisation.
  On shipbuilding, adjustments will have to be made to reduce the capacity of this country. But, again, that will not be affected by the decision to change ownership. The Government are now dealing both with highly successful concerns and with those which have been in longer-term cyclical decline. The aviation industry has been among the country's most outstanding, exporting half its turnover. If other industries performed as well we should have no problems.
  That industry has paid more in corporation tax than all the nationalised industries since they first existed. The
  406
  return on capital in the aviation sector has been far higher than that in the private sector generally, and, of course, far higher than the public sector as a whole.
  No serious arguments have been advanced by the Government or Labour Members to support their case. We are told that the State is the biggest customer of some of these industries. But it seems a curious argument to say that because the State buys something from private industry it should have the right to own that industry. Surely the concern of the State should be to see that the people from whom it buys goods are effective, competitive and efficient.
  We are told that public money has gone into these industries. In many cases it has gone into projects which are practically in the public sector already. But in any case it is far more likely that Parliament and the accounting bodies in Whitehall will have a better chance of ensuring that they are getting value for money if these industries remain firmly within the private sector.
  The hon. Member for Gateshead, East (Mr. Conlan) accused my hon. Friend the Member for Oswestry (Mr. Biffen) of making a synthetic speech and being wholly artificial in what he was saying. I suggest that all the anger we hear from the Minister of State and the Government is largely synthetic. They tell us that this measure is essential to protect jobs. They say that it is desperately urgent.
  But if it is so urgent, why have they proceded with it through the House at such a leisurely pace? Why was there such a gap between Second Reading and the referral to Committee? Why, above all, did the Government not respond when they were told by Lord Carrington in another place that they could have the shipbuilding part, the aerospace part, and even the ship repairing part if only they would reconsider it and submit it in the next Parliament? They could have had every scintilla of their absurd manifesto if they had been prepared to be reasonable and reconsider the matter for a matter of weeks. They could have presented a separate ship repairing Bill.
  I do not believe that the Government think that the Bill is desperately urgent or will save jobs. The Government know that redundancies are inevitable and they

  407
  are content for redundancies to occur in the private sector so that they can put the blame elsewhere than on themselves.
  It would not be surprising if the Government have changed their mind at the same moment that they are making an investment in a successful private industry in this country. We read in the newspapers that they are prepared to sell off the shares that they hold in BP to satisfy the IMF. That makes no sense whatsoever.
  It is clear that nationalisation is not wanted by a majority in the country. It is not wanted, I suspect, by a majority of Labour voters. Regardless of what happens in the Division, we all know that it is not really wanted by a majority in the House.
  11.53 p.m.
  Mr. Les Huckfield: The hon. Member for Chingford (Mr. Tebbit) made a rather unusual speech. If he was so concerned about the memorandum and the loss of the export order to which he referred, surely he would have brought the matter to my Department in complete confidence long before now instead of submitting it to the House as a last minute Cheap Jack debating point.
  Mr. Tebbit Mr. Tebbit rose—
  Mr. Huckfield: The Bill has had some 300 hours of debate in both places—
  Mr. Tebbit Mr. Tebbit rose—
  Mr. Huckfield:—and the democratically elected House has given its continued endorsement to the Bill in the same form in two successive Sessions. We do not argue for the Bill merely because it is necessary to resist another place. We argue for it not only because it makes political, economic and social sense but because it makes industrial sense.
  We have a commitment to this measure. We committed ourselves to it when we put it in our election manifesto. My right hon. and hon. Friends were elected on that manifesto. My hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) specifically fought his by-election on issues such as this. My right hon. Friend the Member for Sunderland, North (Mr. Willey), my hon. Friend the
  408
  Member for Sunderland, South (Mr. Bagier) and my hon. Friends who represent other shipping constituencies specifically fought their election campaigns on this issue. We have the commitment in our manifesto and we intend to fulfil it.
  If Conservative Members cannot accept nationalisation as the only means of evolving some sort of strategy on a national basis for these two industries, perhaps they will accept it on the basis of the thousands of millions of pounds of public money that have been put into the industries over the past 10 years. In the past 10 years £309 million in launching aid has been given to civil aviation projects, and in the same period £345 million has been given in forms of special shipbuilding assistance. I submit that when we have given such large sums to those industries, we need public accountability—and that is what this measure will give.
  The Plowden Committee 10 years ago urged units of the aircraft and shipbuilding industries to get together. Even the hon. Member for Henley (Mr. Heseltine), as the former Minister responsible for these matters, tried to achieve that situation. In aviation we seek to maintain the maximum possible independent capacity and capability, yet we recognise that in future large aviation projects will have to be on a collaborative basis. That is why the Organising Committee has been working hard to ensure that the aircraft industry is given options so that it does not get left out. Despite the amount of public money spent in these industries, the same basic faults that were endemic in shipbuilding 10 years ago still exist.
  We need this Bill because it contains one of the most far-reaching and wide-ranging provisions for industrial democracy incorporated in any statute. We do not believe that one can run an industry by pinning orders on a wall and giving instructions and orders. We believe that one can get the best performance by taking workers into one's confidence. This Bill contains provisions to bring about a shift of decision-making power towards work-people, and I hope that it signifies some kind of progress towards Socialism.
  When I talk about "workers", I do not mean workers who wine and dine, as do some of the lobbyists who have been active on this Bill. When I talk

  409
  about "workers", I include the workers who have been sacked because of their political views on this Bill.
  After 58 Sittings and 200 hours debate on this Bill the hon. Member for Tiverton (Mr. Maxwell-Hyslop) suddenly discovered that an oil rig was not a ship. Now, after 300 hours debate, including at least two months in another place, in which the Bill was not adjudged to be hybrid, suddenly as a last-minute gesture the Conservative Party wheels in the hon. and learned Member for Wimbledon (Sir M. Havers). Thousands of jobs are at stake and indeed the reputation of this House is at stake. But again the Opposition are raising another last-minute, eleventh-hour procedural point.
  The aircraft workers and shipbuilding workers, and indeed the country, will judge them, because democracy itself is at stake. We have two great industries in our hands tonight. I hope that Conservative Members will never have another chance to get those industries in their hands. Bearing in mind the reputation of those two great industries and the reputation of this House, I urge hon. Members to give the Bill a Third Reading.
  Question put, That the Bill be now read the Third time:—
  The House divided: Ayes 280, Noes 277.

  Division No. 16.]

  AYES

  11.59 p.m.

  Abse, Leo

  Davies, Bryan (Enfield N)

  Healey, Rt Hon Denis

  Allaun, Frank

  Davies, Denzil (Llanelli)

  Heffer, Eric S.

  Anderson, Donald

  Davies, Ifor (Gower)

  Hooley, Frank

  Archer, Peter

  Davis, Clinton (Hackney C)

  Horam, John

  Armstrong, Ernest

  Deakins, Eric

  Howell, Rt Hon Denis (B'ham, Sm H)

  Ashley, Jack

  Dean, Joseph (Leeds West)

  Hoyle, Doug (Nelson)

  Atkins, Ronald (Preston N)

  Dell, Rt Hon Edmund

  Huckfield, Les

  Atkinson, Norman

  Dempsey, James

  Hughes, Rt Hon C. (Anglesey)

  Bagier, Gordon A. T.

  Doig, Peter

  Hughes, Robert (Aberdeen N)

  Barnett, Guy (Greenwich)

  Dormand, J. D.

  Hughes, Roy (Newport)

  Barnett, Rt Hon Joel (Heywood)

  Douglas-Mann, Bruce

  Irvine, Rt Hon Sir A. (Edge Hill)

  Bates, Alf

  Duffy, A. E. P.

  Irving, Rt Hon S. (Dartford)

  Bean, R. E.

  Dunn, James A.

  Jackson, Colin (Brighouse)

  Benn, Rt Hon Anthony Wedgwood

  Dunnett, Jack

  Jackson, Miss Margaret (Lincoln)

  Bennett, Andrew (Stockport N)

  Eadie, Alex

  Janner, Greville

  Bidwell, Sydney

  Edge, Geoff

  Jay, Rt Hon Douglas

  Bishop, E. S.

  Edwards, Robert (Wolv SE)

  Jeger, Mrs Lena

  Blenkinsop, Arthur

  Ellis, John (Brigg & Scun)

  Jenkins, Hugh (Putney)

  Boardman, H.

  English, Michael

  John, Brynmor

  Booth, Rt Hon Albert

  Ennals, David

  Johnson, James (Hull West)

  Bottomley, Rt Hon Arthur

  Evans, Fred (Caerphilly)

  Johnson, Walter (Derby S)

  Boyden, James (Bish Auck)

  Evans, loan (Aberdare)

  Jones, Alec (Rhondda)

  Bradley, Tom

  Ewing, Harry (Stirling)

  Jones, Barry (East Flint)

  Bray, Dr Jeremy

  Faulds, Andrew

  Jones, Dan (Burnley)

  Brown, Hugh D. (Provan)

  Fernyhough, Rt Hon E.

  Judd, Frank

  Buchan, Norman

  Fitch, Alan (Wlgan)

  Kaufman, Gerald

  Buchanan, Richard

  Fitt, Gerard (Belfast W)

  Kelley, Richard

  Butler, Mrs Joyce (Wood Green)

  Flannery, Martin

  Kerr, Russell

  Callaghan, Rt Hon J. (Cardiff SE)

  Fletcher, L. R. (Ilkeston)

  Kilroy-Silk, Robert

  Callaghan, Jim (Middleton & P)

  Fletcher, Ted (Darlington)

  Kinnock, Neil

  Campbell, Ian

  Foot, Rt Hon Michael

  Lambie, David

  Canavan, Dennis

  Ford, Ben

  Lamborn, Harry

  Cant, R. B.

  Forrester, John

  Lamond, James

  Carmichael, Neil

  Fowler, Gerald (The Wrekin)

  Latham, Arthur (Paddington)

  Carter, Ray

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

  Leadbitter, Ted

  Cartwright, John

  Freeson, Reginald

  Lee, John

  Castle, Rt Hon Barbara

  Garrett, John (Norwich S)

  Lestor, Miss Joan (Eton & Slough)

  Clemitson, Ivor

  Garrett, W. E. (Wallsend)

  Lever, Rt Hon Harold

  Cocks, Rt Hon Michael

  George, Bruce

  Lewis, Ron (Carlisle)

  Cohen, Stanley

  Gilbert, Dr John

  Lipton, Marcus

  Colquhoun, Ms Maureen

  Ginsburg, David

  Litterick, Tom

  Conlan, Bernard

  Golding, John

  Loyden, Eddie

  Cook, Robin F. (Edin C)

  Gould, Bryan

  Luard, Evan

  Corbett, Robin

  Gourlay, Harry

  Lyon, Alexander (York)

  Cowans, Harry

  Graham, Ted

  Lyons, Edward (Bradford W)

  Cox, Thomas (Tooting)

  Grant, George (Morpeth)

  Mabon, Dr J. Dickson

  Craigen, Jim (Maryhill)

  Grant, John (Islington C)

  McCartney, Hugh

  Crawshaw, Richard

  Grocott, Bruce

  McDonald, Dr Oonagh

  Cronin, John

  Hamilton, James (Bothwell)

  McElhone, Frank

  Crosland, Rt Hon Anthony

  Harper, Joseph

  MacFarquhar, Roderick

  Crowther, Stan (Rotherham)

  Harrison, Walter (Wakefield)

  McGuire, Michael (Ince)

  Cryer, Bob

  Hart, Rt Hon Judith

  MacKenzie, Gregor

  Cunningham, G. (Islington S)

  Hattersley, Rt Hon Roy

  Mackintosh, John P.

  Cunningham, Dr J. (Whiteh)

  Hatton, Frank

  Maclennan, Robert

  Davidson, Arthur

  Hayman, Mrs Helene

  McMillan, Tom (Glasgow C)

  Madden, Max

  Rees, Rt Hon Merlyn (Leeds S)

  Thomas, Jeffrey (Abertillery)

  Magee, Bryan

  Richardson, Miss Jo

  Thomas, Mike (Newcastle E)

  Maguire, Frank (Fermanagh)

  Roberts, Albert (Normanton)

  Thomas, Ron (Bristol NW)

  Mahon, Simon

  Roberts, Gwilym (Cannock)

  Thorne, Stan (Preston South)

  Mallalieu, J. P. W.

  Robertson, John (Paisley)

  Tierney, Sydney

  Marks, Kenneth

  Robinson, Geoffrey

  Tinn, James

  Marquand, David

  Roderick, Caerwyn

  Tomlinson, John

  Marshall, Dr Edmund (Goole)

  Rodgers, George (Chorley)

  Torney, Tom

  Marshall, Jim (Leicester S)

  Rodgers, Rt Hon William (Stockton)

  Tuck, Raphael

  Mason, Rt Hon Roy

  Rooker, J. W.

  Varley, Rt Hon Eric G.

  Maynard, Miss Joan

  Rose, Paul B.

  Wainwright, Edwin (Dearne V)

  Meacher, Michael

  Ross, Rt Hon W. (Kilmarnock)

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

  Mikardo, Ian

  Rowlands, Ted

  Walker, Harold (Doncaster)

  Millan, Rt Hon Bruce

  Ryman, John

  Walker, Terry (Kingswood)

  Miller, Dr M. S. (E Kilbride)

  Sandelson, Neville

  Ward, Michael

  Miller, Mrs Millie (Ilford N)

  Sedgemore, Brian

  Watkins, David

  Moonman, Eric

  Selby, Harry

  Watkinson, John

  Morris, Alfred (Wythenshawe)

  Shaw, Arnold (Ilford South)

  Weetch, Ken

  Morris, Charles R. (Openshaw)

  Sheldon, Robert (Ashton-u-Lyne)

  Weitzman, David

  Morris, Rt Hon J. (Aberavon)

  Shore, Rt Hon Peter

  Wellbeloved, James

  Moyle, Roland

  Short, Rt Hon E. (Newcastle C)

  White, Frank R. (Bury)

  Murray, Rt Hon Ronald King

  Silkin, Rt Hon John (Deptford)

  Whitlock, William

  Newens, Stanley

  Silkin, Rt Hon S. C. (Dulwich)

  Willey, Rt Hon Frederick

  Noble, Mike

  Sillars, James

  Williams, Alan (Swansea W)

  Oakes, Gordon

  Silverman, Julius

  Williams, Alan Lee (Hornch'ch)

  Ogden, Eric

  Skinner, Dennis

  Williams, Rt Hon Shirley (Hertford)

  O'Halloran, Michael

  Small, William

  Williams, Sir Thomas (Warrington)

  Orme, Rt Hon Stanley

  Smith, John (N Lanarkshire)

  Wilson, Alexander (Hamilton)

  Ovenden, John

  Snape, Peter

  Wilson, Rt Hon Sir Harold (Huyton)

  Padley, Walter

  Spearing, Nigel

  Wilson, William (Coventry SE)

  Palmer, Arthur

  Spriggs, Leslie

  Wise, Mrs Audrey

  Park, George

  Stallard, A. W.

  Woodall, Alec

  Parker, John

  Stewart, Rt Hon M. (Fulham)

  Woof, Robert

  Parry, Robert

  Stoddart, David

  Wrigglesworth, Ian

  Pendry, Tom

  Stott, Roger

  Young, David (Bolton E)

  Perry, Ernest

  Strang, Gavin

  Phipps, Dr Colin

  Strauss, Rt Hon G. R.

  TELLERS FOR THE AYES:

  Prentice, Rt Hon Reg

  Summerskill, Hon Dr Shirley

  Mr. Joseph Ashton and

  Price, C. (Lewisham W)

  Swain, Thomas

  Mr. Donald Coleman

  Price, William (Rugby)

  Taylor, Mrs Ann (Bolton W)

  NOES

  Adley, Robert

  Clegg, Walter

  Gardner, Edward (S Fylde)

  Aitken, Jonathan

  Cockcroft, John

  Gilmour, Rt Hon Ian (Chesham)

  Alison, Michael

  Cooke, Robert (Bristol W)

  Gilmour, Sir John (East Fife)

  Amery, Rt Hon Julian

  Cope, John

  Glyn, Dr Alan

  Arnold, Tom

  Cormack, Patrick

  Godber, Rt Hon Joseph

  Atkins, Rt Hon H. (Spelthorne)

  Corrie, John

  Goodhart, Philip

  Awdry, Daniel

  Costain, A. P.

  Goodhew, Victor

  Bain, Mrs Margaret

  Craig, Rt Hon W. (Belfast E)

  Goodlad, Alastair

  Baker, Kenneth

  Crawford, Douglas

  Gorst, John

  Banks, Robert

  Critchley, Julian

  Gow, Ian (Eastbourne)

  Beith, A. J.

  Crouch, David

  Gower, Sir Raymond (Barry)

  Bell, Ronald

  Crowder, F. P.

  Grant, Anthony (Harrow C)

  Bennett, Dr Reginald (Fareham)

  Davies, Rt Hon J. (Knutsford)

  Gray, Hamish

  Benyon, W.

  Dean, Paul (N Somerset)

  Griffiths, Eldon

  Berry, Hon Anthony

  Dodsworth, Geoffrey

  Grimond, Rt Hon J.

  Biffen, John

  Douglas-Hamilton, Lord James

  Grist, Ian

  Biggs-Davison, John

  Drayson, Burnaby

  Hall, Sir John

  Blaker, Peter

  du Cann, Rt Hon Edward

  Hall-Davis, A. G. F.

  Body, Richard

  Dunlop, John

  Hamilton, Michael (Salisbury)

  Boscawen, Hon Robert

  Durant, Tony

  Hampson, Dr Keith

  Bottomley, Peter

  Eden, Rt Hon Sir John

  Hannam, John

  Bowden, A. (Brighton, Kemptown)

  Edwards, Nicholas (Pembroke)

  Harrison, Col Sir Harwood (Eye)

  Boyson, Dr Rhodes (Brent)

  Elliott, Sir William

  Harvie Anderson, Rt Hon Miss

  Bradford, Rev Robert

  Emery, Peter

  Hastings, Stephen

  Braine, Sir Bernard

  Ewing, Mrs Winifred (Moray)

  Havers, Sir Michael

  Brittan, Leon

  Eyre, Reginald

  Hayhoe, Barney

  Brocklebank-Fowler, C.

  Fairbairn, Nicholas

  Heath, Rt Hon Edward

  Brotherton, Michael

  Fairgrieve, Russell

  Henderson, Douglas

  Brown, Sir Edward (Bath)

  Farr, John

  Heseltine, Michael

  Bryan, Sir Paul

  Fell, Anthony

  Hicks, Robert

  Buchanan-Smith, Alick

  Finsberg, Geoffrey

  Higgins, Terence L.

  Budgen, Nick

  Fisher, Sir Nigel

  Hodgson, Robin

  Bulmer, Esmond

  Fletcher-Cooke, Charles

  Holland, Philip

  Burden, F. A.

  Fookes, Miss Janet

  Hooson, Emlyn

  Butler, Adam (Bosworth)

  Forman, Nigel

  Hordern, Peter

  Carlisle, Mark

  Fowler, Norman (Sutton C'f'd)

  Howe, Rt Hon Sir Geoffrey

  Carson, John

  Fox, Marcus

  Howell, David (Guildford)

  Chalker, Mrs Lynda

  Freud, Clement

  Howells, Geraint (Cardigan)

  Churchill, W. S.

  Fry, Peter

  Hunt, David (Wirral)

  Clark, Alan (Plymouth, Sutton)

  Galbraith, Hon T. G. D.

  Hurd, Douglas

  Clark, William (Croydon S)

  Gardiner, George (Reigate)

  Hutchison, Michael Clark

  412

  413

  Irving, Charles (Cheltenham)

  Montgomery, Fergus

  Skeet, T. H. H.

  James, David

  Moore, John (Croydon C)

  Smith, Cyril (Rochdale)

  James, R. Rhodes (Cambridge)

  More, Jasper (Ludlow)

  Smith, Dudley (Warwick)

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

  Morgan, Geraint

  Speed, Keith

  Jessel, Toby

  Morgan-Giles, Rear-Admiral

  Spence, John

  Johnson Smith, G. (E Grinstead)

  Morris, Michael (Northampton S)

  Spicer, Michael (S Worcester)

  Johnston, Russell (Inverness)

  Morrison, Hon Peter (Chester)

  Sproat, Iain

  Jones, Arthur (Daventry)

  Mudd, David

  Stainton, Keith

  Jopling, Michael

  Neave, Airey

  Stanbrook, Ivor

  Joseph, Rt Hon Sir Keith

  Nelson, Anthony

  Stanley, John

  Kaberry, Sir Donald

  Neubert, Michael

  Steel, David (Roxburgh)

  Kershaw, Anthony

  Newton, Tony

  Steen, Anthony (Wavertree)

  Kilfedder, James

  Nott, John

  Stewart, Donald (Western Isles)

  Kimball, Marcus

  Onslow, Cranley

  Stewart, Ian (Hitchin)

  King, Tom (Bridgwater)

  Oppenheim, Mrs Sally

  Stokes, John

  Kitson, Sir Timothy

  Page, Rt Hon R. Graham (Crosby)

  Stradling Thomas, J.

  Knight, Mrs Jill

  Page, Richard (Workington)

  Tapsell, Peter

  Knox, David

  Paisley, Rev Ian

  Taylor, R. (Croydon NW)

  Lamont, Norman

  Pardoe, John

  Taylor, Teddy (Cathcart)

  Langford-Holt, Sir John

  Parkinson, Cecil

  Tebbit, Norman

  Latham, Michael (Melton)

  Pattie, Geoffrey

  Thatcher, Rt Hon Margaret

  Lawrence, Ivan

  Penhaligon, David

  Thomas, Dafydd (Merioneth)

  Lawson, Nigel

  Percival, Ian

  Thomas, Rt Hon P. (Hendon S)

  Lester, Jim (Beeston)

  Peyton, Rt Hon John

  Thompson, George

  Lewis, Kenneth (Rutland)

  Pink, R. Bonner

  Townsend, Cyril D

  Lloyd, Ian

  Powell, Rt Hon J. Enoch

  Trotter, Neville

  Loveridge, John

  Price, David (Eastleigh)

  van Straubenzee, W. R.

  Luce, Richard

  Prior, Rt Hon James

  Vaughan, Dr Gerard

  McAdden, Sir Stephen

  Pym, Rt Hon Francis

  Viggers, Peter

  MacCormick, Iain

  Raison, Timothy

  Wainwright, Richard (Colne V)

  McCrindle, Robert

  Rathbone, Tim

  Wakeham, John

  McCusker, H.

  Rawlinson, Rt Hon Sir Peter

  Walder, David (Clitheroe)

  Macfarlane, Neil

  Rees, Peter (Dover & Deal)

  Walker, Rt Hon P. (Worcester)

  MacGregor, John

  Rees-Davies, W. R.

  Wall, Patrick

  Macmillan, Rt Hon M. (Farnham)

  Reid, George

  Walters, Dennis

  McNair-Wilson, M. (Newbury)

  Renton, Rt Hon Sir D. (Hunts)

  Warren, Kenneth

  Madel, David

  Renton, Tim (Mid-Sussex)

  Watt, Hamish

  Marshall, Michael (Arundel)

  Ridley, Hon Nicholas

  Weatherill, Bernard

  Marten, Neil

  Ridsdale, Julian

  Wells, John

  Mates, Michael

  Rifkind, Malcolm

  Welsh, Andrew

  Maude, Angus

  Roberts, Wyn (Conway)

  Whitelaw, Rt Hon William

  Maudling, Rt Hon Reginald

  Ross, Stephen (Isle of Wight)

  Wiggin, Jerry

  Mawby, Ray

  Ross, William (Londonderry)

  Wigley, Dafydd

  Maxwell-Hyslop, Robin

  Rossi, Hugh (Hornsey)

  Wilson, Gordon (Dundee E)

  Mayhew, Patrick

  Rost, Peter (SE Derbyshire)

  Winterton, Nicholas

  Meyer, Sir Anthony

  Sainsbury, Tim

  Wood, Rt Hon Richard

  Miller, Hal (Bromsgrove)

  St. John-Stevas, Norman

  Young, Sir G. (Ealing, Acton)

  Mills, Peter

  Shaw, Michael (Scarborough)

  Younger, Hon George

  Miscampbell, Norman

  Shelton, William (Streatham)

  Mitchell, David (Basingstoke)

  Shepherd, Colin

  TELLERS FOR THE NOES:

  Moate, Roger

  Shersby, Michael

  Mr. Spencer Le Marchant and

  Molyneaux, James

  Silvester, Fred

  Mr. Michael Roberts

  Monro, Hector

  Sims, Roger

  Question accordingly agreed to.
  Bill read the Third time and passed.

  EUROPEAN SECONDARY LEGISLATION, &c.
  Ordered,
  That the Standing Order of 18th November 1974 relating to the nomination of the Select Committee on European Legislation be amended, by leaving out Mr. John Davies and inserting Mr. David Knox.—[Mr. Walter Harrison.]

  RACE RELATIONS AND IMMIGRATION
  Ordered,
  That the Standing Order of 14th January 1975 relating to the nomination of the Select Committee on Race Relations and Immigration be amended by adding Sir William Elliott.—[Mr. Walter Harrison.]

  LIQUID GAS INSTALLATIONS
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Tinn.]
  12.18 a.m.
  Mr. Wyn Roberts: There is at Llandudno in my constituency a liquefied petroleum gas installation which is located within about 150 yards of a junior school, Ysgol Morfa Rhiannedd, and a school for mentally handicapped children, Ysgol Wern y Wylan. The installation, which has a capacity of 250 tons and belongs to the Wales Gas Board, is also within about quarter of a mile of a major secondary school, Ysgol John Bright, and quite close to the Llandudno Hospital. The installation is surrounded on all but one side by houses.

  415
  I was first approached about the safety of the installation in March of last year by a representative of the parents of Ysgol Morfa Rhiannedd which currently has 123 pupils. As a result I tabled three Questions for Written Answer to which I received replies on 17th March. I am bound to say that the Answers were not very reassuring. First, they established that
  "liquefied petroleum gases are highly flammable and when mixed with air in the correct proportions may explode."—[Official Report, 17th March, 1975; Vol 888, c. 355–6.]
  Secondly, it was established that the site was regarded as a "major hazard" since it contained more than 100 tons of liquefied petroleum gas. My immediate conclusion was that such installations should not be sited within an urban area, but then, on 10th April, in reply to a further Question, I was told:
  " … precise information about the total number of large-scale storages of liquefied petroleum gas is not available, since not all such storages were subject to the legislation enforced in the past by the several inspectorates now incorporated in the Health and Safety Executive. The numbers of factory premises (a) in Great Britain and (b) in Wales where storage of 100 tons or more of liquefied petroleum gas takes place are 184 and 23, respectively."—[Official Report, 10th April 1975; Vol. 889, c. 457–458.]
  These numbers, which relate to factory premises only, suggested that the transfer of such installations to non-urban areas, would be an enormous and costly operation which would take many years to complete, even if the necessary financial resources could be made available.
  As the removal of the Llandudno installation, along with others in urban areas, appeared to be out of the question, there seemed to be no alternative but to rely on the safety precautions laid down in the Code of Practice prepared by the Home Office in 1971. The local authority, Aberconwy Council, obtained the advice of Her Majesty's Factory Inspectorate which reported on 14th August of last year. The report said:
  "The engineering design of the installation is of a high standard well protected with emergency safety devices. When certain alterations, which have been discussed with the Board"
  —that is, the Wales Gas Board—
  "have been carried out by them, the site will comply with the Home Office Codes of Practice for the storage of L.P.G."
  I understand that these alterations have been carried out by the Board.
  416
  Nevertheless, Aberconwy Council, after considering the report in October 1975, instructed its chief executive to state that, despite compliance with all safety codes of practice, the depôt was still not appropriately situated and to investigate the possibility of seeking an alternative site in conjunction with the Gas Board. The Board saw no justification for the removal of the installation, but said that it would reconsider the matter if the Council were prepared to bear the cost of removal to an alternative site. The Council replied that this was "quite out of the question." In other words, the Board came to the same conclusion on the case of the Llandudno depôt as I had earlier on the general problem of these sites in urban areas in Great Britain.
  At this point, I must say a word about the attitude of the Wales Gas Board, which is probably typical of the attitude of other similar bodies in Britain as a whole. It is well summed up in a letter sent to me by the Chairman, Mr. D. H. Fisher, dated 2nd November. He wrote:
  "if we were not satisfied with the safety of the installation we would not continue the operation on the site. We are; so are the Factory Inspectorate who visit it regularly as a matter of routine. We do not consider that we are justified in spending money, and it would be a substantial sum, to move the installation. We have done all we can to allay the concern of some of the local inhabitants and it is for this reason that I have written to you."
  Wales Gas Board has other large installations in urban areas—a 1450 ton installation at Grangetown, Cardiff, and a 2,000 ton installation at Llandarcy, near Swansea. The Llandudno depôt is important to it and to North West Wales. It supplies in the Aberconwy District alone seven schools, a hospital and 90 different premises. The Gas Board's attitude is quite proper and understandable. Nevertheless, the presence of this installation continues to cause concern because it is a major hazard site. We are therefore bound to look more closely at the problem.
  The outstanding fact about the Llandudno installation is its proximity to the three schools I mentioned earlier, involving a total child population of about 1,500. It is notable that concern springs from the parents and teachers, some of whom are themselves parents of children

  417
  at the schools. It is the potential danger to the children that causes concern, as evidenced by a letter I received from the headmaster of Ysgol John Bright on 29th September this year and a letter from the Chairman of the Federated Committee of Parent-Teacher Associations at Llandudno, Mr. H. T. Lindsay. It was the latter that finally prompted me to seek this debate.
  That letter, dated 24th November 1976, and addressed to the manager of the Wales Gas depôt at Maesdu Road, Llandudno, says:
  "The threat to the children of the Llandudno area, and in particular to the pupils of Ysgol John Bright and Ysgol Morfa Rhiannedd, posed by the L.P.G. tanks at Maesdu Road were discussed at a meeting of our committee of 11th November 1976. All members of the committee expressed grave concern at the possibility of an accident at the installation and the effect such an accident could have. The committee support fully the efforts being made by the staff of Ysgol John Bright to get these tanks moved and our dissatisfaction with the current negative attitude of Wales Gas towards this danger. I write asking you to re-examine, in human terms, the possible effects of a fire, explosion or other accident involving these tanks, and to reconsider your decision not to move them.
  In an installation such as yours, where accident could have catastrophic results, I would expect there to be:—

  a formal evaluation of the risks;

  action taken to minimise the risks;

  action taken to contain the effects of any accident;

  an emergency plan to be followed in the event of an accident occurring.
  To assure us that everything that can be done, has been done, until such time as the tanks are moved, I would ask you whether the above applies to Maesdu Road, and if so what actions have been taken and what emergency plans exist.
  To inform them of our concern I am sending a copy of this letter to Mr. Wyn Roberts M.P., to the Chief Executives of Gwynedd and Aberconwy Councils and to the Chief Constable of Gwynedd Constabulary. By copy of the letter I would ask them to inform me why they consider this installation to be an acceptable risk and how long they are prepared to accept responsibility for its presence in an urban area."
  That is a powerful letter, which must be answered. Children at school are the responsibility of their teachers and the education authority. We as parents insist on higher degrees of safety where they are concerned than we demand for ourselves. My first major question to the Government is whether they will look
  418
  again, through the Health and Safety Commission, at major hazard sites in relation to schools and declare that there should be no such site within a certain distance of a school, whatever a completely safe distance may be in relation to the nature of the site and the hazard it presents. There cannot be many existing major hazard sites with a school in their immediate vicinity as in Llandudno. Such sites, with schools nearby, should be segregated, and appropriate action taken either to remove the site or the school.
  This may be an appropriate place to note that the factory inspector's report on the Llandudno site recommended that:
  "Steps should be taken to set up an emergency plan in case of any failure of the main precautions and in the event of a major fire. This should involve Wales Gas Board, the local emergency services and the school authorities."
  So Ysgol Morfa Rhiannedd clearly could be at risk, and so could its near-neighbour, Ysgol Wern y Wylan and its mentally-handicapped children.
  I understand that recently Swale District Council in Kent considered an application for permission to build a new school near an LPG installation, and that the factory inspectors strongly recommended that the school boundary fence should be at least 100 feet away and that the buildings should be as far away as possible. Clearly, it is possible to provide guidelines for planning authorities for the future, specifying safe distances not only for schools but for residences and work places.
  I have read the code of practice and it is mainly concerned with internal safety of installations. It does not really consider circumstances outside the perimeter of such sites and what would happen in the event of an emergency. The section on page 37 dealing with action in an emergency is very brief.
  I very much hope that this second suggestion will be acted upon and that the Government do not take the view that provided that safety codes are adhered to, that is the end of the matter. Safety can always be improved. What were acceptable safety measures in the past may not be adequate for the present and the future when our society is

  419
  threatened by totally ruthless and inhuman terrorists who strike without warning and kill and maim indiscriminately.
  I need not remind the Minister of our extreme sensitivity in Wales to the location of schools in relation to hazards following the Aberfan disaster in 1966.
  Mr. Peter Emery: I have listened with great care to my hon. Friend because this is a problem with which I have had to deal. Has this matter been referred to the Gas Consumer Council for Wales, which was set up specifically to take this sort of problem to the Gas Board in Wales? Has the Council made any representation on behalf of the schools?
  Mr. Roberts: I do not think that it has been referred to the Council, but my hon. Friend will know that these sites are not limited to the Gas Boards. There are many similar installations elsewhere.
  It may also be that the position of hospitals in relation to major hazards sites should be examined for obvious reasons, in particular the difficulty of a evacuating such premises in the event of an explosion and consequent fires.
  There is one further point which should be made. It is clear that as regards the Llandudno site, planning permission was not required since there was no basic change of use when it became an LPG installation. It would surely be wise for the future to require a special planning consent when a site is developed so that it comes into the major hazard site category. I should be grateful for the Minister's view on this matter.
  I must press the Minister for satisfactory answers to my two major proposals, namely that major hazard sites with schools in their immediate vicinity should be separately dealt with and either the school or the site removed to a safe place and that guidelines should be laid down specifying safe distances for schools, residences and work places in relation to major hazard sites involving LPG or hazard from some other source so that we do not increase potential threats in urban areas in future.
  I fully appreciate the cost problem, but I believe that a beginning could be made
  420
  on reducing our current concern along the lines I have suggested.
  12.33 a.m.
  The Under-Secretary of State for Employment (Mr. John Grant): I can understand fully and sympathise with the concern felt by Members' constituents who live near large-scale chemical plants and storage areas. This concern is shared by the Health and Safety Commission which has given, and is giving the question considerable attention.
  Liquefied petroleum gas is flammable and is stored under pressure or refrigeration, either in bulk tanks or in portable cylinders of the kind used on construction sites or in caravans. The fire and explosion risks it presents have been recognised for many years, and the industry, through the Liquefied Petroleum Gases Industry Technical Association, and the Home Office have each issued codes of practice which give guidance on safe methods of storage. Responsibility for the two Home Office Codes, for cylinders and for bulk storage has now been assumed by the Health and Safety Executive.
  There are two risks involved: either that gas may leak from a storage vessel and ignite or that the storage installation may be affected by fire and may cause the gas storage vessels, either bulk tanks or cylinders, to explode, with the consequent risk that missiles may be projected over a wide area. This last risk may be reduced by the fitting of suitable relief valves to tanks and cylinders, and the other precautions adopted are; to site the storage at a safe distance from buildings, boundaries or other plants; to surround the storage area with a protective fence; to keep the area free from combustible material, including grass and weeds; to provide fire fighting equipment, including, in appropriate cases, automatic sprays; and to ensure that possible sources of ignition are correctly controlled.
  It is essential that the storage vessels themselves should be constructed and maintained to proper standards. Where these precautions are adopted the possibility of a fire occuring is remote. The fires that have occurred, such as that at Mitcham in 1970, or in Hereford in 1975, have served to demonstrate the need for the strictest observance of the codes of practice. Her Majesty's Inspectors of Factories work to these codes when visiting premises where liquefied petroleum

  421
  gas is stored. However, even when the highest standards are achieved there must remain a small element of risk, as no one can guarantee absolute safety. Those who operate this type of installation must be vigilant at all times, especially when the installation is in a residential area. The public are understandably worried in such cases, and especially if schools or a hospital are nearby.
  The problem of large-scale plants was brought most forcibly to the public's attention by the Flixborough explosion and it will be recalled that as a result of that disaster, the Advisory Committee on Major Hazards was set up to advise on the problem. Its terms of reference are:
  "To identify types of installations (excluding nuclear installations) which have the potential to present major hazards to employees or the public or the environment, and to advise on measures of control, appropriate to the nature and degree of hazard, over the establishment, siting, layout, design, operation, maintenance and development of such installations, as well as overall development, both industrial and non-industrial, in the vicinity of such installations."
  The first report of this committee was published in September, and it sets out the problem at some length. The criteria suggested in the report for identifying major hazards include storage of more than 15 tons of liquefied petroleum Gas, and therefore the Llandudno site in the hon. Member's constituency will fall within the criteria. The report proposes that such sites, many of which are already known to the authorities, should be formally reported to the Health and Safety Executive.
  It may be helpful in understanding the effect of this proposal to indicate the sort of action that the Health and Safety Executive has been able to take in the case of the storage at Llandudno.
  Prior to the coming into force of the Health and Safety at Work etc. Act, 1974, it was doubtful whether this site fell within the ambit of the Factories Act 1961. Had it done so, the Factory Inspectorate would have been able to enforce those regulations in order to protect the workers, but not to protect the public. Despite this legal difficulty, the inspectorate took an interest in the site, although if a need for action had arisen it is doubtful whether any could have been enforced.
  422
  The passing of the 1974 Act removed this anomaly and the inspectorate, as an operational arm of the Health and Safety Executive, is able to enforce the full requirements of Sections 2 and 3 of the Act. These sections, broadly speaking, require that undertakings should be carried on, so far as is reasonably practicable, in a safe manner as regards the employees—(Section 2)—and the public—(Section 3). Enforcement action under these sections has been taken by the inspectorate to deal with unsatisfactory liquefied petroleum gas cylinder depots.
  Arrangements have existed for some time by which a local planning authority can ask the Health and Safety Executive for an appraisal of risk at sites where certain specified activities are carried on which constitute the current "major hazard criteria". These appraisals take account not only of the nature of the installation itself, but also of any special problems presented by the community in the vicinity. The Aberconwy District Council asked for an appraisal of risk for the Llandudno site in April 1975. The site was visited by a chemical inspector of factories on 4th June, 1975. The inspector's report was considered within the Health and Safety Executive by the risk appraisal group of senior staff who have special expertise in the major hazards field enabling them to look at major hazard sites from the point of view of the risk to the public, including any special risks.
  The group asked the district inspector, as part of his enforcement functions, to write to the Wales Gas Board drawing attention to certain matters which could improve safety on the site. Cylinders of gas stored on the site were not fitted with pressure relief valves. The Board was advised to remove these and also prepare an emergency plan in conjunction with the local authority and other emergency services. The district inspector reports that all necessary action has been taken, and that the emergency plan was reviewed again at a meeting held between the Board and interested authorities in November 1976. The risk appraisal group's report to the planning authority took account of the presence of the schools and the hospital in the neighbourhood.

  423
  By using the existing powers under the 1974 Act, and the arrangements which already exist, the Executive has, therefore, been able to evaluate the risks, to take action to minimise these, and to require an emergency plan to ensure that in the event of an incident the effects of it are contained. I should emphasise that all employers including those who operate installations of the kind suggested in the Advisory Committee's report have a continuing duty under the 1974 Act to conduct their undertaking safely, and that they should not wait for the Executive to take action in these matters.
  In the Llandudno case, among others, the Health and Safety Executive was able to take action, and I am assured by the Chairman of the Health and Safety Commission that wherever a risk which can be shown to be covered by the terms of the 1974 Act comes to their attention the Executive will continue so to act.
  However, there will remain in all these cases some small element of risk. No one can guarantee absolute safety at these plants. The only way in which the risk could be removed entirely would be if the use of the land for this purpose were to be discontinued. That would mean the payment of compensation for loss of use under the planning Acts including the cost of physically removing the equipment.
  Some or all of these costs would fall to the planning authority. The advisory committees report refers to the question of compensation in its section on planning controls. It points out that
  "Any action under planning powers to close down … existing uses … would involve the payment of considerable sums in compensation".
  The Committee comments that it considers the practical issues involved are of such difficulty of application and importance that it proposes to consult further on these matters.
  The employer has, of course, a duty to ensure that a safe system of work is adopted, and Her Majesty's Factory Inspectorate takes the view that this includes the steps necessary to ensure, so far as is reasonably practicable, that potential hazards do not become actual ones.
  424
  If the employer is satisfied that he can continue to discharge this considerable but necessary duty, and continues to conduct his activity, then unless the inspectorate can show that his system of work is in some way defective, there is nothing in the Health and Safety at Work Act to prevent his doing so.
  The risk that remains in such circumstances is extremely remote, and whether or not it is acceptable to the community at large in any particular case is a matter of judgment. That judgment is exercised at present by planning authorities who must weigh the risks, albeit small, of allowing the activity to continue against the disadvantage of closure, including the need to pay compensation. It may be, of course, that the employer will decide that even though he feels he can control the risk, the consequences of failure would be such as to cause widespread injury and damage, and that the operation would be better conducted elsewhere, but he cannot be directed to remove it except on the payment of compensation by the community.
  The report of the Advisory Committee of Major Hazards stresses that every major hazard site must be considered as an individual case. I have already explained that the Health and Safety Executive, in carrying out appraisals of risk for the planning authorities, takes into account the special problems presented by the neighbourhood, including the presence of schools and hospitals, and the recent informal advice given to the Swale District Council is a case in point. Here the authority was advised in general terms about the site of a school near an existing installation and a formal request for an appraisal by the Executive is awaited. When this is received the local circumstances will be taken fully into account. But because each case is an individual one it is not possible for the Executive to lay down hard and fast safety distances in a code of practice, distinguishing between the different types of premises as the hon Member suggests. But I can assure the hon. Gentleman that the individual consideration given does not meet this point.
  The Advisory Committee on Major Hazards also comments in its report that

  425
  it is the existing plants which will cause the greatest difficulty in the application of its recommendations. There can be no doubt about this, but I hope that I have been able to reassure the hon. Member, and through him his constituents, that the duties imposed on industry, and the powers given to the Health and Safety Executive, by the 1974 Act go a long way towards ensuring that plants of the major hazard kind may be allowed to remain, with safety, near most residential areas.
  That is not to say that either industry, or the Executive, can afford in any way to relax its vigilance in these matters, and industry must bear in mind that the duty imposed by Section 3 of the 1974 Act is a very onerous one, in the discharge of which it must have careful regard to the special problems which may be presented by the neighbourhood. Equally the community must recognise that the removal of major hazard plants from residential areas is likely to be an extremely expensive operation which should be undertaken only when a clear and unacceptable risk can be demonstrated.
  This is a highly emotive field, and the publicity given to it can arouse understandable concern. This short debate has shown that the matter can be discussed dispassionately. We are hoping that the future work of the advisory committee will contribute greatly to development of solutions to the difficult problems in this field. The Health and Safety Commission, having regard to the future reports of the Advisory Committee on Major Hazards will, I hope, show us the direction in which we must go in regulating
  426
  these matters, but in the meantime the Health and Safety Executive, as it has done in the Llandudno case will continue to use its existing powers and techniques to achieve the highest possible standards.
  Mr. Wyn Roberts: I am particularly anxious that special consideration is given to schools in the vicinity of major hazard sites. There is much to be learnt about public anxiety when schools are sited in such areas. I should like a further assurance from the Minister that the proximity of the schools in Llandudno has been thoroughly considered and I should like him to comment on the suggestion that particular regard will be paid to this problem in future.
  Mr. Grant: I have already given the hon. Member the assurance that he seeks on the first point. This factor was considered in the appraisal of the situation at Llandudno.
  I repeat that the Health and Safety Executive will take careful note of what has been said in the debate. I shall ensure that its attention is drawn to it so that it may draw it to the attention of the Advisory Committee on Major Hazards and I am sure that in its future deliberations it will take all this into consideration.
  I conclude by saying to the hon. Member that in the meantime—
  The Question having been proposed after Ten o'clock on Tuesday evening and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at twelve minutes to One o'clock.

ENERGY
  Coal Mining
  Coal Mining
  Coal (Imports and Exports)
  Coal (Imports and Exports)
  Coal Miners (Scotland)
  Coal Miners (Scotland)
  North Sea Oil
  North Sea Oil
  QUEEN'S SILVER JUBILEE
  QUEEN'S SILVER JUBILEE
HOME DEPARTMENT
  Criminal Damage
  Criminal Damage
  Electorate
  Electorate
  Prisoners
  Prisoners
  Prison Officers
  Prison Officers
  Deportation
  Deportation
  Child Care
  Child Care
  Documents (Classification)
  Documents (Classification)
  Unruly Certificates
  Unruly Certificates
  Prison Service (Cost)
  Prison Service (Cost)
  Prisons
  Prisons
  Fire Precautions (Hotels)
  Fire Precautions (Hotels)
  Borstal
  Borstal
  Crime
  Crime
NATIONAL FINANCE
  Invisible Earnings
  Invisible Earnings
  Economic Prospects (Forecasting)
  Economic Prospects (Forecasting)
  Tax Evasion
  Tax Evasion
  Tax Forms
  Tax Forms
  Construction Sub-Contracts
  Construction Sub-Contracts
  National Insurance Surcharge
  National Insurance Surcharge
EUROPEAN COMMUNITY
  Direct Elections
  Direct Elections
FOREIGN AND COMMONWEALTH AFFAIRS
  Pakistanis (United Kingdom Entry)
  Pakistanis (United Kingdom Entry)
  Commonwealth Day and Queen's Jubilee
  Commonwealth Day and Queen's Jubilee
  PRIME MINISTER (ENGAGEMENTS)
  PRIME MINISTER (ENGAGEMENTS)
  TUC AND CBI
  TUC AND CBI
  EUROPEAN ASSEMBLY (DIRECTLY-ELECTED MEMBERS)
  EUROPEAN ASSEMBLY (DIRECTLY-ELECTED MEMBERS)
  CENTRAL POLICY REVIEW STAFF
  CENTRAL POLICY REVIEW STAFF
  HAYES AND HARLINGTON
  HAYES AND HARLINGTON
  CARSHALTON
  CARSHALTON
  MEMBERS OF PARLIAMENT (SECURITY VETTING)
  MEMBERS OF PARLIAMENT (SECURITY VETTING)
  CLEETHORPES
  CLEETHORPES
  NORTHERN REGION
  NORTHERN REGION
  WASHINGTON, DC
  WASHINGTON, DC
  WEST MIDLANDS
  WEST MIDLANDS
  SKELTON
  SKELTON
  BRUSSELS
  BRUSSELS
  MINISTERIAL BROADCASTS
  MINISTERIAL BROADCASTS
  ENGINEERS AND TECHNOLOGISTS (RECRUITMENT AND TRAIN ING)
  ENGINEERS AND TECHNOLOGISTS (RECRUITMENT AND TRAIN ING)
  THE ARTS
  THE ARTS
  HOUSE OF LORDS
  HOUSE OF LORDS
  CENTRAL POLICY REVIEW STAFF
  CENTRAL POLICY REVIEW STAFF
  RATE SUPPORT GRANT
  RATE SUPPORT GRANT
  EUROPEAN COUNCIL
  EUROPEAN COUNCIL
  CROSBY
  CROSBY
EDUCATION AND SCIENCE
  Nursery Schools
  Nursery Schools
  School Leaving Date
  School Leaving Date
  Languages
  Languages
  Colleges of Education
  Colleges of Education
  School Books (Purchase)
  School Books (Purchase)
  Comprehensive Education (Ministerial Powers)
  Comprehensive Education (Ministerial Powers)
  School Meals
  School Meals
  Teachers
  Teachers
  Employers (Co-operation)
  Employers (Co-operation)
  Expenditure
  Expenditure
  English and Mathematics (Curriculum)
  English and Mathematics (Curriculum)
  University Places
  University Places
  Colleges of Further Education
  Colleges of Further Education
  Mathematics
  Mathematics
  School Transport
  School Transport
  Class Size
  Class Size
  O-Level Examinations
  O-Level Examinations
  Physical Education and Games Kit (Purchase)
  Physical Education and Games Kit (Purchase)
  Students (Fees)
  Students (Fees)
  Psychologists
  Psychologists
  Handicapped Children (Parental Visits)
  Handicapped Children (Parental Visits)
  Museums and Galleries
  Museums and Galleries
ENVIRONMENT
  Local Authority Mortgages
  Local Authority Mortgages
  Waste Disposal
  Waste Disposal
  Rent Rebate
  Rent Rebate
  Land Use (Buildings)
  Land Use (Buildings)
  Water (Lead Content)
  Water (Lead Content)
  Council Housing (Costs)
  Council Housing (Costs)
ENERGY
  Coal Reserves
  Coal Reserves
  Gas and Electricity Disconnections
  Gas and Electricity Disconnections
CIVIL SERVICE
  Statute Book (1975)
  Statute Book (1975)
  Her Majesty's Stationery Office
  Her Majesty's Stationery Office
WALES
  Ewes
  Ewes
  Hospitals
  Hospitals
TRANSPORT
  Bus Grant
  Bus Grant
  Motorways (Planning Applications)
  Motorways (Planning Applications)
  Highways Act 1959 (Ex Gratia Payments)
  Highways Act 1959 (Ex Gratia Payments)
  Road Construction (Expenditure)
  Road Construction (Expenditure)
  Car Registration (Cherished Numbers)
  Car Registration (Cherished Numbers)
  Railway (Perth-Inverness)
  Railway (Perth-Inverness)
  Dual Carriageways
  Dual Carriageways
  Vehicles (Safety)
  Vehicles (Safety)
NORTHERN IRELAND
  Rates and Rents Arrears
  Rates and Rents Arrears
  Squatters
  Squatters
  Terrorism (Londonderry)
  Terrorism (Londonderry)
  Fines Unpaid
  Fines Unpaid
INDUSTRY
  Power Plant (CPRS Report)
  Power Plant (CPRS Report)
  Foundries
  Foundries
  Concorde
  Concorde
  Sinclair Radionics Ltd.
  Sinclair Radionics Ltd.
  Motor Cycles
  Motor Cycles
  Clothing
  Clothing
  Government Aid
  Government Aid
  Foreign Enterprises
  Foreign Enterprises
  Regional Aid
  Regional Aid
  Northern Region
  Northern Region
TRADE
  Transkei
  Transkei
  Manufactures
  Manufactures
  Motor Cycles
  Motor Cycles
  Co-operatives
  Co-operatives
  NORTHERN IRELAND (TERRORISM PREVENTION)
  NORTHERN IRELAND (TERRORISM PREVENTION)
SOCIAL SERVICES
  National Insurance Contributions
  National Insurance Contributions
  Head Lice (Eradication Campaigns)
  Head Lice (Eradication Campaigns)
  Welfare Milk
  Welfare Milk
  Drugs
  Drugs
  Family Income Supplement
  Family Income Supplement
  Doctors (Specialist Certification)
  Doctors (Specialist Certification)
  Children and Young Persons Act 1969
  Children and Young Persons Act 1969
  Health Services Board
  Health Services Board
  Geriatric Beds (Yorkshire)
  Geriatric Beds (Yorkshire)
  One-parent Families
  One-parent Families
  Psychologists and Trethowan Report
  Psychologists and Trethowan Report
  Trethowan Report
  Trethowan Report
  Electro-convulsive Therapy
  Electro-convulsive Therapy
  Health Services (Expenditure)
  Health Services (Expenditure)
  Joint Financing Projects
  Joint Financing Projects
  Varicose Veins (Hospital Treatment)
  Varicose Veins (Hospital Treatment)
  Blind Persons (Dogs)
  Blind Persons (Dogs)
  Private Beds
  Private Beds
EMPLOYMENT
  Industrial Tribunals
  Industrial Tribunals
  Sex Discrimination
  Sex Discrimination
  Unemployed Persons
  Unemployed Persons
  Teachers (Ayrshire)
  Teachers (Ayrshire)
  Launderettes
  Launderettes
  Acquatels, Basildon
  Acquatels, Basildon
  Mr. Ian Balloch
  Mr. Ian Balloch
  Albright and Wilson Group
  Albright and Wilson Group
  Temporary Employment Subsidy (Ayrshire)
  Temporary Employment Subsidy (Ayrshire)
  Training
  Training
  Ceramic and Allied Trades Union
  Ceramic and Allied Trades Union
  Trico Dispute
  Trico Dispute
  Disablement Resettlement Officers
  Disablement Resettlement Officers
  Employment and Training Services Agencies
  Employment and Training Services Agencies
  Disabled Persons (Fares)
  Disabled Persons (Fares)
  Jobcentres
  Jobcentres
  Hertfordshire (Young Persons)
  Hertfordshire (Young Persons)
  Homeworkers
  Homeworkers
  Factories (Inspection)
  Factories (Inspection)
DEFENCE
  Northern Ireland (Housing)
  Northern Ireland (Housing)
SCOTLAND
  Beef and Pigmeat (Imports)
  Beef and Pigmeat (Imports)
  Meat (Intervention Stocks)
  Meat (Intervention Stocks)
  Power Stations
  Power Stations
  Hospital Staffs
  Hospital Staffs
  Small Businesses
  Small Businesses
  Teacher-pupil Ratios
  Teacher-pupil Ratios
  River Pollution (Industrial Undertakings)
  River Pollution (Industrial Undertakings)
  "Fair Play for Children in Scotland"
  "Fair Play for Children in Scotland"
  Roads (Expenditure)
  Roads (Expenditure)
  Rate Support Grant
  Rate Support Grant
SCOTLAND
  Ewes
  Ewes
  Fire Precautions (Hotels)
  Fire Precautions (Hotels)
  Orkney and Shetland
  Orkney and Shetland
AGRICULTURE, FISHERIES AND FOOD
  Chrysanthemums (White Rust)
  Chrysanthemums (White Rust)
  Rabies
  Rabies
  Food Subsidies
  Food Subsidies
  Ewes
  Ewes
  Fish (Mercury Content)
  Fish (Mercury Content)
  Fishermen
  Fishermen

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Norwich.
The Lord Ogmore—Sat first in Parliament after the death of his father.

OCEAN ISLAND
Lord BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether a decision has been made regarding the future status of Ocean Island.
The MINISTER of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): My Lords, this is a matter which will have to be resolved in discussion during the period leading up to the eventual constitutional conference to consider the independence arrangements for the Gilbert Islands.
Lord BROCKWAY: My Lords, would not the Minister agree that the inhabitants of Ocean Island are among the victims of the most cruel fate since the last World War—cheated into selling their land to the Phosphate Commission; evicted; land devastated so that even trees cannot grow on it, and now enforced to enter into a political association with the Gilbert Islands, which they do not want, and the eastern islands of which are 2,000 miles away? Will Her Majesty's Government sympathetically consider what can be done for these unfortunate people?
Lord GORONWY-ROBERTS: My Lords, I have said before, and I repeat now, that Her Majesty's Government will do everything that is possible and in equity to help the Banaban community, as they will to help the Gilbertese community, and I will certainly bear in mind everything my noble friend has said.
Lord DERWENT: My Lords, can the noble Lord say what is possible?
Lord GORONWY-ROBERTS: Not off the cuff, my Lords, at Question Time.
Lord HAILSHAM of SAINT MARY-LEBONE: My Lords, while nobody would ask the noble Lord to say anything "off the cuff", which he never does, having regard to the statements of the Vice-Chancellor in a recent case and no doubt after the time for appeal has expired or any appeal has been disposed of, will the noble Lord and Her Majesty's Government make a considered statement on the whole subject of these matters?
Lord GORONWY-ROBERTS: Yes, my Lords. In view of the fact that other legal processes may be pending, the noble and learned Lord will agree with me of course that we shall have to choose carefully the time when we make such a considered statement. Indeed, we shall have to judge whether we are helping or hindering. I hope that at the end of the day there will be an agreed and amicable pacific settlement as between the Banabans and the Gilbertese.
Lord SHINWELL: My Lords, while I support my noble friend Lord Brockway and those who have asked that further consideration be given to this question, may I ask whether my noble friend can tell us the amount of compensation that has been paid? Is it not some derisory sum?
Lord GORONWY-ROBERTS: My Lords, it would take me some time to produce the totality of royalties that has been paid at the rate which I notice was deemed by experts to be reasonably fair. As to the future arrangements for the Banabans, which may well involve certain financial arrangements, I could not state them now, but what I said to my noble friend Lord Brockway I repeat to my noble friend Lord Shinwell: we shall bear all these considerations very much in mind when we discuss them, not only with the Banabans and the Gilbertese but also with the Australians and the New Zealanders who have an interest in this matter.
Lord LEE of NEWTON: My Lords, as I remember it the phosphates were sold to Australian farmers at well below

515
world prices. In the discussions which the Government are to have with the Australians, may I remind the noble Lord that the Australians have derived great advantages from the sale of these phosphates?
Lord GORONWY-ROBERTS: Yes, my Lords. My noble friend indicates the way in which this non-profit-making company, which was set up by joint action of the three Governments I have named, disposed of the phosphates over a period of years at what they considered from time to time to be reasonable rates. Actually I think it was the New Zealand farmers rather than the Australian farmers, or indeed the British farmers, who benefited—if that is the right word—from the prices which were then paid. Of course one must remember—and I do not want to detain the House with a detailed examination of this complex and important matter in the context of question and answer—that there was constant payment of royalties, and that the expert evidence was that the royalties paid over the years were reasonably fair.
Lord BROCKWAY: My Lords, appreciating the noble Lord's later replies, may I ask whether the Government will consider making an ex gratia payment to the Banabans in view of the fact that, while their claim for compensation from the Government was rejected on technical grounds, it was accepted on moral grounds by the Vice-Chancellor, who made a devastating criticism of the actions of the British Government at that time?
Lord GORONWY-ROBERTS: My Lords, if I may comment without of course having fully considered the Vice-Chancellor's very lengthy statement of judgment that was completed on Friday—and it took him some clays to read his own judgment; it will take me a few more days to consider it in totality—certain aspects of the judgment which my noble friend has quoted may be set against certain other things the Vice-Chancellor said. He said, among other things, that while one Colonial officer clearly had acted—I think the word was "out rageously", he paid very warm tribute to the actions of, and the service to the Banaban community and to this part of the world by many other colonial officers.
Lord BROCKWAY: My Lords, will the Government consider making an ex gratia payment? That was my question.
Lord GORONWY-ROBERTS: Yes, my Lords. Every aspect of this important and complex matter will be considered carefully by Her Majesty's Government. I am not disposed to express any anticipatory decisions on it before I have studied, first, the Vice-Chancellor's extended judgment and, secondly, the transcript of the proceedings—proceedings which took a very long time indeed. Furthermore, I must have early discussions, not only with the communities concerned in the area but also with two other Commonwealth Governments.

PALESTINIAN REFUGEES: UN RESOLUTION
2.45 p.m.
Baroness ELLIOT of HARWOOD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what attitude they took to the United Nations' resolution of 24th November asking that Palestinian refugees should be returned to the camps in the Gaza Strip, in view of the fact that similar camps were destroyed and their numerous refugees rehoused by World Refugee Year appeal funds and, in Gaza, by the Israeli Government.
Lord GORONWY-ROBERTS: My Lords, the British Government, together with the rest of the Nine, voted in favour of this resolution. When the resolution was earlier adopted by the Special Political Committee on 8th November, the Netherlands representative said that in the view of the Nine the call for the return of refugees applied only to those refugees who were forced to leave and who themselves wished to return.
Baroness ELLIOT of HARWOOD: My Lords, I thank the noble Lord the Minister very much for his reply, which is more hopeful that I had anticipated. I was deeply concerned because the United Nations had a World Refugee Year appeal,

517
for which we in this country raised millions of pounds, as did other countries. It seems inconsistent that they should now ask that the refugees should go back to the camps which have been completely destroyed and rebuilt. Therefore, am I to understand that the reply given by the noble Lord the Minister today is to the effect that this was not the case, and that they have not been asked to go back?
Lord GORONWY-ROBERTS: My Lords, I am glad that the noble Baroness, Lady Elliot of Harwood, has found my Answer clarificatory of the position. I only repeat that the position is exactly as I said. The Netherlands representative, speaking for the Nine, made it clear in the Political Committee on 8th November, before this matter came up substantively on the 24th, to which the noble Baroness refers in her Question, that,
"…in the view of the Nine, the call for the return of refugees applied only to those refugees who were forced to leave and who themselves wished to return".
Lord JANNER: My Lords, would my noble friend agree that the houses which have replaced the hovels on the Gaza Strip are now actually being purchased by many of the refugees who had been housed there in consequence of the fact that they have been properly treated by the Israeli Government? Would my noble friend also agree that tremendous emphasis is being put on the position so far as Israel is concerned, whereas millions of refugees throughout the world have been treated very much worse by other countries?
Lord GORONWY-ROBERTS: My Lords, of course comparisons are usually odious, and particularly so in this field of the attrition of refugees. I would not compete with my noble friend in comparing the horrors of refugee life in any part of the world. I am more inclined to welcome the spirit and content of the Question and supplementary question of the noble Baroness, Lady Elliot of Harwood.
Lord PAGET of NORTHAMPTON: My Lords, is it not a fact that the maintenance of these refugee camps by the United Nations prevented the absorption of refugees such as occurred after the Great War, and such as has occurred for all the Jewish refugees from Arab
518
countries? Is it not a fact that to try to reinstate the nuisance is an international folly?
Lord GORONWY-ROBERTS: My Lords, I am faintly surprised by the murmurs of acquiescence from behind me to that particular supplementary. I hope that my noble friend Lord Janner will look at it carefully tomorrow morning in Hansard, in the full light of day. In reply to my noble friend Lord Paget of Northampton, I very much doubt whether the preamble to his question would be justified, but I take his point. Nobody can boast of a perfect record in dealing with this massive and poignant problem, especially in the Middle East. There may be hopes now, when we are, I hope, moving to a reconstitution of the Geneva Conference, or the establishment of a similar mechanism for agreement, that this, among other aspects of the Middle East question, may at last be considered constructively by the parties concerned.
Lord PAGET of NORTHAMPTON: My Lords, would not the noble Lord agree that the Jewish record in absorbing refugees in the Middle East has been about as near perfect as could be imagined?
Lord GORONWY-ROBERTS: My Lords, this is a matter of argument and opinion. I do not think it would be helpful for any Government Minister to say, Yes, or, No, to that kind of question. What we know is that nobody has a perfect record in dealing with these unfortunate people in the Middle East or in any other part of the world. All of us must do better.
Lord JANNER: My Lords, in view of the reply my noble friend has given, when the refugee question is dealt with, will he bring forward the fact that there are 600,000 Jews who have been dispossessed in Arab lands, have been paid no compensation, whose homes have been taken over by those who have interfered with their lands and made it impossible for them to live there, so that at least the matter will be put in proper perspective?
Lord GORONWY-ROBERTS: My Lords, of course, this is one aspect of this grim question; that is, the position of refugees, their origins, their numbers, the

519
conditions in which they have lived and do live. As I have said, our great hope is that, certainly once the new American Administration have found their feet, it may be possible to convene a constructive conference of all concerned, possibly in Geneva, in order to settle this and other questions relative to the whole complex of difficulty in the Middle East.
Lord SEGAL: My Lords, would my noble friend not agree that slum clearance is a sound policy which should be applied as widely as possible, and that where water, sanitation and other health safeguards can be provided, political considerations ought not to be allowed to stand in the way?
Lord GORONWY-ROBERTS: My Lords, I agree wholeheartedly.

WASTE PAPER IMPORTS
2.52 p.m.
Baroness EMMET of AMBERLEY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is the value, for the most recent convenient period, of waste paper imported into the United Kingdom for pulping; and from which countries is it imported.
Lord WINTERBOTTOM: My Lords, in the first 10 months of 1976 imports of waste paper were valued at £4.7 million cif. Principal suppliers in order of importance by value were as follows: the United States, the Netherlands, Federal Republic of Germany, Irish Republic, and Sweden.
Baroness EMMET of AMBERLEY: My Lords, I thank the Minister for that Answer. Would he not agree that it would be a good way of saving some of the money we are borrowing from these countries if we organised our own waste paper and did not have to buy it from abroad?
Lord WINTERBOTTOM: My Lords, it is not a simple issue, oddly enough. Although we imported this amount of
520
waste paper, we did in fact export a substantial amount. If we take the 10 months in question, we imported £4.7 million worth, as I said, and exported £3.7 million worth. It is in this matter, oddly enough, a question of quality.
Lord BOWDEN: My Lords, is it true that much of the paper we export to Germany is in fact secret documents which have been inadequately shredded before despatch?

ANTI-RABIES PRECAUTIONS: CONTAINER DEPOTS
2.54 p.m.
Lord DE CLIFFORD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government, in view of the reported escape and subsequent recapture of a cat accidentally trapped in a refrigerated TIR Container Vehicle, whether they are satisfied that adequate security precautions are in operation at all inter-Continental Container Depots to prevent such escapes of accidentally trapped animals, when the escape of such an animal, if not subsequently recaptured, could risk the introduction of rabies into this country.
Lord STRABOLGI: My Lords, the fact that this incident was reported immediately to the authorities and that prompt, effective action was taken to secure the two cats involved, is in itself evidence of the acute awareness of the rabies risk. The cats were dealt with as potential risks, even though expert assessment of all the facts indicated that they were almost certainly native animals which had entered the container in question after its arrival in this country.
Evidence from other depots confirms the vigilance and precautions taken in respect of container vehicles. Nevertheless, the Ministry of Agriculture, Fisheries and Food are issuing further instructions to remind all container depots of security precautions and reporting procedures for anti-rabies purposes.
Lord DE CLIFFORD: My Lords, I thank the noble Lord for that reply. There is a great risk, which a number of us have felt, that container traffic might well accidentally bring in some warm-blooded animal which might be affected. Have guidelines been issued previously as to the care which should be taken, or are these totally new ones?
Lord STRABOLGI: No, my Lords. All meat for human consumption can only come in through designated ports, and all containers are checked by Customs. In fact, all vehicles entering the country are subject to search by Customs officers, but it is not the policy of Her Majesty's Customs to disclose the proportion of vehicles which are actually searched.
Lord LEATHERLAND: My Lords, may I ask my noble friend on what evidence the authorities base the opinion that these cats were English cats? May I ask him, for instance, whether the officials said to the cats, "Come here, pussy", or did they address them in German, French and other Continental languages?
Lord STRABOLGI: My Lords, the container was refrigerated at minus 18 degrees Centigrade—
Lord HAILSHAM of SAINT MARY-LEBONE: Snow on their boots.
Lord STRABOLGI:—and it had been sealed for 14 days. Expert opinion is that a cat could survive no more than 48 hours at that temperature. There was no sign, also, that any of the meat was chewed.
Lord GISBOROUGH: My Lords, could the noble Lord say whether it is still the custom for ships to carry cats to combat the rats, and whether this custom itself does not present a pretty pussy problem?
Lord STRABOLGI: My Lords, in the same way, all ships arriving at our ports are investigated by Customs officers, and it is, of course, a very serious offence under the rabies regulations to take a cat ashore. In fact, there have been cases where prosecutions have taken place.
The Earl of HALSBURY: My Lords, in view of the difficulty that the patriarch Noah had in detecting kittens aboard the Ark, could the noble Lord tell us whether, in the event of these cats being accompanied by kittens, to which nationality the kittens would belong?

TORTS (INTERFERENCE WITH GOODS) BILL [H.L.]
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, I beg to introduce a Bill to amend the law concerning conversion and other torts affecting goods. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.— (The Lord Chancellor.)
On Question, Bill read 1a, and to be printed.

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

Amulree L.

Hylton-Foster, B.

Llewelyn-Davies of Hastoe, B.

St. Aldwyn, E.

—(Lord Aberdare.)
Lord SHINWELL: My Lords, may I ask the noble Lord the Chairman of Committees whether, when this Committee have completed their deliberations, a report will be made to the House, and will it be subject to debate, if necessary?
Lord ABERDARE: Yes, my Lords, deliberations of your Lordships' Committees normally appear in the form of reports and these are brought before the House.
On Question, Motion agreed to.

HOUSE OF LORDS OFFICES
Lord ABERDARE: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That the Select Committee on the House of Lords Offices be appointed and that as proposed by the Committee of Selection the Lords following, with the Chairman of Committees, be named of the Committee:

Amulree, L.

Buckinghamshire, E.

Byers, L.

Carrington, L.

Champion, L.

Cholmondeley, M.

Collison, L.

Crawshaw, L.

Darling of Hillsborough, L.

Denham, L.

Drumalbyn, L.

Eccles, V.

Elwyn-Jones, L. (L. Chancellor.)

Erskine of Rerrick, L.

Faithfull, B.

Ferrers, E.

Fraser of Tullybelton, L.

Glenkinglas, L.

Goronwy-Roberts, L.

Greenway, L.

Greenwood of Rossendale, L.

Gridley, L.

Henley, L.

Hood, V.

Hughes, L.

Hylton-Foster, B.

Ilchester, E.

Kemsley, V.

Kinloss, Ly.

Kinnaird, L.

Lee of Newton, L.

Llewelyn-Davies of Hastoe, B.

Long, V.

Loudoun, C.

Lovell-Davis, L.

Mais, L.

Mowbray and Stourton, L.

Newall, L.

Nugent of Guildford, L.

O'Hagan, L.

Peart, L. (L. Privy Seal.)

Robertson of Oakridge, L.

Robson of Kiddington, B.

St. Aldwyn, E.

Sempill, Ly.

Shackleton, L.

Sherfield, L.

Soper, L.

524

Stedman, B.

Strabolgi, L.

Strathcona and Mount Royal, L.

Tweedsmuir of Belhelvie, B.

Westbury, L.

Wigoder, L.

Winterbottom, L.

—(Lord Aberdare.)
Baroness PHILLIPS: My Lords, I would ask the noble Lord the Chairman of Committees why the Select Committee on Commodity Prices—unfortunately, I was not in the House when this was moved—did not contain a female Peer. Women do know a little about prices.
Lord ABERDARE: My Lords, I think this is rather another question from the Motion I am now moving, but my recollection is that that particular Committee was being reappointed. It was the same Committee as was sitting in the last Session.
Lord LEE of NEWTON: My Lords, may not the answer be that that Committee has met 30 times and in concluding the evidence it heard it would be a bit risky to start putting new people on that Committee?
On Question, Motion agreed to.

GENERAL RATE (PUBLIC UTILITIES) BILL [H.L.]
3 p.m.
Baroness STEDMAN: My Lords, I beg to move that this Bill be now read a second time. Your Lordships may have noticed that in another place questions have been asked about the rate liability of certain public utilities. The Government have had to point out that, unfortunately, the orders which should determine the current rateable values of the National Coal Board and mines and quarries, together with the order which determined the rateable values of statutory docks and harbours until 1st April 1976, were all inadvertently allowed to lapse in 1974. Additionally a mistake was made in another order made earlier this year which prescribes a rating formula for the gas industry. However, there was a promise that legislation would be introduced to validate the lapsed orders, and to correct

525
the error in the gas order. The Bill now before your Lordships' House fulfils that promise.
My Lords, this is a small Bill, but because it deals with complicated matters it is by no means simple. It would not be appropriate on Second Reading to take your Lordships through the clauses line by line; we shall have the opportunity later, if the Bill commends itself to your Lordships, to examine the measure in that kind of detail. But I will attempt to explain as simply as I can the main provisions of the Bill.
Clause 1 deals with the lapsed orders. In common with many public utilities, the National Coal Board, mines and quarries and statutory docks and harbours are rated by formulae, since normal methods of valuation would be very difficult to apply. Such formulae are often determined under order-making powers to avoid having to come to Parliament with a Bill every time an amendment is needed. This is the case in the industries in question, and the order-making powers were contained in Section 35 of the General Rate Act 1967. Five orders were made either under this section or under the section in the Rating and Valuation Act 1961 which became Section 35 on the consolidation of rating law in the 1967 Act. They are listed in the Explanatory and Financial Memorandum.
Section 35 of the 1967 Act was superseded by Section 19 of the Local Government Act 1974, and the 1974 Act quite properly repealed Section 35. The Act contained no saving for the orders already made under Section 35, but it gave power to include savings of that kind in commencement orders bringing parts of the Act into operation. Unfortunately, the commencement order bringing the repeal of Section 35, among other provisions, into operation failed to make the necessary saving for the Section 35 orders. Those orders have thus been void since 1st April 1974, the date when the repeal of Section 35 came into operation.
This means that the property occupied by the National Coal Board and other mines and quarries are now, and have been since 1974, rateable in accordance with the ordinary rating provisions of the General Rate Act 1967, and not, as was intended, in accordance with the formulae
526
prescribed in the lapsed orders. A new order for docks and harbours, made under Section 19 of the 1974 Act, came into effect on 1st April 1976. Thus docks and harbours were rateable in accordance with ordinary rating provisions in 1974/75 and 1975/76, but are now rateable under the new order. All interests affected have acted on the assumption that the orders have remained in force. To leave matters to be sorted out under the present law would cause a large number of amendments to valuation lists, involved negotiations, and probably litigation, to no good purpose.
Clause 1 of the Bill therefore provides that any order made under Section 35 shall not be affected by the repeal of that section by the Local Government Act 1974, and, furthermore, that all such orders shall be deemed to have been made under Section 19 of the 1974 Act. Additionally the clause provides for one of the revived orders—the Docks and Harbours (Valuation) Order 1971—to be revoked from 1st April 1976. This is because the order was superseded on that date by the Docks and Harbours (Valuation) Order 1976. The 1971 order was not revoked at that time because it was realised that it had already lapsed.
May I now turn to Clause 2 which deals with the error made in the Gas Hereditaments (Rateable Values) Order 1976. This order specifies a method for determining the rateable value of the British Gas Corporation from 1st April 1976 onwards. It does this by applying a formula to the earlier value specified in the 1967 General Rate Act. Unfortunately, when the formula was devised we overlooked the fact that the 1967 value had been substantially increased by order in 1972. Although the current order refers to the value specified in the 1967 Act, we are advised that this reference must be taken to mean the 1967 figure as amended by the 1972 order. This gives a rateable value of about £150 million, instead of the intended £60 million. Although it is the £60 million which, as broken down in accordance with the prescribed formula, now appears in the valuation lists, the entries in the list have not been calculated in the manner required by law, and valuation officers could be compelled to insert the higher rateable values in the valuation lists. Thus the British Gas Corporation

527
could find itself being liable to pay two and a half times as much as Parliament intended.
Clause 2 of the Bill amends the order to specify the intended value of £60 million in place of the existing incorrect formula. This amendment is retrospective to 1st April 1976. Additionally we are taking the opportunity of ensuring that the enabling power, Section 19 of the Local Government Act 1974, does allow a figure to be specified instead of a formula. This is dealt with in Clause 4. I am sure that noble Lords will join me in greeting this latter provision with some relief since it should result in at least some simplification of rating formulae that your Lordships' House may have to consider in the future.
May I also briefly mention Clause 3. This provides for the indemnification of rating authorities, Valuation Office officials and all other persons against any consequences incurred as a result of the errors rectified by Clauses 1 and 2. Valuation officers have been responsible for maintaining valuation lists in accordance with the orders in question, and rating authorities have been levying rates on those values. All those concerned in such activities have proceeded on the basis that the errors have not been made.
My Lords, the net result of these measures will be to ensure that the rates on the industries concerned have been paid, and will be paid, in accordance with the provisions previously agreed by Parliament. The proposals will not injure the ratepayers concerned. They have acted on the assumption that these errors have not been made, and the intended rateable values have been accepted. I apologise for the fact that this Bill is necessary. In mitigation, I can only say that the law for which my colleagues and I in the Department are responsible is vast and constantly changing. This is not of course to suggest that we take such matters lightly. Far from it. We will continue in our attempts to ensure that such amending legislation is not found to be necessary. I commend this Bill to the House.
Moved, That the Bill be now read 2a—(Baroness Stedman.)
3.9 p.m.
Baroness YOUNG: My Lords, I should like to thank the noble Baroness, Lady Stedman, for introducing this Bill and explaining it. As she has said, it is a short Bill, one of only five clauses, but it is immensely technical. In preparation for it I felt that, rather than consulting anybody, I should have had a few tutorials in higher mathematics, because trying to understand the order affected by it and its algebraic formula is indeed a formidable task. But I accept, as she does, that it is a Bill that is non-controversial. It is obviously right that what has been a mistake should be corrected as soon as possible, and that indeed if there was to be any controversy, it should have been at the stage of the subordinate legislation or in the Schedules to the Local Government Act 1974.
As I understand the Bill, Clause 1 puts back into legislation what was inadvertently taken out by the Local Government Act 1974 and, as I understand Clause 2, it alters the arbitrary basis of the formula for determining the basis of the valuation of the gas industry so that local authorities can rate correctly, starting from a base of £60 million, which is the accepted agreed amount between the local authorities and the gas industry. There are two general points which I wish to raise. First, I did not quite appreciate—I shall understand if the noble Baroness cannot answer this today—how the alteration to the Gas Hereditaments (Rateable Values) Order 1976 would work on the basis of the alterations proposed in Clause 2. Probably I misunderstood the order which, as I said earlier, is very complicated. But if in fact the basis of the rateable value is fixed for £60 million a year, I cannot see why it is necessary to have a formula to calculate it. If it is calculated it should surely come out at £60 million; if it does not come out at that, there is no point in having the formula and one might as well say that it is fixed. Thus, I simply do not understand the basis on which all that is to be determined; but I may be that there is a point in this that I have missed. What I can understand is that if the basis is not correct, then local authorities either could collect considerably more than they should or alternatively less than they should, so it is very important to get it sorted out. I should have thought that whatever was the

529
basis, it is a matter which should be subject to calculation and should not simply have to be fixed.
Secondly, I looked to see whether the Layfield Committee had anything to say on this point, and, as I am sure the noble Baroness will be aware, on page 173, paragraph 80, they comment on the formula rating of public utilities. It seems to me that the Bill bears out the criticism which Layfield makes:
"The discussion between the parties is not based on any very clear set of principles"—
that is, between the public utilities and the local authorities as a basis of rate-making—
"Local authority associations have suggested that the current arrangements are unsatisfactory because the contribution of these industries is too low and also because the procedures are unsatisfactory."
Indeed, the fact that it has been necessary to bring forward this little Bill indicates the complexities of the situation and the very unsatisfactory nature of them. The Layfield Committee go on to say at the end of the same paragraph:
"We recommend that the responsibility for the valuation of public utilities for rating should be given to an independent body".
That is one of their recommendations, and I hope the noble Baroness can say whether the Government will at any rate have a debate on the Layfield Report and whether there is any prospect of legislation arising from any of their proposals. I recognise of course that their proposal for a local income tax is outside the scope of this Bill. Nevertheless, this proposal, like a number of others, does not seem to go against the basic principle of the rating system, is obviously desired by local authorities and would, it seems to me, be of benefit to them, particularly at this critical juncture.
There is a further reason for looking at this matter. About 18 months ago the Government decided not to revalue property while the Layfield Committee was sitting, on the grounds that it was not at all clear that the Layfield Committee would recommend that the rating system should be continued. Now that the Layfield Committee has recommended that the rating system should be continued but that there should be a local income tax as well, the reason for not revaluing falls to the ground. Of course, we get into further complications on matters
530
like the valuation of utilities, which is a very complicated subject in itself, which too become increasingly out of date. These are very important matters of public policy, and I should be glad if the Bill gives an opportunity for the noble Baroness to say something on them. May I assure her, as I indicated at the beginning, that I do not regard the Bill as being in any way controversial? It is necessary and I am glad we have it before us, but it would be helpful to see it set in the general context of local authority finance, which is in such a critical position at the present time.
3.15 p.m.
Baroness STEDMAN: My Lords, I welcome the support of the noble Baroness for the Bill. I regret that it was necessary to bring such a Bill before the House, to right the errors that had been made. The question of the Gas Hereditaments (Rateable Values) Order 1976 is a rather complicated matter to go into shortly. In fact the formula which we put forward in that order was supposed to arrive at the figure of £60 million, but actually arrived at a figure two and a half times that amount, which is perhaps why noble Lords will welcome the comment I made about Clause 4; that we are now able to use figures rather than these complicated formulae. That may make it a little more easy for your Lordships, as well as those who are serving us, to work out the amount.
As for the Layfield criticism of formula rating, the Layfield Report is of course a matter for consideration by my right honourable friend and his colleagues at the moment, and I am sure that they will note the comments of the noble Baroness and will take those into consideration. I hope there will be an opportunity for this House to discuss such of the recommendations of the Layfield Report as the Government are proposing to implement. I should have thought that your Lordships' House was a very good place to initiate a debate on the Layfield principles, and I shall certainly bring that to the attention of my right honourable friend.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

TOWN AND COUNTRY PLANNING (SCOTLAND) BILL [H.L.]
3.17 p.m.
The MINISTER of STATE, SCOTTISH OFFICE (Lord Kirkhill): My Lords, I beg to move that this Bill be now read a second time. The Bill has several main purposes. First, it puts right some technical flaws in Scottish planning law relating to the preparation and adoption of local plans. Secondly, it clarifies the right of appeal against decisions of regional planning authorities on applications for planning permission. Thirdly, it strengthens enforcement powers under the Town and Country Planning (Scotland) Act 1972. It is a short Bill, confined to a few urgently needed improvements, and the Government do not intend to make extensive changes in the planning system in Scotland at this stage. The proposed new Scottish Assembly will have power to legislate on planning matters and will no doubt have its own ideas on the kind of planning system appropriate to the needs of Scot land after devolution. It is clearly the Government's duty, however, to ensure that the planning machinery inherited by the Assembly is both workable and rational. That is what this Bill seeks to achieve.
Your Lordships will appreciate that there are fundamental differences between the formal structure of the organisation for planning in Scotland on the one hand and in England and Wales on the other. It may be useful to summarise the main points briefly. First, district and general planning authorities have a duty in Scotland to prepare local plans throughout their areas. Secondly, structure plans may not necessarily be prepared for all areas in Scotland. Thirdly, regional reports have been prepared by all regional planning authorities and districts must have regard to them and to the Secretary of State's comments on them. This is quite different from the emphasis in England and Wales on structure plans as the fundamental expression of policies and proposals for development.
I turn now to the main provisions of the Bill. The main provision of Clause 2 of the Bill corrects an anomaly arising in connection with the duty placed on district and general planning authorities to prepare local plans to cover their areas. Under
532
Section 12(2) of the 1972 Act as it now stands,
"The planning authority shall not adopt a local plan unless it conforms generally to the structure plan, as approved by the Secretary of State."
If there is no approved structure plan, there can be no adoption of a local plan. I should perhaps explain that, whereas structure plans require the approval of the Secretary of State, local plans are to be adopted by the planning authorities which prepare them. Now it is clearly illogical to require that "the planning authority shall not adopt a local plan unless it conforms generally to the structure plan" when, for many areas, no structure plan will exist for some years to come because regional reports have been prepared, and in some cases none will be drawn up at all. The new wording set out in subsection (3) of Clause 2 is intended to remove this restriction which prevents authorities from adopting local plans.
Local plans are urgently needed in many parts of Scotland—in areas of oil-related expansion, conservation areas and perhaps most urgently in the decaying hearts of our cities. Where local authorities are faced with very difficult decisions imposed by financial constraints it is vital that planning should not be held up by technical anomalies. Forward planning is essential if authorities are to sort out their priorities and make the best use of the limited resources available. Local plans provide a framework for both public and private development, and productive industry must be freed from uncertainty over planning. Only the preparation of new plans to replace the existing, mostly out of date, development plans will achieve this.
Clause 2 will allow authorities to adopt local plans where no structure plan currently exists. There is no intention, however, to give districts in Scotland a free hand at the expense of regional objectives. Whether or not there is an approved structure plan in existence, the regional planning authority will naturally take a close interest in the local plan, and the local plan will need to take account of the policies and proposals of the regional planning authority. The most important of those policies and proposals will be set out in the regional reports which provide the framework for local plans in the absence of structure plans. If there

533
is a structure plan in preparation or awaiting approval, the district planning authority who are preparing the local plan must secure that it conforms generally to the structure plan as it stands for the time being. This is required by Section 9(9) of the 1972 Act, as modified by Clause 2(1)(b) of the Bill.
The Government naturally hope that regional and district councils will work in partnership to operate the new development planning system, and that informal arrangements for co-operation will minimise the need for formal controls. Nevertheless the opportunities for statutory intervention by the regional planning authority in the local planning process do exist. First, where there is no approved structure plan the consent of the regional planning authority is required before a local plan can be prepared. At that stage it is open to the region to give detailed guidance to the district to supplement the regional report. Secondly, the district planning authority will be required by regulations to consult the regional planning authority in its preparation of the plan. Thirdly, the regional planning authority will have the chance to object to the published plan and to be heard at any public inquiry held by the district planning authority. Fourthly, if it is not satisfied with the plan in the final form in which the district planning authority propose to adopt it, the regional planning authority will be able to ask the Secretary of State to call in the plan for his own decision or, in certain circumstances, will be able to take over the preparation of a local plan itself. These reserve powers under which regional planning authorities may assume the functions of the districts in making local plans are set out in Section 177 of the 1973 Local Government (Scotland) Act. They apply where the local plan is out of step with an approved structure plan, where the plan may affect or hinder development in another district, or where a local plan is needed urgently to fulfil an objective in the structure plan, and the district have failed to adopt an appropriate plan. Ultimately any conflicts between district and region which cannot be resolved by the planning authorities themselves will come before the Secretary of State for resolution.
Thus, there is no question of a district planning authority being able to adopt a local plan which the regional planning
534
authority has had no opportunity to influence, nor a plan that conflicts with regional planning policies as set out in regional reports and structure plans unless the Secretary of State, as final arbiter, decides that it should be allowed to do so. However, as I have already said, the Government expect planning authorities to work in partnership and the Secretary of State hopes that he will rarely, if ever, have to resolve conflicts between them.
The Bill contains other, minor, amendments relating to local plans. Subsection (1)(a) of Clause 2 makes it the duty of the planning authority to conduct a survey of the relevant area before preparing a local plan and to keep the survey matters under review. Surveys are required by the 1972 Act, but this duty was allocated in the 1973 Act to regional and general planning authorities and not to districts. Of course in practice all planning authorities carry out surveys as an integral part of the preparation of plans. It is, however, desirable that the duty should be spelled out, and this has been done in general terms in the Bill. In the Government's view, there is no reason why this should involve authorities in additional work. Provision is also made in Clause 5 to simplify arrangements for the transition from old development plans to structure and local plans. At present, an individual revocation order has to be made by the Secretary of State to discontinue the provisions of the old development plan each time a new local plan is adopted. Clause 5 now discontinues the old plans automatically with consequential savings in time and effort. It remains open to the Secretary of State to direct where necessary that part or all of the provisions of the old development plan shall continue in force.
My Lords, I have described at some length the provisions which this Bill makes with regard to local plans. I had to do so because the subject is complex, and I hope what I have said will help to clarify the Government's intentions in making these amendments. I will now go on to deal quickly with the other parts of the Bill. The first of these, Clause 3 provides a right of appeal to the Secretary of State against decisions of regional planning authorities where they have called in planning applications. The

535
1973 Act gave regions similar powers to the Secretary of State in these cases, but did not give them the power of final decision. The appeal machinery in the 1972 Act was not applied to decisions of regional planning authorities. It is clearly inequitable that an applicant should be denied the right of appeal to the Secretary of State, which he would normally enjoy if planning permission were refused simply because the region has intervened.
The Bill applies the appropriate sections of the 1972 Act to decisions of regional planning authorities, with one important modification. The region is obliged, where it has called in an application, to offer the applicant and the district planning authority the opportunity to be heard at an inquiry. Where this has been done, the additional time, effort and expense involved in a second inquiry to go over the same ground where the case comes before the Secretary of State on appeal would seem unjustifiable. The Bill relieves the Secretary of State under these circumstances of the obligation to hold a second inquiry. Clause 3 also provides for an appeal to the Secretary of State where the region fails to come to a decision within three months of the date of calling in the application.
Finally, my Lords, the Bill makes provision to widen the scope and effect of stop notices served after an enforcement notice has been served under Section 84 of the 1972 Act. When stop notices were first introduced in 1969, they were intended to prevent building operations from continuing while any appeal against an enforcement notice was pending. The appeal proceedings could take some time, and in the meantime a building which was perhaps only just begun when the enforcement notice was originally served could be completed by the time the appeal was decided. This could lead, where the appeal was refused, to demolition and consequent waste of resources. Serving a stop notice prevents the unauthorised operations from being continued while an appeal is determined, but the present scope of activities subject to stop notices is limited and excludes changes in land use. Recent experience has shown that the main problem now consists of new unauthorised uses of land, which cause
536
nuisance to neighbours and can give rise to traffic and other problems. These include open-air markets, scrapyards, car sales pitches and so on. Operators have nothing to lose if they continue in business while the appeal against the enforcement notice is pending, and even if the appeal fails, they can simply move on to another site and carry on as before.
The Government consider that measures should be taken to curb these activities, and the Bill therefore extends the scope of stop notices to cover all breaches of planning control, including changes of use and flouting of conditions attached to planning permission. To bring all those involved—such as market stall-holders and people who dump refuse, as well as the site owners—within the scope of the stop notice without having to serve individual notices on each and every person concerned with the activity, the Bill provides for the posting of site notices. These must be displayed clearly at the site stating that the stop notice has been served and setting out its requirements. This can be done only once the relevant enforcement notice and stop notice have been served on those primarily responsible. It will be an offence to carry out an activity prohibited by a site notice. All permanent residential uses of buildings and land are exempted from the stop notice powers to prevent hardship resulting from, for example, evictions. As a consequence of the extension of stop notices to include changes of use of land, the Bill makes some minor changes in the provisions of the 1972 Act for compensation, rights of entry on to land, and the power of the planning authority to require specified information from occupiers and others.
My Lords, the proposals in this Bill are modest, but they are vitally necessary to ensure the smooth operation of the Scottish planning machinery. Many other less urgent improvements could have been included in a longer Bill, but the Government feel that it would be inappropriate to take up very much Parliamentary time on these matters in the same Session as the Bill which will give power to legislate on Scottish planning to a Scottish Assembly. In the Government's view this Bill contains the minimum amount of change needed to cope with current problems which have emerged in the past few years. I hope that the Bill will receive support

537
—indeed, I am sure it will—from all sides of your Lordships' House, and I beg to move.
Moved, That the Bill be now read 2a.—(Lord Kirkhill.)>
3.33 p.m.
Lord STRATHCONA and MOUNT ROYAL: My Lords, like the Bill we dealt with previously, this Bill appears to be a non-contentious piece of legislation, which I am sure the Opposition can welcome as a piece of sensible, tidying-up legislation. Indeed, as the Minister has said, and as is mentioned on the face of the Bill, it seeks to sort out anomalies that have arisen in changing from the concept of development plans to the new system of structure plans and local plans. Without in any way wishing to pre-empt what I have no doubt will be fairly protracted discussions on the issue of devolution when it eventually reaches this Chamber, I believe that this Bill gives us a useful opportunity to look at the state of the art of planning in Scotland, and it gives us a chance to extract from the Government some of their thinking on how they envisage the details operating regarding the relationship between the planning authorities in the districts and the regions, and the Assembly when we finally get it, at least so far as Scotland is concerned.
I think that I ought to try to deal with the provisions of the Bill in three parts. The first part concerns the Clause 2 amendments to the two previous Acts, dealing with the question of structure plans. If we did not know it already, I think that we can genuinely say "Amen" to what the noble Lord said about these issues being fairly complex. It will be very useful for us to read the noble Lord's not uncomplex speech which I hope will clarify the situation for us slightly before we reach the Committee stage. Therefore I hope that the noble Lord will forgive me if I say that while we think it sounds fine, we must have a good look and see whether we still think so after we have read in detail what he has said. But, clearly, anything at this present time which results in a saving of time and effort is something that we should want to support.
I now turn to the question of structure plans. I do not think that it was ever anticipated that the new regions would be able to produce their structure plans
538
within a matter of months of their coming into existence, and perhaps we had better not go into the question of whether or not we think it was a happy thing that they did come into existence. But there they are, and clearly it is ridiculous, as the noble Lord explained, to say that local plans cannot be adopted unless they are in line with structure plans, if in fact no structure plans exist. I think that this was one of the major anomalies that the noble Lord was seeking to eliminate.
I was not totally clear whether the amendment under the Bill now allows these local plans to go ahead whether or not a structure plan exists, but I understood the noble Lord to say that where there is no structure plan it will at least be possible for us to proceed. But I put it to the noble Lord that it might be helpful if, before the Committee stage, he could give us a round-up of the state of play regarding structure plans in the regions. I think that we are dealing with nine or ten regions, and we have this anomalous non-region for the Western Islands which I believe is the planning authority in that area. I wonder whether it would be possible for the noble Lord to produce a small table in the report, indicating what stage we have reached in preparing structure plans. I take it that in some cases there is no intention at all of producing a structure plan in the foreseeable future. I suppose that in other cases the structure plan already exists. It might be quite a useful basis if we could have a summary of where we are, and where we are intending to go on this question, before we get to the Report stage. But clearly the intention here must be a sensible one.
Now I turn to the appeal procedure. Here again, what the noble Lord said sounds right enough—that the Secretary of State would not want to hear the same case twice over and have all the same evidence being repeated in the case of an appeal. But this raises a query in my mind. Again, this may simply be a lack of understanding on my part, but does this mean that the regional planning authority will now be able to go ahead with planning permission in circumstances where it has decided against calling in the proposal? Furthermore, does this in effect mean that it will actually cut short the appeal processes?

539
I quite understand that the same appeal is not going to be repeated twice over, but I am not totally clear whether this means that one element in the appeal processes is cut out altogether. Here again we have to ask the Government what is their view as to how this works under the new proposed Assembly set-up. The Secretary of State is currently the final arbiter in most of these cases. If the Assembly is inserted between the regions and the Secretary of State, is it envisaged that the Assembly will be the final arbiter, or the Secretary of State the final arbiter, or both as being the final arbiter?
I hope it does not sound as if I am trying to ask a lot of purely tautological bureaucratic questions, because that is not my purpose at all. But the noble Lord will be very well aware that one of the big concerns of all of us about the whole of the devolution proposals is that we see a tremendously long chain of government. How many layers are we going to have? Are we going to have local government, regional government, the Assembly, Westminster and then Brussels, with all these things having to go up and then all the way down again? For instance, I know that the Highland Development Board officials already make visits to Brussels from time to time to talk about the various grants they can get for local developments. I am not expecting the noble Lord to give a definitive answer on issues of this kind, because I doubt whether there is one; but if he can give us some idea as to how the Government's thinking is progressing I am sure this will be helpful to us. And if this provokes a certain amount of argument at the Committee stage I do not think it will necessarily be any the worse for that, because I believe it is a genuine argument and I hope that it is not a particularly partisan one. So we should like to hear a little more about that.
Now we move on to the stop notice, and, here again, if this is a faster, handier and more efficient way of enforcement, then basically this is something which we are bound to support. I have to say, however, that one always looks slightly askance at any legislation which greatly strengthens the hand of officialdom. I think we should regard that with a proper degree of suspicion: if we did not, we
540
would not be doing our job. But if development has gone ahead and the detailed planning permission has been subject to certain specific conditions, and if these conditions are obviously not being fulfilled, then it is perfectly plain that the local authority or the regional authority, or whatever is the appropriate authority, is simply not doing its job if it allows such development to continue: either that the provisions should not have been inserted in the first place or we must clearly see that they are enforced. It is obviously intolerable that developers should be able to thumb their nose at authorities which have given permission or have imposed conditions by not adhering to those conditions.
I am not entirely clear whether the powers of entry are being extended for the purpose of checking on the enforcement of a stop notice. I would rather imagine that that is intended to be the purport of this Bill. I said that this raises a couple of doubts in one's mind. For example, is there any danger that these enhanced powers could be used by the planning authorities effectively to reverse a previous planning decision in the guise of simply saying that certain conditions had not been adhered to? It is very difficult not to sound as though one is trying to be unduly suspicious of officials, but our minds do change. We sometimes feel that we wish we had not taken certain decisions or given certain permissions in the past; and one inevitably, I think, could be slightly concerned lest these additional powers were used to get out of any awkward situation where permission had been given which, looking back, one regretted.
I am very glad that the noble Lord said that he was producing a short Bill rather than waiting for a longer Bill. We have had one or two longer Bills to deal with in the recent past—and the less said about them the better—and, unless I am very greatly mistaken, we are going to have an even longer one in front of us before very long. But there is one final question that I should like to ask the noble Lord on this matter of stop notices. What happens if a developer, in good faith, has failed to carry out all the provisions that he has been given of a planning permission?
The important point here is good faith. Can one envisage circumstances where the

541
stop notice could be used for descending upon a developer who had been acting in good faith? We are quite clear, are we not, that the purpose of these provisions is to deal with the man who is deliberately flouting the conditions which were imposed on his planning permission? It is not too difficult to imagine that there could be very serious financial consequences from the use of these stop notices. I think the noble Lord made a reference to this effect on the compensation issue; but to be absolutely honest, I cannot exactly remember what he said about it. If he could give us a little more indication as to how he sees the possible effects of stop notices on the question of compensation or on the financial results of such stop notices, it might be helpful to us. But, as I said, my Lords, on what we have seen so far we would support this Bill, which seems to be an entirely sensible piece of legislation.
3.46 p.m.
Lord BURTON: My Lords, I apologise for not having put my name down on the list of speakers, but while this debate has been taking place a thought has occurred to me which perhaps might be considered during a debate on a planning Bill. This is a question of areas of special scientific interest, and there seems to be an increasing amount of country so designated. It seems to me it is only a matter of time before there is a clash between planning authorities and, I think it is, the Nature Conservancy, who issue these orders. Though I am not looking for any answer today, I feel that this is something which perhaps the Minister should consider.
Lord HARMAR-NICHOLLS: My Lords, like my noble friend I am tempted, as a result of what my noble friend on the Front Bench has said, to put a point to the noble Lord before he replies to this short debate. I suppose one ought not to apologise for intervening in a Scottish debate in England, because if certain people get their way I suppose we shall be in a position where noble Lords from Scotland will be able to tell we English how we ought to plan but we English will have no say at all in how the Scots do their planning. So this is a good chance to grab an opportunity while one can do it without infringing any rules.
542
The point I want to put to the noble Lord arises from what he said at the beginning of his explanation. He explained very clearly what the procedures would be when the regional planning authority took a different view from the district authority, and how the Secretary of State would be brought in to settle it; and he gave a very clear indication that there would be occasions when there would be this sort of conflict, when the district planning authority and the regional planning authority would not see eye to eye and there would be differences of view as to how it should be approached. If in the process of this inter-planning authority battle time is taken up, what protection is there for the developer or for the owner who wants to change the use of his premises or his land, to see that he is not kept waiting for months, and perhaps years, while the various planning authorities are having a private battle as to who has the authority to give the final word? Because one has had experience in England, on some occasions, that while the authorities themselves have been deciding who has the final power it is the individual developer who is losing money and time, and is put to some inconveniences which can sometimes be very dangerous indeed.
It could well be that there is a very clear answer to what I say about protecting the individual from being the victim of a prolonged disputation between two planning authorities and that I have not read it, but it was because the noble Lord did go into some detail as to the procedure for settling this possible conflict that I felt we ought to have on the record what protection there is for the individuals while this neat, tidying up of the authority of the various planning people is sorted out.
3.50 p.m.
Lord KIRKHILL: My Lords, first I acknowledge the very fair and factual, albeit non-controversial, welcome which the noble Lord, Lord Strathcona, has given to this Government Bill which, let us be frank, is basically non-controversial; although, no doubt, at Committee stage there may be points of detail which should be discussed at greater length. From the Government side, certainly we shall listen to any points made. The main purpose of this Bill is to improve

543
the procedures relating to Scottish planning at this stage. As I indicated earlier, most of these difficulties have emerged in the course of the last few years. We want to make Scottish planning coherent and in balance as—assuming the Scottish devolved Assembly ultimately getting under way—it moves from the Scottish Office to the purlieu of the Scottish devolved Assembly.
The noble Lord, Lord Strathcona, was kind enough to indicate to me before the debate started that he would raise one or two specific points. At short notice I might not be able to satisfy him totally, but—and this would suffice both for him and for me before the Committee stage—I can indicate broadly the outlines of Government thinking on the points he raised. I paraphrase for your Lordships—and, indeed, for those of us in the perhaps adversarial position—the noble Lord's questions, but I think the gist of them will be clearly seen. The noble Lord at the very outset asked in effect where we are now with Scottish planning, where they have got to in Scotland.
No applications have yet been submitted to the Secretary of State for Scotland. I might point out that apart from the Islands area, the Highlands Boards, Dumfries and Galloway are general planning authorities as distinct from the other regional authorities. There is this distinction made in four cases. However, one has been prepared by the Orkney Islands Council but it has not been submitted to the Secretary of State. Several other regions, notably Strathclyde and Lothian, have certainly begun preparations. I do not have details about the position respecting other regions at this stage.
My Lords, on the question of appeals, the noble Lord asked this question. Can a regional authority go ahead and thus cut short the process of the appeal without it having been called in? I think that was how he put it. I can reply in this vein. If a regional planning authority calls in, it must offer an inquiry to the parties. This touches, in part, on the point made by the noble Lord, Lord Harmar-Nicholls. They must offer an inquiry to the parties. If the Secretary of State calls in, he must offer an inquiry. The regions cannot interfere where the Secretary of State has called in first.
544
To touch on the point that Lord Harmar-Nicholls made, I have to say that the applicant does not have the kind of defence he would entirely wish for him. What happens under Clause 3—and I would draw the noble Lord's attention to this clause—is that if the region, having, called in an application, fail to reach a decision within three months of the calling there is then a clear appeal to the Secretary of State. To that extent, the applicant has a time limit. I will not be partisan and say that that is an improvement on the English position; but, marginally, it is.
Lord STRATHCONA and MOUNT ROYAL: My Lords, the noble Lord has been addressing himself mainly to cases where the authority decides to call in. What happens if it has not been called in? What we were concerned about was whether a situation could arise where a regional authority has gone ahead and given permission without it being called in—which could be conceivably, in the face of local opposition by people who might thereby feel they were being stifled and did not have an opportunity to go through the procedures. I might be wrong.
Lord KIRKHILL: My Lords, the position is that they have the right of appeal. I touched on this point in my remarks when I explained that in these circumstances the Secretary of State would not seek to call two inquiries. But they have the right of appeal and then get into the inquiry procedure. I made that point clearly in my earlier remarks. I do not think it is one that I obfuscated.
The noble Lord, Lord Strathcona, tempts me to make comment about what might happen once the Assembly gets under way. These are, as he has admitted, speculative waters at this stage. What is true at this stage is that, under the Scotland and Wales Bill, the Assembly and Executive will normally be entirely responsible for planning appeals for Scotland. The Secretary of State's role is defined in Clause 87 of that Bill. I am advised that these link to Schedule 12 to the Bill which gives powers of intervention to the Secretary of State in cases relating to non-devolved interests. Of course, the Bill has still to wend its way

545
through the other place and your Lordships' House, but that is the position at the moment as outlined in the Bill.
My Lords, the noble Lord, Lord Strathcona, also gave me advance notice that he would raise one or two questions anent stop notices and how these might be considered. He asked whether I could confirm that powers of entry are being extended to include checking on the stop notice and also about the extent of the provision of the stop notice. I have to say that the Government have responded to this question of stop notices and the extension of the power of the stop notice. The existing stop notice does not include, for instance, change of land use; the extension of the power does so. The Government have responded to the extended concept of stop notices as a result of pressure from a number of local authorities and individual Members of Parliament because there has been a great deal of public concern, as I think I attempted to indicate in my opening remarks, on the question of one-day markets, dumping yards, scrap yards and car sales that move by the day or by the week. I do not think I could say very much more at this stage. Perhaps it is a Committee point. I will reflect on the question. There may be nuances that escape me now.
The noble Lord, linking on Scotland, remarked that presumably the powers will not be used to revise the import of a previous planning decision. That point he tended to emphasise. I can say emphatically, No. I must add that a stop notice could be served, for instance, to ensure that an earlier refusal of planning permission is respected. The point is that a stop notice can be served only where there is a breach of planning control; that is, development without planning permission. I do not think I can add anything to that. That is the position.
The noble Lord also asked what safeguards there are against unfair use of a stop notice where the developer was acting in good faith. Those were his words. There must be, first, an enforcement notice alleging a breach of planning control. It is possible to appeal against this. This links into the further point about compensation, where authorities using stop notices may be liable to pay compensation if the notice is withdrawn,
546
or an enforcement notice is quashed or varied in certain circumstances. These two matters are linked and the noble Lord's fear is groundless. There is an adequate base of fairness and equity written into the Bill. My Lords, I am sorry if these have been somewhat detailed replies, but they were rather detailed points. As I said in my earlier remarks, I can only say at this stage—and I hope this will continue—that this Bill is worthy of support, although detailed examination as well, as your Lordships determine.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

FUGITIVE OFFENDERS (UNITED KINGDOM DEPENDENCIES) (AMENDMENT) ORDER 1976
4 p.m.
Lord GORONWY-ROBERTS Lord GORONWY-ROBERTS rose to move, That the draft Fugitive Offenders (United Kingdom Dependencies) (Amendment) Order 1976, laid before the House on 4th November, be approved. The noble Lord said: My Lords, this order is made under the Fugitive Offenders Act 1967 and will make four amendments to the Fugitive Offenders (United Kingdom Dependencies) Order 1968.
The Fugitive Offenders Act 1967 regulates the return from the United Kingdom to other Commonwealth countries and United Kingdom dependencies of persons accused or convicted of offences in those countries and dependencies. Provision was made in Section 2(2)(c) of the Act allowing countries outside Her Majesty's dominions in which Her Majesty exercised jurisdiction or over which She extended protection to be brought by Order in Council within the definition of United Kingdom dependency for the purposes of the Act.
The Fugitive Offenders (United Kingdom Dependencies) Order 1968 specified the Solomon Islands, Brunei, the New Hebrides and Tonga as so coming within the Act. This meant that these four countries could apply under the Fugitive Offenders Act to have a person returned there from the United Kingdom if he was accused, or had been convicted, in one of those countries of certain offences against their law. The 1968

547
order also provided for some modifications to the terms of the Act to meet the special circumstances of the countries specified.
In 1970 Tonga was removed from the 1968 order on becoming independent. Recent developments in the other three territories have presented the need to amend the order further. This is the object of the draft order presently before the House. The amendment to be made by Article 3 of the draft order results from the replacement in July this year of the superior court for the British jurisdiction in the New Hebrides. Previously this was the High Court of the Western Pacific, a regional court for several Pacific territories. This has now been replaced in the New Hebrides by a new High Court, the High Court of the New Hebrides. The 1968 order particularly required that, before a person could be returned to the New Hebrides, he must be liable to be tried, or he must have been convicted, by the High Court of the Western Pacific or by the Joint Court of the Condominium. Clearly it is necessary to alter that special provision to add an express reference to the new High Court of the New Hebrides.
The need for the amendment envisaged in Article 4 of the draft order arises simply out of the change of name of the territory now known as the Solomon Islands. This territory used to be known as the British Solomon Islands Protectorate, and accordingly it was called by that name in the 1968 order. The name was changed by Order in Council made in May 1975. The opportunity is therefore being taken to replace the old name with the new where the territory is mentioned in the 1968 order.
The third amendment made by the draft order, that dealt with in Article 5, is a consequence of the change in the relationship between the United Kingdom and Brunei which was made by the Agreement between Her Majesty and the Sultan of Brunei dated 23rd November, 1971. Since that Agreement, Brunei is no longer a country over which Her Majesty extends protection. It follows that it is inappropriate to designate it as a United Kingdom dependency for the purposes of the Fugitive Offenders Act, and accordingly it is necessary to delete
548
the references to Brunei in the order of 1968.
The fourth and last amendment will be made by Article 6 of the draft order. Its object is to bring the 1968 order into line with the present system of administration of the dependent territories in the Pacific by omitting the reference to the High Commissioner for the Western Pacific in relation to the New Hebrides. Under the 1968 order the High Commissioner could request the Secretary of State to surrender a person accused or convicted in the New Hebrides, and he had certain other powers under the Fugitive Offenders Act. The various functions formerly exercised by the High Commissioner, who used to administer several territories in the region, have in recent years been dispersed as a result of the separate development of the territories concerned under their own separate administrations. The effect of this amendment will be to transfer the High Commissioner's functions under the 1968 order to the Resident Commissioner in the New Hebrides, and will thus continue the process of giving the High Commissioner's functions to other appropriate offices in the region, so that in due course his office can be wound up. I beg to move.
Moved, that the draft Fugitive Offenders (United Kingdom Dependencies) (Amendment) Order 1976, laid before the House on 4th November, be approved.—(Lord Goronwy-Roberts.)
Baroness ELLES: My Lords, the House will be grateful to the noble Lord, Lord Goronwy-Roberts, for his usual clear and lucid explanation of detailed amendments to the orders under the Fugitive Offenders Act 1967. As the noble Lord has explained, this Act is something akin to a Commonwealth extradition convention. Naturally, the orders under that Act have to be amended to take into account any change in name, status or development of the legal institutions within the member countries of the Commonwealth. As I understand it, and according to the explanation of the noble Lord, this draft order does precisely that, and Amendments are merely reflecting the present realities within the countries mentioned by the noble Lord which are contained in the draft order. Therefore, we certainly recommend the approval of this order to your Lordships.
Lord GORONWY-ROBERTS: My Lords, may I express my gratitude to the noble Baroness for the way in which she has received this order, which makes amendments of a minor but nevertheless necessary character. May I congratulate her on being so succinct in two sentences, whereas it took me two pages to be less succinct.
On Question, Motion agreed to.

REGIONAL EMPLOYMENT PREMIUM (VARIATION OF AMOUNTS) ORDER 1976
4.8 p.m.
Lord KIRKHILL: My Lords, I beg to move the Motion on the Order Paper standing in the name of my noble and learned friend Lord McCluskey.
Moved, That the draft Regional Employment Premium (Variation of Amounts) Order 1976, laid before the House on 5th November, be approved.—(Lord Kirkhill.)
On Question, Motion agreed to.

COMPULSORY ACQUISITION BY PUBLIC AUTHORITIES (COMPENSATION) AMENDMENT (SCOTLAND) ORDER 1976
Lord KIRKHILL: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the draft Compulsory Acquisition by Public Authorities (Compensation) Amendment (Scotland) Order 1976, laid before the House on 28th October, be approved.—(Lord Kirkhill.)
On Question, Motion agreed to.

FISHING VESSELS (ACQUISITION AND IMPROVEMENT) (GRANTS) (VARIATION) SCHEME 1976
Lord KIRKHILL: My Lords, I beg to move the Motion standing on the Order Paper in the name of my noble friend Lord Strabolgi.
Moved, That the Fishing Vessels (Acquisition and Improvement) (Grants)
550
(Variation) Scheme 1976, laid before the House on 15th November, be approved—(Lord Kirkhill.)
On Question, Motion agreed to.

VALUE ADDED TAX: 48th EEC REPORT
4.10 p.m.
Viscount AMORY Viscount AMORY rose to move, That this House takes note of the Forty-eighth Report of the European Communities Committee of last session on the Draft Sixth Directive on Value Added Tax (R/1746/73 and R/2268/74). The noble Viscount said: My Lords, I have pleasure in moving that this House takes note of the Forty-eighth Report of the European Communities Committee of last Session on the Draft Sixth Directive on Value Added Tax. I am actually moving this at the invitation of the noble Lord, Lord Mais, who has asked me to introduce it on his behalf. He was the Chairman of the Sub-Committee which studied this matter, and I was myself a member of the Sub-Committee.
I should like to begin by saying how much we are looking forward later on to the maiden speech of the noble Lord, Lord Grantchester. Your Lordships may be interested to know that the report before you today is the outcome of the work of a joint Sub-Committee of your Select Committee, composed of Members of both Houses. The experiment, certainly in this case, seems to have worked out well. I confess I am no expert on VAT. In the distant past when I was at the Treasury there was no such tax in existence here. We had then the simpler purchase tax. Now, VAT is established as part of our taxation system, bringing in the very substantial revenue which involves, I understand, about 1¼ million traders.
This report is the second which has been submitted to your Lordships by the Select Committee. The Twelfth Report, dated 29th August 1974, contained a section on the proposals for the harmonisation of VAT. Your Committee then recommended that, although there were a number of aspects of undoubted importance to the United Kingdom which this House would want in due course to discuss, any debate should be deferred

551
until further progress had been made in specifying the proposals.
A good deal of progress has been made, particularly recently; but clearly a good deal of detail still remains to be settled. Since the proposal is that the harmonisation arrangements should come into force on the 1st January 1978 and that the individual countries will have to take whatever steps are necessary to adjust their own systems by that date, it will be seen that there is little time to spare. Indeed, the European Parliament became extremely worried recently about this time problem, and the noble and learned Lord the Lord Chancellor has received a copy of the resolution passed by that Parliament and forwarded to the Council of Ministers, expressing their concern that the Draft Sixth Directive has not yet been adopted, and urging that quicker progress should be made so that it can be adopted and therefore come formally into force by the 1st January 1977—in a few weeks' time—so as to give time for the Member States to take preliminary action. If this new Directive covering the new arrangements does not become effective by 1st January 1978, the VAT revenue will continue to be collected as at present, computed not on the precise yield in various countries but as a share of national GNPs.
There was one meeting of the Fiscal Council of Ministers, held on 21st October, to consider how further progress could be made. Another one has been called for the 16th December, with the object of making as much progress as possible before the end of the current year; that is to say, before the end of this month. There now seems to be some hope that the Draft Directive may be adopted before 1st January next, although it will still leave a number of minor matters—quite a lot in fact—to be settled later.
The purpose of the Draft Sixth Directive is to establish a common system of assessment and administration of VAT in the Member States—a common basis of calculation, as it were. It does not seek to harmonise the rates of VAT, or the rate structures, which can continue to be fixed by Governments of Member States. Whether one day the harmonisation of rates, as well as of assessment and administration, will be sought, depends on
552
the progress towards monetary and fiscal union and is, we have been assured from all sides, a question which is very far into the future. I suppose we can consider that eventually, perhaps, the harmonisation of rates would be reconcilable with the permanent aims of the Community.
The Council decision of April 1970 provided that the Budget of the EEC should be financed entirely from three sources: the agricultural levies (a very big proportion at present); customs duties; and, thirdly, up to 1 per cent. rate of VAT levies on a uniform basis. That is what we are talking about this evening. These three sources are together called "own resources"—a term which implies the money to be made available to the Community as its revenue.
The Draft Directive also seeks to eliminate some distortions to competition which it is felt arise from the current diversity of the national VAT systems. The Select Committee had the advantage of a great deal of written evidence and some very useful oral evidence, which later was printed with this report. It is clear that while many of the proposals are in line with current United Kingdom procedures, some will need action under subordinate legislative orders and some will need primary legislation. Those, of course, will come up for consideration in Parliament in the usual way.
As with many other EEC Directives, the original draft is apt to seem unduly rigid and perhaps unnecessarily detailed—certainly one could call them all very detailed indeed; but in this case there is some welcome evidence that in the discussions which have taken place spasmodically over the last three years, and much more actively over recent months, rather more flexible arrangements have become acceptable, and real attempts have been made to reconcile the differing national procedures and attitudes. Your Committee were glad to hear from the Department of Customs and Excise that, provided that this desire to achieve reasonable flexibility continues, it now seems unlikely that any major modifications of the United Kingdom's VAT system will be necessary. This information is the more welcome as, in the course of the evidence which we received, we got the impression that while in the United

553
Kingdom, at the beginning, the administrative consequentials of VAT were regarded with a great deal of apprehension, now that people have become accustomed to the regulations and procedures they have become tolerably accepted, and any changes resulting from the draft Directive were regarded by most of our witnesses with a good deal of concern. They much preferred the possibility of keeping our system just about where it is. I am talking not about rates, but about the system of collection.
As mentioned in paragraph 21 of our report, VAT is, of course, a tax on consumption and, unfortunately, the United Kingdom consumes a higher proportion of its GNP than the other Member States. This will involve a heavier burden on the United Kingdom than if contributions had continued to be on the basis of GNP shares. In paragraphs 22 and 23, your Committee make the important point that as the VAT rates are not to be harmonised the Member States will be able to continue using VAT as a general economic regulator, as a means of influencing specific sectors or to achieve social objectives. In paragraph 24 your Committee referred to the proposed VAT Committee to be set up in the EEC, composed of representatives of Member States, which will deliver what are called Options on matters concerned with the detailed operation of the Directive. That seems a thoroughly sensible idea, but an important aspect of it is exactly what powers that Committee will have. Assurances have been given that the Council of Ministers will insist on that Committee being purely advisory; but it seems that it may have some power of executive decision in minor matters, and this seems to your Committee to be one of the points which needs to be cleared up as soon as possible.
In paragraphs 26 to 30 of your Committee's report attention is drawn to five issues which we think of particular importance and which we believe your Lordships will wish to consider. The first one is zero rating, the preservation of which is of great importance both for social reasons and because it applies to export goods and services. Your Committee welcome the firm commitment, which has been given on behalf of Her Majesty's Government, that no change involving the abolition of zero rating on necessities can be considered or agreed to.
Various concessions have been made since the original draft Directive was drawn up, most recently at the Fiscal Council on 21st October last, where agreement was reached that Article 28 —I do not propose to take your Lordships through these somewhat weighty Directives in detail, and I trust you will not ask me too many questions about them, but they are easily obtainable—should be amended, so that Member States are allowed to retain those zero ratings which were in force on 1st January this year, at any rate until the abolition of fiscal frontiers which, as any of your Lordships who are in touch with the EEC will know, is an occurrence which is a considerable time away. This goes further than the situation outlined in our report. At the end of paragraph 10 of the report your Committee request that further information should be given on this point by the spokesman of the Government when the report is considered in this House. No doubt the noble and learned Lord, Lord McCluskey, will tell us whether the situation is broadly as I have described it, or whether he has any information to give us which is still more up to date and definite.
In passing, may I remind your Lordships of the difference between zero rating and exemption, of which you are probably all aware. In the case of zero rating, the statistics have to be kept and the input tax paid and recovered in due course. In the case of exemptions, no input tax paid can be recovered but traders can, if they wish, include in the prices they charge the cost of what has been invoiced to them. It is also worth remembering that zero rating is in no sense contrary to the principles of the EEC. The understanding is that, while current zero rating can be continued, no new zero ratings are to be introduced, though the actions of two Member Governments are at present under examination. The important point is that as any decisions of the Council to terminate zero rating would require unanimous agreement under Article 99 of the Treaty of Rome, Member States are protected against termination without their individual consent.
The second issue of importance concerns the exemption of small traders. The current United Kingdom limit of exemption for small traders is £5,000 per annum terminal sales. The Draft Directive proposal sets out a uniform limit of 4,000

555
units of account, or about £1,650 a year, which would mean a severe reduction in the United Kingdom's limit of £5,000. We were advised that such a change would be likely to bring in another quarter of a million additional traders, with no proportionate increase in revenue. It would therefore be extremely expensive in administration, and extremely frustrating to small traders. Indeed, there seems a strong case for some increase above the current United Kingdom limit, which was fixed some time ago, because of the impact of inflation.
This question, I think, is an important one. Your Lordships' Committee were left in no doubt whatever by the witnesses that a reduction in the proposed exemption limit down to four units of account, or anything like that, would be regarded with the deepest concern by the small traders affected and also by the taxation authorities. The present position seems to be more cheerful than that in this respect. At the Ministers' meeting on 21st October a much higher exemption limit of 10,000 units of account, which would be equivalent to about £6,000 in sterling, was considered but without, we believe, a formal decision being taken. That would bring the limit above the current United Kingdom level of £5,000. Alternatively, Member States may be allowed to retain what limits they like, with compensatory arrangements for payment or withholding, if national limits are higher or lower than the Community exemption.
As regards the administration of VAT, your Lordships' Committee were impressed by the arguments adduced both by the witnesses we saw and those whose evidence we read against any further complication of the regulations or procedures. At present in the United Kingdom they seem to be working fairly well, but any unnecessary move towards absolute uniformity in methods of collection might well prove counterproductive. The substitution of monthly for quarterly collection periods might be an example and would most certainly be unpopular with traders here. The present indications are that there would be no interference with the present quarterly system, but I should be most interested in anything that the noble and learned Lord, Lord McCluskey, is able to tell us.
In passing, perhaps I could mention that there is something called partial exemption. The evidence we obtained, particularly from the legal profession, was that partial exemption is not a good idea. There would be almost the same costs of administration as would be involved with full exemption. The legal profession would prefer zero rating or, if necessary, total rather than partial exemption, or that it should be left as it is at present. I have already referred to the uncertainty about the exact powers of the VAT Committee which will certainly need clarification. Finally, there is the important question of the efficiency of the collection of VAT in each Member State upon which the ultimate yield will depend. Your Lordships' Committee feel sure that our Ministers will want to ensure that there will be some way of checking yields against liability. The very important audit court may be able to help here.
If I may make a general remark about our witnesses, we thought that while some had taken a great deal of trouble to inform themselves about the EEC proposals and were experts on the subject, there were others who did not seem to us yet to have taken much trouble to inform themselves about the possible impact of VAT on their interests. They had not, in some cases, passed on their views to the authorities who are negotiating. That, so far as it existed, we thought was a pity.
I think that I have said enough—perhaps your Lordships will consider more than enough. There are still some important problems to be settled in this Draft Directive; but if reasonable flexibility and much less rigidity in detail continues as the policy to be pursued, your Lordships' Committee conclude that a reasonable degree of harmonisation in assessment and administration should then prove attainable without major changes in the United Kingdom system in the foreseeable future.
Your Lordships' Committee would like to thank very much all those who gave up their time to submit evidence to us. They would also like to thank their staff of specialist advisers for their invaluable help and the Clerks of this House who, as always, have once again been a source of tremendous strength to the Committee. If noble Lords ask

557
me any questions I hope that they will preface them with the kindly school examiner's instruction not to attempt more than three questions. Any of the harder questions will be transferred instantly to the noble and learned Lord, Lord McCluskey. My Lords, I beg to move.
Moved, That this House takes note of the Forty-eighth Report of the European Communities Committee of last session on the Draft Sixth Directive on Value Added Tax (R/1746/73 and R/2268/74).—(Viscount Amory.)
4.36 p.m.
Baroness ELLES: My Lords, we are very grateful to my noble friend Lord Amory for introducing the Forty-eighth Report of the Select Committee on the European Communities. He has set out most clearly and carefully the areas of difficulty which have arisen in relation to amendments to the Draft Sixth Directive on value added tax. We shall also be hearing during the debate the noble Lord, Lord Grantchester, who is to make his maiden speech. There appears to be no subject debated in your Lordships' House which does not have at least one expert to speak upon it. Value added tax is no exception because the noble Lord, Lord Grantchester, is the President of the value added tax tribunals. Therefore I do not believe that we could have a greater expert on this subject than him. The noble Lord will be able to contribute a great store of wisdom, knowledge and experience, and we shall certainly look forward to hearing him not only today but in the future.
The Report itself shows the value of the Scrutiny Committees of both. Houses sitting jointly, particularly when a matter both technical and of wide effect is to be studied. Together, the members of both Committees brought out the political and technical aspects during the examination of witnesses. A great many organisations were prepared to give evidence, even though, as my noble friend pointed out, some of the witnesses were not so well prepared as others. In itself this is a tribute both to the organisations themselves and to the way in which the Joint Committee conducted its inquiries. We are very grateful indeed for the work of those who served on the Joint Committee
558
which examined the Draft Directive. What was impressive was the way that the members of the Committee themselves encouraged organisations to take part in lobbying the Commission to find out what was happending and to see what they could do about putting across their own case. If anybody were to accuse the Commission of being bureaucratic, I think that Members of your Lordships' House would compare that kind of advice very favourably with what would happen if one were advised to go to any Government Department to find out what one could do to change draft legislation in this country.
The Draft Directive on the harmonisation of value added tax has been before the Commission since 1973. The amendments that we are considering today were already prepared, mainly by the European Parliament and in the Economic and Social Committee, in 1974. Therefore the Commission cannot be accused of rushing through these proposals. On the contrary, if "own resources" are partly to be provided from a contribution of up to 1 per cent. of value added tax as from 1st January 1978 as opposed to the original date of 1st January 1975, the uniform basis of assessment must be agreed soon. In fact, I understand that it is hoped that agreement will be reached at the forthcoming meeting of the Finance Ministers later this month.
It is also relevant to this debate to know that if the amendments in the document which is before your Lordships—R/2268/74—are not broadly accepted and a common position is not arrived at during the Finance Ministers' meeting, the Council has agreed, at the request of the President of the European Parliament, to have further consultations with the European Parliament under the conciliation procedure. So it means that if a satisfactory conclusion is not reached at the Council of Ministers there is still an opportunity for democratic discussion through the procedures of the European Parliament.
From the evidence in the report, the three areas of concern appear to be the question of zero rating, exemption level and a single standard rate. My noble friend Lord Amory has already outlined the matters relating to these subjects, but I should like to comment in particular on the first two. The single standard

559
rate of course remains within the competence of the national Government, so it is not strictly relevant to the Draft Directive, although of course if simplicity and ease of administration were objectives of the tax, it could hardly be neglected. Rates and coverage, exemption and cut-off points for small firms vary considerably from State to State, and I should like to take this opportunity of paying tribute to the work done by my former colleague in the European Conservative group, Sir Brandon Rhys-Williams, for having defended and emphasised with success in the European Parliament back in 1974 the concept of zero rating—of great importance for us. In fact, the need was strongly emphasised by many witnesses, particularly by the NFU, and it is a most valuable social and economic weapon, particularly in times of inflation. Therefore it is important that the Council of Ministers should agree to the retention of this concept, even regardless of the elimination of fiscal powers.
Can the Minister confirm, therefore, that the concept of zero rating will be retained as a valuable economic and social weapon in the armoury of individual Member States—in particular, of course, our own—and that in fact it will not be eliminated except by the unanimous decision of the Council at any future date. If the objective of the fixed Directive is the creating of a uniform base for assessment regardless of rates, it would seem to be advantageous as a basis for raising revenue to keep the base wider and retain zero rating rather than alternatively to increase the number of exemptions.
The cut-off point for small traders, to which my noble friend has already referred and under which small traders would be exempt from registering, except on a voluntary basis, is one which should remain as flexible as possible. It is clear from the practice in application of VAT in other Member States that there is now a considerable difference both in the level of exemption and the measure of the means of application. The combined effects of inflation and wide fluctuations in exchange rates must make a nonsense of having an immutable figure written into the Directive, unless of course it is to remain a notional figure only to be used for purposes of calculation.
560
The considerations for the small trader obviously have to be finely balanced between his loss of being able to reclaim his inputs and the cost of administration involved if he is registered. It is not irrelevant to recall that taking a basic wage in 1972 as 100, it is now in the region of 210, more than double—an increase also reflected in the cost of administration of VAT reclaims for a trader, and I think this is relevant when we are considering the level of exemption for small traders.
As implemented in the United Kingdom, 4,000 units of account is not a practical figure, as my noble friend has already pointed out. Somewhere in the region of 10,000 units of account, at what we now call the basket exchange rate, would be more realistic unless a simpler and less costly way of administering the tax is found. This proposal should be considered and, if necessary, the figure could be revised annually in the light of fluctuations in inflation rates and exchange rates.
A second question—and I think I am entitled to three, as my noble friend indicated—arises out of the fixing by the Commission of a cut-off point. Would this figure also apply to de-registering?—because at the moment as the Minister will be well aware, the de-registering figure is £4,000, whereas the registration figure is £5,000. I have always thought that this gap often operates unfairly to small traders.
The Customs and Excise Department, which has implemented the VAT legislation, should be encouraged to study further the methods of assessment and collection in other Member States. However able and competent they may be—and this they undoubtedly are—there are certainly areas of application of VAT which could be improved, and I will give one example from personal experience. France, Germany and the United Kingdom all have different systems for the repayment of VAT to a non-national purchaser who is removing goods from one country to another. To put it very simply, if I go shopping in Germany I can get my VAT paid back to me in the shop in which I buy the object so that I have extra marks to spend on more goods in Germany. In France if I buy something, as I did in Paris, I get the VAT refunded at the

561
airport, so that at least one can spend one's French francs in the duty free area at the airport. But in the United Kingdom if you are a foreigner and you buy goods in London, for instance, you have to go through a great deal of paper work and you are not refunded the VAT on your goods except by post several weeks later in the country of your residence. This means that the country is losing sterling and the opportunity for the purchaser to buy further goods in the country before leaving the United Kingdom is lost. This is just a small example.
So often we read in the evidence that other countries cheat and other countries are not as competent as the United Kingdom, but quite frankly one gets a little tired of reading anything quite so chauvinistic, and much as I admire the Customs and Excise and many other Departments of Her Majesty's Government, sometimes I think that if they crossed the Channel and had a little practical experience of how things worked they might have a better impression and a wider knowledge.
To conclude, I agree entirely with the opinions set out in the report. Further study should be made about the efficiency of collecting VAT and the methods of checking yields against the real liability of Member States. This is where the new audit court will undoubtedly fulfil a very useful role. My noble friend Lord Amory has certainly done your Lordships a great service in introducing the report today and explaining the modifications proposed to the original draft. It was encouraging that he was able to point out that modifications have been accepted by the Commission, and undoubtedly further modifications will be made before the Draft Directive is brought into force. So we welcome the report which has been put before your Lordships today, on a subject which, although it may appear to be reserved to specialists, cannot fail. voluntarily or involuntarily, to affect everyone in this country.
4.48 p.m.
Lord GRANTCHESTER: My Lords, I ask for your kind indulgence for a few minutes to pass a few comments on this report and the Sixth Directive. Also, in opening, while thanking the noble Viscount, Lord Amory, and the noble
562
Baroness, Lady Elles, for their kind words of introduction, I admit that those words have made me feel doubly apprehensive.
When I was first appointed to my office as president of the value added tax tribunals in the United Kingdom one of the instructions that was given to me fairly forcibly by all concerned was that it was part of the duties of the tribunals, and my duties in relation to the tribunals, to ensure so far as we could do so, that there was no unfair trading and unfair competition within the United Kingdom. Just looking at the administration of value added tax in the United Kingdom, if a tribunal sitting in Edinburgh were to decide that a particular supply of goods and services in Scotland did not attract a liability for tax but another tribunal sitting in Cardiff in relation to an identical supply in Wales held that it did attract a liability for tax, then one trader would he getting an unfair trading advantage vis á vis the other.
In relation to the Sixth Directive, the Community and the Commission are looking at the administration of the tax—and, of course, it is a Community tax—from the Community point of view; that is, in the way it is administered throughout the countries in the European Economic Community. Therefore, they are concerned that there is no unfair trading within the Community. Just as within the United Kingdom one does not want a trader in one part of the country to be able to sell his goods and obtain a trading advantage because the tax is imposed differently in one part of the country from another, so the Community and the Commission in Brussels will not wish the tax to be operated by Member States in such a way as will produce unfair trading conditions and advantages to traders in one Community country to the detriment of the others.
My Lords, in considering the Draft Sixth Directive, I suggest we should consider that we are going to come under increasing pressure from the Commission to harmonise our value added tax structure with the other countries. This pressure will increase. In the report that has been promoted, the question of harmonisation of the possible unfair benefits and unfair advantages is not really dealt with to any great extent. Only Professor Prest among witnesses before the Committee dealt with

563
this point in any great detail. I suggest that we should recognise that, looking at the tax from the point of view of the Commission, the Commission will increasingly put pressure on the United Kingdom to bring its rates in line with the rates of the other Member States, and to harmonise its administration with theirs. The reason why this is not dealt with in any great detail in the report is, I think, that if anyone is getting benefits at the moment, it is the United Kingdom, where the value added tax collected, to take an example, is less than one-third of the value added tax collected in Germany, and almost a third of the value added tax collected in France.
My Lords, I would suggest that in relation to this problem we should rely on the Committee mentioned in Article XXX to report from time to time on the ways that the tax administration in the EEC countries might be said to be working unfairly, and to advise the various Ministers concerned as to how they could avoid this unfairness continuing in the future. Another way in which, perhaps, the United Kingdom is benefiting, and could be said to be benefiting unfairly, is this. Every day when I look out of my tribunal window into Oxford Street, I see numbers of visitors from France and Germany, over here buying up goods imported by this country from France and Germany, and taking those goods home. These visitors are doing so because they believe—and perhaps this is correct—that they can buy those goods here more cheaply than they could buy them at home. If our low rates of tax are contributing to this, we must expect pressure to be brought to bear to remedy this, because people in other Member States will not willingly allow this situation to continue indefinitely. That is one comment I would like to make on the report.
My Lords, my other comment is this. As has been stated to your Lordships, value added tax is a tax on consumption. Both in the United Kingdom and in the whole Community, what we really need is an efficient, effective and fair tax on consumption. I suggest that value added tax as it now works throughout the community is not really all that efficient. When paying a tax on consumption, the person who pays the tax, and on whom the tax really falls, is the ultimate consumer, the man or woman who goes into
564
the shop and buys the goods, or obtains services for money. That is the person, whether or not he or she knows it, who is providing all this tax. There is the tax on consumption, but the tax is administered so that all transactions have to take value added tax into account. When he buys the raw materials, the manufacturer has to have the tax chargeable on that transaction calculated and entered. When the manufacturer sells the manufactured goods to the wholesaler, again tax comes into that transaction. But in those transactions between persons carrying on businesses where the seller is supplying goods or services in the course of his business, and the recipient of the supply is obtaining them for the purposes of his business, the net benefit of all this to the Revenue is nil. Let us see how this works.
Let us take the case of a wholesaler, as an example, who buys a quantity of goods from a manufacturer. When he pays for those goods, included in the amount he pays is a sum of money in respect of the tax, the tax chargeable on that supply. Therefore, the wholesaler will pay that tax to the seller, the manufacturer, who will collect it, and he will pay it over to the revenue. But, probably, even before it is paid to the Revenue, the wholesaler, the purchaser, has the right to reclaim the whole of that tax from the revenue to set it off against other liabilities he has to the revenue, so it all comes back to him. It is all a tripartite game, in which the tax goes round from purchaser to seller to Commissioners, back to the purchaser, and the real benefit to the Revenue is nil.
I cannot, for my part, think that this is an efficient tax. I would hope that when valued added tax is made general and harmonised within the Commission we could get out of this situation, which is not very difficult. There are at the moment spheres, certain transactions, into which the tax does not enter at all. That is to say, for example, transactions between companies within a group, transactions between small groups of traders in, for example, the London Metal Exchange. In these transactions, supplies between these parties, no tax enters into the matter at all.
The whole tax could be made a lot more efficient if most transactions between registered traders were excluded entirely

565
from the tax, because it is collected at the end of the line. Therefore, when a manufacturer sold goods to a wholesaler you could not get the manufacturer having to work out with his employees on pocket calculators two-twenty sevenths of some mystical sum and collect it from the purchaser; he would not make out his tax returns and pay the tax over to the Commissioners, and the purchaser would not have to make out his calculation just to get the same sum back again. What one wants is a much bigger extension of the present very limited system of excluding tax entering into transactions between business people. If one did that, then large numbers of persons who are now very busy filling up returns, working out the tax, and no doubt a number of people employed by the Commissioners who are very busy checking these returns, could all do something else, one hopes more useful, including, in the case of the Commissioners, a more thorough policing of the transactions at the end of the day, where there is a benefit to the Revenue. This is one way in which the tax, I suggest, might be made more efficient.
All that remains is to deal with what are called exempt supplies, that is, supplies where, although no tax is charged or paid as such, the purchase price for the goods or services contains hidden tax. In the scheme I am suggesting those sorts of transactions could bear tax for which the supplier accounts fully to the Revenue, regardless of whether the supply was made to another trader for the purpose of his business or to an individual consumer who was at the end of the line. In this way the tax could be simplified. I should like to suggest that our representative on this Committee which is to be set up under this Sixth Directive be instructed to consider with the other members of the Committee how this value added tax, the Community tax, could be made generally efficient, effective and fair in all Member States.
5.5 p.m.
The SOLICITOR-GENERAL for SCOTLAND (Lord McCluskey): My Lords, I think I can properly say that this has been a valuable debate and we do appreciate the work of and express our warm thanks to the members of the Joint Committee, and, of course, particularly the Chairman and other Members of this
566
House. We would like to thank those who gave evidence before the Committee and helped to enable the Committee to produce such a cogent report, and, of course, those who have taken part in this debate. I should like specifically, of course, to mention and congratulate Lord Grantchester on his maiden speech. It cannot often happen that one who has made his own maiden speech just, it seems, a few days ago should already be congratulating another on doing the same. It is indeed my pleasure. I had the pleasure of meeting Lord Grantchester not very long ago, before either of us entered this House. As Lady Elles predicted he would, he brought expertise, as so often happens, to assist the House in its deliberations. I shall return in a moment to look at the particular points he put before us.
It would be repetitive if I were to attempt to explain the proposals. The noble Viscount, Lord Amory, in introducing the debate did that, and the joint report in fact does it much better than I could. Accordingly, I will not attempt a general exposition of the Sixth Directive, which is massive in length and complicated in detail; and I shall not attempt indeed to summarise the report, which speaks for itself. But may I pick up the particular points which have been made in debate.
First, I would join with the noble Viscount, Lord Amory, in saying that the sitting of the Joint Committee as a Joint Committee was indeed a success; one has only to study the evidence to see how valuable that arrangement was; and, of course, the report is so valuable partly because of bringing together, if I may put it without disparagement, the political emphasis of the Members of another place and the expert objective emphasis of Members of this House. There is not, as the noble Viscount said, very much time, and indeed there is an element of haste here. I shall return to that when I address myself to what the noble Baroness said.
The noble Viscount mentioned harmonisation of rates, and indeed this was a point which the noble Lord, Lord Grantchester, picked up. There is no proposal in the present draft Directive for harmonisation of rates, as the noble Viscount acknowledged. That is a matter which, if it is to come at all, lies in the future. I may just say, however, in that context

567
that while the noble Lord, Lord Grantchester, was speaking about harmonisation of rates I looked through my brief, and I find, on a quick count, that there are at the moment no fewer than 20 different rates prevailing in the nine member countries of the EEC. So harmonisation of rates does not seem to be something which is just around the corner. I think the lowest rate is of the order of 5 per cent. and the highest something of the order of 45 per cent. So there is a very considerable range of rates from country to country. The noble Viscount spoke of the desirability of achieving as much flexibility as possible so as to avoid major changes in the United Kingdom VAT system. I think I can give the House the assurance that the noble Viscount sought; we do not see that the Directive in its final form will be such as to cause major changes in the United Kingdom system.
If I may pick up in a little more detail the particular points mentioned by the noble Viscount, first, perhaps I may take his remarks about the VAT Committee. The Directive is a complex and wide-ranging Directive, and it is, of course, reasonable, as the noble Viscount acknowledged, to provide some forum other than the Council of Ministers itself in which Member States can come together to discuss the detailed points arising in the course of the implementation of the Directive. That is not really a matter for Ministers; it is a matter for some such body as is proposed. But we acknowledge that this is a sensitive area, and in this sensitive area of fiscal policy the Government are certain that it would be wrong, at the present stage of the development of the Community, to set up machinery under which measures could be imposed upon Member States against their better judgment.
This is a generally held view in the Community and we do not expect the proposals for a VAT Committee in the form as originally drafted in the Draft Directive to survive. In the Government's view what is needed is a committee which will provide a forum for a consultative procedure but with no power to impose measures on Member States against their will. I hope that the noble Viscount will accept that as the assurance that he sought. The most suitable procedures for such a
568
committee can best be settled when the substance of the rest of the Directive has been finally agreed, but that is the overriding matter, that it will not have power to impose measures on Member States against their will. This is a matter which will come up for discussion in that sense on 16th December.
The next matter which I should look at following the order which the noble Viscount took was the matter of zero rating. Indeed, this is a matter which was referred to as well by the noble Baroness. Let me make it clear—I hope again this is the assurance that speakers sought—that the Directive, we expect, will now permit the United Kingdom to retain all the zero ratings which we now have in force and to make marginal adjustments where necessary to deal with specific problems. I think I should inform the House that the present zero rating system covers a considerable range of goods at the moment. In fact, our existing zero rates already cover some 30 per cent. of consumer expenditure, and a further 18 per cent. is exempt from the tax. There are of course the differences, noble Lords will appreciate, between zero rating and exemption. A further 18 per cent. is either exempt from the tax or is outside the scope of its application.
Viscount AMORY: My Lords, would the noble and learned Lord allow me to ask him whether the percentage in the United Kingdom which is either zero rated or exempted is higher than in any other country in the EEC? That is my impression. Certainly the figure that the noble and learned Lord quoted of 30 per cent. sounds familiar.
Lord McCLUSKEY: Yes, my Lords, it is. I can answer that affirmatively. Indeed, there are countries which do not have any significant zero rate at all. It is very nearly 50 per cent. of consumer expenditure which is not liable to the tax. It must be said that our existing zero rates and exemptions already extend so widely across the range of the more essential categories of expenditure that it is difficult to think of substantial extensions to the zero ratings that any future Chancellor, taking into account both the social and the fiscal considerations, might wish to make.

569
Let me emphasise that the Sixth Directive will not in this respect impose any significant new constraint upon this country's budgetary freedom. The obligation not to extend the scope of zero rating is not entirely new in so far as it is contained in the draft Sixth Directive. It is already implied in the second VAT Directive which was an established part of Community Law when we entered the Community. The obligations under the second Directive were accepted then, and of course no one would seek to resile from them.
What we can properly claim is that we have in the discussions following upon the drafting of the Sixth Directive, in fact achieved a small measure of additional freedom because we can now maintain our present zero ratings and make some marginal adjustments. Indeed, we published some orders on 6th December and two of them make very marginal extensions to zero rating. These simply illustrate that the freedom of which I speak has been achieved. I think that that is the assurance that was sought. Unless some further assurance is sought on the matter, I can perhaps turn to deal with the matter dealt with by the noble Viscount and the noble Baroness, of the exemptions for small traders, the turnover limit.
As has been pointed out in the debate, the original draft Directive would have allowed exemption from registration for traders whose turnover was below 4,000 units of account, and at the rate then prevailing that was some £1,650 a year—very much less, of course, than is the figure in this country at £5,000. The background to this is that the limits which the Member States have set for bringing small traders into the scope of the tax vary very widely. Indeed Belgium and Italy have no exemption at all. Our figure of £5,000 is the highest in the Community, with the exception, in part, of Ireland. Our threshold of £5,000 a year of taxable turnover is certainly higher than most. Naturally one would expect that the pressure would be to bring down that figure. But, although final agreement on this part of the Directive awaits decision, hopefully on 16th December, I think we can now properly say that the fears are unfounded.
The noble Viscount referred to what took place on 21st October, but the solution which seems likely to be confirmed is that in calculating their own
570
resources contribution Member States will leave out of account the inputs and outputs of traders whose annual turnover is below 10,000 units of account—about £6,000 at the current rate. They will thus be free to retain their existing practice for traders with turnover below that level.
That, admittedly again picking up the point that the noble Viscount referred to, would leave a problem if a Member State were to wish to set its own exemption limit above the equivalent of 10,000 units of account, since the Member State would then be expected to make an own resources payment relating to the business done by traders in that State whose turnover was below the national exemption limit but above 10,000 units of account. But of course this would be likely to represent only a small part of the Member State's own resources contribution, and some means could no doubt be devised for estimating it.
Viscount AMORY: My Lords, I apologise for interrupting the noble and learned Lord again, but I think it will save time rather than me coming back to ask him afterwards. I am sure he is right in what he has said. From the latest information, does the noble and learned Lord know, if the EEC limit is to be £6,000—that is, 10,000 units of account—and if we chose in this country to have a higher limit, whether we could do so with the com pensatory arrangements to which he has referred, so that we should be fair with other countries? Or does this latest suggestion of 10,000 units of account no longer envisage individual countries having freedom to fix their rates at what they like?
Lord McCLUSKEY: My Lords, as I understand it, individual countries will not be prohibited from in fact fixing their own limit above that, but of course I cannot say that any arrangement has been agreed about what would happen in the band between the EEC figure and the national figure if it happened to be higher.
It might be convenient if at this point I were to refer to what the noble Baroness said in relation to the effects of inflation. One fixes a limit of £5,000, and because of inflation that limit catches more people as inflation goes on. Consideration of course has been given—not so much in a

571
European context, but certainly in the context of the tax in this country—to the notion of indexing the limit, but there are powerful arguments against it. There are arguments for it, as the Joint Committee heard, but there are arguments against it as well. If the limit were raised, particularly if it were automatically raised, by reference to some index, many traders above the new limit might wish to remain registered voluntarily, especially if they made a substantial proportion of zero rated supplies, and especially of course if they were supplying mainly to registered persons.
If the effect of an automatic rise in the limit were to give people the opportunity to deregister, they would, as noble Lords will appreciate, have to face the obligation of paying tax on their stocks at the deregistration date, so the temptation would be not to deregister, even though the opportunity came along. It is thought that, generally, a policy of index linking would create a very undesirable see-saw effect; the same trader could move repeatedly into or out of the field for registration depending on the way his taxable turnover and the registration limit changed in relation one to another. I would reiterate the point I made in a slightly different context; that our national registration limit is already the highest in the Community, with the exception in part of the Irish rate, and one would see index linking as tending to push it up and up in relation to the other Community rates.
Baroness ELLES: My Lords, I am obliged to the noble and learned Lord for that explanation of the reason why he does not think the figure should be changed, certainly not over a long period, but may I ask him whether he would nevertheless accept that the inflationary costs of administering VAT for small traders are going up the whole time and that this must be taken account of in the overall consideration of what figure is reached for annual turnover for the small trader?
Lord McCLUSKEY: Yes, my Lords. I am sure the noble Baroness is right that it is proper to take that matter into account in considering the figure. While I am on that point, I wish to deal with the point the noble Baroness raised in relation to deregistration. To put the matter
572
precisely, the condition for deregistration is that the turnover should have fallen below £4,000 in each of the two years preceding deregistration or that in each of the quarters comprised in those years it should have been £1,250 or less; a quarterly rate of £1,250 is of course equal to £5,000 annually. The view of the Government on that is that it would be undesirable for a trader to be deregistered on grounds of low turnover unless it were reasonably certain that his turnover would remain below the registration level. That is to avoid the see-saw effect I spoke of, moving into and out of the field for registration, and that is why the conditions for registration and deregistration are not identical.
Lord ROBBINS: My Lords, may I ask the noble and learned Lord to elaborate his argument a little? I confess that I find it somewhat difficult to follow. Suppose the value of money accidentally continued stable; there would be no see-saw effect and everything in the garden would be lovely. If there were correct indexing, that would mean essentially that the real value of the limit would remain constant. The purpose of indexing would be just that. Thus, I do not in the end see the noble Lord's argument against indexing on that ground.
Lord McCLUSKEY: My Lords, if I properly understand the point which the noble Lord, Lord Robbins, has made, if one has stability in the currency then one has no risk of any see-saw effect; there is no problem with indexing if the currency is stable. I was really talking about the more likely situation—one is always hopeful—that at the present time inflation is likely to continue, and if one indexes and if the figure (that is, the European units of account figure) is reviewed, as it would be, annually, one would tend to find that a trader who did not himself change his prices and his turnover would find that the figure had passed above his annual turnover.
The noble Viscount expressed apprehension that one effect of the Draft Sixth Directive, when it was completed, might be to compel traders in the United Kingdom to go on to a monthly return basis. I understand that that is not likely, and I think I can reasonably assure him that that will not be compelled by the Draft

573
Sixth Directive. Indeed, one of the important considerations in the mind not only of the United Kingdom Government but of other Governments as well has been to introduce the changes which have to be introduced in such a way as to avoid disturbance of the national systems in a way that would upset traders and others who have an interest in some form of stability in the mechanics of the tax.
Mention was also made by the noble Viscount of the evidence that was given about partial exemption, and he specifically referred to the question of legal services. We appreciate the problems of partial exemption, and indeed the quotations from Mrs. Dorothy Johnstone's book which appear in two places in the report of the Joint Committee express a truth which we would acknowledge. The Bar Council and the English Law Society, in their evidence to the Committee, were concerned about the administrative problems of a partial exemption.
I also know that there has been communication with the Dean of the Faculty of Advocates about the Scottish position. The practical problems in Scotland might be less at the Bar, where the legal accounting systems are possibly somewhat more adaptable to VAT requirements than they appear to he South of the Border, but this is not just a matter of practical problems. We have taxed legal services in the United Kingdom ever since VAT was introduced, and we are not in a strong position to argue differently in the Community. In other words, it would be very difficult to argue for a zero rate in respect of legal services and the Community would probably regard it as very odd if we were to come along now arguing for zero rating in preference to exemption in view of our current practice. It appears that exemption will be the preferred choice of the majority in the Community and I think that that is something which will simply have to be accepted.
There have been some observations—though happily they have been restrained—about the efficiency of the collection of the tax in other countries, and it is perhaps right that I should make a brief reference to the Audit Court referred to in the Joint Committee's report. The audit of Community revenue and expenditure is provided for under Article 206 of the Treaty of Rome, which established an Audit Board for the purpose. Under
574
an amending Treaty dated 22nd July 1975, the Audit Board is to be replaced by a Court of Auditors having higher status and greater independence of action vis-à- vis the other Community institutions than the Audit Board. This is the body which the Joint Committee mentioned in paragraph 29. The target date for setting up the court is 1st January 1977, but that date is not likely to be achieved and the matter will be considered by the Foreign Ministers' Council on 15th December this year. Under the present system, Community auditors already visit Member States for the purpose of satisfying themselves that the own resources contribution is being correctly accounted for. They have power to inspect books and records in the official possession of the Member State and also to visit the premises of traders, though only when accompanied by officials of the Member State.
When the VAT own resources system is established, as it should be following the coming into force of the Sixth Directive in its final form, the Community auditors will no doubt be concerned to see that the system is working as intended in the Member States. The relative inefficiency of the administration of national VAT and, therefore, the efficiency of the collection of the VAT own resources element will probably be for later consideration.
However, the efficiency of tax collection is in any case difficult to measure in the sense of finding out the extent to which there are under-declarations by taxpayers which do not come to light. Any suggestion that this can be done by comparing the VAT yield with the country's national incomes statistics of consumers' expenditure and adjusting for the rates and incidence of the tax is thought to be an over-simplification, since the national statistics themselves are estimates and may have an appreciable margin of error.
Baroness ELLES: My Lords, I wonder whether the noble and learned Lord can inform the House whether any other country in the Community gives powers to inspectors such as are given in this country to investigate the position of VAT upon private premises.
Lord McCLUSKEY: My Lords, perhaps I may come back to that point. I do not know the answer, but I am sure that those in the Box will provide me with the answer before I sit down.
Lord HAWKE: My Lords, can the noble and learned Lord reiterate his statement that the estimates of the national income and so on are subject to a wide margin of error? Successive Chancellors of the Exchequer have only too often come to the Dispatch Box in another place and dealt in questions of £100 million here and £100 million there as likely to make an appreciable difference to national statistics. If they start from a basis where there is a wide margin of error, these exercises seem rather fruitless.
Lord McCLUSKEY: My Lords, I do not wish to make a general comment on that, particularly in the presence of a former Chancellor of the Exchequer, but I believe that he and other noble Lords will agree with me that the history of forecasting is the history of error. To turn to other points dealt with by the noble Baroness, Lady Elles, she rightly said that this Directive first made its appearance in 1973 and was amended in 1974; but it was in April of this year that the Council of Ministers decided that the interim arrangement that we have spoken of could not continue indefinitely and set a target date of January 1978 for the operation of the VAT own resources system. This decision has given a new impetus to the discussions in Brussels about the Draft Directive and we hope to make progress on December 16th. Indeed, I hope to be a witness to that progress in Brussels. The noble Baroness also referred to a single standard rate. I made some reference to this earlier. There are a vast number of different rates in the Community and, looking at the tables of those rates, I found that we had relatively fewer than the other countries in the Communities.
To deal now with the point raised by the noble Baroness in relation to powers of entry, my information is that most of the Member States have powers of entry to premises on which business is conducted. In many small businesses this includes private premises, as in this country. The noble Baroness also suggested and gave a graphic example of profit that might be derived from the study of other countries' systems. I think that I can commend to her the book which I chanced across and which is called A Tax Shall be Charged, by Mrs. Dorothy Johnstone. I read it not so much because it instructed
576
me very much about the subject of this debate but for its elegance and lucid style. If the noble Baroness would care to look at that pamphlet she would find from it that a vast amount of study has already been done by the Department because the Department was able, as it were, to "go to school" on the experience of other countries.
That process is continuing and the Department is always open to ideas from other countries, bearing in mind that the mere fact that a particular method seems to work in another country is not of itself a good reason for immediately introducing it into this country because one likes to see stability in taxes. The noble Viscount mentioned that the general thrust of the evidence before the Committee acknowledged that VAT in practice was not as bad as it was once thought to be. That is a tribute to the stability of the system at the present time.
To come to the noble Lord, Lord Grantchester, he made, in the course of his lucid speech, valuable comments on the importance of regulating the tax so as to avoid unfair competition. I have already remarked on the harmonisation of rates. That seems to be a long way off, though one acknowledges that, once the Draft Sixth Directive has been put into its final form, the next stage will tend to produce pressure upon this and other countries to harmonise their rates. The noble Lord also, with the value of his experience behind him, made a number of comments about the characteristics of a tax—it should be efficient, effective and fair—and criticised value added tax in this country in a way which will certainly be looked at. I do not believe that I can comment in any great detail on what he said because his remarks did not arise directly out of the report, but the recommendation that the noble Lord has made will certainly be given careful consideration and that will be something that will be taken into account not only by the Department in this country but no doubt by the other countries when they meet, in order to try to ensure that the tax, when it is harmonised throughout the Community, will be as near as possible efficient, effective and fair.
It remains for me to reiterate my thanks to those who have assisted in the preparation of this valuable and cogent

577
report and who have taken part in this debate. If there is any point that I have left unanswered, I should be happy to attempt to answer it before I finally sit down.
5.39 p.m.
Viscount AMORY: My Lords, I should like to associate myself with the congratulations that the noble and learned Lord, Lord McCluskey, offered to the noble Lord, Lord Grantchester, on his most interesting maiden speech. The noble Lord has a high reputation as a lawyer and really exceptional knowledge of the subject that we are discussing. I was intensely relieved that the noble Lord did not bombard me with any very intensive questions in depth about the working of VAT in the United Kingdom. I was afraid that he was going to probe me from his extensive knowledge of the sublime mysteries of that tax, but the noble Lord was kind. It is quite clear that the noble Lord is not only a distinguished lawyer but also a complete gentleman.
The noble Lord, Lord Grantchester, asked two questions to which the noble and learned Lord, Lord McCluskey, has referred. First, he gave us a warning about the pressure that he thought we might be under in this country in the direction of harmonising rates structure, apart from the basic arrangements for assessment. Perhaps that will happen, but assurances have been given on behalf of the EEC authorities that there are no proposals under discussion at present for harmonising rates, at any rate until that mystic date when fiscal frontiers will be eliminated. But I expect that in the very long term his warning may be relevant indeed.
Secondly, the noble Lord expressed some fears about the relative unfairness of some of the present rules and regulations, and he mentioned the evidence given by Professor Prest. Apart from Professor Prest, I cannot remember that we got very much evidence about alleged unfairnesses or inequity in the administration of VAT on the current basis. It may be because we did not ask enough questions on that aspect. My noble friend behind me, Lord Hawke, asked what wide margins of errors were, and the noble and learned Lord, Lord McCluskey, referred to the presence of a very out-of-date Chancellor
578
of the Exchequer opposite him and avoided answering that point. My Lords, I will answer as to what it was in my day. In my day £50 million was a substantial figure and even on occasions a crucially important figure, and if it had not been I should never have been offered an appointment at the Treasury. I do not think that I need follow that up any further.
I think I have got off much more lightly than 1 feared. I said that I hoped that noble Lords would tell me that I need not answer more than three questions, though I would have to give my reasons and draw a map.
Lord McCLUSKEY: My Lords, the noble Viscount has referred to what was known at the time as a little local difficulty. If I can have the noble Viscount's indulgence, I should like to refer to a little local difficulty of mine. When I was speaking about lawyers, 1 said that they were likely to be exempt. Of course that was a slip of the tongue; they are likely in the Community to be taxed.
Viscount AMORY: My Lords, that seems to me, as a non-lawyer, to be wholly equitable. But I am in a difficult, even alarming, position this evening, because every single other noble Lord who has spoken has been a distinguished lawyer, and I was afraid for a moment that the kind of observation that would be put to me by one or other of them would be, "I put it to you that everything you have said has been a tissue of inaccuracies". But I have nothing to complain about. I think that we have heard an adequate review of this subject, and it has certainly been a less aggressive discussion than appears to have occurred in another place on the same subject. I very much thank noble Lords who have spoken, and I feel very fortunate in the treatment that I have received, and I now propose to take a hurried departure. Before doing so, I should like to move formally the adoption of this report.
On Question, Motion agreed to.

SCOTTISH TRANSPORT GROUP (CASTLE BAY PIER) ORDER CONFIRMATION BILL
Brought from the Commons; read l a; and (pursuant to the Private Legislation Procedure (Scotland) Act 1936) deemed to have been read 2a and reported from the Committee.
  NORTHERN IRELAND MEAT INDUSTRY
  NORTHERN IRELAND MEAT INDUSTRY
  1975 CRIMINAL STATISTICS: HOMICIDES
  1975 CRIMINAL STATISTICS: HOMICIDES
  RHODESIA: NON-PATRIAL UK PASSPORT HOLDERS
  RHODESIA: NON-PATRIAL UK PASSPORT HOLDERS
  BRITISH LEYLAND: SOUTH AFRICAN UNIONS
  BRITISH LEYLAND: SOUTH AFRICAN UNIONS