Sitting of 20 December 1976

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

    Consumer Protection
    Mr. Freudasked the Secretary of State for Prices and Consumer Protection what specific measures, if any, he proposes to bring forward in order to carry out the commitment in the Queen's Speech to attach high priority to safeguarding the interests of the consumer.
    The Secretary of State for Prices and Consumer Protection (Mr. Roy Hattersley): My Department safeguards the interests of consumers over a broad front. We shall continue to apply and develop policies on price control and on the maintenance of competition, as well as encouraging the adoption of other measures to assist consumers, such as the
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    provision of consumer advice centres and local price surveys.
    Mr. Freud: The whole House will be pleased that the Secretary of State protects the interests of consumers, but will he explain how he came to promise consumers an 8½p reduction in the price of a loaf of bread when it transpired that such a reduction, first, was untrue, second, would ruin all small bakers and, third, would accelerate a number of strikes which we could well do without?
    Mr. Hattersley: Neither I nor any member of my Department ever promised an 8p or 8½p reduction. [Interruption.] If the hon. Gentleman who is making noises which I take to mean dissent has any evidence to the contrary, I hope that he will supply it. What my Department said, and what I stick to absolutely today, is that, as a result of the scheme I announced a week ago, in some shops after 3rd January bread will be cheaper than it would otherwise have been. If the hon. Member for Isle of Ely (Mr. Freud) or the hon. Lady the Member for Gloucester (Mrs. Oppenheim) and her hon. Friends believe that I should continue to keep bread prices artificially high, they had better say so.
    Mr. Ioan Evans: Will my right hon. Friend take it that at a time of inflation the need for consumer protection is greater than ever and that the action already taken by the Government in protecting the consumer is well worth while? Will he encourage the advice centers

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    which have been set up and which are giving very good advice to consumers in various parts of the country, and will he consider other legislative measures to ensure that the housewife gets full value for what she spends?
    Mr. Hattersley: I am grateful for what my hon. Friend says, and I shall certainly do my best to respond to his suggestion. As he knows, despite the financial stringency of the period ahead, I have told local authorities that money will be available next year for the continuation of consumer advice and consumer surveys. I believe that they are of vital importance to consumer protection work, but, unfortunately, we see that some Conservative-controlled local authorities do not intend to pursue that sort of protection. Again, I offer the hon. Lady the Member for Gloucester the opportunity to tell us whether she believes that Conservative local authorities should do that or whether they should abandon that attitude.
    Mr. Montgomery: Perhaps the right hon. Gentleman could tell us where the idea of 8½p off a large loaf came from, in view of his reply to the hon. Member for Isle of Ely (Mr. Freud). Is the right hon. Gentleman aware that this has given a lot of concern to a great many people and that only today, I believe, Sainsbury's unofficially announced that the most that anyone could expect off the price of a loaf of bread will be 1p, and this only in some shops and only for some consumers?
    Mr. Hattersley: If that is what Sainsbury's has announced, it is something of an achievement that since we have removed ½p subsidy the bread price has come down. Secondly, it is exactly consistent with what I said a week ago and what I said a few moments ago. As for where the idea of the 8½p came from, I think that I can help the hon. Gentleman. He will see that the table is a sliding scale. Clearly, therefore, as the table must be boundless at either end, it has to include that figure. But the idea that I said it, that any of my Ministers said it or that any member of the staff of my Department said it is quite wrong. Indeed, if the hon. Gentleman, who, I know, is assiduous in these matters, had been listening to the radio on Monday afternoon when I was asked about the
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    size of reductions, he would know—I have the transcript—that I said, as I said also in my Press conference in the morning, that I could not possibly put figures on it. It was the market operating; I believe that the market had to operate and had to determine what the price would be.
    Mrs. Sally Oppenheim: Is it not an extraordinary coincidence that every news commentator came forward with the figure of 8½p? Does not the right hon. Gentleman have the unique distinction of having alienated both the baking and the retailing sides of the industry, having caused a major confrontation between two unions, having deceived consumers as to what the reduction was likely to be, and having disguised from consumers the fact that some of them will be paying more for their bread as a result of his manipulation? Finally, is he aware that as a result of his high-handed and arrogant way of dealing with this matter he will go into the next round of pay negotiations as a Minister who is not trusted by industry, not trusted by the unions and not trusted by consumers?
    Mr. Hattersley: I hope the hon. Lady feels that that was worth all the preparation. I have told her categorically that I did not say, and neither did anyone else in my Department say, that there would be a specific reduction in the price of bread. Since she has continued to assert the contrary, since she has my assurance about it, and since I can provide her with a great deal of evidence to substantiate what I say, if she did the proper thing she would withdraw the allegation, although I have no doubt that she will not do so. I assure the hon. Lady that I have some pleasure in knowing that, even according to the evidence supplied by her hon. Friend the Member for Altrincham and Sale (Mr. Montgomery), what I said last Monday is true. As a result of decisions which the Government took, in some shops bread will be cheaper than it would otherwise be. That seems to be absolutely my duty, and I am glad that I have continued to perform it. [AN HON. MEMBER: "How much?"] The hon. Gentleman, who obviously has not listened to anything I said, asks "How much?" Let me tell him again. It will be cheaper according to the way the market operates. As he and, no doubt,

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    Professor Milton Friedman understand, one cannot predict the operation of the market.

    Price Code
    Mr. McCrindleasked the Secretary of State for Prices and Consumer Protection if he is saisfied with the operation of the Price Code.
    Mr. HattersleyThe Price Code has now been in operation for nearly four years. Despite amendment and revision, it grows increasingly difficult to judge commercial performance against the criteria stipulated in the code. However, I am broadly satisfied with the operation of the code as part of the current prices policy.
    Mr. McCrindle: Still on the question of bread prices, does not the right hon. Gentleman concede that to have created such confusion in the minds of housewives and to have succeeded in interrupting supplies of bread over the weekend indicates the difficulty involved in any ministerial intervention in the operation of prices? Will he now make absolutely clear at what price the housewife can expect to purchase a large loaf in supermarkets in 1977?
    Mr. Hattersley: Time does not allow me to explain the bread scheme to the hon. Gentleman, but let me at least tell him that what I decided last Monday was not further Government intervention in the bread market but a withdrawal of Government intervention. The complaint of many of the people who are complaining—notably the trade union, which I am sure will be grateful for the support of the hon. Gentleman and the hon. Member for Gloucester (Mrs. Oppenheim)—is that I am not intervening sufficiently. I have made it perfectly clear to the bread industry that if the industry as a whole wants it, nothing would give me greater pleasure than to withdraw altogether. The industry tells me that it does not want such a policy. As it is, I have improved the aspects of competition within the industry. I can only repeat that, as it is competition that will determine the price, it is not possible for me to predict what the price will be.
    Mr. Molloy: Will my right hon. Friend bear in mind that in no circumstances
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    should he accept advice from the Conservative Front Bench on possible future negotiations with the TUC on such questions, because when the Conservatives were in office their negotiations led to the three-day working week and the chaos that followed? If he took their advice, their next achievement would be to see that the nation was put on black bread. Will my right hon. Friend assure us that that will not happen?
    Mr. Hattersley: I told the TUC, as I told other interested parties, what I proposed to do over bread prices. They agree with me—though the hon. Member for Gloucester does not, and is now on record that she does not—that it was intolerable for the Government to keep the price of bread artificially high. I am sure that I was right to stop doing that.
    Mr. Giles Shaw: May I ask the right hon. Gentleman another question about the Price Code, concerning the announcement by the Chancellor of the Exchequer last week of a gas price increase from April 1977? I believe that that increase includes a repayment of capital, which is not allowable under the code. Does the Secretary of State intend to amend the code? If not, how else will he approve the increase?
    Mr. Hattersley: I do not propose to amend the code. When the increase comes forward from the Gas Council on behalf of the boards, it will be submitted in the proper way to the Price Commission. If the Commission believes that the increase is not acceptable under the code, it will say so publicly. There is provision for the Government to proceed notwithstanding that decision, if necessary. But there will be no revision of the code, nor any subterfuge. The Commission will behave in the normal way.

    European Community (Consumer Protection)
    Mr. Neubertasked the Secretary of State for Prices and Consumer Protection when he next expects to meet the EEC Commissioner with special responsibility for the protection of consumer interests.
    Mr. Molloyasked the Secretary of State for Prices and Consumer Protection what recent discussions he has had with

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    his EEC colleagues about proposals for increasing protection for the consumer.
    The Minister of State, Department of Prices and Consumer Protection (Mr. John Fraser): I have recently met Commissioner Gundelach, who has responsibility for the internal market and as such is closely involved with many issues affecting consumers. The present Commissioner responsible for consumer affairs will be leaving shortly and my right hon. Friend and I would welcome the opportunity to meet his successor. I met Madame Scrivener, the French Minister for Consumer Affairs, when she visited London earlier this year at the invitation of the British Government, and my hon. Friend the Under-Secretary of State regularly attends Agriculture Council meetings.
    Mr. Neubert: Will the Minister confirm that our friends in Europe appear to be protecting British consumers' interests by subsidising our food prices to the tune of about £1 2/4 million a day? Does he think that that is a good thing? If so, how does he reconcile that with the Government's accelerated phasing out of our own food subsidies?
    Mr. Fraser: One welcomes the fact that we receive a subsidy of those dimensions under the European arrangements. I do not think that there is anything inconsistent between the receipt of those moneys from Europe and the phasing out of food subsidies on a domestic basis as part of an economic strategy.
    Mr. Molloy: Is my hon. Friend aware that the EEC and its Commission have a very biased policy in favour of the producer? Will he take advantage of the change in Commissioners to see that the voice of the producer is heard and that there is a proper balance for the first time on behalf of the consumer, changing the EEC's present bias in favour of the producer?
    Mr. Fraser: I think that my hon. Friend means that he wants to change the bias in favour of the consumer rather than the producer. It is clear that the common agricultural policy has very much favoured the producer and has paid insufficient regard to the views of the consumers of food. The Government have never disguised the fact that they are dissatisfied with the way in which that
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    policy has worked. I hope that the House will be reassured by the fact that my hon. Friend the Under-Secretary attends Council meetings to put forward the consumer point of view.
    Mr. Marten: Does not the Minister agree that, far from the Common Market's subsidising British consumers, the argument is the other way round? Is he aware that in 1975 we could have purchased the same volume of food on the world market for £800 million less than we paid because we are a member of the Common Market? Therefore, in spite of the so-called subsidy of £350 million that we receive from the EEC, surely we are subsidising the Common Market at the end of the day.
    Mr. Fraser: It would be dangerous to try to draw conclusions at the end of 1976 from the situation in 1975. Whilst cheaper food might be available without tariffs if we were not members of the Common Market, that fact is probably balanced by the amount of subsidy we receive from Brussels. That does not mean that one is complacent about the present situation.

    Petrol Sales (Credit Card Holders)
    Mr. Ioan Evansasked the Secretary of State for Prices and Consumer Protection if he will make a statement on the practice of credit card companies preventing garages from giving discounts to cash customers.
    Mr. John Fraser: Over the past few months, credit card companies have been taking action against traders who are not prepared to abide by the terms of their agreement with the credit card companies and sell petrol on credit cards on the same terms as sales for cash. However, I understand that the Director General of Fair Trading is considering a number of subjects for possible references to the Monopolies and Mergers Commission, amongst which are the services provided to credit card franchise holders, including garages. I have drawn my hon. Friend's interest to his attention.
    Mr. Evans: I thank my hon. Friend for that reply. Will he ask the Office of Fair Trading to take urgent action on the matter? Does he realise that there is a jungle in garage forecourts, where different customers are charged different

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    prices, varying from one garage to another? Will he ensure that the consumer is protected in this regard and that he buys petrol at the lowest possible price, without all the variations in price and trading stamps, without credit card holders being denied concessions and without the other present differentials?
    Mr. Fraser: I am most anxious that the information available to motorists when they buy petrol should be the maximum possible. I do not think that one can regulate by law, or should try to do so, all the offers made by garages. I hope, however, that the offers will be made in a much simpler way so that customers can receive the most benefit from competition.
    Mr. Higgins: Should not the Minister tell his hon. Friend that he had his Question entirely the wrong way round? The credit companies insist that a fair discount should be given to those who buy by cash or credit.
    Mr. Fraser: I am not taking a view on the matter, although I welcome the fact that the Director General of Fair Trading will examine the matter. The credit card companies will not allow a discount to be given only to the cash customer, and threaten to withdraw the franchise if this happens. I think that the views of both cash customers and credit card holders need to be looked at.

    Petrol Prices
    Mr. Costainasked the Secretary of State for Prices and Consumer Protection whether he will seek powers to require petrol stations to display the actual price at which they are offering petrol. instead of advertising reductions per gallon without showing the maximum price.
    Mr. Bryan Daviesasked the Secretary of State for Prices and Consumer Protection if he will seek powers to compel petrol stations clearly to advertise the full price of petrol on their forecourts.
    Mr. Gwilym Robertsasked the Secretary of State for Prices and Consumer Protection what action he proposes to take to improve the display of prices of petrol.
    Mr. John Fraser: If the voluntary agreement on the display of petrol prices does not become more widely observed, we shall have to take further action. I am considering carefully whether the statutory powers to improve price display under the Prices Act 1974 ought now to be used.
    Mr. Costain: Does the hon. Gentleman realise that that is quite unsatisfactory? Surely he is not satisfied with the present situation, where we are told that we get 8p, 9p, 10p or 11p off but probably pay the same price in the end. Surely he will take action to put the matter right. The present situation is misleading to say the least.
    Mr. Fraser: I agree wholeheartedly with the hon. Gentleman that it is misleading and requires action to be taken. The only reason for delay is that a voluntary agreement was reached between the oil companies, the petrol retailers and the Director General of Fair Trading. We thought it right to give the agreement a chance and to see whether it would work. From the volume of complaints from members of the public and the correspondence received, it can be seen that the agreement is not thought to be working properly. That is why I shall take further action.
    Mr. Davies: Will my hon. Friend accept that I take some encouragement from his reply? Bearing in mind the report of the trading officer in Enfield, does he accept that the voluntary agreement is worthless in terms of tackling this problem? Does he not now have sufficient evidence to propose the legislation which is quite clearly necessary?
    Mr. Fraser: Yes, I have had reports from trading standards officers throughout the country, including Enfield. I am awaiting further reports. As soon as I have been able to consider all the evidence, I shall put proposals before the House.
    Mr. Freud: Is the hon. Gentleman aware that it is very nearly two years since he or his predecessors gave exactly the same evasive answers to very similar questions? All that the general public want from a filling station is to know the price of petrol and, if necessary, what

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    added incentive there is to that price. Surely that cannot be difficult.
    Mr. Fraser: I very much welcome the support that is coming from all parts of the House for taking statutory action.

    Inflation
    Mr. Gowasked the Secretary of State for Prices and Consumer Protection what is his latest estimate of the rate of inflation during the year ending 5th April 1978.
    Mr. Hattersley: I refer the hon. Gentleman to the answer my right hon. Friend the Chancellor of the Exchequer gave to the hon. Member for Romford (Mr. Neubert) and my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) on 16th December.
    Mr. Gow: Does the right hon. Gentleman recall the letter of 18th December 1975 written by his right hon. Friend to the Chairman of the IMF, in which he said that by the end of this year inflation would be down to below 10 per cent.? Will he tell the House when the Government expect that that aim will be achieved?
    Mr. Hattersley: I told the House a month or five weeks ago of the factors that had prevented that from coming about. What I am sure of is that the more patriotic Members will attempt to secure that end rather than carping about it.
    Mr. Evelyn King: Is it the policy of Her Majesty's Government this year, or even next year, to stop inflation or merely to diminish the rate of inflation, an ambition that is scarcely comprehensible?
    Mr. Hattersley: I think they would be a very ambitious Government and a very ambitious Minister who thought that inflation could be stopped over a period of years or months without any increases. What the Government intend to do and will do is substantially to diminish the rate and eventually to bring it down to the rate which has been suffered or enjoyed by our industrial competitors.
    Mr. Adley: Does the right hon. Gentleman recall and, indeed, support the claim made by his right hon. Friend the Chancellor of the Exchequer that between February 1974 and October 1974 the then.
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    Labour Government had reduced inflation to 8·4 per cent.? If he supports that, why is it that the capitalist countries of West Germany and America, from which the Government are trying to borrow money, have decreasing rates of inflation while the Socialist Government with whom we are lumbered are still creating rising inflation?
    Mr. Hattersley: I can recall that claim because the hon. Gentleman refers me to it at almost every Question Time. It was a reasonable prognosis to make on the evidence available at the time, but there have been a number of factors—I for my part am prepared to take responsibility for some of them—that have prevented us from achieving that aim. However, our intention is to achieve it, and the painful measures that we announced six days ago are one of the steps towards that achievement.
    Mr. Gow: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the Minister's reply, I give notice that I shall raise the matter on the Adjournment.

    Retail Price Index
    Mr. Peter Bottomleyasked the Secretary of State for Prices and Consumer Protection how much the retail price index has risen since February 1974.
    Mr. Formanasked the Secretary of State for Prices and Consumer Protection what is the latest year-on-year figure for the percentage increase in the retail price index.
    Mr. Hattersley: The retail price index rose by 63 per cent. Between February 1974 and November 1976 and the year-on-year increase recorded in the November index is 15 per cent.
    Mr. Bottomley: Will the right hon. Gentleman tell the House whether that answer is more unpatriotic than the Chancellor's claim in October 1974? Will he tell the House when the country can expect the Government to accept that their policies from February and October 1974 have failed? Will they take the credit for admitting that as a Christmas present to the nation?
    Mr. Hattersley: I do not think that facts are unpatriotic. My answer was

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    devoted to facts. It is a certain attitude that is unpatriotic, and a good example was the attitude adopted by the Opposition last Wednesday.
    Mr. Heffer: Is my right hon. Friend aware that his answer is extremely depressing? Is he also aware that many of us believe that the situation might have been different if we were not in the Common Market, since food prices on a world scale have fallen and we are paying artificially high prices for food in the Common Market? Is it not time that we did something about renegotiating the common agricultural policy?
    Mr. Hattersley: There are essentially three elements in my hon. Friend's question. I agree that the figures I have given are depressing. They are as depressing to me as they are to him. I talked a moment ago about blame and responsibility. I hope that I implied by those remarks that I understand very well that we have an obligation to get the economy into such shape that such figures do not continue into next year and the year after. My hon. Friend and I have no disagreement about the depressing nature of the figures I have given.
    As for the Common Market, certainly there are things that are wrong with the CAP that are not details but fundamental shortcomings. I hope that in the next year or two years the Government will be able to make some fundamental changes in the CAP. It will not be easy, but clearly the CAP has to meet the needs of consumers more nearly and not concentrate on the needs of producers, many of whom are inefficient.
    The price of goods in and out of the Common Market varies from time to time and from year to year. Sometimes we benefit and sometimes we lose. What is very clear is that had we had the difficulties we have faced over the past year, and had they only been solved by measures that improved international confidence, the prospects of achieving that confidence outside the Common Market would have been substantially worse than they have been inside it.
    Mr. Sainsbury: Will the right hon. Gentleman tell us what assessment his Department has made of the extent to which the present excessively high interest rates are contributing towards inflation?
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    Will he tell the consumer what he is having to pay as a consequence of the need to finance the Government's excessive borrowing requirement?
    Mr. Hattersley: It is impossible to make that sort of statistical assessment. We do not know for how long the high interest rates will continue. I am sure that the hon. Gentleman, like me, welcomed the sign of their reduction last week, but, putting statistics aside, he and I are agreed that the industrial as well as the consumer interests of Britain need lower basic interest rates. The Chancellor made this point explicitly last Wednesday. He made it clear that one of the purposes of his measures was to avoid having so high a minimum rate. I hope that it can be reduced in the not-too-distant future.
    Mr. Lipton: How much weight is given to petrol prices in the retail price index in view of the fact that the Department is still collecting reports on petrol prices throughout the country? How can the Department arrive at an accurate figure for the effect of petrol prices on the retail price index?
    Mr. Hattersley: My hon. Friend has asked a complicated statistical question and I hope that he will accept a rather crude statistical answer. My right hon. Friend the Secretary of State for Employment has statisticians within his Department who are considering a number of typical shopping baskets which, despite the mixed metaphor, contain petrol. From those shopping baskets he is able to conclude what changes have taken place in the retail price index.
    Mrs. Sally Oppenheim: May I put a simple statistical question to the right hon. Gentleman to make him even more depressed? Will he confirm that in only one month out of 33, despite the boasts of himself and the Chancellor, have the Government managed to halve the rate of inflation, and that in only one month out of 33 have they managed to bring down the rate of inflation to the rate that was inherited from the previous Conservative Government? Will he confirm that inflation has risen in each of the past four months and that it is not on a plateau, as he and the Chancellor have claimed, but is rising again sharply and disastrously?
    Mr. Hattersley: The hon. Lady depresses me, but not for quite the reasons she imagines. She is right that the reduction in the inflation rate is not what we would hope. I do not balk at that fact, but it is substantially lower than it was last year. When my right hon. Friend the Chancellor of the Exchequer and I talked about a plateau, we were careful to say that the figure would hover around 15 per cent. That seems to be right. We are hovering at that figure, and I believe that we shall begin to see a reduction some time next year.

    Prices Policy
    Mr. Silvesterasked the Secretary of State for Prices and Consumer Protection when he next plans to discuss prices with the TUC.
    Mr. Hattersley: I intend to meet TUC representatives again shortly as part of my continuing discussions with them about prices policy.
    Mr. Silvester: Is the abolition of the Price Code an option that the Government are retaining in any discussions they may have about a possible further stage in wages policy in the summer?
    Mr. Hattersley: It is an option we can hardly avoid. Most of the legislative powers under the Price Code run out in the summer, and the three options we possess are to offer legislation to the House to renew it, to abandon a prices policy or to have a different one. Since the Prime Minister and others, including myself, have ruled out the second option—namely, that of having no price policy at all—we are left with the choice between a Price Code to be offered again to the House and a new prices policy. I hope to make an announcement on that subject in the new year.
    Mr. Ioan Evans: In view of the fact that the trade union movement has given tremendous co-operation to the Government in respect of the social contract in restraining personal incomes, which has assisted a great deal in preventing inflation going higher than it is, will my right hon. Friend examine the TUC's proposals in respect of economic and industrial strategy, since co-operation is essential if we are to prevent prices going higher and if we are to have a more constructive
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    approach to the problem than we now obtain from the Opposition?
    Mr. Hattersley: The TUC and trade union members throughout the country have made an enormous contribution by accepting the pay policy, which means that they have made personal sacrifices. I hope that we can continue to rely on that support during the coming year. We must convince them that we are operating relevant and realistic economic policies on a wide variety of subjects. I shall try to convince the TUC of that fact in initiating my new prices policy.
    Mr. Neubert: As the right hon. Gentleman has announced that the rate of inflation will fall to 15 per cent. in the last quarter of next year, will he say how prices will hover in the meantime?
    Mr. Hattersley: It is never wise to make predictions round about or within 1 or 2 per cent. I stick by what I have said in the last three months. We are on a plateau, and prices will hover around 15 per cent. and there will be a reduction some time next year. It would be foolish to attempt to be more precise than that.
    Mr. Giles Shaw: When the right hon. Gentleman next meets the TUC and discusses prices, will he bear in mind that a large number of trade unionists do not like price freezes, particularly in the nationalised industries? Will he confirm that it is no part of his intention to reintroduce a price freeze in those industries?
    Mr. Hattersley: The problem in terms of nationalised industry prices which the consumer has suffered in the last two and a half years flows from the fact that the freeze was applied by the Conservative Government. We have had to negotiate ourselves out of that difficulty. Two things must happen with regard to nationalised industry prices. First, they must be realistic in terms of the efficiency of the industry, and, secondly, they have to pay proper respect to the other needs of the economy with an adequate prices policy in the general fight against inflation. I think that on balance we are coping with those considerations much better than did our predecessors.

    Food and Drink Industries
    Mr. Giles Shawasked the Secretary of State for Prices and Consumer

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    Protection when he next plans to discuss prices with the Food and Drink Industries Council.
    Mr. Hattersley: I last met the FDIC for this purpose on 10th December. I shall no doubt be doing so again from time to time in the future, though at the moment there are no firm appointments.
    Mr. Shaw: I thank the right hon. Gentleman for that reply. Will he confirm that it is no part of his intention to treat the food industry separately from any other industry and will treat it as another most important consumer industry? Is he aware that interference in the baking industry has had a profound effect on morale in the food manufacturing industries as a whole? Will he please take note that this kind of manipulation of his powers, with maximum price orders and discount structures, tends to worry those who operate in a very competitive industry?
    Mr. Hattersley: On the general question, the food industry is as much a part of the British economy as is any other sector. On the high level of employment and in respect of the need for high levels of investment, I must emphasise that the industry is not being picked on. As regards bread, when I met the representatives of the Food and Drink Industries Council, among their number was Mr. Theo Curtis, Chairman of the Federation of Bakers. If Mr. Curtis asks me to remove all controls from the bread industry I shall do so. My difficulty is that some authorities which have been quoted against me have been the most vocal in the industry with demands that I should continue to participate in the industry. They have been urging me to extend controls over the industry rather than to withdraw them.
    Mr. Rost: If the Minister did not suggest that the price of bread should be reduced by 4p a loaf, why did he not deny that suggestion immediately?
    Mr. Hattersley: I do not believe that it is my job to deny something I have never said. If the hon. Gentleman does not believe what I told the House, I shall not condescend to contradict him yet again.

    Petrol Prices
    Mr. Dykesasked the Secretary of State for Prices and Consumer Protection if he will list the percentage increases in average retail forecourt petrol prices in 1974, 1975 and to the latest available date in 1976.
    The Under-Secretary of State for Prices and Consumer Protection (Mr. Robert Maclennan): The approximate increases were 75 per cent. in 1974, 5 per cent. in 1975 and 2 per cent. in the first nine months of 1976.
    Mr. Dykes: Does the right hon. Gentleman agree that the average trend will be £1 per gallon in a year's time? What will the Government do to prevent that or to delay it?
    Mr. Maclennan: I do not agree with the hon. Gentleman. The increase in the price of petrol has been substantially below that of inflation generally.

    Food Subsidies
    Mr. Maddenasked the Secretary of State for Prices and Consumer Protection what foodstuffs are at present covered by food subsidies; and if he will make a statement about future arrangements.
    Mr. Hattersley: The foods currently subsidised are milk, butter, cheese, bread and flour. As announced last week, the butter subsidy will be abolished, the cheese subsidy will be reduced on 28th December and the remaining subsidies will be phased out over the coming months.
    Mr. Madden: Will my right hon. Friend say what representations he has received to date from the TUC about accelerating the phasing out of food subsidies? Will he also say what will be the effect on the RPI of the phasing out of such subsidies, particularly in respect of elderly people, bearing in mind that the fundamental shortcomings of the CAP are having a distinctly adverse effect on such people who, as a result of that policy, face mounting food bills?
    Mr. Hattersley: I have had no direct meetings with the TUC, although in its statement last Wednesday it showed a

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    general understanding of the Government's overall economic position. The statement said that the TUC would regret the phasing out of food subsidies. I knew that and I understood it well. At a time when there needed to be substantial reductions in public expenditure, I took the view that there were many other candidates for cuts which I could justify much less easily than I could reduce in subsidy terms.
    I took that decision for two reasons. The first was that subsidies made only a marginal effect on the RPI, and I think that they now stand at about 0·4 per cent. [HON. MEMBERS: "Hear, hear."] As Opposition Members who are now cheering will remember, that is not what subsidies were supposed to do. They were supposed to protect certain sections of the population about whom my hon. Friend the Member for Sowerby (Mr. Madden), if not hon. Gentlemen opposite, is anxious. They were supposed to protect those sections in the early months of the Government's life when benefits were low. Over the last two and a half years food prices have risen by 60 per cent. and pensions 90 per cent. Therefore—
    Mr. Speaker: Order. Christmas comes at the end of this week, and there is no sense in the right hon. Gentleman giving such long answers.
    Mr. Marten: On the subject of food and drink, and slightly switching the subject, will the right hon. Gentleman explain why the commodity of coffee is being referred to the Price Commission? Is he aware that 90 per cent. of the cost of manufacturing instant coffee relates to coffee beans, purchased on world markets? Will the inquiry have more to do with retail margins? I have one coffee manufacturer in my constituency, and I would only add that I certainly do not want any more unemployment in my area.
    Mr. Hattersley: The inquiry will be into all the reasons for the increase and it will take place because consumers have shown great concern on this issue. One of my duties is to demonstrate why prices are going up as well as to demonstrate sometimes that they should not.

    Retail Prices
    Mr. Tim Rentonasked the Secretary of State for Prices and Consumer Protection what is his most recent estimate of
    20
    the effect of the devaluation of sterling during 1976 on retail prices in 1976 and the first six months of 1977.
    Mr. Adleyasked the Secretary of State for Prices and Consumer Protection by how much the devaluation of the £ sterling, since October 1974, has affected food prices.
    Mr. Hattersley: Estimates of this kind are always subject to considerable uncertainty. But depreciation over the 11 months to November 1976 might be expected to have increased the retail price index by about 3 per cent. by the end of this year and by a total of about 5 per cent. by the second quarter of 1977.
    As I explained on 15th November, it is not possible to distinguish the effects of sterling depreciation on food prices.
    Mr. Renton: Does not the right hon. Gentleman think it tragic that the international loss of confidence in this Government has led to such a decline during 1976 in the value of sterling, which in turn has led to a further rise in the retail price index? To what extent does the right hon. Gentleman expect the trend to continue next year?
    Mr. Hattersley: Of course I think that the sterling depreciation, which has had the results that the hon. Gentleman describes, is tragic. I doubt whether I would quote the same causes for that depreciation as would the hon. Gentleman. As to the future, the Chancellor of the Exchequer made clear a week ago that we believe that the measures we then took have halted the depreciation of sterling, which was one of their principal intentions. I am sure that it will succeed.
    Mr. Adley: Since all three major postwar devaluations have taken place under Labour Governments, and since the Secretary of State admits that devaluation of the £ sterling increases food prices, does he not agree that the obvious and logical corollary is that Labour Governments result in higher food prices?
    Mr. Hattersley: The hon. Gentleman is making a well-known philosophical error, which I would explain to him were Mr. Speaker to allow me to give longer answers.
    Mr. Skinner: Does my right hon. Friend remember that during and before

    21
    the referendum debate many of us on the Labour side of the House argued that prices would rise substantially if we remained in the Common Market and that the pound would suffer as a result? Does he also recall that he was one of those who went round the country, with others from the Opposition, and said on public platforms that we would benefit as a result of remaining in the Common Market? Will my right hon. Friend, as shortly as possible, apologise from the Dispatch Box?
    Mr. Hattersley: I would do so, perhaps not shortly, if I thought an apology were necessary. I stick by my original contention that the economic difficulties that this country has faced since June 1974 would have been substantially greater had we been outside the Common Market.

    Inflation
    Mr. MacGregorasked the Secretary of State for Prices and Consumer Protection whether he now has a firm date for the target for reaching single-figure inflation; and if he will make a statement.
    Mr. Hattersley: I cannot add to what my right hon. Friend the Chancellor of the Exchequer said in reply to the hon. Member for Romford (Mr. Neubert) and my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) on 16th December, when he made it clear that, given the continuing moderation in the increase in wage costs, the rate of price inflation should start falling again next summer.
    Mr. MacGregor: Does the right hon. Gentleman admit that that answer shows the massive failure of earlier Government policies to achieve their objectives? Is he also aware that an earlier answer he gave about prices hovering around 15 per cent. and then coming down next year below the level of this year contradicts what the Chancellor said in last week's statement, when he said that the RPI would rise above 15 per cent. next year before it came down to that level at the end of the year? Bearing in mind past errors, can the right hon. Gentleman say whether his forecasts now take into account the probable increase in VAT in April, having regard to the Chancellor's declared objective of getting direct taxation down without any increases in expenditure?
    Mr. Speaker: Order. My remarks earlier about long answers apply also to long questions.
    Mr. Hattersley: I do not think that there is any inconsistency in what the Chancellor and I said. "Hovering" means hovering up occasionally as well as hovering down. Of course, no one has ever tried to deny that the progress of our economic policy has had some difficulties.
    Mr. Gow: That will be in "Quotes of the Week" in the Observer.
    Mr. Hattersley: We are doing things now which are painful but necessary. The hon. Gentleman will understand that, whatever the Chancellor has decided for the Budget of next April, he has not told me, and even if he had I would not tell the House.
    Mrs. Sally Oppenheim: May I congratulate the Secretary of State on his command of the euphemism? May I ask him to confirm or deny that, on the basis of the Chancellor's latest figures, prices will have risen by the end of 1977, since the Government came into power, by 86 per cent., of which 30 per cent. is due to the slippages in forecasts that have taken place since the Government embarked upon their attack on inflation? Is it not correct to say that this will cost the average family an extra £16 a year by the end of next year? If the right hon. Gentleman cannot confirm this, will he give the alternative figures?
    Mr. Hattersley: The hon. Lady told the anxious world through the Daily Mail this morning what question she was to ask this afternoon. I had my Department look at it. It thought that it was unwise to make such arithmetical progressions, but as regards whether there was any wisdom in such a method it tells me that the hon. Lady was arithmetically wrong. As for her second question, I do not think prices can have gone up because of slippages in forecasts. Slippages in forecasts do not change anything. They are simply what is written on a piece of paper.

    Consumer Credit
    Mr. Arnold Shawasked the Secretary of State for Prices and Consumer Protection what proposals he has for

    23
    implementing the remainder of the Consumer Credit Act.
    Mr. Cartwrightasked the Secretary of State for Prices and Consumer Protection when he proposes to make regulations to enable consumers to ask the courts to reopen cases of unreasonable credit bargains.
    Mr. Wardasked the Secretary of State for Prices and Consumer Protection whether he will now make a statement on the right of access by consumers to credit reference agency files on themselves.
    Mr. John Fraser: I expect to make regulations and an order early in 1977 which will prescribe the content and method of calculation of the rate of total charge for credit and which will determine which agreements are to be regulated by the Consumer Credit Act 1974. At the same time, I intend to make an order and regulations which will bring into operation the provisions relating to credit reference agencies and extortionate credit bargains and which will start the second tranche of licensing. I hope to make the regulations relating to advertising and seeking business later in 1977. Other provisions will be made effective after this.
    Mr. Shaw: While I warmly welcome such progress as has already been made, may I ask whether my hon. Friend does not agree that the time will soon be opportune to activate those parts of the Act dealing with misleading advertisements in connection with credit bureaux and agencies? Is it not of great importance to many people that the true rates of interest which are being charged should be made patently clear to all? Does my hon. Friend realise that we are anxiously waiting for something to be done?
    Mr. Fraser: It will not be possible to deal with the "truth in lending" regulations for advertising in the context of agreements until we have the second round of licensing under way. While I agree with my hon. Friend in principle, I can tell him that it is much more difficult in practice to devise simple regulations aimed at providing simple information. There are difficulties about specifying an effective rate of credit in regulations.
    Mr. Ward: Will my hon. Friend confirm that after he has made the new regulations, which will be greatly welcomed, it will be possible for individuals to get all the information held on files which concerns themselves? Will they also be able to get information about companies from those files?
    Mr. Fraser: Broadly speaking, they will be able to get information about themselves except where access to a file might reveal confidential information about other people.

    Retail Price Index
    Mr. Michael Morrisasked the Secretary of State for Prices and Consumer Protection what is the increase in the retail price index over the last three months, expressed at an annual rate.
    Mr. Maclennan: The RPI has increased by 19·7 per cent. over the past three months, expressed at an annual rate.
    Mr. Morris: After giving those rather depressing figures, does the Minister think it makes any sense to force up the price of gas, as the Chancellor announced in his recent statement?
    Mr. Maclennan: The extent to which the price of gas might rise following my right hon. Friend's statement is not known at this stage.

    Consumer Protection
    Mr. Simsasked the Secretary of State for Prices and Consumer Protection what measures he proposes to introduce to safeguard the interests of consumers, in implementation of the undertaking given in the Gracious Speech.
    Mr. Hattersley: I would refer the hon. Member to the reply I gave earlier today to the hon. Member for Isle of Ely (Mr. Freud).

    Food Subsidies
    Mr. Montgomeryasked the Secretary of State for Prices and Consumer Protection what is the effect of food subsidies on the retail price index at present.
    Mr. Maclennan: The estimated saving on the RPI is 0·7 points or 0·4 per cent.
    Mr. Montgomery: Is the Minister aware that last week food subsidies were

    25
    reduced by almost exactly the amount which the Opposition urged they should be cut in July, when the Government voted in favour of keeping them at a higher level? Is there, perhaps, a ray of hope in that it has taken the Government only five months to recognise their mistake in this case?
    Mr. Maclennan: Those have been five important months, and I have no doubt that the continuance of subsidies during them will have helped a number of people on low incomes.
    Mr. Gow: Will the Minister tell the House the date on which the Government intend to discontinue food subsidies entirely?
    Mr. Maclennan: Not this afternoon.

    Consumer Advice Centres and Price Survey Schemes
    Dr. McDonaldasked the Secretary of State for Prices and Consumer Protection how many consumer advice centres have been opened and price survey schemes have now been commenced.
    Mr. John Fraser: To date, 113 consumer advice centres have been opened and 290 price survey schemes are in operation.
    Dr. McDonald: I thank my hon. Friend for that answer, but 1 ask him to suggest what advice the consumer advice centres can give to consumers in view of the rise in food prices as a result of action by the European Economic Community and the withdrawal of food subsidies.
    Mr. Fraser: There are things which price surveys can do. They can give information to consumers about where the cheapest goods within a range are available.
    Mr. Rost: What are they costing?
    Mr. Fraser: The cost altogether is about £3 million in a full year for consumer advice centres and price surveys. I was saying that price surveys can indicate to consumers where the cheapest goods are available in a range. The surveys show that there are considerable variations. They enable competitors to fight harder in favour of the consumer.

    CHANCELLOR OF THE DUCHY OF LANCASTER (WASHINGTON VISIT)
    Mr. Tim Rentonasked the Chancellor of the Duchy of Lancaster whether he will make a statement on his recent visit to Washington and on the discussions that he had there.
    Mr. Hooleyasked the Chancellor of the Duchy of Lancaster if he will make a statement on his recent conversations in Washington with representatives of the United States Administration.
    The Chancellor of the Duchy of Lancaster (Mr. Harold Lever): I visited Washington from 13th to 17th November. While there, I discussed general economic and financial questions with leading members of the United States Administration. Our talks were wide-ranging, open and friendly and were marked by a spirit of warmth, understanding and good will.
    Mr. Renton: Although I am delighted that the Chancellor's talks were marked by a spirit of warmth and understanding. may I ask him whether he was not very disappointed that the new swap facilities with the United States are in the amount of only $500 million? Is not this a sign of a total lack of faith on the part of the United States in this Government? To what extent does he believe that all the swaps and standbys announced last week will be able to see us through several months of balance of payments deficits at the rate of £500 million a month?
    Mr. Lever: I was not in the least disappointed. No requests of ours have been refused. The consoling hallucinations of the hon. Gentleman and many of his hon. Friends about the unwillingness of the international authorities and of other Governments to trust the credit of this Government have no basis in fact. As for the future, the massive act of international financial co-operation of which this forms—we hope—a part will be quite ample to see this country through its financial needs in the year ahead.
    Mr. Hooley: Did my right hon. Friend's conversations include any long-range proposals on the part of the United States Administration for a more general reform of the international monetary system, which clearly is not operating now that we have fluctuating exchange rates as opposed to the fixed system which operated so successfully for 25 years in the post-war period?
    Mr. Lever: I touched on wider issues of less immediate importance than those to which I have already referred, and I found widespread recognition of the fact that there were many aspects of the international monetary and financial system that were worthy of study and advance. I have no doubt at all that in the period ahead of us we—that is, the great trading nations of the world—shall have to make further advances in our international financial co-operation to sustain the progress in world prosperity that we are all seeking.
    Sir J. Langford-Holt: The Chancellor said that he had had discussions with the leading members of the United States Administration. Which Administration did he mean? Did he mean the Administration that is powerless before February, or did he mean the Administration that will be powerless after February?
    Mr. Lever: There is only one Administration. Members of the British Government—at any rate, members of the Government now on this side of the House—when they have contact with foreign Governments, have contact with the existing Government who are in power and who will remain the Government in power until pretty well near the end of January. I had no contact with any notional Administration whose personnel could at that time be known.
    Mr. Skinner: Will my right hon. Friend tell me, as a business man who has made a few bob in his time—
    Mr. Russell Kerr: Who—my hon. Friend?
    Mr. Skinner: I am referring to my right hon. Friend. Will he tell me whether he discussed the cock-eyed scheme to sell off £500 million worth of a nationalised industry—British Petroleum—to whoever the lucky bidder is, especially when he, in another capacity a
    28
    short time ago, was chiefly responsible for assembling not all that much but as much as was possible for the State in respect of the oil profits and so on from the North Sea?
    Mr. Lever: The question of British Petroleum did not form part of any discussions in the United States. I do not know whether my hon. Friend wants me to relate this sale and the reasons for it to the possibilities of his emulating in any way my own modest advance in preparing for my old age, but he has a long time ahead of him and I shall be very happy, in the gap between now and then, to assist him in that way too.
    Mr. Biffen: When the Chancellor was in Washington, did the American authorities give any indication whatsover that they favoured a return to a system of fixed exchange rates?
    Mr. Lever: No, Sir.

    INTERNATIONAL MONETARY FUND
    Mr. Gowasked the Chancellor of the Duchy of Lancaster when he last met the Chairman of the International Monetary Fund.
    Mr. Lever: I cannot recall that I have ever met the present Chairman.
    Mr. Gow: May the House take it from that answer that the right hon. Gentleman has not met the Chairman of the IMF? If he meets the Chairman of the IMF, will he ask him whether he thinks that it is sensible for this country to borrow £8,700 million next year?
    Mr. Lever: I do not know whether the hon. Gentleman is confusing the role of Chairman of the IMF, which rotates among the members, with the Managing Director,,Dr. Witteveen. I suspect that he and perhaps many others are in that state of confusion. This is not the kind of general question that is addressed to the Managing Director or the Chairman of the International Monetary Fund, and I therefore do not propose to address it. Neither does it seem to me to be a question relevant to the Question tabled by the hon. Gentleman.
    Mr. Flannery: Are we to understand, therefore, that the IMF now issues its

    29
    orders to the British Cabinet without ever even meeting its members?
    Mr. Lever: I must do my best in the classical manner for my hon. Friend's understanding, but the IMF does not issue orders to the British Government. The British Government's policies derive from decisions of the British Cabinet as supported by Members of the House, and not from the IMF.
    Mr. Lawrence: Did the Chancellor play any part at all in negotiating the IMF loan? If he did, will he tell us in what eventuality the full loan would not be forthcoming?
    Mr. Lever: As the answer to the first part of the question is "No", nothing interesting can be given by way of answer to the second part.
    Mr. Heffer: When my right hon. Friend was in Washington, did he have the misfortune to meet Professor Milton Friedman? If so, did he explain to Professor Friedman that the advice that he gave to Chile to keep inflation and unemployment down has not worked, that under the so-called free enterprise system in that country inflation and unemployment have increased and Chile has got into a hell of a mess, and that we do not need advice from people like him?
    Mr. Lever: In recent months the only contacts I have had with Professor Friedman have been televisual, and that did not give me the opportunity to make the comprehensive comment that my hon. Friend would have wished. When I meet Professor Friedman next, I could perhaps exchange many interesting views with him.
    Mr. Higgins:Despite the initial answer, will the Chancellor say when he expects the draft articles and initial quotas to be ratified and whether the quotas will be substantially less than the $3·9 billion for which we originally applied?
    Mr. Lever: The hon. Gentleman seems to have it in his mind that we applied for $6·9 billion—
    Mr. Higgins:No,$3·9 billion.
    Mr. Lever: Oh, $3·9 billion. The hon. Gentleman ought to read the Letter of
    30
    Intent and the agreement that has been reached. I am not in a position, without notice, to give him the technical details for which the has asked about the dates of ratification and the like. I do not think he ought to worry about the IMF fulfilling its commitments to Her Majesty's Government in terms of the loan.
    Mr. Rost: If the IMF trusts the Government as much as the right hon. Gentleman implied, why is the loan coming in such humiliating instalments, as though we were a fifth-rate banana republic?
    Mr. Lever: That remark betrays an innocence on the part of the hon. Member which he displays over a wide range of topics. These are the usual terms of loan from the IMF, and they have been applied to Governments of the hon. Member's own political complexion. An IMF loan either is or is not a begging bowl operation. If it is a begging bowl operation, it applies to Conservative Governments as well as to Labour Governments.
    An hon. Member: No Conservative Government have applied for such a loan.
    Mr. Lever: The hon. Gentleman who says that no Conservative Government have ever applied for a loan is also showing a degree of innocence on this subject. These are the normal terms of the IMF. They are not humiliating and have nothing to do with bankruptcy. They have a great deal to do with the organised institutional financial co-operation on which the future prosperity of the countries of the world will depend.

BUSINESS OF THE HOUSE (ORDER OF BUSINESS)
Ordered,
That notwithstanding the provision of the Order relating to Business of the House [25th November] any Motion relating to a Memorial to Earl Attlee may be proceeded with at this day's sitting before the Private Members' Notices of Motions provided for in that Order, and that notwithstanding the provisions of Standing Order No. 6 (Precedence of government business) the proceedings on Private Member's Motions, if not previously concluded, shall not lapse until a period after Seven o'clock equivalent to the duration of proceedings upon that Motion.—[Mr. Graham.]

BUSINESS OF THE HOUSE (CONSOLIDATED FUND BILL)
Ordered,
That, notwithstanding the practice of the House relating to the interval between the various stages of Bills of aids and supplies, more than one stage of the Consolidated Fund Bill may be proceeded with at this day's sitting.—[Mr. Graham.]

EARL ATTLEE (MEMORIAL)
3.31 p.m.
The Prime Minister (Mr. James Callaghan): I beg to move,
That an humble Address be presented to Her Majesty, praying that Her Majesty will direct that a memorial be erected within the precincts of the Palace of Westminster to the memory of the late right honourable the Earl Attlee, K.G., P.C., O.M., C.H., and assuring Her Majesty that this House will make good the expenses attending the same.
It is a rare distinction for the House to honour one of its former Members in this way, and the House wisely insists that such a motion shall not be introduced until 10 years after the death of the statesman concerned. Such a period gives an opportunity for a proper judgment to be formed. I believe that I can say in all truthfulness about Clement Attlee that neither the changing perspectives of passing time nor the critical revisionism of modern historians have diminished his stature and his achievements.
If the motion is agreed, an informal Committee of both Houses will, as for previous memorials to past Prime Ministers, be appointed by the Government to advise on the form, site and commissioning of the memorial. Different views have been expressed about the form of the memorial, and this will be a matter for the informal Committee to advise on.
Clement Attlee served in four Governments. The last 11 years was a continuous spell of wearing years, spanning the war-time coalition and the post-war Labour Government. In Churchill's Cabinet Attlee served him as Vice-Chairman of the Defence Committee in the dark and difficult days, right through to the final days of victory.
But, hard though that period was, the greatest challenge in his life came when he succeeded Winston Churchill as Prime Minister in 1945. The task fell to him to preside, in the transition from war to peace, over a people who were emerging exhausted and virtually bankrupt from the greatest struggle of their history. Reconstruction was the watchword in Government among those who were then planning the post-war days, but this was transcended by urgency about the men and women in the Armed Forces, and their state of mind, at that time. This was an urgency that I believe, as one who

33
was outside during the war, did not penetrate into the inner recesses of the Chamber in the later stages of the war. But there was also an urgency about the civilian people as well, because the bomber had brought death, violence and destruction to their very door, and they were more in tune with the men and women in the Armed Services than seemed possible.
To those of us who first crossed the threshold of this House in 1945—and none of us can ever forget the day when we first did so—there was an urgency, there was an impatience, but there was also optimism—
… to be young was very heaven !"
But it was Attlee's task to demobilise the Forces, to reconstruct a bankrupt economy, and to complete the Welfare State with better health, education, housing, employment and security prospects for all, as well as to unwind the Empire and to help rebuild Germany and Europe. It was a staggering task. I do not think that all those who came into the House at that time recognised the magnitude of the task that awaited this country in 1945. But the fact that he largely accomplished it makes his period of office a landmark in our history.
If he were here now he would say, as he often said during his lifetime, that there were many others who surrounded him and helped him in his task, and he never objected that some of them were thought to be bigger than he was. He readily acknowledged the stature of his colleagues. He encouraged their enterprise. He handled their various virtuosities with consummate skill. He regarded his rôle as a co-ordinator and managing wilful and often divergent temperaments as qualifications essential to a Prime Minister.
The habit of working together with other parties, formed during the war, left him with a respect for those who sat on the other side of the House. As he said, in language that only he would use, "You should remember that you do not necessarily think the other fellow's a dirty dog. You hold opposite views, that is all." I still try to remember it, Mr. Speaker, although the hon. Member for Chingford (Mr. Tebbit) sometimes makes that a little difficult.
Although Earl Attlee respected the Opposition, he could be very biting. His
34
style as Prime Minister, as we all know, was in marked contrast to that of Winston Churchill. Attlee presiding at meetings was crisp, businesslike and to the point. Winston Churchill used to invite his Cabinet to accompany him on soaring flights of imagination and eloquence.
That contrast led to an exchange at the Dispatch Box after the war that I recall. Attlee announced a decision on some matter by the Labour Government. Winston Churchill seemed to think that implicit in the announcement was a reflection on his failure to reach a conclusion on the same matter during the wartime Administration. He therefore rose and protested. Attlee replied in typical vein. He said "I must remind the right hon. Gentleman that a series of monologues is no substitute for a decision." Of course, he knew that Churchill had taken many great and far-reaching decisions, but it was typical of the pointed thrust that Attlee would make, and it went home at the time. Churchill and Attlee had a great respect for each other, perhaps because they were so different in their characteristics.
In his dealings with Ministers and with colleagues Attlee was straightforward and direct. He survived and succeeded in a long political career spanning 33 years in the House of Commons, and was Leader of the Labour Party for 20 years. He survived because of his strength of character and his unswerving commitment to democratic Socialism.
Those of us who knew Attlee remember him as a simple, unaffected and modest man, both in his personal and in his official life. He had been well prepared for his greatest post-war task by the constant theme of his life, which from his early days was dedication to the public service.
At Toynbee Hall in the East End, at Ruskin College, serving on Stepney Council as alderman and mayor for a number of years, and in many other fields of activity, his was a life dedicated to advancing the welfare of the British people and to breaking down the notion of two nations. He made no song and dance about identifying with working people. He had no need to. He had a natural affinity with them. Anyone who saw him in Stepney—as I had the privilege to do on two occasions when I accompanied him—recognised that his

35
work and his life among the poor of the East End were not assumed for the purpose of political advancement; it was his natural means of expressing his own character, and this possibly explains his close attachment to Ernest Bevin, to whom he said he felt closer than to anyone else in political life.
What he did was rooted in his humanity, his practicality and his patriotism—Victorian virtues maybe, but none the worse for that. The means he chose for reforming the institutions and improving the lot of working men and women were the Labour Party and this Parliament. He was not activated by dogma or envy, or by some sense of middle-class guilt or by vindictiveness, and therefore he was able to speak for all sections of British society.
One of his greatest tasks was that he achieved a settlement in India. The future of this great sub-continent had always concerned him, even before he came to grapple with it as Prime Minister. He took, without hesitation, the big and controversial decision of fixing a firm date for independence, and then he personally selected Earl Mountbatten, with the agreement of the late King George VI, as the Viceroy who could best carry the policy through. He was right. The Act of Indian Independence was fiercely controversial. But for Attlee and many others who had a passing glimpse of the Indian continent during the war, there was both a personal commitment and a commitment of principle to satisfy Indian aspirations for independence. So he pressed ahead with it, however daunting the problems and bloody the immediate consequences. I do not believe that he had any doubts about what he had done; he was not that kind of man. But what gave him great satisfaction at the end of the day was the letter which he received from Leo Amery, father of the right hon. Member for Brighton, Pavilion (Mr. Amery), who wrote offering his sincere congratulations on the passage of the Act. That single decisive act of statesmanship, for both India and Britain, marks Clement Attlee a place in history, even if he had left nothing else behind.
But it is for many qualities that I ask this House today to agree to erect a permanent memorial to him. As Prime Minister he showed statesmanship and
36
achievement. As a politician he was quiet but had considerable subtle skills. As a parliamentarian he brought to this House the same decency, honesty and integrity in public life as he showed in his private behaviour.
In honouring Clement Attlee the House will pay tribute to him, and through him to the best in the parliamentary and political system which we all serve and which will continue to stand this country in good stead in the years ahead.
3.44 p.m.
Mrs. Margaret Thatcher: May I support the motion so eloquently moved by the Prime Minister. I support it briefly on behalf of my right hon. and hon. Friends, and in being brief I feel that that is a quality which would have appealed to the person whom we are honouring.
The Prime Minister obviously knew Earl Attlee a great deal better than some of us. I knew him only from afar. Above all, he was a great British patriot. He had an outstanding war record in the First World War and an outstanding record of a different quality in the Second World War. This quality of patriotism remained with him throughout his political service and to the end of his life.
Earl Attlee was at the centre of the political stage at a time when there were other powerful personalities upon it. Yet he brought to his own task qualities of a rare distinction which we should never underestimate. These qualities were those of an outstandingly clear mind—and in politics that is every bit as important as a highly intellectual mind and sometimes more so; a decisive mind which was necessary to judge between some of the views urged upon him; and a very courageous mind, because some of the decisions which he took towards the end of his Prime Ministership he had to take alone, and he did not flinch from doing so. Those are three qualities which we should all honour and acclaim and three qualities which will grow and not diminish with the passage of time.
To those people who always watched him from afar I should like to say that there was nothing bogus or artificial about Earl Attlee. He was a person of total integrity and for these reasons I should like to add my voice to that of the Prime Minister in saying why we

37
rejoice with him that he has brought this motion before the House today. We think it is right that we should have a memorial to the late Earl Attlee in this place which, after all, was the home of his great achievements.
3.47 p.m.
Mr. Jeremy Thorpe: It is with some humility but considerable enthusiasm that I associate myself with the motion moved by the Prime Minister and supported by the Leader of the Opposition.
The first occasion on which I attended this House was in the Strangers Gallery when I heard Sir Winston Churchill commend a statue to David Lloyd George and I shall always remember that. I was not privileged to sit in this House with Lord Attlee because, like the right hon. Lady, I came here in 1959 and by then he had been translated to another place. However, I remember him and I was struck by the fact that the shyness and reserve for which he was noted always disappeared whenever he was among young people, showing an interest in them, discussing their careers, and offering sound advice. I remember him particularly as a kind and courteous man, who gave great friendship.
As Prime Minister he received even more than the usual share of vilification which every Prime Minister expects from the Press and the Opposition of the day. However, he had his own reward in that no one would be prepared to deny that he was a man of utter integrity, intense courage and with a profound love for his country.
This is not an occasion on which to evaluate his career. However, I particularly liked his insistence on cutting down on language. I liked the story about the Minister who was sacked and who demanded that Lord Attlee give him an explanation for his dismissal. Lord Attlee agreed to an interview. He sat behind his desk drumming his fingers and said simply: "Not up to the job." That was an admirable test, and a criterion which I would commend to the present Prime Minister.
For a man who in 1927 was a member of the Indian Statutory Commission, he must have been immensely proud to be the architect of Indian independence, when the Empire disappeared and the
38
Commonwealth was created. He was also a man who gave an enormous amount of time and energy to the East End of London, and he must have had immense satisfaction to see the completion of the Welfare State. In this country we contrive to produce men who bring about immense social changes without revolution.
To be deputy to Winston Churchill must have been a very taxing experience, not least of all in time of war. From 1942 to 1945 he was Churchill's deputy, and this must have taxed all his qualities of firmness and tact and entitles him to a share of the considerable credit as one of the architects of victory in the last war.
I understand that there is quite a controversy about the form of the statue and where it will be. I do not intend to enter into that, but I hope that it will be a worthy statue. There are three plinths in the Member's Lobby and it would be particularly appropriate if Clement Attlee could occupy one of them. He would be in appropriate company because one of them is occupied by Asquith, who was the pioneer of the Welfare State, and it was Earl Attlee who completed that edifice. He would be in the company of Lloyd George and Winston Churchill, the latter of whom was the architect of the victory of the Second World War. Clement Attlee, too, was a contributor to that victory.
I hope that we shall have no mealymouthed compromise and that we shall give him a place in the Member's Lobby. He was a great servant to this country and a considerable statesman. A memorial to him will be a pride to us all, and add lustre to those who are already commemorated here.
3.52 p.m.
Mr. Donald Stewart: Although I did not know the late Earl Attlee, or see him at any time, I am fully aware of the great service which he did in war time and peace time. I associate my hon. Friends with the tributes paid to him.
3.53 p.m.
Mr. Robert Mellish: I associate myself with the tribute paid by the Prime Minister. I had the privilege of knowing Earl Attlee and I want to tell the House a story which typifies him

39
and backs up what the Leader of the Opposition said.
I had been an hon. Member of the House for only a few weeks when a constituent who had been a prisoner of war of the Japanese asked for my advice. He said that he was a lance-corporal but that after only 17 days in that rank he was made a prisoner of war. He was in a terrified state both mentally and physically. My constituent explained that he had been paid his back pay as a private. On his own initiative he had written to the War Department insisting that he was a lance-corporal and should be paid accordingly. He was told that he could not, because a man had to serve 21 days in a rank before qualifying. The man explained that that was impossible because after 17 days he was made a prisoner of war.
I raised the subject on the Floor of the House but I got no satisfaction from the Secretary of State for War. I then raised the issue on my first Adjournment debate. With fear and terror I raised the question to an empty House in what is now the Lords Chamber. I got the same reply. I did not know what to do. But an obscure Back Bencher, such as myself, approached me and explained that I must see the Prime Minister who was pro-Army and would never stand for that situation. He told me that I must see Mr. Arthur Moyle, the Prime Minister's PPS, who was father of the present hon. Member for Lewisham, East (Mr. Moyle).
I was called before the Prime Minister and, as usual, he was doodling and did not lift his head from his desk. I told him the story and the Prime Minister asked me "Do I understand that the man was refused payment because he had been lance-corporal for only 17 days?" I told the Prime Minister that that was the point of the story. He shouted "Leave it, leave it".
Apparently the Prime Minister saw the Secretary of State who was coming up for a promotion and he threw all my papers at him and demanded "Answer that." The Prime Minister was in a terrible state and told the Secretary of State "Pay him". He told the Secretary of State to pay not only my constituent but every man who had served in a Japanese prisoner-of-war camp anywhere.
40
I received a letter saying that the matter had been reconsidered and the penultimate paragraph read:
"A copy of this letter has been sent to the Prime Minister."
At that time there was a fine Conservative Member in Parliament, Brigadier Sir John Smyth, V.C., D.S.O., M.C.—an extraordinary man. He had been a prisoner of war of the Japanese. We went together to Mr. Attlee, as he then was, to ask for more money for prisoners of war in Japan. Sir John had photographs of the prisoners, and when shown those photographs Attlee cried. He said he would get more money for those prisoners, and he did. He got another £1 million for the prisoners—prisoners of the Japanese. I do not like the Japanese even today. I must get that on record.
Clement Attlee was a great man and a credit to politics. He gave everyone an example of what honesty in politics is all about. Now that history is coming to be written people will say that this man truly was a great Prime Minister.
3.58 p.m.
Mr. G. R. Strauss: As father of the House I should like to add to what has been said. I knew Earl Attlee well and I am one of those in the House today who knew him when he was Churchill's deputy. Mr. Attlee, as he was then, was a surprisingly good Prime Minister—surprisingly, because he had appeared, until elevated to the high office of Leader of the party, to have serious defects. Many people at the time thought that he was not big enough for the job and that he was too weak to carry out the important task of Leader of the party, to say nothing of Prime Minister. But he proved that we were all wrong and turned out to be a great Leader of the party and a great Prime Minister.
His greatness lay not in his powerful oratory but in his simple and direct speeches, which were the more effective for that. People knew that he felt deeply about everything that he said. There was never any doubt that he meant what he said. If anyone approached him, he would be direct with them, would not give them false hopes and would carry out anything that he promised to do. In his personality, in his position during the war and in his premiership, he proved himself to be a great parliamentarian.

41
A statue in the House is overdue. I hope that it will be effective and will be erected in a good place.
Mr. Speaker:I wish to add a word. I hope that the House will forgive me if I remind hon. Members that I was an hon. Member at the time. Mr. Attlee, as he then was, set for all time, for Prime Ministers and for Leaders of the Opposition, the example of brevity.
Question put and agreed to.
Resolved, nemine contradicente,
That an humble Address be presented to Her Majesty, praying that Her Majesty will direct that a memorial be erected within the precincts of the Palace of Westminster to the memory of the late right honourable the Earl Attlee, K.G., P.C., O.M., C.H., and assuring Her Majesty that this House will make good the expenses attending the same.
To be presented by Privy Councillors or Members of Her Majesty's Household.

INDUSTRY AND COMMERCE
3.58 p.m.
Mr. Ian Stewart: I beg to move,
That this House urges the Government to alleviate the growing burdens imposed on businesses by official regulations and requirements.
After that introduction by Mr. Speaker I hardly know what to say. It was by happy chance that my motion was drawn today to be debated after that concerning the memorial to Earl Attlee, because the first after-dinner speech I ever made was to welcome him back to Haileybury School. After my few halting words of welcome, I explained that I hoped one day to follow Clement Attlee to the House of Commons. He said "You will have to do a great deal better than that but I think that you will." That was a happy illustration of his sense of realism and encouragement which marked his contributions to the House as well.
When I realised that it would be my good fortune to have my subject for debate taken first, I decided to use the opportunity to call attention to the damage caused to industry and commerce by an excess of Government bureaucracy. Since the motion was first tabled I have been inundated by offers of help and information not only from firms in my own constituency but from people elsewhere. I must state in public my apologies to all those who have given me offers of help and information by letter, by telephone and by telegram. I have tried to take account of them and to distil the essence of what they were saying for the benefit of this debate.
I seem to have chanced upon the fuse of an explosive situation. There is no doubt that the problem is much more widespread and dangerous than I had understood it to be. In fact, I have become so snowed under with paper in the last few days as a result of the coming of this debate that I am beginning to know how people really feel about this matter.
To open the discussion, perhaps I may quote a typical example of what has come my way. It is a telegram from an important chemical company in Royston,

43
which is the largest employer in that area. It says,
"During the last two years the burden of Government legislation and the insatiable appetite of Government Departments for statistical returns, particularly in respect of the Price Code, have necessitated taking on an additional 12 people. They make no profitable contribution to our operation and make it increasingly difficult for us to compete in the export market. We employ 850 people at Royston and no supervisor and manager is entirely free to carry out the job of producing and selling goods. Their time is increasingly spent on providing information for Government."
I am not primarily concerned today with the financial burdens on industry, although of course it has to contend any way with record rates of inflation under the present Government, with record interest rates as well, with levels of direct personal taxation which amount to confiscation, and with threats, by capital gains tax and capital transfer tax, to the very survival of the smaller businesses. Demoralising as these may be, they are matters that are frequently raised in the House. This afternoon I want to deal, as the motion says, with the red tape and paperwork that are gumming up the works of so much of British industry and commerce today.
Some of this, indeed, relates to taxation. One of the points that has been made to me time and again is that having a multi-rate system of value added tax doubles the amount of work involved. I have no doubt that a return to a single rate at the earliest opportunity is essential. This is a point that has been communicated to me by large companies and small companies.
Mr. Max Madden: The hon. Gentleman has just identified VAT as one of the burdens on industry and commerce. Will he confirm that VAT was introduced by his Conservative Government and that it was imposed as a requirement of Common Market entry, and that the Common Market is perhaps the biggest bureaucracy ever dreamed of by man?
Mr. Stewart: The single-rate VAT that we introduced was widely accepted as an improvement in the system. The 8 per cent. rate and the extra luxury rate, which were introduced in 1974 as one of the cheap attempts to buy electoral votes in
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October 1974, are the root of all the problems. I had not intended to make a party-political point about that matter but, as the hon. Gentleman has raised it, I hope that everyone will understand that that was the reason lying behind the multi-rate.
Another point in relation to VAT is the effect of inflation on the starting point for registration. It is a matter of urgency that the turnover figure for registration should be significantly increased. It has been estimated that 95 per cent. of those who are registered to pay VAT contribute only 5 per cent. of the yield. Taking the cost at £1.40 per hour of work done for the Government, that is equivalent to the whole of the 5 per cent. yield of the tax taken from those people. That is a problem that has come with inflation. I suspect, therefore, that the problem is getting worse every day.
Some figure provided in July by Thorn Electrical Industries showed that in the previous 12 months £1·2 million had been spent merely notifying hirers of television sets about the changes in the luxury rate of VAT. Even so, I have no doubt that if we could move to a single rate of perhaps 10 per cent., which would give a higher revenue, the saving in administrative cost alone would make it widely welcomed.
Another problem which is related to finance but also involves a heavy administrative burden is that of the Price Code. I think that I had better let it speak for itself. I should like to read an extract from Document PDS 17, of August 1976, about investment provisions, which was received for the elucidation of the problem in relation to the articles under the Price Code by a laundry firm in Hitchin. The document states:
"Application of the relief to net profit margin reference levels.
3.7 The reference level of a profit margin unit entitled to investment relief may be increased by the number of percentage points which result from expressing the relevant expenditure (see para. 3.5) as a percentage of the unit's estimated turnover within control for the relief year (see para. 3.4). The revised reference level will apply throughout the period of the relief year; see also Part 5 for continuing relief in the period following the expiry of the relief year. An illustration is given in Annex 1. It should be noted that the permitted increase in the reference level is additional to any other modification of the

45
reference level under any other provision of the Code. Equally, any modification of the net profit margin reference level under any other paragraph of the Code must be calculated without "—
underlined—
"taking any increase permitted under the investment relief provisions into account."
How on earth is that sort of language comprehensible to any but the largest companies in the country which employ professionals to advise them on such matters?
Mr. Victor Goodhew: The Minister of State will not answer because he was not listening.
Mr. Stewart: I believe that Imperial Chemical Industries has estimated the cost to be over £500,000 a year and that Unilever has estimated the cost to be £300,000 a year—just to comply with the rules of the Price Code and to process their applications.
Yet more perverse than this in many ways is the effect of the whole range of laws and regulations which any business these days must face. I must, though briefly, mention these: the Factories Acts, employment protection, fair trading, safety at work, redundancy payments, training boards, contracts of employment, consumer credit, wages councils, trade descriptions, price codes, shop and office premises, sex discrimination, and so on. Much of this is no doubt well-meaning and desirable in concept in some respects, but cumulatively and in total it is devastating.
I should like to quote again from what has been said by a small business in North Hertfordshire, a garage, motor sales and transport hire business. The financial director says,
"Since the present Government came into power the multiplicity of legislation and regulations particularly in the area of employment and industrial relations have taken up three to four times as much of my time as previously was the case. I would estimate that at least 20 per cent. of my time is involved in keeping abreast of, and ensuring that we comply with, Government legislation regarding employment, PAYE, VAT, health and safety, etc., etc. … Other members of our staff including Managers and our Accountant are involved in additional work as a consequence. We have recently had to employ a full-time person to cope with additional employee's records which we have to keep for our own protection. Alt this in the context of a small
46
Group which employs less than 100 people.…
It may be that we could even accept this if the legislation was not so one-sided and totally in the interest of the employee without any consideration for the employer. We have the added problem that being a service industry we are looked upon by the Government as some kind of parasite even though we provide a vital service."
On top of this there are a number of general and specific problems that companies come across. Again I shall quote one to give an example. It is from a pharmaceutical company in Hitchin:
"In so far as the pharmaceutical industry is concerned, the Medicines Acts of 1968 and 1970 are onerous, to say the least. These … are designed to guarantee the quality, safety and purity of all medicinal products. Whilst I would not disagree with the aims, no distinction is made between the practices of ethical pharmaceutical companies and proprietary medicine companies, such as ours. Thus, we have been obliged to incur capital expenditure at a level … not justified by strict necessity or by the market price of our products, in order to comply with the provisions of the Acts and avoid suspension of our DHSS licences, which would automatically put us out of business."
Examples of this sort of thing can be multiplied many times over.
However, a more general consideration that affects a great number of businesses is that of pensions. The requirements for contracting out of the State scheme have only recently been made available, yet they involve, quite properly, making suitable amendments in many cases to existing benefits provided under individual private schemes. Three months' notice has to be given to employees and meaningful discussions must take place. This will involve already overworked personnel officers in additional burdens.
If there is any delay in obtaining approval by the Occupational Pensions Board to contracting out schemes—and that seems likely in view of the bunching of applications—it could mean that many schemes would not be approved by 1st April 1978 the date on which the new regulations come into effect. In addition, everyone who runs a pension scheme has had to cope with the difficulties imposed by the pay policy. I do not need to cite the pay of hon. Members as an example of the lengths which have to be gone to to protect and preserve pension rights at a time when incomes are distorted by pay policies. This inevitably brings greater burdens of administration.

47
So much has already been said in other contexts about the Employment Protection Act and the Sex Discrimination Act that I shall refer to them only briefly, but they are relevant here. Reports are already coming in of time and money being wasted in the process of advertising jobs under the Sex Discrimination Act. We have all heard of advertisements for fire persons with 36-inch chests. Any local trader or local newspaper could give us examples of the difficulties for local businesses in properly framing advertising in line with the Sex Discrimination Act.
However, the Employment Protection Act is much more widespread. What has been expected and predicted is beginning to happen. It is a measurable effect on the attitudes of employers who in most cases used to be able to sort out these things quite sensibly with their employees, but now feel so hidebound by the regulations that they dare not step over the limit.
A good example of this is the six months' period after which the full protection of employment comes into action. If a worker is on a trial period and he is not 100 per cent. satisfactory or has not completely proved himself at the end of that period there is inevitably a temptation for the employer to say "Goodbye" to him before all the provisions of the Act come down upon the employer's head. I know of instances—although I cannot quote them with references—where the benefit of the doubt has not been given by the employer, not because he did not want the employee, but because the cost to him if his judgement was wrong would be too great.
Just as the Rent Act dried up tenanted accommodation—although it gave security of tenure to those who already had it—so the Employment Protection Act will have a similar effect on jobs for younger women. It may be all right, for those in jobs, but young women will not find it nearly so easy to get a job in future. The pregnancy provisions, which were widely discussed in this House during the passage of the Bill, mean that there will be a bias against giving jobs to younger women because personnel officers will have it in mind that difficulties may arise.
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Another perverse effect of what is again a well intentioned Act is that because of the burdens on an employer of having full-time employees, employers are often seeking two part-timers to do the same job. They will employ married women to do the job in their spare time rather than give a full-time career job to someone who may need it so much more.
No debate on this subject would be complete without reference to the problem of filling in forms and the general burden of paper work which has hit British industry and commerce in recent years. In an Adjournment debate in April my hon. Friend the Member for Harborough (Mr. Farr) drew attention to this in the context of a company in his constituency, a specialised power engineering company employing 34 persons. In one week it received 25 official publications running to 283 printed pages on questions, information, advice and requirements. I shall not repeat the details, but they can be found in Hansard for 2nd April 1976. In that debate my hon. Friend made the interesting suggestion that the Government should try to produce a monthly consolidated issue of all this bumf so that at least some order might come out of the chaos. Some of the questions that are asked in these forms are foolish.
There is the example of a Hoylake company with a work force of 38. In 1974 the company believed that it might qualify and it asked for a £2,000 grant towards the installation of a computer. A questionnaire was sent to the company from a gentleman in Whitehall and one of the questions was "How many trees are there in your garden?" Unfortunately, this company had two too few employees in the productive sector to qualify for a grant. When it looked into this problem it found that if a man stacked castings in a non-productive area under a tree, he was counted as nonproductive. If he stacked castings in a productive area, he was counted as being in productive employment. In that finest of distinctions, two members of the work force of this company were found to be non-productive workers, and the grant was refused.
There is another case, that of Brown's Colour Printers in Glamorgan, subjected to receiving a quarterly issue of a 15-page

49
questionnaire containing 129 questions. Poor Mr. Brown found it difficult to answer all the questions. Eventually, because he could not do so, he received a letter from the legal department of the Department of Industry. This prompted him to make an attempt to answer the questions in order to hold the law at bay. He was rather daunted when he came to question 69. The note said:
"Against heading 69: for example, music and books containing music, art reproductions, photographs; government, company and other authoritative matter—such as White Papers, acts, by-laws, company and other reports and accounts, prospectuses, insurance policies, passports, pension books, bank passbooks, rule books, forms and questionnaires, examination papers, playing cards, albums (stamps or photographic), transfers and plastic base and surface overlay."
After hours of work Mr. Brown came to the conclusion that the only one which concerned him was examination papers. They were not produced during the specified period of return, so the answer to question 69 was "nil". That sort of thing is going on all the time.
My hon. Friend the Member for Arundel (Mr. Marshall) succeeded in getting an answer on 1st December from the Department of Industry about its share register survey. This has cost £115,000. According to the Minister the survey is purely for statistical purposes and is not intended as a basis for legislation. During the year ended October the Department of Industry is on record as having distributed 500,000 forms to companies involved in industrial production, and 340,000 forms to firms in the distributive trades. No wonder that the Business Statistics Department of the Department of Industry employs 1,000 inflation-proofed civil servants to produce and process all this stuff for us.
Mr. Goodhew: Does my hon. Friend agree that civil servants should be flame-proofed as well? It was announced on the wireless the other day that the Government Statistical Office had said that those who ate most in this country were the people in the North-East, because they liked buttered scones. What sort of value is that information to the country? How much does it cost to obtain?
Mr. Stewart: We shall have to say to them, "Let them eat paper". They
50
might be able to satisfy their appetites that way.
Where does all this lead us and the many companies that are so harassed by this paper work? I quote from the chairman's report of a medium-sized power company in the Midlands:
"In … recent years, we have been subjected to increasing control by burgeoning official bodies wielding wide statutory powers and we now expend much time and energy in completing multitudinous forms and satisfying exhaustive enquiries. … It would seem that a deal of the information we are required to provide is either irrelevant or of very limited practical use and, furthermore, we view with disquiet a tendency for official enquiries to include with in their scope much that is of innately private concern. We find this burden of bureaucracy ever more oppressive and costly to bear."
What is true of industry and commerce in general is true in greater part of the smaller firms, and here I should like to say how helpful it has been to have information available this afternoon from the Small Business Bureau. The fact is that 25 per cent. of our GNP is produced by small businesses, and they provide more than one-third of the jobs in the private sector.
The Minister of State, Department of Industry (Mr. Gerald Kaufman): It would be interesting to the House, and helpful to me in seeking to respond to the debate, if the hon. Gentleman would tell us the basis on which these statistics are compiled.
Mr. Stewart: I do not have the basis before me, but I shall be glad to communicate it to the Minister if I can before 7 p.m., or whatever the relevant time may be. Unfortunately, I do not have a battery of civil servants at my elbow who can run backwards and forwards with notes to keep me briefed.
The smaller companies in this country are a great source of invention. They have good industrial relations. They tend to be labour-intensive and so produce jobs that are so much needed. Many provide a reliable personal service. Their greater efficiency is indicated by the rate of return on capital, which is above the average in the country as a whole. Above all, smaller businesses have a fine record of exporting. Most of them are managed by two or three people, and often it is the burden of democracy which to them is the last straw.

51
I should like to quote briefly from a letter written by a firm of local builders Hitchin. The writer says:
"… the figures required"
—that is for the Annual Census of Production—
"bear no relation to the figures we are obliged to supply to our accountants at the end of the financial year, and therefore require us to spend many hours extracting same."
That sort of thing is happening all the time.
I think that it would be right for a class of special company to be created which could be exempt from the great mass of bureaucracy and regulation that faces industry and commerce. After the Bolton Report of 1971, my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) was appointed Minister with special responsibility for small businesses. I believe that the present holder of a comparable appointment is the hon. Member for Keighley (Mr. Cryer). That appointment seems to be a calculated insult to the private sector in view of the fact that the hon. Gentleman's political career has been dedicated to the disparagement of private companies. The only comfort is that his efforts on behalf of small businesses have been so inconspicuous that a week ago today at Question Time his hon. Friend the Member for St. Helens (Mr. Spriggs) had to ask him who really was the Minister responsible for small businesses. By contrast, my hon. Friend the Member for Basingstoke (Mr. Mitchell) has been a far more powerful advocate of the interests of smaller businesses than has any Government Minister, and to have done that from the Opposition Benches is a highly creditable performance.
There are many precedents for exempting smaller companies from the mass of onerous bureaucratic and legal requirements. For instance, there is the VAT starting point, corporation tax exemption, reduction at the lower level of application of the Price Code, and so on. it would be helpful if a new category of exemption could be extended to all companies below a certain level of turnover, staff or profit, or whatever it may be.
Mr. Kaufman: How would the hon. Gentleman seek to ascertain which com-
52
panies fall within the limits which he proposes should be exempted?
Mr. Stewart: I have no doubt that if companies felt that there might be some benefit from or relevance to the information that they were providing they would be only too happy to provide it. The cumulative effect of all this is becoming disastrous.
Mr. Geoffrey Finsberg: If the Government's statistical department is as efficient as the Government claim, one extra feed into the computer would provide the names of the firms falling below that margin and thus disprove the old debating point that the Minister tried to make.
Mr. Stewart: That is probably true, and that is a helpful intervention. Some of the information collected by the statistical department is used for the Government's economic forecasts, and I should have thought that that made the case without any more being said for some reduction in the provision of information.
Morale in small businesses is low, and it has been lowered partly by this unnecessary burden of paperwork and bureaucracy. The Government's tax and pay policies treat skilled and qualified people, such as managers and accountants, as some sort of criminals against society. Their efforts and success are penalised and resented as anti-social. These are the people whom we should encourage. Their energies should be devoted to manufacturing and selling, but already there is a big credibility gap about the Government's industrial strategy and unless they do something about this problem, it will get very much worse.
To illustrate the difference between the attitude of industry and that of the Government to the problem I should like to quote from a letter written by the managing director of one of our engineering companies. He said:
"In industry when we seek to economise, we eliminate all bureaucratic and indirect costs, so that the output remains unaffected, but its unit cost is lowered.
All Governments faced with the same problem seek to reduce the output of product … whilst leaving untouched the bureaucratic structures. The unit cost naturally increases."
Unless that is reversed there will be serious consequences not only in the long run but in the shorter run, too.

53
Those in industry can no longer afford the burden in money or time of responding to the interference by the Government. They are gradually being suffocated by the avalanche of rules and regulations. If the Government are not careful, British business will soon become the Pompeii of the twentieth century, smothered and fossilised by the endless eruptions of our bureaucracy. I hope that the motion will commend itself not only to the House but to the Government before the damage becomes irreparable.
Mr. Deputy Speaker (Mr. Oscar Murton): Mr. Speaker has asked me to say that it might be for the convenience of the House if I inform hon. Members that as the debate on the previous motion on a memorial to Earl Attlee lasted for 26 minutes, the debate on Private Members' motions will now continue until 7.26 p.m.
4.27 p.m.
Mr. Robert Kilroy-Silk: First, I congratulate the hon. Member for Hitchin (Mr. Stewart) on having come first in the Ballot and putting this motion before the House and, secondly, I commiserate with him for having failed dismally to make his case. The only evidence that the hon. Gentleman adduced for the rather generalised complaint that he brought before us was a series of telegrams and letters from his constituents.
I am sure, Mr. Deputy Speaker, that you are aware that there is not an hon. Member who could not produce the same kind of letters, except that we on this side of the House recognise that most of those who write such letters are politically motivated and inspired and that what they say bears no relation to the facts. The hon. Gentleman was attempting to produce evidence to show the damage caused to industry. In fact, he did not mention the word damage during his speech and he has not shown any of the damage that has been
"caused to industry and commerce by an excess of Government bureaucracy."
We have had no illustration of the damage to either industry or commerce. We have had no indication of the so-called excess of bureaucracy. I am sure that there is an excess of bureaucracy. I am sure, too, that there is a little fat in the Civil Service that we could pare. But
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the hon. Gentleman did not illustrate it. He did not indicate specifically and directly the areas in which we should be paring the size of the bureaucracy.
The hon. Gentleman complained that small business men and small industries were asked questions, and he mentioned specifically a firm in Hoylake that was asked to answer a series of questions because it was asking for a grant of £2,000. I appreciate that the company felt that it was an intrusion to have to justify its need of £2,000, but after asking the Government and the taxpayer—because it is taxpayers' money that we are considering—to supply some money, the first should be required to account for its need.
The hon. Gentleman is not least among Conservative Members who complain about the disbursement of taxpayers' money. He is, no doubt, one of those who complain about scroungers and the amount of social security money that is handed out, yet here he is saying that we should give money to private industry with no control over that money and no accountability for it. He is saying that we should give a firm £2,000 to spend but the firm should not be asked questions about whether it needs the money, whether it will use it effectively, and whether it will be a beneficial use of taxpayers' money.
If a business man, whether or not he be a small business man and whether he be in Hoylake or anywhere else, wants public money in however small or large an amount, it is surely incumbent upon him to justify his request and to give his reasons, whatever questions are asked by the appropriate department. I find it strange that the hon. Gentleman should take exception to that.
The hon. Gentleman has talked occastionally about some of those people who have to answer detailed questions when they want money from social security. Now he complains on behalf of business men asking for £2,000 from the Government because they have to answer questions about their need for it. The hon. Gentleman should see the kind of questions that my constituents have to answer and the way they are means-tested when they are asking for nothing more than a miserable pittance with which to sustain themselves and their

55
families. That is a far more important and crucial area over which the hon. Gentleman could shed his crocodile tears.
Mr. Kaufman: Perhaps my hon. Friend, in this exceptionally effective passage of his speech, could also ask the Opposition about the questions required to be answered under the Conservative Government's Housing Finance Act before any of his constituents could get either a rent rebate or a rent allowance.
Mr. Kilroy-Silk: Precisely. This is the whole area which divides our society. It seems that one set of rules is to apply to one type of person and another set of rules and attitudes is to apply to other people. It is quite normal for hon. Members opposite not to make complaint about the intrusions into the private lives of individuals who happen to be unemployed, or who live in inadequate housing, or who are low paid, or who happen, through no fault of their own, to be inadequately or not educated. Hon. Members opposite make no complaints about intrusions into such people's private lives, when these people are having to apply either for supplementary benefit or for unemployment benefit.
Nor did hon. Members opposite complain about intrusions under the Tory Housing Finance Act—now, happily, repealed—or under a host of other provisions. But they complain bitterly about the VAT-man entering a small business man's home and about a few trivial—and I accept that they may be trivial—questions on a form that a business man has to complete.
However, the hon. Member for Hitchin gave a long and interesting list of the Government's achievements, such as the Industry Act, of which we are proud, although it has not done as much as it should, but at least is a start; the Employment Protection Act; the Health and Safety at Work Act; the Equal Pay Act; and the Sex Discrimination Act. Indeed, at one stage when he was reciting that list I thought that perhaps he was rehearsing part of a Labour Party political broadcast. It was an effective enumeration of the important legislation that the Government and the House have passed in two short years.
But the point that the hon. Gentleman failed to note is that it is accepted that
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this legislation imposes burdens. Of course it imposes burdens both on small businesses and on large industry. But one must strike a balance between the burdens that this legislation imposes, whether upon workers or employers, and the benefits deriving from it—benefits that are a consequence, for example, of the Employment Protection Act or the Health and Safety at Work Act. But there was no sign of balance in anything he said in his somewhat mundane speech.
We do not pretend to deny that burdens have been, are being and will continue to be imposed on industry, but they are nevertheless worth while and justifiable in terms of the greater benefits which derive from them in the form of the positive and important rights now possessed by employees in British industry. I hope that hon. Members opposite would not suggest that we should remove the provisions of the Employment Protection Act or of the Health and Safety at Work Act—to name but two of the many Acts the hon. Gentleman cited—from the statute book.
The hon. Gentleman also complained about the amount of paper work, about the multi-rate VAT, and a whole series of other things which the small business men in Hitchin find so burdensome. It seems that they are hard done by in Hitchin and that all the moaners and complainers come from there. They seem to be the only people who write to him. But he did not tell us about the perks available to small and large business men and to the self-employed.
The hon. Gentleman did not tell us, for example, about the sort of thing that has been told in the newspapers in recent months, such as the interest-free loans which business men and industrialists receive, and how many of them can gamble away millions of pounds in a short period, and how they can get free houses and free cars. He did not tell us of the perks that they can get in addition to their normal incomes in the form of personal private enjoyments which are not necessary to their public performance as business men and which do not make a business more effective.
Why do we not talk about that sort of burden on industry and business? It is not the individual business man's money when he gets an interest-free loan, for

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example. It is derived from the consumers in the form of higher prices, from lower wages for employees, or from lower rates of dividends for shareholders. Whatever money is disbursed among private individuals in the form of cheap houses and cars and interest-free loans or holiday homes or yachts is taken out of the community, whether the community be the shareholders—and heaven knows why I should defend them—consumers or employees. The money has to come from somewhere, but there was no mention of that in the hon. Gentleman's speech.
Nor did the hon. Gentleman mention the £900 million in tax unpaid by industry in the last year. There was the £39 million VAT which has been stolen from the Treasury by shop-keepers, and the corporation tax and capital gains tax which has not been paid. The Treasury gives the total figure as £930 million. That money has, in effect, been stolen from the Treasury by industrialists and business men, including small business men, quietly feathering their nests while complaining publicly to the hon. Gentleman about the little irritations they have to put up with in order to obtain grants and loans from the Government. We are told that they are hard done by and to be pitied, given their circumstances.
The hon. Gentleman complained about the burdens that the Government impose upon industry. Was it a burden to rescue British Leyland, or Chrysler or Alfred Herbert? It is a burden to spend millions of pounds daily in bailing out private companies with no control over that money, nor any accountability for it? Let us be clear about this. If we are complaining about what may be legitimate and justifiable interference with industry, let us also look at the other side of the coin and mention the things that the Government do without which industry would not exist or, if it did, would not be as efficient as it now is.
Mr. Goodhew: The hon. Gentleman is going very wide of the motion. It complains of the
"growing burdens imposed on businesses by official regulations and requirements."
Perhaps the hon. Gentleman would like to put his brain to that question, which is the burden of the motion.
Mr. Kilroy-Silk: I thought that I had been doing that very well. Perhaps the
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hon. Gentleman has been asleep for the last few minutes. I am trying to make sense of this nonsensical motion. The hon. Member for Hitchin comes here, hot-foot with telegrams clutched in his hot hand, and tells us all about these complaints by his constituents. But he does not make his case. I am trying to help him to make sense of the motion and to put some meat into it.
I am talking not so much about burdens which the Government put on Industry—because I can find none and the hon. Member provided no examples—as about the burdens which industry and commerce place upon the community and the country as a whole. That is the crucial issue. We are, after all, although the Opposition seem to forget it so often, in the middle of a so-called economic crisis—a crisis in which industry clearly is not taking its share of responsibility and is not doing enough to promote exports or productivity or increased pay in order to get us out of the crisis. Why? Let us look at some of the burdens which industry has imposed upon the country and therefore upon the taxpayer and the individual employee.
Industry has not, for example, as has been made clear time and again in this House, done enough to create investment. It has not invested in British industry. This is not a new complaint. It was made by the right hon. Member for Sid-cup (Mr. Heath) when he was Prime Minister. Time and again, he exhorted industrialists to invest more in British manufacturing industry. The climate under his Government was supposed to be conducive to investment, yet they did not invest in the regions, in plant and machinery or in the new profitable outlets to create jobs. They have still failed to invest, in spite of the inducements given by successive Governments. I am not making a party point. This was said long before we said it—by the previous Conservative Prime Minister.
The facts speak for themselves. We have a lower level of investment in private manufacturing industry than most of our major Western European competitors. There is far less capital behind each man in British shipbuilding and ship repair than in Japan, Norway, West Germany or Sweden. There is far less capital behind British car workers than behind those in Japan, Germany and

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France. The list is endless. In almost every sector of British industry, those responsible have not shown the patriotism which we are asked to demonstrate. British industry has not been prepared to show its faith in its own future and that of the British economy by investing its profits as industry in other countries. with whom we have to compete effectively, has done for the last decade.
Mr. David Mitchell: I agreed with what the hon. Member is saying about the need for greater investment behind every worker. But does he not see that there is a relationship between investment and the investor? If he makes speeches like this, knocking investors, can he be surprised that they do not lay out their money by investing in British industry?
Mr. Kilroy-Silk: No one is knocking investors when they invest. The simple point is that they have not invested in British industry. They exhort everyone else to put his nose to the grindstone. Employees and the labour movement generally are told to restrain their wages, work long hours, get rid of demarcation disputes and become more productivity-conscious. Perhaps all that is fair, but why do not the same exhortations and complaints apply to those with the major responsibility for Britain's industrial future and enterprise, to those who have shown conspicuously in the last 10 years or more that they have failed to deliver the goods and to provide the investment which is needed?
Mr. Michael Spicer: Would the hon. Gentleman not agree that the considerable increase in red tape does not help? He seems to be arguing two ways. At the beginning, he seemed to agree that this situation did impose burdens. Now, he is saying that there are no burdens on industry. At the beginning, he said that the burdens were worth while. I wonder how worth while. The point of my hon. Friend the Member for Hitchin (Mr. Stewart) was that the cost might be severe in terms of jobs and investment. Will he not address himself at least to the question of this cost?
Mr. Kilroy-Silk: Of course, it may be—and that is a question of balance. If it
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can be shown that a particular piece of legislation, however desirable on its own terms, is, through unintended and unexpected consequences, leading to a particular threat of loss of jobs, that should be looked at again. But I have heard no demonstration of that today. After all, the motion has been drawn up by the hon. Member for Hitchin and he has the House for the whole afternoon to make his case. The onus was on him to demonstrate, as I expected him to do, the burden on industry which was leading to loss of jobs. Had he done so, I should have been a receptive audience, but he did not. He gave no specific instances and no indication of where the worthwhile and applauded legislation of this Government has reduced the number of jobs.
My point simply was that although, inevitably, measures such as the Health and Safety at Work Act and the Employment Protection Act must impose burdens on industry—if they did not, there would be no point in having them—those burdens were necessary and were outweighed by the benefits to industry as a whole, particularly to employees. That is a fair and simple point which most hon. Members, I think, would take.
Not only is it true that industry has failed to invest and has therefore failed the nation, that it is failing to provide jobs and has therefore failed the employees: it has also failed to increase productivity per man, which is the responsibility of management. After all, those in management are supposed to be innovatory and enterprising, in a managerial society. If they fail to increase productivity, to invest and to promote more jobs, the responsibility lies squarely on them. The figures show that British management has failed to increase productivity, to take advantage of the tremendous export opportunities now presented to British industry—and not just because of the decline in the value of the pound. That has at least the favourable aspect of having given a tremendous edge to British commodities and services abroad.
Unfortunately, trade returns show that British industry is failing miserably to carve itself a major niche in the new export markets. It is not so enterprising and outgoing and adventurous as it likes us to believe, as it likes to pretend. It

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is prepared instead to sit back complacently relying on reflation, the regeneration of the home market and perhaps the occasional handout and subsidy from the Government to keep it going. But it is not prepared to be aggressive and outgoing and to stake a claim for itself in the export markets which are now clearly an area in which it could have tremendous impact.
Therefore, in an important respect, British industry has failed the nation and those who work for it. It has certainly failed to provide jobs in such areas as Merseyside, which I represent, and it has failed miserably to train its young people for their new skills, responsibilities and techniques that a new advanced industrial age demands. I should have thought that the hon. Member for Hitchin would have mentioned that industry has a responsibility in training and retraining, particularly for the young and those coming direct from school. Yet it has not faced up to that responsibility.
It has not provided the skills, training and retraining which are necessary if British industry is to maintain even a semblance of competition with other European countries. Instead, the Manpower Services Commission on behalf of the British taxpayer had to fork out £140 million last year as an indirect subvention and subsidy to industry in order to train young people who have been made redundant to allow them to pursue another career.
The catalogue of the things which this private enterprise system, that we are told is so beautiful, is supposed to do shows only failure, failure and more failure—on exports, investment, job creation, training and productivity. It has failed abysmally. No hon. Member opposite denies this. On every count, they sit there morosely nodding their heads in reluctant agreement with what I am saying. One or two of them are even waking up.
But the hon. Member for Hitchin dealt with one aspect of this problem, by implication if not directly. He talked about one class only—the employers, the small business men. the commercial entrepreneurs of this system. He never once mentioned what the workers contribute, what would not exist if they did
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not exist. He never once suggested that industry and commerce should have a sense of social responsibility, by enforcing the Employment Protection Act and the Health and Safety at Work Act to look after their workers. He did not indicate, except by omitting any reference to it, the class division in industry.
Perhaps if for once we took a lesson from Japan and tried to eradicate some of the clear class and status distinctions in British industry, we might be able to arouse the enthusiasm and co-operation of workers. It does not exist at the moment simply because they feel that they have no stake in an industry which treats them as mere cogs in a machine. They are treated as hired hands to be taken on and dismissed at the whim of an irresponsible, anonymous and bureaucratic power.
If we are talking about bureaucracies—one of the words in the motion—let us also talk about the private, irresponsible, anonymous bureaucracies in multinational companies. They are bureaucracies, too, and no different from public bureaucracies except that they exercise far greater power than public bureaucracies and they are accountable to no one. They can close down factories in my constituency at a moment's notice, blight the livelihoods of whole families and bring gloom and despair to towns such as Skelmersdale and Kirkby with no thought of the social consequences of their actions.
They take their decisions in secret and never have to defend them publicly or justify them to anyone. They will close a factory even though it may have received millions of pounds of public money. The decisions on Courtaulds and Thorn Electrical in Skelmersdale and Control Dataset and Albright and Wilson at Kirkby were taken in private behind closed doors by anonymous men who wield enormous power and are accountable to no one. Ought we not also to discuss that situation?
Is it right that their kind of power to destroy people's careers and the livelihoods of families and to bring despair and despondency to towns such as Skelmersdale and Kirkby—which were supposed to be the new boom towns, but are now virtually ghost town—should be exercised with no control by Parliament?

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The hon. Member for Hitchin spoke about bureaucracies, but his only substantial complaint was about a firm which had to count its trees before it could get £2,000 from the Government for a computer. What a miserable condemnation of the capitalist system. Instead of talking about the real issues which confront this country and its people and the jobs and livelihoods which are at stake, he can complain only that, in order to get £2,000 from the taxpayer, this poor, little, piddling firm had to answer a few questions.
We did not hear from the hon. Gentleman about the Government grants and loans given to industry. Again industry is a burden on the community, the employees and the taxpayer, not just through lack of investment and the promotion of exports, jobs and productivity, but through the amount of money it takes out of the Exchequer.
In the North-West alone, selective financial assistance under Section 7 of the Industry Act totalled £34·6 million this year up to October. That saved 37,000 jobs. Another £9 million was given in the North-West under Section 8 of the Act. In the one year 1975–76, £36 million was given to the Merseyside special development area through regional employment premium. Another 40,000 jobs were saved, at enormous cost, by the temporary employment subsidy.
Do we hear of the burden which this money imposes upon industry? Is it a burden to give industry in the Merseyside special development area£36 million in one year? Is it a burden to give£34·6 million in special grants under Section 7 of the Act in the North-West and a further £9 million to the area under Section 8? Yes, it is. It is a burden on the rest of us. We have to bear it because of the failure of British industry and the sort of people represented here today by the lion. Member for Hitchin.
The Tories constantly complain, as did the hon. Member implicitly, though not effectively, that they do not want what they call interference but what is correctly called intervention. No doubt they will be indignantly citing cases of intervention which they oppose, but even a cursory glance through Hansard will show it littered with pleas from individual
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Tories asking for more help and handouts for interests in their constituencies. They will vote against aid for British Leyland, but will write letters to the Ministry and put down Questions and motions in high dudgeon to get grants and aid for factories in their own constituencies. We do not hear the complaints about public money going to industry then. They complain only that the money is not going to their factories quickly enough, in large enough quantities or on favourable enough terms. A terrible hyprocrisy pervades the Opposition Benches on such occasions.
I do not object to their laissez-faire philosophy, if they are honest and sincere about it, or to their belief in the virtues and benefits of the free enterprise system, except that all historical evidence shows those beliefs to be unfounded and the system to be unfair, unjust and inefficient. I do not object to them propagating the ideas of private enterprise, but I object when, with their next hot breath, they are quietly asking for handouts. Virtually every hon. Member opposite has been guilty of that behaviour in the past two and a half years.
We hear complaints from the CBI and individual industrialists. They do not want the State interfering. They want the Government to keep out. Of course, they also want the money, but they do not want the forms, the questions and the accountability. They all queue up, as they have always done, at the Department of Industry and, now that it dispenses the largesse of public funds, the Department of Employment, with their sticky little hands, like children going to Father Christmas, asking for more grants and handouts.
We hear from the Aims of Industry, or whatever new-fangled title it has now, and the CBI asking to be left alone, but they trundle down Victoria Street, on the hot line from Victoria Station, to the Department of Industry asking for more taxpayers' money.
The Tories claim to be the stoutest defenders of the taxpayer, but why are they so reluctant to question this sort of subvention of British industry? They question severely the public money which goes to co-operatives such as the one in my constituency or that at Meriden. They get hysterical about where that money goes, but they will not

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complain in the same terms about the much larger sums which go, on a continuing basis, to British industry. They seem to want it left in private hands with no accountability or responsibility for the way in which it is disbursed or whether it is efficiently used.
Unfortunately, industry has failed lamentably to provide the investment opportunities and jobs one could have expected and hoped for from it. It has failed to put back into the community anything like as much as it has received, and it has clearly failed the regions. This is not so much a critique of industry, business and commerce or of individual business men, industrialists and entrepreneurs as a critique of the whole private enterprise capitalist system.
Let us take just the Merseyside area which I represent. It has a dramatically high rate of unemployment—higher even than the rate in Scotland and Wales, and we hear a great deal about the alarming and enormous difficulties confronting those countries. But Merseyside, which is smaller than both, has a higher rate of unemployment than has either. There are more people unemployed in Merseyside than there are in the whole of Wales. There are two areas in Merseyside, Kirkby and Skelmersdale, where the unemployment rate is just touching 20 percent. Perhaps that is partly the failure of the regional policy of successive Governments, but it is clearly due also to the failure of British industry to direct its resources adequately, to invest in the regions and to create jobs.
Not only do we have more unemployment on Merseyside but we have a rate of unemployment among school leavers in particular which is obscene and depressing. We have suffered a net loss of jobs in the past 10 years. The whole area is now subject to a gradual and almost inevitable industrial decline. Most of the major industries that sustained it and made it proud and prosperous are now in decline and are not being replaced by further investment opportunities.
Not only are we not getting new opportunities and new investment but the firms which are there now are closing. Albright and Wilson in Kirkby is to close, with the loss of 130 jobs, Courtaulds in Aintree is closing, with the loss of 600 jobs, and at Skelmersdale, just across the border, Courtaulds
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is closing with the loss of 1,000 jobs. Hygena in Kirkby is closing, with the loss of 150 to 200 jobs. Control Dataset, also in Kirkby, is closing, with the loss of only 50 jobs—and when it is only 50 on Merseyside there is almost a sigh of relief because we are used to talking in terms of hundreds and thousands.
But even though there are all these closures and redundancies in a short period, on top of the many others we have already had, the great cause of concern is that none of these factories is closing because it has suddenly become unviable, because it has cash flow problems or because it has become unprofitable. Albright and Wilson is going to Letchworth because it wants to rationalise and to concentrate production in one area. Control Dataset is doing much the same, and so is Courtaulds. They are closing not because of the present economic situation, not because they are not making profits, not because their specific plants in the area are unprofitable, not because of any act of Government policy, not because of the recession, but because they have no sense of social responsibility to an area of already intolerably high unemployment and they prefer for purely private economic reasons to go to areas where there is no real problem of unemployment.
It is disgraceful that such companies can take such a slight or dim view of their responsibilities to a town that has served them well over the last decade. Such a company as Albright and Wilson or Control Dataset can, almost at a moment's notice, exercising the private, irresponsible, anonymous power of which we have talked—and the bureaucracy of which the hon. Gentleman should have talked but did no—make a decision for its own private interests. which are never accountable and will never be justified—it will never have to give its reasons in this place—which will control the livelihoods of my constituents and demoralise a whole town, with no care for the social fabric of the area or region.
It is disgraceful that firms can do that to areas that have sustained them. Albright and Wilson, for example, has had an effective industrial relations record, with no industrial disputes, yet it can summarily dismiss those men and

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destroy their future, paying no further heed to them. What is more, they do it when they have been in receipt of large amounts of Government money. Courtaulds at Skelmersdale and Aintree has, I believe, received about £56 million of Government money, yet its vote of thanks is to say that it will put another 1,000 on the scrap-heap at Skelmersdale, another 600 at Aintree and another 700 at Flint, which also affects Merseyside.
There should be far more Government intervention and far more Government control, exercising a system to monitor the way in which our money goes to private industry. That money should not be given unless it is shown conclusively that it will be used effectively to promote efficiency, productivity and jobs. If an industry cares so little for the people who serve it and for the towns which give it hospitality, the money should be returnable in full to the Government, which, unfortunately, has not happened until relatively recently.
We do not want an easing of burdens of this kind. They are not burdens on the workers. What we want on Merseyside is more Government help and more Government intervention. We shall never solve the problem of industrial decline or achieve the regeneration of industry on Merseyside, with the creation of new job opportunities, unless and until we have further Government intervention. It is not lack of Government interference or intervention in industry that concerns me. What concerns me is that it is not positive or far-reaching enough, and until we get that we shall not have sustained growth and regeneration on Merseyside.
We on Merseyside want the help that is already provided for Wales and Scotland, both of which have lower levels of unemployment. We want a Merseyside development agency that will be able to look at the total Merseyside picture, that will be able to analyse the defects and deficiencies and channel resources and finds into areas of need. We want a plan for the industrial regeneration of Merseyside. I have repeatedly asked my hon. Friends in the Government to look at Merseyside as a whole, to analyse its industrial problems and isolate its special needs, and to create a tailor-made plan for its industrial regeneration.
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It is no good asking us to wait for the general upturn in the economy. That is like waiting for Godot. He never came, and the industrial upturn may never come. It is no good asking us to wait for an end to the international economic recession. Even in good times Merseyside suffers more than other areas. There has never been a good time for Merseyside in the last 10 years. Any crumbs that may come our way from an economic upturn or reflationary measures, or any new overall prosperity in the international economy, will still leave Merseyside with an unemployment rate that the West Midlands has now experienced for the first time and is creating all hell about, yet that is our normal way of life on Merseyside. An international economic regeneration will not be enough to solve our problems. Extra special measures are needed, measures which are tailored to and specific to our needs.
Mr. Michael Spicer: Where will the money come from? Will not much of it have to come from industry, about which the hon. Gentleman has been so disparaging for the past 10 minutes?
Mr. Kilroy-Silk: If the hon. Gentleman will allow me to continue, something else which I have to say will effectively cover that. I hope that my hon. Friend the Minister of State will be able to answer my specific questions at the end of the debate. Not only do we want a Merseyside special development agency, not only do we want a Government-inspired plan and resources to go with it for the regeneration of industry on Merseyside, but I ask him also to make an announcement today about the location of the headquarters of the new nationalised shipbuilding industry. He will understand that that could be a tremendous morale booster to an area which has suffered many knocks to its industrial future in the past 18 months or so. I hope that he will make that long-awaited announcement and tell us that we are to have that headquarters on Merseyside, that we are to have more quickly the 7,000-odd Civil Service jobs that were supposed to be dispersed to Merseyside as a result of the Hardman proposals, and that he will tell my right hon. Friend the Secretary of State for the Environment about the need to regenerate the construction industry.

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Liverpool, let alone Merseyside, has many derelict buildings and much industrial dereliction and obsolescence, all of which could be changed if the unemployed construction workers were used. We have a great need for new housing in Liverpool and Merseyside generally and for a new hospital at Skelmersdale and Ormskirk. We have the skilled manpower idle, drawing unemployment pay and social security. Is it not a condemnation of the private enterprise system that while we lack necessary facilities, and there is a great need for more money to be spent on house building, house maintenance and the refurbishing of our derelict industrial structure, there are unemployed construction and building workers? Unfortunately, in the measures he announced last week my right hon. Friend the Chancellor of the Exchequer has gone further and will create more unemployment by the increased cuts in expenditure on construction.
All this is highly irrational. It is not just an irrationality of the system but is irrationality of the Government. It is not inflationary to pour money into the construction industry in the way that other public expenditure would be inflationary. That could meet many of the important social needs on Merseyside, while providing much-needed beneficial employment. The real criticism of the private enterprise system is that it does not serve the country as a whole. It has not provided the jobs, productivity, exports or investment and has not served the regions, such as Merseyside. The power to make major decisions affecting our lives is in the hands of a few men, without public accountability or responsibility. It is irrational that that kind of power should still exist in our so-called civilised society.
We shall not solve our employment, investment or export problems, certainly not those of the regions, until we plan our economy and industry effectively. There can be no justification for the discrepancies between Kirkby and Hitchin, no justification for one town being demoralised by 20 per cent. unemployment and the other having an unemployment rate so low that it cannot be counted. Is it an accident that one area must suffer all the handicaps, not only the industrial decline but also the highest
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rates of infant mortality, bad housing, low pay and all the other social evils? If it is an accident, cannot we put it right? Private industry cannot do it, or refuses to do it. We can achieve a fair distribution of our economic resources and the direction of necessary investment to the regions only if we take a far larger stake in public and private industry than has been taken so far.
Despite all the homilies of the hon. Member for Hitchin, private industry has lamentably failed the people of this country, and particularly the regions. It has been on trial for far too long, and it has failed to produce an adequate defence. The National Enterprise Board needs to become what it was supposed to be. The Industry Act needs to be amended along the lines of what it was intended to be. We want compulsory planning agreements and buying into private industry, so that firms can be directed towards the regions and investment can be directed to where it is needed and will be most beneficial.
We must remember that when we talk about industry we are talking not only about profits but about the people who serve industry and are supposed to be served by it. Unfortunately, the vast majority of the people of this country, including my constituents, have not adequately been served by industry. Let us consider pay, holidays, overtime and productivity in the United Kingdom compared with other countries. Why must the British worker be lower paid than his German or French contemporaries? Why does he have to work longer hours in worse working conditions? Why does he have to work with inadequate capital equipment behind him, and with fewer holidays, perks, pensions and all the rest? It is because British industry has failed to sustain the kind of life, productivity and enterprise that its apologists pretend it sustains.
We shall achieve the conditions we seek only when we have the courage of our convictions and the Government act as a proper Socialist, Labour Government. We must acknowledge that we can have a fair, rational, efficient and just society only when we take into our hands the ownership and control of industry and direct it to ends determined by social criteria and not the whims of irresponsible private entrepreneurs, certainly not the vagaries

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and exigencies of a market that puts profit before the interests of people.
5.16 p.m.
Mr. Paul Dean: It is rare for the growing weight of government to be defended from the Back Benches, but the hon. Member for Ormskirk (Mr. Kilroy-Silk) made that attempt early in his speech, though for most of it he addressed himself not to the excellent motion, moved so effectively by my hon. Friend the Member for Hitchin (Mr. Stewart), but to trying to deflect attention from it.
The hon. Gentleman talked about industry's not showing faith in the future. It is no wonder that it does not when the fact or threat of nationalisation hangs over every industry and when people hear the sort of speech the hon. Gentleman has just made.
Mr. Kilroy-Silk Mr. Kilroy-Silk rose—
Mr. Dean: The hon. Gentleman spoke for a long time. Perhaps he will be good enough now to listen for a few minutes.
The hon. Gentleman also talked about industry's failing the nation. It is the Government who have failed the nation, as we can see from last week's mini-Budget, the record levels of inflation, unemployment and bank lending, and all the sensitive economic indicators. The way in which industry has been clobbered is the source of the trouble, and the responsibility is that of the Treasury Bench, not the work people and management in industry and commerce.
The hon. Gentleman said that we must plan. Who are the all-seeing individuals who will produce the plans and solve the problems? The Government should concentrate on the things that only they can do and leave industry and commerce a great deal freer to get on with the job that only they can do effectively.
The House is greatly indebted to my hon. Friend for putting the parliamentary spotlight on the growing burden of government on industry and commerce. Bureaucracy hangs like a heavy cloud over every work place and many homes where work is done. The ever-growing torrent of Acts, regulations, forms, questions, rights of entry and inspections adds
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up to an onerous and oppressive burden on businesses, especially smaller businesses and the self-employed.
Too much effort is deflected from wealth production, exporting, after-sales service and good management. Too much energy runs into the sand in unproductive paper work and in complying with regulations that make the law look an ass and almost invite evasion. Too many people have given up in despair, taking the view that if they cannot beat bureaucracy, they had better join it. Far too many of us are minding each other's busines on behalf of Government instead of producing wealth for the community as a whole.
It is only fair to put the blame where it belongs. It does not lie with officials, who are carrying out Government instructions, although it is fair to note that it is impossible for officials to be adequately supervised when there are so many of them and when their work is so wide-ranging. Basically the blame lies with Government and with Parliament.
There was one point in the speech of the hon. Member for Ormskirk with which I agreed. He said that when a problem arises it is almost automatic to say" What are the Government going to do about it?" It is almost automatic and it may well be right that as Members of Parliament we table Questions. We adopt that approach and ask what action the Government propose to take. It may be that that is right, and in many cases it is, but we must recognise that in so far as Governments respond to that pressure it probably means a new regulation, a new Act, or more officials to carry out the action that is decided.
By far the biggest offender is the Government. That applies especially to the Government now in office, who have an irresistible urge to meddle, to interfere, to control and to direct. As my hon. Friend the Member for Hitchin said, it is not so much each individual act that produces the burden, but the cumulation of them all.
There is also the natural momentum in the machine itself. Once it starts rolling, it is difficult to stop it. I wonder how many of the hundreds of regulations now in operation are still relevant to modern conditions. How many of the forms that go out from Government

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Departments have been considered carefully in recent years to see whether they are necessary? What happens to all the questionnaires that are completed in ever-growing numbers? We are told that many of them are used for forecasting. As my hon. Friend said, if there is a classic case against questionnaires being used for forecasting it is to be found in the almost total inaccuracy of the forecasts in recent years.
My hon. Friend illustrated his theme by mentioning a number of problem areas, including VAT, the Price Code and the problems of the Employment Protection Act, especially for small firms. I shall illustrate my remarks about the growing weight of government with two examples. One relates to the construction industry and the other concerns pensions, to which my hon. Friend also referred. I have selected different areas but my two examples illustrate two of the main dangers that are inherent in over-government.
The first danger is the threat to individual freedom and the ability to choose how to earn a living within the law. In this context I refer to the construction industry. The second danger is the complexity and the multitude of regulations that can frustrate the intention of Government policy and legislation. It is in that sense that I wish to refer to pensions.
In speaking of the construction industry I am thinking especially of the independent sub-contractor and the new tax certificates that will come into operation in April 1977. No reasonable person would complain about the Government's cracking down on tax evasion, but are they taking a sledgehammer to crack a nut? There is some disturbing evidence in the construction industry, especially when we recall the background against which the new regulations are coming into operation.
There is a severe recession in the building industry. There is a higher level of unemployment than the industry has suffered for many years past. It is important that we should not do anything more to make a grim situation even grimmer. We have also to take into account that there is a long and honourable tradition of self-employment and sub-contracting in the construction industry. That is essential in an industry that requires such flexibility and mobility.
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There are also the political overtones to be remembered. Sub-contractors see a threat to their independent existence in the Government's proposed direct labour Bill, which will extend the powers of local authorities to engage in construction work. They suspect that subcontractors will get squeezed out of all public contracts through the twin pincers of the closed shop and the so-called voluntary registers. They remember the Labour Party's pledge to nationalise companies within the construction industry and so to extend still further the tentacles of the State.
Against that background there is no wonder that the sub-contractors are suspicious. It is no wonder that they suspect the Government's motives. It is no wonder that they are reacting against the requirement to produce photographs on the tax certificates.
Let us consider the facts and the evidence. The facts are provided in Hansard.On 7th December I received a reply from the Financial Secretary to the Treasury. He told me that
" At the most recent count on 12th November, 268,669 applications had been received, of which 185,730 had been approved and 20,960 refused. It is not possible to estimate how many more applications will be received. —[Official Report, 7th December 1976; Vol. 922, c. 117.]
That Answer had a misprint in it that the Minister subsequently put right.
The main point that I wish to pick on from those figures is that over 20,000 certificates have been refused. From the evidence that I have so far, it appears that some of them may be refusals without good cause, where there is a previous tax record which is in order. Some, it appears, refer to British subjects returning from abroad who, by definition, do not have three years' tax records but who are prepared to show their good faith in meeting their tax obligations now that they have returned. That is one of the disturbing factors.
Another disturbing factor is that there appears to be delay in the hearing of appeals. A third factor is that local authorities and others are requiring the certificates as a condition of contracts. It looks as though the certificate is becoming not merely a tax collection instrument but a certificate to work. If that is happening, that is contrary to the

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pledge given by the Financial Secretary in an Answer to me on 11th November.
I am grateful to the Minister for agreeing to my request to receive a deputation so that these matters can be discussed, but I wish to refer to the disquiet about the new arrangements. I refer to the danger to livelihood and employment of genuine sub-contractors and the likely high cost of vetting applications and maintaining a register of up to 400,000 firms. I give this as an example of the new regulations posing a potential threat to fundamental rights and to the freedom and right to work.
My second example concerns pensions, and I declare an interest in the subject of pensions and insurance. I wish to refer to the complexity of the situation which frustrates the intentions of policy. After years of political in-fighting in pensions in which some of us were involved in trying to get an agreed scheme and to maintain some stability in pensions, we saw the advent of the Social Security Pensions Act 1975, which was a compromise. Since that compromise was produced the official Opposition have many times said that we would accept it and work it.
As a result, a heavy sigh of relief went out in the firms concerned with pensions. They thought that here at last was a chance of political stability. There is no doubt that the Act is complex and that the regulations are even more complex. There are a mass of specialist things to be done, consultations to be undertaken, and decisions made on every one of about 65,000 pension schemes. It is a formidable task, particularly against the background of a grim economic situation. Time is short, but the Government are making the task still more difficult by their own ambitions and by imposing restrictions on pensions improvements as part of the pay policy. I believe that that is a mistake.
It is not the purpose of my remarks this afternoon to dwell on that matter. I wish to point out that the Government pensions policy cries "Forward" while the Government pay policy cries "Backward". This creates an impossible dilemma. I must warn the Government that their pension policy is in danger of not getting off the ground. There is a
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danger that the deadline of April 1978 will not be met unless they make an early announcement removing restrictions on pension improvements.
A further example of the Government making a complex situation even more difficult lies in the announcement in June this year outlining the Government's intention to introduce legislation for employee participation in the management of occupational pension schemes through the agency of the trade unions. To introduce a new element in an over-burdened programme was bad enough, but it was worse when this was a highly controversial measure. The approach through legislation was contrary to the advice given by the Occupational Pensions Board, which preferred a code of practice to legislation.
There is broad agreement to the concept of employee participation, but there is strong opposition to its being done ex-explicitly through a trade union agency. Again, it is my purpose not to argue the merits of the matter but to point out that in an already over-burdened programme this amounted to a spanner in the works. It added a new controversy, new complications and new delaying tactics. The Government are risking their own policies and deadlines by over-burdening employers, trade unions and pension practitioners.
Those are two further examples to be added to the list already given by my hon. Friend the Member for Hitchin of the sheer overweight of Government legislation. I have tried deliberately in my remarks to be non-controversial. I recognise that the weight of legislation has been growing over the years under Governments of varying complexions. However, it tends to be more oppressive under the present Government because of their desire to interfere in so many affairs. It is a problem that has grown over the years.
If we wish to restore the economic health of our country, as I am sure we all do, sooner or later—and sooner rather than later—we have to tackle this overburden on industry and commerce through the sheer weight of Government legislation and the regulations that flow from it. Until we are prepared to do that, industry and commerce will operate with one hand tied behind their backs and we shall find far too much productive effort— effort that should be channelled into new enterprise

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and increased production—going into unproductive, and in some ways counterproductive, activities.
I hope that, whatever else happens as a result of today's debate, note will be taken of this important and growing problem. It concerns us all, and I emphasise that this problem is not of a party-political nature.
5.36 p.m.
Mr. John Cockcroft: This debate is mainly concerned with the burdens of small businesses in industry and commerce. In present conditions that is where the shoe pinches most harshly.
In the last week I have taken the opportunity to speak to large numbers of small business men in my constituency, which geographically is very large. Most of it, however, is centred on Nantwich town. There are 300 firms in that small area.
I asked the business men to whom I spoke how much of their working time was spent in filling in VAT forms and various other documents. The average figure was about 17 per cent. of that time—in other words, the amount of their time taken up in acting as unpaid tax collectors for the Government.
Those concerned bitterly resent that activity, whatever may be the reason for it. In any case there is a higher proportion here of tax collectors directly employed by the Government than in any other comparable country. I understand that we have four times as many tax collectors in proportion to our population as there are in the United States. Hence there are enormous hords of unofficial tax collectors who should not be doing this work themselves.
The people to whom I spoke believe that the reform of the rating system is urgent. Many people employ members of their own family: and, as well as paying rates as small businesses, they are also taxed as individuals. They believe that the tax burden has fallen particularly heavily upon them in the past three years. Many of the rates paid by this section of the community have risen by 100 per cent. or more within a very short period.
In Nantwich town several businesses are up for sale if a purchaser can be found. One shop is closing completely because the owner feels that he can do
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better if he retires, sells his business and lives by investing whatever money he gets from that source. There are many shopkeepers in my constituency who feel that, if and when they can sell their businesses, it will be simpler for them to invest their money in a building society or in gilt-edged securities, or in some form of fixed security that will bring them in, say, 15 per cent. per annum return and enable them to retire into tranquility, rather than having the worry of all the problems that confront them in a small business. The present legislation tends to lead people to become dishonest in order to escape the extreme rigours of the present burdens that weigh on small businesses.
The new town of Winsford lies in my constituency. It caters for the Liverpool and Manchester overspill. It is a town of about 17,000 voters, with about 27,000 people in all. Set up 10 years ago, it has not been a great success, having relatively high levels of unemployment, a shortage of jobs, a general depression and a lack of amenities. A few years ago there were about 100 shops on the High Street. Then the High Street was redeveloped. The shopkeepers were forced—or certainly heavily persuaded—to move into the new shopping precinct in the town. Many of the shopkeepers went to other parts of the town where there were fewer customers but where the accommodation was cheaper. About 10 of the 100 or so small shopkeepers moved into the new precinct three years ago. Now only two remain.
The main reason for this fall in numbers was the high rent and the enormous increase in rates over a short period. The other shops have been taken over by the large multiples. The situation is depressing, unless one thinks that the future lies with the big battalions and there is no future for the small business man. That is a depressing view because we are talking of a section of the community which in the past contributed much to the greatness of the British nation.
One of the sad features is that in the past so many towns and councils took the view that the centre of their towns should be redeveloped. This pushed the small shopkeepers away from their traditional positions.
I believe that there is a case for aiding the small business men who have been so badly hit in the past few years as a result

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of these enormous imposts by means of differential interest rates. Nowadays there are many handouts, grants and other indiscriminate forms of aid, some of it going to large firms. Perhaps a small proportion of this money could be used to subsidise interest rates for small businesses.
I am told that in Nantwich these business men pay 3 per cent. to 4 per cent. above base rate because they are officially classified by the banks as not being particularly prime borrowers. Perhaps a few tens of millions of pounds a year could be used to help these people who contribute so much to the economy.
The big employers do not have the same difficulties, on the whole. They do not face the same cash flow problems. The answer is to have lower rates of taxation, less prying into privacy and less employment of these people as collectors of taxes. There should be greater incentives for enterprise and a reduction of the cash flow problems which were unforeseable, unforeseen and undeserved.
5.43 p.m.
Mr. Michael Spicer: This debate, launched by my hon. Friend the Member for Hitchin (Mr. Stewart), is more important in terms of the future of our economy than, for instance, tomorrow's debate on the Chancellor's latest proposals. When it comes to what the country will look like economically and politically in ten years' time, the short-term remedial macro-action which the Chancellor can take does not have very much effect. Certainly the proposals of last week will not have very much effect next year, because most of the economic forces which will shape next year are already in the pipeline. We are heading for 15 per cent. inflation, high rates of unemployment and absysmally low growth rates. Nothing that the Chancellor can do in a mini-Budget is likely to have much effect on that.
What will determine the future of our economy and our society is the attitude we adopt as a country towards business and the creation of wealth. We do not claim that over-bureaucracy—the burden placed upon business by red tape and form-filling—is the only deterrent to the efficient running of businesses and suc-
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cessful investment. We make the point that it is an inhibiting factor. Anyone who thinks that the multitude of red tape is an irrelevanace as the hon. Member for Ormskirk (Mr. Kilroy-Silk) seemed to imply, should attempt to export to Japan. It is becoming almost a truism to say that in attempting to export to that country it is not overt barriers which present problems but the amount of red tape. Clearly, this multitude of red tape is an important factor.
There are other factors which affect business, too. For instance, our managers are more highly taxed than any other set of managers in the Western world. In addition, when we aggregate all forms of taxation, business in this country is taxed more heavily than practically any other industrialised country. Those are added factors but the bureaucracy item is a most important element in all of this. I hope that the Minister will at least accept this and move on from there to discuss what can be done.
We accept the need for accountability when public money is provided. We accept the need for a certain amount of form-filling in connection with taxation. The problems arise when the Government begin to practise heavy discrimination by means of the questions they asked. This whole process of discrimination was aggravated by the introduction of selective employment tax—the attempt to distinguish between two sectors of the economy one of which was called "services" and the other "manufacturing" That was the beginning of a most slippery slope. We now have VAT, which is a continuation of the SET idea.
We find as a result of all this that rebates in connection with export services are treated differently from those arising from manufacturing. A whole compendium of questions arises. Anyone trying to export services is rapidly made aware of the heavy hand of bureaucracy as he seeks to discover which aspects of his services are zero-rated, which aspects are exempt and which carry VAT, which, incidentally, acts as a form of discrimination.
Mr. Kilroy-Silk: Would the hon. Gentleman like to tell us what representations were made to the former Tory Government when there were a whole series of regulations interfering in the most minute

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detail with company administration by means of the prices and incomes policy'?
Mr. Spicer: This is a personal opinion, but I believe that a prices and incomes policy is a perfect example of what I mean. A prices code is one of the costs to industry which the hon. Member discounted. He never tried to quantify those costs in terms of jobs lost. A prices and incomes code is a perfect example of a bureaucratic operation that does not further the ends the hon. Gentleman claims he wishes to further—namely, the creation of more jobs and greater prosperity. I was not in the House at the time of the Conservative Government's prices and incomes policy and cannot answer the question in personal terms. But we have here a perfect example of a legislative framework which results in the most appalling discrimination and bureaucracy, particularly concerning prices.
I am very glad that the hon. Member for Ormskirk has returned to the Chamber. He was allowed to open up a very interesting and, I believe, rather fundamental chain of argument which is entirely relevant to the debate. As I said in my opening remarks, the attitude that the Government take to this question—symbolic as it is of a general attitude towards industry—is entirely relevant to the future course of this country. The hon. Gentleman did us a great service by opening up this topic. He seemed to be saying that because industry had let us down, we should put increasing burdens upon British industry with the aim of driving free enterprise out of business, as a result of which, following whatever philosophy he subschibes to, he would replace private enterprise by State enterprise.
That is a perfectly logical point of view for the hon. Gentleman to put forward. But if he were to take it to its logical conclusion—as he is bound to do and, I think, wishes to do—he would have to pay the price in terms of personal freedom. Under any truly Socialist system, such as he was advocating, there has to be direction of labour. This is implicit in what he said. We are far too coy on the Conservative side about this. Under true Socialism the first institution to be abolished is the free trade union as we know it.
If the hon. Gentleman is not prepared to pay the price in terms of personal free-
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dom, the only alternative is to have a mixed economy motivated to a large extent by free enterprise. During the hon. Gentleman's speech I asked him how he would get all the money that he wished to spend. Obviously, it is his right to try to get more money spent in his constituency, but where is it to come from? Certainly in the kind of society to which I subscribe ultimately it can only come from freely motivated enterprise and industry.
The hon. Gentleman cannot have it both ways. Many of his hon. Friends wish to abolish the free system of conducting business and of providing labour. Either the hon. Gentleman wishes to abolish that system or he and the Minister must accept that the only alternative is the one I have just mentioned.
Why has industry not invested in this country? My answer to that question is very different from that of the hon. Gentleman. In a multitude of different ways, an atmosphere has been built up which militates against industry. It is represented in a multitude of different policies towards industry.
All successful Western industrialised countries have Governments which have worked on behalf of their industries in different ways. The Japanese have done it in their way, the Germans in theirs and the Americans in theirs. It has been the misfortune of our country progressively to have had Governments which worked against industry. This has been assisted by the kind of point of view that the hon. Gentleman was putting forward.
The hon. Gentleman asked, from a sedentary position, what was the threat to industry in 1970 and why industry did not invest then. The reason is that breathing down the Government's neck were a whole set of people who were basically anti-industry. There was the fear that one day they might come to power, as they did, and introduce legislation against the interests of industry.
The Minister may not be able to accept the full import of what we are saying on the Conservative side. He may not be able to renounce his own legislation. But I ask him as a Minister of State representing a Government who ostensibly believe in the mixed economy whether he will say something to discount the views being put forward from Left-wing

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Members on the Government Back Benches. Unless he does so—and it may take him great courage to do it—he will be adding yet further to the anti-industry atmosphere which is at the root of the lack of investment.
Investment is not turned on and off by a mini-Budget here and a mini-Budget there. It is something much more profound. Successive Governments have not accepted this and have not realised their peril. People invest not for tomorrow but for 10 years ahead, and therefore they judge investment in terms not of the handouts or subsidies but the kinds of things which are being said by Ministers and by other politicians. That is the atmosphere which either builds up or diminishes the level of investment. In this country we have not had the atmosphere of militant support for industry which has been present in other Western industrialised countries. For this reason they have had investment and to a large extent we have not.
It is not a question of trading off the costs, as the hon. Gentleman was prepared to say, against subsidies. Subsidies are totally different. Governments have them in their wisdom or otherwise, as they wish. But we on the Conservative side believe in something totally different. As has been said, we have not only the indiscriminate burden or red tape but the fiscal and, above all, the verbal burdens that militate in this country against industry as a whole and against investment in particular.
Until we get a consistent approach from Governments of all persuasions in favour of industry and the creation of wealth, the investment will not flow. For these reasons I have enormous pleasure in supporting my hon. Friend on this specific subject which is of great importance, even more important than the sort of subjects we shall be discussing in general terms tomorrow.
5.59 p.m.
Mr. Greville Janner: The speech by the hon. Member for Worcestershire, South (Mr. Spicer) was a potent example of the sort of paranoid attitude which we on the Government side have come to expect from Conservative Members. Every time an industry goes wrong, they blame the Government
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—unless they happen to be in power themselves, in which case they blame foreign Governments, or anyone other than themselves.
In this country industry has got itself into the frame of mind of never accepting responsibility for what it does wrong. I have seen in the past six years some mismanagement in private industry that has been hideous. But, equally, there are some enormously successful and productive industries with managements that have produced very fine results.
Many of these industries are under pressure—those who work in them have to be especially careful, energetic and intelligent to survive and to flourish. On the other hand those industries which blame everyone else, and indulge in the sort of self-pity which we have heard from the last three speakers, tend to go down.
I have a vivid memory of a company in my constituency which went bust in the week before the General Election before last. I telephoned the acting managing director and asked him why he had said nothing to me—the local MP, when 1,800 constituents were about to be thrown out of work. In effect, his reply was "What business is it of yours?" I told him that it was very important to a Member of Parliament that his constituents should have work.
I urged him to tell me what I could do to help. His reply was " Have a word with Tony Benn". He spat it out as if it were an invocation of the devil, but which might nevertheless produce something useful. I suggested that he should have made that suggestion three months earlier and run his business properly, instead of as a family misery. Then the Government might have been able to assist, because it is the job of any Government to help industry.
I remember well the "lame duck" speech made at the beginning of my time in this House by the then Minister for Industry, who was rescued from the CBI, the right hon. Member for Knutsford (Mr. Davies). After he said that the Government would not help lame ducks, Rolls-Royce was saved, and rightly so. However, when we do it the Conservatives call it interference with industrial freedom, or nationalisation of the worst kind, or propping up those who do not deserve to

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live, and therefore imposing burdens on those sections of industry which remain in operation. There is paranoia and schizophrenia in the Opposition's approach. They have double vision on these matters. If they do it, it is good and right; if we do it, it is wrong and a burden.
I specialise in employment law—I lecture on it and write books—and I was concerned to hear the hon. Member for Somerset, North (Mr. Dean) talking about the burdens of the present. What about the burdens of the past? I shall give an illustration of this. The managing director of a firm in the construction industry told me that the trouble with that industry was that in the past people had been treated like pigs. Now that they were treated decently, they just did not believe it.
It is very difficult to create a new atmosphere. For example, in the car industry the industrial relations burden of the past is a bitter one, and it is not possible to throw it off in a matter of months. It takes years to do something like that. The burden of the past affects both sides of industry, and it is something which must be taken account of in considering worker participation in decision-making. t hope that the Minister will take this opportunity to say something about this matter and tell us what the Government hope to do.
As far as management is concerned, too many managers are totally authoritarian and take the attitude that their job is to manage, the workers' job to operate the machines, and that each side should shoulder its own burden. They have had this arrangement for so long that many union leaders—fewer now, I am glad to say—are saying that they prefer to be on their side of the bargaining table and to have no information and to take no part in decision-making.
The future for our industry lies in sharing the responsibility between both sides and the creation of trust. This is not impossible. It exists in many industries, firms and sections already, and not only in the private sector. It exists in both private and public sector industries that are well run. Being well run is not a monopoly of the private sector, and the public sector is not all badly run, as the Opposition suggest. Unfortunately,
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we have some bad management stretching throughout the spectrum.
In winding up the debate my hon. Friend the Minister should pay attention to the special burdens being carried by traditional industries such as those in my constituency—boots and shoes, textiles and hosiery. These industries have survived the depression and the recession in the thirties and now today they are faced with drastic problems. They are industries within which there are some sections which are still flourishing because of superb management. But through no fault of their own they are faced with competition with which they cannot contend, and they are finding life becoming increasingly difficult.
I pay tribute to those sections of industry in Leicester and elsewhere which are building in spite of the problems and increasing employment in spite of general unemployment. In Leicester we happily have a lower unemployment rate than many other places, but it is still the highest we have ever had. I hope that the Minister will bear in mind the burden on traditional industries faced with competition at home and overseas, the efforts they are making to face that competition, and the fact that they have managed to retain a high level of employment and a high production rate.
Finally I refer to the traditional attack on this Government and on Socialist policies generally which has come from the Opposition. They say that we impose huge burdens of legislation on those who are unable to carry them. I can speak with an enormous degree of knowledge of one area only—the area of employment law. The trend for legislation was started by Conservatives in the Industrial Relations Act of 1971, the most important and least controversial parts of which—those concerning unfair dismissal rights—have been carried on in the Trade Union and Labour Relations Act and strengthened in the Employment Protection Act. I suggest that those industries, companies and firms which already have and have had the highest standards of management are very little affected by this legislation. They are potentially affected if a manager makes a mistake and dismisses an employee unfairly, and that is only right. But where they are

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already exercising humanity, kindness and decency by giving plenty of warning of redundancies and where they care about health and safety of employees, they have little need for the Health and Safety at Work Act with its huge potential penalties on managers, directors and secretaries.
On the other hand where employers do not come up to normal decent minimum standards, it is right that the law should intervene and enforce those standards on them. That is what the law is for—to set up minimum standards with which people should comply and with which, unfortunately, too many do not comply. Therefore, I suggest that these laws should not be regarded as a burden on industry, but should be welcomed by industry as providing the best environment in which to produce better treatment and conditions for and relations with their own work forces.
I end with the case of the safety regulations which are to be implemented before long. Here the CBI and TUC have combined to say that these are minimum standards which should be enforced with the weight of criminal law. However, the Government are saying "Not yet." It is not the burden which matters in this case, but the concern for life, limb and decency. I believe that these objectives have the blessing of people on both sides of industry, who understand that they are necessary for industry, they will enable people to work together, and industry to survive, flourish and be successful. So long as people go on blaming this or any other Government for introducing minimum standards for industry and blaming other people for their own failures, industry will not flourish as it deserves.
6.10 p.m.
Mr. Geoffrey Finsberg: I hope that the hon. and learned Member for Leicester, West (Mr. Janner) will forgive that I do not follow him, but he heard none of the opening speeches and what he said contributed little to the debate. I appreciate his position, but I, too, know a fair amount about employment, because I am a professional personnel manager. The unnecessary burdens upon employers did not begin with the 1970 Government, but were the result of such legislation as the Industrial Training Act, the Redundancy Payments Act
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and so forth. I do not say whether the burdens were necessary or unnecessary, but they did not start with the 1970 Government.
Mr. Greville Janner: In view of the hon. Member's compliment to me, perhaps he will now say whether he regards the Redundancy Payments Act, the Industrial Training Act and the unfair dismissal protection as necessary.
Mr. Finsberg: If the hon. and learned Member stays for the rest of the debate, he will hear me deal with those matters in my own order.
The hon. Member for Ormskirk (Mr. Kilroy-Silk) introduced a strange dimension to the debate. He lives in a dream world which only exists in the minds of Mr. Bevan in Transport House and those determined to overthrow democracy in the House and the country. The hon. Member for Ormskirk spoke of loans and grants being given to British firms as though somebody else's money is handed out to them. These loans and grants are given to firms from the vast sums taken from them in taxation. If taxation were lower, many firms would happily cope without such loans and grants.
The hon. Member's speech reminded me of speeches made in the 1970 Parliament by the hon. Member for Manchester, Ardwick (Mr. Kaufman) who could be relied upon to make 50-minute speeches irrelevant to the motion in hand. He had to be dredged up by the Whips because no one else wanted to make such speeches—good though his speeches were.
The hon. Member for Ormskirk blamed companies for deciding their future on an economic basis. What sort of double Dutch is that? Does he not realise that the saving of jobs by rationalisation by some of the firms that he mentioned may be contributing overall more to keeping jobs than by saving them in wide and scattered areas? The nationalised industries are the main industries which do not work on an economic basis and they are the biggest eaters of taxpayers' money.
That reality does not interest the hon. Member. His speech, more than any that we are likely to hear tonight, or for a long time, shows the genuineness of this Government when they state that they are wedded to a mixed economy. Mixed economy, my foot! They will have a mixed economy only after everything has

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been done to preserve their so-called manifesto.
I am sorry to say some nasty things about the hon. Member for Ormskirk, but his speech was squalid and over-long. It was designed to blur the excellent speech by my hon. Friend the Member for Hitchin (Mr. Stewart) who concentrated on the subject in a non-political sense. Virtually every word of the speech by the hon. Member for Ormskirk could have been contained in an election address to his poor constituents. I shall go back to examining the matter on the basis upon which the debate began—a non-political basis.
Year after year, Governments of all colours, as my hon. Friend for Hitchin has said, have been placing more and more burdens on the back of industry. Industry cannot go on taking it. Those who devised the excellent Pay-As-You Earn scheme during the War did not realise then, and people realise even less today, how much extra work has to be done by industry as unpaid tax collectors for the Government. I stress that all Governments are guilty of placing these burdens on industry and then asking why industry does not do a better job.
All parties are equally guilty of placing extra burdens on local authorities by more and more legislation—whether it is good or bad does not interest me in this context. All parties say how terrible it is that the rates go up, but this House has willed the extra legislation and is not prepared to will the extra means. I stress that both parties are guilty, because we are not altogether fair about that in the House.
The last three years' demands for statistics and returns show that the proverbial straw has broken the camel's back. The Minister tried to deride my hon. Friend the Member for Hitchin when he was talking about the VAT cut-off at £5,000. He almost seduced my hon. Friend into saying that traders could apply or make yet another return knowing that the information was already available to the Government statistical branch and could be provided without any extra forms being filled in by industry.
An old canard was brought forward—the wickedness of VAT. My hon. Friend the Member for Hitchin made it plain
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that VAT replaced purchase tax, which operated on a multi-rate basis. The late Sir Gerald Nabarro did more than anyone to blow purchase tax out of this place by the nonsense of it that he exposed.
This Government brought in multi-rate VAT in one of its nine Budgets—one loses count of the times one has been told that such a measure will solve the problem. Small businesses are finding it difficult to cope with multi-rate VAT. I speak as parliamentary consultant for the National Union of Licensed Victuallers the members of which are the salt of the earth and the epitome of those who run small businesses in this country. They are having their lives made more difficult by having to work out the rates of VAT. This extra burden of double rates makes many of their already grey hairs even greyer.
I urge the Government to realise that the more burdens they place on small businesses, the more likely they will fail to flourish and fail to grow into large concerns. One of the reasons small businesses do not want to grow is that the burdens become greater at each stage. That is particularly true of taxation and the need to fill in quarterly returns for VAT.
The cut-off level of VAT was fixed at £5,000 some time ago. It would not be difficult for the Government to raise this figure to £7,500 or £10,000 for those who want to take advantage of it. Such a step would relieve the VAT officials and individuals of an enormous amount of hard work.
I should like to turn to another subject. Perhaps at first it may not appear to be relevant to the debate. However, it is relevant. It is the Seventh Report of the Expenditure Committee for Session 197576 on guided weapons. I should like to read two paragraphs from page 69:
"The Rayner system of monitoring, however, requires frequent and substantial submissions of detailed information by the Contractor thus engaging a number of administrative staff and imposing a severe overhead burden."
Further on it says.
"In general, however, we believe that Ministry of Defence … places too much emphasis on the part played by committees. Taking the Short Blowpipe as an example, we found a total of some 26 Ministry committees operating in 1970 to administer the

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R & D phases of this relatively small project. The result of this organisation was an excessive amount of travelling to attend meetings and the loss of much working time by senior personnel. Today"—
this was in April 1976—
" the number of committees has been reduced to about 16 and the frequency of meetings reduced in some cases from monthly to quarterly."
Here, perhaps, is the punch line:
" Although Company attendance at many of these meetings has now been reduced to a few or even one representative, Ministry representation remains virtually unaltered."
That shows that throughout the spectrum Ministries are burdening industry with more and more requirements, and they are burdening themselves with them.
Again, I am not blaming any particular Government. I am blaming the system. As my hon. Friend the Member for Somerset, North (Mr. Dean) said, the system is getting out of control. That is so under even the most well-intentioned Minister, such as the Minister who is decorating the Front Bench at present, the Secretary of State for Industry, who is a thoroughly well-intentioned Secretary of State. However, he and his colleagues do not know exactly what is being done in their names. That is the problem that faces all of us.
There is a particular worry that comes through in the wording of this excellent motion, which speaks about damage to industry and commerce. It has, perhaps, a special application in London, where jobs have been lost, where commerce is moving out and where industry is being discouraged. If I had to put the blame upon any particular section, I should put it upon the blind subservience of politicians of both major parties in London to the views of the planners. The planners have done more to blight and to kill prospects for employment in London than any Government of any political colour. I think that at last that is being realised.
I wonder, for example, whether we could improve the prospects of employment in London and remove more of the burdens on industry if we seriously asked ourselves whether we need any longer the Location of Offices Bureau, which is designed to move people out of London and causes more unemployment, and whether we really need the industrial
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development certificate system in London now, by which firms are discouraged from extending their works in London and encouraged—in inverted commas—to move out. Do we really need the tight system of office development permits in London today?
I am not asking for financial help for London. All I am saying is that we should treat London in the same way as other parts of the country. There are parts of London with a higher unemployment rate than that of Merseyside, yet those trying to find jobs in London are operating with one hand tied behind their backs by the various Government restrictions that have been brought in by a Government of one party and kept by a Government of another party. We should look at this matter and see whether it is right still to continue the very tight restrictions.
Unfortunately, I cannot overlook the hon. and learned Member for Leicester, West. He is sitting in his place so demurely. Let me deal with one of the points that he mentioned—the Employment Protection Act. When Ewan Mitchell, or someone else, comes to write a book in due course on this subject, he might well decide, with the benefit of experience, that the Act has cost jobs, because companies are not taking on people because of the burdens placed on them by the Act. These are companies with first-class records of employment.
Mr. Greville Janner Mr. Greville Janner rose—
Mr. Finsberg: I shall not give way now. I want to leave time for my colleagues to speak. If the hon. and learned Gentleman had come into the Chamber earlier, he could have made a longer speech.
Mr. Greville Janner: Answer the question.
Mr. Finsberg: The keeping of massive numbers—[Interruption.] I do not answer sedentary interruptions.
The keeping of massive numbers of records which is now being forced upon good employers by the Employment Protection Act is no help to anyone. It is adding to overheads.
Mr. Greville Janner: Will the hon. Gentleman be good enough to redeem

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for once the promise that he made—namely, that if I stayed in the Chamber throughout his speech, despite all temptation to go out, he would say whether he approved of the protection given to employees by the Redundancy Payments Act and of the unfair dismissal rules? That was the hon. Gentleman's promise.
Mr. Finsberg: That was not my promise—as Hansard will show. I gave a promise about three Acts, and not one.
Mr. Greville Janner: Do it anyway.
Mr. Finsberg: The hon. and learned Gentleman would perhaps like a deposit on which he can have some interest paid.
The Industrial Training Act has produced in many cases a massive unnecessary bureaucracy of form filling.
Mr. Greville Janner Mr. Greville Janner indicated dissent.
Mr. Finsberg: It is no good the hon. and learned Gentleman shaking his head. It will fall off one day. That will not help him.
I speak with 10 years' practical experience of the Industrial Training Act—not lecturing about it but having to work the wretched thing. The Act makes good companies fill in unnecessary forms, and they still have their good people poached by firms which are not doing any training, so the Act has had no real effect. I do not question its motives, but in practice it has not worked out very well.
I have never criticised the Redundancy Payments Act. I am merely saying that it has placed a burden upon companies which ultimately must be met by the consumer and not by the Civil Service. Every time we pass these pieces of well-meaning legislation, someone must pay, and it is usually someone who gets no benefit from them—the poor consumer.
Any firm worth its salt is already operating a good system concerning the prevention of unfair dismissals. What the Act tries to do is to make firms fill in many unnecessary forms and to give unnecessary lengths of notice, and that is just not achieving what one was told might be achieved.
Mr. Greville Janner: Absolute rubbish.
Mr. Finsberg: The debate, started so excellently by my hon. Friend the Member for Hitchin, descended to a level that has not done any credit to the House
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when the hon. Member for Omskirk spoke to us. What we must try to do is to get over to the people of Britain, in what I should like to call a non-party political sense—which was the whole basis of my hon. Friend's speech—the fact that the burden placed upon industry is an unnecessary burden if it produces nothing of value. So far, nothing that I have heard from the Labour Benches has made me hopeful. I cannot say what I shall hear from the Minister.
If the Secretary of State is to reply to the debate, I hope that he will forgive me if I do not stay to listen to his scintillating remarks—I mean that genuinely. I hope also that my hon. Friend the Member for Basingstoke (Mr. Mitchell) will similarly forgive me. The debate has continued for longer than I anticipated, because of the previous motion. I shall leave at 7 p.m. to fulfil a pre-arranged commitment. I shall hear some of the reply.
I hope that the Secretary of State of the Minister of State will pay a lot of attention to the points made by my hon. Friend the Member for Somerset, North and my hon. Friend the Member for Hitchin, and to the words of wisdom that I am sure will come from my hon. Friend the Member for Basingstoke.
6.29 p.m.
Mr. Giles Shaw: I am grateful for this opportunity to intervene briefly in the debate. I apologise to you, Mr. Deputy Speaker, and to the House for not having been able to attend all of the debate.
I want to draw attention to three or four elements of industry which concern me particularly. First, I take the view—I do not think that many hon. Members would disagree with me—that industry, be it large or small, fully recognises that it is involved in the political process. It can no longer contract out of its obligations towards the Government, whether it be in implementing legislation that the Government have passed or in contributing to taxation that the Government seek to raise. All industries, all companies and all employers recognise that these responsibilities are now theirs, and they do not seek to shirk them. The importance of the job is recognised, and they realise that if they carry these responsibilities two things happen. First, they have to expand services in that specific

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direction—namely, the maintenance of their role towards the Government and the State. Secondly, unless they are prepared to expand they have to reduce their costs and services in their prime direction—namely, the production and distribution of goods and services at competitive prices.
The consequence of the balance is absolutely crucial. It seems to me—I think I take the Secretary of State with me on this—that Governments would be most unwise to tip the balance of administrative cost against, for example, the small employer, just as they would be most unwise to tip the balance of taxation against the larger employer. They recognise that there are thresholds that are crucial. Therefore, we must proceed by some degree of agreement, hopefully consensus, and fairly careful planning and consideration. It is on this aspect of planning, coming as it does from me rather than from the Government Benches, that I crave the indulgence of the House.
In recent years my hon. Friends have retailed the specific amount of legislation which industry is to some extent carrying. I shall add a couple of additional points to that. The whole trading climate for industry has shifted immeasurably with the access to the European Economic Community. Membership of the EEC has given a whole new raft of responsibilities for commercial and industrial legislation. We have the problems of harmonisation of standards of trading and of seeking to establish in product specification those products that are acceptable throughout the membership of the Nine. In this way, the burden on industry has taken a massive leap forward.
I shall refer specifically to the food industry, in which I declare an interest and with which I have been involved for about 18 years. The results of membership of the EEC on food harmonisation is tremendous. The facts are that such humble things as composition standards of foodstuffs have to be negotiated afresh. In many cases, the use of simple things such as additives, colouring matter or flavouring probably has to be redetermined from lists which have been used in the United Kingdom for about 100 years. The whole matter has to come into the melting pot. This has involved food
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manufacturing companies in tremendous additional work and costs.
I read an article recently in the magazine Food Processing which said that to deal with one particular additive alone —the permitted colour used by British food industry within the European framework—the industry was now embarking on a programme of additional scientific research which would last for four to five years and would cost £500,000. That is one simple food additive. This system is required because European harmonisation regulations demand that all such additives should be specified. In the general framework of the food industry that figure is of no real consequence, but the principle is of great consequence.
My plea to the Government and to my hon. Friends is to recognise that while we may seek to introduce legislation of our own devising—say, consumer legislation, trade union legislation or employment protection legislation—at the same time the EEC harmonisation is going on. It must be incumbent on the Government to organise a priority and to understand that they cannot do this little thing, however desirable, without affecting yet again another turn of the ratchet when industry is seeking to cope with that little thing that somebody in Brussels told us to do the day before yesterday.
There are the problems of metrication which involve machinery suppliers in having to re-jig their tools and design new plant and equipment to produce different specifications for the range of products which normally, given time and planning, can be absorbed. But if at the same time they are required to shift employment practice and to undertake relabelling of their products and new standards are imposed upon them by the Community, these become conditions under which managements find it intolerable to take normal commercial decisions. This is the second point of substance—upon which I hope we all agree—namely, the job of those who work in the industry at any level to arrive at important decisions and to implement them, whether on the part of those on the shop floor deciding at what rate of output they and their colleagues will work on certain machines—and I trust that they are consulted on that matter— or on the part of management

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in trying to decide how best to mount, say, a sales campaign for a product.
The fact remains that managements of industry are involving themselves, 24 hours every day, in decision-making. I am concerned that if we are not careful we shall undermine the resistance of industry to a point at which decision-making is something that those concerned dislike doing because the decisions they are called upon to take are not theirs in origin but are someone else's. When we reach that stage, we are on the slippery slope to both the bankruptcy of skill on the shop floor and the bankruptcy of decision-making by management. I have the honour to represent a constituency in the textile belt of West Yorkshire. My part of the world saw the birth of the Industrial Revolution. Many small textile industries which are still viable—I am sure that many Labour Members know this—have very small management teams of only two or three people. Many of them are still family companies, and they are all the better for being so. But they have very small management resources. I suspect that one of the proud reasons why the wool textile sector—I trust that I take the hon. Member for Sowerby (Mr. Madden) with me—has survived better than the cotton and allied textile sectors is that it has not found itself merged into larger units with heavier administrative overheads and with a more distant chain of communication and management. That has been a feature of the development of textiles on the other side of the Pennines, but it is not a common feature in the wool textile industry. Here one has a closely co-ordinated relationship between small managements and small work forces, with the result of excellent communications, an admirable record of industrial relations and an admirable record of contribution to the economy. But when it is laid upon the small man without expert accountants, lawyers and research and development directors, all industrial legislation can be traumatic indeed. It must involve paying fees for professional services externally and be a net addition to costs.
I should like to make one final point about the consumer, whose interest I have at heart. We in this House are prone to
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believe that the consumer requires more and more information from manufacturers and more and more protection in a general sense against being defrauded wilfully by manufacturers. I agree that protection against wilful fraud or sharp practice is desirable. I have a feeling that consumerism does not represent the vast number of consumers in the United Kingdom but usually represents a concentration of pressure to which Members of Parliament are subject.
I put in a plea, together with my remarks about the burden on industry, that we should put into the correct context the pressures from the consumer—who is our elector—and relate them to what happens at the other end of the chain in industry if new steps are required to be taken on behalf of the consumer. I have in mind Acts of Parliament which cover labelling, merchandise marks, declaration of weights, unit pricing and all the information required on labelling and the possibility of restraints and developments in advertising. This kind of thing sounds fair and plausible for those who seek the interests of the consumer in a wide sense. But, as one of my hon. Friends said, there is a cost, and the cost has to be paid ultimately by the consumer. More than that, however the cost has to mean that management somewhere is deflected away from doing its normal job of seeing that employment is fully maintained, that output is at its highest level and that pricing is at the keenest level, and is diverted into interests which are ostensibly those of the dissatisfied consumer, even though its products have a wide and satisfactory consumer market based on rapid repeat purchase.
I beg the Government to take on board the fact that the consumer is somebody who must be served, but not somebody to whom industry should be a slave to satisfy every whim of protection. The burdens on industry are great. The resources of industry, I hope, are greater still, but there must be a balance in the way in which pressures are put, a spread in time, a plan and a recognition that the pressures of yesterday can scarcely be absorbed by today, and that usually before they are absorbed the pressures of tomorrow follow on too quickly.
Those are the problems with which those involved in management have to grapple, and I hope that the Government

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will see that they are given some encouragement to believe that sympathy exists for the problems which they carry on our behalf.
6.40 p.m.
Mr. Max Madden: Let me at the outset apologise for not having heard the whole of the debate, but I was occupied on an urgent redundancy situation in my constituency which necessitated my being involved in the difficulties of obtaining information.
I approach the motion tabled by the hon. Member for Hitchin (Mr. Stewart) with mixed feelings as a Member of this House and as the son of a minor civil servant. As a Member of this House I must, like many of my colleagues, inevitably do battle every day with red tape and officialdom, and we all bear the bruises of that daily battle. As the son of a civil servant, I am aware of the many unfair and unjustified attacks on the Civil Service for the shortcomings and sins imposed by others.
Whatever our position in the political spectrum, I think we must all be concerned about the efficiency of information-gathering, and the purposes of it, be it by the Government or by public bodies. I believe that information-gathering must be done because it is needed and because it is relevant. But it must be done efficiently and it must impose the minimum burden on those who are asked to supply it.
I was able to hear the whole of the opening speech of the hon. Member for Hitchin. He attempted to argue his case and leave the impression that virtually all information requested by the Government was onerous or irrelevant and not really necessary, and that supplying it imposed enormous burdens on all sorts of industries. Perhaps the hon. Gentleman is an admirer of George Bernard Shaw, who said that if someone wished to make people sit up and take notice of his case he should overstate it. But that is not always an advisable dictum, and I think that the hon. Gentleman overstated his case.
The hon. Gentleman was at pains to list all sorts of Government legislation that has been enacted over recent years, and he seemed to put them with all sorts of other pieces of legislation which many
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of us question as being worth while or necessary. To include measures such as the Employment Protection Act, the Health and Safety at Work etc Act and the Redundancy Payments Act, which the hon. Gentleman described as well-meaning and desirable in some respects, is to do a grave injustice to measures which I believe are important to working men and women in this country.
The hon. Gentleman went on to read numerous letters from various firms. Although some of the comments were valid and one could accept them as being fair-minded and reasonable, the recurring theme of the communications was, I am sure, typical of communications which we all receive from small businesses in particular. There were references to the position being one-sided to the fact that the information that firms were being asked to provide was giving increasing control to the Government, that what was being done was oppressive, and so on.
I believe that what we are seeing is a changing balance within industry, both private and, to some extent, public. Over recent years, small and medium-size businesses have not had the total power over their employees and their environment that they had enjoyed for generations past. I am glad to say that over recent years we have seen the balance of power redressed a little in favour of working men and women. For the first time, some employers and some firms are being forced to give more information about the decisions and the basis of those decisions than they gave hitherto. That is a desirable move because it will create the climate for industrial progress. It will create a climate of co-operation and good industrial practice that is so necessary in this country.
I, as a Socialist, believe in planning, and anybody who attempts to equate planning with bureaucracy is doing a disservice to the political argument and condemning Socialism in a way that is most unfair. I believe in a planned economy. I believe that it is necessary for the State to have information in order to undertake proper planning. The State needs to be able to exert an influence and to try to ensure that there is movement in a certain direction. Therefore, it is valid for the State to ask for information.
When we came to office it was clear that our industrial strategy rested upon

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creating a new framework between the State and big business. We had hopes with the Industry Act and the National Enterprise Board of compulsory planning agreements enabling the State, for the first time, to have a real dialogue with big business so that there could be an understanding about forward planning, policy decisions, investment, product development and all the other major decisions within industry. To an extent we were hoping to have, for the first time, a new situation between productive manufacturing industry and the State.
The concomitant of that policy was to give more time for industry, in this new relationship, to undertake a new industrial dynamic. We hoped that there would be a new industrial stimulus, with time provided for more attention to be given to small- and medium-size businesses, which I and many of my colleagues believe are vitally important to the future of British industry and our economy.
That is where innovation is developed and where the most important strands of British industry lie, but I do not believe that we can create that situation because to some extent the major industrial strategy has not developed in the way that many of us wanted it to develop. Nevertheless, and I say this in all sincerity, I believe that there are enormous advantages in giving more active support to small- and medium-sized industry.
Why do we need information? I referred earlier to Members of Parliament. We are being rather hypocritical in sitting back and condemning the need for people to supply information to the Government. We are perhaps the biggest collection of information seekers in the country. I looked at the Order Paper today. It is not typical, and today might be described as a lazy one. Certainly the attendance in the Chamber cannot be described as a high turn-out, but today there were 41 Oral and 198 Written Questions asking for all sorts of obscure information. I am told that the latest valuation is£18 to reply to an Oral Question, and£12 to reply to a Written Question.
Mr. Stephen Ross: Some Questions put many burdens on the Civil Service and on Secretaries of State. Does the hon. Gentleman agree that many of the Questions need not be tabled?
Mr. Madden: That is a matter of opinion. I have never met a Member who has tabled a Question which he did not think was of burning importance and required urgent attention, but I share the hon. Gentleman's view that one can often question the importance of a Question.
Mr. John Biffen: Would not the hon. Gentleman perhaps agree that a lot of this inflation in the asking of Questions by hon. Members derives from the dubious practice of having research assistants?
Mr. Madden: That is a characteristic comment from the hon. Gentleman, whose views are well known. As far as I know, some of the most searching Questions that are tabled are put down by hon. Members who do not enjoy the privilege of research assistance. For example, there is a Question today from the hon. Member for Plymouth, Drake (Miss Fookes) asking about
"difficulties experienced by consumers in obtaining spare parts for domestic appliances."
There is another Question asking whether the Secretary of State for Prices and Consumer Protection
"will seek powers to require petrol stations to display the actual price at which they are offering petrol".
Yet another Question asks whether the Secretary of State
"will list the percentage increases in average retail forecourt petrol prices in 1974, 1975 and to the latest available date in 1976."
That is an indication of the hunger for information which exists in the House of Commons. I do not wish to resist that hunger, but if those responsible for tabling such Questions believe that it is imposing—
Mr. J. W. Rooker: I did not catch the names of the hon. Members who asked about the price of petrol. The fact remains that in the West Midlands motorists who have filled up their cars at petrol filling stations have found themselves charged a price which bears no relation to the price stated on the forecourt. Should we not probe where the responsibility lies under the Trade Descriptions Act?
Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. I encourage the hon. Member for Sowerby (Mr. Madden) not to go up that road.
Mr. Madden: Whatever the price of petrol may be, Mr. Deputy Speaker, I promise you that I shall not go up that road.
It is rather hypocritical, however, of hon. Members who are themselves so hungry for information to try to condemn the Government for legitimate information gathering. Ever since I came to this place there have been complaints about people being buried in paper, and we ourselves are targets in the paper war. I believe that the Civil Service would do well to take on an army of newspaper sub-editors to reduce the verbiage of many of the papers that it sends out, whether to industry, commerce or anyone else, to make it readable so that one could see what one was asked to do without having to have a degree in English. I believe also that this House and its Select Committees have little to be proud of, because many of their reports are extremely lengthy, unreadable and boring.
If we had a war on the paper emanating from this House, so that at least our views could be easily understood by industry, commerce and Government Departments, we would be doing a great service to many people, and there is urgent need for the Government to review their own information-gathering procedures. It is always necessary to monitor what information is being sought, asking oneself, " Do we need it? Do we need it in the form that we have always been seeking it? Do we not need to stop asking for certain information?" Such Government activity would be valuable.
But I do not want to throw out the baby with the bath-water. and I do not agree with the major claim behind the motion—a condemnation of Government information gathering, or the asking of industry and commerce to supply information. If we are to succeed in moving into a more successful industrial Climate —and that lies at the heart of our success —we must have accurate. extensive and proper information. But it must be done with the co-operation of industry and commerce, which must be able to see that it serves a need. If we go about it in the right way, it can be done. It means an end to the asking of stupid questions —and any of us can find such questions by a quick perusal of Government forms and questionnaires. These things should
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be prepared in a more thoughtful and reasonable manner. This debate can do a little to persuade the Government and the Civil Service to do a little more in that respect. It is long overdue.
It is, however, a continuous chore. It has not just become a problem under this Government. It has been a problem under successive Governments, and no doubt it will continue to be so. I hope that we can deal with it with reasonableness without at the same time condemning all Government information gathering and all Government regulations. Some of this activity is irrelevant and unnecessary, but the vast majority of the information-gathering and regulations, certainly as engaged in by the present Government, serves a real purpose and need on behalf of the working people.
6.56 p.m.
Mr. David Mitchell: The whole House will be grateful to my hon. Friend the Member for Hitchin (Mr. Stewart) for raising this matter. I say "whole House", but I am not sure whether that includes the Minister of State. It depends whether he is wearing his party political hat or will be helpful to us by accepting the motion and the fact that it is not put forward in a party political manner. I hope he will accept that the motion is such that he can use the opportunity to explain what he will try to do to ease the burdens facing business generally.
I am glad that my hon. Friend referred not only to industry but to commerce. There is a tendency in many places, including the Government, to overlook the importance of commerce to the country and its contributions, including the hotel and tourist trade, insurance, banking and shipping, to our overseas earnings. The whole area of what are loosely referred to as "City earnings" is important, so it is good that my hon. Friend drew attention to the problems of commerce as well as to those of industry.
My hon. Friend referred to the Government's insatiable thirst for information and to the management time taken up in coping with it. He referred to the multi-rate value added tax, for example. I was interested to hear the plea of my hon. Friend the Member for Worcestershire, South (Mr. Spicer) for an easing of the complexities of VAT. I believe that the

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Government, in response to an earlier debate, have agreed to investigate the possibility of making VAT simpler, and I hope that the Minister will tell us how that inquiry is progressing.
My hon. Friend the Member for Hampstead (Mr. Finsberg) raised the important point that the VAT exemption limit had not been raised to take account of inflation since it was introduced at £5,000. There is an important aspect here. If the limit were to be raised only in line with inflation, no fewer than 250,000 firms would be taken out of the VAT net and all the work that goes with it. That is a multitude of small businesses, which are those worst affected by the work which has to be done.
During the past week the Treasury has been in negotiation in Brussels, and it has been suggested there that we should be prevented from lifting the £5,000 VAT limit in line with inflation. I and some of my hon. Friends have drawn the Treasury's attention to the need to make sure that we do not "sell the pass" and that we retain the right to lift the limit in line with inflation. Will the Minister of State explain and clarify whether his colleague in Brussels has retained that right for us?
My hon. Friend the Member for Somerset, North (Mr. Dean) drew attention to the unfair burdens arising from what is known as Form No. 714 for subcontractors in the building industry. If there is such a scandalous loss of revenue as claimed, it is curious that the number of prosecutions under the existing legislation has been minuscule. It begins to look as if the Government have got their knife into the building industry and that they are out to destroy the small builders, leaving the large ones exposed for nationalisation.
The Minister asked my hon. Friend where he obtained his statistics. I can help. They came from the Small Business Bureau, a recently-formed organisation which is collecting and collating information on the problems and potential of small firms. My colleagues on the Conservative Smaller Business Committee have found its briefings very helpful, and I am sure that the Minister will hear more of it in future.
The figure of 25 per cent. of GNP created by small firms is derived from
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the 19 per cent. given by the Bolton Committee and an approximate underestimate of that contributed by areas of small business activity outside that committee's terms of reference—small farmers, professional men and so on. My hon. Friend also referred to one-third of all jobs being outside the public sector and coming from small firms. I believe that the exact figure is 34 per cent. It would help us to understand the problems and the contribution of small firms if the Minister could tell us a little more.
One must underline the enormous number of forms, questionnaires and regulations which affect the business community today. In the Daily Mail on Saturday, under the heading
"Red tape paper chain protest chokes a court ",
I read:
"An enormous multi-coloured paper chain was unfurled in a magistrates' court yesterday. Airline boss Mike Keegan was still unrolling it when he ran out of space. It was no Christmas decoration. It was a wholly serious protest.…Look at this lot,' he said to the Bench. 'They are all forms my company have to fill in every 30 days. We just can't keep up.'".
Red tape is strangling British industry. My hon. Friend could not have found more concrete support for his point.
How many questionnaires are there, how necessary are they, what do they cost and what is their value and accuracy? Those seem four reasonable questions. On the first, the Government apparently do not know how many there are, so it is difficult for us to find out. However, I have discovered that last year the Department of Industry sent out 640,000 questionnaires requiring an answer. My hon. Friend earlier quoted a parliamentary answer received more recently than mine which gave a figure of about 900,000. I suppose that that is progress over the last 12 months. I learned that the Ministry of Agriculture had sent out 783,971 such circulars. The Department of Employment's answer was that they just do not know. The trouble is that that is true of so many areas of activity. I am sorry that the Minister responsible for small businesses is not here today, because they are affected more than large businesses. He should have been examining this subject to see whether all these forms are necessary.

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I have here a selection of such forms. There is the Department of Employment new earnings survey 1976, with two pages; the Department of the Environment's continuing survey of road goods transport; the Department of Employment annual census of employment—pages of it; something calling itself a "statutory return" and saying
"Please note change of address,"
no doubt because of a move to larger offices; and the monthly return of total wages and salaries. Then there is a 14-page form from the Price Commission.
Mr. Madden: To what extent are these forms related to information required for submission to the Common Market or connected with Common Market directives which require consultation with all sections of industry, commerce and agriculture?
Mr. Mitchell: I cannot answer that off the cuff, but I can give some indication. For instance, I have here a letter from a lady about a small firm of plumbing and heating engineers, consisting of her husband and herself and four employees. They were advised by telephone one Friday by the Price Commission that they were required to complete a return for them which turned out to be 14 pages of most complicated questions. She goes on to say:
"The forms will take days to complete, but the Price Commission even rang from Reading on Monday and Tuesday to see if the forms had arrived."
When Government Departments are sending 14 pages of forms to a firm employing seven people—
Mr. Kaufman: The Price Commission is not a Government Department. It is a body which was set up by the hon. Gentleman's own party when in office.
Mr. Mitchell: Yes, but the Minister knows that the inquiry relating to this firm was made on the instructions of his Government, if not of his Department. It relates to charges for servicing in the plumbing industry and to call-out charges. That is a matter for which the Government are totally responsible.
How necessary are these questions? There are 64 questions on the survey of labour costs form under the Statistics of Trade Act. One relates to the employer's
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share of insurance contributions, including payments made under certain systems. All that information is obtainable from a company's accounts. The Government have the information and can produce it themselves without having to bother individual firms. Another question relates to provision for redundancy and the total redundancy payments made by the employer and rebates received from the Redundancy Fund under the Redundancy Payments Act. The Government have that information too. Why do they have to get it again? Another form asks how much regional employment premium has been received. The Government pay it, so they must know.
The Government ask for all sorts of information which is within their own knowledge. They even asked what marriage gratuities had been paid. Information was sought on training board payments and receipts, and this again is information which is obtainable from other sources. It is not necessary to burden firms with it. The answer to the question "How many?" is "Far too many". If we ask how necessary the questionnaires are, we find that many are not necessary.
I come now to the question of cost. In reply to a recent question, a Minister at the Department of Industry said that these operations cost it £7·7 million a year. I can assure the Minister that the cost to industry of answering those questions is 20 times as great. The Wine and Spirit Trade Association has told me about a firm which carried out a careful survey of the number of documents it received and the time taken to deal with them every year. The firm employs 95 people and it received 5,348 documents. A total of 912 hours was spent dealing with them. The effect is much worse for smaller firms because the smaller the firm, the higher up the management pyramid has to be the work of studying the documents, seeing how they affect the business and deciding how to deal with them.
What is the value of these questionnaires? The 1973 census has not yet been published. Whatever use will it be when it is published?
Mr. Kaufman: I did not do it.
Mr. Mitchell: I know that the hon. Gentleman did not do that census, but he

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is busy taking another and I hope that he will not continue it.
The 1972 census was carried out when my party was in office. I am not making a party point but am stressing that there is an excess of Government questionnaires and statistic seeking. Some figures in the 1972 census were wildly inaccurate in any case.
I do not want to steal too much of the Minister's time, having had some of my own taken. Small businesses are much more effective than large businesses. They have an important contribution to make to the quality of life, the economy, the gross national product and, above all, a great potential for helping the country's unemployment problem.
It is from small businesses that the large ones grow. Morphy Richards started in a barn in 1936. Plessey's started business in a shed next to a print shop. Wherever we look, we find large firms which had their origins in small firms with the energy and enthusiasm to grow.
The business community is alive. Like human beings, some grow old and tired and their places have to be taken by young, thrusting, vigorous, new firms. It is because the vigorous, thrusting small firms are being damaged and destroyed by the policies of the Government, including the excessive form-filling, statistics and regulations which are suffocating enterprise and intiative, that the House will welcome the action of my hon. Friend the Member for Hitchin in raising this subject.
The hon. Member for Ormskirk (Mr. Kilroy-Silk) asked why the British worker had lower pay and worked with less investment behind him than his Continental competitor. The answer is that this happens because the Government have made it not worth while for people to invest in British industry. When investors are taxed up to 98 per cent., can we be surprised that people do not invest?
The Government say that they want employment, but they regard employers as irrelevant. They say that they want investment, but they dislike investors. They say that they want industrial revival, but they destroy incentives. My hon. Friend the Member for Hitchin was right to draw attention to the burdens
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on industry and commerce, and I hope that the House will accept his motion.
7.14 p.m.
The Minister of State, Department of Industry (Mr. Gerald Kaufman): The hon. Member for Hitchin (Mr. Stewart) should be congratulated on winning the Ballot and having an opportunity to introduce a motion. However, I do not think that anyone who listened to his pathetic, trivial speech in introducing the motion—which was so effectively carved up by my hon. Friend the Member for Ormskirk (Mr. Kilroy-Silk)—could possibly say that he had used his precious opportunity in a fruitful manner.
The hon. Member for Basingstoke (Mr. Mitchell) complained about the number of regulations and the excessive amount of information sought by the Government, but I have here a volume of more than 1,300 pages including the regulations introduced by the Conservative Government in the first four months of 1973. I did not notice any hon. Members opposite putting down motions at that time.
The hon. Member for Basingstoke spoke about the Government's insatiable appetite for information, but he has an insatiable appetite for information him-self. He has a Question today to the Chancellor of the Exchequer:
"What is the latest figure available as to the proportion of VAT which is obtained from companies with an annual turnover of £50,000 or less; what is the number of sole traders and companies with an annual turnover of £5,000 or less which have elected to be involved with VAT; and how many of these are net contributors and how many net recipients of tax."
How on earth are we to obtain that information for the hon. Gentleman without getting it from the companies which he accuses us of bothering?
Mr. David Mitchell: All the information is available from the computer at Southend. It is not necessary to trouble any company for it.
Mr. Kaufman: I presume that the hon. Gentleman thinks that the computer is an anthropomorphic entity which thought up this information for itself. Computers can provide us only with information fed into them, and such information has to be procured from somewhere. It can be procured only by companies supplying it to the Government, and I should be surprised if they were not asked to provide

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it on the forms sent out by the appropriate Government Department headed by my right hon. Friend the Chancellor of the Exchequer.
The hon. Member for Basingstoke spoke about the number of regulations before the House, and I had sympathy with his argument that many seemed excessively trivial, probing and detailed. It is all very well for the hon. Gentleman to tell me not to wear a political hat, but the debate has included some vigorous attacks on a political basis by some hon. Members, including the hon. Member for Basingstoke.
I find, thumbing idly through this 1,300-page volume comprising one-third of the regulations issued in 1973, that they include the Sugar Beet (Research and Education) Order, the Wages Regulation (Ostrich and Fancy Feather and Artificial Flower) Order and the Therapeutic Substances (Supply of Bacitracine Methylene Disalicylate for Agricultural Purposes) Regulations. Presumably these were all matters which the then Government considered to be of paramount importance.
Let us take the Customs and Excise (European Free Trade Association Countries) (Origin of Certain Goods) Regulations 1973. It includes a series of schedules, and Schedule 1 is there simply to interpret Schedules 2 and 3. Included in the information that it is necessary to obtain under Schedule 2(1) is information about
"Vegetable saps and extracts; pectic substances, pectinates and pectates; agar-agar and other mucilages and thickeners, derived from vegetable products:

A. Vegetable saps and extracts:

(i) Opium

(ii) Manna

(iii) Quassia-amara extract

(iv) Liquorice

(v) Pyrethrum extract and extracts of the roots of plants containing rotenone

(vi) Hop extract

(vii) Intermixtures of vegetable extracts, for the manufacture of beverages or of prepared foods

(viii) Other:

(a) Medicinal

(b) Not specified

B. Pectic substances, pectinates and pectates:

(i) Dry

(ii) Other

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C. Agar-agar and other mucilages and thickeners, derived from vegetable products:

(i) Agar-agar

(ii) Mucilages and thickeners derived from locust beans or locust-bean-seeds

(iii) Other."

That is just an extract, and all the information dealt with in this tiny bit of a regulation is information on which the Government would have had to have relations with precisely those small businesses which Opposition Members have been moaning and whining about for the last three hours.
Mr. David Mitchell: If the hon. Gentleman accepts that there are too many questionnaires, regulations and forms, perhaps he would not simply chew the cud over it for too long but would tell us what he can do to ease the burden on small businesses, regardless of party politics.
Mr. Kaufman: I want to chew the cud a little because there is a fair amount of cud to chew.
Unlike Opposition Members of Parliament who, like the House of Lords, seem to get some injection of adrenalin when in Opposition, I take seriously the question of the superfluity of forms, and the fact that there are too many surveys and questionnaires. There is too much intervention of an unnecessary nature, as distinct from that to which my hon. Friend the Member for Sowerby (Mr. Madden) referred—that is, necessary Government intervention. I want to do something about it. I say without hesitation that I am not at all satisfied that my Department should be spending nearly £8 million and that 1,200 civil servants should be engaged on surveys—
Mr. Gwilym Roberts rose—
Mr. Kaufman: May I complete the sentence?
I am not satisfied, and if the level can be reduced I want it to be reduced.
First, I want to know how many surveys are imposed upon us by the European Economic Community; that is, surveys that we cannot do without, as members of the Community. The electorate voted clearly by a majority of two to one that we should be members of the Community, so we have to accept those things that the Community asks us to do.

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I want to know how many of the inquiries are necessary for essential information such as the compilation of the retail prices index. There are a large number of Questions down today about the retail prices index, and I do not think that anyone would wish to dispense with it.
Much other information is necessary for the proper functioning of Government and business. Clearly, this should continue, and no one would quarrel with that.
There may, however, be other questionnaires—I do not know; I want to look into it—which one could dispense with. If they can be dispensed with, I want to dispense with them. If they can be made more simple, I want to simplify them. I do not believe in the propagation of questionnaires for their own sake. I only wish that this had been a continuous view held by all Governments.
I do not wish to make too much of a party point, but we cannot avoid making party points, since there is no one in the House who was elected as an independent. We inherited a very large number of surveys, and it is difficult to put a stop to matters that have continued under successive Governments.
The hon. Member for Somerset, North (Mr. Dean) was an extremely effective Minister at the Department of Health and Social Security, a Department which multiplied bureaucracy as few others have, through the reorganisation of the National Health Service. I am sure that he and his right hon. Friend did not want to augment and multiply bureaucracy in doing what they thought was a very proper reform of National Health Service administration, but acts of Government which do not of themselves seek to multiply bureaucracy often quite unwittingly or unwillingly have such effects. In looking at the way in which Government bureaucracy operates, one has to see what one can do to stop the momentum.
Mr. Madden: Did my hon. Friend see the revelation in yesterday's Sunday
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Times of the amount of waste identified by survey teams working in certain sections of the then Ministry of Public Building and Works, which made considerable savings possible? Would he agree that this sort of information-gathering and survey work is valuable?
Mr. Kaufman: I regret that, as I spend so much of my Sundays approving answers to parliamentary Questions from members of the Opposition who want information from my Department, I do not have time to read the extremely long articles that appear in the Sunday Times, but if my hon. Friend would be good enough, with his slightly greater leisure, to offer me an epitome of it, I shall do my best to consider it.
Mr. Stephen Ross: I am grateful to the Minister for giving way. As I shall not have an opportunity to put the motion which I have down on the Order Paper, perhaps I may take a minute or so. The Minister has referred to the Department of Health and Social Security. He would undoubtedly be very popular if he were to announce the abolition of one tier of health authority. That would be wonderful news.
Mr. Kaufman: It is not for me to intervene in the activities of other Government Departments. If the hon. Member for the Isle of Wight (Mr. Ross) could swing the support of his party behind us on a number of pieces of legislation it might well be that we could spare time for things that hon. Members on both sides think desirable.
The Government have very much at heart the interests of small businesses. We believe that small businesses provide a very valuable service. They provide the kind of service which is necessary to a country of our complexity, they provide employment, and they add to the character of our society—
It being twenty-six minutes past Seven o'clock, the proceedings on the motion lapsed, pursuant to Order this day.

ORDERS OF THE DAY

  CONSOLIDATED FUND BILL
  Order for Second Reading read.
  Motion made, and Question proposed, That the Bill be now read a Second time.

  CROWN AGENTS (FINANCIAL ASSISTANCE)
  7.26 p.m.
  Mr. Nigel Spearing: Under Class II, Vote 8, of the Consolidated Fund there is a fairly large section devoted to the Ministry of Overseas Development. I wish to raise tonight, for the first time, I believe, since 7th November last year, matters of administration of the overseas aid programme. Since that debate last year there has been a report by a Select Committee—House of Commons Paper No. 191 of Session 1975-76—devoted to the subject of the world food crisis and Third World development and the implications for United Kingdom policy. Also, there has been the Government reply, Cmnd. 6567. But, alas, last Wednesday we had the announcement of cuts by the Chancellor of the Exchequer in his December measures.
  I believe that this is the first opportunity which any Department has had, or any Back Bencher has had, under a departmental heading to discuss those measures. I have no doubt that my hon. Friend the Parliamentary Secretary will confirm what I believe to be generally accepted, namely, that there has been a cut of about 10 per cent. in this programme, which means that the programme has declined from about 0·89 per cent. of our domestic budget to about 0·8 per cent. Perhaps he will be able to tell us whether the consequence for the administration of the programme means that there will be non-implementation of matters which are planned or whether it will mean not putting into effect projects or schemes which it was hoped to undertake but which are not at the planning stage at the moment.
  At this time of the year, some people might say that the Chancellor has cut gold, frankincense and myrrh by 10 per cent. I am not sure that that is right,
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  because our overseas programme—it is the administration priorities which I am raising now—is not a straightforward matter. Here again, perhaps my hon. Friend may be able to tell us the extent to which our aid programme is not entirely altruistic in the sense that, certainly in terms of programme aid, there is some return to this country in purchases of products, especially manufactured products, which is valuable for our employment.
  I do not believe that anyone would deny that that is so or would suggest that it was wrong. Obviously, if one puts a Third World country in a completed circuit, as it were, developments are taking place in that country which otherwise might not be possible. But this consideration draws to our attention the difficulty of seeing the shape of the overseas aid programme. Of the large expenditures involved—not as large as some of us would like, but considerable in absolute terms—there must be substantial sums spent on administration, on the assessment of programmes, on the maintenance of specialists in post and so on.
  There is a large sum—over £100 million—in the technical assistance programme. I believe that this is one of the ways—I am sure that the Minister will agree—in which this country can be most effective, through its technical aid programme, especially in parts of the world where British assistance has been traditional over many years.
  On the more direct side, there is the project aid under which particular projects are given assistance, and this is one of the first matters I wish to raise on the Minister's reply to the Select Committee's recommendations. Its seventh recommendation, in paragraph 61, was:
  "The Ministry of Overseas Development should show more willingness to meet requests for the payment of local and recurrent costs."
  The Minister's reply, in his paragraph 9, is a little vague on this, saying:
  "We recognise that these problems may become more severe as we place more emphasis on poverty-focused projects. We shall need to look at these problems case by case."
  In other words, the Ministry is reserving its position on what is in certain countries a very controversial matter. In my experience, the proportion of project aid which can be spent on local costs is often a constraining factor. I hope that my

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  hon. Friend will be more forthcoming tonight than he was in his reply to the Committee.
  The programme aid side of the Ministry's work is at least to some extent controversial. The Government quite properly wish to go along with local development plans drawn up by the Governments concerned. One would have no quarrel with that, but we might quarrel with the objectives or the manner in which the local development plan is being put into effect. In the White Paper "More Help for the Poorest", my hon. Friend states specifically what the objectives of British aid are. I know that he does his best to ensure that our aid meets those objectives. But when I was a member of the Select Committee on Overseas Development we had some unnerving answers to our questions about programme aid for certain countries. It appeared that at least locally there were not very clear indications how it was spent. That raises the whole problem of how one goes about development in a so-called underdeveloped country. The dialogue now taking place between the North and the South, a continuation of the UNCTAD talks in which my hon. Friend played a significant rôle, is part of the attempt to solve that problem.
  We can say to many of the less developed countries that if we are providing aid to help the poorest we need some earnest of intent that there will be no exploitation, which can become rampant. A great deal of party politics has the object of ensuring that there is no exploitation in the United Kingdom, or that it is minimal. How far can we tell sovereign States "We shall provide aid only so long as there is no exploitation in your country"? I shall not dwell on the matter. Everybody knows that it is a very important political question. My right hon. Friend the Member for Lanark (Mrs. Hart) included a chapter on it in her interesting book about aid matters. It is a dilemma that the Ministry and posts abroad must face, especially now that we have nailed our flag to the mast on the question of overseas aid policy. What do we do if in our view the local plan of a host Government does not give aid to those who need it most, and if it contains elements of exploitation, or the risk of exploitation, particularly of the
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  rural poor, of which donors in this country and our Government would not approve?
  How does the programme aid work? It is not something that we can cut off at once, because much of it involves spare parts and matters to which we are committed. In a sense the White Paper of 18 months ago deals with a quandary, but it is a welcome quandary, because if the policy did not exist we should not have the quandary.
  The Select Committee welcomed the White Paper, which at least turned our eyes in the right direction. The Committee turned our bodies in the right direction, but I am not yet convinced that we are advancing in the right direction. In paragraph 56 of its report, the Select Committee said:
  "Your Committee believe that unless some specific rules are prepared, then implementation of a poverty focussed approach to aid will proceed too slowly. Existing methods are not appropriate. They have an inertia of their own. They will not be changed by a statement of principle. Direct action is required."
  That was not one of the paragraphs on which there was a specific recommendation, so I am not asking my hon. Friend to say what he will do about it. I believe, however, that the spirit of that sentence will be echoed, certainly on the Labour Benches.
  Another important paragraph was paragraph 20, where the Select Committee pointed out the need for greater emphasis on rural development. It warned that if one benefited farmers as a whole one was more likely to benefit large farmers who were doing all right and not help subsistence farmers who lacked the ability to absorb the aid. I find some of the thinking behind the Minister's reply a little unnerving. For example, he believes that 30 per cent. of project aid is going to help the rural poor. Paragraph 16 of the White Paper says:
  "half our bilateral project aid (which is about 30 per cent. of our total aid programme) went on projects to help the rural poor."
  But the criteria are difficult to define. Simply providing employment in rural areas does not necessarily mean that the poor people's best interests are being served.
  We can think of our own Industrial Revolution as an example. If coal mines

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  were opened in the countryside, poor people might crowd in to work in those mines or in small workshops nearby, but the creation of paid employment per se is not necessarily the best thing that can happen to people who are outside a money economy.
  I find the Select Committee's report, and particularly paragraphs 20 and 21, out of focus in this respect. In an area which has partly a money economy and partly a subsistence economy, creating more money wealth and bringing more people into the money economy probably pleases economists and makes the statistics look better, but it does not necessarily mean that people's security is improved, or that their real standard of living is any better, if the basic rural subsistence economy is undermined.
  It has now been clearly recognised in aid circles that through forcing statistical development on a country, in terms of all the usual economists' indicators, one not only undermines the basic agricultural economy of an area, which may be a subsistence area, but may make people open to exploitation. That occurs particularly where there is mineral wealth, plantation agriculture or a new product. Paradoxically, some of the least wealthy countries, perhaps those with the least mineral or power resources, have turned to rural development in a more realistic way than those which have been apparently blessed with considerable mineral resources but where urbanisation acts as a magnet and it is difficult to get a meaningful rural development programme started.
  I am glad that our Ministry has focused its attention on the least privileged in the least privileged countries, because I believe that rural development, undergirding the subsistence economy, is the best approach to overseas development and the best contribution that the United Kingdom can make. However, I have severe doubts about the speed and perhaps the efficacy of the strategy whereby this admirable programme can be achieved.
  I know that since the Select Committee's report the ODM has introduced a Rural Development Division. The Commonwealth Secretariat has a rural development section following a most interesting
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  conference that my right hon. Friend the Member for Lanark had in this country when she was Minister for Overseas Development. It was one of the good things that came out of the Rome Food Conference. There are unnerving rumours about the Rural Development Division not having the internal muscle or clout, or whatever political word one chooses to use, to fulfil the admirable aims contained in the White Paper.
  Some time ago I was asking the Ministry about progress in appropriate technology—namely, technology that is not sophisticated but appropriate to rural people who do not have much access to machinery. I found the answers not very enlightening. I am reminded of the phrase that Guy Clutton-Brock, who is fortunately no longer in gaol in Southern Rhodesia, as it then was, used in his book about Nyasaland at the time of the troubles. He said:
  "The problem is that Southern Rhodesia thinks it wants Cadillacs when all it needs is a fleet of Ford Model Ts."
  I am not so sure that many countries want Ford Model Ts. Even they may be technologically too advanced and inappropriate for many countries in the world.
  About a year ago I visited Malawi, Where the Kisungu Cured Tobacco Scheme was taking place. They may well have had the equivalent of Model Ts to get the agricultural scheme off the ground, but once that had taken place they went back, quite properly, to ox carts. Oxen eat food off the farm and not oil, which has to be imported, but reproduce themselves and produce milk and meat. Further, they do not need to be steered as they go along. There are all sorts of advantage to be found in appropriate technology. I am not so sure whether the Development Department, in its sophisticated and almost Westernised guise, has quite the right touch. Some of its agencies have, but I am not convinced that it has the right touch. I am not so sure that it is geared to that type of attitude.
  The Minister's reply, and what I might call accepted development law, are not in disagreement with much of the thinking on the Government Benches and, indeed, throughout the world. As I understand it, the problem goes something like this—there is a reasonable amount

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  of money for rural development but it is difficult to identify a project: and even if it is identified, is it possible to get people to run it? The departmental reply in paragraphs 25 and 13 rightly emphasises the difficulty of finding the right sort of personnel.
  A great deal of help can come from the Rural Development Division. Specialised help can be gained from marketing, grading and storage experts from the Tropical Products Institute and other specialist bodies around the world, but in the end it is the person who is literally on the ground who has to co-ordinate and who has to be on the scene for a certain period.
  Very often such people can come from the countries where the project is taking place, but that is not always the position. The best type of development that I have seen in this respect comes from the Colonial Development Corporation. In almost a worldwide organisation it is possible to develop a career structure for people who will devote their lives to overseas projects. In the past it might have been possible to do that within the Commonwealth Civil Service, but that is no longer true. However, it might be done through some large organisation such as the CDC. I know that in the Select Committee's recommendations there is reference to consultants. I do not know whether the CDC comes under that category, but it probably does. I do not know whether it comes under the category of consultant criticism in the Public Accounts Committee's report to which I shall refer—I think perhaps not.
  The CDC has an important part to play. I hope that my hon. Friend the Minister will be able to reassure the House that some career structure developments are taking place for those who are willing to provide a lifetime of service in other countries and to provide specialised skills. I hope that that form of career structure is on the move. It is clear that success in rural development depends on a person with a knack. Such a person may not be highly qualified in any one area, but it is necessary that he has a knack and has shown by his abilities in other roles that he can do this type of work. That is true abroad and it is probably true in this country.
  That brings me to the courses available for Third World students in this country.
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  Reference is made to this matter in paragraph 17 of the departmental reply. The Select Committee thought that many of the courses available in Britain were not especially suitable for people coming from Third World nations. It thought that there should be an extension of postgraduate research activities in Third World countries themselves. That was stated in paragraph 20. Paragraph 17 highlights the criticism—I must say that I have heard a criticism of this nature in Third World countries—that many of the courses in Britain are not suited to Third World conditions. This is a matter that we must consider carefully. Indeed, I am not so sure whether many of the courses in this country are entirely satisfactory for United Kingdom conditions.
  Recently there has been some concern about the expansion of education in certain areas. I do not want to enter into that discussion now as it is not part of the debate, except to say that the late Richard Crossman, in my hearing at the time of the Robbins Report, said: "Robbins says that we are going to have more of what we have got, but is more of what we have got what we need?" My answer is "No" for the United Kingdom, and I suspect that that answer is even truer for the Third World countries.
  As for rural development, I emphasise to my hon. Friend—I do not think he will need much persuading—that we need to ensure that the system of subsistence agriculture in many Third World countries is not destroyed by development proposals or techniques. There is a need for a balanced system, or a system of development surpluses that can be either broken or undergirded so that there is no breaking up of a society's rural system for statistical gains and developments.
  We all know that in the end rural development depends upon proper surveys of soil and climate, potential crops and the potential for marketing, grading and storage. Those matters must be joint number one in the operations of the Ministry overseas.
  I turn to a related topic that is one step away, as it were, from the PAC's comments on the funding of the Crown Agents. This is a topic that appeared in the PAC's Third Report 1975-76. On 25th October I asked my right hon. Friend the Minister for Overseas Development in an Oral Question if he would be

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  quite sure that when the Fay Committee came to make its report it would thoroughly go into the question of the relationship between the Crown Agents and the Ministry. The Minister for Overseas Development made no mention of any expansion of the Crown Agents. I raised the matter again because my hon. Friend's reply on 25th October was not specific on that issue.
  Since that time the PAC's report has been published. I refer to the Third Report, page xvii, where in paragraph 24 specific reference is made to a further extension of activities by the Crown Agents. It says:
  "However, in April 1974 the Ministry became aware that without their prior approval the Crown Agents had provided £60 million in financial support operations for the United Kingdom domestic institutions. The Crown Agents told us that certain of the support operations had had the encouragement of the Bank of England".
  Clearly, some of the other support operations have not had that effect. The reference to the evidence on page 22 did not back up that first statement.
  In April 1974 there was a Select Committee on Overseas Development which began investigations into the Crown Agents. Everybody thought at the time that the Select Committee would come up with some information on this aspect in its report. However, I ask my hon. Friend to ensure that this matter is covered in the Fay Report—not only as to the way in which the Crown Agents were or were not given permission to extend their activities on this topic but on other matters. Clearly, the further support operations described in the PAC document occurred at a time when questions were being asked by a Select Committee. I believe that the matter should be thoroughly investigated and reported upon. I should not like the Committee to be silent on that matter, because otherwise some of us will still require to know more. Therefore, it is right that I should give my hon. Friend notice that some of us will be questioning him on these matters.
  Many hon. Members recognise the great efforts made by the Ministry in the North-South dialogue. We have tried to be constructive, but we should like to
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  see greater speed in terms of what is being done. We appreciate that we must examine the subject in a world perspective as well to have regard to the interests of the United Kingdom—not only in terms of an increase in world trade but in terms of decreased exploitation in the world, from wherever it may come. We also wish to ensure that some countries which have not had the advantage that we have enjoyed will be developed in a way that is suitable for all their people and not just for some of them.
  7.53 p.m.
  Mr. Richard Luce: I wash to apologise to the hon. Member for Newham, South (Mr. Spearing) for not being here during the first few minutes of his remarks. A little earlier this evening we were both taking part in the proceedings of a Select Committee, and I regret that I missed his earlier comments.
  I congratulate the hon. Gentleman on raising the important subject of the growing importance of rural development in the developing countries. As members of the Select Committee on Overseas Development, we have concentrated on that issue. As we in this country become more and more bogged down in our internal problems, we tend to forget the incredible importance and interdependence of the Western world on the developing countries. The EEC, for example, depends on the Third World for 55 per cent. of all its raw materials. Trading prospects in the Western world in the long term depend on increasing trade with the Third World. In my view, there is no prospect of political stability in the world unless the West encourages increased trade and a higher standard of living in the developing countries.
  The developing countries, on the other hand, depend increasingly on the Western world—in other words, the industrialised countries—for their export markets. Already the less developed countries export three-quarters of their materials and commodities to the industrial democracies. That demonstrates the importance of the Western world to those countries. Secondly, the developing countries depend on aid from the industrialised countries or the developed countries to help them to expand their exports and thereby to improve their standard of living.

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  There have been a number of serious developments in the Third World in the last few years. For example, there has been the impact of the increase in oil prices, and certainly the latest increase will not assist the developing countries. We know that in the last three years the developing countries have seen a dramatic deterioration in their current accounts and a tremendous increase in deficits, rising from a total of £9 billion in 1973 to £31 billion in 1976. We know from the statistics that 650,000 people in those countries have to live on incomes of less than £24 a year. We also know that there is gross under-employment in those areas. It is estimated that in those countries 250 million people may be under-employed. In those countries we have seen a growing switch from rural areas to the cities, with all the concomitant social problems that follow. For example, in 1960 there were 45 cities with a population of I million and more. It is estimated that by 1985 there could be 285 cities with populations of 1 million or more. The vast majority of them are likely to be in the Third World.
  All these factors demonstrably affect the nature of the problem we face. This brings me to the point mentioned by the hon. Member for Newham, South—namely, the importance of rural development. It is important that we should switch our aid towards a greater emphasis not only on the poor countries but on rural areas in those countries. By helping country areas to develop their agriculture and other labour-intensive industries, we can encourage them towards a policy of import substitution, which would help their balance of payments. We must encourage those countries to export more, and we must encourage them to create more employment and higher cash incomes to help them to cope with some of their social problems. The Select Committee has endorsed that approach.
  Our thinking in terms of overseas aid must be more in line with the direction I have attempted to outline. I urge the Government to recognise the fact that there is a need no longer to look at aid and trade as separate issues. The two are entirely interrelated and must be seen as such by the Government. What
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  we need in Britain and in the Western world, particularly within the EEC, is a comprehensive approach towards greater rural development in the Third World. We must aim at a policy that encourages more agricultural production, increased productivity, better yields, improved marketing and an integrated approach embracing roads, water, credit facilities, marketing problems, education, health and many other important facilities.
  In addition, there is the assistance we can give in enabling the Third World countries to buy better seeds and fertilisers, better irrigation equipment and agricultural machinery and in improving the agricultural extension services. Further, there is the help we can give in improving communications and the marketing and processing of agricultural goods for export. All this is greatly needed.
  There is so much that Britain and the West can do in our mutual interests in the less developed countries by way of rural development. We have a great deal to offer. There are the training facilities that we can provide and the expertise in agriculture that we can offer. There is all the experience of the Commonwealth Development Corporation, which has an admirable record. There is a great deal of technical co-operation that we can offer. All this must be done in close co-operation with the approach of the EEC to this issue which, as I understand it, is to encourage self-generating projects in the rural areas of these countries.
  I hope that the Minister will say something about the way in which we are working in harness with the Community on these matters. My view is that until we in the West can work effectively with the countries of the Third World, particularly the poorer ones, to encourage a greater degree of rural and agricultural development, there will be continued political instability in the Third World and the long-term prospects for more trade between it and the Western world will be hampered. I shall be interested to hear the Minister's views and of the Government's approach to rural development.
  8.1 p.m.
  Mr. Frank Hooley: My hon. Friend the Member for Newham, South (Mr. Spearing) referred to the North-South dialogue while the hon. Member for Shoreham (Mr. Luce) pointed out that questions of aid are inter-woven with questions of trade and the general relationship between the Third World and the West. With these points of view I entirely agree. It would be unreal for us to debate the British aid programme and our provision for that programme without taking into account the wider questions which arise in terms of relations between the Western World and the Third World.
  I do not wish to go over the history of the current argument. I shall mention only that it came sharply into focus at the special General Assembly of the United Nations in April 1974 when there was a sharp confrontation between the developing world and the rich countries of the West. The argument went on into the General Assembly debates in September 1974 when there was produced a charter for the economic rights and duties of states, which tried to set out a new relationship between the poorer and richer countries. The argument continued at the Seventh Special Assembly of the United Nations in 1975, when there was some change of attitude on both sides.
  On the one hand the developing countries made it clear that they wanted a new relationship and a better deal but seemed not quite so anxious for a sharp confrontation with the richer countries. On the other hand, the Western World saw the danger of a stark confrontation. It needed raw materials, many of which came from the developing countries. It also needed markets for its products.
  Arising to some extent from the discussions that took place in the General Assembly just over 12 months ago, the scene was set for two major discussions on these problems of aid and development. The first such discussion was the UNCTAD IV conference in Nairobi which took place in May 1976, to which I shall return. The second major discussion was the conference for International and Economic Co-operation which was set up in Paris in December 1975 and which has been adjourned until
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  next spring. This has been referred to as the North-South dialogue and it raises a great many questions in relation to the British aid programme and our contribution to aid and development.
  The CIEC, as it has been called, or the North-South dialogue, had a tripartite constitution. There were the developed countries, the United States, Japan, Western Europe, Australia, Canada and one or two others. The second group, interesting enough, was made up of the OPEC countries which, although they are developing countries in the sense of needing technical and development aid over a wide area of economic and social development, are not poor. They include such countries as Saudia Arabia, Iran and Venezuela, which have enormous oil resources. Nevertheless, in some respects they need aid and technological advice such as we can give through our development programme.
  The third element in the North-South dialogue was the developing countries in the more precise sense, countries like India, Jamaica, Zaire, Zambia, Egypt and a number of others. They are in need of aid and technological assistance but cannot call on the great resources enjoyed by the OPEC countries.
  The interesting feature of the Paris conference was the alliance which developed between the OPEC countries and the other developing countries vis-à-vis the Western countries. The conference has operated in the form of four commissions which have tried to deal respectively with energy, raw materials, development problems and finance. The discussions have taken place within those four categories.
  I do not wish to say much about the energy discussions since these are not a responsibility of my hon. Friend and in any case the British position on oil is changing in that we are moving from being a major consumer to a major producer. The energy discussion is important in the sense that it has shown, so far, a tendency for a common approach to be adopted by the rich oil-producing countries and some of the poorest countries. If this alliance continues, as it might, it will pose certain problems for the Western world. Within the context of the

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  Paris discussions there seems to have been, in this area at any rate, a certain amount of meeting of minds.
  The OPEC countries began to appreciate that the West has a genuine desire for security of the supply of oil and for the long-term development of the supply of oil. On the other hand, the Western countries have accepted that it is reasonable for the purchasing power of the oil countries to be maintained even though they are anxious that changes in price shall not occur in the violent and unpredictable manner which so upset the world economy in 1973.
  There has not been the same degree of common ground on the second issue of raw materials. The principal interest of the developing countries has been to achieve reasonably stable and remunerative prices for basic commodities. They would like to see an integrated commodity programme backed by a common fund to help finance buffer stocks and similar techniques to iron out fluctuations in prices and supplies. A major demand of the developing countries has been for the indexation of the prices of their products so that, as inflation drives up the cost of the machinery and other technological material which the West can supply, they do not fall behind because of a decline in the prices of basic commodities.
  Another major interest of the developing countries has been in the effective establishment of an international fund for agricultural development, something which clearly is of immense importance to them. The agenda in the third commission, on development, generally related to the question of access to the markets of the Western world for the industrial products of developing countries, the transfer of technology from the West to the Third World, and increased financial assistance to the poorest countries which depend directly on the size and scope of our own aid programme.
  The fourth commission was concerned with finance, but specifically with matters such as export earning stabilisation schemes, the financing of investment programmes, and the re-scheduling of debt, which has become a major problem for some of the poorest countries.
  Within these four areas we must consider whether the North-South dialogue
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  has been a dialogue of the deaf or whether there has been a genuine meeting of minds at the Paris Conference. I have suggested that on the question of oil there appears to have been a degree of rapprochement between the two sides—representing, possibly the genuine power structure of the oil producers, on the one side, and, on the other side, the formidable financial and industrial power of the Western world.
  On the question of debt and the problem this creates for developing countries there appears to have been rather less agreement on what could and should be done. The developing countries are anxious that there should be a general conference on debt problems and, perhaps, a multilateral agency to deal with the debt difficulties faced by the countries represented at the Paris Conference. In a recent speech Mr. McNamara, the President of the World Bank, pointed out that the medium- and long-term debt of the countries represented at the Paris Conference had risen from $18 billion in 1973 to $23 billion in 1975 and was likely to rise to $41 billion in 1980. The response of the Western world to the debt problems of those countries has been to suggest that they can be dealt with only on a case for case basis, that only by looking separately at countries such as India, Brazil, Tanzania, Bangladesh and Mexico could any sensible conclusion be reached to the different problems.
  The Western world has also been rather anxious that any unilateral report on debts should not upset the commercial banking system in the Western world. I understand that commercial bank credits to developing countries have risen from $2 billion in 1970 to about $10 billion in 1976. Therefore, clearly the Western world would not want action to be taken which would cause serious instability in the banking system.
  Nevertheless, the problem of debt is serious. The servicing of the capital borrowings by the countries represented at the Paris Conference is still a formidable problem for them which we shall have to help to resolve. I should like my hon. Friend the Parliamentary Secretary to tell the House whether the United Kingdom is interested in the creation or a new agency or in the use of an agency such as the International Monetary Fund to try to manage the debt problems of

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  some of the countries represented at the Paris Conference; or are committed to the general Western stance that these must be dealt with case by case—Tanzania separately from India, India separately from Mexico, and so forth?
  I have always thought that there was a case for trying to get a multilateral agreement with the countries most affected so that they would pay only a certain percentage of their export earnings in any year in capital and interest payments. Obviously, the figure would have to be agreed with the country concerned. If such an agreement could be made for four or five years, at least the Governments of the countries concerned would know that they had a fixed commitment related to their total earnings of foreign currency. This would help them to plan their economies over that period without either needing or wishing to repudiate any debt item.
  This is a serious problem for some countries and I should like to know what the Government's view is about this in relation to our total aid effort. It affects our aid effort in international terms, because to meet the United Nations requirement a certain amount is deducted from our gross contribution representing what is repaid to this country in capital repayments.
  The next major issue dealt with at the Paris Conference was that of commodities and the problem of the common fund. This will become a matter of discussion next year under the auspices of UNCTAD, but the OPEC countries have, for the moment, held their hand and restrained their demands on the price of oil. It appears that there are now differences of opinion between two groups within OPEC. It is a matter of speculation whether this betokens a break-up of the cartel. I doubt it. OPEC, having shown a degree of restraint, will expect that when the North-South dialogue resumes in the spring something will be forthcoming from the Western world on commodities. I do not believe that we have seen a break between the OPEC countries and the rest of the Third World over what they must appreciate is their common interest to establish reasonable and fair prices for basic commodities.
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  It is in our interests to try to evolve a system which will to an extent stabilise the prices of raw materials. Britain is dependent on overseas sources for almost every important industrial raw material, apart from oil and coal. Anything that can be done to iron out fluctuations of the type that we saw from 1972 to 1974 will be in our interests.
  Another argument that has been advanced by the developing countries has been that there should be a reasonable relationship between the export prices of raw materials and the import prices to them of machinery and goods from the Western world. So far, the United Kingdom has resisted this concept, as have most of the rich countries. If they continue to resist it, they will once again face serious fluctuaions in raw material prices, and perhaps even the creation of new cartels to maintain the price of certain materials, where this is possible.
  There does not appear to have been a great movement about the actual volume of aid, following the North-South dialogue. The President of the Royal Bank, in a very forthright speech at Manila in October, stated categorically that the Western world was not producing the volume of aid that was reasonable and was not coming anywhere near the agreed United Nations target of 0·7 per cent. Unfortunately, Britain cannot count herself among the leaders in this respect. It is true that our aid record as a percentage of the gross national product is not so wretched as that of the United States and Japan, but it is nowhere near as good as that of Norway, Sweden, the Netherlands, France and our Commonwealth partners, Canada and New Zealand.
  The announcement by the Chancellor of the Exchequer last week of our intention to cut the aid programme by £100 million was staggering and incomprehensible. I can think of few expenditures more directly to the advantage of this country than expenditure on overseas aid, which promotes development and increase in real wealth overseas, and thus creates markets for this country, which depends more than any other on the expansion and development of international trade.
  In terms of the aid programme, I ask my hon. Friend the Minister how these

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  cuts will affect aid to the poorest countries, how they will affect our aid in terms of rural development, and whether these cuts will affect our contribution to international agencies such as the International Development Association, the World Bank, the United Nations Development Programme, and so on. Goverrunent persistence in a policy of this kind could have a disastrous build-up effect in relation to other aid donors. Other donors in the Development Assistance Committee of the OECD may feel that if the United Kingdom is to reduce its aid effort it weakens the case they can make to their own electorates for doing as much as they are doing now or for doing more. I am seriously worried about the repercussions of this announcement in circles outside the United Kingdom. It is a bad example, and bad examples are sometimes a lot more infectious than good examples.
  What has been called the transfer of technology, a very complicated problem, is linked with private investment in overseas countries and with the best way of transferring the technologies to which we are accustomed in the Western world to countries of a very different social and economic development. My hon. Friend the Member for Newham, South pointed out very clearly the snags which can be encountered merely by crudely transferring one type of technology to a situation which is totally different.
  There are two points on which I should like to hear some comment from the Minister concerning our current policies on the training of overseas students in this country. The Government appear to be pursuing some rather strange policies in this connection. There is the fantastic increase in fees and the differential fee system, which I find entirely repugnant There is the idea that there is something improper or wrong in colleges, universities and polytechnics which have vacant places giving them to overseas students. I find this attitude puzzling, unconstructive and unnecessary.
  No sensible person is suggesting that a local British student should be kept out in order that an overseas student may be taken in. I have never heard that suggested anywhere. But when there are places vacant in polytechnics, universities or other colleges, I find it hard to under- stand why there should be deliberate dis-
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  couragement of overseas students taking those places. I should like some information from my hon. Friend the Minister on his Department's attitude on this issue.
  With regard to the transfer of technology, I wonder whether we are making sufficient use of the enormous range of engineering and scientific expertise that we have in our public corporations. The Coal Board, the Gas Council, the Electricity Council, the railways and so on all have an enormous volume of knowledge and ability in matters which are fundamental to development. With all respect to my hon. Friend the Member for Newham, South, in some way or other the developing countries will have to get away from oxcarts. They may need a railway here and there, and they will eventually need electricity generation.
  Mrs. Judith Hart: My hon. Friend will, I am sure, acknowledge that electricity generation is part of rural development.
  Mr. Hooley: I am sure it is. That is why I am anxious that the knowledge and expertise of the CEGB in generation and in distribution should be brought to bear, if this can be arranged, through the Ministry of Overseas Development or through some other means for the benefit of countries in Africa and Asia.
  The North-South dialogue at the Paris Conference adjourned this month without very much accomplished after 12 months of on and off discussion. It has postponed its consideration of development and aid matters until the spring next year. In the meantime the OPEC countries —which have allied themselves with the developing world, since they have many common problems with it —have made a decision about the price of oil which can hardly be regarded as wildly unreasonable in relation to world inflation. But I am sure they have not said their last word on this and that, having, as it were, dealt with their card for the moment, they will be waiting for some cards to be played by the Western world when the North-South dialogue resumes next spring. I should like to know, in terms of our own United Kingdom aid programme and our United Kingdom aid policies, what we intend to offer them in regard to debt problems, commodities, trade, and the transfer of technology.

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  We are no longer a great front-rank industrial Power. We have been overtaken by Japan, the United States, Germany, France and other countries. But we are influential, we have a rôle to play, we should be putting forward ideas, and the House is entitled to know what those ideas are.
  8.27 p.m.
  Mr. Dennis Skinner: I do not want to speak about the issue just raised by my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley). I want to refer to some of the comments made by my hon. Friend the Member for Newham, South (Mr. Spearing), who initiated the debate. He referred to the role of the Crown Agents. The Crown Agents became involved in property matters several years ago. This became apparent some two or three years ago at the time when the property market fell through the floor.
  Arising out of the serious problems facing the Crown Agents at that time, which were then revealed, the Fay Committee was set up in order to look into what was, without any doubt at all, a scandal. The Crown Agents had changed themselves from a servicing agency to a body involved in property speculation. They saw at that time that millions of pounds were being made—I am talking of the boom which lasted from 1970 until 1973—out of investing in property. The people responsible for administering the Crown Agents decided to put their money in as well.
  Although the Crown Agents were acting illegally those activities have been shrouded in a great deal of mystery. People in the Establishment generally, both in this Government and in the previous one, have gone to great lengths to make it abundantly clear to the speeding motorist that he is committing a serious offence. The same attitude applies to the poor old mother who, in buying a few things for Christmas in the shops, quite inadvertently picks up something and is sent to prison for three months, just because she is trying to look after the kids. Persons convicted in that way must feel that it is a funny old law that allows the Crown Agents, involved in property speculation, to get away with it in the way they did, seemingly getting the backing of two successive Govern-
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  ments for their actions. I just want to put that on the record, and I want to go a stage further with the more recent developments.
  The Crown Agents, when they got involved in property speculation decided to use a sum of money, which was not their money, in what was known as the Stern Group, which was run, by and large, by William Stern, one of the architects of the Tories' ill-fated Housing Finance Act—or so he proudly claimed on BBC television. He was involved in making remarkable sums of money in property speculation, and this involved the Crown Agents, who decided to invest some of their money —although it was not their money really —in the Stern Group. William Stern was involved in shifting money around from one property to another. He had a pyramid-type business. The Stern Group invested large sums of money —money which did not belong to it —in William Stern's business, although it was apparent to some hon. Members at the time that he was on the verge of financial collapse.
  Then a strange thing happened. On to the scene came Kenneth Cork, of Cork W. H. Gully and Co., one of the top accountants in the country. He was put in charge of the receivership of the Stern Group. His job—so most of us thought—was to ensure that William Stern became bankrupt, but he got a bright idea and put a proposition before the 32 creditors, who included the Crown Agents. He told the creditors that there was no need to make William Stern bankrupt after his company collapsed with debts of about £110 million. He suggested that William Stern should be allowed to buy and sell a few properties —to get them cheap and sell them dear, and thus make a few extra bob. The creditors would then get a little of their money back.
  I want my hon. Friend the Minister to tell me when he replies why the Stern Group went to the 30-odd creditors at the meeting in July 1975 with a deed of arrangement put by Kenneth Cork to avoid bankruptcy. I want to know why the Crown Agents acted in accordance with that proposition. Why did they and the Government go along with the scandalous idea that this man, whose company had collapsed with debts of £110

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  million, should be allowed to get away with it? Why should there be a proposition which allowed him to earn £20,000 a year before he passed anything on to his creditors? That was the proposition which Kenneth Cork put to the Stern Group creditors, of whom the Crown Agents were one.
  The Estate Times, which some of us read, published a list which made it abundantly clear that the Crown Agents were on the list of creditors under the name of Four Millbank Nominees Ltd., which is the company acting for the Crown Agents. Has the Minister kept in close contact with the Crown Agents in view of their abysmal record of breaking the law? As the British taxpayer has to bail out this company, it is the Government's duty to let us know what the Crown Agents were doing at that meeting and why they apparently agreed with the proposition put by Kenneth Cork.
  Some prominent newspapers have been taking up the story month after month. Did the Government go along with this proposition? If they did, was it because they feared that the bankruptcy of William Stern would reveal a lot of important names?
  Mr. Tony Durant: On a point of order, Mr. Deputy Speaker. Could you clarify whether this is a debate on rural aid or on the Crown Agents generally?
  Mr. Deputy Speaker (Sir Myer Galpern): In the papers which were issued to hon. Members, the title of the debate is "Financial assistance to the Crown Agents", so there is no difficulty.
  Mr. Skinner: As I made the point in the beginning, my hon. Friend the Member for Newham, South was wise and shrewd enough to put down this subject on a very broad basis of rural development and the Crown Agents.
  I have it firmly in my mind that had bankruptcy proceedings taken place one thing is certain: a lot of names would have been revealed. There were more than 30 creditors, and some of them were very important. Some were shady property companies, and all the dirty washing would have been hanging out to dry. Perhaps Kenneth Cork was asked to find a suitable deed of arrangement dating back to the early part of this cen-
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  tury, in order to get William Stern off the hook so that the names would not be revealed. It was reasoned that the property business would pick up again and some of the losses could be recouped. This has been suggested in the Daily Telegraph columns this morning. It says that it is conceivable that some of the creditors—not the Crown Agents—might get a few bob back.
  This is a very sinister scenario. The Minister should tell us why the Department for which he is responsible had not been informed, and why the Crown Agents took the position they did at the meeting in July last year. Why did the Crown Agents, as a Government body, allow Kenneth Cork to put this proposition in order to get William Stern off the hook? Why was he not made bankrupt? A lot of people—hundreds, I believe—in this country are made bankrupt every year. Some of the people in the Clay Cross affair were made bankrupt because they fought, not for themselves and not to line their own pockets, but for a principle.
  Mr. Durant Mr. Durant rose—
  Mr. Deputy Speaker: Order. I anticipate the hon. Member's point of order. I was going to draw the attention of the hon. Member for Bolsover (Mr. Skinner) to the fact that he cannot go on to discuss Clay Cross.
  Mr. Skinner: There are some people who get very tetchy whenever I mention that. I am talking about the Crown Agents rôle in this very shabby affair. Why were the Crown Agents one of the principal creditors at that meeting in July 1975, and why have the Government allowed this matter to escape them when there are lots of people in the Press and outside who are keeping a very close watch on these proceedings and returning to them on many occasions?
  It is even more sinister that when I raised this matter in the House a couple of months ago it was reported in one of the newspapers and the BBC invited me to make some comments about it on the "World at One" programme. Mr. Kenneth Cork was supposed to come along as well and explain his side of the affair. However, he threatened to issue a writ, and he asked people to write to the newspapers contradicting everything that I have said. But I am prepared to

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  say everything that I have said today outside this place. It is strange that Kenneth Cork should threaten the BBC in this matter. The BBC told me that it could not have me on the programme because Kenneth Cork had threatened to take action. The BBC said that the Daily Telegraph and/or the Sunday Telegraph had published apologies when they had done nothing of the sort about the question of Kenneth Cork and the proposition that he made to Stern in the Sunday Telegraph published in September 1975. It is a shady business.
  The Fay Committee must do a thorough job. It must take up the question of the way in which the Crown Agents acted when they tried to make money illegally out of property and nearly got away with it.
  The Fay Committee should know how many properties Stern has been buying and selling in the last few months since the liquidator refused to make the company bankrupt. The Minister should tell the Crown Agents that, having been bailed out to the tune of £100 million by the British taxpayer as a result of their acting illegally a few years ago when they entered the property market, they have a duty to tell him what is going on now in view of the subsequent proceedings involving William Stern and the failure of Kenneth Cork to make him bankrupt as most people would be in that position.
  After all this time, it is ironic that the one creditor, according to the Sunday Telegraph of 19th December, which is threatening to force the property tycoon into bankruptcy is none other than Kayser Ullman. That company has a record. It was the company that helped to bail out the Leader of the Liberal Party, his company, London and County Securities Ltd., and the chairman of the 1922 Committee. It is the company which, according to the Sunday Telegraph, has threatened to force William Stern, the property tycoon, into bankruptcy. Yet we know that the Crown Agents, which have sat idly by refusing to do anything about the situation, are accepting proposals which have been made in the past 15 months.
  Some difficult and provocative questions have to be answered. If my hon. Friend the Minister cannot answer them
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  now the Fay Committee must, because there are a few hon. Members and some people outside who will continue to press the issue until the truth emerges. It does not matter to me how big the names are. I know that there are a few big names, and my hon. Friend knows the many interests that the Crown Agents have in various companies. I intervene to help make the truth available.
  8.44 p.m.
  Mrs. Judith Hart: I wish that at the time I set up the Fay Committee I had appointed my hon. Friend the Member for Bolsover (Mr. Skinner), because he would have been a first-rate member of that committee. I do not know the truth or the merit of my hon. Friend's argument, but I think that it would be wise to take account of the reconstitution of the Crown Agents and of the fact that the situation is entirely different from that which existed in the early days and which led to the problems there.
  I am sure that my hon. Friend the Minister who is to reply to the debate will not be able to say much about these things because they are in the hands of the Fay Committee, but I say to my hon. Friend the Member for Bolsover that it would not be a bad idea if he got in touch directly with the committee. The committee is responsible to hear anything that anyone wants to say to it, and I am sure that my hon. Friend could make a contribution. I emphasis to my hon. Friend that, whatever happened about this matter in July 1975, he should get in contact with the committee. Kenneth Cork's name is not familiar to me. It reminds me of Pamela Hansford Johnson's novel about Cork Street. I do not know about these things. in all seriousness, if there is something that the committee needs to know about, my hon. Friend should get in contact with it.
  We are debating aid administration, which covers the Crown Agents. I should like to touch on one or two aspects of aid administration. I know of the valiant efforts that my hon. Friend the Parliamentary Secretary has made in the last few weeks on this matter —at least, I think that I know of the valiant efforts he has made. I want first to ask him, particularly as aid administration concerns rural development, which is our main subject matter

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  tonight, what he supposes will be the effect on aid administration of the 10 per cent. cut in the aid programme this year and next year.
  My hon. Friend will correct me if I am wrong, but my understanding is that a 10 per cent. cut in any public expenditure programme of any Government Department is a good deal higher than any other percentage cut suffered by any Government Department in the last three or four public expenditure exercises. My understanding —again, my hon. Friend will correct me if I am wrong —is that the maximum expenditure cut in all Departments except perhaps defence has been about 6 per cent.
  A 10 per cent. cut over the next two years can to a certain degree be accommodated by the allowance that is made in any departmental public expenditure programme for carrying over from one year to the next, for the possibility of overspending or underspending —but not 10 per cent. in two years running. Therefore, it must mean that an element of the aid programme will have to be sacrificed next year and the year after.
  Since the emphasis of the aid programme —as my hon. Friend appreciates, it has been my emphasis as much as that of his right hon. Friend since I left the Ministry—is on a poverty-oriented programme and rural development, one must then ask where programmes which had been planned will now not occur. I am not necessarily speaking of those agreed with other developing countries, and not necessarily of the point at which we have to abandon programmes agreed with them. However, how far shall we have to abandon programmes that within the Department have been settled?
  Looking at this matter, I see one problem in the allocation of the aid programme that is much more serious in terms of a cut than would have been the case even three or four years ago. It appears to me that a far higher proportion of the aid programme is committed to multilateral programmes well in advance and automatically. For example —I make no complaint about this, and neither would any of my hon. Friends—we have a commitment to the IDA in the World Bank. One is glad about that. One would not want to cut it for an instant. It is one of the best elements of our multilateral programme. Equally, we have com-
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  mitments taken on in advance to the United National Development Programme, and we have the new commitment, about which we can have no debate or argument, to the European Development Fund.
  There is now a higher proportion of the aid programme which is automatically committed, with a little less latitude than in previous years for the disposition of our own aid. Even when there is a 10 per cent. cut, it seems—perhaps there is more complexity to it than I apppreciate—that it must fall on about 75 to 80 per cent. of the programme which is capable of being committed bilaterally. If that is the case, we are getting to the heart of the argument of programmes to the poorest countries and to rural development in the poorest countries—because we all agree that if we are talking about the poorest countries we are talking about rural development, with all the aspects of it which have been mentioned on both sides of the House tonight, and someone will come out very much worse at the end of this exercise as the result of a 10 per cent. cut in each of two consecutive years.
  In the case of other departmental programmes such as education and housing, sooner or later, in one way or another, the House is given fairly precise information about where the cuts will have their effect. Even if the Government do not tell us, the local authorities tell us that they have a certain reduction in their school building, housing or roads programme. It has not been the practice for the Government to tell us where aid cuts fall, but perhaps that is because we have not had cuts in the aid programme for many a long year.
  We have not had the increases that we might have wished, but we have not had the cuts. In 1969–70 we did not have cuts. We had a marginal reduction in the planned programme under the Conservative Government of 1970–74. We did not have cuts in 1974–75 or 1975–76. We only have them now. Perhaps it is a new experience and new questions should be put to the Government. I would not expect my hon. Friend to be able to give me an answer tonight, but I would expect him to take note of the fact that a 10 per cent. cut in the aid programme must be accounted for to this House.
  We have a right to know where those cuts will fall and how far they will affect,

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  for example, our commitment to the European Development Fund. In parenthesis, I must say that I should greatly welcome such a cut. I know that my right hon. Friend and my hon. Friend have fought hard and without success on the matter of the European Development Fund and the whole aid programme of the EEC, but that has resulted in an absurdly nominal recognition of the need to provide European aid to countries which are not associated with the EEC.
  The end of the long struggle of two, three or four years to try to get a decent aid programme from the EEC to India, Bangladesh, Pakistan and other non-associated countries has ended with a dismal pebble in the pool. My lion. Friend knows that as well as I do. I would welcome it if the 10 per cent. cut came on the EDF programme, because it has little to do with the priorities of the British aid programme as we have expressed them in the House. Given the scale of the cuts, we have a right to know where they will fall in terms of the programmes envisaged or semi-committed within the Department.
  In terms of many of the aspects raised by my hon. Friends, in terms of the role of UNCTAD, the North-South dialogue and what is happening in the relationships between the rich world and the poor world, the Government and the Department are, if I may be subjective, taking an extremely good and positive approach. I should like, however, on the debt problem—and I think that it was this to which my hon. Friend was referring—to see some kind of compromise whereby we recognise that while a case-by-case approach is right because of the immense variations in the debt problems of the developing countries, nevertheless, we as a nation would be right to make a generalised commitment to understanding the debt problems of the Third World. So far we have not quite done that.
  We have said rather rigidly "We take a case-by-case approach". We have not been ready to say that it is within the framework of a general agreement that the debt problems of the Third World must be understood that we should wish to take a case-by-case approach. The difference is between the narrow, rather sterile—I am using rather rude words but am doing so deliberately—
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  and arid approach of the economists who advise the Government on these matters from various Departments, and the political understanding that only Ministers can bring to these problems. I wish my hon. Friend well in his efforts to advance political understanding instead of the rather narrow analysis of many of the advisers in Whitehall on this subject, as on other subjects, in relation to UNCTAD and the Common Fund.
  There is something very wrong, and we have commented on this in this House time and again, when, in a debate on this whole matter of relationships between ourselves and the Third World, there is such a poor attendance in the Chamber. I know that we are debating this issue on the Consolidated Fund Bill, but this is the first opportunity we have had for about 18 months for a real discussion of these matters. Until this country wakes up, until the Government wake un and until the Opposition Front Bench wake up. nothing very much will be done. Not one Opposition Front Bench speaker has been present throughout the debate. Indeed, there has been only one contribution to the debate from the Opposition benches. The Liberals are not here. SNP Members are not here. Plaid Cymru Members are not here. Let us take careful note of that when our colleagues and our comrades responsible in this country with activities concerned with the Third World next ask us to initiate matters in this House.
  It is time that these matters were regarded as being at the centre of our economic thinking, because until they are we shall never solve our nation's problems. We shall solve our problems only in the context of some kind of answer to the problems of the Third World.
  As my hon. Friend realises, I could speak for another half hour on this sub-jest, but I shall not do so. I know how hard my hon. Friend is working on these matters. I know that he will not be able to give complete answers tonight, but I hope that sooner or later the Government will take note of the desperation that is now entering into this dialogue.
  9.0 p.m.
  The Parliamentary Secretary to the Ministry of Overseas Development (Mr. Frank Judd): I join my right hon. Friend the Member for Lanark (Mrs. Hart) in lamenting the poor attendance for what

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  has been a thought-provoking debate. I am sorry that there will not be time, if we are to do justice to the other debates tonight, to do justice to all the points which have bene raised, because they have been profound and deserve detailed commentary.
  It is clear that we are greatly indebted to our hon. Friend the Member for Newham, South (Mr. Spearing), and, to some extent, to my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley), for having balloted for this subject. My hon. Friend the Member for Newham. South has a long-standing and unrivalled commitment to overseas aid. I have seen it at first hand both in this country and abroad. But his commitment is not surprising when one considers the witness of his political life and also his active life—though he does not brag about it—in the United Reformed Church. What is clearly stamped on him is Chapter 4, verses 2 to 5, of the Second Book of Timothy, and the more hon. Members take that text seriously on an issue of such profound importance as this the better.
  Mr. Hooley: What is the text?
  Mr. Judd: My hon. Friend will find it instructive to go to the Library after this debate and read the whole of the Second Book of Timothy.
  The aid programme for 1977–78 is being cut by £50 million in current prices to £494 million as against the £516 million that we are spending in this financial year. It amounts to a cut of some 10 per cent. This cut in the real value of next year's programme will reduce substantially our ability to respond effectively to the needs of developing countries.
  It means that in real terms we shall do less than we are doing at present. Et means that we shall be able to achieve correspondingly less next year in our fight to help the poorer countries in overcoming hunger, malnutrition, disease and premature death, that more people will go hungry and will die, that more children will suffer, that less will be done to lessen malnutrition, infant mortality and diseases, that we shall have to refuse many requests for help with projects aimed at improving the lot of those living in the rural areas, and that the resources available to the multilateral agencies will be less than would have been the case otherwise.
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  The multilateral agencies are indeed in the forefront of the fight against rural poverty no less than the bilateral programme. The consequences of the cuts in the aid programme are therefore without doubt greater misery, greater suffering, more widespread disease, and more deaths in the developing world. About that there should be no illusion.
  Naturally, it is my fervent hope and the no less fervent hope of my right hon. Friend—I have his authority to say so—that, as soon as circumstances permit, we should restore and more than restore the aid programme to the level at which we should all like to see it operating. Let us consider the challenge as spelt out not only in the context so eloquently expressed in the debate but in the international context.
  We at present devote 0·37 per cent. of our gross national product to aid, whereas Sweden and the Netherlands have already passed the 0·7 per cent. target. Since 1961, the proportion of total Government expenditure on aid has fallen from 2 per cent. to 0·89 per cent. When we look at our record compared with other countries within the OECD, we find, by my reckoning, that only two of them are providing less per head of population for aid than we are. Surely we all agree that just when we have looked to others to come to our assistance with a significant loan from the IMF, it behoves us to look with an increasingly acute eye at our own responsibilities to those Governments who are struggling with problems against which our own begin to fade into insignificance.
  This debate has been largely about rural development—though I shall come to other subjects later. It is now just over a year since we published the White Paper, for which we owe a great debt of gratitude to my right hon. Friend the Member for Lanark setting out our new aid policy on rural development. That policy expressed our commitment increasingly to concentrate our aid on the poorest countries in the world, defined as those with aper capita income of less than $200 a year, which is not much more than 6 per cent., or one-twentieth of the per capita income in the United Kingdom.
  We have also said that we intend to concentrate in that strategy on the poorest

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  groups within the poorest countries. Since the vast majority of the world's poorest people live in the rural areas, that inevitably means concentrating on rural development. Many of those whom we are trying to help live on the very margins of existence. In fact, to say that they "live" in any meaningful sense is probably an exaggeration.
  They produce barely enough food to survive on. They have little or no access to the basic facilities of shelter, health care, or education. They are at the mercy of the elements and can face starvation or death if the rains fail and there is drought, or if the rains are too great and there is flooding.
  In case anyone thinks that this is a partisan rendering by a Minister with special responsibility in this sphere, I shall refer to a speech made by Robert McNamara to the World Bank not long ago. He expressed the challenge far more clearly than has been done for a long time and spoke with all his distinguished record at the Pentagon:
  "Malnutrition saps their energies, stunts their production and shortens their lives. Illiteracy darkens their minds and forecloses their futures. Simple preventable diseases maim and kill their children. Squalor and ugliness pollute and poison their surroundings. The miraculous gift of life itself and all its intrinsic potential, so promising and rewarding for us, is eroded and reduced for them to a desperate effort to survive. The self-perpetuating plight of the absolute poor simply cuts them off from whatever economic progress there may be in their own societies. They remain largely outside the entire development effort, neither able to contribute much to it nor able to benefit fairly from it. Unless, he said, specific efforts are made to bring them into the development process, no feasible degree of traditional welfare or simple redistribution of already inadequate national income can fundamentally alter the circumstances that impoverish them."
  That is a challenge that no reasonable hon. Member can ignore.
  The rural development projects that we finance normally have at their core an increase in agricultural production, to provide both food for the farmers themselves and an income to help develop the social and other services if the community is to succeed in raising its standard of living. But increasing agricultural production itself requires the provision of basic economic and social services. These may include agricultural extension, rural roads, water supply,
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  credit and marketing systems and basic education and health systems—in other words, integrated rural development.
  The contribution of inputs needed will vary from region to region, but we are prepared to finance projects involving either inputs into one or two sectors, or into a number of different sectors in order to promote the balanced development of a particular region. In particular, we need to take account of the impact which inputs into one sector can have on others. For example, we need to take great care when financing irrigation projects that steps are taken to prevent the spread of water-borne diseases such as bilharzia.
  In the last year or so, we have become involved in a number of rural development projects which fit in with our strategy. These include projects in the Upper Region of Ghana and in Gambia, in both of which we are providing, along with other donors, inputs such as fertilisers, veterinary services and marketing facilities. In the Upper Region of Ghana, 125,000 farmers are benefiting from schemes in which we and the World Bank are involved. I was fortunate to be able to visit the Gambia recently and to travel through the area of the project there. I was impressed by the professionalism and dedication of British experts there and by the potential for using British aid in support of an imaginative Government programme to help the rural poor. Other projects in which we are involved include the setting up of three demonstration farms in the South Darfur province of Sudan as the first stage of a project in which Arab development funds are also involved, designed to halt the present decline in incomes of poor farmers, and involvement with the World Bank in a major irrigation and rural development scheme in Sri Lanka.
  These examples show that we are making progress with our aid policy. More generally, the proportion of our bilateral project aid allocated to projects designed wholly to benefit the rural poor was greater in 1975 than in 1974. This trend is encouraging, but we still have a long way to go. Furthermore, it would be wrong for me to give the impression that implementing our policy will be easy or quick. It will not.

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  Rural development projects involve difficult technical problems in ensuring that inputs such as fertilisers and seeds are properly adapted to the areas where they are needed, difficult institutional problems in ensuring that channels exist for funds and equipment to reach those in the often remote areas who really need them, and complex social problems involving the changing of deeply entrenched social attitudes.
  Furthermore, the development of the rural areas often presents difficult political problems for the developing country Governments themselves, and can involve us in delicate negotiations in pursuit of our policy. It will take time and experience to learn how best to overcome these various problems. As a result we shall need to continue to finance sound development projects in other sectors.
  We are also having to adapt our own aid machinery in order to cope with the very special problems created by rural development projects. Measures we are taking include making more use of interdisciplinary missions to visit countries and discuss with Governments the scope for our involvement in rural development projects, the introduction or expansion of schemes designed to train British experts in the various aspects of rural development, and the appointment to the Ministry's development divisions overseas of social development advisers to take account of the social problems involved in projects.
  We have in the Ministry and in our development divisions overseas professional advisers with a wide knowledge and experience of the various aspects of rural development, including agriculture, fisheries, education, social development and engineering. In addition, the scientific units of the Ministry, in particular the Land Resources Division, the Tropical Products Institute and the Centre for Overseas Pest Research, carry out research and provide technical advice which is respected throughout the developing world and in industrialised countries too. We have also set up a Rural Development Department within our Ministry to focus on the problems associated with our new policy. I can assure my hon. Friends that we do use CDC and are prepared to use public corporations to help us with consultancy where appropriate.
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  However, we are aware that the new policy is likely to put a strain on our available manpower. We shall therefore be making more use of other sources of expertise, including consultants, experts from British universities and technical co-operation experts in between overseas assignments to help us identify and prepare projects. We are also strengthening our links with other donors, for example, the FAO and the World Bank, in order to share our expertise with them and to benefit from theirs.
  My conclusion on this score, therefore is that in the first year of our new aid strategy—I hope that my right hon. Friend the Member for Lanark will be pleased with this news—we have made good progress in overcoming the difficulties which we face and in finding and beginning to implement projects which we believe stand a good chance of making a small but important impact on the alleviation of some of the appalling poverty which exists in the world today. In saying that, however, I take up one point made by my hon. Friend the Member for Newham, South. I freely recognise—I say this from my own experience both before and since coming to the Ministry and from my experience on field visits—that we cannot overestimate the importance of field liaison in the effective implementation of the rural development-oriented programme.
  My hon. Friend asked also about local costs. Most of our bilateral aid is tied to the procurement of British goods and services, but rural development projects often involve a high proportion of local costs. In exceptional circumstances we are prepared to provide aid to cover these costs in certain cases where we consider that the need requires it—for example, on projects in very poor countries which the Government themselves cannot mobilise enough local resources to finance. We have to keep local cost aid within reasonable bounds, of course, but this has not, in my experience so far, been a hindrance to our ability to assist poverty focused projects in most countries, although there are some significant exceptions.
  Mr. Spearing: On the question of local costs, would not my hon. Friend agree that some of the most effective schemes in rural development are schemes allowing people to develop their own resources on

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  their own, and that these most useful schemes probably require a higher proportion of local costs? Would he not agree that, although there is a dilemma here, that is probably one of the best ways forward?
  Mr. Judd: I acknowledge the force of what my hon. Friend says. I put it again to him that where there are exceptional circumstances we are prepared to look at them. We have not always been able to overcome the difliculties, and to suggest otherwise would be to mislead the House, but we accept that the point which my hon. Friend makes is profoundly relevant to the whole effective operation of rural development work.
  My hon. Friend referred also to exploitation. Again, I think that most of us in the House would agree that, if we are genuine about the concept of partnership in development, the most important factor in any development situation—nothing can compensate for its absence—is the style, the commitment and the priorities of the Government on the spot. I am convinced, therefore, that in the context of our new programme we would naturally emphasise the relationship where this was clearly established as something in harmony with everything we were trying to achieve.
  I have noted what my hon. Friends have said about students, and I acknowledge the force of their feeling on this issue. As they will appreciate, this is mainly a matter for my right hon. Friend the Secretary of State for Education and Science, and I shall see that their observations are conveyed to her. I assure my hon. Friends, however, that in our Department we well understand the important contribution which the education of overseas students in this country can make to the whole development process, so long as we take steps to ensure that the sort of people we are financing and the sort of courses on which we are financing them are relevant to the priorities which we have established as of overriding importance in our programme.
  My hon. Friend the Member for Newham, South referred to a lot of matters—he always does, and rightly so—and I take next his reference to appropriate technology. We are conscious of the need to ensure the appropriateness of the tech-
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  nology that we sponsor in our projects. We try to ensure that the machinery we provide under aid does not displace labour and can be easily operated by local people. Much of the initiative for the development of appropriate technology must come from the developing countries themselves, since they will be better aware than we are of the special needs of different regions and sectors. But we nevertheless play an important rôle in sponsoring the development of appropriate technology through our scientific units, particularly the Tropical Products Institute and the National Institute for Agricultural Engineering, and also through our support of the Intermediate Technology Development Group itself.
  Now I come to the other important point, raised by my hon. Friend the Member for Bolsover (Mr. Skinner). It would have been impossible for me not to recognise since taking up my present office the great significance that my hon. Friend attaches to the issues he has raised. I also recognise his strength of feeling. I assure him without qualification that the terms of reference of the Fay Committee of Inquiry are wide and powerful. It has been given every encouragement to leave no stone unturned. Like my hon. Friend, I look forward keenly to the committee's findings.
  I am sure that my hon. Friend understands that we must await publication of the committee's report, but I must say two things to him tonight. First, an attempt by the administrator to execute a deed of arrangement between Mr. Stern and his creditors failed. My hon. Friend may have been misinformed, because the Crown Agents voted against the scheme.
  I am sure that my hon. Friend will endorse my other point, which is that in his anxiety about the past—and it is a sad and sorry story on which we are waiting for the Fay Committee to report—he will not wish to overlook the debt of gratitude owed to the present Crown Agents. I believe that it is partly due to their professionalism and commitment that so much has been revealed, because they have been determined to put the Crown Agents on an absolutely honourable and proper course. They are sparing no effort to do it. I should like to place on record my appreciation of that.
  Mr. Skinner: If the Crown Agents representative at the meeting of creditors voted against the so-called scheme of arrangement, why have there been no proceedings in regard to the bankruptcy of Mr. William Stern subsequent to that meeting? Mr. Stern has gone on involving himself in buying and selling various properties. As my hon. Friend probably knows from various letters sent to the Department of Trade and my right hon. and learned Friend the Attorney-General, I have received countless letters from people with investments in some of the concerns with which Mr. William Stern was involved. They have written about the money which they invested and have wondered whether they will receive anything at all.
  I also receive letters from the Department of Trade, usually from the Under-Secretary, my hon. Friend the Member for Hackney, Central (Mr. Davis), who makes it plain that at this stage no money is coming back. Notwithstanding the long period—15 months—if there was no deed of arrangement, as reported in the Sunday Telegraph of 19th September 1975, why is Mr. Stern carrying on in the way that he is?
  Mr. Judd: I am sure that my hon. Friend will agree that at this stage, when we are awaiting the Fay Committee's report, it would not be helpful to be drawn too deeply into an exchange on this matter. I can assure my hon. Friend that the Crown Agents are well aware of the significance of the issue. The way in which they voted demonstrates that.
  No hon. Member should be in any doubt that the Crown Agents have been instructed to cease their property speculations and to withdraw, as rapidly as is conducive with proper dignity and proper care of public money, from the secondary banking activities in which they have been involved. That is a course upon which they have set out with deep commitment.
  Mrs. Hart: My hon. Friend will confirm that that instruction was given a year and a half or two and a half years ago.
  Mr. Judd: My right hon. Friend rightly reminds the House that the instruction was given some time ago.
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  She will be glad to know that it has been faithfully executed.
  My hon. Friend the Member for Heeley, with his unrivalled—
  Mr. Skinner: Is my hon. Friend leaving the Crown Agents?
  Mr. Judd: I think that we shall leave them at this juncture.
  Mr. Skinner: I assumed that my hon. Friend was going to answer my other question. Will he now instruct the Crown Agents to take the appropriate measures to ensure that William Stern is made bankrupt in accordance with the law of the land as, indeed, some creditors are suggesting they might do?
  Mr. Judd: That is not necessary on the part of the Crown Agents. That action has already been taken and the Crown Agents' position, as I am sure will be recognised, has been established in the way I have communicated to the House.
  I return to the interesting speech of my hon. Friend the Member for Heeley. My hon. Friend has a long-standing commitment to international affairs and international development no less than other aspects of international politics. I shall say a word about the Conference on International Economic Co-operation in Paris. I remind the House that at that conference the EEC Community participates as an entity with the presidency and the Commission as its spokesman. As a consequence, whatever the practice of individual member States may be in aid-giving, any statement made on the Community's behalf and any decisions eventually adopted by the CIEC must also be acceptable to all member States. Decisions must also be acceptable to the other seven Western countries participating.
  In some matters related to aid we can go further to meet the developing countries than some of our partners, although in others our present economic position does not make that possible. We shall be holding the presidency of the Community for the first six months of next year. I assure my hon. Friends that we shall do our best to give a constructive lead in the dialogue, subject to our own national constraint and the limits to what can be done by our partners.

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  My hon. Friend the Member for Heeley asked about the UNCTAD programme as it had been mentioned in the UNCTAD resolution. As we stated and voted at UNCTAD—I was there to cast one vote and I know what I am about to say from my own experience—we are committed to serious study of that programme. We are already participating in international talks about specific commodities listed in the programme. I shall always take every opportunity of telling the pessimists about the outcome of UNCTAD that it was exciting, because for the first time the international community produced a specific list of 18 commodities. We are considering that list seriously.
  My hon. Friend also referred to the Common Fund. That is a matter for my right hon. Friend the Secretary of State, but I can say that we shall take part in the exploratory talks in good faith. We have deep reservations about the fund's effectiveness as a mechanism for supporting any international commodity programme. We have repeatedly expressed that view. I believe my hon. Friend will accept that it is because of the seriousness with which we treat the international community that we believe that it would be wrong to pretend that we do not have profound reservations when we have them, but it is a measure of our seriousness that we are determined to put our reservations before the international community, probing them in depth. We shall ascertain whether our reservations can be met and how far we can commit ourselves.
  My hon. Friend also mentioned debt, as did my right hon. Friend the Member for Lanark. The indebtedness of the developing countries was the second main subject at the UNCTAD Conference and continues to figure prominently in the CIEC. The proposals of the developing countries' Manila Declaration took the form of inviting creditor countries to agree to across-the-board measures of relief from debt service obligations for whole groups of developing countries. Britain and most other industrialised countries regard these proposals as misconceived for three main reasons.
  First, they believe that debt service problems represent only one element, albeit in some cases a major element, in-
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  balance of payments problems and need to be considered in that wider context. Secondly, they believe that the incidence and magnitude of such balance of payments problems vary widely and that where they exist they may be in varying degrees temporary or more deep-seated, and accordingly need different responses. Thirdly, they believe that there can be few developing countries that will not need to continue to borrow in future in order to sustain the development process.
  But willingness by potential creditors to continue to lend must depend on confidence that debt obligations will be honoured. But confidence is a volatile commodity, and measures which involved generalised failure to meet debt service obligations, whether on ODA or commercial debt, would seriously risk undermining the confidence on which international credit—and, indeed, the whole system of international trade and payments—rests.
  This is by no means saying that Britain, or other industrialised countries, are in any way unsympathetic to the difficulties of those developing countries which face serious balance of payments deficits and heavy debt service payments. Substantial measures have been agreed during the past year, in the IMF, to make finance more readily available to meet short and medium-term balance of payments difficulties. For those countries with a longterm structural problem, help in the shape of ODA on appropriately soft terms is particularly important. Our recent decision to provide bilateral aid to the poorest developing countries in the form of grants is part of our response, and we hope that other donor countries will progressively adopt similar policies. Nevertheless, we recognise that individual cases have arisen and will arise involving acute or structural balance of payments difficulties which will call for exceptional remedial measures. Well-tried arrangements exist for considering these cases in the shape of aid consortia, special aid groups and ad hoc meetings of debtors and creditors.
  Against this background, creditor countries expressed their willingness at Nairobi at UNCTAD to give quick and constructive consideration to individual requests, with a view to taking prompt action to relieve developing countries suffering from debt service difficulties, in particular the least developed countries and the most seriously affected. The UNCTAD IV

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  resolution also called for an examination of the features which might usefully be discerned from past operations and from the present situation, to provide guidance in future operations as a basis for dealing flexibly with individual cases. The British delegation worked hard throughout the Nairobi conference to achieve a marrying of the case-by-case approach with some general consideration of debt problems. It recognised the point made by my right hon. Friend the Member for Lanark. The consensus which was ultimately reached at the conference was based on a proposal which we ourselves had put forward.
  We have continued to take the lead in the CIEC in identifying features of debt situations in accordance with the Nairobi resolution. We believe that this work should go a long way towards meeting the concerns of the developing countries for speedy and sympathetic consideration of their problems, while preserving the case-by-case approach. The developing countries have expressed appreciation of our evident good will and have come a little way to meet us. But they still persist so far in arguing that in addition to this work, there is a need for an immediate once-for-all generalised debt relief operation.
  This has been a thought-provoking and powerful debate. Hon. Members have expressed their concern at what has happened to the aid programme. In our work there are three points of which we are constantly convinced. The first is that an aid programme by Britain is right. One can qualify that statement by all kinds of rationale and different arguments, but the basic principle, as I am sure every hon. Member will agree, is that an aid programme is the right course. However we approach the technical problems, the principles at the basis of social justice and social morality are indivisible.
  How often we hear the phrase "Charity begins at home", but the truth is that if we contract out cynically from our international responsibilities, we shall soon be contracting out of our responsibilities nearer home. The rot then cannot be stopped in either direction. The programme is right, and that is why these things matter.
  It is obviously in our long-term interests as a trading nation to improve
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  the trading abilities of the world community. I always remember Paul Hoffman, the distinguished American who headed the United Nations Development Programme, almost exploding with anger in a New York hospital bed once when I was talking to him and saying that aid was not charity. He said "When I was in the automobile industry I always said that it made nonsense to set aside less than 3 per cent. of your budget for market development. I am not asking for as much as that." One of the problems of Britain is that there are people around who do not have the vision to see that, just because of the difficulties now confronting us, the purchasing power of the developing world becomes more important than ever.
  The third reason for continuing this programme is that of international stability. Those of us who have families must recognise that in today's world, where one quarter of the population monopolises access to three-quarters of the world's wealth, where there has been a revolution in communications so that the deprived three-quarters are well aware of the disadvantaged state in which they live, there is no prospect of future stability if the problems of social justice are not tackled in a way which affords them the highest priority. For everyone who cares about future world stability this is an investment in the future, because in tackling at the root the problems that cause instability and conflict we shall be making a profound contribution to the stability of future generations.
  Above all, we have to remember that, while we have deep and acute economic problems, as a nation our problems are not exclusively economic. They are also psychological. They are problems of will and determination. One of the ways in which we shall find our self-confidence as a nation and in doing so begin to win the confidence of the world community is by facing up to our international responsibilities and answering them fully as we should. Nowhere is this more obvious than in the sphere of aid and development. On that score I again express my appreciation to my hon. Friend the Member for Newham, South for having given us the opportunity tonight to remind ourselves of what we should be doing.

  STONEHENGE
  9.37 p.m.
  Mr. Michael Hamilton: All is not well today at Stonehenge, and since this is the most-visited ancient monument in Britain it is right that the House should know about the situation there. There is a dangerous assumption that if something has survived from prehistoric times it will continue to survive and a few centuries more or less will have no effect. Nothing could be further from the truth. The alarm bells are beginning to ring.
  Hon. Members who have visited the cave paintings at Altamira in Spain and at Lascaux in France will know of the increasing attraction of those places and of the mounting anxiety lest the breath of the daily throngs of tourists will damage the paintings. Something of this anxiety is now apparent in Wiltshire, where the weight of numbers is becoming unmanageable. It was Dr. Johnson who said:
  "Salisbury Cathedral and its neighbour, Stonehenge, are two eminent monuments of art and rudeness, and may show the first essay and the last perfection in architecture."
  The practical care exercised in the maintenance of these two monuments has been in marked contrast.
  From the first day that the spire of the cathedral was completed, with all of its 400 ft. and more, successive deans and chapters have accorded the highest priority to its maintenance. Architects, including Sir Christopher Wren, have strengthened it with iron collars. The lean from the perpendicular is measured regularly, just as a doctor takes the temperature of his patient. The result is that, although the spire dwarfs Big Ben and the Victoria Tower, it has stood up firmly through more than seven centuries.
  Stonehenge is in melancholy contrast. For most of its life there has been no Department of the Environment. It is not just wind and weather that have done the damage. Stones have actually been removed through the years. Stones have been taken to build bridges or to dam streams. Moreover, in the past visitors have been allowed to chip away pieces of stone for the purpose of taking souvenirs, In the last century my constituents hired out hammers to visitors to facilitate their task. We all have to live. I see my hon.
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  Friend the Member for Stretford (Mr. Churchill) smiling. It is a fact that wages in Wiltshire have always been below the national average. If visitors were too idle to chip away the pieces for themselves, instead they could buy pieces for mementos.
  Moreover, at this time of the year severe storms sweep across Salisbury Plain. It was on 3rd January 1797 that one of the finest stone arches—trilithons, as they are called—fell. When one trilithon falls, as with a plantation of trees the pressures on the remainder increase. On New Year's Eve of 1900 another trilithon fell. It must be said, if only in fairness to those prehistoric builders, that a contributory cause of these falls has been digging by treasure hunters in the past too close to their foundations.
  The greatest danger to Stonehenge today is what I have called the problems of popularity. The M3 motorway brings Stonehenge within an hour and a half of London. The coaches arrive there by mid-morning. The number of visitors grows week by week and year by year. Chatsworth, Blenheim, Longleat—they are all left standing in the league table. Stonehenge exerts a fascination which is insatiable.
  Nobody knows what purpose Stonehenge served. Nobody knows who built it. Nobody knows where the stones came from. Some say that they came from the hills near Edinburgh. Some say that they came from Pembrokeshire in Wales. But at the rate of 16 men per ton it must have taken 800 men to pull one stone and it must have taken them decades to do it. Therefore, I suppose I can fairly claim that my constituents are not frightened of hard work.
  Stonehenge was already old before the first Roman arrived here and already its history had been forgotten. Some people attach immense importance and significance to the fact that the main axis of the monument is aligned to the midsummer sunrise. There are a great many numbers and alignments at Stonehenge, and numbers and lines never cease to fascinate people. The Arc de Triomphe in Paris was set up to commemorate the victories of Napoleon's troops, and the French will tell one that Paris is aligned' so that on 15th August—Napoleon's

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  birthday—the sun as viewed from the Champs-Elysées sets in the centre of the arch. These things are of great significance, or they are of none. It may be just the numbers game. It may be just a field day for the coincidentalists. It may be just the mass of legend. But, whatever the cause, the press of visitors to Stonehenge grows year by year.
  In the short 12 years that I have represented Salisbury, the numbers have more than doubled. Each June the place becomes like a carnival site. There are whirring cameras, there are fireworks, there are Morris dancers, there are so-called Druids waving branches of oak, and there are incense burners—all of them waiting for 4·59 a.m. on 21st June.
  But it is not all fun. Back in the relatively peaceful days of 1956, the Salisbury Journal reported that 15 military policemen had been called out in order to quell an unruly mob and to restore order. Ten years later it was mods and rockers on their motor-cycles.
  This year things were more difficult still. The midsummer rally planned this year began earlier than expected. The authorities were caught on the wrong foot. The monument was engulfed long before the solstice sunrise was due. It was a friendly and easy-going crowd, but among them was a mere handful of potential troublemakers. The police were hesitant to go in and clear the site. Why was this? The Wiltshire Constabulary, as I know it, is second to none. The reason was not basically the wish to avoid a repetition of the events at Windsor, although I concede that that was a factor. I believe the basic reason to be that, had the police moved, the monument itself might have been damaged. In other words, and not to put too fine a point on it, for some days Stonehenge was hijacked and held hostage. This must never happen again.
  Inevitably these problems spill over into the surrounding district. Local farmers speak of their woods being fouled. Amesbury householders find that milk bottles are stolen from their doorsteps. The people in the married quarters at Larkhill, which is more than a mile away, complain that with midsummer temperatures they have to sleep with their windows closed because of the noise.
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  It is the accumulation of these things that prompts me to speak tonight of these problems of popularity. I am concerned with the well-being of the monument, as is the Minister, but I am also concerned with the well-being of those living in the district.
  I want to be fair to the Department of the Environment. I believe that it is alive to these difficulties, and I pay special tribute to Lady Birk, who has responsibility for ancient monuments and who has herself on more than one occasion been to look at matters on the ground.
  Indeed, I remember appealing to the Department some 10 years ago, and receiving the fullest co-operation from it, when someone threatened to route an overhead power line too close to the monument. I believe that the Department has given thought to these matters and has drawn up fresh plans for the improvement and management of the site. It is these that I wish to hear about.
  The neighbourhood of Salisbury was one of the most important areas of prehistoric England, and the city's museum has exhibits of almost every age. The Minister will know that the museum recently has been given what was the finest remaining archaeological collection in private hands—the Pitt-Rivers collection, which is beyond price. It is a museum which was provided, as were most museums, by Victorian benefactors. It is rich in treasure but poor in funds. The constant worry is how the curator's salary can be paid.
  I appeal to the Minister on this matter. Stonehenge used to be in private hands, it used to belong to the family of Sir Philip Antrobus, who lives in Amesbury, and it was generously presented to the nation. The Minister enjoys a sizeable revenue each year from 750,000 visitors. I urge him to be generous in providing facilities at Stonehenge whereby the museum can make its existence known to those who visit the monument. For the sake of the museum, I would like to see a few crumbs fall from the Minister's rich man's table.
  In closing, I would point out that Stonehenge probably took three centuries to build. It is a highly sophisticated building and a good many generations of

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  my constituents must have devoted their whole lives to working on it. They created an interlocking series of astronomical observing instruments of remarkable ingenuity and which architecturally are of great simplicity. It genuinely ranks with the seven classic wonders of the world—the Hanging Gardens of Babylon, the Pyramids and so on. The monument is worth safeguarding, and I hope the Minister will agree with me.
  9.53 p.m.
  The Under-Secretary of State for the Environment (Mr. Kenneth Marks): It is symbolic of the variety of aspects of the work in my Department that I am replying to this debate now, and at some time during tonight or tomorrow morning with the permission of the House, I shall reply to a debate on nuclear power and the environment. 1 only hope that 3,500 years from now there will be debates on whether Windscale is being properly looked after.
  It has been recognised for many years by those concerned about our natural and man-made heritage that the popularity of a particular area or feature may damage, or even destroy, the very thing that has attracted visitors to it. I believe that the House and the public, will agree that we have a duty to future generations as well as to the present one in respect of our heritage.
  The principle is well stated in the report of the National Parks Policies Review Committee which said in respect of national parks that their enjoyment by the public should be in such manner and by such means as will leave their beauty unimpaired for the enjoyment of this and future generations. This recommendation was endorsed by the Secretary of State for the Environment, then my right hon. Friend the Member for Grimsby (Mr. Crosland), in a circular to local authorities in January of this year.
  Hon. Members may perhaps wonder how this doctrine can possibly apply to the apparently robustly constructed Stonehenge Circle. But Stonehenge is more than the familiar stone circle; it is a "henge", comprising a ditched and banked enclosure containing within it an arrangement of upright stones, pits and
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  the settings of former timber structures; and there are associated features, notably the Heelstone and the Avenue—the processional route to the circle which is severed only a few yards from the henge by the A344 road.
  The effects on the monument of increasing numbers of visitors–120,000 in 1951, 300,000 in 1960 and 700,000 in recent years, coming second only to those who visit the Tower of London—have been worrying the Department and our advisers, the Ancient Monuments Board, for many years. I have been amongst those crowds on a Friday afternoon in August. The turf has been worn away, leaving a sea of mud in wet weather. We have replaced this by gravel, but then it was found that the bank and ditch surrounding the enclosure were being eroded. Fences were put up on each side of them. Since then, we have realised with growing anxiety that the stones themselves are suffering wear.
  The wear is partly caused by adults and children climbing on the low and fallen stones, but there is more to it than that. Fairly recently it has been discovered that there are faint incisions on some of the upright stones representing axe and dagger symbols of Bronze Age date. These are of significance to archaeologists, but we have evidence that they are at risk by the amount of rubbing and fingering to which they are subjected.
  The density of crowds in summer and at fine weekends throughout the year is such that the custody staff cannot control them. There is no room within the circle to fence off corridors within which large numbers of people can shuffle round in a queue.
  Rationing by price was tried, and the price of admission was increased to 40 pence during the summer, keeping it to 10p in winter. That caused many complaints and hostility to our staff, and it had no significant effect on attendances. There has been a recent addition of overenthusiastic festivities—some would say hooliganism—during the night of the Summer Solstice. Because of the dangers to the monument and to people, it has been necessary for more than 10 years to surround the henge with dannert wire, and to admit inside it only the Druids—who have been allowed for over 50 years to perform their rites—and a limited

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  number of local residents selected by the district council.
  My hon. Friend the noble Lady, Lady Birk, who also is Under-Secretary of State in the Department, met representatives of the district council last April to discuss these arrangements. On police advice it was agreed that they must continue until there is evidence of an improvement in public behaviour. The organisers of unauthorised free festivals have in recent years made Stonehenge a target at that time of year. In 1975 they were deflected from the monument by the police, but invaded surrounding farmland. In 1976 the vanguard arrived well before the solstice and established themselves close to the monument. The police advised against attempting to dislodge them unless there was an alternative site available. There was and is no such site.
  I appreciate that there is resentment in Amesbury and Salisbury against the festival because of the aggressive behaviour of some participants in the locality and because of the expense which falls upon the public funds. The Department is in touch with the police and the local authorities about the expected 1977 festival. We are anxious to co-operate with the police and the local authorities. We control only a small area adjoining the monument. While the defence of that area may be reasonable, it would not necessarily be to the advantage of the local community. Intruders would go somewhere else near by.
  A group of drop-outs set up a sordid encampment adjoining the monument in 1974. After some months the Department secured their removal by an injunction from the High Court, after some rather bizarre proceedings lasting several days. All the trespassers claimed the same name—Wally. They then settled on the adjoining trackway from which they were eventually dispersed by the highway authority. They then squatted in Amesbury. Their leader has since died. The Department has no responsibility for any remnants of the sect who may survive in the locality.
  However, I believe that the House will recognise that some other radical action is necessary. It has been suggested that the car park should be moved from its present site near the monument to another site so far distant that only the
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  most robust and determined would-be visitors would ever get to the monument. There would be practical difficulties about that. There are abundant opportunities for unauthorised parking in the locality. It would also be unfair to less active and older visitors.
  We have come to the conclusion, after much agonising, that the right course will be to ask visitors to remain outside the henge, that is about 30 yards away from the stone circle. We would not envisage erecting a formidable physical barrier: simply a line of rope to define the limits of access. That would enable visitors to have a view of the stones, undistracted by fences or by crowds of people milling about within and around them. We should also be able to restore the turf surface, thus enhancing the present appearance of the monument.
  Like you, Mr. Speaker, as a teacher I frequently regret that I am not allowed to use visual aids in this place. However, I assure the hon. Gentleman that maps are available—I can show them to him later—to give a picture of the stones as they will be seen from the area where the public will be permitted. I do not deny that this proposal involves a sacrifice which many will regret. In return we propose to provide explanatory material at the outer part of the site, including a model of the monument as it would have been at various stages of its history. We shall also reduce the admission price to 20p.
  I hope that these measures, taken as a whole, will prove acceptable to the public. We are relying upon their understanding and co-operation to save this unique monument from further damage. We owe this not only to our children and their children, but to Europe and the world, since Stonehenge is of international significance, no less than the caves of Lascaux and the Acropolis, where comparable measures have been found necessary.
  We are working urgently on arrangements to implement these proposals. We hope in the long run to provide parking and other facilities a little further away than the present site. The site would be invisible from the monument. It would permit of more adequate facilities for visitors, in particular the provision of "interpretation" of the monument and other Wessex pre-historic monuments.

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  Visitors would be told about related material—I am sure that the hon. Gentleman will be glad to hear about this—in Salisbury and Devizes Museums. The new facilities would be designed for visitors to the monument, not travellers in general. The main charge, probably the sole charge, would be for parking.
  I am grateful to the hon. Gentleman for raising the matter. I look forward to co-operation between my Department, the local people and the many visitors who will continue to go to Stonehenge.

  DEFENCE
  10.3 p.m.
  Mr. Patrick Wall: Modern history seems to show that the advent of a Labour Government automatically leads to two things: first, an economic crisis; secondly, defence cuts. Of course, there is a relationship between those two, but I believe that there is some instinct in the Labour Party which is opposed to defence. I am not for a moment suggesting that the Labour Party is unpatriotic or anything like that. However, I am saying that there is a strain in the Labour Party ranging from the professional pacifist to the fellow traveller. This was well illustrated in an article in The Times of this morning by Lord Chalfont, entitled
  "By the left, quick march to suicide or surrender".
  The predecessors of the present Labour Party opposed rearmanent in the 1930s, and today the Labour Party advocates defence cuts and opposes any form of rearmament. In the 1930s the Labour Party took no notice of the threat from Germany. Today it takes no notice of the threat from the USSR. Today we even have Ministers who preach Marxism and a Trotskyite in charge of the Labour youth. It seems that the Tribune Group on the Government side of the House is self-confessed anti-NATO, anti-nuclear and anti-American, which are the three sure safeguards the country has at present. Obviously no one from the most extreme pacifist to the most extreme militarist on either side of the House wants to spend a penny more on defence than necessary. But surely in deciding what defence expenditure should be we must estimate what the threat is, because defence is
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  obviously a reaction against a threat and a safeguard for the State against any possible threat from outside.
  It seems to me that when we are arguing, as we did in the debate last week on the Estimates, no one on the Government side considers the threats. Government supporters either ignore them or feel that they do not exist and dismiss them out of hand. Yet, an article in The Times earlier this year said:
  "The Soviet Union spent more than 50,000 million roubles"—
  that is, £31,000 million—
  "on defence last year. … Previous official estimates of Russian military spending put it at 7 per cent. of the country's gross national product. But the Ministry now believes it is between 11 and 12 per cent. and that spending has been increasing at an annual rate of 4 per cent."
  Other sources put Soviet military expenditure between 15 per cent. and 19 per cent. of the GNP—these are largely American sources. Be that as it may, the former Secretary of State for Defence—now the Secretary of State for Northern Ireland—put out a paper to all hon. Members last summer. I quote from the first paragraph:
  "During 1976 the Soviet Union will bring into service over 200 new generation intercontinental ballistic missiles (ICBM); a variety of other missiles; 1,000 combat aircraft, mostly swing-wing types; over 700 helicopters; over 3,000 tanks; 4,000 armoured personnel carriers; up to ten nuclear submarines—of which six will each carry 12–16 ballistic missiles of 4,800 miles range; and major surface ships, including a 40,000 ton aircraft carrier."
  Yet, at about the same time as that statement was put out by the right hon. Gentleman, the National Executive of the Labour Party demanded a further £1,000 million cuts in defence suggesting that they could be achieved by scrapping the AW cruiser programme or the MRCA, or by cutting the BAOR in half, thus violating the Brussels Treaty.
  I am not suggesting that the hon. Gentleman who is to reply to this debate is implicated in this, but it should be said that members of the Labour Party who are putting forward this proposal are either stupid or subversive.
  What is the threat? I suggest that today the threat is both direct and indirect. It is direct in Central Europe where the NATO forces are outnumbered by two or three to one. It is indirect in the subversion of our industries at home. It is

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  direct on the Northern flank, as the Norwegians or Danes will tell us. Only the other day Danish parliamentarians were saying that Soviet exercises at sea and in the air were coming closer and closer to the Danish frontier and air space. It is indirect in the Mediterranean with an alliance with Libya and later with Mintoff's Malta. There is a threat to Yugoslavia when the president dies, and later to Italy.
  It is direct on the southern flank with the takeover of Angola and Mozambique, with Rhodesia and Namibia to come, and then an indirect attack on Southern Africa. Why? Certainly not to abolish apartheid—the Soviet Union could not care anything about that—but to control 60 per cent. to 90 per cent. of the world's key minerals. This threat has developed and increased, as the Government have admitted in White Paper after White Paper since the Cuban missile crisis of 1962, particularly at sea.
  What have the Labour Government done in response? I want briefly to consider the cuts that have been made in defence since 1962. Labour Governments were in office from 1964 to 1970. In 1966 there was a defence review that was to end all defence reviews and stabilise the Forces for at least one generation. That led to a cut of 16 per cent. in the defence budget. It stabilised at £2,000 million in that year of crisis. That was in February. In July there was another cut of £100 million, followed the next year by another cut of £100 million, and in 1968 by yet another cut, this time of £110 million.
  History repeats itself. When the Labour Government came to power in 1974, we again had a defence review to end all defence reviews, which was to stabilise the position of the Services£Navy, Army and Royal Air Force£for the next generation. There was to be a cut of £7,208 million at today's prices off the projected programme for the Services over the next 10 years. That was to stabilise everything. This time the Government did not wait for three or four months. They cut another £168 million off at today's prices within one month, and that was followed by three cuts this year: in February a cut of £626 million; in July a cut of £100 million; and last week a cut of £300 million; making a total at today's prices of £8,402 million.
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  That is an enormous sum which, if carried out during the next few years, will successfully emasculate our defence forces and render them non-credible.
  As the House knows, defence expenditure can be cut today but the results may not be seen for another five to 10 years. I suggest that the lessons of history today and a study of political geography will show that in about three or five years' time the Soviet Union will take over Southern Africa and affect our key communications at sea and in the air, we shall then feel the effect of the savage cuts that have been inflicted on the defence forces in the past two years.
  I want to consider briefly four effects of the cuts. We talk about figures, and say "cuts of £100 million", but that does not mean anything to the man in the street. What do defence cuts mean in terms of manpower or effort? First, let me consider anti-submarine warfare, and here I hope that I carry the Minister for the Navy with me.
  This is probably the greatest threat faced by the Western alliance. Soviet nuclear submarines outnumber those of all the Western Powers put together. The Soviet Union will have 24 of its new Delta class submarines at sea before the first American equivalent, Trident, gets to sea. lit was said by the Minister in the passage that I quoted that these vessels have missiles with a range of 4,800 miles. Therefore, they can cover the whole of Europe, China or America from the Barents Sea. They are formidable weapons.
  What have we to counter this vast submarine fleet? I do not mean just this country, because we cannot do it, but NATO as a whole. In anti-submarine vessels compared with Soviet submarines it is about two to one, yet in the last war allied anti-submarine vessels compared with German U-boats were six to one.
  Mr. John Roper: Does the hon. Gentleman agree that we have considerably more helicopters than the Soviet Union has? An effective helicopter is as good as a frigate these days in anti-submarine warfare.
  Mr. Wall: I agree that we have many more helicopters than we had in the last war, because then we did not have any.

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  I do not agree that we have more than the Soviet Union.
  Mr. Roper: Yes we have.
  Mr. Wall: In the last war?
  Mr. Roper: No, now.
  Mr. Wall: I said that that was the situation in the last war. As I understood the hon. Gentleman's case, it was that we now have powerful anti-submarine helicopters, and the Sea King is worth a frigate. I was comparing our situation during the last war. I said that then we had no helicopters, but that today we have, and so does the Soviet Union. That country also has missiles to shoot down our helicopters. On the other hand, the hon. Gentleman must give me this, in the last war the German U-boats had to surface at night, and that is when the Royal Air Force got them. Today, the nuclear submarine does not have to surface at all.
  Although I accept that we have helicopters as well as anti-submarine vessels, we have a far more difficult target. No one knows—and I hope that we shall never have to know—exactly which will prove the most powerful weapon, the nuclear submarine or the anti-submarine helicopter. But the disparity in forces is two to one. Those are the figures given by Admiral Kidd, Supreme Allied Commander, Atlantic, who says that he has two anti-submarine vessels to every Soviet submarine.
  Mr. Roper: I am sure that the hon. Gentleman does not want to mislead the House. He is suggesting that by including helicopters one makes the position worse. That is not the case. He went from a proportion of two to one to four to one. I am sure that that is not what he intended to say. By including helicopters we are improving the balance in favour of the West. Let us get the figures straight.
  Mr. Wall: Either I am getting confused, or the hon. Gentleman is. In the Second World War, the ratio was six anti-submarine vessels to each German U-boat. Today, the ratio is two NATO anti-submarine vessels to each Soviet submarine. We have also helicopters, but the Soviet submarines are true submarines and may well prove virtually undetect-
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  able. Therefore, the threat is far more serious today than it was in either of the world wars, when submarines very nearly brought Britain and the allies to their knees. I hope that I have got that point over. I am dealing with antisubmarine vessels.
  What are the problems? We have to get reinforcements from the Americas to Europe; our oil supplies come round the Cape, as do our minerals. What have we to contribute to NATO? I exclude the County and Bristol classes as light cruisers. We then have only two destroyers with four building; we have 39 general purpose frigates and 15 antisubmarine frigates, with four building. It is an appallingly low total. It means that the Royal Navy has a smaller number of ships at sea than at any time since 1875. That is our awe full position in facing this great Soviet threat.
  When translated into hard facts, the cuts mean that nine frigates or destroyers which would have been used for antisubmarine purposes will not now be built. That is my understanding of the situation. The effects of the cuts will mean that over the next few years we shall have nine fewer frigates or destroyers than we would have had otherwise. The situation is shown in its full seriousness when we remember that it took six frigates to maintain the unlamented Beira blockade.
  The Nimrod aircraft are another very powerful anti-submarine weapon. I believe that there are 43 of them. Does the cut of 5 per cent. mean that 10 of them are now to go. Or has the cut to be reversed in their case? Stories have been floating around that the Government have decided to maintain all the Nimrods, and I hope that the Minister will be able to assure me that that is so. I know that he, too, acknowledges the value of the Nimrods, and I am sure that he wants them maintained in service, because they are the finest anti-submarine aircraft in the world.
  Not only do we have to watch the threat of Soviet submarines. We have the requirement to exercise suveillance over the growing Soviet surface fleet as well as over the new 200-mile fishery limits. Four Nimrods are to be allocated to watch those limits, so they will be heavily employed in that duty. I am

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  convinced that there is no case for cutting the number of Nimrods.
  The immediate reinforcements for NATO's northern flank are three Royal Marine commando groups and a Canadian battalion. Norway has in the north one Norwegian or NATO brigade. The Soviet Union has four front-line divisions there, with four in reserve and 400 front-line aircraft available. How are we to get reinforcements to Norway? In the past, they would have been covered by an aircraft carrier in support and have been carried in two commando carriers operating helicopters and so giving maximum mobility. Heavy stores would have been landed by assault ships.
  These cuts mean that there is only one carrier left, the "Ark Royal", and she is in dockyard at the moment. The two commando carriers have also gone. I think that "Hermes" has a secondary role, but she is much more likely to be employed in anti-submarine warfare. One of the assault ships is in mothballs and one is used for training, and the Royal Marines have their helicopter lift cut by 50 per cent. In the recent exercise, to reinforce the northern flank we had to hire British Rail train ferries at a cost of £500,000, which would have been much better spent on maintaining some of the ships to which I have referred.
  My third point relates to a subject which always excites some Labour Members below the Gangway£that of Rhodesia. They would love to send forces out there to do something about Mr. Smith. Let us consider what we could do, what mobility our forces have. Under these cuts, the United Kingdom mobile force has been cut by 66 per cent. The Belfast fleet, the only aircraft capable of carrying the Abbot or a light tank, have been scrapped. We only have Hercules left. I am not sure how many Hercules we have, but it was about 75. Can the Minister confirm that the number is to be cut to 55?
  When UDI was declared, HMS "Eagle", an aircraft carrier, was sent to the Indian Ocean, I think with the idea of protecting Zambia, which we were supplying with petrol. There is no aircraft carrier left to do that and the Fleet train is being cut by 30 per cent. so the mobility of afloat support that we could offer has been seriously reduced.
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  These are the facts. We talk about a cost of millions of pounds. This is what it means today—and the picture will be much worse in a few year's time.
  One other example is BAOR. Everyone is very proud of BAOR and says that it is the best army in the world. I think it is, but it is beginning to get a bit rusty. With 7,000 tanks, the NATO forces in Germany are facing Soviet tanks which have grown in number from 13,650 to 19,000 over the last two years. We claim to have the best tank in the world, the Chieftain, yet its engine sometimes gives trouble. I understand that the Chieftains are being re-engined, which will make them again the finest in the world. The only trouble is that all the re-engined Chieftains are going to Iran. We have also produced some new armour, which also is the best in the world, but it is also going to Iran. That is what cuts mean to soldiers in the field.
  I turn to anti-tank weapons. We are told that we are going to replace our semi-obsolete weapon with Milan. Will Milan he postponed now, or shall we buy that Franco-German weapon? How long will our helicopters or what is left of them be equipped with the SS11, which is the thoroughly obsolete French weapon? When shall we get something like Tow or Hot?
  NATO radio communications in BAOR are not good, because one army, the British, cannot talk to the Americans or the Germans without special arrangements being made. Communications need overhauling. Will these cuts mean that the new NATO communications, which should have been operational in the 1990s, will be postponed till the next century?
  I turn to tactical nuclear weapons. Honest John, which we have used for many years, is now completely obsolete and Lance will replace it. Do these cuts mean that Lance will be postponed, or shall we get it in the field next year? The Institute of Strategic Studies tells us that we have 420 front-line aircraft in Germany. How long will they last—a week?
  These are the practical effects of these continual defence cuts, year by year. I have not mentioned things like stockpiling and reserves. We are supposed to be preparing to fight a 30-day war. I should be very surprised if we have 30 days'

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  stores. These cuts must also have an effect on training. If things go wrong, the cuts will have to be paid for in blood —and that has happened before in the history of this islands.
  The blame must lie with the Government because they have the full knowledge of the threat. This year's White Paper said on Page 5:
  "Nor can the West ignore the fact that during the past year the military capability of the Warsaw Pact has increased in numbers and in quantity."
  It also says that there has been a steady improvement in the conventional forces of the Warsaw Pact countries, that the Soviet Union has a strong and effective naval air force, that the capability of the ground forces of the Warsaw Pact countries continues to increase, that the Warsaw Pact air forces and missile systems are being improved and so on.
  The Government know the threat. The Secretary of State said that cuts on the scale advocated by some of his hon. Friends would entail a policy of, at best, neutrality and, at worst, surrender.
  The Government can no longer pretend that these cuts are not affecting NATO. General Haig, the Supreme Allied Commander of NATO, Admiral Kidd, the Supreme Allied Commander, Atlantic, and Admiral Hill-Lawton, Chairman of the NATO Military Committee, all say that the balance is shifting against NATO. All our NATO Allies, even countries such as Denmark and Norway are spending more on defence, yet we are cutting down.
  The old argument that we spend more than anyone else is becoming less and less valid. It never was really valid because our gross national product was considerably less than those of France and Germany and the figures did not tally.
  The fact that the Chiefs of Staff chose to go to Downing Street and exercise their prerogative for the first time for a long time shows how serious this matter is. It is serious not just because it weakens NATO, but because it weakens NATO's resolve. If other countries see us cutting, they will want to cut. Why should the Americans have divisions and forces in Europe when they see that the Europeans are not defending themselves? We are the key for America because we are
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  closest to the Americans. If we cut, we shall weaken the will of the Americans to stay in Europe and we shall weaken the fabric and structure of NATO.
  An hon. Member opposite said recently that if the Chiefs of Staff felt so strongly about this matter, they should resign. The Secretary of State said that this would be a matter for the Chiefs of Staff. It would not. It would be a matter for him. He is the political head of the Services and if things are so serious, he should take the advice of my right hon. Friend the Shadow defence spokesman and resign. If the right hon. Gentleman does not think the situation is serious enough to do that, I have no doubt that he will realise the seriousness of it in the next few months and, unless the Government go first, I believe that the Secretary of State will have to go.
  The real blame lies on the shoulders of someone else—the Chancellor of the Exchequer. He came into office as a Minister of Defence welcomed by the Services. It was said that he talked their language and understood their problems, yet he cut and cut again. As Chancellor of the Exchequer, with five or six years' experience as Minister of Defence, he knows the threat, yet he still cuts and cuts again and is backed by the Government for party political purposes.
  That is the indictment of the Government. They know the threat and the danger to the State, yet they cut defence for party-political purposes. I am only sorry that the old-fashioned penalty of impeachment can no longer apply to the Chancellor of the Exchequer.
  10.29 p.m.
  Mr. Victor Goodhew: I intervene briefly to congratulate my hon. Friend the Member for Haltemprice (Mr. Wall) on having raised this subject and giving us the opportunity to consider it once more. Perhaps the more often we put the facts to the Government, the more likely we are to get the message through.
  One would not have expected it to be necessary for us to keep spelling this out to the Government. Every time they publish a defence review or White Paper, they become more explicit in their explanation of how NATO countries are slipping behind the Warsaw Pact Powers. The Government keep on spelling out this military threat, but, having spelt it out and having illustrated it with figures,

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  models and drawings of ships and aircraft to make absolutely sure that we know what the threat is, they come back each time and cut our forces.
  It is an extraordinary state of double-mindedness. I was in Rhodesia a while ago and happened to pick up a Gideons' Bible which was beside my bed. As there were great decisions to be made, I turned to the section marked "great decisions" and was referred to the Book of James, chapter one, verse eight, which read:
  "A double-minded man is unstable in all his ways."
  I wonder what is happening to right hon. and hon. Gentlemen on the Government side who spell out the threat and then assure us that it is all right to cut back still further.
  We all know that there is great danger in complacency when we are facing the Russians. I do not trust the Russians, whatever conference is going on. We all know that on the central front there are regular offensive exercises which rush up to the Iron Curtain and then stop. We always assume that they will stop when they reach that point. No one seems to realise that one day they could roll straight on. We are told in the White Papers that we must differentiate between the political threat and the military threat—that the political threat is one thing and the military threat is another—and that we are going through a period of detente and would have ample time for reinforcement because there would be a time of rising political tension.
  The time we need for reinforcements is immense, since the Russian troops are on the ground and have only to roll across friendly countries to cross the border, whereas the Americans have to fly large quantities of men and materials across the Atlantic and we have to use train ferries or whatever it is that we have adapted for our latest movements.
  We are told that there will be time for reinforcement because the political threat does not exist while we are talking about detente. I warn the Government that if I were a member of the Soviet Government I would not start to increase political tension if I intended to make a rush to the Channel ports or beyond. I would have a conference on security and co-operation in Europe. I would have a Helsinki accord, in which I would agree
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  to make great advances in humanitarian fields, and I would keep talking about detente until everyone in the NATO countries was lulled into a false sense of security. Having done so, when the moment came I would strike, and I would know perfectly well that I would be through to the Channel ports before real reinforcements were available. These are the facts, and that is why the complacency on the Government Benches is not only incredible but positively dangerous and could be disastrous.
  I appeal to right hon. and hon. Gentlemen on the Government side to remember that we depend on the credibility of NATO for the security of these islands. When it comes to the credibility of the whole operation and the morale of NATO forces, it is wrong to continue in this complacent way, spelling out how much the threat against us is getting greater and greater while continuing to cut further and further to the bone. Any Secretary of State for Defence who allowed the situation to continue to the extent that it has done, in the light of warnings he has given or that have been given by his predecessors, should resign.
  I hope that the Minister tonight will carry back to the Secretary of State for Defence the message that, if he allows this to happen in the light of what the Chiefs of State have said, the only course is to resign.
  10.35 p.m.
  Mr. Peter Rees: I am glad to have the opportunity to take part in this debate, and I am grateful to my hon. Friend the Member for Haltemprice (Mr. Wall) for providing the occasion. For reasons which will emerge, we will have a special interest in the subject which I wish to raise.
  The general tenor of the debate is directed to the level of defence expenditure, and I shall not touch on the general considerations, which have been so adequately and eloquently covered by my hon. Friends the Members for Haltemprice and for St. Albans (Mr. Goodhew), though I must observe in passing that in all the Chancellor's eight or nine Budgets we have always been told that defence must bear its fair share of cuts. The concept of "fair share" is highly subjective, and I should have thought that in comparison with other

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  parts of public expenditure, defence has by now borne more than its fair share.
  Without dragging personalities into the debate, I can only assume that the Secretary of State for Defence—I wish that he were here to contribute to the discussion—was chosen, after his experiences with such great subjects as the Channel Tunnel and Tameside, for his general pliability in the Cabinet and the likelihood of his being bruatalised with apparent ease by the Chancellor of the Exchequer.
  I wish, however, to narrow the debate a little to the local consequences of the defence cuts and to focus the attention of the House on the impact on the town of Deal in my constituency. I believe that there is a risk that the depot of the Royal Marines, including the Royal Marine School of Music, may soon be phased out. I see but few hon. Members present on the Government side, which is some indication of their interest in and attachment to defence questions, but for those of my hon. Friends who are here perhaps I may be permitted to remind the House that Deal, like so many other parts of my constituency, has a great martial past.
  As my hon. Friend the Member for Stretford (Mr. Churchill) is soon to speak from the Dispatch Box, I think it not inappropriate to say that the Lord Warden of the Cinque Ports has his seat at Walmer Castle. Moreover, Deal Castle has its Captain, and the present Captain is a distinguished ex-Royal Marine. I pay tribute to my right hon. Friend the Member for Sidcup (Mr. Heath) for reviving that old and honourable office few years ago. Although there is no one now living in Deal who can personally recall the fleet lying at anchor off the Downs, such memories are cherished by the residents of Deal.
  More important even that those factors, important though they are, for over 150 years now the Royal Marines have maintained a distinguished and notable presence in Deal. Although this has latterly been confined to the training of recruits and the Royal Marine School of Music, neither of those functions, notwithstanding anything that General Brown may have said in an unguarded moment in Washington during the past year, is an unimportant facet of our defence capability.
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  The connection which has been built up between the town of Deal and the Royal Marines is not just a sentimental connection, though I remind the House that it was from Dover, but a few miles away, that on St. George's Day the Royal Marines set off to assault the mole at Zeebrugge, in what I believe to have been a shorter and sharper engagement than that experienced by any other arm of the British Armed Forces. I did not myself have the privilege of serving in the Royal Marines, although I like to think that I served in as glorious a unit, but I recall that on that occasion the Royal Marines won more VCs and suffered more casualties than perhaps any other unit has ever done in a comparable engagement. We rememember that incident with great pride, and I have been privileged to take part in their services on 11th November in their own chapel at Deal.
  In a more mundane fashion, however, the Royal Marines have contributed and still contribute greatly to the social and economic life of Deal. The economic life of Deal is, perhaps, a little narrowly based, but the Marines make a great contribution to the town's shops and hotels, and they provide a range of jobs which would not be open to residents of Deal if they were not there.
  With the contraction of the Armed Forces, the contraction of the Royal Marines and the contraction of their amphibious role, there have for some years been ugly rumours about the closure of their depot. We have noticed that recruit training has taken place at other Royal Marine centres, and we have watched with alarm possible developments.
  The Under-Secretary's predecessor was good enough to receive a delegation that I brought up from the town to emphasise the long connection of the corps with Deal and the grave effect there would be on the life of the town if the depot were closed. Now, only a fortnight ago, the blow has fallen. It must have been one of the first and least attractive duties of the hon. Member for Sheffield, Attercliffe (Mr. Duffy) as Under-Secretary to write to inform me and the commanding officer that the depot would be phased out between now and 1981.

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  I do not say that we had reconciled ourselves to the possibility, but there may have been certain military grounds for concentrating recruit training elsewhere. However, we had at least nourished the hope that we should be able to retain the Royal Marine School of Music. Apparently, this is not to be. There is the probability that the school will be transferred to the barracks at Eastney. The Under-Secretary told me in his letter that certain capital expenditure would have to be incurred there. Has he yet been able to ascertain in any detail just what it would cost to convert the barracks at Eastney compared with the cost of renovating and converting the depot at Deal? I believe that, making judicious allowance for the optimism of planners, it will be found that there are no real savings in hard cash if the move is made.
  Minutes cannot adequately reproduce the vigour and feeling that we managed to convey to the hon. Gentleman's predecessor, so I emphasise to the Under-Secretary the damaging effect that such a move would have on the life of Deal and the surrounding district. I refer not only to the impact on the commercial, hotel and cultural life but to the loss of jobs. In a difficult period, between 100 and 200 jobs may be lost. It would appear that the social contract is designed to save jobs, but not defence jobs. I would like to feel that it at least covered the welfare and livelihood of those who serve in the Armed Forces and those who minister to their needs.
  We recognise that in a period of financial stringency the Armed Forces must be as cost effective as possible. I have indicated one matter which I do not believe has yet been adequately explored and on which I and the residents of Deal will require reassurance. But there are wider considerations, which I urge those who speak from the Front Bench tonight and on other occasions to bear in mind. We want to see our Armed Forces as effectively deployed and well armed as possible, but there is also the crucial question of maintaining the interest and pride of the country as a whole in the Armed Forces, particularly in what we may describe as a prolonged period of peace.
  In saying that, I am fully conscious of the forces' rôle in Northern Ireland and other parts of the world. It is par-
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  ticularly important that there should be a visible presence, however small, in all the great martial areas of the country which have been used to providing the bulk of recruits and welcoming in their midst the Forces of the Crown, whether the Army, the Royal Air Force, the Royal Navy or the Royal Marines.
  I like to count the constituency which I am privileged to represent as one of those areas. We have always been very proud of our martial connections. It would be very damaging to the long-term future of the Armed Services, and the support which they rightly derive in full measure from the civilian parts of the country, if everything were concentrated in Portsmouth or on Salisbury Plain. There may be the best possible strategic reasons, but there are wider considerations. I hope that the Minister who replies to the debate will show that he is sensitive to them.
  I hope the Minister will show that on this occasion he is capable of rising above the rather ugly wrangles that have obviously taken place inside the Cabinet Room. I hope he will demonstrate that he still preserves an open mind on these issues and will hold out the possibility at least that, when the sums have been done and all the wider factors that I have canvassed tonight have been taken into account, we shall retain a Royal Marine presence in Deal.
  10.45 p.m.
  Mr. Patrick Mayhew: My hon. and learned Friend the Member for Dover and Deal (Mr. Rees) has made an important speech upon the effect that the cuts may well have upon a distinguished corps and upon a distinguished part of these islands that has sustained the corps for several centuries. In a brief intervention, I shall add my expression of gratitude to my hon. Friend the Member for Haltemprice (Mr. Wall) for giving the House the early opportunity to comment upon the effects upon our defence forces and upon our defence as a whole of the cuts announced last Wednesday and to speak on a slightly broader canvas than that of my hon. and learned Friend.
  Four cuts ago, in December 1974, the Minister of State, Ministry of Defence—the right hon. Member for Stockton (Mr. Rodgers)—said that the cuts represented a cool and considered judgment of

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  what the country needed to spend to secure its safety. I make no apology for reminding Labour Members yet again of those words. I do not flatter myself that the occasions when I have reminded them of them before are fresh or, indeed, present in their memories. It needs to be said time and time again that four cuts ago the Government's then judgment, which was said to be a cool and considered one, was that the defence budget was what was considered necessary to be spent by the country to secure our safety.
  If I might ask a rhetorical question at this time of night, is it thought that the threat since then has receded? Is it thought that the threat has diminished'? Is it thought that the right hon. Gentleman's judgment was in some way not cool enough, that it was in some way ill considered and that it is not now found necessary to spend as much to secure our safety? What is the explanation?
  I am certain that we shall hear tonight the phrase that is to be found in every Defence Minister's brief—no doubt it is to be found in the Under-Secretary of State's brief—that "Defence must piay its part".
  The Under-Secretary of State for Defence for the Royal Air Force (Mr. James Wellbeloved)The Under-Secretary of State for Defence for the Royal Air Force (Mr. James Wellbeloved) indicated assent.
  Mr. Mayhew: What meaning does that phrase have? Defence has no part unless the hon. Gentleman and his right hon. and hon. Friends in the Government choose to give it one. Unless the hon. Gentleman is prepared to supply a meaning for that phrase that is so often produced, I hope he will have the courage to delete it from the brief so sedulously prepared for him by those whose task it is to reinforce a policy so dangerous to the country.
  No reinforcement is needed by the Eastern bloc forces that confront our Army in Western Germany. The reinforcement that we have always relied upon in the past to enable the Eastern bloc to achieve a full-strength surprise attack—namely, a nine-day warning of the reinforcement build-up—would no longer be necessary now that the preponderance of the Warsaw Pact forces is so great that the knockout blow could
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  be delivered without that period of build-up.
  Is this the time to cut again? There is insufficient transport, as I believe, to support our forces for more than a couple of days in the event of a sudden attack. There is insufficient ammunition to support them for more than a couple of days. There are insufficient reserves of men to provide a rest for front-line troops who will have to bear the brunt. To continue to talk of a 30-day capability is sheer nonsense, and the awful thing is that it is known to be nonsense by those upon whom we rely to bear that brunt with their own bodies. I ask the Government to bear in mind the effect upon the morale of our troops, who see this as the third cut this year when they know that already they are down to the bone, as Sir Michael Carver said when the last cuts were imposed.
  That is the third and last question I ask the Under-Secretary. What are the Government to say to the troops in view of what they have said before? I am sorry that the Secretary of State is not here. I am sorry for him, because it is clear that he has been put into his present job to be a push-over for the Chancellor. It is absolutely clear that he was put into the job to offer no resistance and to be a push-over to the Chancellor, who was Secretary of State for Defence for five years and who is known to be an infinitely tougher character.
  What is to be said to sustain the morale of the troops? How can the Government square their present action with what they have said to the troops before? What are they to say about the capacity now to meet a sudden push by the Eastern bloc forces without a need for reinforcements?
  10.51 p.m.
  Mr. John Roper: I, too, am grateful to the hon. Member for Haltemprice (Mr. Wall) for having given us the opportunity to have this debate on this important matter tonight. Some of us thought that we would intervene in tomorrow's debate, but it is probably better that we have had a chance to raise these important points tonight.
  I join issue with the remarks made by the hon. and learned Members for Dover and Deal (Mr. Rees) and for Royal Tunbridge Wells (Mr. Mayhew). Those who

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  have known my right hon. Friend the Secretary of State for Defence over the years know that he is a considerable authority on defence matters. He was for a number of years the chairman of the Defence Committee of Western European Union and he prepared a number of important reports on defence. It is unfair to suggest that he is not well-informed on these matters and that he will not do his best to ensure that the defence of Britain receives the resources that it deserves.
  I apologise if I misunderstood the statistics of the hon. Member for Haltemprice when I intervened during his speech. I thought that he was comparing the present relative numbers of our forces and those of the Soviets rather than drawing the historical parallel. He will know that to discuss these matters and draw comparisons between likely anti-submarine warfare in these times and anti-submarine warfare in the last war we are not comparing like with like. We are restricted in what we say about the techniques available—not merely helicopters but other developments in comparison with ASDIC sets and frigates which were used in the last war to locate submarines. In NATO we are developing effective anti-submarine capabilities.
  I agree with the hon. Gentleman absolutely—I, too, recall the remarks of Admiral Kidd—in what he said about maritime patrol aircraft. I am confident that the Nimrods have a continuing important role to play. I wish to see us co-operating much more closely with our allies in Western Europe and in NATO in operating Nimrods. Recently there has been an imaginative suggestion by the Dutch that they will place a squadron or perhaps two squadrons of Nimrods in Scotland to work alongside the RAF Nimrods there in exactly the same way as the Dutch marines are operating effectively in Arbroath alongside British marines. These are the practical ways in which we can co-operate in a period in which all Western countries face problems as a result of inflation, and get a better buy for the pounds and guilders that are available for defence.
  I share a great deal of the concern that has been expressed tonight about the cuts. I am particularly concerned about ad hoc cuts. Inevitably defence has to
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  take its share in any particular cut. If we must have cuts, we have to look at our resources and say what is available, and this must be part of an appraisal of our commitments. I am particularly concerned that we might be spreading resources even more thinly over the same number of our commitments.
  If we have to look again at the resources available, we should look at the commitments. We should look at Cyprus, a subject to which I shall return later, and at our contribution to the strategic deterrent of the alliance. But at the moment, when we are talking of the conventional forces, we must surely be concerned because of the contribution we are making to NATO.
  This is an extremely serious matter. If we reduce our contribution to the conventional forces in NATO on the central front, other people will follow us. The net result will be that the nuclear threshold will be lowered. Initially we might have to use tactical nuclear weapons, and then perhaps strategic nuclear weapons sooner if there were no adequate conventional forces in the central front in Europe. Therefore, we must look extremely carefully at the savings we are seeking to make.
  In listening to the hon. Member for Haltemprice I had the impression that it was only Labour Ministers who ever made cuts in our contributions to the central front or, indeed, to our contributions as promised under the Brussels Treaty. The hon. Member may have noticed that I left the Chamber. It was, indeed, to get hold of the Defence White Papers of 1957 and 1958, because it was in those two Defence White Papers that we really began, under a Conservative Administration—when Lord DuncanSandys was Secretary of State for Defence—to sell the pass in regard to our commitment to the central front and to Western European Union.
  The hon. Member will know that the commitment in the revised Brussels Treaty is to four divisions and to one tactical air force. There are no figures in the document, although the figure quoted at the time was 77,000 men. It was the Secretary of State for Defence who in the Defence White Paper of 1957 cut that commitment from 77,000 to 64,000. In the following year he cut it again from 64,000 to 55,000. Those were the serious

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  cuts in our contribution to the central front.
  It was Lord Duncan-Sandys who in his White Paper of 1957 said that we had to cut the size of the tactical air force in Germany by a half. That was in one White Paper. Those were cuts of much greater severity, in regard to the British contribution to the conventional forces of NATO, than anything that my right hon. Friend may have done in the last six months.
  In view of the criticism made about my right hon. Friend the Prime Minister—
  Mr. Wall: At that time, as the hon. Gentleman will appreciate we had forces throughout the world—in the Mediterranean, the Indian Ocean, and so on—which we do not have today.
  Mr. Roper: We had 100,000 men in the Far East and the Middle East at that time.
  But the most interesting passage in the Defence White Paper of 1958—particularly in view of the remarks made by right hon. and hon. Gentlemen on the Conservative side about my right hon. Friend the Prime Minister—is contained in paragraph 43. After having said that we were reducing the commitment to 55,000, the paragraph goes on to say:
  "In this connection, the Government have, in accordance with the revised Brussels Treaty, asked the North Atlantic Council to consider the financial problem involved in maintaining these forces in Germany."
  It goes on:
  "The Government are most anxious to continue to make a substantial contribution to the NATO shield. But they have been obliged to state clearly that, in the event of adequate financial assistance not being forthcoming they will have to reconsider reluctantly the British land and air forces they can afford to retain on the continent."
  That is the Conservative Government of 1958 in their own defence White Paper, and that after reducing the contribution to the central front from 77,000 to 55,000 in two years. Then they have the nerve to suggest that it is only Labour Governments which threaten our contribution to the central front, and make cuts.
  Also it was the Government of that time who fell for the nuclear fallacy.
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  They were more concerned about status than security. They were more concerned about being able to pretend to maintain the position of a great Power than about maintaining the security of this country with adequate forces on the continent of Europe. I hope that my right hon. Friends and hon. Friends will not suffer from the same illusion.
  While the whole of the £100 million for the coming year, or the £200 million for the following year, cannot be taken from the Polaris programme or the research and development programmes for modernising and developing strategic forces, when the Government look at where the cuts must be made—if, reluctantly, there must be cuts—they should look at areas where we may be duplicating forces which are adequately provided by the United States rather than cutting the conventional forces which we contribute to the central front, and which, I believe, are vital for the continued security of this country and the alliance as a whole.
  11.3 p.m.
  Rear-Admiral Morgan-Giles: I cannot tell a lie—I came here to speak about motorway inquiries. But I listened to siren voices, and I did so not least because motorway inquiries is a topic which is very low on the list and may not be reached. Secondly, I was absolutely outraged by the remarks of the Secretary of State for Defence the other afternoon, when he was replying to questions on Defence. I am sorry that he is not here tonight. I wanted to put a skewer into him about this subject.
  In answering an extremely difficult question, the Secretary of State said, in a throw-away line, that the Chiefs of Staff "could speak for themselves". They cannot speak for themselves, and the Secretary of State knows it. The two squirming Ministers on the Government Front Bench know it, too. They should be thoroughly ashamed of what their political boss has said. It is grossly unfair to the Chiefs of Staff to suggest such a thing, and to take refuge behind their skirts in such a way.
  All they can do is go to the Prime Minister as a body and represent their professional judgment of the facts. That is a very rare event, and that is what they have done. It is not too strong to

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  say that it was despicable for the Secretary of State to suggest otherwise.
  Having got that off my chest, I want to say that since the cuts we have, of course, inadequate forces for waging war. We also have inadequate forces for preventing war. One of the troubles with discussing defence is that we so often escalate it into a declared war in which we are all shooting each other and rushing around sinking submarines. I was unimpressed, by the way, by the suggestion by the hon. Member for Farnworth (Mr. Roper) that life was becoming easier for anti-submarines. As an old anti-sub-mariner, I assure him that if one is chasing a nuclear submarine, it is 10 times more difficult, not the other way sound.
  I expect I am bound to be thought of as a crusty old—I almost said an unparliamentary word there—admiral, who wants squadrons of battleships sailing the seas, and hordes of aircraft flying through the skies. I admit it, I do! But, joking apart, I want to prevent war. Those who have seen a war at the sharp end are those most likely to want to prevent another. If a country is too weak in its conventional defence, a potential enemy may be tempted to exercise blackmail by the use of its greater strength.
  Several hon. Members have spoken of the adverse effect on NATO of these ad hoc cuts. That is a strong argument because of the downward spiral in NATO which could be induced by our cuts. Members of NATO look up to Britain. They look up to our forces because they are professional—I think that they are the best. If we spiral downwards, others in NATO will do the same.
  As in our own national defence, one of the greatest inadequacies in NATO is prevention. I fear that the arrangements within NATO for crisis control, for handling a situation before war is declared and for the prevention of war are inadequate. General Alexander Haig, the Supreme Commander of NATO, told me at a recent North Atlantic Assembly meeting in open session that he was dissatisfied with the security of his communications in time of crisis. He said that he had no adequate means of securely communicating with subordinate commanders in NATO. If that is so, it is a deplorable weakness which should cause
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  the Government to think again about the cuts: the money that they are cutting could surely be used to remedy that weakness.
  Another inadequacy is in our Home Defence reserves. Our reserves consist of good people with a vital role to play. They experience interesting training and I am not dissatisfied with the quality of the reserves, but we have virtually no reserves for home defence, and the Government in previous incarnation cut civil defence.
  I talk of prevention and crisis control, not of war itself. We all remember the Orsen Welles broadcast about men from Mars landing on our planet and the way people screamed out of town in a panic. There could be a panic situation without a bomb being dropped or a rocket being fired if blackmail were brought to bear against this country. Just the threat of rocket attack could cause tremendous panic among civilians, but there will be no one to stand at the end of the street and say "Go back home: everything will be all right".
  Mr. Roper: I would not dare to contradict the hon. and gallant Member for Winchester (Rear-Admiral Morgan-Giles) about submarines, but is it not the case that in addition to the Territorials, eight or ten, or more, battalions earmarked for the British Army of the Rhine will be made available for home defence? If that is so I do not know what he means by saying that no one will be available for this purpose.
  Rear-Admiral Morgan-Giles: As I understand it, all the reserves, of the Army and certainly the other Services, have war stations to which to go. There are not specific reserves for specific local areas with no other functions than that. That is what there should be.
  A further point about the prevention of war is that we must have vastly improved arrangements for protecting our trade routes. It is at sea that an escalation of incidents, below the threshold of declared war can very easily be imagined. There are innumerable scenarios in which our merchant ships, going about the seas on their perfectly lawful occasions—as the old naval prayer has it—could be prevented, interrupted and harassed. In this short debate I need not say what an enormous increase we see year by year

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  and month by month in the Soviet navy. Yes, month by month, because one additional nuclear submarine is launched for the Soviet navy every month.
  This subject is world wide. The Cape route is perhaps one of our most vulnerable areas. Here I am totally dissatisfied with the Government's policy regarding Simonstown. Admittedly, navies may have longer legs these days. They can remain at sea longer. Sailors do not like it, but navies can do that. They can refuel at sea, and so on. However, what we cannot do without is the intelligence that the South African authorities have. I am talking about matters at sea, which have nothing to do with apartheid or the internal policies of South Africa, whatever one may think of them.
  As I hope the Minister knows, there is a combined operational headquarters at the back of Simonstown called Silvermine, which I have visited. I have seen the secret shipping plot there, as has my hon. Friend the Member for Stretford (Mr. Churchill). That intelligence is vital to us for the prevention of war. But, as I understand it, we now have no contact with the South African authorities, no means of getting that Intelligence and no secure communications to enable us to do so. If that is the case, it is deplorable that just blind ideological prejudice prevents the Government from doing this, because very little money is involved.
  Finally, at Christmas, which is a time for family gathering, it would be appropriate to pay tribute to those who will not be able to be with their families this Christmas. I refer, of course, to the troops in Northern Ireland. It is these men, together with the members throughout the United Kingdom. who are the defenders of our freedom under the law. And freedom under the law is our most precious heritage.
  11.13 p.m.
  Mr. Ian Gow: Last Tuesday, during a short debate on the Estimates, the Minister of State for Defence, speaking just 24 hours before the Chancellor of the Exchequer rose to announce spending cuts, said,
  "We all wish that we could spend less on defence".
  He went on to say—and I want to emphasise these words:
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  "but it would be irresponsible of any Government to make any major reductions in our defence spending outside the context of the mutual and balanced force reductions".
  He concluded, in this passage of his speech:
  "This is the environment in which we must take our decisions."—[Official Report, 14th December 1976; Vol. 922, c. 1241.]
  Those of us who heard the Minister of State give that undertaking listened with incredulity 24 hours later to the words of the Chancellor. This is how the Chancellor put it to the House:
  "Despite the big cuts which we have already made in defence expenditure, we cannot achieve the necessary reductions in public expenditure and the PSBR without a contribution from the defence budget. We are looking to defence for further savings of £100 million in 1977–78 and £200 million in 1978–79".—[Official Report, 15th December 1976; Vol. 922, c. 1529.]
  Thus it is that we may put in marked contrast the words of the Minister of State on Tuesday with those of the Chancellor of the Exchequer on Wednesday.
  We are entitled to ask the Minister for the Air Force, who I think is to wind up this debate, whether between Tuesday and Wednesday there really was that mutual and balanced force reduction which the Minister of State said was a precondition for a reduction in defence expenditure. Was there that mutual and balanced force reduction in the 24 hours that elapsed between that undertaking to the House of Commons and the announcement by the Chancellor? Of course there was not.
  We are entitled to point out that there seems to us to have been no co-operation, no discussion, between the five Ministers in the Defence Department and the Chancellor of the Exchequer. Indeed, it is clear to us on this side of the House that the Government have betrayed their first duty to the country, because overriding every other consideration is the duty of the Government to provide, in so far as they can, for the safety of these islands. When the Minister of State tells us that there could be no further cuts except in the context of mutual and balanced force reductions and the Chancellor of the Exchequer comes to the House 24 hours later and announces those cuts without the mutual reductions, the House and the country are entitled to ask "Why?".

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  We are entitled to ask the two Ministers who bear this heavy responsibility what battles they fought in their Department. What battles did they or the Secretary of State fight in the Cabinet? My hon. and learned Friend the Member for Royal Tunbridge Wells (Mr. Mayhew) gave the House the answer; that the former Secretary of State for Education and Science, the supposed victor of Tameside, was put into the position of Secretary of State for Defence because he was and is, and is shown to be, a push-over.
  The charge that we level against the Government and against the two Ministers who sit opposite us tonight on the Government Front Bench, almost in lonely splendour, is very serious, because we are asserting that the cuts in defence expenditure have been made not at all on any grounds of national security but solely to gain the approval of this total package from the hon. Gentlemen who sometimes sit, but are not now sitting, below the Gangway on the Government side.
  The question of Britain's contribution to NATO is the supreme contribution that this country now makes to defence. I am one of those—perhaps a minority on this side of the House—who look without bitterness and without regret at the concentration of Britain's Armed Forces in Europe. Our world-wide rôle has gone. It was without a tear on my part that we abandoned our rôle east of Suez. I know that I shall not carry my hon. and gallant Friend the Member for Winchester (Rear-Admiral Morgan-Giles) with me when I make that observation.
  Rear-Admiral Morgan-Giles: Hear, hear.
  Mr. Gow: I believe that we need to concentrate our defence capacity exclusively in Europe, apart from the residual legacy that we have in Hong Kong, Cyprus and Belize. We need to formulate and frame our defence policy on the basis of defending these islands against an assault from the only quarter from which an assault is apprehended—namely, from the Soviet Union. For me, the supreme task therefore is to prevent an enemy from gaining control of the land mass that is adjacent to these islands in North-West Europe. That and the sea
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  routes around these islands are for me the crucial element of our defence.
  Rear-Admiral Morgan-Giles: My hon. Friend and I will not differ seriously, but why only the sea routes around these islands? Where does the "Red Duster" go?
  Mr. Gow: If my hon. and gallant Friend has leave of the House, no doubt he will be able to develop his case at greater length. I shall make my speech in my own way.
  I was asserting that the overriding duty of the Government in defence relates to the task of preventing the land mass of North-West Europe and the sea routes around these islands from falling into enemy hands, and I believe that the further cuts over and above the other very extensive cuts we have had so far—£100 million next year and £200 million in the following year—cannot be carried out without a significant and meaningful reduction in the contribution that this country makes to NATO.
  It is that reduction in our defensive capacity at the very moment when the Soviet Union and the other Warsaw Pact countries are increasing their own military capacity which, I believe, is the ultimate in irresponsibility on the part of the Government. We are entitled to look to the alternative means of saving £100 million next year and £200 million in the following year, because public expenditure is a matter of priorities.
  I believe that if the Secretary of State and his four ministerial colleagues had joined with the Chairman of the Chiefs of Staff and the three Chiefs of Staff—five Ministers and four of the most senior officers in the Armed Forces—in saying to the Prime Minister and the Chancellor "We cannot fulfil our overriding duty to the country, the Armed Forces and to the people by allowing these cuts to go through", they would have carried the day. They would have done something more. If they had stood up to the Chancellor and the Cabinet, they would not only have fulfilled a duty to themselves, to the Armed Forces and to the country but their stand would have marked a turning point for the revival of the sense of national success, the sense of national priorities and the sense of national pride which their past conduct has done so much to undermine.

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  The two Ministers present—the Under-Secretaries of State for Defence for the Royal Navy and the Royal Air Force—are patriotic, diligent and honest men. How much they would have added to their reputation and to the morale of the Armed Forces if they had done what, I suspect, in their hearts they know they should have done—that is, refused to accept these further cuts in our defence expenditure, this further humiliation being heaped upon the Service men for whom they bear ministerial responsibility.
  There is today a real crisis of morale in our Armed Forces, a growing sense of disillusionment that their political heads are no longer prepared to fight the political battles which should be fought in the Cabinet. This is a serious charge, but Ministers must know as they go about the air stations and warships that such a crisis exists. If evidence is required, not from the senior NCO's or even the officers, would the Ministers dare to tell us what the Chairman of the Chiefs of Staff and the three Chiefs of Staff said to the Prime Minister in the presence of the Secretary of State? It would be wrong to ask in detail what went on at that meeting, but the Ministers must know that the Chiefs of Staff said that these further cuts would be gravely damaging not only to our defence capacity but to the prospects of morale and recruitment in all three Armed Forces.
  We hope to have some explanation of the grievous events of the past fortnight, the unprecedented meeting of the four most senior officers in the Armed Forces and the Prime Minister, and the contrast between what the Minister of State said on Tuesday last week and what the Chancellor said on Wednesday. Unless we have a convincing answer, the country will draw the only possible conclusion: that all five Ministers in the Ministry of Defence have betrayed the high trust which, temporarily at any rate, is placed in them.
  11.27 p.m.
  Mr. Churchill: It is a refreshing experience to be able to take part in a defence debate which is taking place between democrats, when we are all united in our desire to maintain the freedoms and the peace of this country which it has been the privilege of our
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  people to enjoy for more than a generation. On both sides, we share a recognition of the need for a stronger British defence within the concept of NATO as a prerequisite for the maintenance of our freedom and of peace.
  I congratulate my hon. Friend the Member for Haltemprice (Mr. Wall) on his excellent speech and, above all, on having given us all the opportunity of debating his subject at a time when our defences are uppermost in the minds of our fellow countrymen, who are deeply concerned at what has been happening for some months but particularly in recent days. They share the concern expressed by several of my hon. Friends, not least my hon. Friend the Member for Eastbourne (Mr. Gow), that something must be gravely wrong with our defences for the Chiefs of Staff to take the step unprecedented in peacetime—unprecedented since 1921, I understand—of seeking a person interview with the Prime Minister to express their grave concern.
  My hon. Friend the Member for Haltemprice has drawn attention to the Jekyll and Hyde approach of the Government—their schizophrenia towards defence. They recognise the threat; I am sure that none of the Ministers here tonight or the former Secretary of State, who had no doubt about the gravity of the situation, would seek to talk down the seriousness of what is facing us.
  This is not a static threat—it is growing. It has been well set out in successive White Papers. In the face of mounting Soviet build-up on land, under the sea and in the air, however, the Government's only action is to cut, cut and cut again.
  The latest cut, the fifth in two years, brings the total of cuts under this Administration to £8,402 million. This level of cuts must eat deeply into our defences. The level of troops must be affected. Even before this year's round of three cuts, it was proposed in the last defence review—which was supposed to be the review to end of reviews—that 30,000 should be lopped off Service manpower. Now we have hon. Members such as my hon. and learned Friend the Member for Dover and Deal (Mr. Rees) voicing concern, which I share, over the future of the Royal Marine Commando.
  Defence industries have also been affected. In its January report, the

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  Expenditure Committee estimated that 200,000 job opportunities in defence industries and the Services would be lost because of the cuts proposed up to that time. The Government are allegedly concerned about unemployment. They have set up a job creation programme, but, despite the millions of pounds of taxpayers money and the great effort being put into that programme, it is as nothing when compared with the Government's job destruction programme in the defence industries.
  Equipment is also affected. The introduction of new equipment will be postponed. We know that equipment programmes will be pushed back, but perhaps the Minister who replies will explain how this is to be done. Equipment and training cut-backs are among the few ways in which the £200 million savings for next year—proposed between the Chancellor's July and December measures—can be made.
  As my hon. Friend the Member for Haltemprice pointed out, there are already many deficiencies. We have great deficiencies in respect of airlift capability. That has been the major casualty of the Labour Government's cuts in this round. It has reached the point where we have to charter Fred Olsen ferries to get our troops to exercises in Norway. More seriously, it means—I do not expect the Minister to confirm this at the Dispatch Box—that we are unable to reinforce BAOR as we would wish and as we are under an obligation to do in time of crisis.
  There is a great lack of deployment of anti-tank missiles. My hon. Friends have pointed out that the new communications systems are not to be introduced and that our equipment is not compatible with that of many of our allies. It is intolerable that this situation should not only exist today but should be allowed to continue into the future.
  My hon. Friend the Member for St. Albans (Mr. Goodhew) and my hon. and learned Friend the Member for Royal Tunbridge Wells (Mr. Mayhew) also drew attention to the fact that we are under an obligation to our NATO allies to maintain in Europe a fighting capability of 30 days' stocks. I want to put a question to the Minister who is to wind up the debate. When do Her Majesty's Government intend to get BAOR and
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  RAF stocks in Germany up to even half the fighting days' capacity that we are under an obligation to maintain?
  My hon. Friends have draw attention to the danger of surprise attack. No longer can we rely on the 30 days' tension period which characterised the planning on which many of our arrangements have been based. The Yom Kippur War was a salutary shock not only to the Israelis but to some of us in Europe, because we saw how, with, on one side of the border—or, in that case, on one side of the canal—a large standing army that requires no reinforcement to move on to a footing of aggression, and, on the other, armies that depend on reinforcements from civilian sources, surprise attack can come about today.
  There is no denying that Soviet units in Eastern Europe are deployed in an attack formation and that they are in sufficient strength to cross the border into Western Europe and make deep inroads towards the Channel without any reinforcement whatsoever. We can now rely on no more than 72 hours' advance notice of any such movement. This must be a matter of deep concern to all of us.
  What is the significance of the latest cuts in defence? It is not in their size—£330 million. What is that compared with what the Services have suffered before? Nor is it even the fact that these £330 million worth of cuts come on top of an £8,000 million cut. The true significance of these cuts, and the reason for the unprecedented protest by the Chiefs of Staff to the Prime Minister, is something different. It is that for the first time the United Kingdom is cutting into its commitment and its capability within NATO. This has never happened before in the case of any previous cuts. I challenge the Minister to deny that none of our capabilities and commitments is to be cut in the next two or three years.
  What is the reason for these cuts? I am sure the Minister will admit that they are certainly not for defence reasons at a time when the Russians are spending more on defence and are deploying more and more equipment. The cuts are not for defence reasons and not for economic reasons. As my hon. Friend the Member for Eastbourne made clear, there are many other areas of expenditure where the burden could have been borne.

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  If the Government had dropped even a part of a single nationalisation measure, we would have been able to maintain our commitment in NATO and would not have had to cut the capability of our forces. To put that in terms which our citizens will perhaps appreciate more easily, the cuts in defence expenditure that we are being asked to make in the coming two years could be accounted for in terms of one bottle of whisky per family per year. I am sure that every one of our citizens would willingly make that sacrifice in order to ensure that our troops have the equipment they need and that we live up to our commitment in NATO.
  The reason for the cuts is not defence or economics. The reason is politics, pure and simple. It is an appeasement by the Government of the extreme Left within their own party. It is always at times of economic crisis that the extreme Left gets its pound of flesh, or in this case, one could say, its £8 billion of flesh. In 1965 it was the TSR2. In 1967, in the wake of that year's November devaluation, it was the commitment of the present Chancellor of the Exchequer, in his then capacity, to pull out all our forces from east of Suez, even though in the months before he and the then Prime Minister had been saying how vitally important it was to maintain our posture in the Gulf and Singapore. Now we have the greatest cuts that have ever been made to the defence budget.
  I share the deep concern expressed by the hon. Member for Farnworth (Mr. Roper), my Manchester neighbour across the Ship Canal, that the nuclear threshold in Europe is being lowered by a policy of unilateral disarmament at a time when the Soviet Union is boosting not only its strategic capability but also its conventional capability at an alarming rate. Ten years ago we hoped that we were moving out of the "trip-wire" philosophy towards a balanced response, but now we are cutting the ground from beneath that capability.
  Finally, I share the determination of my hon. and gentleman Friend the Member for Winchester (Rear-Admiral Morgan-Giles) when he says that the single most important issue for Members in the Chamber tonight, and for our people, is the maintenance of peace. The word must go out that the threshold of
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  peace is now being consciously and deliberately lowered by the present Government.
  11.44 p.m.
  The Under-Secretary of State for Defence for the Royal Air Force (Mr. James Wellbeloved): I congratulate the hon. Member for Haltemprice (Mr. Wall) on his success in winning a place in the debate on the Consolidated Fund Bill, and I rejoice that his position in the Ballot has been No.3, thus enabling us all to retire to our beds at what is, for the House of Commons, a relatively early hour.
  I welcome the hon. Member for Stretford (Mr. Churchill) on his first appearance to speak at the Dispatch Box on behalf of the Opposition. I am sure that we shall hear a lot more from him in the years ahead as he continues to occupy, as I hope he will, a position on the Opposition Front Bench. But I must tell the hon. Gentleman that he will not enhance his reputation if he poses questions which could be very damaging to our security and the morale of our Armed Forces, posing them in the sure knowledge—or, at least, what ought to be the sure knowledge—that no responsible Minister could from this Box give him the answers which he requires.
  The hon. Gentleman did that at one point tonight when he asked me about weapon stocks in Germany. No Minister in any Administration would give him or any other hon. Member that sort of information, since it could only be of assistance to those whose job it is to seek out our secrets if we were to respond to questions of that kind.
  Mr. Churchill: But will not the Minister agree that the only reason for that question put him in some embarrassment and an inability to answer, is that in this respect we are falling down on our commitments. If we had our proper requirement for 30 day's stock, he would be able to say that we were fully up to our commitments to NATO.
  Mr. Wellbeloved: The hon. Gentleman is repeating his offence. Let me now turn to the other point which the hon. Gentleman made about the capability of reinforcement of British Army of the Rhine.
  Rear-Admiral Morgan-Giles Rear-Admiral Morgan-Giles rose—
  Mr. Wellbeloved: In a moment. The hon. and gallant Gentleman will have his opportunity, because I shall have something to say about his speech.
  Rear-Admiral Morgan-Giles: Will the Minister give way on the question of stocks?
  Mr. Wellbeloved: I would rather get on with the debate. Otherwise, we shall be up and down like yo-yos all evening, thus defeating the good fortune of being in third place, on which I congratulated the hon. Member for Haltemprice.
  The hon. Member for Stretford asked me about reinforcement of our Army on the Rhine. There is no problem whatever in this respect. The planned capability is there, and we can meet the NATO timetable requirement. There need, therefore, be no problems or anxiety in the hon. Gentleman's mind or in the minds of our allies or our soldiers in Germany about our capability to meet our requirements in that respect.
  I turn now to the main burden of the debate. I recognise the concern which has been expressed in the House about the reductions in defence expenditure announced by my right hon. Friend the Chancellor of the Exchequer last week. Unlike some of my hon. Friends, I do not welcome these cuts, let alone wish that they had been larger. I take the view that anyone who feels that the cuts are not enough is either seriously misinformed or has deliberately set his face against some very hard facts.
  My hon. Friend the Member for Farnworth (Mr. Roper) does not welcome cuts in defence expenditure. Neither do I. I must add that, like my hon. Friend, I regret just as much the cuts which have been made in overseas aid, in housing, in roads and in education. But I believe that they are a regrettable necessity.
  There is no need for me to go over those considerations of our economic performance and foreign confidence in our future which have led to the cuts in expenditure as part of the Government's overall strategy for economic recovery. It is widely accepted that the share of the national product which is accounted for by the public sector has grown too quickly, is now too large, and must be reduced if British industry is to regain the cutting edge which is crucial to our future well-being and indeed survival as
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  a humane, tolerant society able to safeguard the interests of all its citizens.
  I say to the hon. Member for Eastbourne (Mr. Gow) that that is a responsibility that my right hon. and hon. Friends and I fully accept. It is a responsibility to ensure that public expenditure is brought within bounds which are sustainable by the country's economy. The Government's strategy should be to embark upon a period of recovery so that we can discharge all our responsibilities—our domestic responsibilities to our citizens and our responsibilities in Europe to our NATO allies.
  The hon. and learned Member for Royal Tunbridge Wells (Mr. Mayhew) said that he expected me to use certain words, and I do not intend to disappoint him. It is the Government's judgment that defence must play its part, because it is inextricably bound up in the community which pays for it. When other sectors of the community are being asked to draw in their horns, it would be wrong to exempt defence. But we must acknowledge that the defence budget is not an inexhaustable fund—at least not if we are to continue to be a credible member of NATO and to make a meaningful contribution to the mutual protection of our society which it affords.
  When this Government came into office, the money we spent on defence and the world-wide commitments we still held were out of all proportion to what we could afford and, as a medium-sized European Power, could be expected to afford, especially in relation to the defence effort of our partners. The Defence Review was a sensible slimming down of the resources we commit to our Armed Forces, which are now almost wholly committed to NATO. It is in NATO that our future lies and where we can do most good.
  Subsequent cuts in expenditure, which have admittedly been made for budgetary reasons, have so far been found from the support area and not the front line. I hope that we can repeat this in implementing these latest cuts, although there is obviously a limit to the extent to which the tail can be cut without the teeth being affected.
  Some hon. Members argue not only that the defence cuts which have been imposed since the Defence Review are

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  wrong but that spending in this field should have been increased. But it is the Government's duty to distribute the available resources fairly and according to the needs and wishes of the people they govern. It must be true that, within a given overall level of Government spending, if one spends more on defence one must spend less on schools, hospitals, roads, assistance to industry, university places and so on.
  Mr. Nicholas Winterton: Quite right.
  Mr. Wellbeloved: The hon, Gentleman must assist his right hon. and hon. Friends on the Opposition Front Bench to spell out just how much they would cut from the expenditure on all those other things.
  Mr. Nicholas Winterton: Will the hon. Gentleman direct his attention to the remark made by my hon. Friend the Member for Eastbourne (Mr. Gow), that the first priority of any Government is to guarantee the security of the State against external aggression? Many people who know a great deal about European defence have stated time and again in the past two years that our defences have been cut below what is acceptable. Will the hon. Gentleman now direct his remarks to that point, and perhaps say that if there are any further defence cuts he will do the proper thing and resign, as he should have done already?
  Mr. Wellbeloved: The first responsibility of any Government is to ensure that the economic base upon which the whole strength of a nation depends is such that it can meet not only its military security requirements but its domestic requirements, which include all the matters I have mentioned. If our citizens cannot have adequate treatment for their illnesses, if their children cannot be educated in reasonable buildings and in acceptably sized classes, if our pensioners cannot be given enough money—as a right and not as charity—to make their retirement anything more than a struggle, are they not entitled to ask, and would they not ask, whether the Government have their priorities wrong? There is no God-given level—
  Several Hon. Members Several Hon. Members rose—
  Mr. Wellbeloved: I should like to press on. I wish to respond to many points which were made seriously. If Opposition Members will contain themselves, I shall get down to the nitty gritty in a few moments.
  There is no God-given level of defence spending, and we must allocate our resources as best we can according to the judgment that we make in the light of the nation's available funds.
  Mr.Goodhew Mr.Goodhew rose—
  Mr. Wellbeloved: I take some comfort from the fact that some say we spend too little while others say that we spend too much. Given that the Government are now following a strategy that is to bring about our economic recovery, our defence expenditure will be playing an important role in allowing us to achieve our economic objectives so that we may meet our military requirements.
  Mr. Goodhew Mr. Goodhew rose—
  Mr. Gow Mr. Gow rose—
  Mr. Wellbeloved: I shall not give way as I want to press on and try to deal with the points that have been made.
  The hon. and gallant Member for Winchester (Rear-Admiral Morgan-Giles) described himself as a crusty old admiral. I must say that I do not share that view of the hon. and gallant Gentleman. We have had many exchanges in the House and joined in many debates on naval affairs, and I have never found him a crusty old admiral. I can recall discussing the rum ration for the Royal Navy on one occasion when we almost came to accord.
  The hon. and gallant Gentleman, as well as other hon. Members referred to the visit by the Chiefs of Staff to the Prime Minister. The Chiefs of Staff saw the Prime Minister 10 days ago and the Opposition—I do not hold it against them as Oppositions will take advantage of whatever opportunities they can seize—have made great play of their visit. They have used it to mount what I can only describe as a somewhat illogical demand for the resignation of my right hon. Friend the Secretary of State for Defence. No doubt this highly party-politically motivated demand will be rehashed again and again by some Opposition Members.

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  The matter is quite simple. The Chiefs of Staff were exercising their undisputed right—and their duty, as they saw it—to represent their views to the Prime Minister on the effect of the cuts in expenditure and to convey to him their concern about the build-up in the forces of the Warsaw Pact. They did what was for them the right and honourable thing, since the Chiefs of Staff are the Government's professional advisers on defence matters and it must be appropriate for them to offer their views on these cuts.
  The fact that the Prime Minister, having heard their views, felt obliged to confirm that cuts in defence spending would still have to be imposed does not reflect badly on either the Government or the Chiefs of Staff. When cuts are being considered it would be unwise for the Cabinet to formulate its package without the benefit of advice, solicited or otherwise. Having received advice, it is the Government's ultimate responsibility to take the measures they consider most appropriate.
  The Chiefs of Staff must of necessity look to the defence field and to that alone, since it is part of our way of conducting public affairs that their influence does not extend beyond this. The Government, on the other hand, must direct the activities of the nation across the whole spectrum, of which defence is only a part, albeit a very important—indeed, a vital—part. As I have already said, it is the Government's firm belief that defence should bear a share, but not a disproportionate share, of the burden of spending cuts which demand sacrifices of the whole community of which the Armed Forces rightly wish to be considered a part.
  Mr. Churchill: But is it not the duty of the Secretary of State to represent in Cabinet the views of a Department? Does not this incident show a clear lack of confidence on the part of the Chiefs of Staff in that they took this unprecedented step in peace time to approach the Prime Minister?
  Mr. Wellbeloved: There the hon. Gentleman goes again. Neither of us was party to the discussions that take place in Cabinet. We may make assumptions, unwisely, based upon reports that have appeared in the Press, but none of us,
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  except those who are present at a Cabinet meeting, knows precisely what goes on.
  My right hon. Friend the Secretary of State accompanied the Chiefs of Staff on their visit to the Prime Minister. I have no doubt from my knowledge of my right hon. Friend, of the discussions that I have had with him and of the knowledge and understanding that I have of his views, that in those places where it is his responsibility to take and express a view to his colleagues he took a line that made quite clear the state of the threat and the state of the requirements of the Armed Forces. However, my right hon. Friend, like every member of a Government, must look at the situation in its totality as it affects the nation. It is sometimes necessary to give as much weight to other factors as to those which are of a particular departmental interest.
  Mr. Peter Rees: The Under-Secretary cannot have it both ways. He cannot tell us half the story and then say "But I was not at the meeting and my right hon. Friend was". If he purports to speak from the Front Bench, representing the interests of that great Department of State, he cannot leave it there.
  The question I am putting to him is a very simple one susceptible of a fairly simple answer. Are we to infer from as much as he was condescended to tell the House this evening that it was the considered professional view of the Chief's of Staff, given to the Prime Minister—it was their perfect constitutional right to do so, as the hon. Gentleman has admitted—that the cuts proposed and to be debated in Cabinet, presumably, were likely to bring the defence capabilities of this country below an acceptable level?
  Mr. Nicholas Winterton: They are that already.
  Mr. Wellbeloved: The hon. and learned Gentleman is asking me to make a quite impossible statement. The Chiefs of Staff visited the Prime Minister. They expressed to the Prime Minister their concern about the effects of the cuts and their impact upon our defence posture. I have gone on to explain a number of other issues. I do not believe that I should be asked to go further.
  In what is a highly political debate in which the lines are drawn clearly and

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  sometimes stridently, I believe it is right for me to pay tribute to the Service men and the civilians of the Ministry of Defence who have worked to put into effect the very substantial economies that have already been called for. This task has not been an easy one, and it does not get any easier with practice. Some difficult decisions have had to be, and will have to be, made. But they have carried out their duties with a dedication and enthusiasm that sets an example to the rest of the country. I believe that the great majority have, without applauding the cuts, recognised the need for and the purpose of them. Morale, a fickle and intangible quality which can react unpredictably, has held up well.
  Without wishing to offer too many hostages to fortune, I hope that we can now look forward to a period of greater stability in defence. If our forecasts are right, the cuts in public expenditure just announced should, together with other measures the Government are taking, put the economy on the right course.
  We all realise that the next year is going to be tough going, but, as British industry moves forward, stimulated, I hope, by a general upturn in the world economy, and as North Sea oil comes ashore in ever greater quantities, the rate of economic growth should climb. This will allow our national wealth to grow enough to pay off our external borrowing, reduce unemployment whilst keeping inflation in check, and hold the level of public expenditure, including defence, steady. I hope that this scenario will prove to be realistic, because I earnestly believe that the Armed Forces need a period of stability to adjust to their new size and roles and to digest the economies they have had to make.
  Mr. Gow Mr. Gow rose—
  Mr. Wellbeloved: I should not wish the House to gain the impression that the defence horizon is one of unrelieved gloom and that the Services are at best standing still and more likely irretrievably regressing. We have heard a lot about the effects of cuts on the Armed Forces, and I would not pretend that the Services are not smaller than they were a few years ago, or that we have not lost some items of equipment, either in-Service or on order, which the Services would have liked to have.
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  But it is important to acknowledge the improvements which have been made recently. For example, orders placed by the Royal Navy since the Defence Review announcements were made last year include the second ASW cruiser, HMS "Illustrious", a Fleet submarine, two Type 42 destroyers and two Type 22 frigates. These orders represent a major contribution to the workload of the shipbuilding industry and to the maintenance of the Royal Navy as the major European member of NATO.
  Mr. Gow: On a point of order, Mr. Speaker. Is there any protection for hon. Members when a Minister is simultaneously struck with a twin affliction of blindness and deafness?
  Mr. Speaker: The hon. Gentleman can only hope that it is the season of peace on earth and good will towards all men.
  Mr. Wellbeloved: The hon. Member for Eastbourne should take note that throughout the whole course of his eloquent but none the less party-politically biased speech, nobody from the Government side sought to intervene. I hope that while I am not delivering a biased party-political speech I shall receive even greater courtesy from the hon. Gentleman and his hon. Friends.
  Mr. Gow Mr. Gow rose—
  Mr. Wellbeloved: I would rather press on, because I have not yet got to the many points raised, and I owe the hon. Member for Haltemprice some replies to the very serious points he addressed to me during the course of the debate.
  A radical restructuring of BAOR is in progress. We shall be able, without increasing the overall size, to increase the number of company size combat teams by over a quarter. Instead of the present three divisions and supporting formations, there will be four new-styled armoured divisions, an artillery division, and a new style formation to be known as the 5th Field Force.
  We hear quite a lot about the growing potential of the Soviet Union to reach the United Kingdom with its bombers and reconnaissance aircraft such as the Bear and the Foxbat, but we hear very little about the improvements we are making in the Royal Air Force's air defence capability. We have nine air

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  defence squadrons, seven in the United Kingdom and two in Germany.
  With the transfer of Phantoms to this role and the running-on of some of the existing Lightning squadrons, I believe that we shall have greater strength in air defence than we have had for some time. And, of course, now that full development has been approved, we have the air defence variant of the Tornado to look forward to.
  Aircraft are, of course, only the most visible part of our air defence system, and I should refer very briefly to the developments in other fields such as the deployment of Bloodhound and Rapier missiles, the major improvements proposed for our ground-based early warning system, the hardened aircraft shelter programme, and the impending decision on a successor to the Shackleton AEW aircraft.
  The hon. Member for Haltemprice raised the subject of Milan. On 22nd October we signed a memorandum of understanding with the French and German Governments on the purchase of the Milan guided missile for the British Army. This will provide a really important additional anti-tank capability. After an initial purchase to ensure that the system is in service as soon as possible, production will be under licence in the United Kingdom and will create employment for about 2,000 people. We also agreed to collaborate on studies for future anti-tank guided weapons systems. I cannot give the assurance the hon. Member sought that we shall not seek to rephase expenditure on the Milan in 1977–78, and 1978–79, but I can say that we have no intention of cancelling this important weapon.
  The hon. Member referred to the Lance nuclear weapon which the alliance has procured from the United States. It is being introduced into service with BAOR. It is not an expensive project, but it is an important one. Other NATO countries are buying it, so it is unlikely to appear in the list of savings.
  He also referred to anti-tank weapons for helicopters. Having considered the priorities of the defence budget, we find that by accepting some deferment, provision can be made for a helicopter antitank guided weapons system to be mounted on Lynx helicopters. An evaluation of suitable systems, including
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  the Franco-German HOT and the American TOW is now under way, and it is expected that a decision will be made next year.
  The hon. Member for Haltemprice also asked about the RAF Transport Force. This Force was reduced by 50 per cent. as a result of the defence review—the Comets and Britannias were phased out, and reductions made in the numbers of Andovers, VC10s, and Hercules. Following the 1975 public expenditure survey, there were further changes in the Transport Force. The Belfast squadron was withdrawn, and the numbers of VC10s and Hercules were increase above the earlier level, so that we now have 11 VC10s and 45 Hercules.
  These decisions mean the more economic overall use of the Transport Force, and also yield useful economies without detriment to our reinforcement plans. I want to emphasise that last point. Although it is true that we have lost a little of our flexibility by disbanding the Belfast squadron, the resources we have are sufficient to carry out our military air transport commitments to NATO and our main overseas non-NATO commiments. While I cannot give a cast-iron guarantee that there will be no reductions in the Transport Force, and in particular the number of Hercules, it is highly unlikely that we should reduce it in the absence of a reduction in our commitments.
  The hon. Member asked a number of questions about off-shore protection. The Defence Under-Secretary for the Royal Navy only last week visited Rosyth, went aboard HMS "Jersey", one of the new Island class ships, and reported to my right hon. Friend on the state of play in that area. I know that the hon. Member for Haltemprice has taken the view in the past that the Ministry of Defence has not given sufficient priority to off-shore protection of fisheries and oil rigs, but I can give the assurance that we are fully aware of our responsibilities in this direction.
  The Royal Navy and the Royal Air Force will commit as much of their resources as is considered necessary. So when we talk about the level of forces, in terms of ships and aircraft, whose prime task is offshore protection it is important to bear in mind that these operate as an integral part of the Royal Navy and RAF and that the response to

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  any situation which demands action beyond the normal surveillance and patrolling will come from the total resources of the Armed Forces.
  There have been criticisms not only of the resources we are committing to offshore protection but the capabilities of those forces. I take the Nimrod aircraft first, since I am more familiar with it in my everyday job as RAF Minister. This aircraft, which has a long-term future in the Air Force as our long-range maritime aircraft, was chosen as the best military solution.
  Its endurance, range, and specialised surveillance equipment all make it an entirely suitable vehicle for the task it must undertake. It is certainly superior to any other aircraft in terms of performance and cost-effectiveness in the RAF's inventory for this job. Four Nimrods will be added to the existing squadrons at Kinloss and St Mawgan and will begin operations on 1st January. We reckon that 180 hours' flying a month should be sufficient but we shall natuurally keep a very close watch on events and we are ready to increase the flying effort if we consider this necessary.
  As far as the Royal Navy is concerned, the offshore protection force will consist not only of the five ships of the Island class which will be in service by the end of 1977, but seven or eight mine counter measures vessels, a fast patrol boat, two ships of the Bird class as well as the resources of the Department of Agriculture and Fisheries for Scotland. While there has been criticism of the Island class ships because of their supposed lack of speed the characteristics required for a small ship designed specifically for the peacetime protection role are primarily good sea keeping and endurance and the five new ships will have both. Neither high speed nor extravagant armament is required since, as in the case of the RAF, if the need arises support will be avail. able readily and rapidly and at the right level to meet the situation.
  I have been asked about the ASW capability. The Government recognise that aspect of the Soviet threat and decided in the defence review to maintain the core of the Royal Navy's anti-submarine forces—the new class of antisubmarine cruisers and the nuclear
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  powered fleet submarines. The ASW cruisers will take the effective, large Sea King anti-submarine helicopter to sea in increasing numbers.
  Hon. Members will recall that we have ordered two of these cruisers. We have nine nuclear powered fleet submarines in service and more are being built. The Royal Navy is the only European NATO navy which operates these vessels.
  The hon. Member also asked about the number of Nimrod aircraft. The four additional aircraft to be used in offshore protection are composed of part of the eight additional Nimrods ordered as part of the measures to maintain employment at the manufacturers, Hawker Siddeley Aviation. The remaining four are still in the course of delivery. In 1977 we shall have four squadrons of Nimrod based in the United Kingdom and one in Malta. For obvious reasons it has never been the practice to reveal the detailed numbers of front-line aircraft.
  The hon. and gallant Member for Winchester referred to the security of communications between SACEUR and his major subordinate commanders. This is of course a collective NATO responsibility rather than a matter for this or any other country. The hon. Member will be pleased to hear that a new and improved NATO integrated communications system is being introduced, funded collectively from NATO infrastructure funds, to connect NATO headquarters with capitals and with the headquarters of the principal NATO commanders.
  The hon. and learned Member for Dover and Deal (Mr. Rees) raised an important constituency matter which causes concern to my hon. Friend the Under-Secretary for the Navy and myself. The hon. Member has had discussions about the matter with the present Parliamentary Secretary to the Ministry of Overseas Development when he was Under-Secretary for Defence for the Royal Navy. My hon. Friend the present Under-Secretary has corresponded with him. He has taken note of what the hon. and learned Member said. My hon. Friend will contact the hon. and learned Member. He is prepared to discuss the matter and to go to Dover to see the situation at first hand. I hope that the hon. and learned Member will regard

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  that answer to his problem as fair and reasonable.
  Mr. Peter Rees: I am grateful for the offer of the Minister's hon. Friend to come and discuss the matter again. He appreciates that this matter is of intense local concern. The point on which we should like particular reassurance—I realise that this may be a little Premature—is that if turns out that the cost of converting the barracks at Eastleigh for the Royal Marines School of Music is roughly equivalent to the cost of keeping the school at Deal, the school will be kept at Deal.
  Mr. Wellbeloved: My hon. Friend the Under-Secretary of State for Defence for the Royal Navy made a specific note of that point. He will give consideration to that aspect and any others which come to the fore when he gets down to taking the final view on this matter.
  The hon. Member for Eastbourne made great play with the statement made in the House by my hon. Friend the Minister of State. If anyone studies the Hansard report of my hon. Friend's speech. I think that we will observe that my hon. Friend was speaking in the context of a great number of points made—and replying to them—by some of his hon. Friends below the Gangway. It think that it is fair for me to say, therefore, that the Minister of State's comments and statement must be seen in the context of that debate.
  I share the conviction of the hon. Member for Eastbourne that we must concentrate our defence capacity in Europe. The hon. Gentleman has taken a very courageous line in his own party in putting that point of view forward quite consistently for some time. I pay tribute to him. However, our policy must be based on our economic ability, because we cannot defend these islands unless we have that economic ability to sustain a military capacity. Therefore, if we are to concentrate—as we are—in NATO and in Europe and to be able to defend these islands, we must have the economic ability.
  I know of no hon. Member who would wish to see this country surrender to a threat posed against it. Hon. Members have differing views as to what
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  is required to meet that threat, but I do not think that it can be a charge against any hon. Member that he does not wish to preserve the freedom and independence of this country.
  Mr. Gow: Does the Minister agree that there are some of his hon. Friends who wish that the United Kingdom would withdraw from NATO? Secondly, does he agree that our defence policy is really in the nature of an insurance policy? When the threat to this country is increasing, does the Minister think it wise to diminish the insurance policy?
  Mr. Wellbeloved: I have several insurances on my life, as a private citizen, to protect the future of my family. One of the things that I have observed in life is that if I wish to ensure that those insurances shall pay out upon my death, I have to maintain the premium, and I have to maintain that premium by an ability to earn money, to create the resources for my family that can pay for that insurance premium. That is precisely what the Government are seeking to do in respect of our premium for security by our membership of NATO and by our defence expenditure and to ensure that we have the economic ability to pay the premium. I believe that that would be more readily achieved if the Governments policy were more wholeheartedly supported in all its aspects by a larger number of hon. Members.
  I turn to the very interesting speech of my hon. Friend the Member for Farnworth. He brings to bear on our defence debates a wealth of experience. He is a distinguished member of the Defence and External Affairs Sub-Committee of the Select Committee on Expenditure. He raised several interesting points. I shall consider them all and draw to the attention of my right hon. and hon. Friends in the Department those which are more appropriate to them.
  My hon. Friend was right to remind us of what has gone before in terms of defence expenditure and policies. I am particularly grateful to him for bringing out into the open the White Papers of 1957 and 1958—particularly paragraph 43. I assure Opposition Members that they will hear more about paragraph 43 if they initiate further debates on defence affairs.

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  I am also reminded by my hon. Friend in his reference to those two Defence White Papers that it was the same Government who virtually stripped this country of an air defence capability. When I hear Conservative Members talking about what this Government have done and about the responsibilities of the Government I ask them to recall that it has been Governments since 1964 who have replaced the capacity of this country to put up an air defence of these islands.
  The hon. Member for Macclesfield (Mr. Winterton) looks a little bewildered. I think that he would do well to spend a little time in the Library with the Defence White Papers of his own party in those years—
  Mr. Nicholas Winterton: I do not live in the past.
  Mr. Wellbeloved: The hon. Gentleman says that he does not live in the past. It is of little use coming to a debate as this and having all sorts of emotional—[Interruption.] I am sorry if I am keeping hon. Gentlemen opposite up. Many emotional speeches have been made and we are entitled to try to set the matter in some perspective. I do not take kindly to people who in the past have put this country and its defence at grave risk and who now come along and make the sort of emotional claptrappy speeches that some of them have chosen to make during the debate.
  I know that the House would not expect me, and even if it did I should not be prepared to do so, to tell hon. Members at this stage how the cuts will be shared out among the Services, or how the savings will be found. No. doubt the defence White Paper will have more information, and this can be discussed more fully in the debates which will follow.
  Once potential savings have been identified, and obviously we cannot drag our feet on this, NATO will be fully informed and invited to offer its views on how the alliance as a whole sees the savings being found. I hope that our allies will understand the reasons for the cuts and accept that in difficult times we are making strenuous efforts to maintain our contribution to the alliance. I am sure they will appreciate that ad-
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  justing the defence budget at this time will help put Britain on the road to recovery and that only in this way can we guarantee that the part we play in the alliance will be based upon an economy that can sustain that commitment. A short-term defence establishment of disproportionate size which helps to bankrupt us is certainly not in the interests of our partners or of our security.
  Mr. Churchill: Can the hon. Gentleman give the House the categoric assurance that I requested—namely, that these cuts will not result in any cut in Britain's commitment to our capability in NATO?
  Mr. Wellbeloved: The statement that I have made it clear. The details of the cuts have not been fully considered by—
  Rear-Admiral Morgan-Giles: What?
  Mr. Wellbeloved: The details of the cuts have not been fully worked out as to the precise areas on which they will fall. It is the intention of my right hon. Friend and my colleagues in the Department to give the most careful scrutiny to this matter, and when we have made our final—
  Rear-Admiral Morgan-Giles Rear-Admiral Morgan-Giles rose—
  Mr. Wellbeloved: No. When we have completed our studies, those facts will be put to NATO in the normal consultative process.
  I hope that I have answered all the points raised by the hon. Member for Haltemprice. I hope, too, that the next time we have a defence debate it will be conducted at an earlier hour and with the same amount of good will as we have experienced on this occasion.

  JUVENILE VANDALISM
  12.30 a.m.
  Mr. Tim Rathbone: I make no apology for raising this subject again at this hour and following upon the last debate. It has to do with the defence of the realm, albeit against vandals within the journey rather than attackers from outside. Vandalism is an evil, expensive and all-pervading problem which seems to have the ability to increase with prosperity and to go on increasing in adversity. It has now reached the staggering

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  cost to the nation of over £100 million. By coincidence, that is almost the same sum as the defence cuts we have just debated. It is a sorry thought that the wave of vandalism we face may have in some way contributed to the invidious cuts in the defence expenditure.
  Vandalism is of deep concern to all thinking people. That is why I am glad to raise the problem again, to reestablish its size and nature as well as its cost, to attempt to identify where possible the extent of juvenile vandalism, to propose some avenues of investigation aid to ask questions about future plans.
  This subject has been raised more than once in the past year. It was raised in an Adjournment debate a year ago yesterday by the hon. Member for Woolwich, East (Mr. Cartwright), supported by my hon. Friend the Member for Woolwich, West (Mr. Bottomley). It was raised in an Adjournment debate with regard to Scotland by the hon. Member for Glasgow, Maryhill (Mr. Craigen). It was mentioned by the Prime Minister in the debate on the Queen's Speech, when he said:
  "Levels of crime are a cause for serious concern, especially offences committed by young people. There is a disturbing increase in vandalism, especially among teenagers."—[Official Report, 24th November 1976; Vol. 920, c. 30.]
  It was mentioned also by the hon. Member for Leicester, East (Mr. Bradley), supported by me, in Questions to the Secretary of State for Education and Science only a few days ago.
  I believe that the number of times the subject has been raised illustrates the continuing concern and the breadth of the concern in geographic terms. Also, it is a problem of enormous breadth in its variety and types. It can vary from daubing and writing, carvings on wood, paintings with aerosol cans—some in loving terms and some in the crudest of language—to casual vandalism such as broken windows, ripped-up benches, destroyed sporting facilities, pulled-up or cut-down trees, ripped-off car aerials, damage to parks and recreational facilities, and even, sadly damage to cemeteries. It can culminate sometimes in organised vandalism by gangs in trains and damage to people and property as such gangs arrive and depart.
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  It is difficult to differentiate between these types when assessing extent and cause. On present statistics, that is virtually impossible. But one point is clear—the number of people under the age of 17 who are vandals has increased dramatically in recent years. Those proceeded against for malicious damage and criminal damage increased in numbers by one-quarter from 7,412 in 1971 to 9,205 in 1975, compared to an increase of only 8 per cent. for the period of six years between 1965 and 1971. Between 1971 and 1975, the number of young girls in this overall group of young people almost doubled.
  Those who were cautioned as an alternative to prosecution more than doubled in number from 1971 to 1975, from 2,982 to 6,108, and the number of girls cautioned rose by more than four and a half times. This does not include all offences, because not all are reported, and it does not include those involving property worth less than £20. The Home Office report last year said in paragraph 5.2:
  "We have little doubt that unrecorded minor damage of a value in each case of less than £20 has increased correspondingly; this is the kind of damage to which the younger age groups are particularly prone."
  Therefore, applying that sort of increase, one can almost double the extent of vandalism as a whole.
  These statistics, dramatic though they are, are only the tip of the iceberg. A Home Office survey was conducted in Liverpool some time last year. We were told on 19th December:
  "Early findings of the study"
  among 600 Liverpool schoolboys
  "confirm that vandalism is prevalent among 11- to 15-year old boys in the city and that police records represent only the tip of the iceberg."—[Official Report, 19th December 1976; Vol. 902, c. 1954–5.] So this country sadly faces an avalanche of wanton destruction, from Scotland to the English Channel.
  In my own area of East and West Sussex, vandalism for the 10 months to October 1976—probably the most up-to-date figures in the country—is up by 45 per cent. over a whole 12-month period three years earlier. This again applies to vandalism of property worth more than £20. That, Sussex police confirm, is almost entirely vandalism by juveniles. I

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  guess that there is not a city, town, village or even hamlet untouched by this offensive, distressing and costly destruction.
  I must stress the cost, although it is difficult to assess. I would substantiate my belief that it is gargantuan by picking up first the costs of the random selection of 13 authorities reported in the Home Office report "Protection against vandalism" and applying a very restrained inflation factor to allow for increases in costs since 1971–72 when these measurements were made, but making no allowance for the increased incidence of vandalism. Vandalism to lighting and transport would now be costing £233,000, to street furniture and parks £165,000, to housing £237,000 and to libraries and schools £362,000. The total cost for those 13 authorities would now total £1,050,000.
  Another instance is fires in schools, reported in the Department of Education and Science report "Fire and the design of schools". This shows that fires measured as being caused by malicious ignition—which is a way of describing arson—rose from 53 in 1962 to 398 in 1973. Half as many fires are caused by malicious arson as by heating and cooking processes or by the operation of heating and cooking appliances. The cost in 1973 of all fires causing total damage of more than £10,000 was £4,470,000. Even that estimate pales into insignificance beside the estimate in The Times on 11th January 1975 that total school fire costs were £9 million in 1974, which would be £12½ million at today's prices.
  My next illustration is one cited by my hon. Friend the Member for Chislehurst (Mr. Sims) but reported last December that the city of Manchester faced damage by vandals to the average value of a horrifying £10,000 a day. He also cited a report from London Transport that vandals were costing them £200,000 per annum. Only last November, in a debate on vandalism in Scotland, mention was made of an equally horrifying figure for that part of the United Kingdom—a total cost of £12 million per annum. The Home Office report "Protection against vandalism" also said that vandalism had cost British Rail £1 million per annum and the Post Office £426,000 for damage to kiosks alone.
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  Taking all these figures together, leaving out figures which might overlap and implying an incerase in costs to allow for inflation—but not to allow for the increased incidence of acts of vandalism, since that might tend to inflate the results—I arrive at the horrifying minimum estimate of vandalism in England, Wales and Scotland of £114,327,000. Since juvenile vandalism accounted for 22 per cent. of total proceedings for offences involving more than £20 reported in 1975, the juvenile share of that total at the lowest projection is over £25 million.
  With costs of that gargantuan proportion, vandalism must be a prime area for the application of cost-benefit analysis when considering what counteraction might be mounted and what costs might be involved. Action to counter this destructive and costly avalanche of vandalism was never more necessary than now, as the Government cut building and maintenance projects and local authority programmes particularly are squeezed.
  All actions, however, minor, require increased expenditure, but, if that expenditure can of itself erode in any small way that horrible figure of £114 million, cost-benefit analysis will clearly show how that increased expenditure will reduce costs, to the benefit of all. I would suggest five areas of action for inclusion in the Home Secretary's plans for next year.
  First, the Home Office has said that the gathering of information should be encouraged and that people should be encouraged to report occasions of vandalism, without fear of complicated process or reprisals. The Home Office report last year suggested that this could be arranged very simply and encouraged relatively easily. What has the Minister to report on that front?
  Also under this head, local authorities and local police forces need to be encouraged to identify types of vandalism more accurately, particularly to separate deliberate vandalism from genuinely accidental breakage and to identify age and characteristics of vandals, where possible. I am glad that—according to the Home Office—the Sussex police will be reporting age categories from the beginning of next year. Cannot others be encouraged to follow? What lead is the Home Office giving.

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  Also under this head, cannot the Home Office establish a reasonable national nomenclature for vandalism, so that reports from different sources can be coordinated and combined and, what is perhaps even more important, compared? Should not some measurement of vandalism costing under £20 now be made? Until such measurement is made, it will not be possible to reflect properly in the budgets of different Departments the cost they are having to bear for vandalism under their own heads. Lastly, should not the Home Office establish a central information source, where records of counteractions, both successful and unsuccessful, can be available as source material for others to study? I should appreciate answers from the Minister to all these points.
  The second area in which I suggest the Home Office should instigate action is in terms of applying more persuasion to all those who have some point of influence on this horrible problem. For children—and here liaison with the Department of Education is crucial—clear standards of behaviour need to be set. I refer not to dictatorial rules but to useful yardsticks against which children and adults can compare and measure children's behaviour. If children are allowed to behave exactly as they like, it is a disservice to them and to their parents, because it leads almost inevitably to lower-quality child behaviour levels, or levels which are of the lowest quality possible.
  I suggest to the Home Secretary that persuasion can be applied much more strongly to teachers, magistrates, parents and grandparents, because a greater knowledge of the immense proportions of the problem of vandalism—what it is and what should be done to combat it—cannot but lead to better, and better-directed, counter-actions. Publicity can play an important part. In the same way as the Government are at the moment about to mount a campaign to draw people's attention to the dangers of drink and driving, could not a campaign be mounted by the Home Office at the beginning of school terms?
  The third area in which I suggest action should be mounted is in the study of statistics concerned with the causes of vandalism. It has been reported that the Home Secretary was planning to call a
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  special conference next month to study all the aspects of vandalism, its causes and methods of control. Can the Minister make any report on that plan? What further research projects have been undertaken by the Home Office Research Unit since its last report in June 1975? What further study has been made in conjunction with the Department of the Environment on ways of designing out vandalism when erecting public buildings without dehumanising the architecture within which we wish humans to behave more humanely?
  There can be few areas of national expenditure in which greater benefit could be expected from a careful study of cause and effect and where different approaches to containment and deterrence can be tried, measured, improved, changed and tried again. I shall be grateful to have the Minister's comments on this aspect of the problem.
  The fourth area in which I wish to make suggestions is that of policing and the prevention of vandalism. Prevention must be the first call on police and local government resources. I would advocate the installation of alarm systems and the institution of dog patrol schemes and the like. It is also interesting that East Sussex County Council has reported that buildings such as school assembly halls that are used on a more continuous basis than their prime function requires seem likely to receive less than their fair share of damage from vandalism. Surely it is better for local authorities to organise more extra-mural use of their buildings, even if it costs extra in terms of heating and supervisory time, than to have to pay the same or greater cost that destruction by vandals entails.
  When vandals strike, it is imperative that they are caught after the first misbehaviour for maximum beneficial effect on themselves and for maximum deterrent effect on others. This requires a fully-manned and properly motivated police force. I hope that the Home Secretary's review of police negotiating machinery and the full meeting that he has promised between his own advisers and the Police Federation will lead to reconsideration of the honest claim of the police for a £6-a-week wage increase. Parliament must not and cannot take for granted the forces of law to preserve order in our community. In the end

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  police and parents must co-operate, but the police must be in a position to give a lead.
  The fifth area in which, I suggest, there is room for greater action than at present lies in establishing responsibility for vandals' actions and in punishing them. Cannot the Minister do more to ensure that the vandals pay more towards the cost of repairing their vandalism, either by cash or by community service? Is not more action required by the Home Office to encourage magistrates to impose such penalties?
  Why is it that parents or guardians are liable under civil law for the actions of their children only in exceptional circumstances such as when they actually instigate the act? Why should adults have greater responsibility in law for their dogs than they have for their children? Should not the Home Secretary examine yet again whether the law should be changed as it pertains to parental responsibility for the actions of their children?
  When such huge sums of money are involved, it is unsatisfactory to claim, as the Under-Secretary of State for Education and Science claimed recently, that if the problem were as large as I have made it out to be proposals to deal with it would have been put before the House long ago if such proposals were possible. Surely that cannot be so.
  I appreciate that this is a complicated area in which to legislate. The role of foster-parents, adoptive parents or those acting in loco parentis requires particular consideration. I hope that the Minister will take another look at the problem and will not stand pat on his most recent statement, which he made to me in a letter earlier this month. He said in his closing sentence:
  "This matter has been carefully considered but we can at present see no equitable way in which parental responsibility might be further extended."
  If we want our younger generation to behave kindly and treat our goods gently and carefully, we must show consideration for them and their ways. One mark of consideration is to have proper rules, to encourage people to abide by them and to encourage people to apply them fairly. In this effort, the Home Office and the Home Secretary can provide the genesis for improvement.
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  I hope that this debate, in contributing to a better understanding of the ghastly extent of vandalism in our country, particularly among those under 17, and even more particularly among young girls, will reinvigorate the Home Office in its catalytic role among Government Departments, local authorities, the police, teachers, professionals in child psychology, civic groups, parent groups and all interested and worried individuals, so as to encourage all these to reappraise vandalism and bend their energies to reduce it in the fture. If it achieves that in some measure, even at this early hour of the morning the debate will have been worthwhile.
  12.55 a.m.
  Mr. Jonathan Aitken: My hon. Friend the Member for Lewes (Mr. Rathbone) has done the House a fine service by so ably discussing the important subject of juvenile vandalism. It is a deeply disturbing national problem and I congratulate my hon. Friend on the research he has done into its size, scope and cost. I found his figures quite staggering.
  There are, I believe, no easy answers or simple solutions to the problems, especially at a time in our society which could, perhaps, be labelled in common parlance as the era of "Public apathy rules—OK." I hope that this debate is a small step towards countering that apathy and in expressing Parliament's growing concern about lawlessness and vandalism. Concern is certainly deeply felt among our constituents. Time and again one hears such questions as "Are children and young offenders above the law? Can the police cope with the problem any longer? Do the courts have the powers to punish them when these young offenders are caught? Does Parliament have the will to support the courts and the police in a drive to fight this evil cancer which is growing in our society?"
  My hon. Friend the Member for Lewes mentioned the question of parental responsibility in this matter. I believe that the roots of juvenile vandalism are to be found in the increasing indiscipline and breaking down of family life in today's society. We have reached a stage when we should make families more responsible for acts of vandalism committed by their children.

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  I believe, too, that parents should be made to foot the bill when children go on the rampage. It is not enough just to make parents responsible for nonpayment of fines. Under civil law they should be compelled to pay at least some of the cost of the repairs made necessary by acts of vandalism and violence.
  There is the special problem of vandalism in schools. It is, I suppose, a truism that a school which has created an atmosphere of good discipline and school pride and spirit will see far less vandalism among its pupils than will one which has been neglected by the authorities, by the teachers or by parents. I think I can illustrate that by reference to two schools in my constituency. I refer, first, to the Conynghame School at Ramsgate, a modern comprehensive school. When it was first built—and especially when it was under construction—there was a serious problem of both truancy and vandalism, to such an extent that many parents of children in the area even went so far as to refuse to send their children to that school. Once the builders were out of the way, however, and the school had settled down, once it was able to take pride in its new facilities and all the excellent equipment, the truancy rate fell and the vandalism rate dropped to almost nil. Today it is one of the finest and most respected schools in the area.
  Another school in the constituency, called Hereson School, also in Ramsgate, is rather neglected by the authorities, at any rate in financial terms, and the facilities are well below par. It has a high truancy rate, and it is believed that some of the vandalism in the neighbourhood is by truants. But on recent visits to the school I learnt that, although the truancy rate is high for most of the classes, it falls almost to zero in the craft classes—carpentry, engineering and so on.
  The school is in particular trouble, however, because the plant—as it might be described—in the craft classrooms is seriously under-utilised. Because of the lack of one craft teacher, one of the major craft classrooms is used for only six periods out of 40 a week. As the craft classes appear to produce a nil truancy rate, as in many other schools throughout the country, the Department of Education and Science could profit-
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  ably consider the allocation of resources to make sure that those parts of school life which have that result should be helped by the provision of adequate numbers of teachers.
  I turn to the subject of football hooliganism, perhaps the nearest thing in our society to primitive ritualistic tribal warfare. We welcome the Government's indications of concern, as shown in the Queen's Speech, in which higher penalties were promised. But they will not be enough. Magistrates and judges must become tougher in using the existing powers. It is surprising how rarely magistrates order a convicted soccer hooligan to attend an attendance centre on Saturday afternoons for the duration of the soccer season. If it is said that there are too few attendance centres for the purpose, the Home Office might consider prescribing certain practice grounds and training areas of League soccer clubs as attendance centres under the Criminal Justice Act. In that way, soccer could put its own house in order.
  My hon. Friend was right to stress the role of the police in combating the rise of juvenile vandalism. Prevention is, of course, better than cure. Such areas as can still afford the manpower for the traditional beat policing methods have higher success rates than metropolitan areas which lack the manpower. We still need more police. The Thin blue line is far too thin. I am glad that it is my party's policy to make the police an exception to our general rule of reducing public expenditure. We have promises that we shall spend the extra money to increase police manpower generally.
  I deplore the Government's Scrooge-like attitude to the present police pay claim. It is a complicated matter, but an overwhelming majority of policemen and, I believe, of the public find it difficult to understand the Government's curious double standards. These allowed them to settle swiftly, almost embarrassingly swiftly, the seamen's pay claim, which was on all fours with the police pay claim, by devices within the fringe benefit arrangements, but the Government have not so far been able to make any such fringe benefit arrangements available to the police, who have a far better claim that the seamen had. This neglect of the police pay claim will

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  have the sad consequence of driving the Police Federation into the hands of the militants. I urge the Government to be extremely careful in the steps they take and to reconsider their so far rather unsympathetic handling of the claim.
  In passing, I make reference to the Special Constabulary. I have constantly urged the need to strengthen and expand the constabulary, because the presence of special constables on the beat is as good a way as any of preventing juvenile vandalism from occurring. I believe that the Home Office has recently published the working party's report on the Special Constabulary. I wonder whether the Minister will be able to comment on the Government's attitude.
  Lastly, I refer to the Children and Young Persons Act 1969, which has been an almost unmitigated disaster in terms of the courts' powers to control juvenile vandalism. Undoubtedly the authority of society as a whole has been sadly eroded as a result of the Act's abolition of approved school and fit person orders. It has managed to confuse the children in need of care and protection with young delinquents who need stiffer penalties. There is a desperate need for more secure places for juvenile offenders of a certain category.
  Recently at one of my constituency surgeries I was visited by a probation officer from Broadstairs, who told me that on his patch alone there are two or three young male offenders in the 15–16 age bracket who definitely need to be in secure places and who, because of the inability and impotence of the courts to sentence them to secure places of custody, are out on the streets and almost certainly practising their criminal habits. The alternatives of sending them to prison or abusing unruliness certificates are unacceptable, and as a result, in one area alone—there are 80 such areas in Kent—there are two or three young offenders out on the streets who should be in secure places.
  The Government's belated White Paper recognises that there are serious defects in the Act but sets out half-hearted half-measures and completely fails to propose any adequate powers for the courts to make secure care orders. I am pleased
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  that a report has been produced by eminent members of my party, including my hon. and learned Friends the Members for South Fylde (Mr. Gardner) and Runcorn (Mr. Carlisle) and my hon. Friend the Member for Chislehurst (Mr. Sims). Under their authorship an admirable report has been produced which suggests much-needed reforms. It suggests that there should be provision for the juvenile courts to make new orders, including residential care orders ad short says in detention centres. It suggests a number of other amendments to the Act. The Government should turn their minds urgently to these much-needed reforms.
  There are no easy answers to these probelms. Whether it is law reform, stiffer penalties, more money spent on the police or improvements in schools or in the hearts of families, there are no simple solutions. But at least the House has now spent a few moments, thanks to the initiative of my hron. Friend the Member for Lewes, in seriously discussing this problem. I hope that the Government, including the Minister, will take the reigns firmly in hand and will do something to pull in this serious and growing disurbing problem of juvenile vandalism.
  1.9 a.m.
  Mr. Roger Sims: I join my hon. Friend the Member for Thanet, East (Mr. Aitken) in thanking my hon. Friend the Member for Lewes (Mr. Rath-bone) for performing a very valuable service in raising, with some very vivid illustrations, one of the two issues which, probably more than any others, concern ordinary people who do not generally take much interest in the affairs of the House. The two issues are vandalism and hooliganism.
  The extent of the concern in the country about these matters is well illustrated by the fact that in various parts of the country people of no particular political persuasion but worried about these matters have got together to form an organisation called HAVAC—Hooliganism and Vandalism Action Campaign. Members of the Yorkshire branch of this organisation have sent a number of hon. Members a circular describing their concern and putting forward their suggestions for dealing with the problem. The extent of their worry is demonstrated by the fact that they

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  came to Westminster at their own expense and sought to meet hon. Members from both sides of the House.
  I believe that the Government share this concern. I should greatly like to hear the Government say so tonight. It was depressing a few days ago to hear a Minister at the Department of Education and Science argue at the Dispatch Box that there is not widespread vandalism in schools. Every hon. Member knows that, unhappily, there is.
  The worrying aspect is the mindlessness of the hooligans and the vandals. They display a complete lack of respect for other people and other people's property. Some acts of vandalism—for example, the wrecking of telephone meters—may have an aim: there is something to be gained from them. But most cases of vandalism, such as defacing a wall, wrecking the windows of a bus shelter, or wrecking an occupied council flat, are purposeless.
  Why do vandals do these things? Perhaps it gives them some momentary satisfaction, the same sort of feeling as some of us experience when smashing china at a side show at a garden fete. It is difficult to find any other explanation for some of the behaviour which goes on in such a widespread fashion.
  Some of the responsibility must lie with the home and the school. Do parents teach respect for property and persons? Do they even exercise such respect themselves? Do some of them show concern for their children? We frequently read of children brought before the courts for such offences and the parents not knowing where the children were. Some schools teach and maintain the proper standards. Others, alas, seem to regard self-expression as more important than self-discipline.
  Part of the answer must lie in the attitude of the community as a whole. All of us individually as parents and as teachers, but also collectively, should look after community property just as we would look after our own property. It some times takes courage to wade in and stop a crowd of lads from doing damage, but we should all be able to feel that we can do so and that in doing it all our fellow citizens would support us, but, unhappily, we are inclined to think that if we "have a go" on the
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  most modest scale we shall get very little support.
  If children are inclined to vandalism, we can at least make it a little more difficult for them. This should be taken into account in the design of buildings—in the type of materials used—and in the layout of estates. A large council estate in East London has no public convenience. As one resident said, is it surprising that visitors use the lifts as lavatories?
  God forbid that we should be obliged to live in jungles made of rough concrete, but surely there is some scope for a degree of vandal-proof architecture. As was suggested, the real deterrent to vandalism would be more police patrolling, preferably on foot or even in a car, but rather more frequently than passing one spot once a night. After all, the possibility that a copper will come round the corner at any moment is likely to put off any vandal. The trouble is that at the moment there are just not sufficient police.
  I do not propose to embark on a lengthy discussion of the position of the police, but I remind the House that our police forces up and down the country are still well under strength. There are no more police in metropolitan London now than there were in the 1920s. I share the hope expressed by my hon. Friends that the Home Secretary will give the most sympathetic consideration to the pay claim at present being made by the police. Their hours and their conditions surely merit every possible consideration so that we can reward them adequately for the very onerous work they do, and in that way also add to the happily improving flow of recruits.
  If a child cannot be educated or brought up to eschew vandalism or to be deterred from it, he will have to be dealt with when he perpetrates vandalism and is caught. Here we come, as my hon. Friend the Member for Thanet, East said, to the Children and Young Persons Act 1969. As the House will know, a Select Committee of this House, the Expenditure Committee, very carefully examined the working of the Act. Although it was a Committee which included people with a wide spectrum of political views and attitudes on these matters, it produced a unanimous report

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  in September 1975. Unfortunately, it was not until May of this year that the Government felt able to produce their White Paper giving their observations on that report.
  There were 40 recommendations in the original report but, unhappily, there has been remarkably little action on any of them. I shall refer to a few of the outstanding matters. First, there is the need to restore to the juvenile courts the power to place the sort of child who is evidently a young criminal in some sort of secure accommodation under the secure care order, to which reference was made.
  This is a matter which the Government have not faced. The Expenditure Committee urged that such an order be instituted. The Magistrates' Association has constantly supported this view. The study group has urged it again after having looked at it from many points of view, yet the Government will not accept the need to restore this important power to the courts.
  Then there is the desirability of short sentences. The trouble is that at the moment a court can send a juvenile to a detention centre for only three months. Many magistrates feel that a much shorter sentence would be extremely useful, particularly for this sort of offence, but the Home Office seems reluctant to grant such powers to the magistrates' courts.
  It is rather curious that at the annual meeting of the Magistrates' Association a couple of months ago the Lord Chancellor was actually urging magistrates to think very seriously about much shorter prison sentences for adults, yet in regard to the juvenile equivalent, the detention centres, the Government appear unwilling to agree that the courts should be enabled to make shorter sentences. These can quite obviously be very effective in certain circumstances. There is a strong case for strengthening supervision orders, which have now replaced probation orders for juveniles. But the point about a probation order is that the lad or girl had to agree to go on probation and there were certain conditions attached to an order. If these conditions were not complied with, the delinquent could be brought back to court. There are no
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  such conditions attached to a supervision order, and the child who is the subject of such an order can do virtually what it likes, because the supervisor has no power other than to bring the child back to the court, when the court either renews the supervision order, which makes bringing him back seem rather pointless, or makes a care order to bring the child into care. It may well be using a hammer to crack a nut. As far as that recommendation—that conditions should be attached to supervision orders—is concerned, the Government have indicated that they are seeking views. I hope that the Minister will tell us what progress has been made.
  Reference has been made already to the desirability of fining vandals. However, the trouble at present is that a vandal can be fined in a juvenile court but there is no means whatever of getting the money out of him. He knows that if he cares not to pay, nothing can be done until he is 17. Clearly this is ridiculous, and it brings the law into disrepute. There are very strong arguments for introducing some form of sanction for non-payment of fines, not only against the child, but against the parent. Also, there is a case for not just a fine, but compensation. There are some proposals in the Criminal Law Bill which go part of the way towards this, and I hope that we can go further.
  The Minister told me recently in an answer to a question that there were at present 60 attendance centres. There has been no increase for some years, and there are no immediate plans for any increase. There are parts of the country where there are no attendance centres at all. Although a juvenile court may have a vandal or delinquent who is particularly suitable for a centre, if there is no centre available, there is nothing the court can do.
  These centres are places—usually schools—where the lads are required to work out their 12 or 24-hour sentences in two-hour stints on Saturday afternoons. While they lose their liberty, they do not lose their schooling, or lose time from their jobs. They must turn up, well presented, and do a couple of hours of physical training, or some suitable activity. This is an acceptable way of dealing with offenders, and a pretty effective one in many cases.

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  Plenty of premises are available in schools all over the country, and plenty of staff are available. There are many police officers who are perfectly willing, for a modest remuneration, to give up part of their spare time to work with these lads on Saturday afternoons. There are many handcraft teachers also willing to do so.
  I urge the Minister to think again about plans for increasing the number of attendance centres. Of course it will involve some expenditure, and one knows the constraints, but we must balance this against the cost of vandalism. A police chief in the West Midlands said that vandalism cost about £9 a minute. Although it is difficult to calculate any accurate figure, the cost of vandalism is likely to be about £100 million a year, or not far off. Against that we must balance the relatively modest expenditure on attendance centers—a very valuable investment.
  I hope that in his reply the Minister will accept that vandalism among juveniles worries many of our fellow citizens. They look to the Government to do something about it. I hope that the Minister will display a greater sense of urgency than his Department has shown hitherto, and that he will give us not words, but actions.
  Mr. Deputy Speaker (Sir Myer Galpern): Before calling the Minister to reply I remind hon. Members that in any debate on the Consolidated Fund Bill it is not in order to advocate legislation, for example, as a means of suggesting how a problem should be solved by amending the law. That is strictly out of order. Hon. Members must restrict themselves to matters of pure administration.
  Mr. Rathbone: On a point of order, Mr. Deputy Speaker. If there is a direct relationship between the change in the law and a reduction in the expenditure on which we vote within the Consolidated Fund, is it in order to refer to it.
  Mr. Deputy Speaker: It would not be in order. Strictly speaking, anything which requires legislation is out of order.
  1.25 a.m.
  The Minister of State, Home Office (Mr. Brynmor John): I hope that I shall keep within your guidelines, Mr. Deputy
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  Speaker. I shall not propose new legislation but I shall refer to legislation.
  I am grateful to the hon. Member for Lewes (Mr. Rathbone) for the opportunity to underline that the Government view the vandalism problem seriously. In his otherwise constructive and moderate speech, the hon. Member for Chislehurst (Mr. Sims) suggested that the Government lack determination to deal with the problem. I assure him that they do not. We may disagree about the remedies, but the Government acknowledge juvenile vandalism as a problem.
  The hon. Member for Lewes acknowledged that statistical information about the monetary value of damage attributable to vandalism is not reliable. I acknowledge that the total amount of damage may well exceed £100 million annually. That is not all caused by juveniles, although they cause a significant proportion.
  I have no doubt that responsible parents should not only be instilling into their children a responsibility towards property which belongs to another person but should encourage young people to look at publicly owned property in a different light. Too often people regard publicly owned property as no one's property. That is a fallacy and is the source of many wrong attitudes towards public telephone kiosks and bowling greens, for instance.
  If the sheer amount of damage done in financial terms is not enough to convince people, they should weigh the cost in terms of deprivation of enjoyment. There is, for example, the deprivation of a person who wants to play bowls when the green is marked, or the anguish of a person who wants to phone a doctor in an emergency but who has to walk a mile or more to another kiosk because of vandals. Such anti-social acts should be taken seriously by those who have responsibility for young people in our society.
  The problem has neither a ready solution nor a ready and easily identifiable cause. In penal policy, if the causes of this type of offence were easily identifiable and if the deterrence of them were a mere function of harshness of penalty, clearly criminal reform and penology would he a very simple subject. However, it is an extremely complex subject. It is a matter of understanding it better and of

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  gradually completing our knowledge, or making it rather fuller, of the causes of this type of offence before we pronounce with certainty upon policies which may do good but may do as much harm as good.
  Let me deal with publicity in this context. We are studying whether publicity in itself and programmes of publicity would be desirable. However, the hon. Gentleman must recognise, as we do, that publicity could be counter-productive. It could provoke people instead of turning them away from vandalism. That is why when we study publicity we study the types that are not themselves likely to be counter-productive. That does not admit of quick dramatic gestures, but it means that when action is taken, it is taken in full knowledge of the consequences and the likely harm as well as good that might arise from a measure.
  My right hon. Friend the Home Secretary has been studying the problem of vandalism with considerable care. It is a matter that has been raised by hon. Members on both sides of the House. It is clearly something that affects many constituents of all of us. My right hon. Friend has already met chief officers of police to discuss the problem. He is to hold a conference in the new year. The hon. Gentleman almost seemed to ask whether I could give the result of the conference before it was held. It is to be held in the new year. It will be taken seriously.
  It will be based upon a number of factors which have become available. For example, the Home Office has recently finished a number of inter-related studies in co-operation with some local authorities that had shown interest in measures to combat vandalism. The extent and causes of particular types of vandalism will have been studied.
  However, the results, at any rate in publishable form, will not be available until the middle of next year. Some of the studies are coming towards fruition. Before too long we should see their results becoming apparent and available so that they can inform the debate on this subject which must continue.
  Great point was made about the incompleteness of the statistics. I am happy to tell the hon. Gentleman—the
  236
  hon. Member for Chislehurst also mentioned this matter—that concerning the readiness of the report, police forces have designed special report forms on this type of incident. They now record all acts of vandalism that are reported to them, irrespective of the amount of money involved, so the arbitrary £20 limit has been removed. That should give us a much clearer and more complete picture of the total cost of vandalism in the future.
  Mr. Rathbone: I welcome that piece of information. As to the conference in the new year, am I right in understanding the Minister to say that that conference will take place in the knowledge of the reports of those local authorities? If not, what will be the conference agenda and what will be its point? I was not trying to anticipate the conclusions. I wanted rather to seek information about the direction.
  Mr. John: It will clearly be fashioned by the information which is steadily, and to a growing extent, becoming available. Obviously, the inter-related studies of the causes and extent of vandalism are just some of the data that becoming available. The hon. Gentleman mentioned the booklet "Protection against vandalism." I intend to deal with that in a little more detail.
  That is just some of the information that is becoming available, and I think that at the meeting the causes and other matters will be discussed. I have no doubt that some of the practical matters that have been adumbrated here about buildings and so on will be considered. I shall return to that matter later.
  The argument about prevention being better than cure takes us only so far, because we must acknowledge the certainty that not everyone will be prevented from being a vandal by good example or better teaching. My view—and it has never materially shifted—is that the greatest deterrent against crime is not necessarily the harshness of the punishment when caught, but the probability of detection. That is the greatest deterrent against crime, and that view has commanded fairly general support. Following the publication of the booklet the police have formed anti-vandal squads. They have undertaken anti-vandal and anti-vandalism campaigns in various areas to

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  bring home to members of the public the point about the cost and the sheer misery that is created by this sort of crime.
  I do not want to be thought to be complacent about police strengths, but I am happy to inform the House that the net strength of the police has risen by nearly 2,000 in the past year, and that the strength of the Metropolitan Police has risen by nearly 1,000. The hon. Member for Chislehurst may say that that is only taking us back to the position in the 1920s, but that improvement represents a step in the right direction and I believe that it is a welcome sign.
  I return to the booklet "Protection against vandalism". It is not merely a factual study. In the appendices it sets out measures that can be taken in the design of buildings to make the vandal's task much more difficult. I can tell the House that 18,000 copies of the booklet have been circulated to interested bodies, including the Royal Institute of British Architects, the CBI, the TUC, and so on. It has been distributed to those who may form opinion and those who may lead discussions, and I believe that the information in the booklet will prove extremely valuable in that context.
  The hon. Gentleman mentioned police pay. My right lion. Friend has made clear the Government's attitude on the matter. He does not believe—nor do I—that the seamen's case is at all comparable. I do not think that in a delicate situation such as this we help the situation by engaging in controversy, particularly if the matter arises tangentially out of a debate on a different subject. My right hon. Friend has made certain proposals to the police, and those who know my right hon. Friend realise that he is sincere about those proposals and would welcome discussion of them.
  I propose to deal now with the problem of the law. I detect a number of points that arise out of the discussion on the part that the law plays in combating juvenile vandalism. It is no part of the Government's duty to tell the courts what penalties they must impose. That is right and essential to the independence of the legal process. It is tempting at times to say "We must tell them to be stiffer in their penalties", but we do not see individual cases, and if there is a hallmark of our justice it is that the penalty
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  imposed is not a procrustean measure but one designed to fit the case and the needs of the individual. We should with the greatest difficulty enter that course without endangering the independence of the courts which we value so much.
  What is done in the courts is not a matter of ministerial control, and I would not wish, and never do in correspondence, to comment on decisions in individual cases. But the House has a duty to ensure that a wide range of measures is available to magistrates, measures appropriate to the particular case, so that if they choose they may impose a sentence which best fits the needs of the case.
  Despite the strictures against the Children and Young Persons Act, but one must remember that it was introduced in response to the failure of the previous policy, with the approved school system built in, significantly to halt the rise in juvenile crime. So when we talk about the Act, we are not talking about something which was replacing a successful and tried and true measure but something completely untried. It was a response which, in its inception and idea, was designed not only to fit the needs of the individual and, where appropriate and possible, to keep him out of the criminal court process, but to place emphasis, parentally and socially, upon the need for care and control where that, too, was appropriate.
  The response of the Government to detailed recommendations then was appropriate. We would all at times wish that responses were quicker to particular issues, but I think that we tried to meet this situation by our own suggestions and by our response to others. By so doing, we have helped to instil a rebirth, if one accepts the terms used by the hon. Member for Chislehurst, of magistrates' courts working under the present system.
  We have completed our consultations with the bodies involved and have concluded that it would be feasible to add certain requirements which courts might impose in addition to those already available under the 1969 Act. We have provided sanctions which might be administered by the courts in the event of breach of a supervision order. In the light of these consultations, we hope soon to be in a position to make positive proposals. Here we have not only commented but

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  moved towards action. I hope that hon. Members will agree that that is a constructive move towards a solution of the problem.
  The third strand of the matter is that of parental responsibility. There has been a slight duality of advocacy on this matter. If we took too literally and seriously the doctrine that the parents were automatically to be responsible for what the child did, however hard they had tried themselves. it would be imposing a very heavy burden. It would breed resentment and could lead to a breakdown in the confidence which we need to build up among all sections of the community so that parents feel it right, in their interests and in the interests of society, to inculcate into young people values and behaviour that take account of the need to concern themselves with the welfare of others in their actions. We shall not do that best by imposing a code that is obviously unfair, and any code that automatically made parents responsible for the default of their children would be unfair.
  The courts have significant powers to make parents responsible for fines and compensation awards incurred by juveniles. This is included in Section 55 of the Children and Young Persons Act 1933. I know of the objection that a person can always prove that he did not conduce to the default.
  The 1969 Act provides that in care and criminal proceedings, parents may be required to enter into a recognisance to take proper care of the child and to exercise proper control of it. The maximum sum in which parents can be bound will be increased from £50 to £200 by the Criminal Law Bill which is now in another place.
  I think that the hon. Member for Chislehurst spoke about the law as it is rather than how it will be. If he will consider Clause 35—
  Mr. Deputy Speaker: Order. I understand that the hon. Gentleman gave an assurance earlier in his speech. He is now straying from it and getting on to legislation.
  Mr. John: My assurance, Mr. Deputy Speaker, was that I would not get on to new legislation. However, I have mentioned the clause number and hon. Mem-
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  bers who look it up will see that the position is more reassuring than they have sought to suggest to the House.
  The tackling of juvenile crime, particularly vandalism, is a combination of social awareness and social responsibility on the part of parents and children. It is a function of the police through their strength and the probability of their detecting crimes. It is, in part, legislation and, in part, greater understanding by us all of what prompts this sort of activity and the cost and misery it can wreak on a community.
  It is because I believe that the debate has furthered consideration of these matters and has, perhaps, highlighted them that I am grateful to the hon. Member for Lewes for initiating it. I hope that he will accept my assurance that we are no less concerned than he and his hon. Friends to tackle the problem.

  HOSPITAL MEDICAL RECORDS (CHILDREN)
  1.49 a.m.
  Mr. Robert Adley: I am grateful for the opportunity to raise a matter which is of great concern to me because of the experience I have had with a case in my constituency and which I know is of equal concern to the Minister, whom I thank for being here, and my hon. Friend the Member for Reading, South (Dr. Vaughan), whose advice I have sought on this case on a number of occasions in the past few weeks.
  In response to your admonitions, Mr. Deputy Speaker—
  Mr. Deputy Speaker (Sir Myer Galpern): I do not think that the Chair should be accused of admonishing anyone. I simply stated the Standing Orders.
  Mr. Adley: I think that what I have to say will be in order and within the ambit of Class XI of the Supplementary Estimates, which is the heading under which this topic has been placed.
  The matters I shall raise include medical technicalities in which I am not well versed as I have no medical qualifications. Some of the matters impinge on legal complexities and I am not a

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  lawyer. I am trying as a Member to use a layman's judgment to ensure a fair deal for a constituent and to put forward fair representation in commonsense terms of a problem which has implications well beyond my own constituency. The matters I shall raise are a labyrinthian combination of political, medical, ethical and administrative affairs. I start by setting out simply the position of the Price family in Christchurch.
  The Price's young daughter, Tanya, now aged 20 months, is suffering severely from a damaged brain which the parents claim results from a vaccination against whooping cough, but which, it has been represented, may be a condition from which the child suffered from birth. There are four points which I put to the Minister. First, can we somehow get at the facts and ascertain whether Tanya Price was brain damaged before or by the vaccination? Secondly, can doctors or medical science tell whether a person can suffer brain damage by a vaccination? Thirdly, can the parents of an infant child expect either for themselves or, on their behalf, a medical adviser, access to the medical records of their child? Fourthly, has there been in this case any unacceptable delay either by the Department of Health and Social Security centrally, or by the area health authority and, attendant upon that delay, has there been any attempt to cover up the fact and prevent Mr. and Mrs. Price from having access to the medical records and, through them, information about their daughter's health?
  The Minister wrote to me on 21st October, some weeks after I first raised this case with the Department on 6th August. The hon. Gentleman said:
  "I have received a report from the East Dorset Health District which indicates that the fits suffered by Tanya were not caused by a vaccination procedure but were due to a condition which began about two months after birth."
  That was hotly disputed by the Prices and, after I had shown them the Minister's letter, Mr. Price wrote to me:
  "It goes without saying that we disagree with his decision, as we are sure that Tanya was not having convulsions before the whooping cough injection."
  The other side of the case is put by the Chairman of the Dorset Area Health Authority, Sir David Trench, who is quoted as saying in an interview in the Daily Mail on 29th November:
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  "There is no doubt in my mind that Tanya's condition was caused by the injection."
  One of those propositions—the Minister's or Sir David Trench's—must be factually in error.
  The point is that if Tanya was brain damaged before she had the vaccination, she should never have had it in the first place. I maintain that her medical records are the best way of checking her condition in the first six months of her life prior to vaccination, and it is because these records are being consistently withheld from the Prices and also from their medical adviser that I have sought to raise this matter in the House tonight.
  Alternatively, if Tanya was not damaged prior to vaccination, there would seem to be either an extraordinary coincidence of timing or—as seems to me much more likely in the light of evidence from many other people—the vaccination itself was the cause of the brain damage from which this poor child is now suffering.
  The second proposition involves discovering whether medical science is sufficiently sophisticated to enable us to know whether the vaccine can cause brain damage. I quote from the Sunday Times of 31st October this year—from an article entitled "Lifespan", in the colour magazine, which contains a section on vaccination:
  "Vaccination has played an essential part in the decline of infectious disease over the last 50 years. Routine vaccinations, however, have declined by about a third over the last year because of worries over the effectiveness and safety of whooping cough vaccine. However, other vaccinations which your child should have at each age are detailed in the accompanying chart. Whooping cough vaccine is officially recommended but is excluded from the list because experts still argue whether the benefits are worth the risks."
  I said that the case that I wished to deploy tonight was not of an isolated incident in my own constituency. This is confirmed in a letter to me from Dr. James Loring, Director of the Spastics Society, one sentence of which reads:
  "We have a number of children whose handicap stems from the triple vaccination and they are indeed tragic cases."
  Clearly, therefore, the Sunday Times and the Director of the Spastics Society are convinced that there is something very wrong indeed with this whooping cough vaccination.

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  I am awaiting from the Minister information—which I am sure he will pass on to me as soon as he gets it—showing whether whooping cough vaccination, apparently recently withdrawn in West Germany, is the same as the vaccination that is still being administered in this country. Perhaps, to save my tabling a Written Question, the Minister will be kind enough to publish in the Official Report the answer to that question, when he receives the answer. There are now so many cases where parents are claiming that their children are suffering from vaccine damage that we surely cannot go on much longer believing either that all these cases represent a coincidence of timing or that they are subject to the lack of certainty which is and remains the Department of Health and Social Security's attitude to the whole question.
  It would not be appropriate on this occasion to go into a discussion of the Pearson Report, but I have no doubt that it is eagerly awaited by many people who will take some interest in the proceedings here tonight. In reply to a Question tabled by me on 2nd November the Minister himself said:
  "It is not possible to be sure whether brain damage has resulted from vaccination or is due to an unrelated cause."—[Official Report, 2nd November 1976; Vol. 918, c. 549.]
  I must tell the Minister that I have a sufficient number of letters in my possession—some of which I have sent to him and many more that I shall be happy to send to him—to enable me to assert, on behalf of a large number of parents, that they, together with the Sunday Times and the Director of the Spastics Society, are in no doubt about the damage that whooping cough vaccine is doing and has done.
  I have letters from places as far apart as Dunfermline, Devizes, Macclesfield, Parkstone, Bournemouth, Poole and Blandford, both in Dorset, and New Milton, in my constituency. I shall certainly make sure that the Minister receives all these letters. He has asked me to pass on to him any information that comes to me.
  I have no wish to be sensational, but the Minister must know that there is increasing concern about this whooping cough vaccine.
  Mr. Deputy Speaker: Order. The hon. Gentleman is creating some difficulty for the Chair. The subject that the hon. Gentleman was anxious to discuss was the availability of medical records in National Health Service hospitals. Earlier he made a very fleeting reference to a desire to gain access to records, but he is now going on to develop the question and to argue about the efficacy of vaccines, partticularly the vaccine against whooping cough. I think that that is not really in accord with what he sought to discuss in this debate.
  Mr. Adley: I mentioned this to Mr. Speaker earlier, because the precise wording of the heading to my debate was not of my choosing, and Mr. Speaker advised me that anything under the heading of the National Health Service would be technically in order under the Supplementary Estimates that we were discussing. I am trying in my argument now to explain why I believe that the Prices' medical records have been withheld, which has a great deal to do with the lack of certainty—
  Mr. Deputy Speaker: What I have heard has been an argument as to whether one should use vaccines against whooping cough, and the hon. Gentleman has been trying to adduce medical evidence, letters, and the rest. I can still see the point that he wished to urge on the Minister, that records should be available to establish his first case on whether the girl had convulsions, or whatever she suffered from, before she had the injections. That is reasonable and relevent. I hope that the hon. Gentleman will keep that in mind.
  Mr. Adley: I intend to revert directly to the wording on the paper before you, Mr. Deputy Speaker. I said before that I had no wish to be sensational. The Minister knows that there is increasing concern about this vaccine and concern about symptoms similar to those found in the early years of the thalidomide saga. The severe brain damage from which many children are suffering is even more distressing than that suffered in that tragedy.
  I return to the subject of the access of parents to the medical records of their infant children. It is clear that the medical profession takes good care to ensure

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  that its actions and its possible mistakes are as well protected as possible. That is understandable. I have been seeking some form of guidance on the subject of disclosure of information by doctors, consultants and so forth. I referred to S. R. Speller's "Law Relating to Hospitals and Kindred Institutions". I should like to quote one sentence from page 332 relating to the release of information.
  "Even when there is no legal compulsion on a medical practitioner or other member of the staff of a hospital authority to give information to the police, there may still be a public or social duty to do so".
  Of course the police are not involved in this particular case, but I submit that the question of public or social duty is very much part of the argument which I am trying to deploy. I believe that the behaviour of certain medical and administrative people in this case shows that they put their interest in secrecy as their top priority, and that is a situation which I am not prepared to tolerate on behalf of my constituents and which I shall fight in every way possible.
  My constituent Mr. Price is a bricklayer, and Mrs. Price is a confused young housewife. I believe that they are being baffled by scientific arguments put forward by people who have at their disposal the finest legal and medical brains. In my view that was confirmed to me by the Minister himself when he wrote justifying the failure to give some information to Mrs. Price by saying, in his letter of 26th November:
  "I understand, for example, that when she approached the general practitioner she asked about 'clinic records' and understandably was referred to the Pokesdown Clinic. Her inquiry of the Area Health Authority referred to 'medical records' and she was correctly advised that these were held by Tanya's general practitioner."
  That is all fine and dandy if one is fully conversant with the legal niceties of the differences between these various records, but for ordinary folk who are not medically or legally qualified there is a complex verbal jungle through which it is almost impossible to cut unless one has a great deal of time, money and knowledge.
  I wish to make clear that the Minister has never failed to be helpful to me on every occasion, and, if anything has emerged from the discussions on this case, it is that the Minister himself has far less power and authority than perhaps he
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  would wish—and certainly less than I would wish—if he is to be able to give practical assistance to my constituents in obtaining these medical records.
  The Minister may recall that on 1st November I wrote to him to describe in some detail the run-around which Mrs. Price was given over a period of two days when she was merely trying to establish where her daughter's medical records were. I remind him that I wrote in these terms:
  "On Wednesday last, 27th October, Mrs. Price saw Miss Routh, the health visitor who had looked after Tanya from the date of her first visit until the time she had to go into hospital after the vaccination. On being asked for Tanya's medical records, Miss Routh said she did not have them, and that they had been posted to Dr. Mrs. Brown last November after Tanya's vaccination. Dr. Mrs. Brown has now retired, and the Prices are registered with Dr. Hill in Boscombe. Mrs. Price went to Dr. Hill's surgery and asked if the records were there. She was told they were not, and was referred to the Pokesdown Health Clinic. Mrs. Price went to Pokesdown and asked if the records were there, and was told by Mrs. Day, the health visitor, that the records were not at Pokesdown and suggested that she should contact the Dorset Area Health Authority office at Ferndown. Mrs. Price got in touch with Ferndown, and was told that the records were not there and that she should contact her doctor. She then got back in touch with Dr. Hill's secretary, who repeated that they did not have the records and suggested that she try Pokesdown again. This she did and on this occasion Mrs. Day admitted that the records were there."
  This is not some smart young housewife being driven around in a Rolls-Royce. Mrs. Price is the wife of a bricklayer, using her own initiative and finding her own transport, very often by bus, and carrying with her her little daughter who is completely incapacitated.
  Where now is the Dr. Mrs. Brown who has retired and who was the person who administered the vaccination? Why did Mrs. Day say on one day that the medical records were not in the place where she admitted they were on the second day? Is Mrs. Routh willing to come forward to help to unearth the information which the Prices need to establish the medical facts about their daughter?
  What is the true role of the Dorset Area Health Authority? I believe the chairman, Sir David Trench, to be a good and charming man, and I have no doubt that he is doing his best to help me and to help Mr. and Mrs. Price. But, like the Minister, he seems almost powerless in

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  the face of a bureaucratic machine which is relentlessly pursuing its own ends, and—dare I use the phrase?—a medical Mafia which seems determine to make protection of its own interests its first priority. All this time my unfortunate constituents, Mr. and Mrs. Price, are being driven near to distraction. They are now being forced to have recourse to the law merely to gain access to their daughter's medical records.
  At the meeting of the East Dorset Community Health Council on 1st November, somebody raised the question I have been asking about the transfer of medical records. The minutes record:
  "Mrs. E. Cook replied that the patient's records belonged to the Health Service".
  What is this all-powerful Health Service that it, an inanimate "it", decides that "it owns things"? I have reason to believe that many Community Health Councils are concerned about the way in which these questions are handled. I am extremely unhappy about the way in which the whole case has been dealt with.
  Sir David Trench wrote to me:
  "it would seem inappropriate to endeavour to persuade the general practitioner, who has now retired, to obtain from her successor and produce her records at this stage."
  Everybody seems to have good reasons for preventing the records being uncovered and diligently protecting those who could help uncover them.
  My fourth question is whether there has been a cover-up in this matter of the availability of the medical records.
  Dr. Gerard Vaughan:(Reading, South): This is clearly a complicated and serious matter. My hon. Friend has said that the health authority refused to release the records to the parents. There may be strong reasons for that. Is my hon. Friend also saying that it has refused to release them to the parents' legal representatives or to a doctor acting on the parents' behalf? That would be a very serious accusation.
  Mr. Adley: The answer to both questions is "Yes". Only this morning I received from Sir David Trench a letter in which he said:
  "as soon as the agreement of all concerned with the hospital and clinic records to so doing has been received (which we are pressing
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  for to the best of our ability) these records can be released, subject of course to any conditions which may be made by the Medical Defence Union. The question of the release of the general practitioner's records is a different problem in view of the complaint made to the Family Practitioner Committee, as I have already explained."
  The Family Practitioner Committee had seemed to be another key to the problem, one which the Prices hoped would help them unlock the records, but only a few days ago we learnt that the family practitioner committee for Dorset had refused an examination of the case because Mr. Price made his claim too late.
  I remind the House that Mr. Price is not medically or legally qualified. His concern has been for his daughter, and he has been doing a great deal. He has taken his child to France, where he heard there was a possibility of treatment. We have tried to raise funds locally. Mr. Price has been concerned not with the niceties of administration but with trying to help his daughter. In a letter dated 16th December, the family practitioner committee turned down his request for an investigation, the administrator saying:
  "The Committee do not accept that ignorance of the complaints procedure can be regarded as a reasonable cause for failure to submit a complaint within the time limits and I regret to inform you therefore that the Committee are unable to accept that Mr. Price's delay in raising his complaint was occasioned by illness or other reasonable cause."
  Another door has been slammed in Mr. and Mrs. Price's faces. I can tell my hon. Friend that I have a doctor in Lymington standing by who is ready, willing and able to give what he describes as an
  "impartial opinion of the value of the records"
  to the Prices just as soon as he is able so to do. But the chairman of the area health authority, in a letter I received this morning, states that it has
  "traced a general practitioner of that name"—
  that is Dr. Rogers, the doctor whom on my suggestion the Prices have picked as their assessor—
  "in Lymington and are checking that he is indeed the doctor concerned. One can presume he is, but the possibility of a retired consultant of the same name in Lymington being the doctor concerned is a remote possibility."
  For God's sake, when will people stop writing formal letters? I have spoken

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  to Dr. Rogers this evening. He has not been approached so far by anyone. His telephone number is Lymington 73063 and the code for Lymington is 0590. Perhaps that information can be passed on to the Dorset Area Health Authority. It seems unbelievable that one has to go to the lengths of recording these matters in Hansard to get something done.
  It was as long ago as 30th November—about three weeks ago—that the Minister told me that
  "The Dorset Area Health Authority is urgently pursuing the possibility of disclosing Tanya's hospital and clinic records to a medical adviser nominated by her parents. I understand that the agreement of the clinicians concerned in the case is still awaited."—[Official Report, 30th November 1976; Vol. 921, c. 93.]
  That was the answer I received when I asked the Minister about the records being made available to a medical adviser.
  The Prices are fed up with waiting, and I am getting fed up too. The whole story, which started when I wrote to the Minister on 6th August, is one of delay, muddle and administrative arrogance. From 6th August to 21st December I have had no satisfaction, and I do not believe that the Minister has had any either. I know that the hon. Gentleman is a kind, compassionate and concerned man who similarly wants to ensure that something is done.
  Disclosure of medical records is a thorny problem, and I am not advocating that every person should always have access to his or her own medical records. I am saying that the parents of an infant child should have the right—I stress "the right"—to have the child's medical records examined by an impartial medical adviser. That was the advice that the Minister first gave me in a letter he wrote on 17th October in which he said:
  "When we met, I also mentioned that it is possible in certain circumstances and with the agreement of the clinicians responsible for medical records, for those records to be disclosed to a medical adviser nominated by and acting for a patient or, in the case of a child, the patient's parents. I confirm that I am now using my best endeavours for such a procedure to be followed in Tanya's case."
  I have no doubt that the hon. Gentleman has used his best endeavours. What alarms me is that his best endeavours and his powers are insufficient to obtain what I believe is a fairly simple and unrevo-
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  lutionary measure of justice for the parents of a child who has suffered a tragedy that may be hard to imagine, presumably, by many of the people who go under the glorious name of administrators.
  Tanya Price is a small, blonde, helpless victim of medical science and of an automated machine called the National Health Service. I apologise to the Minister, my hon. Friend and the House if my temper has been raised slightly as I have gone through the debate, but I hope that the debate will somehow cause those who seem only to want to secrete information for their own protection to think and to feel a little shame.
  2.19 a.m.
  The Under-Secretary of State for Health and Social Security (Mr. Alfred Morris): I am grateful to the hon. Member for Christchurch and Lymington (Mr. Adley) for his kindly reference to me and for indicating that he and I have already been in touch—indeed, that we have met at length—to discuss the various issues raised by the very unfortunate case of Tanya Price.
  The hon. Gentleman may find it helpful if I preface my remarks on the principles governing disclosure from medical records with an explanation of the different types of such records which may be compiled for patients in various parts of the National Health Service. This has an important bearing on the particular case with which the hon. Gentleman and I have been concerned.
  Every doctor involved in providing health care compiles his own clinical case notes for every patient with whom he deals. To these may be added information from other health professionals concerned in the treatment of the patient. The general practitioner has his own set of records, and so does every hospital consultant. These two types of records are held quite separately, each under the control of the responsible doctor, and there is no linkage of general practice and hospital notes. Other medical records are also held separately—for example, in the school health service and in child health clinics run by area health authorities. It may be confusing for a patient, or his representative, who is seeking access to "medical records" covering every episode of treatment which he

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  has received, but this is the way health care is organised in this country. It reflects a complete and comprehensive system in which many different disciplines and specialisms are involved.
  In any consideration of the circumstances in which it might be appropriate to make the contents of all or part of a patient's medical records available to him or to the parent of an infant patient, it is first necessary to understand the purpose for which these records are compiled. They are the doctor's clinical notes, intended by him to be of assistance to all those properly involved in the care of the patient's health. As such, they are under his personal control, or the control of any doctor who succeeds him in the care of the patient. Any disclosure from the records is a matter for the doctor responsible for the patient at the time that a request is made. He would, of course, consult other professionals who may have contributed to the record, but the decision on disclosure rests firmly with him.
  The basic principle applied to clinical case notes is that information from them will not be used for any purpose other than that for which it was supplied or obtained without the consent of the responsible doctor and, usually, of the patient. The decision whether or not to disclose information from them to anybody, including the patient himself, is one which involves clinical judgment. It is not one which can be taken lightly.
  There could be many sound medical reasons why it might not be in the best interests of a particular patient for him, or for a relative, to learn the details of his medical records. Much of what was in them would be highly technical. Moreover, even where they appeared comprehensible to a lay person, they might be capable of misinterpretation. Wrong conclusions might be drawn from which much unnecessary distress could result. There could also be many occasions where, in the judgment of the doctor concerned, it would not serve the medical wellbeing of a patient for him, or his relatives, to learn of the nature of his illness.
  Thus the patient does not have automatic right of access to his medical records. This applies both to personal
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  details provided by the patient himself and to information compiled by doctors and others relating to the patient's health. Access is under the control of the doctor responsible at the time for the patient's treatment, and confidentiality is safeguarded both by the ethics of the medical profession and of the other professions which contribute to health care. The doctor concerned will wish to keep his patient properly informed, but the extent of any disclosure is a matter for individual clinical judgment.
  The prime purpose of the medical ethic of confidentiality is to protect the interests of the patient. When he presents himself to a doctor for treatment, the patient does so in the knowledge and expectation that all that passes between them will be treated in strictest confidence.
  There will be cases, however, where litigation of one sort or another is in process or contemplated and where the patient, or his representative, may wish to see more of his medical records than the doctor concerned has judged it appropriate to disclose. In this situation, although the doctor may be reluctant to disclose information direct to the patient or his representative, he may be prepared to make it available to a nominated medical adviser who is able to interpret it without risk of misunderstandings.
  In the particular case of Tanya Price, as I have already assured the hon. Gentlemen, there has been no intention whatever to cover anything up. It was her way of referring to the notes she was seeking which resulted in Mrs. Price being referred from one agency to another. When Tanya's mother finally located the clinic's notes, she was told that they were "not available". What was meant by this was that it is not the practice to make them available to patients or their relatives. This was the correct advice to give, for the reasons which I have already stated, namely, that disclosure to patients or others of medical records is always a matter for the clinical judgment of the responsible doctor.
  As the hon. Gentleman knows, the Dorset Area Health Authority is now

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  urgently pursuing the possibility of disclosing the records concerned to a medical adviser nominated by Tanya's parents. What is more, as I informed the hon. Gentleman in my letter to him of 26th November, the area health authority is also prepared to meet the costs of that adviser. All this flowed from my meeting with the hon. Gentleman on 11th November, when I undertook to use my best endeavours to secure the agreement of all the doctors concerned to this course of action.
  Mr. Adley: The Minister is reading a brief which tends to repeat half the letters I have read to him earlier. Does he understand the point I am trying to make, that there is a difference between, say, a man of 43 whom a doctor thinks may or may not have cancer and a child of six months, as Tanya then was—she is now 20 months—who is virtually unable to move or to speak and whose circumstances physically are beyond dispute? We are trying to get at the truth of what happened. That is a different situation altogether from trying to discover whether one doctor or another may be making a misjudgment on the question of a person having a particular disease or something else.
  Mr. Morris: Throughout my speech I have sought to refer not only to the patient but also to the patient's representative. The hon. Gentleman was accusing me of reading a brief, perhaps on the assumption that I was endeavouring to follow someone else's handwriting. If the hon. Gentleman would like to come beside me, he would see that I am very much endeavouring to follow my own handwriting at this very early hour in the morning. If I have hesitated, it is because I might perhaps have written my note with rather more care than I was able to do towards the end of last night.
  The hon. Gentleman can be assured that it is the wish of everyone in the area health authority who has been involved in any way in this case that it should be resolved as speedily as possible and in the best interests of Tanya herself. In the six letters which have gone to the hon. Gentleman from me or from my office, arising from or associated with this case, and in the eight parliamentary Questions which I have answered from the hon. Gentleman, I have tried to make clear
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  that my Department and the Dorset Area Health Authority are anxious to assist in every way possible.
  As I have said, at the meeting with the lion. Gentleman on 11th November I promised to use my best endeavours to ensure that Tanya's medical records would be made available to a medical adviser nominated by her parents. I am glad that since then there has been some progress towards this end. The achievement of our objective is, however, subject to the agreement of all the clinicians, and I understand that the authority has not yet received the agreement of all the doctors concerned. Until all the consents are received, the authority cannot proceed further in the matter of releasing the records. Nevertheless, it is doing all it can to obtain them and is acting as quickly as possible.
  The hon. Member mentioned France. It is understood that a French doctor was unable to diagnose the cause of Tanya's condition. Nor was he able to offer any alternative treatment. Tanya's father thanked the area health authority and the consultant for their help in providing the French consultant with a report of Tanya's medical history.
  The hon. Member referred to the article in the Daily Mail. I cannot enter into the controversy about that, but I understand from Sir David Trench that he refutes the impression given by the report of his interview in that newspaper.
  The chairman and the appropriate officers of the area health authority have taken, and are still taking, a personal interest in this case. The hon. Member has now received the chairman's further letter which was sent to him last Friday giving details of the current situation. What has struck me again and again in looking into this case is that the consultants and all the other staff concerned have both sympathy and understanding for Tanya and her parents. I am sure that all concerned will continue to do their best for the family.
  As I have said on other occasions, action is being held up not by bureaucratic procedures but by the fact that the doctors concerned are mindful of the prospect of litigation and are seeking advice from their defence associations. I really must underline the importance of this point.

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  Having a handicapped child, from whatever cause, can impose severe strains on a family. I refer briefly to what is being attempted to help families with handicapped children. There has been a considerable working together on both sides of this House. We can all take some pride in the work and achievements of the all-party Disablement Group. There has been very little party element in this field, and I pay the warmest possible tribute to the officers of that group, who have done very great work for handicapped children.
  Special cash provision for handicapped children is comparatively new but increasingly important. The attendance allowance was the first cash benefit to become payable. Today this allowance is paid to the families of about 40,000 severely handicapped children. Our new mobility allowance is already payable to handicapped children between 11 and 15. Children aged from five to 10 will be the next to benefit and will receive the mobility allowance from April. Claims on behalf of them will be accepted from 12th January. We estimate that about 30,000 handicapped children under 16 will receive the mobility allowance when it is fully phased in. All these children will be receiving outdoor mobility help for the first time. This is an important breakthrough in helping handicapped children, not only in this country but internationally.
  To some extent, beneficiaries of the mobility allowance and the attendance allowance will overlap. Many handicapped children are eligible to receive both. At the maximum, the families concerned will therefore now receive £17·20 a week. This compares with nothing at all six years ago. From the age of 16, the handicapped child can now also receive our new non-contributory invalidity pension, which provides an additional £9·20 without any means test. Money is not the answer to all the problems faced by disabled children and their families. It is clearly right, however, that we should seek to relieve the additional handicap of poverty which so often hits families with a severely handicapped child.
  The Family Fund, which is administered for my Department by the Rowntree Trust, continues to provide
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  another important source of help for families with severely disabled children. In its first three years the fund has helped over 23,000 such families, and already some of the needs highlighted by the Family Fund are beginning to be provided for by new cash benefits and statute-based services.
  Dr. Vaughan: I cannot see the relevance of the Minister's remarks to the problem of the Price family obtaining access to the records. Has the Minister said that the area health authority is prepared to release the records to an independent medical opinion since the individuals and doctors concerned have given their consent? That is the point at issue.
  Mr. Morris: On the hon. Member's first point, I am seeking to relate the particular case to help for the handicapped child generally. Tonight we heard that Tanya Price's parents are hard pressed. I am often told that people are unaware of the benefits that are available to the families of handicapped children. I was taking the opportunity to debate the problem of families with handicapped children and to explain what has been done by successive Governments in recent years.
  On the hon. Gentleman's second point, I have made the position clear. Bureaucratic procedures do not cause the delay, but doctors, mindful of the prspect of litigation, seek advice from their defence associations. I underlined the importance of that earlier in my speech.
  The hon. Member for Christchurch and Lymington recalled our meeting on 11th November at which I promised to use by best endeavours to make the medical records available to a medical adviser nominated by the parents. I have sought in the debate to explain what has happened since then. There has been some progress towards the end which the hon. Gentleman and I agreed to seek on 11th November.
  Mr. Adley: The Minister has tried, Sir David Trench has tried, I have tried and my hon. Friend the Member for Reading, South (Dr. Vaughan) has tried, but someone somewhere is preventing these medical records from being presented to independent medical advisers. What other recourse than to the courts have my constituents if, somewhere along

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  the line, some faceless person is preventing the records from being seen by an independent medical adviser?
  Mr. Morris: I think that I have sought to explain the position. When what I said earlier is read carefully, I believe that it will be accepted that I have answered the point that has been put. If the hon. Gentleman is suggesting that we should change the ground rules that have applied for a very long time, that is a very novel suggestion. What I have been saying tonight reflects the practice of a considerable time. I am emphasising the point that some of the doctors concerned, mindful of the prospect of litigation, are seeking advice from the defence associations. The hon. Member for Reading, South (Dr. Vaughan) has some experience in these matters. I ask him whether they are within their rights to do so.
  Dr. Vaughan: I am certainly not trying to change the ground rules. I was merely asking whether the health authority had agreed to release the records as soon as the various medical people had cleared their own position.
  Mr. Morris: What the area health authority has been seeking to do is to help on the basis of the suggestion that I made to the hon. Member for Christchurch and Lymington on 11th November—namely, that we should seek to make the medical records in this case available to a medical adviser to be nominated by Tanya's parents. At our meeting on 11th November I could not state—nor did I make any attempt to state—the probable timing of progress. I am glad to have been able to say tonight that there has been some progress. I hope that there will be more progress.
  I was seeking to emphasise the very considerable work done by the Family Fund in the service of severely handicapped children. I was saying that the fund has helped over 23,000 families. Even so, the fund has so far assisted only half of the total number of families whom it believes to be eligible for and to need help. It has recently given fresh publicity to its rôle. It was publicity aimed at families who are eligible for help but slow to apply. If right hon. and hon. Members can publicise the availability of help from the fund, especially
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  in areas of low take-up, I know that its administrators will be deeply appreciative of their assistance.
  The Family Fund is, of course, careful not to duplicate provision that can be made available to handicapped children and their families under the provisions of the Chronically Sick and Disabled Persons Act 1970 and other legislation. Anyone who goes among the families of handicapped children, as I and the hon. Gentlemen very often do, knows how highly they value not only the new cash benefits but also the aid that is given by local authorities under Section 2 of the 1970 Act.
  Mr. Deputy Speaker: Order. I do not want to intervene in the Minister's speech, but what he is now telling us is not really relevant to the position because the hon. Member for Christchurch and Lymington (Mr. Adley) did not raise the question of where he could get help in order to aid the family concerned. The Minister has made his reference to the availability of the fund in all general cases of disability.
  Mr. Morris: Naturally I have the deepest respect for your ruling, Mr. Deputy Speaker. You were the Chairman of the Standing Committee that considered the Bill, as it then was.
  Mr. Peter Rost: I hope that the Minister will forgive me for intervening in the debate, but I have listened most attentively and with considerable alarm to the whole story. Will he clarify a point that is still worrying me? He has implied that, if certain doctors do not agree to the disclosure of these medical records to an independent doctor, that is the end of the matter. Is he really suggesting that these parents must take the matter to a court and take the risk of a court forcing disclosure of the records? Does he have no other powers to make the records available?
  Mr. Morris: If I were to go into the legal implications of this case, Mr. Deputy Speaker. I think that that again would not be within the terms of the debate.
  Mr. Deputy Speaker: It may be that I should not have intervened earlier, but the Minister made his point when he read two or three times the statement that the consultants were consulting the

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  defence associations because of the possibility of legal action. I think that that covers the situation. It seems to me that one has to await the outcome of that.
  Mr. Morris: That really was an important statement that I made, and I repeated it to underline its importance.
  I spoke on this wider matter because I was moved by what the hon. Gentleman said about the kind of family that we are considering in this debate. He was saying that Tanya's parents are not people who rush about the town in posh cars. I got the impression that he was very concerned about the plight of the family and not just about the anxiety that is being caused to it. That is why I was seeking, to the best of my ability as the Minister with special responsibility for the disabled, through the House to help the family if I possibly could more immediately than I can in the matter of dictating the timing of further progress for which I am looking into the matter of making the records available to a medical adviser to be nominated by Tanya's parents.
  All that I have been saying in the latter part of my speech relates to our concern for handicapped children generally. We must recognise that the most important handicapped child to any parents will be their own, but Tanya's case is of deep concern not only to her family but to everyone who has been and still is involved in it. I accept that this is a matter of deep concern to the hon. Gentleman, just as I know he will accept my concern about making progress towards a settlement that will be satisfactory from every point of view. I shall follow developments in this case with a close personal interest.

  BRITISH TRANSPORT DOCKS BOARD (CHAIRMAN'S SALARY)
  2.48 a.m.
  Mr. Nicholas Ridley: I should like to raise the subject of the incomes policy implications of the rise in the salary of the Chairman of the British Transport Docks Board. Although I apologise to the Under-Secretary of State for Transport for asking him to reply to this debate at this hour, I must also express a little
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  disappointment that it has to be him—I do not mean this personally—rather than a Minister from the Department of Employment, because it is a matter of incomes policy that I want to raise.
  I am no lover of incomes policy, and I wish it every conceivable but, none the less, as a malevolent bystander. I must point out the problems that have arisen for those who believe in the credibility of the Government incomes policy from the events surrounding the raising of the salary of the chairman. In no sense do I wish to criticise the chairman or his conduct of the Board or in any sense the operations of that Board, or to doubt the worth of the chairman and the undoubted fact that this is about the only nationalised industry that is making some sort of a profit, and to that I pay a tribute. It is in no sense about the chairman himself that I wish to speak. I want to speak about the Government's incomes policy.
  The matter arises from a mistaken report in The Times of 25th November, when we were told that the chairman had a new salary about 24 per cent. higher than his old one—an increase from £10,748 to £14,145. The report said that this had been arranged by terminating his existing contract and substituting a new one. These allegations were corrected next day in The Times, when we were told that such was not the case, but that in fact he had undertaken to work for four days a week as opposed to three and to take on the responsibilities of managing director as well as that of chairman.
  Of course, in any normal world one would feel that he was grossly underpaid both before and after these new responsibilities were put upon him. At present, I would have thought that he was richly worth his salary, and probably a great deal more. But that aspect does not arise at present. I merely question how it can be that someone earning over £8,500 is to begiven ar ise of 24 per cent., whether he is doing more work, and more responsible work, or not. That, as far as I can make out, is in contradiction to the Government's incomes policy, which has laid down in uncertain and unequivocal terms that those earning over £8,500 a year are not to have an increase in any circumstances. I hope

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  that the Minister will spell out what the rules are.
  My concern is not just for this case, which is obviously important, but with others in similar ciircumstances, perhaps in the private sector, who do not quite know what is right and what is wrong and should clearly know what they can and cannot do. Admittedly, this case arises out of the previous incomes policy—the £6 a week limit—leading to another incomes policy. But, as I understand it, the same rules apply in relation to higher earnings, and the case I am raising really alters the situation. The document "The Attack on Inflation" introduced this phase of the policy. The title is a little hollow when we read that inflation is gathering pace again. The £8,500 limit is contained in paragraph 7:
  "The Government consider that the upper limit for the £6 increase should be £8,500 a year rather than £7,000",
  which had been proposed by the TUC. The Government firmly applied the limit to the nationalised industries in paragraph 18, which said:
  "The Government intend that the policy should he strictly applied by the nationalized industries…"
  Paragraph 10 of the paper by the TUC spealt it all out much more clearly:
  "The more prosperous can more easily bear the burden of helping the economy and should be prepared to take a cut in their current standards of consumption. Those with incomes over £7,000 a year should forgo any increase in their incomes in the present period of difficulties. The Government should apply this principle to the public sector."
  These vague statements, which appear to mean that people earning over £8,500 a year should not have any more, were amplified in the debate on Members' pay on 23rd July. The Lord President maintained that Members earning over this amount should not take the £6 a week increase. He said:
  "hon. Members who have earnings from other sources which together with their parliamentary emoluments take their total earnings to £8,500 or more would be asked to forgo the £6 increase in full. That statement was based on the understanding upon which the House accepted the Remuneration, Charges and Grants Bill. In that debate I said that no one earning £8,500 a year or more should take an increase of any kind in the coming year. Guidance to that effect has been issued by the Department of Employment and the Department has advised that the obligation to comply with the pay limits where earnings are derived from more
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  than one source rests with the individual concerned. This is the general way in which the Department have given advice and I am sure that hon. Members would not expect to be treated any differently."
  I would in fact expect to be treated differently, but hon. Members might have accepted that if everyone in the public sector had been treated similarly.
  The Parliamentary Secretary to the Privy Council Office said in that debate:
  "The hon. Member for Chingford asked about aggregation and the £8,500 limit. I understand that anyone receiving more than £8,500, whether from one job, two jobs or three, has been expected to comply with the limit"—[Official Report, 23rd July 1976; Vol.915, cc.2245, 2310.]
  What is the difference between someone with one job, two jobs or three, and someone working three days a week or four? This is a nice point of semantics, but I am certain that if an hon. Member told him that he had taken on another job which would take him over the limit, the Lord President would say ferociously that he could not have an increase.
  In the case of the Chairman of the British Transport Docks Board an increase was clearly acknowledged by the Government to be in order. This requires explaining. The ground rules have never been spelled out. I know of no document which gives precise guidance. Perhaps that is because the Government want it to be fudged; they want to be able to allow people to use their discretion. Perhaps this particular case has such approbation from the Government—this nationalised industry is actually profitable—that they thought they would give a little reward in this case, and they bent the rules to permit it.
  But this is the essence of the evils of Socialist planning of incomes—that some people can have the rules bent for them but others cannot. If this is what incomes policy means to the Government, they had better think again: it is not good enough. If an ordinary worker on the shop floor can take other work or do more work and breach the pay limits, he is surely entitled to the same treatment as the Chairman of the BTDB. But under the £8,500 limit different rules apply. What we do not know is what rules apply over that limit.
  I do not believe in any of this. I did not accept the £8,500 limit. I made it clear that I would take the increase of

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  £6 a week and give the money after tax to charity. So I do not suggest that hon. Members should be treated differently or better than they are. I merely say with some feeling that if we are to have this nonsense, if we are to suppress differentials and hold down the incomes of those with responsibility and skill and those who earn more than others—which I am not in favour of doing—it must be seen to be patently fair.
  One of my motives for raising this subject is to get the Government to put the particular circumstances of this case on the record. I have no doubt that that will be of assistance to the Chairman of the BTDB, since he will not then be subject to any misunderstanding. But, equally, the Minister must convince the rest of the higher earners that the rules which apply are applied equally throughout the whole public sector. That is why I should like him to spell out the rules closely and carefully, so that we may be certain that there is equal dealing on all sides.
  3.2 a.m.
  The Under-Secretary of State for Transport (Mr. John Horam): As the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) has said, I am not departmentally responsible for the operation of the Government's incomes policy, so I cannot go into details about how it works. But he asked me a straight question and I should like to give him a straight answer in relation to the position of Sir Humphrey Browne, the Chairman of the British Transport Docks Board.
  The hon. Gentleman asked how a person earning more than £8,500 a year could apparently receive more money when this was specifically not allowed under the previous phase of the incomes policy. The answer is that Sir Humphrey Browne has not been earning more money at any stage. He became Chairman of the BTDB in May 1971. Mr. Stanley Johnson was then the managing director, and Sir Humphrey was called upon to devote three days a week to his Docks Board duties. In effect. it was a part-time job.
  On 1st January 1976, following the retirement of Mr. Johnson, Sir Humphrey Browne became Executive Chairman as opposed to Chairman and took on some
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  of the functions—not all the functions, as the hon. Gentleman said—previously falling to the managing director. The additional functions involved him in four instead of three days' work a week, and his salary was modified accordingly.
  The rules for the determination of salaries in this case are that part-time nationalised industry chairmen's salaries are calculated pro rata to the relevant full-time rate, which in this case is £17,600 a year plus thresholds. That rate has remained unchanged since 1974. That is why the salary appeared to increase from just over £10,000 to just over £14,000. He was simply being paid pro rata for an extra day's work consequent on his taking up part of the job of being managing director.
  It is misleading, therefore, to describe Sir Humphrey, as The Times erroneously did on 25th November, as
  "beating the freeze on top salaries."
  His salary has not changed in any way.
  The analogy that the hon. Gentleman drew with Members' salaries does not hold. Members of Parliament, certainly those here tonight, would not consider themselves in any way part-timers. The job cannot be divided in the same way as that of a part-time chairman or a part-time member of a board, whether in the private or the public sector, can be divided. Therefore, the analogy that the hon. Member put forward does not hold in this case. The situation with regard to Sir Humphrey Browne is plain. In no sense can he be said to have beaten the pay freeze on top salaries.
  Mr. Ridley: That is not a good enough answer. The Minister must be aware that few workers have had increases of £3,300, whether or not they have done increased work or taken on extra responsibilities. I do not want the hon. Gentleman to go over the history—I went over it in my speech—but will he tell us what are the guidelines that will enable us to determine whether people earning over £8,500 a year may have an increase? That is the one thing that the Minister has not dealt with, by the device which I warned the House he would use, saying that he was not responsible for that part of the case that I wished to raise, but which is stated on the Order Paper for today:
  "The implications for incomes policy of the rise in the salary of the Chairman of the British Transport Docks Board."

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  That is the point that has been raised, and the Minister has not dealt with it. He has said that Sir Humphrey has had a rise, and good luck to him. I agree—good luck to him; but may we be told what are the rules in relation to rises in this incomes bracket?
  Mr. Horam: The hon. Member accurately stated the rules. I did not answer the question by attempting some subterfuge in relation to their technicality. I replied in a straightforward manner by saying that there had been no increase in the case of Sir Humphrey Browne. He has not had an increase in salary. His salary has remained the same since 1974. Therefore, on those very simple terms, the hon. Member's case does not hold.

  INDUSTRIAL DISEASE AND INJURY
  3.7 a.m.
  Mrs. Audrey Wise: I rise to speak on the economic cost to the nation of industrial diseases and injuries. One problem that we have in discussing this subject is that in a true sense these costs are incalculable. There are certain figures which are known and can be quoted. For example, the last available figures show that in one year £211 million was paid out directly in benefits received on account of industrial diseases and injuries. The force with which families have been struck is shown by the fact that £23 million of that sum went in death benefit. That is a measure of the seriousness of the matter. All Members of Parliament in their own surgeries see many instances of lives broken as a result of industrial injuries, even where the sufferer has survived.
  The latest figures also show that 15·3 million working days were lost. The consequential lost production must be enormous. As I say, it is not possible to give an exact figure, because this is something at which one can only hazard a guess. Lost production is not costed—the extra work which has to be undertaken and the loss of efficiency—because the lost working days do not represent the entire picture. People may be at work but considerably less efficient because they have suffered an accident and returned to work. Even an accident that is regarded as too trivial to merit time off may result in a great loss of efficiency.
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  I would contend that these figures alone, showing the direct effects of industrial injury and disease, indicate the depth of the problem facing the nation. Nobody can attempt to sayy that all these accidents and all these diseases are inevitable and unavoidable. Most of us would agree about the importance of proper working conditions, proper safety precautions and different attitudes to safety that are concerned with protecting workers by such means as protective clothing and, more importantly, by building safety into industrial processes.
  No one can deny that these would greatly reduce the number of working days lost and the amount of money that is paid out in benefits, and the pain and distress suffered by everyone concerned. Parliament itself has clearly recognised this. When Parliament passed the Health and Safety at Work etc. Act 1974, introduced by this Labour Government, it included a section that empowered the Secretary of State to take a new initiative in this field by enabling workers to have safety representatives with legal standing.
  Until now the main preventive agency and the main enforcement agency of safety laws have been the Factory Inspectorate. The problems facing factory inspectors can be understood by referring to figures that have been given by the Department of Employment stating the number of factory inspectors and the number of premises with which they have to deal. At the last count there were 663 general factory inspectors and 167 specialist inspectors, making a total of 830 factory inspectors.
  Those inspectors have to deal with 209,573 premises under the Factories Act, 179,451 premises under the Offices, Shops and Railway Premises Act, plus all the construction sites in the country, of which the precise number is not known, plus all the new working places that had never before been covered by safety legislation, such as hospitals and educational establishments. In fact, the number of work places with which the Factory Inspectorate could be involved must number not far short of 1 million. Yet only 830 people carry this burden.
  It is quite obvious that this is a superhuman task and that the full-time professional factory inspector can do no more than look at the worst excesses and

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  the major hazards. To back them up with vast armies of experts in the form of worker safety representatives—people who are experts because they actually work at the job concerned—is a means of ensuring safety in the most economical and efficient manner possible.
  When Parliament passed the Health and Safety at Work etc. Act, we thought that that would be the case. The Factory Inspectorate itself thought so, too. I quote now from the report of the Chief Inspector of Factories for 1974, the latest report available. Discussing the new Act, the Chief Inspector said:
  "The Act imposes a new and more extensive duty on employees to take care for their own safety and to co-operate with the employer. At the same time, it confers on them new and important rights in the matter of disclosure of information, the appointment of safety representatives and the establishment of safety committees."
  Unfortunately, the Chief Inspector was not quite right there. He was taking an optimistic view of the legislation, because the Act does not directly give employees the right to appoint safety representatives. It empowers the Secretary of State to lay regulations to give employees that right. But I can well undersetand why the Chief Inspector made that confident assertion in his report, since everyone, including Member of Parliament—certainly, all of us on the Government side—assumed that the regulations would be laid at the earliest practical moment.
  The Chief Inspector continued:
  "Whilst it is vital that employers clearly understand the practical consequences of their new duties, it is equally important that employees and their trade unions understand the importance of playing their part. They must accept the responsibility of the provisions of the new Act to make a much more positive contribution to occupational health and safety."
  Trade unionists throughout the country have taken those words to heart, and they have been making detailed and extensive preparations ready for the coming into force of regulations about safety representatives precisely so that they can play their full part and accept their new duties. The representations which are coming to me from constituents in Coventry, which is very much a manufacturing city, are that there is deep disappointment now among trade unionists because they are being deprived of the right to take a full share of respon-
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  sibility. They want to do everything they can to achieve a safer working environment, and they want to have legal support and legal standing in so doing.
  The Factory Inspectorate has been looking at and revising its own methods. Realising the colossal nature of the task before it and being aware of the increasing complexity of technology and growing daily use of dangerous substances, the Factory Inspectorate has appreciated that it will have to change some of its methods. In his paragraph on inspection policy, the Chief Inspector said:
  "In the last few years inspectors have been encouraged to spend as much time as necessary in selected factories in order to carry out a more precise diagnosis of problem areas and to prescribe solutions".
  I ask the House to note those words "in selected factories". He said further:
  "This flexible and selective approach to inspection is not without problems. Whereas previously the high-risk factory and those with low standards could be identified from personal know ledge, the new policy calls for more time to be spent in fewer factories, and, in consequence, it is more difficult for an inspector to select companies for in-depth investigation, due to the diminution of his knowledge of many companies in his area."
  That being so—I do not at this stage quarrel with that policy—it is even more important that those who have the in-depth knowledge because they are there every day carrying on the processes and working in the factories concerned should have the full backing of the law through the safety representative regulations, which would be the greatest preventive measure that we could possibly take.
  The Chief Inspector also said, making it crystal clear that the factory inspectors now had to take that very selective view:
  "Unless there is a serious hazard or the employer has already ignored previous approaches, the best and obvious first step and certainly that envisaged by the spirit of the new Act, is for the employee, where appropriate, through the trade union representative to put his concern initially direct to his employer."
  That is exactly what the safety representative system is supposed to be about. It is clear that when the report was ordered to be printed, in September 1975, the Chief Factory Inspector fully expected safety representative regulations to be in force quite soon.
  What has happened? It is now more than two years since the Health and

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  Safety at Work etc. Act went through the House. We were recently informed by my right hon. Friend the Secretary of State that the proposed regulations were to be deferred indefinitely on cost grounds—not on the ground that no agreement had been reached. The Health and Safety Commission was able to lay draft regulations before my right hon. Friend with the agreement of all sides of industry.
  I tabled an Early-Day Motion in which I accused the Government of capitulating to the CBI and so causing the delay. That drew from the CBI a rather plaintive letter in which it made it clear that it, representing employers, was in agreement with the regulations. I am pleased to be able to place that on record. But it is also an unfortunate fact that what is true in theory at the heights of the CBI is not necessarily what happens on the factory floor.
  Shop stewards in my area tell me that at factory level the story is not so rosy. If it were, the matter of the regulations would not be so urgent. But my shop stewards have been told by their employers that the whole question is in doubt. It is being said that it is a matter not of when the regulations come in. but if they come in. Although the CBI states that it is in favour of the regulations, in practice employers are not willing to operate the draft regulations until they have the force of law. That is a great pity. There is no law preventing them from operating the draft regulations, which have been published and which are known to everyone.
  The shop stewards have taken great pains to prepare themselves. In my area they have gone to spectacular lengths to study the issues, holding regular meetings in their own time and bringing together workers from all the factories there, through the Coventry Health and Safety Movement. They are taking a serious attitude and they feel thwarted and frustrated by the fact that the Government, having gone so far, have now put the whole matter into limbo.
  In some ways this gives us the worst of all worlds. We cannot tell trade unionists "Go ahead; just negotiate this with your employers", because we have made it a parliamentary matter. We have made it half way to being a law, and half way is a worse result than if we had never dabbled in it.
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  If we did not intend to go ahead with the regulations, it would have been far better to make that clear from the beginning. But we intended to go along with the regulations, and a further instance of that fact can be found by examining the First Report of the Advisory Committee on Major Hazards, which was produced during the summer. The committee is dealing with the hazards that are the most frightening, the most dramatic and, in some ways, the most difficult with which to deal. In making its report it stated:
  "Safety representatives will have a special role to play in major hazard installations because in addition to their normal functions as outlined in the consultative document containing draft safety representative and safety committee regulations, they will be expected to take part actively in the formulation and application of additional controls which we suggest—for example, safety audits and emergency procedures."
  It is no use setting up the Advisory Committee on Major Hazards, having the committee study the problem and issue documents in which it clearly expects safety representative to be functioning in the near future, and then leaving it high and dry. Who will help now with the safety audits and the emergency procedure studies? The Government are preventing the proper operation of the Health and Safety at Work etc. Act in many ways through delaying unduly the full operation of the enabling clause.
  What does the Health and Safety Commission feel about it? It has stated loud and clear:
  "We believe that the proposals we have made are essential to the full and effective implementation of the Act."
  It says:
  "the credibility of the Commission will be undermined"
  if the regulations are not laid.
  The Government set up the Commission. Surely they cannot want to undermine the credibility of their own creation.
  The Commission stated that during the discussion on the proposals the question of the cost of implementation was raised. It
  "considered the comments very carefully and came to the conclusion that the initial cost would, in the longer term, be outweighed by the benefits ensuing from the improvements in health and safety which would flow from the proposals."
  In other words, these are cost-saving proposals. They are not merely expenditure.

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  There is no extravagance involved. As my hon. Friend well knows because he gave the appropriate answer, the costs involved are minimal. They consist in giving paid time for training, for carrying out inspections and discussing what to do following the inspections. We shall not be creating full-time safety representatives with fancy wages. The whole objective is that they will continue to do their jobs. It is from that background that their main expertise will flow. The costs are minimal.
  I understand that the sector that has expressed anxiety about cost is the public sector, especially local government. Most of the work places involved will not have been covered before by safety legislation. If a local council is asked how much it will cost, it will have to embark on sheer guess work. I think that "estimate" is too dignified a word. It is not possible to say how much the regulations will cost to implement. For example, no one knows how many safety representatives would need time off, because the matter is subject to negotiation. A great deal depends on exactly what is formulated in negotiations. I guess that everyone will be reasonable in work places where there is not a great hazard. I cannot envisage people queuing up thinking that this is an easy way to get some paid time to do something that it not necessary. Nobody knows, because the matter is subject to negotiation.
  In answer to a Question my hon. Friend told me that the direct cost to local government and the public sector would be £55 million. That is no more than a guess. Even if it is an accurate guess, it is not too much to spend on better health and safety precautions. Many people working in the public sector—for instance, in universities—are worried. I have received strong representations, not only from shop stewards in factories, but from people working in universities. A serious accident occurred recently at the university in my constituency.
  We should not delay promulgating the regulations because local authorities do not want to have a further statutory duty imposed upon them without extra resources to enable them to fulfil that
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  extra duty. If more resources are needed to ensure health and safety at work, more resources must be found. I have some sympathy with local authorities, but it is monstrous if public expenditure constraints lead to elementary, far-reaching and sensible precautions being thwarted. We have waited for two years. How many more years do we have to wait? When shall we be able to afford proper provision to ensure health and safety?
  Our purpose in raising the matter tonight is to argue that we cannot afford not to take all possible action to enhance health and safety at work. The losses resulting from unnecessary accidents and ill-health far outweigh the cost of enabling workers to play a full part in improving their work environment. No one but workers can do this satisfactorily.
  Even an enlightened employer tends to see the issue in terms of muffling a worker against hazards or providing him with ear plugs. The worker will see the issue much more clearly and have a great incentive to persuade the employer that it is not the mask on the worker but the extractor on the machine that is the best method of preventing damage to health, that it is not ear muffs but the reduction of noise levels.
  Unless the Government bring the regulations into force quickly, they will incur much acrimony, their reputation will be damaged, and they will throw away a great measure of good will and the chance to harness the expertise of trade unionists and their willingness to perform useful and constructive work in this regard.
  I urge my hon. Friend, and through him the Government, to go ahead and lay these regulations before Parliament without further delay in order to cut the costs of industrial diseases and injuries.
  3.35 a.m.
  Mr. J. W. Rooker: When, on 13th March 1974, I made my maiden speech in this House on the subject of industrial safety, honestly did not think that nearly three years later we should be engaged in this debate tonight. It is, quite frankly, to the shame and discredit of the Government that we are forced into this position.

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  My hon. Friend the Member for Coventry, South-West (Mrs. Wise) has illuminated the inadequacy of the present inspection system and the enforcement process of the Factory Inspectorate in terms of its numbers. I do not intend to repeat what my hon. Friend said. I wish to look at the examples of some of the workers who suffer from the accidents and industrial diseases and, at some of the resource cost to the nation, and to offer a couple of solutions.
  It has first to be made abundantly clear that the working-class way of death in this country is to be a manual worker. When we look at the statistics contained in research reports, at the Registrar General's figures for deaths, at the various occupations and the reasons for death, it is apparent that what people do for a living largely determines the age at which they die. This is a great tragedy and a disgrace, bearing in mind that the Health and Safety at Work etc. Act has been on the statute book for more than two years.
  I shall use what I admit are selective quotations from one or two reports to shame my hon. Friend the Minister, although I know that he does not bear personal responsibility, because the members of the Cabinet are the people really responsible for holding up the measure.
  The first report to which I refer was published in 1971 by the National Institute of Industrial Psychology. It is a report on 2,000 accidents on the shop floor, together with a massive study of their causes by independent investigators. They came to four basic conclusions, which are extremely disturbing. They said that
  "the risks of accident were so much an integral part of work systems as at present arranged, that the more work was done, the more accidents occurred".
  They said that
  "people who changed tasks frequently had more accidents than those who did not change frequently".
  They also said that the highest accident rate on quickly repetitive tasks occurred towards the beginning of the period of the task and that people had to learn or re-learn in order to avoid the risks inherent in the job. Lastly, they said that
  "serious accidents were often the result of an unusual situation".
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  In essence the authors of the report, after examination of the numerous factors that might affect accidents, said that
  "it is the work situation that is accident-prone, not the individual."
  This was a crucial conclusion to reach, bearing in mind that the report was published in 1971 and that a year later the Robens Committee in its report basically blamed apathy among the workers in industry as the reason for many industrial accidents, in flat contradiction of the 1971 report. The Robens Committee was not exactly loaded with people who had worked in manufacturing industry in the sense that I and my constituents would define the term. The Robens Committee clearly did not take account of the report of the National Institute of Industrial Psychology, otherwise it would not have come to the conclusion that it reached.
  The facts concerning the way of death of British workers are starkly reported. The figures from the Registrar General are quoted in a book published early in 1974 by Patrick Kinnersly called "The Hazards of Work: How to Fight Them". I shall refer to this publication later, but it makes the point that furnace men face twice as many chances of dying from tuberculosis as Members of Parliament. Fishermen have three times as many chances of death from lung cancer as Members of Parliament, and their chances of dying from bronchitis are four or five times as great. I could go on and on, but these stark figures show that the working-class way of death is far more likely to strike the manual worker than someone who can lord it around on these Benches. These figures, which come from the Registrar General, show what people are doing when they die, and, quite frankly, it does not look too good for manual workers. They actually die at an earlier age as well.
  A lot of work was done on this aspect by Frank Field, who is well known for his work among the low-paid and the poverty-stricken in this country. He published a pamphlet called "Unequal Britain" and did research into accidents at work. He made the point that accidents are a very important aspect of inequality at work—the unequal impact of accidents across the social classes, and the processes responsible for these accidents. Practically all fatal accidents

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  occurred in occupations dominated by manual workers. One does not need to look too far to substantiate that. In the September issue of the Department of Employment Gazette, details of the accidents occuring at work in factories in the second quarter of 1976 are published. Ninety-one people died at work in factories in the second quarter, and there were 61,000 accidents.
  This publication makes the point that those engaged in oil conversion, iron founding, vehicle repairing, heavy chemicals, the construction industry, bookmaking and stationery, and food processing were most at risk. Food processing seems a safe enough job, but the figures show that two people died in that safe industry in the second quarter of this year. All these are manual occupations; there is no section for white-collar workers or professional occupations. There is no section for Members of Parliament or managers. These figures tell a sorry tale.
  Nevertheless, the people I have mentioned are not the only ones who suffer death and cause cost to families and a criminal loss in terms of family tragedy—maybe the loss of a breadwinner leading to a family needing to live on supplementary benefits, or the creation of yet another one-parent family. Manual workers have it bad both ways, because predominantly they are the only ones who work shifts. I know this from my own experience. On the night shift only a skeleton staff was kept on to see that the administrative side was running satisfactorily. It was on the shop floor that most of the night work was done.
  Some work on accidents to shift workers is being done by the National Economic Development Organisation, which produced a report in 1973 on shift working in the motor industry. It is a very interesting report which makes many suggestions about the reasons for the quality of some vehicles not being good. NEDO examined three of the largest motor manufacturing plants in the country and found that there was a statistically significant increase in the rate of accidents per man hour on the night shift over the corresponding day shift. For obvious reasons the three plants were not named in the report, but I assume that they included the plant at Dagenham
  276
  and the British Leyland plant at Long-bridge. One can only guess at the identity of the third plant.
  Over the 11-year period from 1958 to 1969, 43 per cent. more accidents per man hour shift occurred at night than during the day. In plant No. 2, 61 per cent. more accidents took place on the night shift than on the day shift. In plant No. 3, 21 per cent. more reportable accidents took place on the night shift during the five years 1965 to 1971.
  Workers need protection from criminal negligence by their employers. We must ensure that regulations provide that shift workers receive more than their fair share of cover, because they are more at risk than other manual workers. A fair amount of time in the motor industry is taken up by people running round dealing with accidents, providing first aid and so on. The position is no different now from what it was in 1973.
  The terrifying thing is that no one actually knows how much industrial accidents, and diseases cost. The Department of Employment published a paper which analysed the resource costs to the country of the various industrial diseases and accidents, taking account of the cost of such expenses as doctors and ambulances. The analysis included Factory Inspectorate and Department of Health and Social Security data. The figures I shall quote are those for 1969, and hon. Members should remember that inflation will have doubled the cost then given.
  In the appendix to the Robens Report, the DHSS said that the national resource cost was £335 million a year. The Factory Inspectorate's estimate was £133 million. The report stated that the figures were conservative. The DHSS said that the number of deaths attracting awards for industrial death benefit amounted to 1,918. The Factory Inspectorate said that 649 fatalities were reported under the Factories Act. It is commonly believed that between 500 and 600 workers die each year as a result of their work. The Factory Inspectorate is only one part of the reporting machinery since deaths must also be reported to bodies which are responsible, for example, for quarries, mines, shops, offices and construction sites. The figure of 649 does not compare with that of nearly 2,000 given by the DHSS. That means that people are dying as a result of industrial diseases

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  many years after they have contracted them. They are dying as a result of industrial accidents but many years after receiving their injuries. They are dying at the rate of 40 a week.
  Therefore, it is no good taking figures based on those of the Factory Inspectorate. We must go to the national insurance figures, because the national insurance administrators are the sticklers and they have all the information.
  Furthermore, the Department of Employment, in the paper that used these figures, then looked at the non-reportable minor accidents. It said that the DHSS figures showed 841,000 per year reported accidents and spells of sickness and absence due to disease and injury, but it wanted to calculate the non-reportable minor accidents. It used a ratio of 1:30. On a figure of 841,000, it was estimated that there were 25 million accidents of an occupational nature in industry per year. The ratio of 1:30 was used, whereas the National Institute for Industrial Psychology, in the report to which I referred earlier, in its summary of 2,000 shop floor accidents, reckoned that we needed to use a ratio of 1:50 to obtain an accurate estimate of non-reported accidents. Nevertheless I shall settle for 1:30, which gives a figure of 25 million industrial accidents, injuries or diseases of some sort, reported or non-reported. That is a massive number.
  We are at the beginning of a week. Based on the Factory Inspectorate figures for the second quarter of this year, accidents in factories are running at 1,000 per working day, or 5,000 a week. There will be 5,000 factory accidents before Christmas Eve. In Britain 5,000 families will have to cope with someone injured in an industrial accident in a factory before Christmas. That figure does not include all the other cases, but merely those in factories.
  Deaths in factories were 91 in the second quarter of this year. That is seven a week. There will be seven more deaths in factories this week. Taking the DHSS figures of the number of people who are dying this week as a result of catching an industrial disease perhaps years ago or as a result of industrial injuries last week, last month or last year, one realises that such people are dying at the rate of 40 a week. Therefore, 33 more people will die this week, at home or in hospi-
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  tal, as a result of industrial accidents or diseases. That is a total of 40 this week who will die by Christmas Day as a result of criminal negligence in industry, and at least 5,000 people will be injured in factories.
  Apparently nothing can be done to stop that. Things could have been done some months ago to prevent it from happening if certain courses of action had been taken, as has been suggested. There are several solutions. One that comes to mind appeared in the Industrial Law Journal of September this year, in an article entitled
  "Economic Deterrence and the Prevention of Industrial Accidents"
  by Jenny Phillips of Wolfson College. shall quote one paragraph of her conclusions which rings a little bell in my mind. When I read the article, I thought "That is funny. I have heard the words before in a different context." The heading of the paragraph was
  "Introducing economic incentives."
  It said:
  "The evidence suggests that an approach to the improvement of safety based on the following two objectives would be effective. First, firms should pay the full costs of all work-related accidents"—
  I thought that I had heard that before;
  "secondly, firms should be made aware of these costs."
  That rang another bell in another context. It is what the Chancellor wheeled out in the 22nd July measures in relation to road accidents, to make sure that the cost of road accidents to the National Health Service is recovered from motorists.
  We shall be passing a Bill later in the Session to raise motor insurance premiums by about £3 per head to pay for the full cost of road accidents that falls on the NHS. Perhaps we could start by making sure that the total cost of what I consider to be criminal negligence by employers and which falls on the NHS is recoverable. If we had a similar Bill, I think that it would receive all-party support. It would certainly get the support of Labour Members. That is a suggestion that I shall pursue in line with the Government's present policy vis-à-vis the road accident situation, because it is a positive proposal and one that would bring home to industry the

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  real costs of not taking industrial accident prevention seriously.
  The other matter is the vast improvement in the number of safety representatives, whether they be statutory safety inspectors or factory inspectors in the conventional sense, which we shall not get although we were promised that their number would be doubled to 1,600. We want 200,000, which is what we shall get as a minimum of trade union-appointed safety representatives as laid down in legislation passed by this House during the past two years. That is an absolute "must".
  My hon. Friend told the House that the CBI had said it was not to blame for the delays. It may be that it is not to blame, and perhaps local authorities are responsible for the delays, but it is fair to point out what the CBI said in its evidence to the Robens Committee. Volume 2 of the Robens Report, Selected Written Evidence, said at paragraph 1.40:
  "The CBI has remained firmly opposed to the introduction of a legal requirement in this field and the exhaustive examinations which have occurred over the past decade has confirmed it in the rightness of its view."
  That was the CBI's evidence to the Robens Committee on the matter of statutory safety committees and statutory safety representatives on which the Health and Safety at Work etc Act was largely based; but it may be that the CBI has had a change of heart.
  All this has taken a long time, because early in 1970 a Bill entitled Employed Persons Health and Safety Bill was introduced into this House by my right hon. Friend the Member for Blackburn (Mrs. Castle) when she was Secretary of State for Employment and Productivity. The Bill was introduced a little late, and in February it got bogged down in Committee. In May there was a General Election and the Bill fell, but that measure included the setting up of statutory trade union-appointed safety representatives. There were certain restrictions which were different from those that we have now, but the principle was there.
  There was no vote on Second Reading. That does not mean that there was no opposition to the measure from Conservative Members. I have the Hansard quotations if they are required, but it is easier to quote from an article in The
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  Guardian of Tuesday 15th January 1974 reviewing Patrick Kinnersly's book to which I have referred. The article made great play of one of the speeches that I read in Hansard in March 1974, that of the hon. Member for Folkestone and Hythe (Mr. Costain) on Second Reading.
  The article said:
  "Resistance to joint safety committees has been ably led by Mr. Albert Costain, Conservative MP for Folkestone and Hythe. In a debate on the Employed Persons (Health and Safety) Bill which would have given workers' safety representatives certain rights of inspection after an accident, he voiced the employers' old fear that committees would interfere with production.
  He said that the Bill would be 'a sea lawyer's paradise, giving wonderful opportunity to those who want to make trouble and disrupt our industries, where all strikes have failed'.
  He did not mention the wonderful opportunity to reduce the disruption to life caused by accidents, such as the bridge collapse on a Costain construction site near Dartford, Kent in March 1971 which killed a man."
  That was followed up in Professor Wedderburn's book "The Worker and the Law", which is still the standard textbook for most shop stewards who have to fight employers who will not tell them anything about their legal position. He made the point about the Employed Persons (Health and Safety) Bill that the
  "CBI insisted that voluntary methods were best, recalling that the Minister of Labour in 1966 pledged that the voluntary system would be given a chance to work before compulsion was introduced. The President of the National Federation of Building Trades Employers said the Bill would 'provide increased opportunities for disruptive elements to exploit new areas of industrial life'. The Bill lapsed with the General Election."
  Clearly, the CBI has apparently changed its spots. But it has had a long way to go. It has opposed the measures for statutory trade union-appointed or worker-appointed safety representatives. It was opposed to statutory committees.
  The Robens Report concluded:
  "We are in no doubt that the concept of employee safety representatives is more important than the concept of joint safety committees."
  That is a most important message to take on board. The Robens Report dismissed the CBI's evidence and submissions.
  I want to give examples from Birmingham which demonstrate starkly why we need safety representative legislation as soon as possible. There are some firms

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  with very good safety records compared with the average. One is Joseph Lucas. It has a first-class record in industrial safety compared with the rest of the engineering industry. When one sees the things that can go wrong in a firm with such a good record, it shows how bad things are in other firms.
  In the Joseph Lucas annual report for 1976, the chairman said:
  "Health and Safety Committees have been established with both staff and manual union representatives and environmental health and safety engineers have been appointed at all our major plants. It is regretted that despite all efforts the annual analysis of reportable accidents showed a small increase in the number per 1,000 employees, but the overall record continues to be twice as good as the national average for the engineering industry."
  I accept that. But let me give the figures at Joseph Lucas for accidents involving amputations. In 1971 there were 21, in 1972 there were 13, and in 1975 there were 11. The figures are falling. These accidents, however, occurred in a firm which has a better record than the average, and it is to its credit that it publishes such information to its employees.
  The firm's report to its employees in 1975 said that its performance that year had not been as good as the previous year's. When, however, on 13th February, the shop stewards asked for the establishment of a health and safety library because, they said, they would need reference works and documents on important diseases and accidents so that they could study the remedies, they were told that the firm was waiting for the statute to be enacted and for the regulations to come into operation. Yet Joseph Lucas is a firm with a good safety record.
  The shop stewards asked for 22 books; they have got four. One of the books asked for was Kinnersly's. They have not got it yet. The firm told them that it would not stock the library with political works. It is a very good book. It stands out as being written in simple language about industrial hazards and how to combat them before they start.
  My right hon. Friend the Leader of the House referred to the book in 1974 when moving the Second Reading of the Health and Safety at Work etc. Bill. He said:
  "I believe that … the Robens Report and Patrick Kinnersly's book should be taken together since they make an excellent intro-
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  duction to the Bill."—[Official Report, 3rd April 1974; Vol. 871, c. 1289.]
  Yet Lucas tells its stewards that they cannot have the book because it is a political work. I hope that the firm gets its finger out and arranges for the library to be stocked instead of waiting for the regulations. Let the stewards continue to build on Lucas's very good safety record so that people such as myself will not be able to quote the bad attitude which goes with the good record. Attitudes are wrong. Employers who speak about "if" the regulations are introduced rather than when they are put into effect cast doubt on whether the Government intend to bring them into force.
  British Leyland has the remarkable record of appearing in court in Birmingham twice in one day last week. One of the cases was not reported, but stewards on courses at the Aston University Department of Hygiene saw the firm get fined £250 for not providing safe methods of work after a man had fingers amputated in a power press.
  Setters were allowed to work a press without guards because the flywheel could not be "barred over" as the bar would not fit into the hole in the flywheel, which was worn. The men used the "on/off" button to inch the arm down. One man worked the button and the other had his fingers and his head under the arm. One day the press stuck in the "on" position, down came the arm and off came the man's fingers. There were also accidents on two other adjoining presses.
  Such accidents could have been avoided if someone had checked the presses, the holes in the flywheel and so on. I admit that the setters were crazy to work in that way, but insufficient care and attention was paid to the matter. Four hundred notices have now been put around the Castle Bromwich works, and the holes have been repaired so that the bars will fit without slipping, but this is long after a man's fingers have been amputated. British Leyland was fined only £250, but even this was an improvement on the average a few years ago when, if a man lost a hand, the firm was fined only £50.
  In another court last Friday, British Leyland was fined £200 by the stipendiary magistrate after an accident at its Hay Hall Road factory at Tyseley when a lathe operator got his hand stuck

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  round a chuck while it was working. He lost a finger and part of his thumb. He had been clearing a swarf with a bar which got caught in the chuck. His gloved hand caught in the hook at the end of the bar and his hand was dragged round the chuck. The firm said that it did not know that the job was being done that way and that instructions had been given that a new system should be used. The thumb is an important part of the anatomy. It is as important as the big toe and is worth a great deal of cash in national insurance terms.
  As the largest motor company in the country, British Leyland should be littered with safety representative officers. A shop steward who has left to spend six months at the Aston University Hygiene Department has been given leave of absence, but it is unpaid. The man has a TOPS award from the Department of Employment. He is highly motivated, and I hope that the firm takes him back when he has finished his course.
  Our largest factories have a better safety record than the smaller backstreet plants, but this shows how bad the average is and how urgent it is to get statutory representatives who can raise issues without fear of victimisation, losing their job or promotion prospects or missing out on overtime because they are acting on behalf of their fellow workers to ensure that the maiming and killing stops. There is a cheap way of doing this; we should make sure that workers are allowed to police the places where they work.
  4.12 a.m.
  Dr. Oonagh McDonald: My hon. Friends have already referred to the costs of industrial injuries and accidents. The figures for recent years have been alarming. Benefits paid between April 1975 and March 1976 totalled £211 million and working days lost through industrial accidents and injuries between June 1974 and June 1975 totalled 15·3 million.
  But these figures do not begin to touch the real cost of industrial accidents, injuries and diseases to this country. I wish to illustrate this by looking at a case which has involved a number of my constituents—the dispute at the Isle of Grain power station.
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  The dispute began in June over a small issue when a number of laggers involved in construction work demanded protective clothing because they were working with asbestos. Their employers, Babcock and Wilcox, refused to supply the clothing. The men pressed for it and later the Factory Inspectorate upheld their claim and the company was obliged to provide free protective clothing.
  Because of that refusal, the men went on strike and were later dismissed. For the past six months, neither the employees of Babcock and Wilcox nor anyone else has been working on the site. Construction has been held up for more than six months.
  The cost of that to the Central Electricity Generating Board has been extremely high, as has been the cost to the employees. Since they were described as being involved in an industrial dispute, they received neither unemployment pay nor social security for the whole period. Yet their complaint was perfectly justified and was upheld by the Factory Inspectorate.
  What is extremely bothering about this dispute is that it means that work on the power station site has been stopped for many months. Work on constructing that site will probably not begin fully until the new year, when the site has eventually been made safe.
  It is difficult to estimate the cost of a dispute like that, but the dispute arose simply out of a desire of the men to be properly and rightfully protected in the course of their work. Had there been safety representatives and a safety committee the matter would have been discussed and no doubt peacefully and easily resolved.
  That is just one example. Obviously, many more cases must occur day by day, week by week, throughout the country. The time lost in discussion, strikes, bitterness and the souring of industrial relations all adds immensely to the cost of industrial production, and is perhaps one of the causes of our low rate of industrial productivity.
  It is important to bear in mind costs of this kind when we are faced with the estimates that we have been given by local authorities and some public sector employers for introducing this type of

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  legislation. The figure of £55 million per annum has been quoted. That figure might well have been plucked out of the air, because those who make the estimates have nothing on which to base them. There is, in fact, only one cost of health and safety at work which local authorities are in a position to assess, and that is simply the cost of accidents and diseases in terms of days lost through such accidents and diseases and the compensation that those authorities may have to pay out for them.
  It would be valuable to have an estimate of these costs to local authorities and public sector employers, but none hase been provided so far. Perhaps my hon. Friend will be able to provide such figures now or in the future.
  In an argument like this it is not enough just to weigh the most of accidents and diseases in monetary terms. We cannot estimate losses in human terms—in terms of bereavement, disablement, suffering and pain caused by some of the really vicious industrial diseases. We can no longer afford to regard the health and safety of workers as a kind of optional extra which, if employers in the private sector have sufficient profits or those in the public sector can find some money, can be provided by those employers if they choose. After all, it is not the employers' health and safety which are at risk; it is the health and safety of their employees.
  What we have to do is to insist that this legislation is properly implemented as soon as possible—that safety representatives and safety committees are set up—because there is another important aspect to this matter. It is not just a matter of protecting the worker; it is also a matter of involving the worker in the very process of production and work at his place of work. It is an important extension of the responsibility of workers at this time. It would provide a way of involving workers in the planning and production of their work—and after all, they, more than anyone else, would have an incentive to ensure that this work was safely and therefore efficiently carried out, because it would be their own lives and health that were at risk.
  When we consider what employers get away with—when the average fine for neglecting their employees' health and
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  safety is £95—we begin to wonder what the Government and society really value. How can we consider the case of a man whose life hase been wrecked by some kind of industrial disease, or who has lost a limb at work? How can we consider the case of the woman who has lost her husband or the man who has lost his wife, and say that negligence is worth only £95? That is to make a mockery of the value of human life. It is not just a question of imposing very low fines for this kind of negligence. It is also a question of ignoring the fact that no employers have been gaoled for this kind of negligence.
  If we find a man who is drunk when driving and who causes death or injury through that drunkenness, he is arrested and, if found guilty, he is imprisoned. Yet when an employer is negligent in a similar way he is not gaoled, even though this is possible under the Act. Instead, when it comes to the health and safety of so many workers throughout the country we tell employers that we shall only try to persuade them to consider the health and safety of workers properly, that we shall not impose this duty as an obligation with serious sanctions attached to it.
  Too much has been lost for too long in terms of life and limb. The time has come to put a stop to this sort of carnage at work and to make sure that the legislation on safety representatives and safety committees is introduced immediately. There can be no further excuses.
  4.22 a.m.
  The Under-Secretary of State for Employment (Mr. John Grant): My three hon. Friends the Members for Coventry, South-West (Mrs. Wise), for Birmingham, Perry Barr (Mr. Rooker) and for Thurrock (Dr. McDonald) have spoken this morning of their concern about the level of industrial accidents and diseases and the cost to the nation in terms of human suffering and the long-term social and economic damage of what is effectively an unnecessary by-product of industrial activity.
  My hon. Friend the Member for Perry Barr in particular catalogued some graphic and damning situations, to which I know he does not expect me to reply in detail this morning, but I shall make two brief points. He mentioned the position of Members of Parliament and their

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  health. One ought to say that those of us on the night shift at the moment do not think we are "lording it", although our conditions are rather better than those of most of the people that my hon. Friend was talking about.
  My hon. Friend mentioned the question of fines for industrial safety offences. The Criminal Law Bill will raise the maximum fines substantially, from £400 to £1,000, with some possibility of inflation-proofing. Of course, it is really up to the magistrates to use these fines appropriately. The evidence suggests that they have not always done so in the past.
  Mrs. Wise: On that point, no doubt my hon. Friend is aware that conviction on indictment at present carries an unlimited fine, yet the maximum fine so far imposed is still £400.
  Mr. Grant: I can only hope that, now that the maximum level is to be raised substantially, magistrates will impose what I frequently feel, and what I am sure my hon. Friends feel, would be more appropriate fines in these very grave situations.
  All three of my hon. Friends referred to the inadequacy of statistical information on accidents and occupational diseases and the difficulty of making reliable estimates of the true costs. Their general concern about the whole situation has been coupled with expressions of deep distaste at the Government's decision not to bring into force for the time being the Health and Safety Commission's proposed regulations, on safety representatives and safety committees.
  It has been suggested that we have allowed exaggerated estimates of the cost of introducing the regulations in the public sector to influence us unduly, that we have overlooked that the initial cost would in the longer term be outweighed by the benefits and economies from improvements in health and safety that would flow from the proposals, and that by our decision we have, in effect, undermined the intent and purpose of the Health and Safety at Work etc. Act and so impeded progress towards the development of a healthier and safer working environment. I think that that sums up the main criticisms made by my hon.
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  Friends, and I shall do my best to answer them and explain the Government's attitude.
  First, I assure my hon. Friends and the House that the Government share their concern about the incidence and cost of industrial accidents and diseases. No one can rest content with a situation in which about 350,000 accidents, including 600 to 700 fatalities, are being reported annually to the various authorities responsible for enforcing our health and safety legislation, in which we are spending about £210 million a year on industrial injury benefit under our social security system, and in which we are losing over 15 million working days annually through incapacity.
  The true costs of industrial accidents and their consequent toll of death, injury and disablement are, as my hon. Friends have said, incalculable. One has only to think of the full costs of lost production. Here I take the point made my my hon. Friend the Member for Thurrock about the Isle of Grain and the effect on industrial relations. One has to weigh the costs of lost production and of replenishing the work force and replacing damaged plant and equipment, as well as the burden on the National Health Service.
  All these factors cannot be accurately calculated from the data we have available of the number of accidents and the incidence of occupational disease or from the volume of claims met annually through the Industrial Injuries Scheme or through compensation payments by the private insurance sector. My hon. Friend the Member for Perry Barr underlined that point, and he had obviously done some great homework in producing some formidable figures and evidence of his own.
  The Robens Committee on Health and Safety at Work had in evidence a good many estimates of total costs, ranging between £200 million and £900 million annually, and it drew attention to many of the problems involved in making any reliable estimate of the cost to the nation of occupational accidents and diseases.
  There are no easy solutions, but I should point out that action is being taken by the Health and Safety Commission with a view to improving our sources of

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  information about the number of accidents and our ability to measure and assess safety performance. Proposals for new regulations which will rationalise the existing arrangements for the reporting of accidents and extend the system to all sectors of employment are now under consideration in the light of the many comments received on the consultative document issued earlier this year.
  I turn now to the main issue and the nub of the argument advanced by my hon. Friends—that is, the desire of the trade unions to play a full part in developing and improving the standards of health and safety at work, and the importance which they attach to the Commission's proposed regulations on safety representatives and safety committees. I fully understand that desire. I share the trade unions' view, and I am well aware of the acute disappointment which has been caused by our decision not to bring the regulations into force for the time being.
  I understand the strong feelings on this subject, especially within the trade unions, and I recognise their concern for the social contract, of which they believe this to be an integral part. Also, I well know of the preparations which the trade unions have in many cases made for the introduction of the regulations.
  I assure my hon. Friends that the Government's decision was not taken lightly or without considering the longer-term benefits which should accrue from implementation of the regulations. If they had been implemented immediately, however, there would have been an increasing cost to employers at a time when the Government are reluctant to impose additional burdens on them. We have to be concerned also about the immediate cost to the local authorities, and the Government consider that it would be unreasonable to expect them to implement the regulations at a time when we are pressing them to cut expenditure in other sectors.
  Dr. McDonald: My hon. Friend has mentioned the Government's anxiety not to place further cost burdens on employers, yet two weeks ago we passed the National Insurance Surcharge Bill, which did precisely that.
  Mr. Grant: I take my hon. Friend's point, but it does not invalidate the case
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  for not putting still further burdens on employers at present.
  There have been suggestions that the cost estimates have been unrealistic. Some of the figures bandied about at the beginning of the whole debate on the matter—I do not mean this morning's debate—were hard to swallow. It is difficult to produce precise estimates. A good deal depends on the view of how active safety representatives and committees would be. We think, however, that the cost would be considerable, and, regretfully, we are having to restrict public expenditure in the interests of our short-term economic needs.
  Despite that, we are giving urgent further consideration to the whole issue in the light of the many representations. Since my right hon. Friend's announcement we have had discussions with the TUC and the Health and Safety Commission. I thought that my hon. Friend the Member for Coventry, South-West was very graceful in her reference to the CBI. In fairness, I should say that, whatever the CBI said about the matter in the past, it has made clear that it is in favour of full implementation of the regulations. The TUC and CBI representatives on the Commission have presented the Government with a united view on the issue. It is a Commission view, and it is to their mutual credit that they have been able to reach this agreement.
  There has been some suggestion that the regulations are too vague and open-ended in that they give representatives the power to inspect premises more often than the degree of danger might justify. It has also been suggested that we might initially confine the application of the regulations to those areas, such as factories, which are generally accepted to be the most dangerous. The Commission has told us that such regulations, which are intended to cover a great variety of situations, cannot be too precise and that it is preferable to provide a framework in which employers and workers can work out in joint consultation what arrangements are best for their circumstances.
  The Commission has pointed out, too, that dangerous processes are not confined to areas of employment which could be readily defined in regulations and that

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  difficulties could arise for employers and unions if the regulations covered some people in a particular workplace and not others. We have considered these aspects in our further consideration of the proposals. We must be mindful of the Commission's views.
  Mrs. Wise: Do the Government accept those views, which seem to be reasonable and correct?
  Mr. Grant: We are very mindful of the Commission's views. This is yet another matter that is very much under consideration within the context of our overall consideration of how we might move further on the issue.
  It has not been said too strongly this morning, but there have been suggestions that by the decision we are undermining the whole purpose of the Act, which extended the protection of health and safety legislation to about 8 million employees who were not previously covered and constituted a great step forward. I must refute those suggestions. The Government retain their determination to support the Commission in implementing and enforcing the provisions of the Act and the promotion of positive health and safety attitudes.
  Mr. Rooker: I hate to make a cheap party point, but the Act is a Tory Act. The only change we made after the February 1974 General Election was to put in the trade union and worker safety representatives and the statutory committees. We had the problem over the Liberal amendment, a matter which we did not win when we were not a majority Government but which we corrected in the Employment Protection Act. The present Act is basically the same as that published in January 1974. The Government cannot claim great credit for it because it was presented, without any disagreement, by the previous Conservative Government. We are asking for the injection of the Labour bit into the Act.
  Mr. Grant: I am conscious of that for which my hon. Friends are asking. Indeed, it is that with which I am endeavouring to deal. Even though we are determined to support the Commission in implementing the provisions of the Act, this does not mean that every set of legislative proposals that the Com-
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  mission puts forward has to be accepted in its entirety and implemented immediately. It has to be for the Government to decide in the whole of their legislative programme and commitments how and when such proposals should be implemented.
  We have to take a realistic if sometimes unpalatable view. In the present circumstances, in which we have an immediate need to restrict public expenditure to try to cut the rate of inflation and improve our general economic position, it is worth recognising, despite what my hon. Friend the Member for Perry Barr has just said, how much has been achieved by the Commission and the Executive. I shall spend a few brief moments analysing what has been done.
  First, I must mention the high priority that has been given to the establishment of a network of advisory committees to provide a focus for continuous discussion between the major interests involved and to make expert advice available to the Commission as well as securing the effective participation of employer organisations and the trade unions in the creation of safe systems of work. Already a number of committees have been established to advise on particular hazards across the whole spectrum of employment. Among them is the Advisory Committee on Major Hazards, the Advisory Committee on Asbestos and a new medical advisory committee.
  The Advisory Committee on Major Hazards has recently produced its first report, which deals with the control and siting of installations that could present a major threat to the safety of employees and the general public from explosion, a sudden release of toxic substances, or fire. The report's recommendations are now being considered by the Commission and comments on the proposals are being sought from a number of interested organisations. In addition, in a major effort towards developing positive attitudes from shop floor to senior management, the Commission is looking to the development of industry advisory committees, which have already been set up in agriculture and in the nuclear sector. It is intended to extend the committees to a further 20 major industries.
  Perhaps I should mention some other advancements. There are proposals for regulations and codes of practice on a

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  variety of subjects, including the packaging and labelling of dangerous substances, measures to reduce the exposure of employed persons to noise, controls over projects including, for example, research into the measurement and control of respirable dust, the prevention of explosions and the protection of workpeople against injury from moving machinery. All these matters are under way and various pilot studies are in progress to identify new and different problems to be faced in various sectors of employment not previously covered by legislation, such as hospitals, education, health services, water supply, local authority and leisure activities.
  There is plenty going on at the moment, including the planned increase of the Factory Inspectorate, which is going ahead according to schedule. There is a great deal to do apart from the establishment of safety representatives and safety committees.
  We accept unequivocally the desirability of making the regulations so soon as possible. As I have said, we are already examining further possibilities and further ways of doing so. Despite the inescapable public spending constraints, that remains a live issue on which final decisions have yet to be made. We shall take careful note of what my hon. Friends have said today.
  My hon. Friend the Member for Coventry, South-West said that some shop stewards have been saying to her that it is a question no longer of "when" but "if", but it is still the case that the question is not "if" but "when". I hope that the further consideration which we are urgently giving will find a reasonable and sensible way of resolving the problem.

  NUCLEAR POWER
  4.39 a.m.
  Mr. Nigel Forman: I rise at this rather early hour to discuss Class IV, Vote 6, of the Civil Vote on Account, which makes provision for £122 million to be spent on nuclear energy in 1976–77 and for £55 million required on account for 1977–78.
  As there are in themselves considerable sums of money but are in fact small beer compared with the huge sums already
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  spent and projected to be spent on nuclear energy in the United Kingdom, I believe it is right for the House to pause at this stage and ask itself a few key questions about the future of nuclear power in the United Kingdom. I believe that we should try to formulate sensible answers to some of these questions before proceeding further.
  The key questions on which I should like to focus are these. First, is the further development of nuclear power in the United Kingdom inevitable? Secondly, if so what size and shape should that programme be? Thirdly, what would be the likely consequences of such a programme in all the various aspects that that involves? Fourthly, what would be the impact upon the environment of such a programme? I know that some of my hon. Friends, particularly my hon. Friends the Members for East Grinstead (Mr. Johnson Smith) and for Derbyshire, South-East (Mr. Rost), wish to catch your eye, Mr. Deputy Speaker, and therefore I shall not be dealing with that aspect in any great detail.
  Fifthly, what are the wider implications of such a nuclear programme? I am thinking here particularly of the implications as regards nuclear proliferation which I regard as a key issue. Finally, what are some of the ethical considerations involved? We should not overlook the fact that there is a strong ethical dimension to this whole debate.
  The United Kingdom is in the fortunate position of being what is known as a four-fuel economy. By that I refer to coal, oil, gas and nuclear power. However, as our recoverable stocks of oil and gas are definitely finite, a consensus has emerged to the effect that this country will be faced with an energy gap towards the end of this century which, it is said, can be bridged only by the extensive further development of nuclear power.
  Everyone from the Secretary of State for Energy downwards, including the Under-Secretary—the hon. Member for Midlothian (Mr. Eadie)—who has kindly turned out at this hour to reply to this debate, foresees that the energy equation by the year 2000 or so will rest upon the tripod of coal, nuclear energy and conservation. The debate so far has been concerned largely with trying to strike the correct balance between those three.

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  Whichever way we look at the equation, the nuclear industry has been able to argue that the further development of nuclear power in Britain is both necessary and inevitable. I would not dispute that. Nor, I believe, would the British Gas Corporation, which was the only notable witness at the National Energy Conference last July to cast doubt on the now conventional wisdom that an energy gap will materialise at some stage in the future.
  Hon. Members will recall that the Corporation, in a paper it submitted to the National Energy Conference, made the following statement, which was notable for its disagreement with virtually everybody else at the conference:
  "Discussions of energy supplies over the next 25 years are tending to take as axiomatic an energy shortage in the United Kingdom in the 1990s. Statements in the discussion at the Church House meeting of February 26th, 1976 by several speakers appeared to accept, almost without question, an 'energy gap' at that period.
  In the view of British Gas, such an assumption is very much open to question; certainly we would all be most unwise to allow energy policy decisions which have to be taken over the next few years to be determined by such an uncertain premise."
  The more interesting question to attempt to answer is my second one, namely, on the assumption that the further development of nuclear power in the United Kingdom is inevitable, what size and shape should our programme take?
  In one of its documents for the National Energy Conference in July, the Department of Energy forecast that the contribution from nuclear and hydro, which it lumped together, would increase from its present level of some 13 million tons of coal equivalent in 1975 to 25 million tons of coal equivalent in 1980, 30 million tons of coal equivalent in 1985 and a bracket of 40 million to 55 million tons of coal equivalent in 1990. Beyond that, things were thought to be too murky to predict.
  The Department's forecasters also had the good sense and the good grace to enter, in paragraph 26 of their submission, the following caveat, that
  "The foregoing figuring and analysis covers a period of only about 15 years from the present day. It is thus heavily conditioned by existing patterns of production and consumption and by fairly well established past relationships between energy and other econo-
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  mic and technological considerations. Analysis related to the projection of past trends can provide a reliable framework for the consideration of energy policy for only a limited period ahead, and in the longer term the patterns of the past become less of an influence, their relationships weaken and the wedge of uncertainty widens."
  That is an appropriate choice of words, I think—
  "the wedge of uncertainty widens".
  Indeed, in my view even the United Kingdom Atomic Energy Authority has become somewhat more realistic as the passage of time, the criticism of its previous forecasts and the light of common sense all begin to break through.
  In his most recent public pronouncement on this aspect of the subject, Sir John Hill, Chairman of the UKAEA, wrote in The Times on 26th November 1976:
  "The probable nuclear programme, particularly in view of the high energy prices now ruling and the sustained depression which this country is experiencing, is likely to be much smaller"—
  that is to say, smaller than the previous reference programme submitted to the Flowers Commission in 1974–75.
  "No 'massive increases' in our nuclear programme are contemplated at the present time."
  Well might he have said that, and I regard it as at least an improvement on the wild negotiating bid put in by the UKAEA at the time when it submitted its reference programme to the Flowers Commission, when it was apparently advocating 104 gigawatts of nuclear capacity by the year 2000 and no less than 426 gigawatts by the year 2030, of which no less than 370 gigawatts would have been fast reactor capacity.
  My first conclusion is that the total nuclear programme for which we plan ahead need not and should not be anything like as large as that for which the UKAEA originally bid in the immediate panic atmosphere engendered by the oil crisis more than two years ago. But that still leaves a legitimate and important debate about the shape of the planned nuclear programme. The UKAEA would like to see an early decision taken by the Government to build the first demonstration commercial size fast reactor—the so-called CFRI—since it sees this as a vital stepping-stone to an eventual pattern of nuclear power generation based increasingly on fast reactors.

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  That is undoubtedly one of the reasons why the Authority is so keen to press ahead with its plans to extend its reprocessing facilities at Windscale, particularly the mixed oxide plant, which is projected to be able to handle some 1,000 tons of throughput—far in excess of the total foreign business which British Nuclear Fuels Limited is likely to be able to secure in this sensitive and dubious field.
  We also gather that, following the so-called Marshall Report on the safety of PWR pressure vessels, the United Kingdom Atomic Energy Authority is keen to reopen the Government's 1974 decision to proceed with 4,000 megawatts of SGHWR capacity and is veering back to its earlier position of favouring the building of PWRs under licence, or is veering towards a new readiness to consider a modest programme of AGRs. These have proved their advantage in terms of cost of operation and are beginning to look more hopeful.
  Our future thermal reactor programme is shrouded in such uncertainty that the AEA is inclined to adopt a "double or quits" attitude by focusing all its pressure on the need for the CFR1 decision and the associated question of reprocessing mixed oxide at Windscale. This suggests that we could be approaching a turning point in the development of Britain's nuclear power programme.
  It is doubly important at a time of scarce resources and growing doubts about the AEA's previous advice to the Government, and the virtually stagnant electricity demand, that the Government should take their time and give themselves the maximum chance of taking the best available decision in the circumstances. The Government have the unenviable task of balancing a number of important factors to establish their decision as the best one available.
  The first interest which must be taken into account, but not necessarily the most important, is the power plant manufacturing industry, on which the Central Policy Review Staff published an interesting report. Paragraph 29 of the summary and conclusions at the beginning of that document states:
  "It is undeniable that the measure which will help in the longer term is a contractual
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  commitment to a firm and steady ordering programme in the years ahead."
  It is precisely that firm prospect of a contractual commitment which is not currently available to the four large firms which are principally involved in this sector in the United Kingdom. It makes no economic or social sense to order generating plant far in excess of likely future requirements, because this country's requirements for electricity, from any source, have been consistently overestimated since 1965—long before the oil crisis.
  I do not believe that we should make nuclear ordering policy in any way dependent on the need, however pressing, to keep our over-large and under-rationalised power plant manufacturing industry in exactly the same shape as that to which it has become accustomed.
  The next clearly identifiable interest is that of the UKAEA itself—the institution which is now in the driving seat. Even if its latest recommendations led the Government to steer an erratic and non-profitcise direction the nuclear industry should established and powerful institution, backed by a mystique of professional expertise which is not readily available to poor lay politicians, like myself, who have to make value judgments and assist in taking decisions which establish how far down the nuclear road and in which pre-able course in recent years, it is a well-be allowed to take us.
  In essence, the current argument of the UKAEA is that we have a successful thermal reactor programme which could now be judiciously expanded by further limited ordering of AGRs or PWRs, but that if we are to safeguard "civilisation as we know it", once the energy gap sets in towards the turn of the century, the Government must make a firm commitment to the fast reactor programme in the shape of the CFR 1 and the reprocessing technology which goes with it. My response to that is to say that the need for nuclear-generated electricty on the scale envisaged by the UKAEA is not proven, that the cost of such electricity as provided by fast breeders is more than the country can afford—on its own at least—and that the environmental and social risks raise doubts about whether the game is worth the candle.

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  I shall deal first with the question of need. Since 1965 the rate of growth of United Kingdom electricity demand has been consistently below the forecast and there is a substantial over-capacity of about 40 per cent., if one includes the usual spinning reserve of 20 per cent. Because the stations ordered in the late 1960s and early 1970s are still under construction, it is estimated on the same basis that there will be about 55 per cent. surplus capacity by 1980. If that comes about, it will produce the kind of situation which I more usually associate with the Soviet Union where some production targets have been so far out that the authorities might as well have done their planning with a roulette wheel. The nuclear industry and the miners must realise that there is such a thing as electricity saturation which may well arise sooner than anyone thought possible.
  If further evidence were needed, I can do no better than quote from paragraph 7 of Chapter I of the recent CPRS Report which states:
  "The United Kingdom generating boards consider that no additional generating capacity will be required in this country until 1985 or 1986, assuming a 3 per cent. growth in GDP and the associated growth in electricity demand."
  The significant point is not so much the forecast itself as the heroic assumptions on which it is based. Are we likely to achieve a 3 per cent. annual growth rate over the years to 1985? If we do, what incontrovertible evidence is there that the relationship between economic growth and electricity demand will remain as it was? It is always possible that we shall see a higher ratio of electricity demand to economic growth than in the past. Anything is possible, but since past assumptions are based on a period in our history when "we never had it so good" and the domestic consumer market appeared to thrive, I assume that the ratio is more likely to be adjusted downwards, which means less demand for electricity.
  As Harford Thomas said in a recent article in The Guardian:
  "Translated into human terms it is fundamentally simple: enough is enough."
  I turn to the cost issue. Britain is now a comparatively impoverished country and there is little evidence that North Sea oil will or should much change
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  our basic situation. We already have too much overseas debt to pay off and such extra wealth as the oil does generate will need to be put into the balance of payments and industrial investment. In such a situation I contend that even if it could be demonstrated that we need more and more nuclear electricity, we can no longer afford it unless we allow it to eat up all our scarce resources like a fearful institutional tape worm.
  The total cost of our ill-fated AGR technology is estimated at £2,000 million so far, with more to come. No one knows what the development of commercial fast breeders would eventually cost. We know that the development of the prototype fast breeder is already costing some £50 million a year in research and development alone. That is in the Government's recent little document "Report on Research and development—1975–76." We also know that the best estimates of the cost of CFR1 have a margin of error of some 100 per cent. for the future, ranging from £1,000 million to £2,000 million, depending on the accounting assumptions made. We know that the capital costs of the fast breeder are about 77 per cent. of the total, whereas fuel cycle costs are only 18 per cent., so that the acknowledged high uranium efficiency of fast breeder reactors does not necessarily mean that they would be economic as compared with thermal reactors.
  Furthermore, the costs of introducing new reactor systems have invariably turned out to be substantially higher than originally forecast, and the real capital costs of nuclear power have risen steeply. For example, according to a recent study by the West German Government, the cost per kilowatt of the German 300 MW fast breeder prototype will be several times greater than that of a standard light water reactor. Other studies have indicated that fast breeders would be economic only if their capital costs were no more than 15 per cent. to 20 per cent. higher than those of light water reactors. That seems unlikely to me, if not totally improbable.
  I am afraid that the suspicion must remain that since it would probably be the biggest civilian technology project ever undertaken in the United Kingdom, CFR1 is something that this nation cannot and ought not to afford. If we must

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  go down the fast reactor road, it would be much better to stretch the existing design of the protoype reactor to, say, 350 MW, assuming that subsequent events prove that there is no possible alternative, and then to instal a cluster of such reactors on one or two remote sites, together with their own reprocessing complexes.
  However, my broad conclusion remains—namely, that we ought not to allow this particular cuckoo to claim such a disproportionate share of the food that is brought into the nest.
  Finally, I turn to the environmental and social side. At this point I should like to put down a marker and ask the Minister whether he can give any indications as to what progress has been made with the questions, to which I personally attach quite a lot of importance, which I and some others put to the Nuclear Inspectorate some months ago, and to which I am still confidently expecting answers in the near future. The environmental and social risks are aspects that have been graphically portrayed, as hon. Members will know, in both the Flowers Report, with which we are all familiar, and the First Report of the Fox Commission in Australia, on the Ranger Uranium Environmental Inquiry, which is perhaps less well known to my colleagues but which, none the less, I commend to the House.
  In many ways, for responsible politicians these environmental and social risks ought to be deemed the most crucial considerations of all. The attitude of the nuclear industry, on the one hand, was typified by Sir John Hill in his famous, or even notorious, recent article in The Times, when he wrote,
  "We could not run today's programme on 1950 technology. I am convinced that the technology of the year 2000 will be satisfactory for the programme of the year 2000."
  In other words, no matter what the problems, technology will find a way. That, I believe, is a statement of faith, not a statement of fact, and I should like to draw attention to it for what it is worth.
  On the other hand, Sir Brian Flowers, in his recent memorable lecture at the British Nuclear Energy Society, said,
  "The crucial long-term issues are on the one hand the competition between nuclear energy and coal, and on the other hand between both and renewable resources; and also between high electricity and therefore high heat-
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  waste, on the one hand, and vigorous conservation measures on the other."
  These are the real environmental and social issues on which we can make choices and on which we politicians are uniquely placed to deliberate and to decide. Whereas the nuclear priesthood would have us leave everything to the specially equipped initiates behind the altar screen, I say that Sir Brian Flowers and the Fox Commission have got it right in their quiet but insistent demands that these issues be aired, and once aired be decided, after full public debate, by the duly elected repesentatives of the people.
  I shall not at this late—or early—hour rehearse all the many important environmental and social issues which are raised by the further development of nuclear power. Suffice it to say that ordinary people in my constituency and elsewhere—I know this from my post bag—are worried by the problems of nuclear waste, and I know that my hon. Friends will say more about that. Ordinary people are worried by the threat of nuclear terrorism and, if they stop to consider the question at all, they must be worried by the prospect of further nuclear proliferation.
  It would be irresponsible to take irreversible decisions about the next stage of nuclear development unless and until we have a fool-proof and publicly acceptable way of dealing with the problems of nuclear waste, as my hon. Friend the Member for East Grinstead will no doubt point out if he catches the eye of the Chair. It would be shortsighted in the extreme to embark upon a programme of nuclear development which required much of the paraphernalia of a police State to guard society adequately against the threat of nuclear terrorism. And it would be the very reverse of statesmanlike or responsible conduct for this Government, or any of their successors, to embark consciously on a nuclear policy which tried to maintain the pretence that there is a natural fire-break between the so-called peaceful and so-called military uses of nuclear energy, when every responsible nuclear scientist knows that there can be no such divide.
  Today there are at least 19 countries operating nuclear power stations, including such countries as India and Pakistan. There are at least another seven countries with reactors under construction, including such as Brazil and Taiwan. There

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  are at least six more countries with power stations on order, including such as Iran and Yugoslavia. I ask the House to ponder some of the countries that I have chosen and the reasons why I shall not embarrass any country by saying why I pick it out. The nuclear genie is out of the bottle and the only important question is the extent to which the major nuclear suppliers can delay or control its fearful progress.
  More dangerous than reactor development, there are now at least five countries with nuclear enrichment capacity—the USA, the United Kingdom, France, the Soviet Union and China—and there is a real likelihood that Iran, Brazil and South Africa will join this select band before too long. Further, there are at least five developed countries with the capability, or the ambition to have a capability, to operate reprocessing plants—the USA, the United Kingdom, France, West Germany and Japan—and there is the distinct danger that this lethal technology will spread to Brazil and Pakistan, unless steps can be taken at the highest international level to undo the damage already done by cut-throat commercial competition with its ruthless disregard for the lone-term survival chances of mankind—and I put it no lower than that.
  All this adds up to a disturbing picture of a world drunk on the prospect of nuclear power and desperate for a slice of the Faustian bargain so thoughtlessly entered into by the Americans, the British and the Canadians more than 30 years ago. As I wrote in a letter to The Times, I believe that this country could get by with a more modest nuclear effort, consisting of an extended life for our existing Magnox reactors, incremented with a limited programme of one of the more modern thermal reactors, depending on the outcome of the current review. Of course, in the longer term our energy options in a sane society could be much more varied and benign than those suggested by the nuclear industry's alarming and unsatisfactory dichotomy between their preferred course of action and "the end of civilisation as we know it".
  We could begin to implement a really serious programme of energy conservation—and on this I pay tribute to my hon. Friend the Member for Derby, South-East for his work—based upon significant further price rises coupled with wide-
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  spread design changes in buildings, factories and modes of transport. This would probably save at least as much delivered energy each year as our current nuclear programme now produces.
  We could and should rapidly scale up our investment in the more promising alternative energy sources, such as solar, wind, wave and tidal power. There should not still be a differential of some 100 times between the amount of money spent on nuclear research and development and what is spent on alternative sources. We must get the balance right. Equally, we should press ahead boldly with nuclear fusion, which may not have nearly as many environmental disadvantages as fission. One of our laments on this side of the House, judging by what we have learnt from Press reports, is with regard to nuclear fusion. Can the Minister throw light on the situation, which is causing considerable concern on both sides of the House and to the skilled scientists whose future depends so much on the viability of the JET project?
  All these things are possible, but I hope that the House will forgive me if I conclude by returning to a few of the ethical issues which I believe to be at the root of this whole debate and put a few questions upon which we politicians should focus our minds. I put them in the form of simple questions.
  Can we justify to our complete satisfaction taking decisions which, being effectively irreversible, will influence the state of the world as far ahead as the human mind can see, and well beyond? Certainly a generation which attempted to take such decisions without exhaustive thought about all the consequences would stand convicted of a peculiarly wicked selfishness and shortsightedness—that is, if there were succeeding generations around to convict us.
  Can we justify pressing ahead with nuclear power without heeding the Swedish scientist Hannes Alfven's warning that
  "if a problem is too difficult to solve, one cannot claim that it is solved by pointing to all the efforts made to solve it."
  That is worth pondering.
  Can we justify passing on to subsequent generations a pattern of electricity power generation which decisively influences our social priorities, pre-empts a disproportionate share of our economic resources,

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  and increases the ever-present risks of nuclear war? I do not think we can, and that is why I urge the House and the country to think again before it is too late.
  5.13 a.m.
  Mr. Hector Monro: I congratulate my hon. Friend the Member for Carshalton (Mr. Forman) on his excellent speech and on initiating the debate, which I welcome. This is not the hour at which to start off on a major debate about nuclear energy when the House has been crying out for long enough for a debate in relation to the Royal Commission report. Nevertheless, we have to seize every opportunity.
  I recall speaking in the debate in 1974 when we discussed in some detail the future power programme, and again more recently in the debate on the Address, because, they gave me an opportunity to turn attention to some of the issues relevant to my constituency. These pressures have developed during the summer following the announcement by the Secretary of State for Defence in April that there would be a tritium plan at the atomic energy site at Chapelcross—an announcement that he would not have made had he thought that nuclear weapons were not going to be continued in three and a half years' time.
  I welcome the announcement of the new plant and reaffirm my belief that the Magnox plant at Chapelcross is most important for my constituency. The Magnox system has been proved to be safe and there is nothing secret, sinister or new about tritium. One group in my constituency has said that I have taken up an ambiguous position on nuclear power. Nothing could be further from the truth. I have been absolutely consistent and I made my position clear at an open meeting in Annan this summer, arranged by the district council and attended by representatives of British Nuclear Fuels, the Atomic Energy Authority, the Nuclear Installations Inspectorate and the Scottish Development Department. All were available to answer questions and to give any requisite explanations about nuclear power.
  I accept that the Magnox generating station at Chapelcross should continue. There has been no difficulty so far about
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  waste at Windscale. I do not accept in that statement the recent seepage, which has been clarified by the detailed statement by British Nuclear Fuels. Second, I accept the tritium plant, always believing that the indication of costs has been greatly exaggerated and also realising that at some time in the future the tritium produced may be used commercially as well as for defence. Third, in the general field, which is important in relation to operations at Chapelcross, I accept the nuclear deterrent in my insistence that Governments since the war, of both parties, have followed the right policy, that peace is more certain to be maintained with a nuclear deterrent available to our Armed Forces. Those who are opposed to the nuclear deterrent on moral grounds should say so and not hide those objections behind a smokescreen about environmental pollution, which is another matter.
  I want electricity generated by nuclear power, I want defence on the present basis, and I want the 500 or 600 jobs which are provided at Chapelcross. Safety precautions are of an exceptionally high standard and those who work there take them more seriously than anyone else. Accidents in Britain have been a remote possibility.
  We now have a new situation, covered in Chapter 8 of the Report of the Royal Commission, in relation to waste disposal and the announcement by the AEA that members of its staff have been prospecting for sites for disposal in the relatively distant future. I believe that a decision is several years away. It is therefore right to spend a few months ascertaining the facts, but I hope that the Minister will be able to give us further information.
  I understand the wave of emotion in South-West Scotland and other areas, although I certainly would not use the emotive language about a nuclear dustbin which some have used. But it is essential to have as much information as possible on which to form a judgment. To this end, I asked for assurances when I spoke in the debate on the Queen's Speech. The Minister of State, Scottish Office said that he would write to me and I am grateful for the letter which I have just received from him. As it is crucial to this issue, I will quote the gist of his reply.

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  The Minister wrote:
  "Your remarks about Chapelcross were most welcome and I am glad that you took the opportunity to reaffirm your support for the construction of the tritium plant. I am satisfied that the plant, which will provide much needed new jobs in the South West, can be operated safely under the stringent inspection procedures applied by the Nuclear Installations Inspectorate.
  You asked specifically for an assurance about consultations on proposals for the disposal of radioactive wastes. The Atomic Energy Authority is undertaking a preliminary research programme to investigate geological strata which might be suitable for the disposal of long-lived radioactive wastes resulting from the reprocessing of irradiated fuel and, as you know, crystalline and hard sedimentary rocks in the Southern Uplands are being studied as part of this programme. No decision to begin preliminary test drilling will be taken before public announcements have been made and the consultations with local authorities have been undertaken. The authorisation of the Secretary of State is required before any disposal of radioactive waste can be made and the construction of a disposal facility would require planning permission. I can, therefore, give you an absolute assurance that there will be ample opportunity for public discussion before any decision to authorise the disposal of radioactive waste in Scotland is taken."
  I am pleased that he took the trouble to send me that detailed reply so quickly and I hope that it will go some way to allay the fears of people in Scotland, because it applies to the whole of Scotland, and not just to the South-West.
  As for consultations with local authorities, many of us realise that the site mentioned by the AEA near Loch Doon is in the Strathclyde Region and that there would need be cross-border consultations, as it is likely to affect Dumfries and Galloway more than the larger region.
  I will not go into further detail about the power programme, which my hon. Friend has outlined with great clarity, dealing with the forecasts of requirements towards the end of the century. I believe and hope that the Magnox stations will continue to run certainly into that period, assisted by the AGRs. I agree that we must proceed with the SGHWRs we talked about in 1974 in such detail only if there is a clear requirement for their construction, on grounds of cost or power.
  The crucial decision will be made only after careful consideration by the Secretaries of State for Scotland, the Environment, Energy and Defence. Those four
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  Ministries must have exceptional expertise not only on safety factors, which must be paramount, but also on environmental issues. Before a final decision is taken, I am sure that the House will want to debate the issue in the greatest detail.
  I accept that some of my constituents view the whole nuclear programme with the greatest horror, but I believe that they exaggerate the likelihood of an accident. The Magnox and later tritium plants at Chapelcross have not been and should not be dangerous to the environment. However, none of us can give an absolute assurance that an accident will never happen.
  So far as I know, waste from Chapel-cross is at the moment no problem at Windscale. But if we are to have new sources of supply—as may well be the case, as suggested by my hon. Friend—and there is additional waste to be disposed of, it will create a new situation. Then we shall require the provision of all the facts, in the greatest detail, in order that we can discuss them in the House.
  Tonight I await with great interest the Minister's reply. I hope that he will continue in the helpful fashion shown by him and by the letter from the Minister of State, Scottish Office, and that his reply will go further towards allaying the fears of my constituents and the large number of tourists who come each year to this attractive part of South-West Scotland.
  I hope that the Minister will be able to give a great deal more information than we have at present, including, perhaps, the time scale in respect of the decisions and actions that are likely to be taken. On what the hon. Gentleman says tonight will depend to a great extent the degree to which this problem continues—the problem of the emotional approach to this subject, which is arousing so much attention in Scotland at the present time.
  5.26 a.m.
  Mr. Donald Stewart: Like the hon. Member for Dumfries (Mr. Monro) I thank the hon. Member for Carshalton (Mr. Forman) for initiating the debate. This is a subject which we are in danger of sweeping under the carpet. I cannot follow the hon. Member's

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  remarks in detail, because I do not have the mass of information and figures which he presented to the House. I simply wish to make two general points.
  The question of the use of nuclear power as a principle is something to which the House has given only cursory attention. It may be—I do not accept it, personally—that at the end of the day we shall have no alternative to nuclear power installations, owing to the disappearance of fossil fuels, although the discovery of oil fields and new coal fields at this time should put that decision a considerable way into the future. There are also sources of solar power and wave power, which are in an elementary stage at present.
  It appears to me that, in the typical fashion of this country, we are bumbling into something without any serious consideration beforehand. There will probably be second thoughts, as with Concorde, when it is too late to call the whole thing off.
  According to information that I have been able to gather, nuclear power stations have a finite life of approximately 30 years. They cannot be dismantled; they will be buried in concrete—monuments to the foolishness of man for future generations. We are the inheritors of the foresight and provision made by previous generations. Are we to hand on to those coming after us a landscape dotted with these insane monuments? Surely it is time to stop this Gadarene swine advance.
  This brings me to the question of the disposal of radioactive wastes. It has recently been announced that surveys have been made in the Western Isles, Galloway and other parts of the United Kingdom for suitable sites to bury such wastes. It is the height of obscenity to bury them in such areas. Windscale at least has some employment from its nuclear installation. My constituency in the Western Isles—one of the areas under consideration—would have the danger and pollution with any of the employment—although I would not even want the employment. If, as has been reported, we are to do this work for the Japanese and others, it is a degradation of this country that is scarcely credible.
  In my constituency in the Western Isles we live in the face of many
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  obstacles, such as the highest cost of living in the United Kingdom, the highest cost of transport, the greatest level of emigration, and so on. The "abominable no-men" of the Scottish Office react with indifference to suggestions that might make life easier or somewhere nearer parity with the rest of the United Kingdom, but when they have to find a new dumping ground for dangerous material they seek to dump it on us. The people of the Western Isles and the rest of Scotland are fully aware of the insult of such a suggestion.
  I am not as sure as the hon. Member for Dumfries (Mr. Monro) that, if we receive various assurances from the various ministries he mentioned, we should give our approval. We know that they will give us the assurances.
  Mr. Monro: I should not like to be on record as being as forthright as that. I said that we could not come to a decision until we had received all the assurances, and if the balance of evidence is against the storage of nuclear wastes in the south-west of Scotland, I shall fight it tooth and nail.
  Mr. Stewart: I apologise if I pitched the hon. Gentleman's argument higher than he intended it to go.
  Most people are aware that there is some evidence that an appalling disaster took place in Russia as a result of an installation or the burial of radioactive waste. The disaster caused heavy loss of life and devastated an area for the foreseeable future. I say on behalf of my constituents that they will never approve of this. If it is tried it will meet bitter and determined resistance. I await the Minister's reply with interest.
  5.32 a.m.
  Mr. Geoffrey Johnson Smith: I do not want to sound churlish, particularly as there are two Ministers on the Government Front Bench, for which we are grateful, but I agree with my hon. Friend the Member for Dumfries (Mr. Monro) when he says that this is an appalling hour at which to have a debate on this subject. The only way in which we could have a debate was for my hon. Friends the Members for Carshalton (Mr. Forman) and Derbyshire, South-East (Mr. Rost)

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  —both Englishmen, though one is beginning to wonder to what extent this is once more a Scottish debate—to raise the matter. The Leader of the House should be asked to arrange a debate on this subject in Government time, at a more civilised hour, and at an hour calculated to arouse much greater public interest, and to give, one hopes, more education. It is disgraceful that, although the House debates so many other things of a comparatively trivial nature, it has to be through our own initiative in choosing a subject on the Consolidated Fund Bill that we can have a debate on this monumentally important subject.
  I declare an interest, not in the nuclear field but as a director at the British end of an American company which manufactures and sells a machine that helps to conserve power. I think it was my hon. Friend the Member for Carshalton who pointed out that the conservation of energy has an important part to play in the whole question of the timing of any future energy policy based on nuclear power. Indeed it does, and from my knowledge of fuel conservation I would say that we have not yet begun to touch the subject in this country.
  It is not my purpose to publicise the activities of the company with which I am involved. I want to confine my remarks mainly to the question of radioactive waste. It always seems to me that so many of us, when we consider the problem of nuclear energy, are faced with an either/or argument—with two stark alternatives, both of a Doomsday nature. There are those who say that if we travel some way down the nuclear road we shall end up by blowing ourselves up. Others say that if we do not embrace nclear technology we shall travel down the road to slow starvation, to a life depicted by the BBC in "The Survivors" programme, and it will be back to the caves for us. Certainly disruption of normal civilised life as we know it would be our fate.
  I hope that somewhere between those two stark alternatives there is a more rational and realistic solution. But I am sure that we should be quite wrong to ignore the serious warnings which have already been referred to by my hon. Friend the Member for Carshalton in his excellent survey of the whole problem.
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  I begin by referring to what was said in the Flowers Report, the Sixth Report of the Royal Commission on Environmental Pollution, in paragraph 338:
  "… there should be no commitment to a large programme of nuclear fission power until it has been demonstrated beyond reasonable doubt that a method exists to ensure the safe containment of long-lived, highly radioactive waste for the indefinite future … We are clear that such a demonstration will require a substantial programme of research."
  Nothing that we have heard either in the debate this morning or on other occasions, it seems to me, can detract from the serious point there made. The report emphasises with devastating clarity the serious risk posed to civilisation by the creation of radioactive wastes which arise from nuclear fission.
  These wastes—hope that hon. Members will forgive me for going into this a little, but one is seeking through the debate to trail a line of thought for a wider audience—are nothing more nor less than cancer-producing substances which can remain dangerous to human, animal and plant life for thousands of years, or, some say, for hundreds of thousands of years. It is therefore essential, if we are not only to protect ourselves but to prevent needless and untold suffering for succeeding generations, that we devise measures designed to ensure the containment of these highly radioactive wastes.
  The Flowers Report is right to emphasise the immorality and irresponsibility of committing future generations to the consequences of fission power until it has been demonstrated beyond reasonable doubt that at least one method exists for the safe isolation of these wastes for the indefinite future. It is, therefore, disturbing to read in paragraph 391 the following words:
  "Neither the Atomic Energy Authority nor British Nuclear Fuels Limited in their submissions to us gave any indication that they regarded the search for a means of final disposal of highly active waste as at all pressing, and it appears that they have only recently taken firm steps towards seeking solutions. We think that quite inadequate attention has been given to this matter, and we find this the more surprising in view of the large nuclear programmes that both bodies envisage for the coming decades, which would give rise to much greater quantities of waste."
  To be fair to the organisations mentioned, they have subsequently started inquiry into methods which can, we hope, lead the

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  way to finding out just how they could dispose of these nuclear wastes. Nevertheless, in my view, the criticism sticks. It does not seem that adequate thought has been given to the matter.
  According to the report, it seems that there are at least two reasonable options for the permanent disposal of certain types of waste, certainly in a vitrified form, that is, by disposing of them in some large thick almost impenetrable formation on land or below the ocean bed. The hon. Member for Western Isles (Mr. Stewart), the Leader of the Scottish National Party, has said that neither he nor his constituents would be at all happy to have anything dumped into the ocean bed, so I join him in hoping that the Minister can give us a comment on that aspect of the problem.
  The Flowers Report tells us, however, that although both those methods would seem to point to a solution, we should need a substantial period of study and research. What action has already been taken? What is the Government's view on this aspect of the problem?
  On the lower levels and less-long-lived radioactivity, the report points to a lack of a clearly formulated policy for the disposal of intermediate-level solid waste at nuclear stations. It also says that a programme of research is required into the possible future effects of plutonium discharges to the sea from Windscale, and that the responsibility for waste management strategy should rest with the Secretary of State for Energy, backed by a national waste disposal corporation charged with responsibility for the safe disposal of all waste at national sites.
  On this matter, and others to do with safety, the report has much to say, in language which I found both reasoned and dispassionate. But it is easy to exaggerate the risk to our health and environment, and it is not my purpose to do that. Exposure of the British population to radiation from nuclear power is less than 1 per cent. of that from cosmic rays. It is comparable with radiation from luminous watches. The accident rate in the nuclear industry is not high, and its safety record is good. I can well understand why my hon. Friend the Member for Dumfries should seek to have more information on this point, not with a view to taking easy assurances
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  but with a view to being able to give assurance when he believes that the record justifies it.
  Chlorine is just as toxic as plutonium, but production is permitted, and we do not have people starting scares about chlorine every five minutes. As for the problem of waste, Sir John Hill, Chairman of the Atomic Energy Authority, is quoted as saying that it is
  "the biggest non-problem of the century".
  According to a report in, I think, The Guardian, he is much more worried about the prospect of handing down to his children an inheritance of a carbon monoxide polluted world, following massive use of fossil fuels, than one in which there are deposits of nuclear waste buried in obscure areas of this planet.
  What must puzzle many people is how two such highly-trained and intelligent men can disagree so profoundly. Sir John Hill seems to think that the fast breeder reactor is vital to our future. I believe that he has predicted that without it we shall face catastrophe—not just a drastic drop in our standard of living but a complete breakdown of civilisation as we know it. On the other hand, the Royal Commission, chaired by Sir Brian Flowers, reported that its anxiety about the hazards of an economy based on plutonium
  "leads us to the view that fast reactors should be introduced only if they are demonstrably essential".
  The Principal and Vice-Chancellor of the University of Strathclyde wrote in a letter to The Times on 1st October:
  "The recent Flowers Report has stimulated Lord Rothschild to an emotional outburst on the United Kingdom nuclear programme."
  He argued:
  "The breeder is an excellent plant for burning plutonium, the best use of the material. …The breeder could be the safest form of reactor."
  In the light of that type of comment and debate, it is no wonder there is public unease about the polarisation of views by those eminent men—unease about the nature of nuclear technology, unease possibly based on ignorance, but real enough, for, unlike the people of Sweden and the United States, the British people have not yet been exposed to the information that is available. There is also unease about the consequences of making the wrong decision.

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  When one adds to all these questions about safety and health the political, military and social dimensions—the threat of terrorist activity, the vulnerability of nuclear sites to conventional attacks in war, the demands for greater surveillance, leading to security measures at variance with civil liberties, the need for international collaboration and control over the proliferation of nuclear weapons—my inescapable conclusion is that the Secretary of State should do two things.
  First, the right hon. Gentleman should ask his right hon. Friend the Leader of the House for a full debate in the House at a proper time so that reports appear in the Press and that those who are associated with radio and television and who are now asleep should add to the publicity. He should also consider ways of informing the public of what is at stake. Secondly, he should refuse to be stampeded into taking an early decision.
  There are some other conclusions to be drawn but I offer them more tentatively. First, there is the energy gap prediction. I find such predictions notoriously unreliable. They are even more unreliable than long-term and mid-term economic forecasts, on which they are based to a large extent. Therefore, they are often doubly wrong, or have factors introduced into them that make them more likely to be inaccurate. They have that built-in unreliability from the start.
  Secondly, how sure are we that other forms of energy, such as solar power, wave and tidal power, together with better and more effective use of existing sources of conventional power, cannot give us rather more time than perhaps we once considered possible so that we can decide whether we must plan now or whether we have a little leeway in which to make up our minds about how far down the nuclear road we should go?
  Might we not, given realignment of our research efforts and a greater concentration of energy conservation programmes, find that the next step in the application of nuclear technology will turn out to be nuclear fusion, which eliminates the most dreaded dangers to our environment?
  Thirdly, I hope that the time spent analysing and sifting these issues will not be regarded as procrastination. I hope it will not be thought that we are running
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  away from the problem. But even if the Government decide in favour of the fast breeder reactor, there is—I do not believe we can escape this problem either—the question of cost. If it has to be faced, I cannot see how we can surmount it unless we do so in concert with our friends in the EEC.
  Fourthly, I hope that the Secretary of State will begin to consider the implementation of those parts of the Flowers Report which, it is generally agreed, will benefit the environment. The right hon. Gentleman has a daunting task. The report is probably the most significant that he or any other Minister has had to consider since the war. The decisions that must flow from it can have nothing but the most profound effects.
  As we know from our correspondence and what we have read and heard already, it is easy to take an emotional view on either side of the argument. All I ask is that we take a realistic view.
  5.48 a.m.
  Mr. Robin F. Cook: When I was a very much younger man my father firmly warned me against betting and lotteries. I am bound to say that my experience in every ballot and lottery in which I have taken part since coming to this place has amply borne out his words, not least the place that I received in this debate
  It might be for the convenience of the House, and not least for the convenience of my Front Bench colleagues, if I raise in this debate the matter that I had hoped to raise on its own in a later debate. It is a matter of high relevance to tonight's debate and a matter that has already been discussed by many of the Members now in the Chamber. I think that no reasonable objection can be taken if I speak on the same matter.
  Before doing so, I want to turn back to one of the comments made by the hon. Member for Dumfries (Mr. Monro), who said that he could not agree with some of the higher estimates of cost produced for the tritium plant at Chapel-cross. I think that he will agree that it is difficult to put up an accurate estimate of the cost for the plant when the Government refuse to make an estimate any more accurate than "a matter of several million pounds." In such a situation it

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  is not surprising that members of the public and Members of the House are encouraged to use their imagination in either direction as they may wish.
  I agree with the hon. Gentleman that it is difficult to make an environmental case against the proposed development at Chapelcross, precisely because it has been producing plutonium for 20 years, and in the light of that it is perhaps difficult to object to the production of tritium which is comparatively benign.
  The objection lies in its use in the nuclear deterrent. As the hon. Gentleman will be aware, on that matter we differ and I do not think that he sought to suggest that I have ever attempted to hide the fact that we differ on that issue. But that is another debate.
  I wish to concentrate my remarks on the points that have been raised by other hon. Members, particularly the hon. Member for the Western Isles, (Mr. Stewart), concerning the permanent disposal of radioactive waste. This is a narrower matter than the wider view taken by the hon. Member for Carshalton (Mr. Forman) in introducing the debate so ably, but it is nevertheless, although a narrow matter, one that is bound to give rise to concern, as I am sure my hon. Friend is aware. It has aroused concern particularly in areas where people have found that bore holes are to be dug at the bottom of their gardens in the Western Isles and Dumfriesshire.
  It is an irony that these areas should have been chosen for the disposal of radioactive waste. I share the doubts of the hon. Member for Carshalton about whether we shall need an expansion of the nuclear power programme or a substantially expanded electricity generation capacity, but, if we do need such expansion, it will be because of the demands of the industrial areas and not because of the demands of the communities in Galloway or the Western Isles. A new ethical dilemma is introduced when industrial communities contemplate taking the waste which arises from their activities and transporting it to other communities with a different life style. It is ironical that the Western Isles is the one corner of Britain that can be found where there is a large number of communities without electricity.
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  There may be sound geological reasons against burying the waste in the main square of Whitehaven or in Workington. Yet, it is just this solution of burying the waste on the site where it arises that the Germans are considering. They intend, if they can, to build their re-processing facility on the site which they identify for permanent disposal of the waste arising from the re-processing factory. They are at present only hopeful that they will be able to find such a site, as we are. Neither of us has yet successfully identified an absolutely cast-iron safe site for such an activity.
  However, in principle I should not object to the search—quite the reverse. I and others before me who have been sceptical about the need for nuclear power have urged on a number of occasions that the fact that it has not been established that there is one infallible way of disposing of the waste that will arise from the programme is one reason for exercising caution in the development of the nuclear programme.
  It is surely a matter of surprise that it is 20 years since we started generating electricity by nuclear power and that only now, 20 years later, are we getting round to looking at whether there is a safe way of disposing of the waste material. We all have our favourite passages in the Flowers Report. Some have been quoted already. I find this sentence striking:
  "It is strange in retrospect that a matter so important for the safe development of nuclear power should have been delayed for so long."
  It is, perhaps, not surprising that the task has been postponed for so long, because it is not an easy one. We are faced with the problem of disposing of fission products which will remain radioactive for several centuries during which time they will need to be infallibly separated from the environment and infallibly safeguarded. Looked at from the other end of the telescope, it is as if somebody during the Wars of the Roses had buried a dump of toxic material which only now was ceasing to be radioactive and could be released into the atmosphere.
  It is a daunting task. Quite apart from other considerations, it will demand the transmittance and transference of knowledge from one generation to the other on an unprecedented scale. When we remember that in London or in any of our major cities we have already lost sight of

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  where we buried the cables and drains of the previous century, it is difficult to envisage that we shall quite so easily transfer the knowledge about such a burial chamber over centuries and, indeed, over millennia.
  I find it a particularly graphic illustration of how long such a burial chamber would have to be in operation to be safe that one of the criteria applied in identifying a site is that it will be immune to change in the event of a future ice age.
  Faced with such a problem, it is perhaps not surprising that some of the solutions proposed are quite bizarre. It has been suggested that the waste could be put in a rocket and fired into the sun. That is a solution which is open to a large number of objections, not least the fact that it would be very extravagant in its use of energy in disposal of waste which arose from a process which was intended to increase the net production of energy.
  It has also been suggested that it might be put in the Antarctic ice cap and allowed to melt its way down to the bottom, but that, too, is open to the very obvious objection that it would be contrary to the Antarctic Treaty, which is one of the few achievements we have obtained from the process of multilateral disarmament of the past two decades.
  All in all, geological disposal appears the most likely bet, and in that context it is certainly sensible that we should see what is the most likely and appropriate site. But before we do so, the public, and in particular this House, are entitled to more information. A particular point on which I seek information from my hon. Friend the Minister when he replies is the capacity that is envisaged for the disposal site. Are we looking for a place where we can dispose of the present amount of highly active waste which has accumulated at Windscale, or a site to deal with the waste which will arise from the present British programme if and when all the AGRs are started up?
  If that is the capacity we are looking for, I for one would find it difficult to take exception in principle to a survey seeking to identify a suitable site.
  If, however, we are looking for the waste which would arise from an expanded nuclear programme, we are involved in a very different search
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  indeed. As the hon. Member for Carshalton has indicated, the United Kingdom Atomic Energy Authority has quite unrealistic forecasts of expansion in nuclear generation. The proposal which it submitted to the Royal Commission indicated that by the end of the century it saw nuclear power increasing twentyfold. As the hon. Member observed, Sir John Hill appears since to have written in The Times saying that in effect the authority did not really mean it. This is undoubtedly in response to the criticism of that unrealistic forecast.
  Nevertheless, undoubtedly there are those in the nuclear industry who see a substantial expansion of nuclear power over the coming two or three decades, and I was very struck to note that a Mr. Allardice of UKAEA, speaking in Portree over the weekend, said that the site it was looking for was in connection with the development of a fast breeder reactor station. He appears to have said in Portree that the waste which would arise from an expanded British nuclear programme, including a fast breeder, would only come to something like the size of the average semi-detached house. Some hon. Members may be familiar with this comparison, because it is one that is already used by BNFL to describe the waste it has accumulated to date.
  I am beginning to find BNFL's concept of the average semi-detached house distressingly flexible. If it is the case that we are now hunting for a place where we could dispose of the waste which would arise from a programme involving fast breeder reactors, I should be deeply distressed, because the approval of such a programme is a decision which should be taken on its merits and a decision about which I and other hon. Members have grave reservations.
  Lastly, on the question of the capacity of the site we are seeking, I ask the Minister for an assurance that the site is intended to cater only for waste from the nuclear programme in Britain. The survey is part of a European survey, and, as I understand it, each country is specialising. Britain is looking at granite areas, Germany at salt areas and Italy at clay areas in order to establish which is most suitable for a site. Am I to understand from that division of labour

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  that if we discover that granite is not suitable, and salt is, the Germans will establish a site, and we shall be able to apply for the use of it? Or, if we discover that granite is suitable, will other Eurpean countries be able to apply to us to use our site on some isolated island in the West Hebrides?
  The question of foreign waste also arises in relation to the contract of BNFL to reprocess foreign nuclear waste, and in particular, the contract which was signed recently with the Japanese authorities. I was interested in the story in The Times last Saturday which said that the United States may prevent such a contract, and stop the shipping of waste to Britain.
  Mr. Forman: Does the hon. Member have any information to suggest that BNFL has actually signed the contract? If so, would he tell us more about it? My impression is that the Japanese and BNFL are about to sign the contract, but they have been "about to sign" for some time.
  Mr. Cook: I cannot speak with the authority of the Minister. My hon. Friend will have to clarify that when he winds up the debate. My understanding is that they have signed, but I cannot recall the reference to mind.
  I was dealing with the United States intervention in the contract between BNFL and the Japanese, and I would hope that my hon. Friend will comment on this. In any event the Royal Commission, in its report, said that it would be wrong to return the reprocessed waste to Japan, partly because of difficulties of transport, and partly because, if we accept that geological disposal is the way to bury it, it would be eccentric to return the waste to a country with a high incidence of eathquakes.
  The quite clear implication of the Royal Commission is that if we handle foreign waste, we should consider burying in our own country the vitrified waste arising from that process. It is difficult for us to evaluate the correctness or otherwise of this, as long as we are in doubt about the Government's reaction to the Royal Commission Report. Indeed this difficulty occurs on a number of points. One particularly relevant passage of the report relates to its suggestions about the creation of an independent
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  agency for handling waste disposal. The Royal Commission suggested that there should be an independent National Waste Management Advisory Committee, and a National Waste Disposal Corporation. The reason for suggesting that these should be independent of the nuclear lobby is that those who dispose of the waste and take decisions on its costs should do so free of any influence as to its effect on the profitability or otherwise of the reprocessing business. We are entitled to know the Government's response to that recommendation.
  This is a new technology. No one has yet succeeded in the permanent disposal of vitrified waste on a commercial scale. We should approach the matter cautiously and we must have a high degree of confidence in those responsible for evaluating the project. I would have greater confidence in their ability to do so objectively, if I knew it was being handled by an independent agency, rather than the nuclear industry which may be seeking to justify the decision to go ahead with the fast breeder reactor. I would be much more encouraged by the creation of such an agency than I would be by assurances of adequate public consultation, because I think that we shall see at Windscale that adequate consultation does not include the full rigours of a public planning inquiry.
  I recognise that I have sought a considerable amount of information which the Minister may not be able to provide tonight and I shall be happy if he writes to me later. However, it is absurd that we should be debating a matter of this gravity during a necessarily brief debate in the middle of the night. It would be unfair to press my hon. Friend the Minister on that because he has no ministerial responsibility for the timing of debates, but I would assure him that were he and his Department to press for a full day's debate at a more regular time of day, he would have the support of all hon. Members.
  There is some controversy about how future generations will regard our decision to develop nuclear technology. But there can be no disagreement that future generations will find it inconceivable if we embark on an expansion of that industry without finding time for a proper debate.
  6.6 a.m.
  Mr. Tom King: The closing comments of the hon. Member for

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  Edinburgh, Central (Mr. Cook) will be supported by all hon. Members. I do not wish to restrain my gratitude to my hon. Friend the Member for Carshalton (Mr. Forman) not only for initiating the debate—albeit at such an early hour—but for his impressive speech. That is not to say that I endorse every word that he said, but I was impressed with the range of the speech and the way that he dealt with the issues. Although I value this opportunity I regard it as a house warming party for a more substantial, full-ranging debate soon after the House reassembles.
  The hon. Member for Western Isles (Mr. Stewart) referred to hiding things under the carpet. We would be outraged if the Government thought that they could get away with it by wrapping the matter up in a parliamentary nightshirt. The scale of the issues involved requires a major debate at a time when all hon. Members can take part and when it will receive full publicity. The conclusion drawn by Sir Brian Flowers is that it is now time for a debate by Parliament and people—and he did not mean at 6.5 a.m.
  I tip-toed towards this subject with caution. I am here only because of the unavoidable absence of my hon. Friend the Member for Ross and Cromarty (Mr. Gray). I should not otherwise have chosen to take part in such a controversial debate so soon after taking over my present responsibility. It is one of the most important spheres with which I shall be concerned. The subject is complex and technical. As my hon. Friend the Member for Carshalton said, the ethical, moral and futuristic implications of the issues are beyond the experience of any hon. Member in the House. As my hon. Friend the Member for East Grinstead (Mr. Johnson Smith) said, the report is probably the most substantial and significant which has been received by any Minister since the war. One can see the scale of the problem and the scale of the isues before us.
  As I look for certainty and information in trying to familiarise myself with the issues, I realise that everything I touch turns to dust and that uncertainty is everywhere. My hon. Friends have referred to the difficulties of forecasting. I can appreciate the Minister's difficulties in that respect, because if he attempted
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  even now to give us any sure forecasts of energy demand, he would know that no one in the House would believe them. The uncertainties and difficulties, especially against the background of recent unfortunate forecasting experience in relation to energy, electricity demand and the major economic forecasts give us no confidence that we can see with any certainty what the probabilities are. The scope for variations is enormous. The potential margins for error are very great.
  Is there an energy gap to come? If there is, how big will it be? These are very difficult issues which the Government and the House will have to consider.
  The issues raised in the Flowers Report provide at least some guidelines as to the way in which we should go forward into the whole question. This debate deals with nuclear power, but one cannot separate nuclear power from the capabilities of the other energy sources, and our dependence on those will depend on the demand for energy and the resources available and on the decisions that are taken about the availability of those other resources.
  There have been cries for a great debate. I very much hope that in that great debate, if it takes place, as we have said, in Government time as well as in public time, and elsewhere, there will be borne in mind something to which Sir Brian Flowers drew particular attention. He contrasted the two sides of the argument that tend to become polarised. Perhaps one has tended to imagine certain identikit images across the Chamber of the great protagonists of the argument. Sir Brian Flowers said,
  "The environmentalist tends to see those in the industry as being so committed to furtherance of their technology as to be wilfully blind to its dangers to the world. Those within the industry tend to see environmentalists as people opposed to all technology who are prepared to denigrate their work on the basis of nebulous fears of future catastrophes."
  That puts very clearly the two extreme poles of the argument. The plea of Sir Brian that
  "The arguments of both deserve to be heard with greater mutual understanding"
  is a cry that we should echo in the House, because it is extremely important as we move into what is clearly a very serious and most important debate.

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  Having accepted, therefore, the honest motives of both sides, it is equally important to ensure that we avoid any unnecessary sensationalism. Comments have been made about plutonium and the effect of a quantity of plutonium no larger than an orange. Sir Brian Flowers indicated that this was a highly misleading and most unfortunate description which was clearly very sensationally presented.
  We also need to ensure that in the House we preserve a balance. The Secretary of State has made great play of his desire for the fullest and widest possible public debate, and for a realistic approach to the issues. I am not sure that he has played quite as valuable a part as he might have done in ensuring that. His reaction to the incident at Windscale has raised public concern, when perhaps a little more study would have shown that there were other Ministers who were well aware of what had happened.
  I think that an official statement from a body that is responsible to the Minister that
  "In the view of the company it is very important that questions of this sort, blown up as they are by the media out of all proportion to their true significance"—
  with respect, they are blown up by the media egged on by the Secretary of State—is something to which the right hon. Gentleman will wish to give his attention, because these are difficult issues and they must be approached responsibly.
  I welcome the approach of submitting questions to the Nuclear Inspectorate. I know that my hon. Friend the Member for Carshalton has his list on the table, but when I read the Secretary of State's list of questions I get rather concerned about which angle he is pursuing. Question No. 1 is:
  "Has the work done on fast reactor technology so far, here or world-wide, enabled you to say authoritatively that fast reactors will be as safe in operation as thermal reactors now in use?"
  I think that anybody in the House with a fairly elementary understanding of the subject could answer that.
  One wonders how that question can lie together with Question No. 16. which is:
  "What advantages do you see in Britain building its own commercial-sized demonstration fast reactor … on the present state of technology, as compared to the alternative
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  possibility of waiting until the state of the art has advanced here and abroad and certain unresolved safety questions are better understood and better remedies have been found in dealing with them?"
  That is the most loaded question that could have been put to anybody, and rather contradictory to Question No. 1.
  When one is worrying about a sensational approach to this problem I am not sure that Question No. 6 which asks
  "If the core melted through the pressure vessel and sank into the earth how far would it go and what could stop it and how could it be subsequently recovered?"
  does not take us into the world of science fiction, or, if not that, whether it is helpful at this stage to raise that sort of issue.
  Having posed all the difficulties—and I recognise the real problems that face the Secretary of State and Ministers over this issue and the scale of them—and having outlined the uncertainties, I think that the first clear opinion that impressed itself on me in my initial study of the subject was that made at the nuclear forum about the importance of keeping all the options open for as long as possible, because it is clear that we are moving into an uncertain technological field, with distinguished people holding diametrically opposite opinions. There is a need for clarification in order to avoid commitments too early or any earlier than is absolutely necessary.
  My hon. Friend the Member for Dumfries (Mr. Monro) spoke up boldly for the situation in his constituency. In a sense I share his problem because I have a Magnox reactor and an AGR in my constituency. I know many of the problems and difficulties that can exist in such a situation.
  I now come to the problem of the disposal of waste. I was struck by the statement of Sir Brian Flowers that he was confident that an acceptable solution would be found. I thought that that was a bold statement, recognising the difficulties that exist. But that statement having been made, he emphasised the time and scale of effort that would be needed to identify that solution.
  Clearly, if we are to keep our options open. that search must be pursued as a matter of urgency, because we do not know now whether that option exists. If there were no acceptable way of dis-

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  posing of waste, that would raise real problems for the future of any fast breeder programme. It is therefore a matter of crucial urgency that the Government press ahead with their search for a suitable disposal method. It is true that this is needed in any case to deal with the waste from the present reactor programme. It seems inescapable that that programme must be pursued as a matter of urgency.
  It seems to me also that, in giving ourselves the greatest time in which these options can be maintained, the most active programme of energy conservation is essential. In my new responsibilities, I have the initial impression that energy conservation has not received more recently the impetus that it should have done. There was impetus at the time of the oil crisis, but that has now gone, and those who see further ahead can lee even more reason for an active programme now.
  Benign sources would be everyone's ideal if they were achievable. I see no desire for nuclear power for the sake of it. If the renewable sources of energy are a rather earlier prospect than seems to be the case now, that is extremely important. I would like to see some evidence of a greater concentration, perhaps on a European or wider international scale, on the process of research into such sources.
  Mr. Forman: One of the important points to be brought out on benign sources is that they have tended to be dealt with by the Department so far as something which can or cannot be plugged into the existing system for the provision of electricity through the highly centralised grid. If one is to make a success of renewable benign sources, one has to think in terms of different kinds of provision for different purposes. More could be achieved if we liberated our imaginations from the old concepts and studied other applications of solar energy beyond those derived from the provision and storage of electricity in photo-voltaic cells, for example.
  Mr. King: My hon. Friend is moving his imagination even wider, and at this late hour I cannot follow him, but he may well be right. I shall study that suggestion carefully to see how he is
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  going to do it. Since the proposed Severn barrage would be just outside my constituency, I know that there has been a lot of talk in the West Country about one of the possible sources of renewable energy in that area. The project has been looked at repeatedly for the last 60 or 70 years but little direction and drive has been put behind it.
  Mr. Peter Rost: The Government have at no time been prepared to sponsor a feasibility study, which could be done at relatively low cost.
  Mr. King: My understanding is that a small feasibility study is now going on. However, my hon. Friend may be more correct than I am in the matter, so perhaps the Minister can enlighten us.
  But the issue on which there will be the most disappointment arises from Dr. Brunner's statement, reported in this morning's Press, that the fusion JET programme project is on its deathbed. It will be tragic if that element in European co-operation has collapsed so completely. As one eminent scientist has said, if even scientific co-operation is impossible to obtain in Europe on projects which could be so beneficial to the whole Community, the prospect is distressing.
  We all know the problems which the Secretary of State has had with his opinions of European energy policy. It is not for me to say what effect that may have had on the programme and on attempts to get the JET project for Britain. I know that the Under-Secretary has been working very hard to rescue something from the project and to get it sited at Culham. I pay tribute to his work, but his row may have been made harder by the way in which it was originally hoed by his right hon. Friend.
  I do not want to be controversial at this hour and I hope that the Under-Secretary can give us better news than appears in today's papers. If Europe's attempts to fund a research programme have collapsed, we face a grievous problem.
  This debate, so ably initiated by my hon. Friend the Member for Carshalton, has just skimmed the surface of issues which transcend party political differences and which will affect not just our children and grandchildren but many generations to come. We face many problems.

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  None is easy and we shall find no perfect answers. It is clear that decisions will have to be made, and this House has a major responsibility and rôle to play in reaching those decisions.
  6.27 a.m.
  The Under-Secretary of State for Energy (Mr. Alex Eadie): We have heard some interesting views in this debate and it has been useful to the House to consider this important subject. I note the strictures of hon. Members about the time at which the debate has taken place, but it is hardly inspiring for a Minister to be replying to a debate at this hour. No doubt hon. Members' comments have been noted.
  The hon. Member for Bridgwater (Mr. King) made fun of the difficult questions posed by the Secretary of State to the Nuclear Installations Inspectorate. It may be a new experience for the hon. Gentleman to find someone asking questions to which he does not know the answers. It is a tradition of the House that people pose questions when they already know the answers. Let us await the replies of the inspectorate and perhaps the lion. Member for Bridgwater will wish to return to this subject.
  I hope that the hon. Member will reflect on words he used about JET. He said that nuclear fusion was on its deathbed. I have not seen the Press reports, but I doubt whether that was the implication of any remarks made by Dr. Brunner.
  Mr. Tom King: That is the view of Dr. Brunner reported in the Press today. It is not my sentiment.
  Mr. Eadie: The hon. Member was generous in his comments about the part I have played in this issue. I have answered three debates on the subject and I believe that the demise of the subject has been greatly exaggerated.
  We are coming to the end of the Dutch presidency of the Council of Ministers and we had to consider whether it would be possible to have discussions before Dr. Brunner's term of office ends. I can reveal to the House that Dr. Brinkhorst, the Dutch President of the Research Council, and Dr. Brunner have seen me at the Department of Energy to discuss matters relating to fusion. Dr. Brinkhorst pointed out the time dilemma involved
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  and said that unless he could be assured that a deal could be clinched at one further meeting, he was not disposed to call a meeting of the Council of Ministers.
  I have fought hard for the JET project to come to Culham. I have been conscious of the fact that we have a strong case because we have the necessary scientific and technological background there. Our case impressed many people in Europe, but I also stressed that the European Community must do fusion and that there would be no obstruction from Great Britain if the European Community decided to take the project somewhere other than Culham. I have made this clear here and in the Council of Ministers.
  I do not believe that fusion is on its deathbed. I am sure that the EEC will show the necessary determination and resolve to ensure that fusion becomes a Community project and I look forward to reporting to the House any progress which can be made in the new year. I am reasonably optimistic that I shall be able to impress on my colleagues in the EEC that Culham is the best site for the project.
  Mr. Forman: Will the Minister comment on my point about the questions asked of the Nuclear Installations Inspectorate or will he be coming to that later?
  Mr. Eadie: Perhaps the hon. Gentleman could wait a little while. I broke off from my speech because fusion is so important.
  The future development of nuclear power in this country raises issues of great concern to us all. They relate to our long-term energy supplies, to our economic and industrial health and to our standards of living up to the end of the century and beyond. No less important they relate to the safety of nuclear power, to protection of the environment and to the well-being of our society.
  At one level, nuclear power is a highly technical subject which it is often difficult for the layman—however intelligent—to grasp or fully understand. At another level, the issues are much too important to be left to the experts. They are the sort of issues on which many people, without expert background, can have firm views; and it is important for the Government that these views should be

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  formed now, before decisions are taken, rather than later, when the decisions are being carried out and when a change of views would be damaging and disruptive.
  That is why the Government attach importance to public debate now. We recognise the need to explain the facts, inform the public and publicise the issues. Discussion of a subject such as the fast reactor, for instance, on which strong views are held, can all too easily become a sterile confrontation between two opposing points of view. We must try to break through these fixed positions to a balanced discussion of the issues.
  Nuclear power at present contributes about 3 per cent. of this country's total energy needs, or about 10 per cent. of our electricity generation. As the AGR stations currently under construction come on stream over the next few years this proportion will increase. Beyond that point the development of nuclear power will depend on decisions yet to be taken.
  One decision that we shall have to reach concerns the future of the steam generating heavy water reactor. I am sure that hon. Members are familiar with the background. It has been referred to in the debate. The SGHWR was chosen by the Government in 1974 as the reactor system to be adopted for the next nuclear power station orders. Following this decision the programme of design and component development work was undertaken by the Nuclear Power Company with the aim of producing a detailed reference design for the generating boards. The NPC completed and submitted this documentation last June. The Atomic Energy Authority then advised my right hon. Friend that this was an appropriate moment to take stock of progress with the SGHWR programme. The Authority recommended to us that, for a variety of reasons, the SGHWR looked less attractive than it had seemed two years before. In particular, they were concerned at the prospect of launching a new reactor system, which appeared more expensive than other reactor systems at a time when forecasts of electricity demand had fallen sharply from what was previously expected. On balance, it was their view, though the SSEB dissented, that the programme should be replaced by advanced gas-
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  cooled reactors—AGRs—or by pressurised water reactors—PWRs.
  The Government have not yet reached a view on this advice. We still have it under study. The House will recall that in October, my right hon. Friend agreed to a proposal that the Nuclear Power Company should carry out a six-month assessment of the SGHWR, AGR and PWR systems, on the clear understanding that this would not jeopardise the nuclear industry's ability to start work on site on an SGHWR early in 1979. The Government are not committed to accepting the outcome of this assessment, but I believe that it should provide a firm basis on which to reach a decision on the future of the SGHWR programme. We recognise the importance of ending the present uncertainty as soon as we are able to.
  I would like to turn to the question of future policy on the fast reactor, which the Government currently have under review. I would stress that no decisions about the next stage in the development of the fast reactor have as yet been taken. The Government have not made up their minds about what should be done. There is a lot of misunderstanding about the nature of the decision which is before the Government. I should like to clarify it.
  The fast reactor has been under development in this country since the 1950s. At the present time, a prototype fast reactor is being brought un to its full power of 250 MW at Dounreay. We have already, therefore, progressed some way down the road of developing a fast reactor for commercial use. The question is whether we should continue down that road and, if so, at what pace and in what way.
  Let me emphasise that we are not about to take decisions whether to install fast reactors in great quantity in this country. We could not take decisions of that kind at the present time. Nor are we in any way committed to an official energy strategy, of the kind which the Royal Commission on Environmental Pollution outlined in its recent report, involving the installation of 33 GW of fast reactors by the year 2000.
  I noted that the Royal Commission report was fairly extensively quoted. One can lift a page and make a quotation. Incidentally, since it has been suggested that I was trying to be critical, let me

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  say that I was making the point that one has to read the whole report and not pick out pieces of it. I was not deriding the report. I was making a constructive comment.
  The report on nuclear power and the environment needs to be taken very seriously by the Government and I am glad to see that the House will be debating it later tonight. The point I am making is that decisions leading to the large-scale use of fast reactors can only be taken progressively over the years. What is at issue at the moment is whether we should plan to build one commercial-scale demonstration fast reactor—a CFR for short—in this country at an appropriate time, with or without international co-operation, or whether we should adopt some other approach to the further development of the fast reactor in this country, perhaps by relying on foreign technology, designs and licences later in the century if we find then that fast reactors can be operated safely and acceptably and are needed to maintain our energy supplies.
  A variety of possible options are involved in a decision of this kind. In particular there could be flexibility in timing. If we were to decide to build a CFR in this country, we would not necessarily be bound to start construction right away. There is also the question of international co-operation. This is a very important factor which the Government will want to take into account in reaching their decisions.
  The Government have these matters under review. The arguments involved in a decision about a CFR are complex. There are no easy or clear-cut answers. I would like briefly to draw the attention of the House to two of the issues.
  First, there is the basic argument about energy policy and about whether we shall need to install the fast reactor in the long term to maintain our energy supplies. At the moment, with our massive coal programme and North Sea oil and gas coming ashore, it is hard to believe that there will come a time when we shall have problems of this kind. None the less, we must take seriously the possibility that by the end of the century we shall face declining indigenous reserves of oil and gas, and a tightening of world supplies of oil and uranium.
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  In such a situation, the advantages of the fast reactor would lie in its ability to use uranium up to 60 times more efficiently than existing thermal reactors. For a country like the United Kingdom, with virtually no reserves of uranium of our own, this could be of great importance. It could turn our large stocks of depleted uranium into a major new energy source, give us greater independence of world uranium suppliers and extend our ability to meet our energy needs economically as our North Sea reserves decline.
  There are, of course, great uncertainties about the long-term prospect for energy supplies. There is nothing inevitable about the future pattern of energy supply and demand. Nonetheless, the question for the moment is whether, and how, we should keep open the option of ordering fast reactors in the long-term, assuming that they can be shown to be safe and, what is more important, publicly acceptable.
  Mr. Forman: Will the hon. Gentleman come to the question of the commercial fast reactor, because the points that I sought to make about the proportion which is a capital cost as opposed to a nuclear fuel cycle cost is relevant to the argument that he was making about uranium and the efficient use of uranium.
  Mr. Eadie: I did not intend to come to that point but, taking a figure from the top of my head, figures of up to £2,000 million for the total gross cost of a CFR, including its fuel cycle, have been mentioned. If I am wrong I shall rectify that figure by writing to the hon. Gentleman.
  In considering this, we need to bear in mind the considerable assets in terms of expertise and hardware that we have built up in fast reactor technology over the last two decades. We need also to make the bset judgment we can about the contribution we can expect from other energy sources and from energy conservation. I believe that coal production and the development of the Government's energy conservation programme will play an important part in meeting our longer-term needs. Research into the renewable energy sources, much of it already under way, should show more clearly than we now know how far their development will be technically and

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  economically viable before the end of the century. I resist the temptation to deal with some of the other points made, save to point out that wave energy is energy generated in a similar fashion to energy from power stations.
  Our present judgment is that we cannot rely on the energy sources besides nuclear power to meet our longer-term needs without involving undue economic penalty.
  The second issue is whether the arguments against the fast reactor on the grounds of safety and its social and environmental effects are so strong that we should pull back from developing it any further. Here most of all, I think, we need to have public debate, and, as a contribution to that debate, my right hon. Friend the Secretary of State for Energy has put a long list of questions to our Nuclear Installations Inspectorate. These questions include a number from the hon. Member for Carshalton (Mr. Forman), to whom we are grateful for initiating this debate. I am sure that the House will appreciate that the answering of these questions is a substantial task. Anyone who has seen, for example, the questions posed by the hon. Member for Carshalton will readily agree that it is a formidable task. Although I am grateful to the hon. Gentleman for the help and interest he has shown, I cannot give a precise date for when the answers will be available, but I expect that they will be available next month.
  The recent report of the Royal Commission on Environmental Pollution is a major development in public discussion of nuclear safety. The Government are studying it carefully, and we shall be publishing a reply when we are ready to do so.
  Mr. Tom King: Why not sooner?
  Mr. Eadie: I do not want to pre-empt that reply—it is a formidable report, which should not be replied to hastily—but I make two points in this connection. First, there is no such thing as absolute safety or absolute freedom from environmental effects in any energy strategy. Coal mining, North Sea exploration, nuclear power and even the development of renewable energy sources all involve risks and uncertainties. The hon.
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  Member for Carshalton has heard me talk about the theory of probability and so on. One can make a good speech on that alone. They all involve risks and uncertainties, and all require us to pay a price for the advantage which they give to us. As a former coal miner, I know of the toll taken when one tries to develop that source of energy.
  Nuclear power development raises safety and environmental issues of a special nature. It is therefore all the more important that we evaluate the risks in an orderly and responsible fashion. We shall not find all the answers at once. We need to be satisfied at each stage that they are properly prepared, in terms both of our knowledge and of the precautions we take before going on to the next stage.
  My second point is that to some extent we have time in which to resolve these safety issues. We are not about to embark on a large-scale fast reactor programme. Decisions of that kind are a decade or more away. The Royal Commission said that its concern about the effects of a plutonium economy on our society related not to the position at present, or even in the next decade, but to what might happen within the next 50 years. What is important is that our decision-taking should not outstrip our grasp of the safety and environmental implications of what we decide and our ability to develop adequate precautions and counter-measures.
  My hon. Friend the Member for Edinburgh, Central (Mr. Cook) addressed himself to questions of radioactive waste. I have spoken for long enough, and anyway my hon. Friend was right to say that probably this morning I could not reply to his questions in any detail, but I undertake to write to him answering them to the best of my ability.
  Long-lived highly-radioactive wastes resulting from the reprocessing of irradiated fuel are at present stored in liquid form under constant surveillance. They are mainly at Windscale, but there are also some at Dounreay. I say to the hon. Member for Western Isles (Mr. Stewart) that it is not a question of England getting all the nuclear power jobs. Thousands of people in Scotland depend on nuclear power for their livelihood. Therefore, it is wrong to speak of

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  the Scots not getting the jobs, If the hon. Gentleman went to Dounreay he would find thousands of people dependant on the jobs there, and then he would probably look at the matter from a different angle. In the case of oxide fuels, these wastes represent well under 3 per per cent. of all the material processed.
  It is intended to solidify the wastes into stable glass, which will be insoluble in water and will thus be capable of being disposed of safely. A process to do this, called Harvest, is well under way. A full-scale demonstration plant should be in operation in the 1980s.
  It is expected that it will be possible to dispose of such vitrified waste in at least one of three ways—burial in deep and stable geological formations on land, emplacement in suitable long-lived containers on the bed of the deep ocean, or burial under the floor of the deep ocean. The Atomic Energy Authority has under way a programme, financed with EEC funds, to assess the suitability of granites and other hard rocks for the safe underground disposal of such wastes. Similar assessments of clays and salts are being undertaken elsewhere in Europe.
  The AEA is making use of a recent study which it commissioned from the Institute of Geological Sciences and which is to be seen as a contribution to the debate on the factors and criteria which bear upon the selection of areas in which the use of specific geological formations for disposal would he possible. In this early part of its research the AEA is examining the suitability of geological strata against these criteria and trying to identify suitable sites for test drillings.
  The areas currently under consideration occur in different parts of the United Kingdom, from parts of the Highlands and Islands of Scotland and the Southern Uplands to parts of North-West England and the Cheshire-Welsh Border area.
  There are no plans to undertake borings in Cornwall. The AEA has said that West Country granites do not satisfy most of the criteria laid down by the IGS as necessary for the safe disposal of hight radioactive waste. As the programme develops, it may be necessary to extend the search to other areas and to other geological formations.
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  The Authority also has a very small current research programme on disposal to the deep ocean floor. This is likely to expand into a point programme with with the United States, France and Japan, under the auspices of the Nuclear Energy Agency of the OECD. One cannot stand still on these matters. Indeed, we have a responsibility to continue the researches.
  The need for such programmes to be carried out has been fully endorsed by the recent report of the Royal Commission on Environmental Pollution, which argued that research work should be carried out vigorously into methods of disposal of high level wastes. That report has been quoted fairly extensively during the debate.
  No decisions have been taken on where to dispose of the wastes. Any decision to use geological strata on land would be taken only after a thorough evaluation of other methods of waste disposal and after the fullest consideration of all the safety and environmental issues involved, which would include consultation with local authorities and other bodies concerned, and on the basis of a conclusion that it was safe to do so.
  The research involved in establishing the feasibility of alternative methods of waste disposal will take a number of years to complete, and this will provide ample opportunity for wide public debate.
  The Government have to reach decisions on the future of both our thermal and our fast reactor programmes. The safety and environmental issues will be of major concern. We shall also have to assess the rôle of nuclear power in meeting medium and longer-term energy requirements, as I have explained. The future of our nuclear construction industry is a further aspect that was referred to in the debate and is one that we must consider carefully. Finally, we shall have to take into account the implications for public expenditure.
  Mr. Forman: Is the Minister in a position to say anything about the exact status of the Japanese contracts as regards BNFL?
  Mr. Eadie: I shall write to the hon. Gentleman on the matter. My hon. Friend the Member for Edinburgh, Central asked me the same question. I give the hon.

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  Gentleman the assurance that I shall write to him.
  I welcome the initiative of the hon. Member for Carshalton in raising the future of nuclear power in the United Kingdom. It has given the House the opportunity to consider the issues involved in our future decisions on nuclear power. I have found it valuable to hear the views that have been expressed.

  RAIL COMMUTERS (WEST SUSSEX)
  6.59 a.m.
  Mr. Michael Marshall: On the Vote on Acount, Civil Supply Estimates, Class VI, Vote 2, I seek to draw the attention of the House to the plight of the rail commuter in West Sussex. In raising this subject I immediately declare an interest as one of the vice-presidents of the Mid-Susesx Rail Users Association.
  I am glad to have the support at this early hour of the morning of my hon. Friend the Member for Chichester (Mr. Nelson), who is also a vice-president of the Mid-Sussex Rail Users Association, and I am authorised to say that my hon. Friends the Members for Horsham and Crawley (Mr. Hordern) and for Shoreham (Mr. Luce), who are also vice-presidents, wish to be associated with my remarks.
  Mr. Geoffrey Johnson Smith: I do not have the honour to be a vice-president of the Mid-Sussex Rail Users Association. However, as part of my constituency is in West Sussex, I shall be delighted to be associated with my hon. Friend's remarks.
  Mr. Marshall: It is very heartening to have my hon. Friend the Member for East Grinstead, who takes a keen interest in many matters affecting our county, with us at this early hour. Indeed, he has been here for some hours past discharging his onerous task of trying to keep the country's policy on the right lines.
  I welcome also the Minister who is on duty to answer the debate and who had the courtesy to write to me on 14th December. I shall be referring to his letter extensively as part of what I take to be the Government's policy on the whole question of commuters' problems, but the policy is obviously not confined to our county.
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  I seek to draw the attention of the House to the problem, but not just from a constituency point of view. Much of the thinking that my hon. Friend and I have devoted to the matter has been greatly facilitated by the representations made to us by the Mid-Sussex Rail Users Association. The Association is a very active body which co-ordinates closely with British Railways, Southern Region, and in general it does a first-class job of trying to ensure that the arguments are fairly and fully explored.
  I emphasise that in referring to the Mid-Sussex line which links the Sussex coast with London I am also seeking to consider the problem of the commuter within the county generally. That involves the various services along the coast and the whole infra-structure of Southern Region. If I concentrate on the problems on the Mid-Sussex line. it is because the coast to London line is the area with the most commuter traffic. Very detailed points about the service on this line have been made by the Mid-Sussex Rail Users Association.
  The present feeling of anger on the part of commuters stems from the fact that over successive years—I accept that this is not confined to one Government, although I shall seek to show that the present Government bear a special responsibility—the policy of encouraging people to move away from large urban centres to areas of cheaper housing carried with it the supposition that some form of relatively cheap transport would be available for commuters through the season ticket system.
  Many people have tended to move into my constituency a few years ahead of their retirement, with the intention of commuting to work over the last few years of their active working life and then settling down to retirement in our part of the world. This section of the community is hit particularly badly. We are in a period of high inflation and an effective wage freeze. Yet costs have risen sharply all round. Food prices have risen particularly sharply.
  I will quote some figures to show how fares have increased over the last few years. Second-class season ticket rates for all stations between Bognor Regis and Horsham to London have more than doubled since September 1972. The cost of a second-class season ticket

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  between Arundel and London has risen risen by 120 per cent., the cost of one between Arundel and London has risen by 110 per cent., and the cost of one between Horsham and London has risen by about 110 per cent.
  When we get down to the figures, we are talking about a season ticket which has gone up from £235 in the case of Bognor Regis in 1972 to £493 in 1976. These figures, with the anticipated increases from 1st January of approximately a further 11 per cent. for the Bognor and Billingshurst area, and 16 per cent. for the Horsham and Christ's Hospital area, mean that we are seeing not only a doubling of the figures that I am quoting, which apply right across the board, but an impost in terms of rail travel of about £10 a week.
  The Minister will appreciate that for the average salary earner to find out of net income £10 a week purely to get to his place of work is becoming a burden of a very high order indeed.
  This has been particularly aggravated since January 1975, because in the case of Bognor Regis certainly the increase has been 60 per cent., and this clearly reflects, in the minds of the Mid-Sussex Rail-Users' Association, its assessment of the present Government's policy of discriminating actively against the rail commuter.
  Looking at the Government's Transport Policy document and combining that with the recent pronouncement of the new Chairman of British Rail, as well as the recent statements of the Secretary of State for Transport, I do not think anyone can be particularly sanguine about future prospects. All these various experts suggest that rail fares are likely to continue to rise in real terms at the expense of rail traffic so that the present rail subsidy can be minimised. Likewise, it seems that investment levels are to be pegged, which can lead only to a deterioration in the services. Therefore the basic worry that has been put to us is that in the short term fares will continue to rise fairly rapidly, and that in the long term, as the result of traffic losses, there will be the possibility of further cuts in the services or total withdrawal of certain services.
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  Taking the Mid-Sussex line for the moment, in British Rail subsidy terms that line now has a loss of about £900,000 per annum, yet we must assume, because of the density of the traffic and the nature of the area, that that service was profitable in the recent past. Therefore we must argue that the trend towards non-profitability has been caused by inflation and the loss of traffic because of rapidly rising fares.
  It is in that context that I must put it to the Minister that the Government bear special responsibility, because they are a Government who have brought in an era of high inflation, varying between 15 and 28 per cent. through their whole period in office. They have a special responsibility for answering the kind of passionate conviction felt by the commuters that they are being singled out in this matter.
  It is common ground that, in discussing these matters in the past, Members on all sides have drawn on the comments made by the previous Chairman of British Rail, Sir Richard Marsh, who made it absolutely clear that in his time in British Rail the commuter was being singled out because it was felt that he could bear the extra burden, being captive trade.
  Although there are now disclaimers coming from British Rail, the House will want to hear from the Government how far they can substantiate any argument which goes against that, because, coming from such an authoritative source, that squares very closely with the instincts and the passionate feelings of commuters up and down the country.
  If we look particularly at what the Government have been saying recently, we should perhaps refer to three sources. On 12th November there was an Adjournment debate in which my hon. Friend the Member for Harrow, East (Mr. Dykes) raised the problems of London commuters. That debate, which we do not need to rehash in full today, inevitably covered a certain amount of common ground. I have also the evidence of a letter from the Chairman of British Rail, dated 18th November. Finally, I have a letter from the Under-Secretary of State, dated 14th December, for which I thanked him earlier but to which I shall want to return.

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  All these sources of information, on which the Committee can draw to assess what is the Government's true intent and thinking about the problem of the commuter, seem to me to bring out three common features. The first common feature which must be evident to all is the frustration which commuters and all representative bodies feel in trying to pinpoint the true cost-and-earnings situation in respect of that part of British Rail's services which they use. This frustration is made all the stronger because of lack of any clarification about the relationship between British Rail's commuter and freight services.
  The immediate suspicion goes back to the comment of Sir Richard Marsh about the commuter being made to carry the burden. This was brought home sharply in the debate in this House on 12th November, when my hon. Friend the Member for Sutton Coldfield (Mr. Fowler) said:
  "A subsidy of £66 million a year is going to British Rail freight operations. A subsidy of £31 million a year is going to the National Freight Corporation."—[Official Report, 12th November 1976; Vol. 919, c. 892.]
  Here is a whole area where the Government must have a view. On what possible grounds can freight traffic be treated any differently from commuter traffic? Freight should pay its way on a straightforward commercial basis and should not receive a subsidy. If the Government put this argument forward in the case of commuters, they must apply it also to freight.
  On 12th November the Government had no answer. I hope that the Under-Secretary will address his mind to this issue now. The fears I have expressed have been added to by a letter I received from the Chairman of British Rail, Mr. Peter Parker, in which he says:
  "The new fares will be applied on a selective basis equivalent to a 12½ per cent. average increase overall, which is in line with the latest position known to the Board of the rate of inflation and, when allied to the various measures that the Board has taken to reduce the working costs, are essential to meet the Board's obligation, recently confirmed by the Government to maintain constant the taxpayer's financial contribution to the railway passenger network."
  The words on which commuters will seize are "selective basis". What selective basis? This is precisely the way
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  in which uncertainty occurs, and a clear-cut assurance is required from the Government.
  Recent debates and correspondence have revealed the Government's refusal to show any particular interest in possible variations of the fare structure. They must have some views on the apparent illogicality and seeming unfairness of policies of lower fares for day trippers and holidaymakers, as opposed to commuters. The commuter is the backbone of British Rail traffic. He provides the vast bulk of revenue of British Rail and passenger traffic, and it seems to many that the idea of fiddling around with penny package deals of an Away-Day scheme—desirable as that may be when British Rail is running effectively—brings out the effective discrimination in favour of those who do not contribute anything like the turnover of the commuter to British Rail.
  Then there is the suggestion, put forward by the National Union of Railwaymen, of a 10 per cent. reduction in the cost of season tickets. The Government attitude was summarised in a letter from the Under-Secretary of State in which he said:
  "We would not wish to intervene if British Rail decide to experiment, but they would have to cover the cost if the experiment did not succeed."
  With all respect to the Minister, that is not a very encouraging voice. It is hardly a clarion call from the Government to British Rail to pull out the stops and try something adventurous. The Government do not wish to intervene and if British Rail do not get it right, it must foot the bill. It seems to me as if a passing the buck attitude is coming through at a time when commuter anguish is growing.
  The Government should have some thoughts on the matter. I stress the approach taken by the NUR because many hon. Members will feel that it is a good sign to see the unions coming forward with a solution that they believe will help increase revenue.
  I am not satisfied that the matter has been examined thoroughly. The Minister made general estimates about the likely effect on traffic. This is an ideal opportunity for him to say to British Rail and the NUR that if they seriously want the scheme they should get together and tie it in with productivity talks.

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  The Government have been most shy over productivity and manning levels. They have failed to impose a standard of judgment on what is going on, and that makes me worreid about what is happening in the Department. The Minister's final paragraph in the 14th December letter reads:
  "Finally, turning to your own point about manning levels and the operating efficiency on the railways, I think this is in an area in which the Railways Board is best able to judge what improvements are possible and, in consultation with the unions, take appropriate action."
  I regard that as passing the buck. What is to be the yardstick by which British Rail's success is judged? If we are told that over a long period it is gradually to get British Rail back into the black, that is one standard. But surely the Government must have some thoughts about whether the numbers are meaningful.
  Does the Minister accept the projected reduction in staff levels of 40,000 by 1981? Is that figure likely to bring with it opportunities for fare reductions? Can he hold out some faint hope to the hard-pressed commuters that if they stick with British Rail they will see some light at the end of the railway tunnel? The Government have a responsibility to make clear whether they are seeking to bring in constructive policies. I do not preach interventionism in the nationalised industries, but the Minister is responsible for laying down broad principles.
  The Government's approach to the subject recently has been wishy-washy. The Minister comes with freshness and vigour to his post, perhaps illustrating some of the Government's problems because they took so long to pick out his talent. He must be prepared to give some Christmas cheer to the commuter.
  Commuters feel that they are being made political scape goats and that they are among the front line troops being sent over the top to be mown down in the gunfire of the Government's own crossfire.
  7.19 a.m.
  Mr. Anthony Nelson: I congratulate my hon. Friend the Member for Arundel (Mr. Marshall) on raising this important matter, which effects many of my constituents. I share some of the responsibility as vice-president of the Mid-Sussex Rail-Users Association—
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  an organisation which is representative of a large number of my constituents and which reflects, both in its formation and in its activities, the real problems and fears which are shared by many residents in both our districts.
  I know that these are problems which as my hon. Friend has said, are shared by our hon. Friends the Members for Horsham and Crawley (Mr. Hordern) and Shoreham (Mr. Luce), in whose constituencies there are major commuting stations to London. Pulborough station, in the Shoreham constituency, carries a substantial number of constituents from the rural area in the middle and east of my constituency, but also a number of my constituents travel to and from London from stations just outside the constituency, outside the border of West Sussex, from both Haslemere and Rowlands Castle and some other stations on the London to Portsmouth Line.
  I should like to pick up a point made by my hon. Friend. There is a substantial and a growing number of people who are commuting both within Sussex itself and along the South Coast line. Many of my constituents have expressed fears and made representations to me, as the Minister may know, about the future of the South Coast line, particularly from Chichester going west to Havant and beyond, and going east to Bognor Regis and Brighton. This line is used substantially, certainly during the peak hours.
  Many of my constituents have expressed fears about the substantial increase in fares which they have to pay on these lines. They feel that they are being unfairly treated in having, perhaps, to cross-subsidise some of the massive costs of the main commuter services up to London. They are also concerned about the future existence of some of these services in terms of whether the network will continue, or indeed, if it continues, whether there will be a sufficient frequency of services along the South Coast line to satisfy their needs.
  Many of my constituents who have had to suffer a decline in the service provided by British Rail and to bear substantial increases in costs feel justifiably aggrieved. Many are in a similar category to those mentioned by my hon. Friend the Member for Arundel, being

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  fairly elderly people who are approaching retirement and who therefore find it extremely difficult, on perhaps rather more fixed means than many younger commuters, to make ends meet. It is these personal difficulties of many of my constituents that I want to impress upon the Minister.
  Many of my constituents who are commuters are at the end of their tether. They are approaching the end of their finances. It has been extremely difficult to make ends meet for many elderly families over recent years. The increases in fares from Chichester and Haslemere, two of the main commuting stations for residents of my district. have been over 100 per cent. over the last few years. They are simply not able to bear such an increase without taking a major reduction in their standards of living.
  I understand that such cuts in living standards have been a necessity of the present Government's economic policy, as they would be the policies of any Government, of whatever political colour, at present. Nevertheless, these people are being called upon to bear a very substantial financial burden. This increase in costs will make life very difficult for them, especially in meeting other commitments. such as mortgage repayments, their family's health and the cost of their feeding over the next year. For many families it is a matter of desperation that the latest substantial increases in costs have taken place.
  They feel victimised, frustrated and bewildered that they were encouraged in years gone by to settle in those areas and have undertaken substantial personal commitments and liabilities, but inexorably they seem to be being pushed into further and higher contributions, by means of fares, to British Rail. The situation seems to be spiralling out of control, and they have no influence over it.
  It is on behalf of these people that I make this plea for the Government to express at least some sympathy and some more finite plan and means of dealing with the situation and providing assurances that it will not be allowed to get out of control.
  I understand that the Chairman of British Rail and the administration of
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  that nationalised industry have been operating within the constraints of policy defined by successive Governments. Indeed, when the new Chairman of British Rail wrote to me in response to some representations that I made to him he was not slow to point out that part of the reason for the substantial increase in fares over the past few years was the degree to which prices were kept down under the counter-inflation policy of the Conservative Government. I do not believe that it is sufficient to lean on Government policy as a means of defending some of the substantial increases in fares that have been necessary recently.
  I recognise, too, that the Government's social contract has some influence in this, to the extent that British Rail feel unable to take the necessary incisive action about overmanning and employment levels throughout the system because they might be persuaded to believe that that was unacceptable in terms of the social contract. Thus, in a sense British Rail are continuing to operate within the constraints of Government policy and it is my constituents who are having to pay the real price, because these inequities and inefficiencies are continuing. Overmanning has to be paid for. and there has to be a substantial subvention to cover the deficit.
  I understand that in recent years the figure has been running at £300 million, and this sum has been borne not only by the taxpayer but by those who have to travel. They are hit twice. Not only do they have to pay their fares, but they have to make a substantial contribution to the deficit by way of their taxes. I should like the Minister to provide some reassurance that further economies will be undertaken by British Rail to ensure that further substantial increases in fares will not be necessary, nor will there be a need for a substantial increase in the subvention from public funds to cover their deficit.
  We should like to know what progress is being made on the financial returns that British Rail get from off-peak travel, excursions and away-day fares to which the new Chairman pointed as a major means of cutting down some of the cost or maximising the use of some of the expensive facilities that are necessary for peak travel.

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  We should like to know, too, how the problem of overmanning, which undoubtedly exists, is to be dealt with by British Rail, and what encouragement the Minister is giving them to take an incisive attitude in dealing with this problem. There are difficult problems from British Rail's point of view, but there is far greater concern amongst rail users who, in the last resort, have to pay the price of inefficiency.
  I believe that there is a need for greater understanding amongst rail users of both the Government's and British Rail's policy. There is a need for more explanation and reassurance. Rail travellers have been left out in the cold. They feel frustrated and victimised, and unless a few of them are able occasionally to write to their Members of Parliament and he is able to publicise some of the problems facing British Rail and explain the reasons for some of the increases in fares and chances of service, they do not know what is going on. I expect that the representations that I receive are but the tip of the iceberg.
  The problem is real and personal for many families. The increase in fares has to be paid out of net income. The fares have risen substantially more than the rate of inflation, and certainly substantially more than people's net incomes. This is a desperate situation for many rail users in West Sussex, and we look to the Under-Secretary of State to provide us with some reassurance and real answers to this difficult problem.
  7.30 a.m.
  The Under-Secretary of State for Transport (Mr. John Horam): I am sure that the commuters of mid and West Sussex will be grateful to the hon. Members for Arundel (Mr. Marshall) and Chichester (Mr. Nelson) for raising this matter, and I thank both hon. Members for the responsible way in which they have approached it. I have learnt not only from the debate but from the comments in the newspapers that the activities of the mid-Sussex Rail Users' Association, of which both hon. Members are, I believe, vice-presidents, reflect the concern in that part of the country.
  I can well understand the use by the hon. Member for Chichester of such words as "desperation", "victimised" and "bewildered" about the attitude of
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  commuters faced with these enormous increases. The figures are startling. Since 1974, fares have increased by about 90 per cent. on a cumulative basis, and if one adds the 12½ per cent. expected in January, there is a considerable cumulative total for anyone to have to face in about two and half years. That is a much faster growth than the general rate of inflation.
  I think that the hon. Gentlemen will accept that, with a labour-intensive service of this kind, there are special problems in a time of inflation in the sense that its costs are bound to increase faster than those of manufacturing industry. It cannot make the kind of rapid gains in productivity and other such measures when coping with fast increasing wages that manufacturing industry can make. All public transport is struggling against the erosion of its market by the increase in car usage which is going on despite the economic situation. There is also the peaking factor twice a day, which adds to the difficulty of keeping down fares as we would like.
  Even so, despite the enormous increase in fares, the amount taken at the ticket office is still not meeting the total costs of the services provided. The present public subsidy to the railways is running at an historically unique level—about £300 million. The share of London and the South-East commuter services is about £80 million, so they are not discriminated against in the proportion they receive of public funds aimed at keeping down fares.
  Despite the huge increase in fares, a substantial subsidy is still protecting commuters of mid and West Sussex against the full impact of the economic situation. The Government are committed to carrying on with fare subsidies, or total passenger subsidy, although the latest round of cuts means that a small amount is being taken off passenger subvention. But in total we look to a freezing of the amount of passenger subsidy over the next few years, and therefore, within the total transport budget, given that we are having to cut back severely on the roads programme and works—which has also affected mid and West Sussex—rail subsidies are a rising proportion of the total
  Mr. Michael Marshall: Would the hon. Gentleman care to cover the part of the subsidy in respect of freight services?
  Mr. Horam: Yes, I will come on to that. I wanted to deal with some general points first. The hon. Member made something of a party point when he said that this Government had a special responsibility for the sharp increase in fares. I cannot accept that. The hon. Member for Chichester said that fares had been held down under the counter-inflation policy of the Conservative Government. That was probably sensible then but there are enormous difficulties when one has to adopt realistic pricing policies for all nationalised industries. The catching-up process is difficult. That is a clasic argument against an incomes policy and it is unfair to place any special responsibility on any Government for trying to meet the inflationary problems of our time, which are part of a wider picture.
  The hon. Member talked about commuters wanting to know the true cost of their services, as opposed to the true cost of freight carrying and so on. He talked about the £66 million subsidy to British Rail and said that the Government must have a view. Indeed they have, and they have stated it frequently. We want the freight subsidy phased out, since it was the policy under the 1974 Act, to which his party contributed, that there should be none. There have been difficulties caused by the economic recession and the decline in the steel and coal trade. Therefore, we have had to help out for a period, but the subsidy is being reduced and will be sharply eliminated. We cannot justify it on social grounds.
  The hon. Member slipped into saying that freight should pay its true costs. By the same logic, presumably passengers should pay their true costs, too. But then they would have to find the £80 million to the tune of which London and South-East commuters are being subsidised, and he would not want that. So when freight is no longer subsidised, the commuters of West Sussex will continue to be subsidised. There can be no alternative at present.
  The hon. Member said that the Government had shown no interest in fare structures but added that the Secretary of State had given his blessing to experiments with different fare structures particularly to an experiment in cutting fares to
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  see whether there is any substance in the NUR's view that extra traffic could be attracted. He chastised the Government, however, for saying that there would be no subsidy to cover any resultant loss. I have given the hon. Gentleman credit for a responsible attitude. Equally, we cannot responsibly sign a blank cheque for such experiments. This is a matter for the commercial judgment of British Rail in conjunction with the trade unions who will want to be included in the information and marketing exercises which are involved.
  Mr. Michael Marshall: The Minister is missing the thrust of my argument. I said that the suggestion of the NUR for a 10 per cent. deduction in the price of season tickets provided the Government with a golden opportunity to get the sides together to consider productivity, bargaining and so on and to have a more meaningful dialogue. The Minister said that this was a matter for British Rail and that the Government would not intervene.
  Mr. Horam: I entirely accept what the hon. Gentleman has said. Of course we are bound to sound rather wishy-washy because we are in the middle of consultations. We have completed the formal consultations with everyone who has a logical and viable interest in transport.
  The hon. Member for Chichester spoke about a finite view. I accept that we must arrive at a clear view on how to tackle these problems and square the difficult circles in transport policy. We are arriving at a view, but I cannot reveal it at this hour in this debate. We are in this process of arriving at clear-cut decisions and I hope that the House will be happy when we bring them down-not like tablets of stone from the mountains, but after further, more informal contacts with the interests involved. There are many conflicting and entrenched positions in transport policy and we must get people talking to each other about problems in a way in which they have not done before.
  We have tried not to rush in foolishly since the Department was set up but to take our time. Inevitably this means that for a while we must sound negative and wishy-washy. However, clear-cut, positive action is going on though I hope that hon. Members will understand why I cannot say more about that.

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  I accept that the consultation and drawing together of the threads must include consideration of flexible marketing policies, fares, manning and productivity. One of British Rail's responses to the consultation document has been to suggest 15 methods of cost cutting which it intends to pursue with the unions. We are encouraging British Rail to continue with the consultations and to look creatively at the problems.
  It is too easy to stand back and tell commuters that they must be realistic and face facts. Even if it is difficult, we must seek a creative way forward and give people an understanding of the sort of problems we face, including, for example, the constraints on public expenditure. We should not be entirely gloomy. I have figures which show that despite the increases of the past two and a half years, commuters on the lines referred to by hon. Members still get very good value for money. It is about 2p per mile. The monthly season ticket for commuting from that part of the country to London compares reasonably favourably with driving costs. Going by rail is also faster and more comfortable.
  Mr. Michael Marshall: I want to pick up the hon. Member in his use of the figure of 3p per mile for cars. He is on a dangerous line of argument. Half my constituents are hiring and driving cars for groups of commuters. That makes a hole in the Minister's argument. That is what he must watch out for. People are beginning to move from rail to road.
  Mr. Horam: If it was a dangerous argument I should not have used it. But the rail fare is not quite such a bad bargain, even though I accept that it may encourage car pooling and various schemes of that kind, whereby people can drive more cheaply.
  For the longer distances, by comparison with the shorter, in fare per mile, taking the example of the British Rail monthly season ticket, whereas a person who is commuting a distance of five miles pays a fare of 3·80p per mile, the person commuting a distance of 30 miles pays only 2·73p per mile, and for 60 miles—the sort a distance that the hon. Member is talking about the cost is down to 1·84p per mile, in terms of the actual cost of the journey.
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  Hon. Members are righly complaining. I am not saying that they are not. They are complaining with justice. The fact is that, relatively speaking, they have not a bad deal by comparison with the commuter over a shorter distance. I do not want to encourage them to make speeches about the shorter-distance commuter, but they might bear that fact in mind.
  It is our job—although we cannot reveal our conclusions today—to take on board the points made by hon. Members. We ask them to understand that we are sympathetic and are trying to be as creative as possible in getting a good economic solution, which, fundamentally, means running things in the least expensive way consistent with a sensible service.
  We want hon. Members also to be realistic about the sort of time scale in which we can achieve progress. I accept that the fare increases in the last two and a half years have made enormous inroads into people's incomes, but there are other problems in transport which are also our concern.
  I hope that I have generally answered the points raised by hon. Members. We have not heard the last of this. I am sure that commuters in Sussex should be grateful to all the effort that hon. Members have put into making their points this morning.

  ENVIRONMENTAL POLLUTION (NUCLEAR POWER)
  7.49 a.m.
  Mr. Peter Rost: In wishing you a good morning, Mr. Speaker, I hope that you will express tolerance towards us humbler folk who have been waiting patiently for our turn throughout the vigils of the night.
  I was tempted to tag my contribution on to the earlier debate on the future of nuclear power, but that, though a temptation, would have done even less justice to the importance of the Royal Commission Report on pollution and nuclear power, by Sir Brian Flowers, than has already been done by Parliament in the way in which this report has been treated since it was published on 22nd September. In any case, if I had tagged on to the earlier debate it might well have been regarded as queuejumping—not that I would wish to accuse any of my colleagues of having done

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  that. It would also have been a major insult to the Under-Secretary of State for the Environment (Mr. Marks), who has been waiting up all night with me in order to keep me company at this early hour and to respond to the debate on this important subject.
  I very much appreciate what the Under-Secretary has done, even if he will only be carrying the can for the Department of Energy, as I shall be concentrating my few remarks on what I regard as the major, broader implications of the report by Sir Brian Flowers, which relates rather more to the Department of Energy than to the Department of Environment. I therefore hope that the Under-Secretary will at least act as a dawn messenger-boy to the Department of Energy to pass on any of the remarks that might refer to that Department rather than to his own.
  In a few moments one cannot even begin to do justice to the significance of this monumental Royal Commission Report. All that I can do is to register a protest that something of this importance has to be raised in Parliament at the end of an all-night sitting when, inevitably, the Chamber is almost empty and one cannot begin to expect the kind of publicity that this report should attract.
  One must register a protest that the Government have not found time even for a one-day debate on the report, which in my view, and in the opinion of many experts who have commented on it since it was published, is of great significance to the future not just of this country and our children but of the whole of mankind.
  The report is far more important in its implications than many of the matters that have been debated in Parliament in recent weeks. It does no credit to this Chamber or to our democratic institutions that such important matters have to be relegated to such irrelevant times in the Parliamentary timetable. I hope that the Under-Secretary will acknowledge this and will ensure that proper time is found for a public debate in this Chamber on the report by Sir Brian Flowers.
  The most important issues raised in the report to which I shall refer are summed up in recommendation No. 27, which goes to the heart of the matter—
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  "There should be no commitment to a large programme of nuclear fission power until it has been demonstrated beyond reasonable doubt that a method exists to ensure the safe containment of long-lived, highly radioactive waste for the indefinite future."
  That sums up the basic approach presented in the report, and I want to know where the Government stand. We have not yet had a clear indication of their view, and, although we understand that they need time to consider the report, the House is entitled to know whether they accept that basic opinion and recommendation. Do they believe that we should not move ahead until we have solved, or at least are without reasonable doubt within reach of solving, the problem of radioactive waste?
  If the Government accept that conclusion, I must remind the Minister that there seems to be some doubt about whether the nuclear industry accepts it. The comments on the report made by the Atomic Energy Authority and British Nuclear Fuels imply that they do not accept it.
  The broader implications of the report in so far as they affect our energy strategy—I refer to Chapters IX and X—are, in my view, the most important sections, and I shall make a few general observations on those themes. They are summed up in three recommendations which open up the whole spectrum of energy strategy for generations to come and go right to the heart of the debate.
  They are as follows:
  "44. We should not rely for energy supply on a process that produces such a hazardous substance as plutonium unless there is no reasonable alternative.
  "45.… a major commitment to fission power and a plutonium economy should be postponed as long as possible.
  "46. There should be increased support for the development of other energy sources including energy conservation, combined heat and power systems and fusion power."
  Those passages set out the major areas of debate for the future of our energy strategy, and it would be interesting to hear from the Government how far they are prepared to agree with those conclusions.
  The main issues about whether or to what extent we develop the fast breeder technology or to what extent we can provide more environmentally satisfactory alternatives are the issues which go to the heart of the matter. The Flowers

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  Report does not fudge those issues. It attempts to face them in a realistic and balanced way. We should do the same. We have not done so in the past, and, in my view, the Government have so far certainly not done so. The alternatives have not been properly assessed. The research and development prorities have not been allocated towards even exploring what possible options can be provided, over what time scale and at what cost. Nor has the major contribution which a more rational energy use strategy can contribute been properly assessed, and certainly not implemented.
  Those are vital issues for Government strategy and decision, and we want to know where the Government stand on matters of such major principle, even if we cannot have a detailed response tonight to the Royal Commission's recommendations.
  The Flowers Report recommends emphasis on research and development of alternative energy sources and investment in conservation before we can decide where the future energy balance lies over generations, perhaps until we have fusion power. These are the problems and areas of decision-taking which will involve the responsibilities of the House and affect the future of mankind. Therefore, it is time we received some indication of the Government's reaction.
  The report says that the current allocation of funds for research and development is, as it has been over recent years, out of balance, bearing in mind the possible relative rôles of a nuclear programme, for which the annual research and development expenditure is still running at about £80 million, and other energy resources such as solar and wave power, on which we are still spending only about £1 million a year. We cannot come to a decision whether they can provide answers, and to what degree, unless we allocate them a higher proportion of research and development spending.
  The Department of Energy has given the impression that the Government have almost a closed mind on some of the broader strategy policy implications. The Under-Secretary of State for Energy did so tonight, when he said that we could not rely on alternative renewable sources of energy without paying economic penalties. I have heard this from officials in
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  his Department and elsewhere, such as the electricity industry and the nuclear lobby. The implication is that possible developments in solar, wind, wave, tidal and fusion power will be far more expensive. That may be, but how do we know? Nobody has worked out the figures. We do not even know what a nuclear programme will cost, so how can we cost the alternatives? We have not done the research and development, let alone the detailed economic costings of alternative programmes. Therefore, I regard that line of argument as spurious.
  The implication within the Department is still that it is heresy to suggest that there might be other options for the longer-term solution of our energy problems than the existing routes. I hope that that impression will soon be dispelled. Unless it is, and unless it becomes respectable to suggest that there might be other solutions, we shall be in danger of debasing the broad nuclear argument. The more that the pro-nuclear lobby promotes its case by debasing the alternative options the greater is the danger of its argument becoming counter-productive. That is exactly why those who are opposed to any form of nuclear alternative are gaining strength in the public opinion argument.
  I recognise that the Flowers Report accepts that there must be a nuclear future. But it would be equally helpful if we could get from the Government a clearer indication that they, too, accept that there may be alternative routes recommended by the Flowers Report that are preferable.
  There can be no doubt that the attitude of the Government in the Department of Energy, as is suggested in the Flowers Report, has until now been passive. I regard it not as passive but as negative. Perhaps in some respects it is even complacent.
  The conclusions that I wish to reach in these superficial comments upon the Royal Commission report are that if we accept nothing else from it we should accept the case for a proper public debate. We are told by the Secretary of State for Energy that a public debate is under way, but how can it be a public debate when the Government have given no guidance and the debate has not included the Government? I do not call it a public debate on the future of our

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  energy strategy if the Secretary of State presides at a conference and in other respects sits on the fence. It is not a public debate that will lead to correct decisions taking if it consists of little more than an exchange of correspondence in The Times. We need more than a—I quote from the Flowers Report—
  "bland, unsubstantiated official assurance that the environmental impact of nuclear power has been fully taken into account."
  We need something such as a Green Paper from the Government as an initial response to the issues raised by the Flowers Report and then a proper parliamentary debate, not a debate in the early hours of the morning after an all-night sitting, followed, perhaps, by a proper investigation. The present impression is still one of a neutral Government preferring to sweep the problems under the carpet rather than face the fundamental issues raised by the report.
  The real importance of the Flowers Report is that it does not give the Government an excuse for lethargy. It does not allow them to do nothing. It does not justify a deferment of decisions. It outlines procedures and guidelines which might allow us to take the right decisions. An acceptance of the principal recommendations of the report would give us time, not to procrastinate, but for reflection, time for a full consideration of all the implications, time for our technology to catch up on the problems of waste disposal, time for the Government to implement higher priorities for conservation programmes, time for a re-allocation of priorities in research and development of alternative sources of energy.
  One thing about the Flowers Report is that it is not a report that anybody can ignore. These are not issues that a Government can duck or sweep under the carpet. Governments of course can sit on the fence for a long time on many issues and get away with it, but the Flowers Report is not one of those issues. This is an area of debate where the Government must stand up and be counted. The Government must take note, consider and respond constructively and urgently. That is the least we should demand, and that is the least the nation expects, not just for the sake of our children and theirs but for the future of mankind.
  8.13 a.m.
  Mr. George Thompson: When I came to the House this morning I expected to be taking part in the debate on subject No. 25. Hon. Members can imagine with what surprise I saw that we were still on subject No. 10. However, the remarks that I wanted to make on the subject of the disposal of nuclear waste fit in perfectly on this subject. I shall address myself to Chapter 8 of the Flowers Report.
  I agree with the hon. Member for Derbyshire, South-East (Mr. Rost) that it is a scandal that we have to debate the Flowers Report on the Consolidated Fund Bill. At Business questions in the week of the Gracious Speech I asked for a debate on this report and the Leader of the House advised me that it was a matter that could be raised during the debate on the Loyal Address in reply to the Gracious Speech.
  I raised the matter then, as did two other hon. Members. In such a debate we receive no answer to our question—we simply ventilate the subject. It may well be that this is all that we shall be able to do this morning. It is a great pity that the report has to be debated through the archaic procedure of the Consolidated Fund Bill with very few lion. Members present.
  I believe that there must be in the House a number of Members who have the necessary scientific knowledge that I do not have and who could make useful contributions to such a debate. I certainly hope that in due course such a debate will take place, but I should have thought it would be better if a full debate on the Flowers Report could take place before the Secretary of State for the Environment makes his decision whether to call in the Windscale planning application for a full public investigation.
  One of the interesting things I have noticed in the Flowers Report is the way that it criticises the lackadaisical approach of the nuclear industry in this country to the problem of waste disposal. For instance, in paragraph 381 the report states:
  "The delay in bringing the vitrification process into commercial production stems from a long period of inactivity in the 1960s when no further development work was carried out. It is strange in retrospect that a matter so important for the safe development of nuclear power should have been delayed for so long."

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  It is indeed strange in retrospect, and I think the peoples of these Islands will want to know why this dilly-dallying took place.
  Again, we are told in paragraph 389:
  "We have assumed that the actinides will not have been removed, and therefore that it is necessary to look further ahead than the few hundred years needed to allow the majority of the fission products to decay to harmless levels."
  This is the crux of the whole matter—the length of time that these dangerous products will remain radioactive. It is this that is bound to arouse public anxiety.
  Indeed, I am bound to say, from my own point of view, that in the 1950s and the early 1960s, when I was at university as a mature student, I did not take on board the full case that the Campaign for Nuclear Disarmament was putting before us at that time. In retrospect I wish that I had taken more interest and done more about it then, because the dangers that were being talked about then in regard to armament are now facing us in relation to the disposal of nuclear waste from our power stations and other installations.
  After all, what are a few hundred years? It is a very loose term. It is only a few hundred years since King James VI came down to London instead of sending down a viceroy and staying in Edinburgh, which might have been more satisfactory to many of us. It is only a few hundred years since the death of King Alexander III brought about the confrontation between England and Scotland at the time of Edward I. Just how few are a few hundred years. In the case of some of the products we are talking about it is a question not of a few hundred but of a few thousand years.
  Paragraph 391 of the Flowers Report states that
  "Neither the AEA nor BNFL in their submissions to us gave any indication that they regarded the search for a means of final disposal of highly active waste as at all pressing, and it appears that they have only recently taken firm steps towards seeking solutions. We think that quite inadequate attention has been given to this matter, and we find this the more surprising in view of the large nuclear programmes that both bodies envisage for the coming decades, which would give rise to much greater quantities of waste."
  There is a case there that must be answered by the Government and by the nuclear industry, and answered to the peoples of these Islands.
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  If we look at the ideas that have been suggested for getting rid of the nuclear waste we enter the world of high science fiction. There is a notion that it could be sent off in a rocket to the sun. No doubt that is the best place it could go, but we cannot trust our technology to get it on the way to the sun. If we cannot trust our technology to get it on the way, how can we trust our technologists when they tell us that they can safely dispose of radioactive waste for 30,000 or 100,000 years? What certainty can we have when on the one hand they doubt the technology they have and, on the other, they invite us to trust them?
  The problem which definitely interests me, as a Scotsman and a Gallovidian, is where the nuclear waste will eventually end up. I have been in correspondence with the Department of Energy, and I posed two questions which I thought deserved plain answers. I asked for an assurance that no foreign waste would be deposited in Scotland, because I understand that Windscale will, hopes to, intends to or expects to—whatever the jargon of the bland bureaucrats may be—handle Japanese waste. I wanted, I still want, and I shall go on wanting until I get satisfaction, a categorical assurance from the Government that no foreign waste will he deposited in the rocks of Scotland. Each country should keep its own waste to itself.
  Nuclear waste has been generated in Scotland, and it is up to us to dispose of it, but we do not want to be saddled with waste from other countries. I also asked the Secretary of State for Energy what position the Scottish Assembly is supposed to take on this vital matter. We know that these matters will not be devolved to the Assembly, but do the Government seriously believe that the Scottish Assembly, which will be functioning, will do nothing if nuclear waste is ever irretrievably deposited in the rocks of Scotland? Do they seriously believe that the Assembly will sit there meekly in Edinburgh and allow itself to be bypassed and overridden?
  Mr. Gordon Wilson: Is my hon. Friend aware that it is equally scandalous that there is no Minister from the Scottish Office present to discuss this great problem of the danger arising from the likely dumping of English and other nuclear waste in Scottish soil? This is

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  an argument not just for the Assembly having control, but for an independent Scottish Parliament having control.
  Mr. Thompson: I could not agree more. As for my views about the policy of an independent Scotland—
  The Under-Secretary of State for the Environment (Mr. Kenneth Marks): May I point out that this subject was debated from 5 a.m. to 7 a.m. with a Minister from the Department of Energy here. No hon. Members from the Scottish National Party were here to hear it.
  Mr. Thompson: I was not here because, as I said, I came in to join in the debate on item 25.
  The Comptroller of Her Majesty's Household (Mr. Harper): You must be joking.
  Mr. Speaker: Order. We cannot have a cross-conversation like that. Hon. Members are making me forget that it is Christmas.
  Mr. Thompson: Thank you, Mr. Speaker, for protecting me from sedentary interruptions. I may well abandon that somewhat unproductive seam, and point out that I was not complaining about the Department of Energy not being represented at the moment. I am sure that the Minister on the Front Bench will convey my thoughts to the Department of Energy very adequately.
  Another gem in the report will be of interest to people in Scotland and the north of England. Describing the various formations into which nuclear waste can be deposited, and dealing specifically with clay, the report states significantly:
  "There are extensive areas in southern England and other areas of the UK that might be geologically quite suitable and would be worth investigating as potential disposal sites, but there will undoubtedly be difficulties because of public reaction".
  That seems to prove that the nearer one is to London the safer one is from nuisance and dangers. For instance, one can write to the Ministry of Defence to complain about low flying aircraft. The answer always is that the remote, rural areas must tolerate the nuisance as low flying cannot take place over densely populated areas.
  We do not want nuclear waste in the hills of Galloway—and we say that not
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  for ourselves alone but for future generations. It is all very well for the Chairman of the South of Scotland Electricity Board to tell us that the nuclear industry has had a splendid safety record over the last 30 years. There may be doubts about that. But I want to be certain that the successor to the present chairman will be able to put his hand on his heart and say that the industry has had a splendid safety record over the last 30,000 years.
  Further expenditure on research is required into ways in which the use of nuclear fission can be reduced and perhaps extinguished. We have coal, hydroelectric power and other alternatives. We should not need to go on developing nuclear fission power stations until we have examined our requirements and the alternatives available to us. We must contribute as much as possible to finding the alternatives. We must avoid creating a plutonium economy which, if my constituency were selected for waste disposal, would result in convoys of heavily armed vehicles transporting vitrified fuel into our hills.
  I campaign to prevent that state of affairs not just for our people but for the future of mankind. Although my main remarks have concerned Scotland the problem knows no boundaries. It will not stop at the River Sark or when it enters the sea. The problem is world wide. We must ensure that all the alternatives are explored before we commit ourselves to the dangers of a plutonium economy.
  8.30 a.m.
  The Under-Secretary of State for the Environment (Mr. Kenneth Marks): The Government are fully conscious of the immense importance of the subject covered by the Sixth Report of the Royal Commission on Environmental Pollution on Nuclear Power and the Environment. We are fully aware of the interest taken in the subject not only by the House but by the public at large. There is no lethargy. As the hon. Member for Derbyshire, South-East (Mr. Rost) said, this is not a report that anyone can ignore. The Government have no intention of ignoring it.
  Much of the criticism in the debate has been based on the fact that the Government have not provided a full day's debate on it and that it should not have been taken as part of a Consolidated

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  Fund debate. It seems to me that the time for the main debate, a full day in the House, is when Government Departments and Ministers have had time properly to consider the Flowers Report, which is only three months old, in addition to listening to the national debate that has been going on and to debates of this kind. This is the sixth time that this matter has been debated in the House since September—through the Queen's Speech, a number of Adjournment debates, a debate earlier this morning and now this debate.
  It is right that the Government should be listening to all the comment that is being made, giving the Atomic Energy Authority and the other nuclear organisations some opportunity to reply to what is in the Flowers Report. It is significant that a few hours ago the Opposition Front Bench spokesman in the previous debate that we had on precisely the same matter, the hon. Member for Bridgwater (Mr. King), said that he tiptoed into the debate. That was fairly obvious. The debate will not end when the Government publish their views. It will then continue. We are at the stage when the Government are being told not to rush, to think carefully and to consult, yet at the same time we are being told to hurry up, to publish our views and to have debates on the subject immediately.
  It therefore seems to me to be right that we should remind ourselves what the Report is about. The main thrust of it is the need to give thought in good time—certainly within the next decade or so—towards the situation which may arise, perhaps 50 years ahead, if the country should decide to have a large component of nuclear power in its energy supply, based on the fast reactor. The point about the fast reactor is that it uses plutonium as part of its fuel supply and over time produces more plutonium than it consumes.
  The Commission has addressed itself to a number of problems it sees arising in this context. The main ones are safety: the need to safeguard the increased amounts of plutonium which will be produced and which will have to be transported to and from the nuclear power stations; the social and political implications of the measures which may be needed to provide this protection; the problem of proliferating the scope for
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  nuclear weaponry; and the problem of safely storing and eventually disposing of long-lived highly radioactive wastes.
  Here perhaps we should note the Commission's point that the problem of disposing of these wastes is already with us. Reprocessing of irradiated fuel from existing nuclear power stations produces wastes of this kind, but the quantity would, of course be considerably increased if there were a substantial extension of nuclear power in the years to come.
  We ought to note, too, that the Royal Commission was satisfied with the basic standards limiting discharges of radioactivity to the environment, and with the adequacy of the arrangements to enforce them. It has, however, drawn attention to several matters on which it thinks action should be taken now. One of these is the need to press ahead urgently with research into methods of disposing of the highly active long-lived wastes. Some were mentioned in the previous debate by my hon. Friend the Under-Secretary of State for Energy. Another is to organise facilities for the disposal of certain of the less highly radioactive wastes.
  I should point out to the hon. Member for Galloway (Mr. Thompson) that it was explained in the earlier debate that the research into the possibility of storing waste in certain rock formations is in its preliminary stage, with this country doing some research into the possibility of storage in granite, with Italy doing research into the possibility of storage in clay, and with Germany doing research into the possibility of storage in salt rock formations. The research is concerned only with investigating the possibility of using differing types of rock. The question of selected sites does not arise at this stage, and there will be prior consultation before anything of that kind happens.
  Mr. Gordon Wilson: Does the hon. Gentleman realise that it may be a waste of resources searching for facilities of that kind in Scotland, because there is a welling tide of public disapproval at the whole prospect of having such wastes left in Scotland? The constituency of my hon. Friend the Member for Galloway (Mr. Thompson) is affected, but many people throughout the country who will not be affected directly have a tremendous distaste for and feeling of horror at the whole prospect.
  Mr. Marks: The hon. Member for Galloway (Mr. Thompson) also said that Scotland was producing radioactive wastes, and he felt that there should be some way of disposing of that. I hardly think that the hon. Gentleman would advocate putting Scottish waste somewhere else. However, we are a long way from the point where that matter need arise. As I have said, there will be consultations. Decisions are some way off on whether the whole thing will be needed but we are right, and the countries with which we work are right, to examine the possibilities, as the flowers Commission suggested we should.
  Mr. John Biffen: This question will come up repeatedly over the next few months. Can the hon. Gentleman say whether these decisions are of an environmental character which will therefore fall under the devolved powers which would rest with the Scottish Assembly, or are they powers which will be retained by this House of Commons?
  Mr. Marks: I do not think that I am in a position to answer that now, but no doubt during the 30 or so days of debate in Committee on the devolution Bill there will be ample opportunity for that matter to be raised, and I shall note it for answering in the future.
  The Commission also proposes the introduction of certain organisational changes as soon as possible; namely, making my right hon. Friend the Secretary of State for the Environment responsible for radioactive waste management strategy, the establishment of a Nuclear Waste Management Advisory Committee to help him in this task, and the setting up of a Nuclear Waste Disposal Corporation to carry out the disposals.
  Finally, the Commission goes on to consider the broader question of what it calls energy strategy and the place of nuclear power, especially fast reactors, in it. It advocates proceeding as slowly as possible in the direction of a major expansion of nuclear power, especially by means of the fast reactor, though it is to be noted that it does not rule out either nuclear power entirely or an initial use of the fast reactor.
  The Commission also strongly advocates a wide-ranging public debate before any major decisions are taken on an expanded use of nuclear power, and it
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  puts forward some ideas on how it might be conducted.
  In sum, it can fairly be said that the Commission's report constitutes a valuable contribution to the public debate on this very important question.
  I should also like to remind the House of what my right hon. Friend the Secretary of State for the Environment said on behalf of the Government as a whole when the report was published in September of this year. The Government are studying the report in detail and they will be making their views known in due course. I think, however, that I should also reiterate a number of points which my right hon. Friend then made which the Government feel to be important, because they are directly addressed to matters which immediately concern people and honourable Members in both debates this morning have drawn attention to them.
  One cannot repeat too often that the Government attach great importance to maintaining the present very high standards in reactor safety and environmental control. There has been considerable research—it takes a long time—into the storage of long-lived and highly radioactive wastes, but a lot remains to be done. It is already clear that, quite apart from the research, important questions of policy will have to be tackled, notably in the choice between disposal below the land and on or below the deep ocean bed, and there are both domestic and international problems of considerable complexity here.
  Mr. George Thompson: The hon. Gentleman has spoken about the Government wanting a debate and so forth, and I follow him in that. I know that he cannot tell us now what is to happen to Windscale, but will he take my point that it seems odd for the Government to be taking such a decision without the House having had a chance to debate the Flowers Report. If the Government are not in a position yet to let us know their reaction to Flowers, how are they in a position to make a decision on Windscale?
  Mr. Marks: My right hon. Friend has a decision to make on Windscale which is perhaps of more urgency than the total debate, and it may well be that an earlier statement will be made on Windscale.

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  That could include a public inquiry, where there would be ample opportunity for the points raised to be considered.
  I must also repeat that the Government do not accept the view expressed by the Commission that the Government are under-estimating the implications of the threat posed by illicit possession of nuclear material. I wish to draw attention to the fact that while the Commission very properly pointed out the profound implications of a large nuclear programme, it did not consider that the abandonment of nuclear fission as one of the options for future energy supply would be wise or justified.
  There are—and this is the main reason underlying the whole of the Commission's report—obvious major environmental and social considerations, to say nothing of international factors, in whatever mix of energy sources will best meet our requirements. It cannot be stressed too often that decisions on options will be taken progressively and will at all times take account of the environmental and social considerations to which the report draws attention, and which honourable Members have raised tonight.

  SPANDAU PRISON
  8.42 a.m.
  Mr. Cyril D. Townsend: I raise the subject of Spandau Prison. I have taken an interest in the case of Rudolf Hess since I did a spell of guard duty as a young Army officer at Spandau. Sir Winston Churchill wrote in the third volume of his history of the Second World War:
  "I am glad not to be responsible for the way Hess has been and is being treated."
  But the British Government are partly responsible on behalf of the British people for what happens at Spandau, and what happens there is a disgrace to us all.
  I would like here to pay tribute to the work that my hon. Friend the Member for Abingdon (Mr. Neave) has done over the years to try to obtain the release of Hess. In October last year, my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) raised the matter in an exemplary speech during an Adjournment debate. I am grateful to him for joining me in waiting to take the opportunity to raise the matter again today. He said in that debate:
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  "It is no part of my case to suggest that Hess was other than a dedicated fanatical and ruthless Nazi Party leader. The case for clemency…does not rest on any alleged innocence during the Night of the Long Knives, or, indeed, on any claim to ignorance of the impending attack on Russia. All the evidence would suggest that he was fully implicated in both episodes, as well as in many of Hitler's crimes."—[Official Report, 20th October 1975; Vol. 898, c. 206.]
  I entirely agree with that view.
  At Nuremberg, Hess was found guilty of crimes against peace and war crimes. Lord Justice Lawrence imposed a sentence of life imprisonment. When I was at Spandau in the bitter cold of a Berlin winter, Shirach and Speer were still imprisoned with Hess. On 30th September 1966, Shirach and Speer were released. Tonight and every night, Hess, now aged 82, is in solitary confinement in that ghostly pile with its 600 empty cells and high brick walls. His health is failing. And this barbarous punishment is being carried out in the names of us all.
  In Britain today, a life sentence can often mean only 10 years, with remission. Hess has been in captivity since May 1941. It is obvious that he is no danger to anyone. If he should be released, after a bout of publicity he would be forgotten by all but historians. The longer he remains in Spandau, the greater the danger that he will gain widespread personal sympathy. Should he die in prison, as appears highly likely, he will become the rallying point for extreme Right-wing elements in West Germany and elsewhere. The three books of letters he has written to his wife have sold better than any works on the German resistance to Hitler. No useful purpose is served by his continued imprisonment. On the contrary, there is staggering inconvenience and expense.
  The Minister of State for Foreign and Commonwealth Affairs, told the House in October 1975:
  "It is the Government's belief, for reasons of compassion, that Hess should be released and released now."—[Official Report, 20th October 1975; Vol. 898, c. 209-210.]
  That was also the position of previous Governments. Two of the parties to the quadripartite agreements—France and the United States—have joined Britain in urging clemency on the fourth party, the Soviet Union, but to no avail. The Soviets

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  have remained vindictive and intransigent.
  I praise the Government for the efforts made to obtain the release of Hess. I ask this morning for a further specific and categorical statement that they will continue to press the Soviet Government with all the energy and resources at their command to release Hess and to close down Spandau. Once it has been shut, I should like the bulldozers to move in.
  During Questions on 18th February, I raised with the then Foreign Secretary, the present Prime Minister, the case of Rudolf Hess. After saying that the Soviet Union had turned down Britain's request, he added:
  "I inquired into the extent of the guard when I was in Berlin recently, I understand that, taking into account the four countries concerned, there are 20 warders and 104 soldiers, who take it in turns in their tours of duty one month in four to guard this one man. But I see no prospect of a change in the situaation at the moment."—[Official Report, 18th February 1976; Vol. 905, c. 1265.]
  I hope that the Minister will tell us how many non-military personnel are supplied by Britain on a permanent basis. I understand that the salary of at least one—the deputy governor—is paid by Britain.
  Excluding the military guard, what is the total cost to Britain of keeping Spandau open? I appreciate that the Berlin Government carrys the main financial burden. Last year I tabled an Early-Day Motion congratulating the Government on making a further approach to the Soviet Government and regretting that British soldiers were still called upon to carry out guard duties at Spandau. A total of 81 hon. Members were kind enough to sign that motion, including the hon. Member for Oxford (Mr. Luard), who was one of its leading supporters.
  For 90 days a year the British Army supplies a guard of one officer and 25 men armed with personal weapons. I can assure the House from personal experience that itis a ridiculous, disagreeable and degrading task, as the Minister knows. For young professional soldiers, it is boring in the extreme and a cruel military charade.
  In reality, the security of this frail 82-year-old man is the responsibility of the highly competent civilian warders. The soldiers are for show. They know it,
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  and they resent being called upon to perform this duty. It imposes a considerable strain on the resources of our small manpower garrison in Berlin.
  If, as is most likely, the Soviet Union turns down a further request by the Government for the release of Hess, I should like the future of the military guard to be reconsidered by Britain in conjunction with the United States and France. I should prefer it to be removed, but failing that, it should be greatly reduced. At the very least, the military pomp and circumstance must go. At Spandau, there is no cause to blow a trumpet. We should be ashamed of what is being done in our name so long after the war.
  In May this year, I went to the Soviet Embassy in London with my hon. Friend the Member for Dorset, North (Mr. James) and the hon. Member for Ipswich (Mr. Weetch). The Soviet Ambassador refused to see us and the counsellor who did was unnecessarily hostile. He gave us the traditional Russian reply that Hess was seen as a symbol of Nazi Germany and had worked closely with Hitler prior to the attack on Russia. He also made the point that Hess had never relented.
  Following our visit to the embassy, we got in touch with Hess's wife who was prohibited by the governors of the prison from informing her husband of our visit. She had particularly wished to tell him of the Russians' complaint that he had never relented.
  Hess's son, Wolf Rudiger Hess, wrote to me to complain that although the prison regulations are supposed to allow the prisoner access to the lawyer of his choice, the lawyer whom Hess had chosen—Dr. Bucker—was not allowed to see him. Hess is not allowed to make any statement, verbally or in writing. He is thus not allowed to relent. Hess's son has told me in a letter:
  "There is no doubt at all that my father would express his regret for the millions killed in the Second World War."
  It is clearly intolerable that any prisoner, whatever his crimes, should be treated by the authorities in this despicable way. I complained in writing to the Minister of State at the Foreign Office in June. His reply was courteous, but unsatisfactory.
  The Government are operating these petty, out-dated, inexcusable regulations in conjunction with the other Powers. The House has the right to demand that

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  these censorship regulations be relaxed and that a more civilised and rational attitude be adopted by the governors—our governors.
  In many matters, the Soviets give the impression of being totally inflexible, yet just when it seems that the ice has become permanent, there is a sudden and unexpected crack. The release at the weekend—at the start of Amnesty International's Prisoner of Conscience Year—of Vladimir Bukovsky was just such a crack. Who can deny that international pressure over the years was a vital factor? So often, liberal, humanitarian pressure seems quixotic and futile, yet in the long run, it is resoundingly worthwhile, even when dealing with the Russians.
  The object of this debate is to reinforce that pressure: to make the Government try again to persuade the Russians to agree to the release of Hess; and to show that the House and the British people have not forgotten the cruel absurdity that is Spandau.
  It is no longer good enough for the Minister to say—as his predecessors have said—that we do not like what goes on but that the Russians will have it no other way. Let us remember our humanity and forget the rest.
  8.54 a.m.
  Lord James Douglas-Hamilton: It is a great pleasure to support my hon. Friend the Member for Bexleyheath (Mr. Townsend), who speaks with great authority on this subject, having been an officer guarding Hess in Spandau.
  I raised this subject on the Adjournment last year and mentioned that my hon. Friend the Member for Abingdon (Mr. Neave) had worked tirelessly to secure Hess's release, but that no response had been elicited from the Russian Government. I also declared by interest on two grounds—first, that in May 1941, Hess flew over to see my father, whom he had not seen before and did not see again, and secondly, that I wrote a book on the subject which is now out of print, though there is still a copy in the Library.
  My hon. Friend the Member for Bexley-heath and I are not the only Members with an interest in this subject. The right hon. Member for Kilmarnock (Mr. Ross) guarded Hess in the war, as a soldier, and took charge of him. He was in good
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  hands then. Not only that; my hon. Friend the Member for Abingdon interrogated him after the war at the Nuremberg war trials. It is true to say that hon. Members from all parties support the release of Hess.
  After the war, at Nuremberg, Hess was charged with crimes against the peace; war crimes; crimes against humanity, and having a common plan or conspiracy to commit those crimes. He was acquitted on the charge of crimes against humanity and having a common plan or conspiracy to commit those crimes. He was found guilty on the first two charges. While there might have been a case at that time to execute Nazi war criminals, I suggest that, the judges having refused to execute him at the time—only the Soviet judge thought he should be executed; the majority took the view that there was no case—there is no case for keeping him in prison today.
  Hess presents no threat or danger to anyone, and if he were released he would fade into the background. There can be no useful purpose in keeping him guarded by large numbers of soldiers at considerable cost. Far from having a symbolic value, his continued imprisonment creates a great deal of sympathy for somebody who in the past did nothing to deserve it, in the years when his crimes were committed. It seems most undesirable to create sympathy, because the people of Germany do not remember the crimes committed in the past; they see an 82-year-old man kept in prison on his own and they feel sympathy for him.
  Hess has spent 34 years in captivity, 30 of them in Spandau. That is a long period of imprisonment by any standards. The last 9½ years have been spent in solitary confinement. Nine and a half years in solitary confinement is a barbarous form of punishment.
  Last year the Minister then concerned—the hon. Member for Birmingham, Sparkbrook (Mr. Hattersley)—agreed that the time had come to make a further request to the Russian Government that Hess should be released. The Minister later wrote to me saying that he would let me know the answer from the Russian Government. It is with great regret that I must inform the House that no answer was ever given by the Russian Government. When a senior British Minister makes an important statement on

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  behalf of the Government and forwards a request to the Russian Government, as a matter of courtesy that Government should reply. If the Russian Government refuse to reply surely there is a case for sending them a reminder, especially since they have had a year to think about it.
  Therefore, I support my hon. Friend in making the request that the Government should again make an approach to the Russians—this time in conjunction with the American and French Governments.
  I have had two parliamentary replies from the Under-Secretary of State—the hon. Member for Meriden (Mr. Tomlinson)—recently, on behalf of the Government. In the first, on 1st December 1976, he said:
  "The Soviet Government have been left in no doubt that it is Her Majesty's Government's view that Hess should be released."—[Official Report, 1st December 1976; Vol. 921, c. 149–150.]
  In the second he mentioned that not only had the Minister of State for Foreign and Commonwealth Affairs made representation to the Soviet ambassador, the Prime Minister had also raised the question with the Soviet Foreign Minister, Mr. Gromyko, in March this year. He said that the Soviet response had been totally negative in each case. There was no real response—just a formal reply indicating a lack of interest. I am sure that if the American, French and British Governments made a joint statement it would be different. It would ensure that there was a consideration of the matter. It would be difficult for the Russian Government merely to give a formal reply.
  I hope that the Minister will be as direct as Sir Winston Churchill was when he wrote:
  "Reflecting upon the whole of this story, I am glad not to be responsible for the way in which Hess has been and is being treated."
  I hope that the Minister can take this matter up once more, together with the French and American Governments, in the hope of eliciting a reply from the Soviet Government.
  9.0 a.m.
  The Under-Secretary of State for Defence for the Army (Mr. Robert C. Brown): I congratulate the hon. Member for Bexleyheath (Mr. Townsend) on rais-
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  ing this subject again. We are well aware of the humanitarian aims that lie behind the desire to have this matter ventilated in the House again. When this House ceases to be moved by compassion it will be a poorer place.
  The problem to which the hon. Member has drawn attention has a long history. The House will recall that we last discussed Herr Hess's continued imprisonment during the Adjournment debate on 20th October 1975. Perhaps I could repeat some of the background.
  Herr Hess made his bizarre flight to Scotland on 10th May 1941 and spent the remainder of the war in prison in the United Kingdom. In 1947 he was tried with other Nazi leaders at Nuremberg, was convicted of crimes against peace and was sentenced to life imprisonment. He was sent to serve that sentence in Spandau Prison in the joint custody of the Four Powers—the United Kingdom, France, the United States and the Soviet Union. The other Nazi war criminals imprisoned with him have long since been released but, except for a brief period in hospital, Hess has remained. Now at the age of 82 he has spent 35 years in prison, the last 10 of them as Spandau's sole inmate.
  The arrangements for guarding the prison were agreed between the four occupying Powers after the war, and their execution is supervised by four Governors, one nominated by each of the Four Powers. Each of them provides a guard for one month at a time in rotation. Because the prison is located in the Western Sector of Berlin, the Soviet troops, when it is their turn for duty, are driven in from the East. In addition to the guard, there are a number of civilian warders, five of whom are British.
  The British Garrison in Berlin is responsible for providing the military guard at Spandau during the months of January, May and September. It then consists of one officer, one sergeant, three junior NCOs and 21 privates. As the hon. Member for Bexleyheath has clearly indicated from his own experience, this is not by any means a popular duty, but the soldiers understand that their disagreeable task is part of an obligation brought by international agreement—the point is carefully explained to them—and so they do their duty.

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  Since the subject has been raised under a financial debate, I perhaps ought to mention that the existence of the guard causes no additional charge to public funds, because it is made up of troops whom we would otherwise need to have in Berlin as part of the British Garrison In accordance with the Allied Declaration on Berlin dated 26th May 1952, which was published as Command Paper 8564, expenditure on local supplies and services for the British Forces in the city is met without charge to United Kingdom funds.
  Similarly, the maintenance and running cost of the prison and wages of the civilian warders are paid for by the Federal German Government through the Berlin budget. It follows, therefore, that even in the present financial climate and the search to exploit every possible economy, however small, there would be virtually no saving if this commitment were to be ended.
  Mr. Townsend: I hope that the hon. Gentleman will take seriously the point that this would be a very good moment to reduce the size of the guard. I appreciate that it would not make any financial saving but I am sure that the hon. Gentleman will agree that it would have a lot of other advantages.
  Mr. Brown: That point has not escaped me. I shall come to it later.
  The real and—in the view of this Government—compelling reasons for releasing Hess are those of common humanity. The requirements of justice have, after 35 years, surely been met in full, and the demands of compassion deserve a hearing. Successive British Governments have taken the view that Hess should be released on humanitarian grounds and over the last 12 years repeated representations to this effect have been made to the Soviet Union. On several occasions we have acted in concert with the French and American Governments, who share our view that Hess should be set free. One such occasion was after last year's debate, to which I referred initially, when my right hon. Friend the then Minister of State for Foreign and Commonwealth Affairs, now Secretary of State for Consumer Affairs, made a special appeal to the Soviet authorities. More recently, in March of this year, my right hon. Friend the Prime
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  Minister again raised the question with the Soviet Foreign Minister, Mr. Gromyko, during the latter's visit to London. On each occasion the Soviet response was entirely negative.
  Why does the Soviet Union continue to set its face against humane action? It maintains that Hess, once released, would become a focal point for resurgent Nazi aspirations, and that in any event Russian public opinion would not tolerate the release of a man who, as deputy to Hitler in the years before 1941, shares responsibility for the deaths of millions of Soviet citizens in the years that followed. Hon. Members can judge for themselves the validity and reality of these claims, but, whatever the real reason may be, as long as the Russians refuse to contemplate Hess's release there is nothing the other three Powers can do to change the situation.
  It has been suggested in the past that we should take action to release Hess without the consent of the Soviet Union. This is unacceptable. The Four-Power agreements governing Hess's imprisonment are valid and binding. They are part of the complex of agreements concerning Berlin, on the strict and total observance of which by all the Four Powers depends the survival of West Berlin as a free and democratically-governed city.
  In these circumstances we and our allies are powerless to put an end to the deploable incarceration of this 82-year-old man until the Russians can be brought to admit the inhumanity of its continuation. I have already referred to the efforts which this Government and their predecessors have made in this direction in the past. It is hard to see what purpose would be served by a fresh approach at this point. But I can assure hon. Members that this Government will continue to look out for suitable occasions to raise the question again with the Soviet authorities.
  The hon. Member for Bexleyheath spoke of the number in the guard. Without commitment, I tell him that I shall consider this question. I think that the numbers will be dealt with in the Four-Power agreements, but I shall look into that and write to the hon. Gentleman, whom I thank sincerely for raising the subject.

  SECONDARY EDUCATION (CHESHIRE)
  9.9 a.m.
  Mr. Alastair Goodlad: I am very grateful to the Under-Secretary of State for Education and Science for being here at the end of a long and arduous debate. I particularly welcome her presence as she represents the city in which I was born and brought up and to which I was a frequent visitor until very recently. I am sure that I shall receive a sympathetic hearing for that reason, if for no other.
  I seek to bring to the attention of the House the difficulties that have been experienced by two of my constituents, Master Richard Wilkinson and Miss Rebecca McMillan, in obtaining admission to the secondary schools of their choice. I should like first to state briefly the facts about Richard Wilkinson.
  Richard Wilkinson is currently not at school at all, and has not been since last summer. He is looking after the rabbits of a neighbour. He was offered a place at the Tarporley County High School although his parents' first choice for him had been the Nantwich and Acton Grammar School because there are already two of the Wilkinson children at the Nantwich School. The siblings rule has hitherto been fairly generally applied in Cheshire. In years previous to this Richard Wilkinson would have been directed, as was his brother, to attend the Nantwich and Acton Grammar School, but unfortunately for him the catchment areas have recently been changed.
  The burdens imposed on his family were he to attend Tarporley County High School can readily be imagined. There would be different starting times in the morning and different finishing times. There would be different holidays, different uniforms, different school homework requirements, different sports days to attend—or perhaps such events would take place on the sameday—and difficulties in attending parent-teacher association meetings and school functions.
  The primary reason which was given for his direction to Tarporley County High School was that there was not room at Nantwich. The letter of 6th December received from the Department of Educa-
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  tion and Science by Mr. and Mrs. Wilkinson states:
  "In the case of your son, exhaustive inquiries have been made of the Cheshire Education Authority who have satisfied us that there are sufficient staff at Nantwich and Acton Grammar School to cater only for four first-year classes, and these classes have been filled in accordance with their normal policies and procedures. I must emphasise that we have regarded the fullness of the school as the most important factor in our consideration, even though the Authority may have mentioned other factors in their discussions with you. In these circumstances, although we are sympathetic to your request and recognise the problems which will result from the attendance of your children at different schools, we have concluded that the Cheshire Education Authority have not acted unreasonably in terms of Section 68 of the 1944 Education Act."
  Subsequent to that letter the Wilkinson family received a letter signed by the Headmaster of Nantwich and Acton Grammar School, dated 13th December, which stated that he had been shown the letter written to Mrs. Wilkinson on 6th December. He wrote:
  "I notice that you say '…there are sufficient staff at Nantwich and Acton Grammar School to cater only for four First year classes, and that these have been filled …' In fact the decision to reduce the number of classes to four was made by us precisely because we received fewer new pupils this year. We started the year with only 129 first year pupils and we now have 131 pupils. Last year there were 154 and in 1974 there were 191. If the fullness of the school is, as you say, the most important factor in the case, there is no reason why this boy should not have been admitted in September. We could have accepted him without difficulty then, and we can still do so now."
  There seems to be a difference of opinion and, I submit, an error.
  I do not propose to weary the House at this stage by going into a post-mortem on how such an error might have arisen, but in the light of the letter from the Headmaster of Nantwich and Acton School it seems that the county council has not behaved wholly reasonably.
  On 18th December a letter was received by the Wilkinson family from Councillor Norman Ribbeck, a highly respected member of the Cheshire County Council, in which he said to Mrs. Wilkinson:
  "I am extremely sorry that I have been unable to help you because I regard your request as eminently reasonable."
  I hope that the Minister and her right hon. Friend will feel able to reconsider the case of Richard Wilkinson in the light of what I have said.

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  I turn now to Miss Rebecca McMillan, who is currently attending Tarporley High School, although Helsby School was her first choice. Again, she has a sister, Helen Elizabeth, already at Helsby, and there appears to be another variation on the part of the Cheshire County Council from the siblings rule.
  There are a number of reasons why I think the county council has not been wholly reasonable in the case of Rebecca McMillan. First, prior to 1974 Helsby County Grammar School was available to children at Mouldsworth, where the McMillans live, but when the Chester area, which includes Mouldsworth, became comprehensive, the so-called boundaries were adjusted to exclude Mouldsworth children from the school and to send them instead to Tarporley County School.
  In 1978 Helsby will become comprehensive and the zonal boundaries will be adjusted to make it available once again for Mouldsworth children. Secondly, there is the question of distance. Helsby School is approximately three miles from Mouldsworth, whereas Tarporley School is over eight miles. All the factors which I mentioned in connection with the Wilkinsons having children at different schools apply equally to the McMillans. I think that the children are likely to suffer as a result of the logistical difficulties imposed on the parents.
  Mrs. McMillan is the deputy headmistress of a primary school which is changing its headmaster next term, and she has been notified that the new headmaster will rely very heavily on her during the first year of his headmastership. Therefore the burden on her will be considerable in any event.
  The Wilkinsons were given notice in May of this year of their right to a stated choice. Unfortunately, the McMillans were not given such early warning. Originally Rebecca McMillan was not allocated to any secondary school at all. It was not until Mrs. McMillan became aware that other children in the area had allocations that she contacted the allocations officer and an allocation was belatedly made. The allocations officer, she tells me, admitted that Rebecca had been "lost in the system", and that she was never considered in the allocation sequence.
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  My requests to the Minister and to her right hon. Friend the Secretary of State in these two cases are in no way intended to reflect adversely on Tarporley High School. Having myself visited the school both before and after its recent improvements and extensions, I can confirm from my own experience what has been said to me from all sides in my constituency—that it is an excellent school, served by an exceptionally able and dedicated staff, which its pupils are indeed fortunate to attend. Nor, may I say, is my appeal to the Secretary of State on behalf of these parents in any way politically inspired. As the Minister knows, both schools are shortly to become comprehensive schools. It is a matter of choice. We are all in this House dedicated to a degree of choice in education, although emphases differ, where it is administratively possible.
  These are deep waters and I do not intend to lead the House very far into them at this moment, but I remind the House that to invite the Secretary of State to utilise her powers under the Education Act 1944 is not an egregious request, even after the Tameside decision.
  I am sure that I do not need to remind the Minister, but I would like to remind the House by quoting the words of the Secretary of State when she replied on 8th December to an adjournment debate raised by the hon. Member for Lewisham West (Mr. Price). She said:
  "The power conferred by Section 68 has been used sparingly. But successive Secretaries of State have directed local education authorities to admit particular children to the schools preferred by their parents in circumstances where an authority's refusal of admission has been regarded as unreasonable. This will be an important point.
  In the past five years 35 directions have been given in such circumstances, relating to about 90 children. One such direction, relating to the admission of two children to a primary school, has been issued within the past few days. They are issued without regard to the politics of the authority concerned. The power to give these directions is always used reluctantly, because the decision of an elected local authority charged with the administration of education in its area is not lightly to be set aside.
  I think it right as does my right hon. Friend, that there should he an ultimate remedy available to ensure that the rights of parents are preserved. Taking into account the attitude of the higher courts, I assure my hon. Friend that I shall continue to use the Section 68 powers in appropriate cases and will examine what might be done to improve the arrangements whereby school places are allocated and

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  how parents' views can be properly considered within a non-selective system."—[Officiai Report, 8th December, 1976; Vol. 922, c. 596.]
  In my submission it is administratively possible and educationally desirable that Richard Wilkinson and Rebecca McMillan should attend the schools of their choice. I appeal to the Minister while there is still time to urge her right hon. Friend to use her powers to intervene on the children's behalf, because I think that the local authority has behaved unreasonably.
  9.22 a.m.
  The Under-Secretary of State for Education and Science (Miss Margaret Jackson): This debate gives the House an opportunity to consider how choice of school cases is approached, and the constraints on the powers of the Secretary of State to intervene in them. Most hon. Members have choice of school constituency cases from time to time and they might find it helpful if they knew a little more about how they are handled.
  I should first say that the powers of the Secretary of State to intervene in these cases are severely limited. Her powers are conferred by two sections of the 1944 Education Act, Sections 37 and 68.
  The first power is that conferred by Section 68 of the 1944 Education Act. This is the one which is most often quoted, but we have always recognised that the power conferred by it is severely limited. Recent court decisions have certainly emphasised this.
  It is not so widely understood that the power is available to the Secretary of State only if she is satisfied, and properly satisfied, that an authority has acted or proposes to act unreasonably. It is not up to the Secretary of State simply to say whether she in the same circumstances, with the same factors involved, would have reached the same decision as the authority. She is not able simply to substitute her judgment for that of the authority. She must have evidence that the authority has acted in a way that can be regarded as unreasonable in the legal sense.
  In addition to Section 68, Section 37 gives the Secretary of State power to direct a local authority to name any particular school in a school attendance order if such an order is needed, when the authority is unwilling to name a school
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  of the parent's choice because, in its opinion, that school is unsuitable to the child's age, ability and aptitude, or, the child's attendance at that school would involve unreasonable expense for the education authority. I will simply note in passing that no school attendance order is yet in existence, as far as I am aware, in respect of the children who are the subject of this debate—but the matter could arise.
  Two cases have been referred to the Department by the hon. Member in recent months. The first is the case of Richard Wilkinson, who wants to go to Nantwich and Acton Grammar School but who has been offered a place by the authority at Tarporley High School. Richard has two brothers at Nantwich and Acton already, one brother at Christledon Secondary and a sister at Duddon Primary. The parents are naturally concerned about having five children at four different schools.
  I have great sympathy with the Wilkinsons. The authority's case is that Nantwich and Acton is already full with children who live close to the school than the Wilkinsons and have therefore a prior claim to a place there. I am aware that the acting headmaster of Nantwich and Acton has written to the Wilkinson and to the Department saying that he considers that there is room for Richard at the school. But it is for the authority rather than the headmaster to make the decision and the authority has pointed out that, by normal standards, the school is full, because each of the classes which Richard could enter has already more than 30 children.
  The Secretary of State considered very carefully indeed whether the circumstances of this case were such that an exception should be made to normal practice. She was unable to conclude that. under Section 68, restricted as she is by the drafting of that section especially in the light of recent court decisions, she was empowered to issue a direction against the Cheshire authority. She regrets that, as I do. It is because Section 68 is so restrictive that the Secretary of State decided not to issue a direction. For my part, I am continually urging on authorities the need to take the particular circumstances of individuals into account when deciding whether to make exceptions to usual policies or procedures.

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  But if the authority refuses to do that, we have to fall back on an assessment whether, in the terms of Section 68, the authority can be said to have acted unreasonably.
  I recognise that many people will say that the authority should have made an exception and that it was behaving unreasonably in this case, but we must consider whether it acted unreasonably within the terms of Section 68.
  The other case that the hon. Member has referred to the Secretary of State is that of Rebecca McMillan. Rebecca lives in Mouldsworth, a village about four miles from Helsby, where her parents would like her to go to school. The Cheshire authority has offered her a place at Tarporley High School which is about eight miles from Mouldsworth.
  This is a similar case to the Wilkinson case. I have sympathy with Rebecca's parents and would feel much happier if her request for a place at the Helsby School could be granted. But I have to ask whether the authority is acting so unreasonably in refusing to offer a place at Helsby that the Secretary of State could issue a direction to it. The answer to that question must be "No". Under the terms of the 1944 Act we are forced to conclude that we are unable to issue a direction as the authority was not acting in an unreasonable manner when it refused Richard Wilkinson and Rebecca McMillan the school places of their choice.
  But this does not mean that 1 am completely satisfied with the way in which we approach choice of school cases generally. I am far from satisfied that we have things quite right in this area. In fact, it is our intention, in consultation with the interests concerned, to see what can be done over a period of time to improve the arrangements whereby school places are allocated, and to ensure that parents' views are properly taken into account. As my noble Friend said during the Lords' debate on the 1976 Education Act, we have not excluded the possibility of future legislation on this matter.
  Although I have made plain in these particular cases that we have not felt able to issue a direction to the authority, my right hon. Friend will be writing to the authority asking it to re-examine the cases with great care and to reconsider
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  them, in view of all the circumstances and the substantial points which have been raised by the hon. Member, to see whether it is exceptionally able to accommodate these children. I hope that we shall be able to settle the matter satisfactorily.

  PRISONS
  9.30 a.m.
  Mr. Stephen Ross: We are coming to the end of a fairly long night. I do not intend to keep the House for very long on the subject of prisons, although I happen to think that the subject is too little discussed in the House, and, when points are raised, it seems that it is discussed with some reluctance.
  As a Member representing a constituency with no fewer than three prison establishments within it, and at one time threatened with a fourth, I should like to air a few points this morning. I did not realise that I would have as much ammunition when I decided to seek this debate. I have with me a series of articles by Mr. Peter Evans which appeared in The Times only last week. Peter Evans is that newspaper's home affairs correspondent.
  I should like to start by quoting from his first article, published on Monday 13th December, because it sums up very succinctly—much better than I could possibly do—the crisis that is now hitting our prison system.
  "The prison system is having to contain increasing numbers of highly dangerous men for longer periods in a population that will remain at crisis level into the 1980s. Yet the resources essential for reducing unprecedented pressures that the prisons were never designed to handle are being so drastically cut that there is now no prospect of real relief.
  The prison service is being reduced to living on its wits from day to day with less and less room for manoeuvre and margin of safety."
  During the earlier debate on Spandau, it was going through my mind that here was a place with goodness knows how many people looking after one poor 82-year-old incarcerated within. If only we could have Spandau moved in some way or if we could make use of the facilities there, it might be of great relief to our prison system. That could not possibly happen. However, there was the great luxury of this thing in Berlin. It is

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  a terrible thing, and I believe that it is wrong that the man is still there, but there is this enormous attention being given to one man when we are at our wits' end in having to deal with our own rising prison population.
  Most of the headings in Class IX vote 7 in the Supply Estimates show various increases of costs, presumably mainly due to inflation and wage rises, but on page 183, Section A, on prisons, we see a decrease in provision of £5,800,000. So, my first question is: Why such a sharp cutback, and what does this mean in practice? With our prison population at a record level of over 42,000, and unfortunately increasing, what is the Government's policy to be for the future?
  I suggest that those in the service and those living in close proximity to maximum security prisons—and we have two—are entitled to know, and to know rather more than is released to them at present.
  What, for instance, is the shortfall in the establishment of the prison service? How is security now affected by that? We hear rumours of cutbacks, for instance, in dog patrols around the perimeters of prisons. We hear of fewer staff on duty during recreational periods keeping an eye on the prisoners, and of prisoners themselves having to spend longer in their cells than is normal or is good for them.
  I accept that in regard to Albany Prison and Parkhurst Prison on the Isle of Wight substantial sums have been expended and are being further expended on security. Following the break-out last summer, a new security fence is being erected around Parkhurst. A great deal of money has been spent on the interior at Albany, which is one of our modern prisons, built within the last 15 years. Why was it chosen to be upgraded from a Category C prison, the original intention for that establishment, to a Category B prison in the first place? That has caused great problems.
  Is the supervision within that establishment now sufficiently improved following the structural alterations? That was one of the problems following the recent IRA disturbances within that prison.
  In his series of penetrating articles in The Times last week, Peter Evans highlighted many more of the present problems, in particular, doubts about treat-
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  ment that now abound. Is Parkhurst still considered to be a prison, or is it a psychiatric hospital? What consultations are taking place between the Home Office and the Department of Health and Social Security about greater provision of midway secure establishments where first offenders with convictions for serious crimes can receive the right sort of attention without having to be committed to Broadmoor? This is important, because there is dire shortage of such establishments. They just do not seem to exist, and one suspects that there are many inmates of Broadmoor—I have experience of this, having had two cases of this type—who probably should never have been there at all and who could give way to those now in penal institutions who ought possibly to be at Broad-moor.
  What is to be the future policy about long-term IRA prisoners in our prisons who are claiming political status? They are causing problems wherever they go, and we could well do without those who are on the Isle of Wight.
  There seems to be overcrowing in all our prisons, as was vividly described by Mr. Evans when writing about Leeds gaol. He said:
  "Room is so scarce that prisoners have to take turns to stand up and shave. The most squalid part is slopping out the night's dirty water, urine, and faeces.
  "Prisoners then emerge, drowsy and subdued, after having been confined from 8.15 p.m. to 7.45 a.m., to carry the slops to a recess on a landing after prison officers bang on doors to wake them. As the number of their wing and landing is shouted by an officer, they queue for breakfast … They eat it sitting on beds in their cells because there is not room for all three at the one small table."
  That is reminiscent of Dickens and does not read very nicely, particularly when we consider that this is 1976.
  Bearing in mind the need for equality of the sexes, Mr. Evans also describes the situation at Holloway. He says:
  Many of the people sentenced to prison would be better off elsewhere. Some ought not to be there at all. At Holloway prison, for example, the population includes up to 100 unconvicted on remand (on average 10 per cent. are found not guilty); up to 60 convicted on remand, 80 per cent. of whom get noncustodial sentences; about 30 drug addicts and alcoholics; a further 15 prisoners with an alcohol difficulty; and 12 psychotics, a class of prisoner which it is difficult to find hospitals to take. That is a total of 217 out of Holloway's average population of 380."

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  "There is a queue of patients in prison waiting to go to Broadmoor or one of the other special hospitals run by the Department of Health and Social Security. One experienced medical officer told me that transfers were made more easily when the special hospitals, of which Broadmoor is one, were run by the Home Office."
  It appears that many people who are remanded to Holloway ought not to be remanded to that establishment in the first place.
  The picture is a disturbing one, and unless some positive decisions are taken soon the morale of the Prison Service, which I suggest is not as high as it should be, to put it mildly, will deteriorate. It is time for new initiatives about the type and length of sentence and consideration whether other forms of punishment which do not involve complete detention should be introduced. We hear about weekend or even overnight stays. I am sure that these things must be brought forward, otherwise we shall have a crisis of almost insoluble problems.
  At the third prison in my constituency, Camp Hill, a Category C prison, £315,000 is being spent on a new sports complex. Very little information was given to my constituents about this matter and it caused something of an uproar when it was realised that although there are 110,000 residents on the island they do not have such facilities as are proposed at the prison. There is no indoor heated swimming pool for the local population, nor is there even an indoor sports complex, yet money is being spent at Camp Hill on such facilities. I am not saying that the prison will have a heated swimming pool, but it will have a pretty elaborate sports complex. I do not doubt that it may be highly desirable and that there are good reasons why it is being built.
  I have exchanged correspondence with the Home Secretary and the Prime Minister, who knows my constituency. Why cannot these facilities be widened to provide dual provision for the benefit of all concerned? Surely, with a first or second offenders' prison like Camp Hill, such a course would give a movement between the outside world and the inmates, to the benefit of all concerned. Such ideas should be encouraged. If we are to spend that amount of money—and, as I say, no doubt there is a good case for it—on sport
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  and recreational facilities for those whom we are trying to restore as good citizens to public life, can we not have these things discussed more openly, with the plans made public, so that the people concerned know what is going on?
  How are the cuts to affect the civilians within the prison staff? I hear rumours of possible redundancies among maintenance men and, in some cases, instructors. The Prison Service seems to be going against Government policy by doing away with direct labour and bringing in outside contractors to do maintenance. The people concerned some of whom have worked in the prisons for many years, are entitled to know. In his concluding article last Thursday Mr. Evans says:
  "The prison system is suffering from a crisis of faith. People are not so sure as they once were what prisons are for."
  It surely it time we tackled the whole problem comprehensively and had the determination to provide sufficient funds to structure a service of which we can be proud, rather than fail to face up to the problem fairly and squarely and risk the backlash that is inevitable unless action is taken.
  In the 10 minutes or so that I have spoken I realise that I have only skimmed the surface of the problem, and I realise that it is a complex matter, but I hope that we shall have time in the House for a full-scale debate on the whole Prison Service early in the New Year.
  9.43 a.m.
  Mr. John Prescott: I congratulate the hon. Member for the Isle of Wight (Mr. Ross) on raising this important subject. Anyone who takes the least interest in our prisons policy knows that with the ever-increasing number of incidents taking place, there is a major cause for concern.
  Hull Prison had the most serious riot in this country this century, with the exception of the Dartmoor riot. I want to express my gratitude to my hon. Friend the Minister of State, who gave me every co-operation in that serious situation, giving me all the information available to him, and also making available the governor and others involved in containing the situation. I want to express the appreciation of all my constituents for the way the matter was handled.

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  The situation was made worse by events which followed the riot. It was decided, rightly, to contain the riot and allow it to follow its own course and not tackle it head-on. That approach led to an agreement between the prisoners and the authorities, whereby the prisoners came down off the roof. What has the Hull incident to teach us? To me it says that there is something seriously wrong in our prisons policy.
  At the time, complaints were made by prisoners to me that they had no confidence in the system of expressing their grievances through the Home Office administration. The complaints may or may not be justified. I promised that if they had any evidence I would make my own investigation and interview any prisoner who wished to talk to me, and that I would make my own analysis and report and submit it to the Fowler inquiry set up by the Home Office to look into the causes of the riot.
  After much hard work, I have produced a 20,000-word report which I am giving the Home Secretary today. It contains my observations on the incident and follows interviews with a number of people involved in it, including prisoners who took part in the riot, people associated with the prison who are not Home Office employees, and others with genuine views arising from their experiences of prison and prison life.
  The hon. Member for the Isle of Wight made an important point when he said that insufficient information was given about prison policy. The Official Secrets Act plays a large part in determining people's co-operation in giving information to someone who is trying to make an appraisal of what happens in prisons.
  I recommend in my report that, as the Act is being reviewed, the Home Office should also allow people associated with prisons to take part in the public debate which is necessary in order to bring changes to the prison system.
  The excellent articles in The Times by Mr. Evans are a step in the public debate which is necessary. I hope that my report, which I shall release in three or four weeks, will be another step, and I appeal to the Home Secretary to consider
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  making public the findings of the Fowler inquiry into the Hull riots. That would be an important step towards a proper analysis of what happened at Hull and how to bring about the changes which I am sure will be recommended.
  The Gale inquiry into the Parkhurst riots of 1969 was not made available to the public or to hon. Members. Indeed, I understand that it was not sent to governors of other dispersal prisons. That surprised me, and seems to indicate that there is even an "in" crowd in policy making in the Home Office.
  Since the decision to establish maximum security prisons, of which Hull is one, we have spent considerable sums to ensure that no one escapes from them. The record shows that we have been successful. High walls, television cameras, and lights have been built and installed to show category A and B prisoners, who are to spend a major part of their lives in prison, that they will not get out.
  The committees of inquiry which recommended the establishment of these prisons also recommended that they should have liberal regimes. I am bound to say that from the conclusions in my report it seemed that the opposite was happening. We had a more reactionary approach. We say an increase in the number of incidents in our prisons, culminating in the riots in Hull Prison.
  I do not intend to say any more on the subject of my report. I hope that the report on the policy inquiry will be made public, so that this House can begin to take part in the essential debate about a change in prison policy, which is desperately needed, because if people believe that at a stage when more and more people are going to prison we shall reduce the problem by cutting back on the provision of places, they are living in cloud-cuckoo-land.
  There will be problems. The problems are increasing. Do we get tougher? Do we put people in gaol, put them in cells, lock them up, feed food through the door and then forget about them? I presume that we have not reached that stage. The Prison Rules talk about the rehabilitation of prisoners. That is right. Our policy is based not on retribution but on rehabilitation.

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  I suggest that we have to consider two different policies for prisons—one for dispersal prisons and one for local prisons. The fact is that the essence of the problem lies in the chemistry of the prison—all the things that go to make up the character of a prison, such as the attitudes, the rôle of discipline, the type of prisoner, whether people who need psychiatric care are being kept in prisons instead of hospitals, and the cutting back in equipment, which lead to reduced free social time. All these things affect the situation in our prisons.
  I hope that we shall review the whole of our prison policy at this stage. If we do not, we can only look forward to further incidents, with men—as at Hull—creating riots which cost us more money in terms of repairing the damage done than we save in overtime. I hope that the situation will bring about a change in policy.
  9.53 a.m.
  The Minister of State, Home Office (Mr. Brynmor John): There were three strands in the contribution made by the hon. Member for the Isle of Wight (Mr. Ross), but I know that he will forgive me if I turn first to the point made by my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) about the report. I assure him that I shall pass on to my right hon. Friend the Secretary of State what my hon. Friend said about publication. I am sure that my right hon. Friend will consider it most carefully. My hon. Friend put very eloquently the point in favour of the publication of the policy report, and I shall see that my right hon. Friend has that information and considers it.
  Secondly—this is a general point concerning both hon. Members who have spoken—there is the lament: how little opportunity there is for the House of Commons to debate the subject of prisons. When I see some hon. Members sticking rigidly to the concept of the House of Commons as it was and refusing to consider ways of lightening the load upon the House I reflect that it is a very salutary lesson to have debates like this one, when we see how many subjects we leave from month to month and year to year without adequate debate. The subject of prison policy is an extremely interesting one, which is
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  left untapped and undebated for far too long.
  I take issue with both the hon. Member for the Isle of Wight and my hon. Friend the Member for Kingston upon Hull, East for the way in which they expressed themselves. This is not merely a debate about prison policy, because, in isolation, prison policy is but a reflection of our larger penal policy, on sentencing and deterrents generally.
  As a country we are in a profound dilemma. We are torn between those who want us to look at alternatives to prison and those who say that we should deal with prisoners in a tougher way. Many people urge us to be more severe, but the public good dictates that a much cooler and closer look at the subject is necessary.
  I can assure both hon. Members that my right hon. Friend the Secretary of State has taken a close interest in this subject and is examining all possible ways of alleviating the problem of the high prison population. He will do whatever is necessary and whatever is possible to cope with what is admittedly a great problem.
  The three strands of the problem are staff, security, and recreational facilities at Camp Hill. This debate, although it has touched on general policy, is about expenditure. Prisons make highly intensive use of manpower, and prison officers' pay accounts for 60 per cent. of all prison expenditure, or, if we take net current expenditure, it accounts for about 75 per cent. This compares with capital expenditure of about 25 per cent. and operating costs of 15 per cent. of all expenditure.
  Whatever the public expenditure position, no cuts in staff are envisaged. The White Paper on public expenditure shows that by the end of the decade the present staff is scheduled to increase by about 3,000. The ratio of staff to prisoners will not worsen in any way, staff salaries will increase, and the number of staff quarters will be increased.
  The hon. Gentleman mentioned a shortfall in the establishment. At 30th November there was a shortfall against the establishment for 31st March 1977 of 324, but by 31st March that is expected to be made good, so that there will be no overall shortfall.
  Secondly, the hon. Gentleman mentioned civilian staffs. As far as can be

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  foreseen, no cuts in civilian staff will be necessary. He mentioned a sum that has been expressed as a cut in the Supplementary Estimates. One of these is a diminution in the amount of overtime working.
  I take the point made by both hon. Gentlemen that this leads inevitably to some restriction of facilities and lack of provision which, in the long run, is undesirable. I can only say that in a very difficult situation we are trying to do all that we can to make the situation tolerable. The diminution of overtime has meant greater staff availability. The existing staff is not stretched as tightly as it was. That is one helpful point.
  The second point the hon. Gentleman raised was the question of security. This is not affected by the cuts. Half the £6·6 million allocated for improvements to existing establishments is for security measures and essential services. In the next three years the proportion will increase.
  The hon. Gentleman wondered about the status of Parkhurst. The sum of £1·2million is being spent there on perimeter security and greater security of the special security block. At Albany, a Category B dispersal prison, £1·6 million is being spent on security, making the outside perimeter wall concrete, providing anti-climbing devices, strengthening cell walls and installing closed-circuit television. At that prison there is a system whereby the cell doors and doors between buildings are locked electrically. I understand that a scheme to improve that system, at a cost of £180,000, is starting.
  Mr. Stephen Ross: I was amused by the Minister's last comment, having talked four days ago to a gentleman who knows all about this. I advise the hon. Gentleman to look at that sort of installation again. I gather that it creates great problems within the prison. It is gadgetry gone mad, and there are terrible problems with it.
  Mr. John: I shall draw the hon. Gentleman's intervention to the attention of those who advise me. I always have problems with gadgets, but I have always attributed that to my own inadequacies rather than those of the system.
  Mr. Prescott: The problems cause more overtime.
  Mr. John: That is probably true.
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  Extra places are being created in prison establishments, both by the building of new establishments and by the updating of two existing establishments. The hon. Gentleman mentioned Holloway, which is one of these being updated. In the renovation process the problem of space becomes a little more acute. When anything is being renovated the living standards are temporarily affected. By the end of 1980–81 some 4,700 extra places in prisons will be provided.
  The hon. Gentleman also dealt with the question whether prisoners at Holloway and Parkhurst should be in special hospitals. Both at the trial and thereafter, there is a careful process for vetting those who should be in special hospitals. It is my task to consider applications by people in special hospitals for transfer to outside hospitals, to mental hospitals, and subsequently for conditional discharge. It is a matter which exercises me considerably. We must have the twin aims of the welfare of the patient and the security of the public. It is no good saying that one can automatically ignore either factor, because one is blamed if something goes wrong.
  I carefully consider any transfer between the special hospitals and other hospitals. It is not my intention to overload Broadmoor, which I have visited recently, or deny facilities to those who are worse off. The staff at Broadmoor, who are a most dedicated and expert body of men and women, consider each case carefully, on its merits, and effect transfers. Every week I effect the transfer of varying numbers of patients from one of the special hospitals to other hospitals or from other hospitals back into the community. I believe that that is the right way to approach the matter, in terms of expenditure as well as in terms of humanity.
  Mr. Prescott: Is my hon. Friend saying that there are sufficient places available for all those who are considered to require medical treatment and should be transferred from prisons to special hospital facilities—for example, the psyschiatric patients? The Butler Committee makes it clear that there are insufficient places, and that as a matter of urgency 2,000 should be provided.
  Mr. John: I am not saying that. I think that my hon. Friend is being most

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  unfair when he makes that suggestion. The hon. Member for the Isle of Wight talked about a queue for the special hospitals. We are ensuring that the queue continues to move. The Park Lane project will provide some extra places, although I concede what the Butler Committee reported.
  The hon. Gentleman raised the problem whether those who are remanded to Holloway are rightly remanded and whether there is any need for a remand in custody, especially when we bear in mind that 10 per cent. of those who are remanded are acquitted. I must make it clear that it is a matter for the courts to decide. In my view, the courts are rightly independent of ministerial directive as to what decisions they make in individual cases. The legislative framework that the House has provided by the recent Bail Act should mean that the number of remands in custody will diminish. That is because the criteria for remanding in custody are tightened and turn chiefly on the person on remand re-offending while awaiting trial.
  The last matter raised by the hon. Gentleman was the sports complex at Camp Hill. He is right in saying that many of our institutions are Victorian in a very real sense of the word. Conditions are undesirable. We would wish to see them improved if we could do so. Part of the dichotomy lies in the public's attitude.
  I suspect that the hon. Gentleman must have experienced a certain reaction from some of his constituents. When a sports complex is built, such as the one at Camp Hill, for use by prisoners, a similar attitude is expressed to that which is heard about unemployment or social security—namely, "If I were unemployed, I should be getting money from the State" or "If I were not working, I should get social security payments." The same reaction is heard when attention is turned to prison facilities. It is said, "If we were prisoners we should get sports facilities, but as we are not we do not get them." The country has to face that profound dichotomy.
  The fact is that if the public want prisoners to be in a fit state to re-enter life in the community, the facilities that we have been discussing are necessary. But more important than that is that if people want good relationships inside the
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  prisons between staff and prisoners, such facilities are necessary both for the welfare of the prisoner and for the good running of penal institutions. All these matters are considered, and I have dealt with the amount of money that we are spending on capital projects and the emphasis that is placed on security and general basic maintenance.
  Mr. Stephen Ross: I agree with what the hon. Gentleman is saying. It is something that should be said more often and more publicly, especially in a constituency such as mine. I am glad that the words have been said. I am sure that they will be printed, and I am sure that the Minister's remarks will be received in the right spirit.
  Mr. John: It is consolidation for staying up through the night if I can contribute to that debate. Although the overwhelming preponderance of improvement to existing institutions is confined to security and general basic amenities, clearly in any humane règime we have to spend a proportion on education and vocational and physical training. These are carefully weighted on a national system of priorities, and they constitute in total between 1 and 2 per cent. of the building programme. We believe that at Camp Hill, with its high preponderance of young prisoners in what is a training establishment, they will benefit very greatly from the provision of those facilities.
  I think that the hon. Member was unduly gloomy when he said that the matter was rejected. He will know that the Home Secretary is reconsidering the matter after the initial indication of refusal. I cannot minimise the difficulties which we see in this matter but I assure him that we shall give the most careful consideration to the point he makes about the public sharing in the facilities. In particular, he has mentioned the high number of his constituents who are employed in the prison service. They would be part of that.
  The hon. Member mentioned the IRA causing problems and claiming political status. The people who are in prison are in prison because they have been convicted of criminal offences. It is no part of the British Government's policy to imprison upon political grounds. This is

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  imprisonment for criminal offences. Certainly while that happens we can have no dual standards. The people concerned were properly convicted under due process of law and are, therefore, prisoners as are any other prisoners. I can understand the hon. Gentleman's point about the friction which it has caused, but thought it right to emphasise that.
  The debate has been interesting and, I believe, valuable. I hope that those who have heard it—hon. Members have not flocked in in large numbers to hear it—will at least read the report of the debate in Hansard, and that this will spark off interest.
  We are, as the hon. Member will know very willing to answer questions on the subject. Time for debate is rather more difficult. There is no wish on the part of the Home Office to stifle debate on what is, after all, a public matter of the highest importance.
  I am tempted to quote Shakespeare and say that
  "our revels now are ended".
  I am grateful to the hon. Member for having raised this important problem and for the opportunity I have had of putting on the record certain views held by my Department.
  Question put and agreed to.
  Bill read a Second time and committed to a Committee of the whole House; immediately considered in Committee pursuant to the Order of the House this day; reported, without amendment.
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 93 (Consolidated Fund Bills), and agreed to.
  Bill accordingly read the Third time and passed.

  JOINT COMMITTEE ON CONSOLIDATION, &C.,BILLS
  Ordered,
  That Standing Order No. 87a (joint committee on Consolidation. &c., Bills) be amended as follows:

  Line 2, leave out from 'Members' to 'to' in line 4.

  Line 33, at end add '(3) Two shall be the Quorum of the Committee'.—[Mr. Walter Harrison.]

  CONSOLIDATION, &C., BILLS
  Ordered,
  That the Lords Message of 16th December relating to the Joint Committee on Consolidation, &c., Bills be now considered—[Mr. Walter Harrison]
  Lords Message considered accordingly.
  Ordered,
  That Mr. Daniel Awdry, Mr. Richard Body, Mr. Richard Crawshaw, Mr. Greville Janner, Mr. Ivan Lawrence, Mr. John Lee, Mr. Edward Lyons, Sir Anthony Meyer, Mr. Ivor Stanhrook, Mr. William Wilson, and Mr. Alec Woodall be members of the Committee to join with the Committee appointed by the Lords on the Joint Committee on Consolidation, &c., Bills:
  Ordered,
  That the members of the Committee nominated this day shall continue to be members of the Committee for the remainder of this Parliament:
  Ordered,
  That this order be a Standing Order of the House.—[Mr. Graham.]
  Message to the Lords to acquaint them with such Orders as are necessary to be communicated to their Lordships.

  GRUNWICK PROCESSING LABORATORIES LTD
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Graham.]
  10.15 a.m.
  Mr. Ted Fletcher: In moving the adjournment of the House I wish to call attention to the situation which has arisen at the firm of Grunwick Film Processing, in Willesden, following a strike by 200 workers at that establishment for union recognition. The firm is in the constituency of my right hon. Friend the Member for Brent, East (Mr. Freeson). I know that he and my hon. Friend the Member for Brent, South (Mr. Pavitt) have done everything they can to resolve this dispute and the workers at the firm have paid tribute to their efforts.
  However, this dispute is much more than a local constituency matter. In my opinion the management has clearly breached the provisions of the Employment Protection Act, and if its present attitude is allowed to prevail it will be a signal for every firm which refuses to

  401
  recognise unions to drive a horse and cart through the Employment Protection Act.
  The dispute began on 25th August, when 200 workers, most of them of Asian origin, walked out of the firm in support of a demand that their union—APEX—should be recognised by the management. The need for a trade union is self-evident when one considers the wages and working conditions at Grunwick. For example many of the workers receive, or did receive before the dispute, £25 for a 35-hour week if they worked in the office. If they were process workers they received £28 for a 40-hour week. They were compelled to work overtime, as this was set out in the terms and conditions of their employment. There was no 40-hour week, in effect, because any employee could be told five minutes before the end of a normal day's work to do compulsory overtime.
  Workers in this establishment have to raise their hands to go to the toilet. Some of them have been dismissed instantly for trivial reasons. None of them could take holidays in the summer; they were compelled to take them in winter. Over the past two years, in spite of the £6 wage ceiling and the subsequent 4½ per cent., these employees only had an increase of between £2 and £3. In short, this employer paid poverty-line wages, and forced workers to work in feudal conditions, Also there have been reports that the management is abusive and uses obscene language to work people. This has been a complaint from the works committee to the management.
  These are the reasons why the workers decided to join a union. The response of the management to the dispute was that it promptly sacked all those who went out on strike and resolutely refused to discuss the dispute with either APEX or ACAS. Throughout the management adopted a belligerent attitude towards the strikers. Strikers were abused and threatened with black-listing. Photographs and films were taken of the pickets, and on two occasions the pickets were run down by management cars. No action was taken by the police and, according to reports which I have heard, the police give the impression that they are employed by the company and not the public.
  On 29th October, the national executive of the Union of Post Office Workers
  402
  decided to support the strike by stopping all mail from reaching the company. A debate took place in the House on 4th November on the union's action and the Minister said that agreement had been reached between the union and the management of the company. He said that the company would allow ACAS to conduct a ballot among those inside and outside the company and that it would abide by the result. In view of that assurance the Union of Post Office Workers agreed to call off its sympathy action.
  At that time the National Association for Freedom announced that it intended to take action in the High Court against the Union of Post Office Workers and the Post Office. Yesterday, I read in the Press that this organisation is connected with the United States CIA in some way. That is the type of organisation that gives support of this reactionary management.
  On 12th November, APEX complained to ACAS that the company is delaying and will not agree to hold the ballot until the following Wednesday. The deadline passed and the company still delayed. On 19th November the company refused entry to an ACAS representative. It said that it was consulting a QC and that it would contact ACAS in due course. On 22nd November the managing director rang ACAS and said that he objected to the ballot on legal grounds and that a letter was on its way to ACAS which should arrive the following day. No letter arrived on 23rd, 24th or 25th November. On 26th November, after ACAS rang the company to say that a messenger was being sent, the contents of the letter became known. The company objected to a ballot of strikers because it claimed that they were no longer workers, having been sacked.
  This is a long history of procrastination to avoid a ballot of employees because the company knows that a ballot will go against it.
  The latest report is that on 10th December, when the General Secretary of APEX was advised by ACAS officials that they met the management of the company that day, but that the company was still raising objections. The management has agreed in principle that the matter will be proceeded with under a Section II inquiry but has challenged the

  403
  wording of the questionnaire because it does not want any reference made to APEX. ACAS will not agree to the reference being deleted. The managing director is still consulting his legal advisors.
  I raise the matter because I want to know what action the Minister has taken to enforce the provisions of the Employment Protection Act.
  Since the strike started, those employees who have remained at work have received a 15 per cent. all-round increase. Those on £25 have been given a £6 increase£conditional upon their voting against a union. The pickets advise me that they have evidence that pressure is being brought to bear on the employees to vote against a union in return for wage increases.
  This is much more than a local dispute. The TUC is backing the strikers. Mr. Len Murray, the General Secretary, has addressed a meeting of the strikers. It is unprecedented for the General Secretary of the TUC to address a meeting concerned with a local dispute. However, the TUC recognises that a point of principle is involved here, and that if the firm is successful in delaying a ballot through procrastination, this will destroy the intentions of Section 11 of the Employment Protection Act, and it will be a signal for other firms to follow the lead that this firm has given, backed by the reactionary organisation, the National League for Freedom. How ironic that title sounds when one is talking about the freedom of individuals to join a union.
  Nevertheless, I believe that the Department has some responsibility to see that Acts passed by this House are carried into effect. I know that the Department has done some sterling work in the short time in which the Act has been in operation, but I cannot escape the conclusion that it has been dragging its feel in this dispute. Now that I have raised the matter, I hope to get some assurances from the Minister that he is prepared vigorously to pursue this case, that the Department will explore every possible avenue to see that this firm carries out the intention of the Act, that a ballot will be held, and that we can get away from the Dickensian systems of management with which we are still faced within this particular firm.
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  I hope that I can get the assurances that I require from the Minister that progress will be made and that this dispute will be resolved.
  10.28 a.m.
  The Minister of State, Department of Employment (Mr. Harold Walker): All of us in this House who have taken an interest in the dispute at Grunwick Processing Laboratories should be indebted to my hon. Friend the Member for Darlington (Mr. Fletcher) for raising this subject this morning. All of us on the Government side of the House, and perhaps some Opposition Members, following the disastrous experience of the Industrial Relations Act, are firmly of the view that a voluntary system of industrial relations, based on consent, is the right system in this country. It is the absence of any basis for consent, as shown by the unwillingness of one of the parties to sit down and discuss the issues, which has prolonged this dispute so that it is now about to enter its fifth month.
  I should first like to set out the history of this dispute, and the situation as we understand it. The strike began during late August, with the object of securing the reinstatement of a number of employees who, it is alleged, were dismissed unfairly. The strikers, numbering about 150 of the firm's 450 employees, were themselves dismissed shortly after the strike began. The strike was at a very early stage made official by the Association of Professional, Executive, Clerical and Computer Staff—APEX—which is claiming recognition and the reinstatement of the dismissed workers.
  Following the refusal of the company to negotiate directly with APEX, the union sought the help of the Advisory, Conciliation and Arbitration Service in seeking an early solution. ACAS several times tried to persuade the company to accept its help and meet the union, but the company refused each time to meet the union. Had the employer agreed to meet APEX, either directly or under the chairmanship of ACAS, I am confident that this dispute could have been resolved at a much earlier stage, and without the prospect of lasting damage to industrial relations within the company, as now seems likely.
  As APEX was unable to persuade the company to negotiate, on 15th October

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  the union referred the recognition issue to ACAS under Section 11 of the Employment Protection Act. This procedure provides for an inquiry by ACAS, if the issue cannot be resolved by conciliation, leading to a written report which can include specific recommendations for recognition. ACAS was unable to make much progress on the recognition question during the second half of October. However, following an appeal by the TUC to affiliated unions to help APEX. the Union of Post Office Workers decided on 29th October to authorise its members not to handle mail to and from the company, and this action was imposed on 1st November. Two days later, the company agreed, for the first time, to co-operate with the inquiries of ACAS into the recognition issue. The following day the Union of Post Office Workers instructed its members to resume handling the company's mail. This aspect of the dispute was discussed in the House in an emergency debate on 4th November, and I do not wish to add anything to what my right hon. Friend the Secretary of State and I said then.
  In the light of these events, I hoped that ACAS would be able to proceed with its inquiry into the recognition issue, with the full co-operation of the employer, and that the dispute would soon be over. However, as my hon. Friend the Member for Darlington has told the House, that has not proved to be the case.
  At this stage I ought, perhaps, to describe to the House how ACAS goes about dealing with recognition issues which are referred to it under the provisions of the Employment Protection Act. When such an issue is referred to ACAS, the Service is placed under a general requirement to examine it, consult those it considers to be involved and to make any inquiries it thinks necessary. The procedure on a reference is largely for ACAS to decide, but at all times the Service is required to encourage a settlement by agreement and, where appropriate, to promote such a settlement by conciliation. If it is not possible to settle an issue in this way the service is required to prepare a formal report setting out its findings and recommendations for recognition, if any. The process of discussion, investigation and inquiry necessary before a recommondation can
  406
  be made, is bound to take some time. It is obviously desirable from everyone's point of view that this work should be done thoroughly.
  ACAS's recommendations cannot be enforced directly, but if an employer does not comply with ACAS's recommendation for recognition the union concerned may seek a unilateral award of terms and conditions for the workers in question from the Central Arbitration Committee. Such an award will be enforceable in the courts. We believe that these arrangements will be more likely to secure the establishment of stable collective bargaining arrangements and put effective pressure on an employer to negotiate, than a direct requirement, statutorily enforceable, that the employer recognises a union. Moreover, it will in appropriate cases at least provide something equivalent to the fruits of collective bargaining for the workers in question.
  The recognition provisions of the Employers Protection Act are still relatively new and we have had only limited experience of how they operate in practice. However, there seems little doubt about their popularity. ACAS has already received a total of 430 formal applications about recognition issues in the first 10 months that the provisions have been in operation. So far, 81 have been settled by conciliation, of which approximately two-thirds resulted in the union being recognised. Eight have been the subject of a formal report.
  In the Grunwick case, ACAS has discussed with the employer and with APEX how it intends to proceed with its inquiries, including the questions to be put to the workers in a questionnaire. The arrangements for the inquiry have been complicated by the need to translate the questions into Gujerati, which is the first language of many of the company's employees. I have been informed that the company has raised a number of objections to ACAS's proposals, relating particularly to the questionnaire that the service plans to put to the workers. I hope that the House will understand that it would not be right for me to go into the details of the objections raised by the company. ACAS is an independent body—its independence is clearly defined in the Employment Protection Act—and I very much hope that the objections raised by the company will be speedily resolved,

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  although I have heard rumours that the company, with the support of the National Association for Freedom, are contemplating legal action against ACAS to support their complaints. It is not the first time that this ultra right wing organisation has sought to interfere in industrial disputes. Some hon. Members of the Opposition occupy leading rôles in this pernicious organisation. I understand that over 60 of the workers dismissed by Grunwicks have made complaints of unfair dismissal to an industrial tribunal. I have every confidence in the ability of ACAS to deal with this matter.
  What, then, are the lessons to be drawn from this dispute? As the House knows it has long been a tradition that Ministers should neither support nor condemn one side or the other in an industrial dispute, particularly when pay policy considerations are not at stake. This is a tradition that I support, for ministerial interventions on one side or the other rarely help resolve disputes, and can sometimes make them worse. However, I think that there are good reasons for departing from tradition in the case of this dispute. As I said in my opening remarks, our voluntary system of industrial relations depends on consent, and a willingness to give and take on both sides. Here we have a dispute where I am sure that everyone, even including the company, would agree that a substantial number of the workers are members of a trade union, and the company, faced with four months of industrial action, has never, at any stage, been willing to sit down and discuss the situation with the trade union. At no stage does the company seem to have shown any real willingness even to attempt to explore how a reasonable settlement to the dispute might be reached. And all this despite the support which the dismissed workers have received from fellow trade unionists, including the General Secretary of the TUC.
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  The company may feel that in the short term it will be able to resist APEX and the strikers. I do not know whether or not that will prove to be the case, but I feel sure that the management is neglecting to consider the long-term future of the company. It may be able to win a victory in the short term, but if that is the case it will be at the price of lasting damage to its future industrial relations with its employees. It will take a long time for the scars of this dispute to heal. That is why I feel bound to appeal to the company to change its attitude, and at least show a willingness to talk to APEX and to co-operate fully with ACAS in its inquiries.
  It is a great pity that no member of the Opposition Front Bench has felt it necessary to make a similar appeal to the company to talk to APEX. I am sure that such an appeal would carry greater authority if it came from both sides of the House. I am forever being told that the Opposition have adopted a more conciliatory approach to industrial relations. Here is an ideal opportunity for them to demonstrate this new approach, if it is indeed their attitude.
  I am sorry that I cannot do more to help my hon. Friend the Member for Darlington. I congratulate him for bringing this affair once more to the attention of the House and the public at large. I deeply regret that this damaging dispute has continued for so long. I am sure that but for the attitude of the company it would not have lasted so long, and I appeal to the employer to adopt a more sensible and conciliatory approach. Given good will on both sides, I feel sure that this dispute could be speedily resolved.
  Question put and agreed to.
  Adjourned accordingly at twenty-one minutes to Eleven o'clock a.m.

  SCOTTISH JUDICIARY
  SCOTTISH JUDICIARY
  SCOTS LAW (EUROPEAN COMMUNITY LEGISLATION)
  SCOTS LAW (EUROPEAN COMMUNITY LEGISLATION)
  THE ARTS
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PRICES AND CONSUMER PROTECTION
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  Food Subsidies
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  Price Increases
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  Price Commission
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  price Control
  price Control
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DEFENCE
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NATIONAL FINANCE
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  Tool and Clothing Allowances
  Tool and Clothing Allowances
AGRICULTURE, FISHERIES AND FOOD
  White Rust
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  Butter
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  Food Subsidies
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EMPLOYMENT
  Young Persons
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  Jobcentres and Professional and Executive Recruitment
  Jobcentres and Professional and Executive Recruitment
  Conditions of Employment
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  Fair Wages
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  Unemployed Persons
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  Development Areas
  Development Areas
  Disabled Persons
  Disabled Persons
  New Year's Day
  New Year's Day
  Coventry
  Coventry

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Oxford.

CONCORDE: NEW YORK LANDING RIGHTS
The Earl of KIMBERLEY: 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 they will exert strong pressure on the United States Government and the Port Authority of New York to grant Concorde landing rights in New York forthwith, in view of the further postponement of this decision by the Port Authority to February 1977, when the new Administration will be in office.
Lord ORAM: My Lords, our concern at postponement of the decision has been expressed to the United States Government and to the New York authorities. We are also taking steps to publicise the economic benefit to New York of air services there by Concorde.
The Earl of KIMBERLEY: My Lords, I thank the Minister for that very satisfactory Answer. Does he not agree that should the decision go against Concorde in February there will then be an even longer delay while an appeal is heard, which may well prove disastrous to the whole project?
Lord ORAM: Of course, my Lords, we are hoping for a favourable decision, and we hope to avoid the situation to which the noble Earl refers.
Lord TREFGARNE: My Lords, can the noble Lord say whether the extension of the existing Washington service through to Fort Worth has yet been agreed with the American authorities?
Lord ORAM: Not without notice, I am afraid, my Lords.
Lord WYNNE-JONES: My Lords, in view of the report in the Press recently that the noise level of Concorde had been appreciably reduced, can my noble friend say what are the results obtained at Washington on the noise level?
Lord ORAM: My Lords, I understand that noise from Concorde measured at Washington has been entirely within the levels predicted by the Coleman decision.

EUSTON STATION: INFORMATION FACILITIES AND STAFFING
2.38 p.m.
The Lord Bishop of LONDON: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what progress has been made towards the provision of an information kiosk at Euston Station.
Lord WELLS-PESTELL: My Lords, British Rail have agreed to make facilities available for leaflets giving information about the services available to people arriving in London without adequate preparation. My right honourable friend the Home Secretary has offered to meet the initial cost of providing such leaflets.
The Lord Bishop of LONDON: My Lords, I thank the noble Lord for his reply which goes partly towards meeting the needs of those people who believe that a kiosk is essential. Can the noble Lord give an assurance that he will press for the erection of a kiosk, which would be manned by people who could give personal advice? Can he give us any information about the possibility of one of the lodges outside Euston Station being available? Furthermore, can the noble Lord say whether there is any substance in the rumour that the free lodge is in such a miserable condition that it may have to be demolished?
Lord WELLS-PESTELL: My Lords. since this matter was first raised in your Lordships' House—some appreciable time ago, I admit—it has given us an opportunity of taking a fresh look at the situation. On a former occasion I think I said

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that British Rail had refused to make available a booth on the concourse, and the question of the booth, which is known as the East Lodge, was under discussion. British Rail have said that information leaflets, which will be drawn up after consultation with the various voluntary organisations working in the area, will now be made available from the British Rail Information Services, which, as your Lordships may know, at Euston is right in the centre of things.
After very careful consideration and following discussions with the various voluntary organisations, it has been established beyond reasonable doubt that it would be better to help the various voluntary organisations themselves to do a much better job than they are doing at the moment, and not have the booth which we were considering at East Lodge. It is true that it is in a very dilapidated state, but that has nothing to do with the decision. In the past few months wehave been able to ascertain that on arrival at Euston, as at other London railway stations—and this also applies to Victoria Coach Station—very few people go to the existing facilities. They immediately go to the West End, and it is in the West End that these services are needed.
There are five voluntary organisations working in the West End doing a remarkably fine job, and it is felt that, if we could strengthen the work that they are doing and provide them with sufficient money to extend it, that would be preferable to having a booth in Euston which is some considerable distance from the railway station itself. I should point out that just outside Euston Station there is a Citizens' Advice Bureau, Saint Philomena's Hostel and Friends' House—all within a stone's throw of Euston Station—where help and advice can be given.
Lord BROCKWAY: My Lords, may I ask the Minister this question? In view of the large number of young people who come to London and are now found to be homeless, is it not desirable that the leaflet distribution should be accompanied by a kiosk at Euston Station, and other stations, to which these young people might he immediately directed? It is difficult for them to reach Friends' House or either of the other places unless they
1074
have information guiding them to those premises.
Lord WELLS-PESTELL: My Lords, in theory I would agree with my noble friend, but I was trying to say that there arc five organisations, which are known as the West End Co-ordinated Voluntary Services, who in fact go to stations, and particularly to Euston Station, and that one organisation patrols regularly by car to pick up boys and girls who are in need of help. We feel that what we have in mind will serve a much better purpose.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, while I am sure the whole House will appreciate the personal interest which the noble Lord has shown in this matter, may I ask him whether part of the trouble is not or was not the existence of shady characters who were themselves lying in wait for these unfortunate young people? Can the noble Lord say whether anything has been done to intercept these doubtful characters and to prevent their activities?
Lord WELLS-PESTELL: My Lords, so far as my personal knowledge is concerned, I would say to the noble and learned Lord that some of these organisations regularly patrol Euston Station with a view to getting hold of young persons. I do not know to what extent they have observed undesirable people, but it is a matter I should like to pursue.
Baroness MACLEOD of BORVE: My Lords, may I ask the Minister what will be in the leaflets, whether addresses will be given, how the leaflets will be distributed and whether they will also be distributed at the place at which the young people get on to the train—in other words, in Scotland or at Manchester, or at any of the big cities—as well as in London when they arrive?
Lord WELLS-PESTELL: My Lords, we had a campaign some months ago in which posters and leaflets were distributed at railway stations in certain Northern towns, and this, we feel, has been successful. The content of the leaflet which we propose for the Railway Information Bureau at Euston will be drawn up by representatives of the voluntary organisations, of the local authority social services

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and of the Home Office. It will contain not only all the matters mentioned by the noble Baroness but other information as well. We are hoping that it will be possible to arrange a telephone system which will be available 24 hours a day.
Lord AVEBURY: My Lords, the noble Lord said that one of the problems is that young people pass straight through Euston without necessarily seeking the guidance which is available from the agencies located there, and that they arrive in the West End, where they are got at by a variety of undesirable influences. Does that not indicate that the same kind of facilities which the noble Lord has mentioned as being provided at Euston Station—that is, the leaflets—should be available centrally in the West End? Would he not consider advising Westminster Council to take over Playland, which we understand is still flourishing there, and to convert it for this purpose? —Playland being the place where these young people were got at by so many undesirables.
Lord WELLS-PESTELL: My Lords, one of the reasons why we want to involve further the five organisations working in the West End is because they, too, will be able to establish advisory and help centres, and to have the leaflets. As to the reference to Playland made by the noble Lord, I would have to pursue this with my right honourable friend.
The Lord Bishop of LONDON: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, if and when an information kiosk is provided at Euston Station, the financing and staffing of the project will be undertaken by the Voluntary Services Unit of the Home Office.
Lord WELLS-PESTELL: My Lords, it has already been necessary for me to spill over into the second Question of the right reverend Prelate, and I do not want to cover that ground again except to say that, in reply to his Question, the Answer is: No, my Lords. The Voluntary Services Unit already makes grants to GALS,
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which stands for the Girls Alone in London Service. That organisation, which is situated in the West Lodge at Euston Station, received from the Voluntary Services Unit at the Home Office £10,000 in the present financial year. In the current financial year we have made available £56,200 to the West End Co-ordinated Voluntary Services, which provide a variety of services for young people. I understand that my right honourable friend the Home Secretary has offered to make additional money available to these agencies—the additional sum being a further £10,000—in order, as T tried to point out in reply to the right reverend Prelate's first Question, to make their facilities of service even more effective than they are at the present moment.
The Lord Bishop of LONDON: My Lords, while acknowledging the very great personal interest which the noble Lord takes in this matter and expressing gratitude for it, and while also thanking Her Majesty's Government for the information which the noble Lord has just given, may I ask him whether he will bear in mind that the personal influence and contact of skilled advisers cannot be replaced by leaflets? Will he bear in mind the importance of having, at key centres, places where people can go to receive personal guidance and advice from those skilled and experienced in the matter and able to give it?
Lord WELLS-PESTELL: My Lords, the noble Lord will know that I have expressed myself a number of times on this matter: that we must not let loose on to the community woolly-minded, do-gooders. Part of the money is to be used to see that this kind of work is done by adequately trained people. I want to come back to what I said at the beginning. Only an infinitesimal number of boys and girls—and we have been able to establish this beyond reasonable doubt in recent weeks—go to West Lodge and even to the local services which are available just outside Euston. They go instead direct to the West End, and this we want to cover more effectively.
Lord SOPER: My Lords, is the Minister aware that the co-ordination of these various bodies, for one of which I am responsible, is a marked advance and one of the best preventatives against the kind

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of woolly do-good attitude which in some cases takes place? Is he further aware that nine out of 10 of those who request advice are asking for somewhere to put their head down that night? The problem of homelessness is the acutest of all these problems facing the organisations.
Lord WELLS-PESTELL: My Lords, this is so. The noble Lord is referring, I am sure, to the Kingsway Day Centre and we acknowledge the tremendous contribution that that centre is making as part of the co-ordinated voluntary services in the West End of London. But we are aware that one of the solutions to the present problem is the provision of more accommodation.
Lord TAYLOR of MANSFIELD: My Lords, in listening to the questions and answers it seems to me that all the emphasis for the provision of facilities for this service is on Euston Station. There are two adjacent stations, St. Pancras and King's Cross, serving the North as Euston serves the North-West. Are these facilities available at these two stations?
Lord WELLS-PESTELL: My Lords, the facilities are not available at the moment. But the fact that Euston have now offered to provide facilities in their main information services enables us to hope that we shall be able to do something similar at St. Pancras and King's Cross.
Lord AVEBURY: My Lords, I agree with the noble Lord, Lord Soper, that the most acute part of the problem is homelessness. Will the noble Lord not advise authorities such as Lambeth, which are wickedly vandalising existing property, to desist from that while homelessness affects not only young people coming from elsewhere but young people who are becoming homeless within London itself.
The LORD PRIVY SEAL (Lord Peart): My Lords, I think we should proceed to the next Question.
Lord WELLS-PESTELL: My Lords, we touched on this point the last time I raised this matter. We are not unmindful of what is going on in unoccupied buildings and dwelling-houses and so on. The noble Lord raised this matter recently and I have conveyed the information to my right honourable friend.

BRITISH LEYLAND AND SOUTH AFRICAN UNIONS
2.54 p.m.
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 they have concluded their review of the attitude of British Leyland towards the recognition of trade unions with black membership in South Africa.
Lord WINTERBOTTOM: My Lords, as I told your Lordships in a Written Answer on 7th December, my right honourable friend the Secretary of State for Industry is in touch with British Leyland about their policy towards black trade unions in South Africa and the company are keeping that policy under review.
Lord BROCKWAY: My Lords, is it not the case that the TUC, the Churches, both Protestant and Catholic, Sir Robert Birley and the Secretary of State for Industry himself have expressed deep concern on this matter? Is it not desirable that a company which is largely Stateowned should give a precedent in this matter in view of the opposition of very many British companies to the proposal?
Lord WINTERBOTTOM: My Lords, it is no part of the Government's policy to restrict normal civil trade and investment relations with South Africa. British Leyland's overseas investment policy is a matter to be decided by its management in the framework of overall plans agreed by the National Enterprise Board.

BUSINESS OF THE HOUSE
Lord PEART: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That Standing Order No.43 (No two stages of a Bill to be taken on one day) be suspended until the Christmas Recess.—(Lord Peart.)
On Question, Motion agreed to.

PATENTS BILL [H.L.]
Lord ORAM: My Lords, I beg to introduce a Bill to establish a new law of patents applicable to future patents and applications for patents; to amend the law of patents applicable to existing patents and applications for patents; to give effect to certain international conventions on patents; and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(Lord Omni.)
On Question, Bill read 1a, and to be printed.

NATIONAL INSURANCE SURCHARGE BILL
2.56 p.m.
The SOLICITOR-GENERAL for SCOTLAND (Lord McCluskey): My Lords, I beg to move that this Bill be now read a second time. The Bill now before the House gives effect to a measure announced by my right honourable friend the Chancellor of the Exchequer in another place on July 22nd. This is the introduction of a new tax to be known as the National Insurance Surcharge and it will be collected through the machinery of the National Insurance contributions. I must emphasise however to noble Lords that this is a tax and, as such, in no way affects the rate of contribution or of benefits under the National Insurance system. Indeed, the most important word in the Title of the Bill is the word "Surcharge".
The new tax will come into operation on April 6th, 1977. The new tax is to be levied at a rate of 2 per cent. on those earnings which are liable to secondary Class 1 National Insurance contributions. In effect, the surcharge will apply to earnings under £105 per week. It will not apply in respect of those earning less than f15 a week for whom no National Insurance contribution is payable. These figures of £15 and £105 are the new limits for National Insurance contributions for 1977/78. They were announced by the Secretary of State for Social Services on December 7th 1976.
This new tax will be collected together with the employers' National Insurance
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contribution so that there will be no additional administrative work for the employers. In effect, the employers will calculate the employers' contribution as though the rate had been increased by two percentage points. The additional revenue will be paid over to the Inland Revenue.
Baroness ELLES: My Lords, did the noble Lord say that the 2 per cent. would be on the contribution or on the earnings?
Lord McCLUSKEY: My Lords, I intended to say (and I hope I said) that it will be on the earnings. If that satisfies the noble Baroness, perhaps I can return to repeat that the employers will calculate their contribution as though the rate had been increased by two percentage points in relation to earnings. The additional revenue will be paid over to the Inland Revenue along with the National Insurance contribution and PAYE. The revenue from the surcharge will be paid into the Consolidated Fund along with the proceeds of other taxes. Because the surcharge makes use of the machinery of the National Insurance contribution for purposes of collection, it will be exceptionally cheap to collect. It will throw no extra administrative burden on employers, and no additional civil servants will be needed to operate this tax.
If I may turn to the reasons for the introduction of this tax, when my right honourable friend announced the introduction of this tax in July, he explained that the size of the Budget deficit in the current financial year, although raising problems of financing, was advantageous at a time of recession, as it enabled unemployment to be kept lower than it would otherwise have been. However, given the prospects for 1977/78, both in world trade and at home, he wished to reduce the public sector borrowing requirement during that year. This was part of a long-term strategy to reduce the borrowing requirement steadily over the next three years. If this did not happen, it was his view that the financing of the public sector could preempt private savings, which productive industry was likely to require on a substantial scale to finance stock building and investment. Alternatively, it would lead to an excessive growth of the money supply, which would refuel inflation.

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The National Insurance surcharge, which he then announced (that is, on 22nd July), was seen as one step in beginning this reduction of the public sector borrowing requirement. Although the rate of the surcharge is comparatively low, the comprehensive nature of its base makes it revenue-rich and therefore well suited to its objective of reducing the public sector borrowing requirement. The revenue yield in 1977/78 is estimated to be £950 million. The reduction in the PSBR which will result is some £700 million. The difference between these two figures is explained very largely by the increased level of public expenditure in money terms which will be occasioned by the higher price level caused by the imposition of the surcharge.
Although circumstances and forecasts have changed since July of this year, there is still a need for this substantial increase in revenue. The measures which my right honourable friend announced in another place last Wednesday are a reflection of the continuing need to reduce the PSBR in 1977/78 and in subsequent years. It is linked with a large external deficit and with a severe problem of internal financing. An excessive PSBR presents the choice, on the one hand, of high interest rates and, on the other hand, printing money.
A gradual reduction in the PSBR will enable us, without inflation and without intolerable interest rates, to provide for the borrowing needs, both of the public sector and of industry. This is essential to the industrial strategy, because it is necessary for industry to be able to borrow for investment and for working capital at tolerable interest rates. The National Insurance surcharge is of course only part of the strategy. Other measures were announced by my right honourable friend the Chancellor of the Exchequer last week which will carry this matter further forward. It is clear that our long-term objectives will be achieved by a combination of public expenditure and taxation changes. The National Insurance surcharge was the first of the tax changes to be announced and it forms part of the economic line-base on which last Wednesday's measures were calculated.
If I may turn now to the economic effects of the surcharge, noble Lords will appreciate that to raise almost £1,000
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million in taxation is bound to have, and does have, a considerable effect on the economy, and this would be true whichever tax instrument was chosen. The choice of the National Insurance surcharge in particular was made because of the nature of its economic effects. The surcharge is a tax on consumption. That is, although it is to be collected from employers, it is expected that they will pass it forward into their prices, which will eventually reach the consumer. However, because it is a tax with a very broad base (although at a low rate) the time taken for the effects to pass through the economy to the final consumer is much greater than in the case of other taxes on consumption; in particular, for example, value added tax.
The estimate is that the adverse effect on unemployment by the fourth quarter following the introduction of the surcharge might be of the order of 10,000 jobs lost. Similarly, the effect on the retail price index at that point in time is estimated to be of the order of just under 1 per cent. Comparable figures for an increase in the standard rate of value added tax which would achieve the same effect on the PSBR would be an addition of some 50,000 to the unemployment figures and about 1.8 per cent. on the retail price index. This reflects the fact not only that VAT comes through more quickly, but also, as I told this House two weeks ago in a debate on VAT, that it bears almost entirely on about 50 per cent. of consumer expenditure, whereas the surcharge will spread very widely over the whole domestic economy.
Perhaps it would be useful if at this stage I were to say a few words about the comprehensive nature of the tax, which I know is of concern to many here. I have already explained the economic reasoning which led the Government to make this a non-selective tax. There are also sound practical reasons. The National Insurance contribution system is itself non-selective, and one of the merits of the surcharge is that it follows the contribution system in all respects. This will enable employers, as I have already said, to behave in practice as though there had been an increase of 2 percentage points in the rate of the employers' contribution, thus eliminating extra work for them. It would have been impossible to introduce a system of selective payments for 1977/78 given the administrative timetable already

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laid down by the National Insurance contribution system. Selectivity in that year could therefore be introduced only by means of a system of repayment. This would involve the employer in making a claim for repayment, which would have had to be processed and checked. If that system were introduced, there would then necessarily be additional work for employers, and additional civil servants would be required to operate the scheme. Inevitably, there would be difficulties of definition, and borderlines would have to be drawn which would no doubt give rise to complaint and criticism.
Having said that, it may of course be argued that many of these points which go in favour of this form of tax do not apply to Churches and charities; or if they do, that their validity is much reduced. This is a point of view of which the Government are well aware. Indeed in another place Treasury Ministers have already announced that they will consider very carefully representations from Churches and charities. I understand that the most reverend Primate the Lord Archbishop of Canterbury is shortly to lead a deputation to meet the Prime Minister to discuss this matter. Accordingly, at this time I would not wish to say any more, although I will listen to the debate and, in the light of the points made, it may be desirable for me to add something to that.
Baroness ELLES: My Lords, if the noble and learned Lord will allow me to intervene once more, would he ensure this time that the Prime Minister will receive the most reverend Primate the Archbishop of Canterbury and his delegation if they go to 10 Downing Street?
Lord McCLUSKEY: My Lords, that question is misconceived, with respect. The noble Baroness imagines that the Prime Minister refused to see the Archbishop. That is not so. The Archbishop sought a meeting with the Prime Minister on two days which were two of the busiest days for many years in the life of a Prime Minister of this country. The Prime Minister did not decline to see the Archbishop but sought to make a different arrangement. The Archbishop has no free time to meet the Prime Minister before Christmas. But of course as soon as it
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suits the Archbishop, the Prime Minister will meet him.
My Lords, in conclusion, this is a new tax for this country, although the machinery, in the form of the employers' National Insurance contribution, has existed for a long time. It is the Government's view that this non-selective way of raising a large sum of revenue with its effects being spread thinly across the whole economy is preferable to other, more selective, measures which could have been taken. It does of course present problems for particular interests, but it is necessary to point out that many of the difficulties would be created by any increase in taxation of similar magnitude. My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be read 2a.—(Lord McCluskey.)
3.10 p.m.
Baroness ELLES: My Lords, we are grateful to the noble and learned Lord, Lord McCluskey, who has outlined for the benefit of the House draft legislation to implement the proposals made by the Chancellor way back in July—a long time ago in the economic history of this country. It must be said at the outset that we on these Benches consider the measure contained in the Bill to be thoroughly objectionable both as to the way in which it is to be implemented and as to its probable effects upon the economy.
The Title of the Bill is itself deceptive, as indeed the noble and learned Lord very honestly indicated. The surcharge to be paid by employers is not, as one might be forgiven for imagining, on the National Insurance contributions but on the earnings of the employees. Therefore, although it is 2 per cent. on earnings, it is 23 per cent. on the National Insurance contribution. I should like to emphasise that point, because I do not think it was made quite as clear as perhaps it might have been by the noble and learned Lord in his brief. If 2 per cent. is calculated on the employee's share of the contribution, that would be 2 per cent. on 8½ per cent. of somebody's earnings; but in fact he is paying 2 per cent. on earnings and 23 per cent. on what is 8½ per cent. on National Insurance contribution; so the total contribution by the employer is an increase of 23 per cent. on the National Insurance contribution.

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The noble and learned Lord has said that there would be no additional cost to the Civil Service involved here because it would be raised through the National Insurance scheme. I wonder whether he could explain how the money will be transferred from the collectors of National Insurance money to the Treasury. I imagine that some members of the Civil Service must be employed to effect such a transfer—or is it done entirely on Giro? Further, it might be reasonably assumed, if it is reasonable to assume anything any more, that the extra payments would be a contribution to the National Insurance Fund. It might be thought possible, say, to allow the payment of £10 to old age pensioners as a Christmas bonus or to increase the child allowances, which are so badly needed for poor families. But not a bit of it, as the noble and learned Lord has indicated. The estimated yield of over £900 million per year will be paid into the Consolidated Fund, at the same time reducing the PSBR—thus enabling the Chancellor to cut back less on public expenditure than he would otherwise have had to do. From a growing number of published examples and following the statement of Mr. du Cann, chairman of the PAC, it appears that about £1 billion—rather more than the tax yield—could be saved just by being more efficient, responsible and competent in administration and in Government. In effect, what is happening is that the new tax is a boost to the squanderers in the public sector.
Lord McCLUSKEY: My Lords, in the light of what she said and in view of the fact that she interrupted me twice, may I ask the noble Baroness to explain how one can pay the benefits to children or old age pensioners without increasing the public sector borrowing requirement?
Baroness ELLES: My Lords, I think I have given one indication; that is, if administration was more efficient £1 billion could be saved, to say nothing of what could be saved by stopping the nationalisation programme, which is to cost the Government several thousand million pounds. There are several ways of saving money in connection with the Public Expenditure Account, as the noble and learned Lord well knows. The Government considered in July the necessity for bringing in this tax against a totally different set of economic circumstances
1086
and still see fit to introduce a measure which in effect amounts to a net 2 per cent. increase in direct taxation on earnings; the only difference from the present methods being that it is the payer who foots the Bill and not the recipient. During the last few weeks in the worsening conditions of the economy, the Government have made several policy statements, with some of which we on this side of the House would certainly not disagree. But if the Government meant what they said, or if the half of them who speak were aptly able to implement what they propose, there would be no shred of justification for this new tax—a tax which is both unfair and dangerous because of the way in which it is being levied. It is also dangerous because of its possible and, indeed, probable effects upon the economy.
We are told by the Prime Minister and the Chancellor that it is vital to encourage industrial investment: indeed it is a basic thesis of the Government's industrial strategy, so we are given to understand. Both the TUC and the CBI recognise the need to shift resources to the manufacturing industries, but does an extra tax on all employers—and I repeat, all employers—encourage investment?—especially when one takes into account the exorbitant minimum lending rate, which is now over 14¼ per cent. The tax will cost an estimated £400 million to manufacturing industry. At the same time, the mini-Budget includes proposals to phase out the regional employment premium, so that regions which are trying to revitalise their industries and create jobs in areas of high unemployment will find it harder than ever to follow their programmes. Is this what could be called encouragement? Is this a shift towards manufacturing industry, on which the future of the British economy depends?
We are told that inflation must be curbed, and we absolutely agree with that. In July, when the tax was proposed, inflation was running at the rate of just over 14 per cent. Incidentally, were we not to have been into single figures as regards inflation by the end of this year? Who remembers that promise now? The figure is now rising again and running at about 15 per cent. Yet it is admitted that this tax will be passed on in prices not only of food but also or other goods and services, such as gas, electricity, travel and so on. In any circumstances, can this be

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considered a contribution to curbing inflation?
We are also told that unemployment must be checked. We totally agree with that. It was unimaginable in the early 1970s that the unemployment figure for this country could reach 1 million, let alone 1½ million. Yet we read again yesterday of estimates of 2 million unemployed. Those figures cannot express the consequences on even more people, including families and dependants; and it is no use quoting statistics only. These are human beings we are considering, passing their days in ever-declining hope.
Over £900 million is being removed from the very sector which is able and which must, if we are to survive as a nation with a viable economy, create new wealth and new jobs and be able to offer opportunities to young people who are completing their education. I have said over and over again in this House that one of the most immoral situations in this country, whichever Government are in power, is to have thousands of school children leaving school and being neglected by the society in which they are meant to earn their living. Yet, according to Government calculations, this new tax will result in at least another 10,000 unemployed by the last quarter of next year. Other estimates show convincingly, and regrettably, that that figure will be largely exceeded.
We are also told that the private sector must he encouraged, particularly to increase our exports. Who, my Lords, would not agree with that, with a trading deficit of over £500 million in November alone? But who are our exporters? A pay policy was surely agreed between all parties—the workers, the CBI and the Government. Why is it that only the employers are now to be affected by an alteration in the pay policy? Many small firms are among our exporters, making components for engineering, precision industries and so on. What does the tax do for those small businesses? It directly puts up the cost of labour. According to an Answer published in Hansard on 13th December in reply to a Question put down in another place, it will cost an extra £1,607 per year for a firm with 25 employees, £6,407 for 100 employees and for a large firm with 10,000
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employees the enormous sum of £642,700. Of course, one can go on calculating in that proportion according to the number of employees involved. No wonder the figures for bankruptcies are higher than they have ever been, having declined during the period 1971–73. There are now over 7,000 for 1975 alone, not to mention the incalculable number of firms which just folded up in despair in the present state of the economy.
Is this extra cost going to help the private sector and small businesses, especially with the minimum lending rate at its present level? We are told, and once again we agree, that direct taxation is too high. Everybody would agree with that. But, as I have said, this Bill, in effect, imposes a direct tax on earnings: regardless of whether it be the payer of earnings or the recipient of earnings, the effect of this surcharge is a direct tax.
We are told that the yield will be over £900 million, but the net benefit to the Consolidated Fund will be around £700 million, and we must ask: Why? The noble and learned Lord quite rightly gave one or two reasons as to why there should be a difference. But according to the statement made by the Financial Secretary in another place, it was also estimated that part of this £200 million from the tax receipts will be needed to pay for the unemployment benefits of those who will become unemployed, because of the imposition of the tax. Crushed between the Treasury computer, which fails, like almost every other projection, to give an accurate image of the future, and the Marxists within the Labour Party, who know only too well what they are projecting for the future of Britain, the Chancellor has totally failed to encourage those citizens—and I believe that they represent the vast majority of the people of this country—who are waiting and wanting to co-operate to restore, through increased productivity and successful export programmes, the failing economy of Britain.
Finally, there are two areas on which others will be speaking in this debate. The Churches were specifically told that they would suffer no more taxes, and they were actively encouraged by the Government to switch from self-employed to employed status. Yet some days later—but I will say no more as, undoubtedly,

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the right reverend Prelate the Bishop of London will be informing the House of these matters on the basis of his personal, expert knowledge. The other area is that of the voluntary organisations, on which the noble and learned Lord has rightly touched, and has said that the Prime Minister is willing to receive representations. We on this side of the House are wholly in sympathy with the charities and the Churches, and are very pleased with the statement which the noble and learned Lord has made that the Prime Minister will receive representations and consider very seriously their position. But what conclusions are we to draw from this collection of statements which we have had on the economy? Do the Government imagine that the citizens of this country can really believe any more what the Government are saying? It is no longer a question of a credibility gap. and it is clear that everything that is said by the Government in relation to the economy is merely listened to with increasing incredulity. What a way to run a country which was once great!
The fact is that since this tax was proposed the economic position of the country has changed. Certain assumptions were made which have already been proved baseless: economic growth of 4½ per cent. which was estimated in July, now may be 2 per cent.; inflation was declining in July but now it is not. It is now assumed that investment in industry will increase by 19½ per cent., but on what basis is this assumption made? It seems to be a totally groundless assumption. This Bill does not answer any of the real problems with which the country is faced hut, on the admission of the Government, will serve to exacerbate them. It does not answer any of the economic, social, financial or political needs of the country. Above all, it does not give any incentive, which is so badly needed for the wealth creating sectors of the economy. Consequently, it will not provide confidence in the Government, either at home or abroad, if they proceed with this measure. We on this side of the House maintain that this is a bad Bill, and will be of no benefit at all to those who most need help.
Lord JACQUES: My Lords, before the noble Baroness sits down, may I ask this question? She has a very great interest in the EEC. Will she admit that
1090
this Bill brings employers' contributions and taxes a little nearer to the rates which are paid by our partners in the EEC?
Baroness ELLES: With pleasure, my Lords. In fact, the noble Lord has very kindly drawn attention to the fact that our direct taxes are considerably higher than those in any other country in the EEC. The United Kingdom pays 43 per cent., Germany pays 33 per cent. and France pays 20 per cent. Further, the social security contributions in the other EEC countries include medical services and health services, whereas in this country they are paid out of direct taxation. Further, if anybody wants to make any comparison between social security benefits obtained in any other European country and those in this country, I know where I would live.
3.23 p.m.
Lord BANKS: My Lords, I should like to join with the noble Baroness, Lady Elles, in thanking the noble and learned Lord, Lord McCluskey, for the concise way in which he has introduced this simple, though controversial, measure. However, I must confess at once that I dislike this tax intensely. The 2 per cent. surcharge on employers' contributions to National Insurance is clearly a tax on employment at a time of high unemployment, and it will, for some employers, be the last straw. It must encourage employers to employ fewer people. We are told that the surcharge will be passed on in prices, but of course not all businesses will be able to do this. The Government's estimate of the increase in unemployment directly attributable to this tax is 10,000, but I shall be greatly surprised if it is not much higher than that. Figures of 75,000 to 80,000 have been mentioned in the debates in another place. The surcharge must be taken into account together with the increased contributions which employers are to pay, anyway, from next April in respect of those earning over £95 per week, and these National Insurance burdens are being added at a time when it is estimated that there will be a surplus of £888 million in the National Insurance Fund in 1977–78. So, first, it is a tax on employment.
Secondly, the tax takes no account of ability to pay and it will be bound to

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bear heavily on small firms, on labour-intensive industries and on firms in a marginal position between profit and loss. The Government tell us that the self-employed are not affected by this tax, and of course their own National Insurance contributions are not affected. But they are affected in their capacity as employers, and many partners and sole proprietors will feel the weight of this extra burden very severely.
Thirdly, the tax also takes no account of ability to pass on the surcharge in prices and some organisations, by their very nature, are quite unable to do that. This is, of course, the position of the Churches and the charities, to which the noble and learned Lord referred, and figures have been given in debates in another place of the frightening extra cost which will have to be borne by the Churches and the charities. I have no doubt that the right reverend Prelate the Bishop of London will be able to give us more detail of this situation. But perhaps I may say just a word about the position of my own denomination, the United Reformed Church. The Churches generally are now contemplating moving to employed status for their ministers of religion, and the cost to the United Reformed Church, which is one of the smaller of the major denominations, would be £150,000 a year. That is just to move to employed status, because the Church will now have to find the employer's contribution for all its ministers. If the 2 per cent. surcharge is added, it will have to find another £40,000 on top of the £150,000. This is money which has to be raised; it is not money which will come in from any automatic source.
The fourth reason why I object to this tax is that I believe it is an abuse of the National Insurance system. The National Insurance Fund will have a surplus this year of £932 million, so the estimate runs, and, as I have already mentioned, in 1977–78 of £888 million. I think it follows from that that the National Insurance system is being used as part of a deflationary policy, at the moment. The whole basis of National Insurance is that there should be contributions from employers and employees, and also a contribution from the Treasury at a fixed rate. What would happen in the ordinary course of events in 1977–78 is
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that the Treasury would make a contribution of about £1,500 million to the National Insurance Fund, according to the agreed basis as approved by Parliament.
What is happening, in effect, is that that is being reduced by very nearly £1,000 million as a result of this surcharge. So a major change is taking place in National Insurance policy, but it is disguised; it is being introduced by a backstairs method. With the increased contributions projected for next year for those earning over £95, of which employers will have to pay their share, this makes the burden of National Insurance contributions, with the surcharge, much heavier on the employer than it need be, and this must subject the whole system to strain.
It has been said—the noble Baroness has answered this effectively—that in countries on the Continent employers pay more in social security contributions; but, as she pointed out, to get a proper comparison it is necessary to know what is spent by employers in this country on other benefits, such as pension benefits, which are provided through the national social security systems in some of the Continental countries to which reference has been made.
Lord BROWN: My Lords, is the noble Lord one of those who believes in earmarking specific tranches of taxation for quite specific purposes—for instance, the road vehicle tax for the Road Fund, the National Insurance contributions for the National Insurance Fund, and so on?
Lord BANKS: My Lords, I thank the noble Lord for his question. If it is understood that these moneys are being raised for a particular purpose—and the contributions are given a particular title, which suggests that they are—then the answer certainly is, Yes. What we need to know is the incidence of taxation on employers in those other countries as well, as compared with this country.
We on these Benches have long questioned the contributory principle, since the National Insurance scheme is "pay as you go" and is not really insurance at all. We have advocated that National Insurance contributions should be regarded as a social security tax; that is what they really are. Indeed, we suggested that they could be regionally

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varied to help the implementation of regional policy. But we have never advocated that money raised by this tax should go to the general revenue.
It seems that there is a likelihood that the surcharge which is being imposed to deal with the current difficult situation may become a permanent feature, because it is much easier to impose a tax than it is to repeal it. When the noble Lord replies I should be grateful if he would give us an assurance that at least it is not the Government's intention that this surcharge should become a permanent feature of the taxation scene.
The Government say that this tax is an essential part of the package designed to reduce the public sector borrowing requirement in 1977/78. On 22nd July the Chancellor announced public expenditure cuts which were calculated to reduce the public sector borrowing requirement by £800 million in 1977/78, and also the surcharge, which we are discussing today, which was designed to reduce the public sector borrowing requirement by £700 million, making a total of £1,500 million to be reduced by that set of measures. Last week the Chancellor said that notwithstanding those measures the forecast of the public sector borrowing requirement was now £10,500 million for 1977/78 and he proposed a package of measures which would reduce that requirement by a further £1,800 million. Therefore, taking together the July and the December measures, the total reduction in the public sector borrowing requirement is £3,300 million, of which this Bill contributes £700 million.
I think that helps to put the Bill into perspective. I am quite convinced that it will be possible to re-arrange the package to eliminate altogether the surcharge. For example, we might well have had a larger contribution from drink and tobacco —perhaps even double. If we were to achieve that, it would leave a smaller revenue to be raised from other taxation. For this purpose I should have preferred to use value added tax, but less would have to be raised by this means than is being raised by the surcharge. In those circumstances, I think that a 2 per cent. increase would have been sufficient.
Unlike the surcharge, value added tax does not affect food, nor does it affect many necessities. Also it does not affect
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exports, and I believe it to be generally fairer. The fact that it bears more heavily on selected areas than the surcharge, because it is not so broadly based, and that it finds its way immediately into the retail price index, would be offset by the fact that, under the arrangement I am suggesting, less revenue would have to be raised by value added tax than by the surcharge. I have no doubt that the package could be rearranged in some such manner and I therefore reject the argument that there is no alternative to the National Insurance surcharge.
For the reasons which I have given I regret that the Government have felt it necessary to introduce the Bill, and I hope that it will not be long before they feel able to bring before us another Bill that is designed to repeal it.
3.37 p.m.
The Lord Bishop of LONDON: My Lords, I, too, would like to thank the noble and learned Lord for the clarity and brevity with which he has presented the Bill, although I regret that I do not think that I shall be able to emulate the second admirable quality of his speech. I am grateful that the noble Lord has confirmed the assurance given in another place, that the position of the Churches and the charities will be given very careful consideration by Her Majesty's Government. I shall bear in mind that assurance in what I have to say to your Lordships.
Your Lordships will be aware, from the publicity which has been given to their representations, of the widespread and deep concern felt by the Churches and charities over the likely impact of this surcharge. In this debate the noble Lord, Lord Allen of Abbeydale, will present the views of the charities and of the National Council of Social Service. I, as Chairman of the Churches Main Committee, a body which represents all the major Christian Communions and the Jewish Church, shall seek to place before your Lordships the grounds on which the Churches base their conviction that this Bill would impose on them a gross and damaging injustice. Before I do so, I want to remove some of the misunderstandings which have arisen as a result of the publicity given to the negotiations between the Government and

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the Churches and charities, to which reference has already been made in this debate.
First, the information that the Churches were seeking an urgent interview with the Prime Minister was not supplied to the Press by the Churches themselves. Where it came from I do not know. Secondly, it was unfortunate that the situation was presented as one between the Archbishop of Canterbury, speaking for the Church of England, and the Prime Minister. This was never the case. The negotiations throughout have been made by the Churches Main Committee, or with its knowledge and consent. Sir Ronald Harris, the First Estates Commissioner, communicated first with the Chancellor of the Exchequer and it was only when the Committee was satisfied that it could not get a sympathetic response from the Chancellor that it felt it necessary to ask the Archbishop to lead a delegation to see the Prime Minister himself.
A similar state of affairs had arisen over the Community Land Bill and the then Prime Minister, Sir Harold Wilson, received a deputation led by the Archbishop. The issues of this surcharge were so grave that it was felt necessary to ask for another interview with the Prime Minister. The deputation would have been led by the Archbishop of Canterbury and would have included Archbishop Dwyer, the Archbishop of Birmingham and the Elected Chairman of the Roman Catholic Bishops Conference; the Moderator of the General Assembly of the Church of Scotland; The Moderator of the Free Church Council; the Archbishop of Wales; and the Chief Rabbi and others of us, together with the noble Lord, Lord Allen of Abbeydale, and other representatives of the National Council of Social Service. There was never any question of Dr. Coggan going alone to fight the battle for the Church of England. It was the leaders of the Churches and representatives of the charities going together to express jointly their deep appreciation.
It has been represented that it was discourteous to approach the Prime Minister at short notice and at a time when he was deeply immersed in negotiations with the International Monetary Fund; and that it was unfair to put him
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in a position when his inability to receive the deputation looked like a snub to the Archbishop. Certainly the Prime Minister's decision was in no way interpreted by the Archbishop or anyone else involved as a slight or a rebuke. Nor was the approach made at the last moment. It was on 22nd July that the Chancellor announced his intention to impose the surcharge on employers' National Insurance contributions, and that he would introduce legislation "early in the new Session". On August 10th the noble Lord, Lord Allen of Abbeydale, wrote on behalf of the National Council of Social Service seeking exclusion for charities. On 19th August Sir Ronald Harris wrote setting out the position of the Church of England, and reflecting the situation facing all Churches.
Since neither representation received any encouragement from the Chancellor of the Exchequer, the Churches Main Committee on 8th October decided to ask the Prime Minister to receive a deputation at the highest level. On 5th November the Archbishop of York, acting on behalf of the Archbishop of Canterbury who was out of the country at the time, and Lord Allen of Abbeydale representing the National Council of Social Service, wrote to the Prime Minister asking him to receive the deputation. The Prime Minister's reply was dated 23rd November, but for some unexplained reason it did not reach the Archbishop till 3rd December, ten days later than the date of the Prime Minister's letter, and nearly a month after the dating of his letter to the Prime Minister. A copy of the Prime Minister's letter of 23rd November was sent to the other signatory, Lord Allen, under cover of a letter from a private secretary, dated 30th November, a week later: and it was by his courtesy that a copy reached the secretary of the Churches Main Committee on 2nd December.
The Prime Minister's letter gave no indication of any readiness to make relaxations in favour of the Churches and the charities, but suggested that the delegation might like to meet Mr. Joel Barnett, the Chief Secretary to the Treasury, to discuss the problems, "especially in the context of the clergy becoming employees". Your Lordships will appreciate that it was not discussion I at this level or of this nature that was

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being sought, and the Archbishop repeated as soon as possible, in a letter of 3rd December, the request that the Churches and charities should be exempted from the surcharge, or that the deputation should be received on 6th December or 7th December.
Meanwhile events had caught up with the negotiators. On 30th November the Ways and Means Resolution was introduced into the House of Commons and passed, and the National Insurance Surcharge Bill given a First Reading. On 2nd December the Bill was published and the Churches and charities had a first opportunity to see what it contained. On 6th December the Bill was given a Second Reading: on 8th December it was taken through all its remaining stages and the Ways and Means Resolution precluded any useful amendment. So the Prime Minister's reply on 6th December to the Archbishop's letter of 3rd December had to point out that since the Ways and Means Resolution had been passed, it would not be possible to introduce relief into the Bill.
A letter over the signatures of Lord Allen and myself, setting out the concern of the Churches and charities, appeared in The Times on 6th December; and on 8th December the Archbishop again wrote to the Prime Minister asking that a deputation should be received at the earliest possible date. We are thankful to know that this will take place early in the New Year. I apologise to your Lordships for recounting this catalogue of dates, but it is necessary to do so to belie the suggestion that the Churches and charities dragged their feet until the last moment. The facts are that representations were made as early as August and that the request for a deputation was made on 5th November.
The mysterious delay in the delivery of the Prime Minister's reply of 23rd November, coupled with the speed at which the Bill was taken through another place, combined to rob the parties concerned of an opportunity to meet and to discuss the issues before decisions were reached. I again repeat that the Churches have never interpreted the Prime Minister's inability to see the delegation as an affront. Although, as I have said, publicity was not given nor sought by the Churches, it has nevertheless served a useful purpose in
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alerting the general public to the implications of the Bill for Churches and charities, and the evidence is that the deep disquiet of those most closely involved is shared generally throughout the country.
I come now to the problems presented by this Bill for the Churches and of the negotiations which have preceded it. As long ago as October 1972, the Churches Main Committee received representations from the Department of Health and Social Security regarding the place of the clergy within the reconstructed National Insurance Scheme. In the course of negotiation it became apparent that the Department, very reasonably, wished to treat with the Churches en bloc through the Churches Main Committee, and that it would need to have one policy for clergymen of all denominations, and that whereas the Department would consider sympathetically representations made to it, it reserved the right to require the Churches to accept "employed" status for their ministers.
The negotiations have been protracted both because of the complications of the scheme and because of the varied status of ministers of religion within their respective communions. By the middle of this year the answers had come in and had been collated. The Church of Ireland wished to remain self-employed. The Roman Catholic Church asked for special consideration by reason of the particular status of its priests. All the others opted for employed status, reserving the right to contract in or out at a later date. These decisions were of course reached on the information of the costs involved in contributions as they were then known.
Perhaps I may illustrate the situation by describing the position of the Church of England, since this is the one which I know most intimately. The clergy of the Church of England are proud of their independence and of being self-employed persons. But after very careful weighing of all the factors it was thought that the advantages of employed status were sufficiently strong that it would be worth while accepting this position. The issues were fully debated in the General Synod at York in July of this year, and it was agreed that for the purposes of the new Social Security scheme, the clergy of the Church of England should be advised to accept employed status and then to "contract out". It was recognised that

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this would cost £350,000 a year, above vs hat the clergy are already paying, and that this sum could only come from the Church Commissioners, and that in consequence there would be that amount less available for distribution for clergy stipends and pensions. But it was thought that the long-term advantages justified this expense.
My Lords, these decisions were reached on Friday, 16th July, in good faith that this would be the extra cost to the Church of England with its 12,000 clergy. Comparative figures relate to the other Churches. Consider our dismay, therefore, when six days later, on 22nd July, the Chancellor of the Exchequer announced in another place that he intended to place a 2 per cent. point surcharge on the employer's contribution as a tax. The effect of this would be at one stroke to double the cost of the new scheme. For the Church of England it would mean not £350,000 a year, but £700,000 a year. For the Churches together the Chancellor's tax would cost at least a further £675,000 per annum. I need hardly expand further on the devastating effect that these sums will have on the economy and effectiveness of the Churches. Doubtless the noble Lord, Lord Allen of Abbeydale, will point out a similar situation regarding charities. The figures speak for themselves.
On a number of grounds we of the Churches and charities are bound to record our most energetic protest against the imposition of this tax. We do so on the following grounds. First, we consider it to represent a clear breach of the repeated assurances given by the present Government that they do not intend to tax Churches and charities beyond the indirect taxes which have obtained for some time. I do not want to go over again the ground we covered in the debates on the Community Land Bill and the Community Land Tax Bill. Suffice it to say that by reason of their service to the community, Churches and charities have for 400 years been exempted from direct taxation. This principle has been maintained until recently by all Governments. Churches and charities are not liable to income tax, corporation tax, capital gains tax, and receive favourable treatment over capital transfer tax. The Government have said that if a wealth tax were to be introduced, it would not apply to charities. The
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Layfield Committee recently recommended the continuance of partial exemption for charities from local rates. The recent Goodman Committee recommends that, subject to certain technical conditions,
"the present relief granted to charities should be continued".
There was an entitlement to refund on SET. The development land tax, we were told, was not a tax at all. The Churches and charities pay VAT because this was an indirect tax replacing purchase tax. The clearest statement of Government policy in recent months was that of Mr. Denzil Davies, the Financial Secretary, in the Committee stage of the Development Land Tax Bill in another place when he said:
"Again I can say quite clearly … that there is no intention of extending taxation to charities in general".—[official Report, Commons, 13/5/76; col.1172.]
And later:
"… there is no intention of extending taxation, be it income tax, capital gains tax, corporation tax, or any other tax, except those indirect taxes which we have imposed on charities for a long time. Any other direct taxation will not be extended to charities".
Nothing could be clearer than that.
I hope it is not going to be suggested that this surcharge is an indirect tax and therefore may properly be imposed on Churches and charities. I do not know whether there is any clear-cut definition of the difference between "direct" and "indirect" in this connection. I have consulted a number of people experienced in tax matters, and they all agree that whatever this surcharge may be, it certainly is not an "indirect" tax, if only for the reason that it is inescapable for those who pay the employer's contribution. ft is a direct tax laid upon that contribution. The Financial Secretary on 13th May said —and I have already quoted him:
"There is no intention of extending taxation, be it income tax, capital gains tax, corporation tax, or any other tax, except those indirect taxes which we have imposed on charities for a long time".
Surely, my Lords, if the English language means anything, the implication of those words in this case is clear beyond any question.
My Lords, I hope no one is going to suggest that exemption for Churches and charities is impossible for practical reasons.

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One of the commendations we have already heard accorded to this surcharge is that it is so easy to compute and to levy. If such be the case, then it must be equally easy to grant exemptions, and I cannot believe that it is beyond the wit of the Treasury to do so. It has been done in the case of SET. The Prime Minister himself, when Chancellor of the Exchequer, in June 1966 devised a scheme for refunds, and the Churches and charities were grateful to him for his understanding. I hope we may have similar reason in this case to be grateful to him and his successor, for it should not be impossible to find a method of exemption either by way of non-payment of the surcharge or refunds.
Secondly, this surcharge is highly discriminatory and unjust. The Churches and charities have no desire to opt out of the responsibility which lies upon all of us to shoulder the burden of restraint and sacrifice which the state of the economy requires. Nor do they ask for special treatment other than that which has been traditionally accorded to them. But they do ask that they shall be treated in this instance in the same way as others and not discriminated against. They ask that the Chancellor's assertion, repeated by the noble and learned Lord, that this is a broad-based tax shall be implemented in their case. For this is precisely what it does not do.
Most employers other than the Churches and charities, with the possible exception of those who can afford domestic service, will be able to pass this tax on to the consumer or to deduct it against corporation tax. The whole tenor of the presentation of this case by the noble and learned Lord was that it was a tax that employers could pass on to others. The Chancellor said in another place on 22nd July,
"The addition, like the existing contribution, will be an allowable cost for purposes of the Price Code and corporation tax".
On the Second Reading of the Bill on December 6th, Mr. Sheldon said:
"We must expect that the surcharge will be deductible against corporation tax, just as the employer's National Insurance contribution is deductible. We must expect that, over a period, the bulk of the surcharge will be passed on into prices … As the House is also aware, the surcharge will be an allowable cost under the Price Code in the terms in which such costs are defined in the code".
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Local Authorities will be able to charge it against the rate support grant.
But, my Lords, the Churches and charities have no one on to whom the surcharge may be passed; no corporation tax against which it may be set. Nor is there any wealthy sponsoring body that can carry the burden. As regards the Church of England, the extra £350,000 will have to come from the funds of the Church Commissioners, out of funds which are provided for the increase of stipends and pensions each year. Nor can the Churches, thank God, sack overnight the clergy whose contributions they might not be able to afford. In the case of Churches and charities this tax must eventually be paid by the lowly-remunerated clergymen and parish workers, by retired clergymen and widows; or in the case of charities—as the noble Lord, Lord Allen, will no doubt tell us—by the children cared for by Dr. Barnardo's Homes or the National Children's Homes or by the blind and the spastics. I mention these cases not to wring your Lordships' emotional heartstrings but to remind you of the facts. This is not a broad based tax. This is a grossly discriminatory tax against a small minority who have a right to look to the Government for protection.
There is another area in which this surcharge could discriminate against the clergy or the employees of charity. We indicated our readiness to enter the scheme on the figures before us. The resources of the Churches were going to be stretched very tight in order to do so, but they reckoned that they could just about manage it. With this new impost some of the Churches may be forced to say that they simply cannot afford the price which they would be required to pay. So the clergy might have to remain self-employed. Thus, for reasons totally unrelated to the terms of the social security scheme—for that is what this surcharge is—a clergyman could be deprived of the opportunity of enjoying the full benefits of a National Insurance scheme which is his right as a citizen. It could be too expensive, not as a scheme, but because of a charge laid upon the employer which has nothing to do with the insurance at all. Here again, the impost on the Churches and charities is discriminatory and unjust.
Finally, my Lords, the application of this surcharge would place the Churches

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and charities in a position of the utmost jeopardy. We know that the 2 percentage points levy will double the cost to the Churches. Since this new tax is so easy to compute and to collect, there will be a great temptation to use it again in the future. If the percentage rate were to be increased to 4 per cent. a further £350,000 would be required for the Church of England alone, and the overall cost, contribution and tax, for the Church of England would rise to £1,050,000; if the levy were to be increased to 6 per cent., the overall cost for the Church of England would be £1,400,000. My Lords, we simply do not have the money to talk in these terms, when there are so many commitments over and above the provision of a proper stipend for the clergy and church workers.
Moreover, my Lords, it is particularly unjust when, at a time when the Churches are trying to raise the stipends of the clergy, and there is so much sacrificial giving from church people, any modest increases that we are able to achieve would mean that the costs of employed status and the 2 percentage points levy would both rise. It is reasonable that the contribution to social security should rise. It would be very hurtful, however, if the reward of giving for clergy stipends were to be the necessity to pay a large slice of it away in this surcharge. Incidentally, I note that there have been indications recently that the Chancellor hopes in his next Budget to reduce income tax. This would, of course, be a very welcome step for all of us. But I hope he will not attempt to compensate the Exchequer by increasing the percentage points of the surcharge. If he were to do this, it might well in the long run harm the clergy more seriously than the paying of direct income tax.
My Lords, I apologise if I have occupied too much of your time and your attention. My reason for speaking at length is to ensure that your Lordship's House and Her Majesty's Government are left in no doubt about the extreme gravity with which the Churches and charities view the consequences of this surcharge. We find it difficult to understand how it can be that, at a time when charitable activities are being asked by the Government to renew their efforts and to fill the gaps left by the inability of Government to
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meet the essential needs of society, they are being subjected to the punitive provisions of this measure and to the uncomfortable threat that the Government intend, little by little, to erode the protection which has over the centuries been extended to them. They want to get on with their work; they want to be free to do so.
We should have liked to amend the Bill by including a power to enable the Minister to exempt Churches and charities from its provision. Unfortunately, we were precluded from proceeding in this way by the terms of the Ways and Means Resolution. We take some comfort from the observations of Mr. Denzil Davies in winding up the Second Reading in another place on December 6th, which have been confirmed by the noble and learned Lord. Mr. Davies on that occasion assured the House that without entering into any commitment the Government would listen to representations and consider them in depth, and, if satisfied that they should be acceded to, would put the matter right before the tax is introduced on April 6th 1977. I hope the Government will consider the representations I have made in the light of Mr. Davies's observations on May 13th that there is no intention of extending taxation to charities, and that they will, in his words, "consider" our representations "with great sincerity", and "put right what a great many people believe to be a major act of injustice.
4.8 p.m.
Lord ALLEN of ABBEYDALE: My Lords, I rise to speak about the position of charities under this Money Bill. I must begin by declaring an interest, not a financial one, in that I am chairman of the National Council of Social Service, a body which has in membership a wide variety of voluntary organisations which serve the community. I do not propose to detain your Lordships by repeating the arguments which have been so clearly put by the right reverend Prelate, or by going again over the earlier history of our exchanges with the Government, but I do want to say that, like him, I was encouraged by the undertaking given by the Treasury Minister of State in another place, that if the Government decided to make a concession it would be possible to "put the matter right"—and those were his

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actual words—before the tax was introduced next April. I listened also with appreciation and hope to what the noble and learned Lord said when introducing the Bill this afternoon. But Mr. Denzil Davies did not say quite how this would be done. No matter. He left the door slightly ajar, and I hope that the debate this afternoon may help to push it open.
I am urging this for two main reasons. In the first place, this extra tax would be a blow to charities just at a time when the Government themselves, because of the financial pressures on local authorities, have urged increased reliance on voluntary organisations concerned with care in the community. I must say that I found it slightly ironic that earlier this afternoon, at Question Time, we heard tributes paid to the increasing work done by voluntary organisations in dealing with certain social problems in London on the same day as we are taking the Second Reading of this Bill. The Social Services Secretary said this summer that, pound for pound, the Government could often buy more service through a voluntary channel than through a statutory one. Indeed, he felt able to promise some extra money to those charities which were already grant aided by his Department. But there are not very many of these, and, grateful though we must be for this concession, I am afraid it goes nowhere near to solving the problem created for charities by this Bill.
As has been said, charities cannot set off their extra expense against corporation tax; charities cannot increase their prices across the board; charities, at best, can recover only a limited amount by increasing their charges, if that is how they raise some of their income—and by no means all of them do—and some rather anxious calculations have been going on. Out of the cases I have been looking at, I should like to give just three examples. The Royal National Institute for the Blind calculate that the net extra cost to them would be of the order of £50,000 a year, which would somehow have to be met from their own charitable funds. This is a pretty discouraging prospect for an organisation which, over the last four years, has contributed very nearly £2 million from its own funds on providing homes and hostels, training and rehabilitation centres, and education for the blind, and has spent another £1½ million from its own funds on braille.
1106
The Spastics Society, for their part, calculate that the extra cost to them would be nearly £40.000 a year. For Dr. Barnardo's the figure works out at some £75,000. These are all net annual figures and they assume, for example, that local authorities will have the money to pay increased charges—itself not a totally reliable assumption. At a time when charities are naturally finding it harder to raise money, the results could only be a cutting back of voluntary work which is provided inexpensively (which surely matters in these days of financial troubles) and is much needed for the wellbeing of the community.
I come now to my second main reason for urging a concession. This is one of principle. It is quite simply that the current proposal runs counter to long accepted principles relating to the taxation of charities, and fills me with foreboding for the future. From the correspondence I have had with Ministers and from the debates, I think that I can identify four separate arguments advanced so far against the concession which Churches and charities are seeking, and I should like to take them in order, very briefly.
The first is the argument that hitherto charities have not necessarily been completely relieved of indirect taxation such as VAT. The right reverend Prelate has already commented with some eloquence on this point. I would simply add that I too am not aware of any universally accepted definitions of direct taxation and indirect taxation, but certainly if one of the criteria of indirect taxation is that by refraining from doing certain things, or refraining from making certain purchases, it is possible to avoid paying the tax, then this tax certainly does not meet that criterion. Any of the charities concerned could meet it only by sacking its staff and closing down. But anyway the tax is no more indirect than was SET, from which charities were exempt. Nor is it more indirect than rates, from which charities get a certain mandatory relief.
The second of these four arguments is that to relieve charities of this new tax would be administratively impracticable, as the Chancellor first put it, or very expensive, as the Prime Minister put it subsequently. On this I would repeat that it proved perfectly feasible to work out procedures for the recovery of SET. The

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present problem is admittedly somewhat different since SET was designed as a wide-ranging and deliberately discriminatory fiscal device, and the methods of collection which have been explained this afternoon make the deduction, or the recovery, of a surcharge by charities slightly more complicated. These are intricacies which obviously cannot be lightly brushed aside, but nevertheless I can see no reason at all why some pretty simple and inexpensive machinery should not be devised for the recovery of this tax by charities.
The third argument is that if a concession were made to charities it would be impossible to stop there. But it proved quite acceptable to Parliament to make concessions in the recent community land legislation which were limited to charities, and to charities alone, and to refuse to extend them to other claimants, such as pension funds. For the life of me I cannot see why this should not be done again.
But there is a fourth argument which has just been touched on but which has never been made quite so explicit as the others. I suspect that a difficulty which the Government have had in mind is that to make any concession would involve making a concession to some organisations which—how shall I put it?—count as charities but are somewhat less than favourite children in the eyes of Her Majesty's Government. There is a general issue involved here which will no doubt be discussed in the coming months in the light of the recent report of the committee which the noble Lord, Lord Goodman, was good enough to chair for the National Council. But whatever emotions this issue may arouse, I would argue that it is marginal in the present context. I certainly hope that the voluntary bodies which look after the blind and the spastics, and some of the other unfortunates of Our society, are not going to lose this battle on the playing fields of Eton.
4.18 p.m.
Viscount NORWICH: My Lords, I do not intend to delay your Lordships for very long at this hour. Most of the points I was going to make have already been admirably put before your Lordships by the right reverend Prelate and by the noble Lord, Lord Allen of Abbeydale.
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I think I shall confine myself this afternoon therefore to the effects, in perhaps slightly more detail than that just given by the noble Lord, on one particular charity about which I suppose I should declare an interest, though once again it is far from being a financial one. I speak of the National Trust, on whose executive committee I have the honour to serve.
The National Trust is, I suppose, in many ways fairly typical of virtually all the charities in this country in that it stands to be desperately hit by the new legislation which is proposed. It is untypical, however, in that, first, it has already been hit even more than most of them by galloping inflation, since many of the endowments which enable it to maintain the very large number of properties it owns were calculated with great care some years ago so that almost every one of them is totally inadequate for the purpose at the present time. Secondly, as these properties are extremely widespread all over England, Wales and Northern Ireland, it is obviously necessary to have a large number of individual employees looking after them, and by definition the organisation has to be very decentralised.
The result of this, briefly, is that with a total staff of about 1,200, the National Trust will have to pay between £45,000 and £50,000 a year. This is not just on the staff who run the Trust at head offices and in regional offices but the gardeners, woodsmen, caretakers, curators, nature reserve wardens, any number of people on all of whom this new tax will have to be paid. They cannot possibly any more be reduced in number. Having run at a very serious deficit for the last two years, we have reduced all we possibly can and to reduce further would be dangerous. If this money is to be found, the only alternative will be to cut back to a very dangerous degree on the maintenance on the houses which were given to us on trust and which it is our trust and duty to preserve. In this connection, it is worth metnioning that we already spend rather over 85 per cent. of our income on the maintenance of these houses. It is nowhere near sufficient at present prices and the Historic Buildings Council said only recently that it would be an extremely grave mistake if urgent maintenance were postponed until brighter days in future;

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the longer we wait the more expensive these things will be.
I need not say more. I wanted to give a brief indication of the kind of thing I am sure all charities are facing in various degrees and I can only say how glad I was to hear of the delegation under the leadership of the right reverend Prelate which will he calling on the Prime Minister in the near future. I hope the Government will, even at this late date, find it within their power to do something to stop this appalling and, I believe, disastrous injustice.
4.23 p.m.
Lord GORE-BOOTH: My Lords, like the noble Viscount, Lord Norwich, I will not detain the House for long. Nor is it my purpose to develop anything I say into a general attack on Governmental fiscal or taxation policy. My principal purpose is to put the matter in yet another way. The right reverend Prelate said he did not wish to enter into an emotional aspect of the matter, but I suggest that a little emotion belongs because, after all, people who contribute to charities do so not wholly cold-bloodedly but with a feeling of emotion.
Perhaps I can put it simply by saying that in the case of the Save the Children Fund, in which I declare a similar interest to that of other noble Lords in relation to other charities, if the Bill in its present form becomes an Act, the children will pay £25,000 in tax. I am not being unfair about this because the Bill is perfectly honest, in its reference to the Consolidated Fund, in making it clear that the children will not get the £25,000 back again, and I would assure your Lordships that even in this inflationary time one can do a lot for deprived children with £25,000.
The only other argument I would add to those which have been so brilliantly and thoroughly expounded by the right reverend Prelate and by my noble friend Lord Allen of Abbeydale, is that the housemaid's baby is not always a wicked thing and it may be a method by which highly desirable reforms have gradually been inserted into our political and economic system. Thus, I would not be so rash as to condemn all housemaids and all babies proceeding therefrom. But in this case it is surely very easy to
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see that the principle of adding just a little more to the burdens on the Churches and just a little more to the burden on charities can go further and wider each time there is a financial crisis, so that each time the Government will, in the name of economy or in the name of balance, be placing a greater burden on people who are still gallantly ready to go on paying what money they have left, after they have been taxed, towards good causes. If that principle were to spread—and I think that if the Bill goes through it would tend to spread—then the taxation on the lame, the halt, the blind and the children would become more and more formidable, to the disadvantage of them all.
I beg the noble and learned Lord, Lord McCluskey, not to refer this matter to the borrowing requirement. Without being oflensive, I would say that your Lordships have provided the Government with a number of alternative methods to reduce the borrowing requirement rather than taxing the unfortunate. I will of course not enumerate them for fear of prolonging my speech or transgressing my initial principle of not attacking the Government's policy in general, which could then indeed happen. I would urge that in advising his right honourable friend the noble and learned Lord should not use that particular argument, which is so easy to refute. I hope that when there is an interview with the Prime Minister, Mr. Callaghan will be briefed to consider what is said to him both with his mind and with his heart, and indeed, as we heard, by a curious providence, in the prayer that was read to us before we started this Sitting, that the Government will make use of
"… the true Christian act of charity towards another".
4.28 p.m.
Baroness PHILLIPS: My Lords, I, too, will not delay the House for long as the argument has been so splendidly put by the right reverend Prelate. However, I should be betraying my own small charity if I did not intervene. When I was a very young Socialist we used to perform a play which was supposed to describe the capitalist economy. In the play, two men started out with a shilling and handed it hack and forth, one to the other, and at the end of the day the man who started with a shilling still had it and

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the other man had nothing. Listening to the explanation of this new surcharge and constantly listening to the explanation of the economy, I begin to think that that strange play was indeed correct.
I can say straightaway in the case of my charity, that the recipients, the consumers, are young mothers and children to whom we are not able to pass on any more extra charges: they are already beset on all fronts and it would be quite impossible for us to do that. We receive from the Government a grant, for which we are very grateful, which has hitherto met the cost of the salaries. Like most charities, we depend heavily on voluntary labour. We have a very small, very low-paid staff, and the grant just covered our expenses until last year. The staff met together and, being women and practical and patriotic, we all agreed that there would be no increase during a period of 18 months. However, unfortunately that did not solve the problem because postage went up, travelling went up, the cost of electricity and gas went up—in other words, there was nothing on which we could cut back except by sacking the people who were working for us.
It is not my intention to make an emotional speech: I am merely stating the facts as they are. One of our staff is a young widow whose case I have pleaded many times. She is not entitled to the full pension nor, indeed, to reasonable increases in pension. Another is a deserted wife who gets the minimum from the State and who receives a very low wage from us because it is all we can pay. One is a single woman who, because she has retired, has to pay back part of her pension under the earnings rule. The rest of us who receive our wages pay back the normal tax to the State, so that, out of the original grant, I have worked out that nearly half already goes back to the State. There must be a more economic way of handling that, though, no doubt, like Parkinson's Law, it keeps some people in jobs.
When it comes to VAT, we have small educational conferences and I am at present engaged in a battle to the death with the Customs and Excise—and whoever thought of giving the Customs and Excise the job of collecting VAT? The Customs and Excise were trained as revenue officers on the assumption that smugglers were
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doing something wrong. Those of us who have to pay VAT arc not doing anything wrong. On our small conferences we now have to pay VAT. If we have a charitable exercise, if we have a carol concert, we have to pay VAT. There is no question but that a large amount of the money that we receive from a grateful State already goes back to the State: now we come to this new surcharge.
I must say straight away to the Government, though I feel sure that highly intelligent economists have thought this out, that it is introducing a totally new principle to put a surtax on what is virtually a National Insurance fund. I agree with those of your Lordships who have already expressed the fear that, though it is 2 per cent. now, there is always the danger that this could be increased. It is all too easy to add to an existing surcharge rather than think up a new tax.
I was a little confused by the explanation given by the noble and learned Lord, Lord McCluskey, that this would mean no additional work. Surely each extra tax that has to be collected means additional work. When one considers that, as a charity, because of what we already have to collect for the State, we have to employ a highly skilled accountant, whereas in other circumstances we could employ a much less well paid bookkeeper, I suggest that already most employers are doing part of the State's work. They may be doing this with great joy and enthusiasm, but I suggest that it is not wise to stretch it too much. I can only say in the case of my own charity that we have come to the end of the road. If one more tax is imposed upon us there is no question but that we shall go out of existence. Maybe that will not matter to some people, but it will matter a great deal to the 50,000 mothers and babies whom I hope I have served.
4.34 p.m.
Baroness ELLIOT of HARWOOD: My Lords, there is one point that I should like the noble and learned Lord, Lord McCluskey, to clear up if he can or at any rate to give me some information about when he replies to this most interesting and moving debate. I have spent almost all my life in voluntary organisations raising huge sums of money for various

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good causes. I have also spent a lot of my life on the committees of big trusts that donate their funds, which are entirely charitable and have absolutely nothing to do with any kind of taxation of any sort for they all have charitable status, in distributing such charity money to organisations that have been carefully considered and looked at by these committees. What is to happen now? Are the gifts of these trusts, whose money is entirely charitable and has nothing on earth to do with taxation, to be falsified if their money is given to the organisations? I could cite any number with which I am associated, like the noble Baroness, Lady Phillips.
What will be the position if, in giving out money from these trusts, we find that a proportion of it will have to be given to the Exchequer in taxation? Would not that have some legal aspect which would falsify the wills and deeds under which such great funds have been set up? I am speaking of funds that were set up many years ago and whose interest is, as it has always been, devoted to charitable objects. I believe that this may complicate matters in a court of law if somebody were to go into the matter, because we are not allowed by law to use our money except for organisations that are charitable and whose funds all go to the objects for which they raise and administer money.
I believe that this is one of the most iniquitous pieces of taxation I have ever heard any Government put forward. I am not saying that because we have a Labour Government. If it had been my own Government, I should have been just as angry. I think that it is monstrous and I found the speeches of the right reverend Prelate the Bishop of London and the noble Lord, Lord Allen of Abbeydale, for the Council of Social Service, with which I have been associated all my life, and everybody else most moving, as was the appeal of the noble Baroness, Lady Phillips, whose work for voluntary organisations is very well known. I hope that the Government will look at this again because it seems to be something which is altogether without foundation. It is like a vicious circle. It will go round and round and it will make everything much more difficult just when we are all longing for people to give voluntary service in order to save money for the Government and when a great number of
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organisations are doing that. I hope that the noble and learned Lord, Lord McCluskey, will also take into account the fact that many great trusts are only allowed to give their money to organisations that have charitable status and do not pay tax at all. If this is introduced, it may add a complication which would be very difficult and would mean that a lot of money would be wasted by the giving trusts. I hope that the noble and learned Lord will think about this as well as about everything else that has been said here today.
Baroness GAITSKELL: My Lords, I should like to add just one sentence to this debate to which I have listened after an absence of two and a half months from this Chamber. It has been a very moving debate. We are asked to make sacrifices, but I have not heard one speech that has given any alternative to this proposed tax or surcharge. The noble Baroness, Lady Elles, attacked the Government for raising unemployment by this tax, but I always thought that the Conservative Party had up till now urged higher unemployment in order to deal with our problems. That is all I have to say.
Baroness ELLES: My Lords, perhaps may be allowed to intervene. The Conservative Party has never recommended higher unemployment at any stage of any of its policies. If the noble Baroness took the trouble to read the Hansard of another place, she would have seen that the Financial Secretary himself stated that there would be further unemployment as a result of this tax. This has not been denied by the Government. I think it is only a question of how many, but it has never been denied by the Government that this tax will create further unemployment.
Lord DRUMALBYN: My Lords, I shall certainly not delay the House for more than a minute or two. I do not want to add to all the many things with which I have entire sympathy which have been said about the effect on Churches and charities. I think that the case has been fully made there. I want to make two simple points. First, it seems to me to be wrong in principle to use a Department such as the Department of Health and Social Security and the National Insurance Scheme as a tax gatherer. This seems to be wrong in principle. It can in the future open the

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way for very serious extension, and I should go so far as to say serious abuse. The second point is this. The noble and learned Lord, Lord McCluskey, agreed that this proposed tax would be passed on to the consumer; that is, the consumer of goods produced at home. It must follow that to that extent it will make it easier for the foreigner to compete on the British market.
My Lords, this is a serious aspect of the problem. The noble Baroness has just challenged us to say what we would do. If a tax of this kind were being introduced, should have thought that some adjustment should also be made to equate the effect on imported goods with the effect on goods manufactured in this country. May we not finish up by finding that one result of this tax is a further decline in our position so far as the adverse balance of payments is concerned, which again would have to be made up by borrowing from abroad?
4.41 p.m.
Lord McCLUSKEY: My Lords, as the right reverend Prelate pointed out, I was brief in introducing the Bill, but I regret to say that in the light of the debate I have heard I will need to be a little longer in replying. Having regard to what was said by the noble Baroness, I should like to begin by turning to the general matter. Noble Lords will be aware that the debate today is not a general economic debate. It is the Second Reading of the National Insurance Surcharge Bill, although I do not pretend that general economic considerations are entirely irrelevant to it, nor did I do so in my opening speech; and I am not seeking to suggest a censure of the noble Baroness for raising the matters that she did. Of course it is true that the Bill forms part of the Government's general economic strategy, as do the measures which the Chancellor announced last week. That is why, in my opening speech, I explained, I hope briefly, the economic background to the decision taken six months ago to introduce this tax. Once the decision had been taken however and was announced in July, the yield of this tax became one of the important and the fixed factors for 1977–78 against which the Chancellor had to view the changing economic forecasts for the domestic and world economies presented to him this autumn: in other words, if I may be
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forgiven by the noble Lord, Lord Gore-Booth, for saying so, a reduction in the public sector borrowing requirement of £700 million in the first year, which will result from the introduction of this new tax, is part of the base line from which the Chancellor decided to reduce the PSBR still further last week.
This second stage decision, which was announced last week, does not therefore properly fall within the scope of this debate. I think that Members of this House will recognise that, and I must ask noble Lords to accept that I cannot, on behalf of the Government, properly comment further on the measures before they are debated in this House. I think that noble Lords will know that they are to he debated in another place tomorrow—
Lord GORE-BOOTH: My Lords, I hope that as the noble and learned Lord referred to me he will give way for a moment. I think that he will be aware that I was purposely trying to avoid the general economic discussions. I was arguing for charities, and of course that makes the borrowing requirement argument rather different.
Lord McCLUSKEY: Yes, my Lords; of course I entirely accept what the noble Lord says.
The noble Baroness suggested that the Title of the Bill was misleading; the noble Lord, Lord Gore-Booth, said that the Bill was a perfectly honest Bill. I would hope that in emphasing, as I did at the beginning, that the important word in the Title is the word "Surcharge" that helps direct attention to the true character of the Bill; but plainly, in the light of this debate, this House fully understands the true character of the Bill. It is a taxation measure pure and simple, riding, one might put it, on the back of the National Insurance Scheme, and I shall address myself to the propriety of that in a moment or two.
I will come later to the matter of charities and specifically Churches, and I hope that noble Lords will allow me to reply to that in some detail. But before I do so I want to make it quite plain that although this is levied as a tax on earnings, it is in fact, with these exceptions in relation to charities and the Churches, a tax upon consumption. The noble Baroness cannot have it both ways; it is not both at the same time.

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It is one or the other. In fact, it is a tax on consumption because under the provisions of the Price Code and the special arrangements relating to distributors, retailers and the like, the extra cost to manufacturers, distributors and so on will be able to be passed on. That is why ultimately there will be an effect upon the RPI, and in that sense the tax is an indirect tax. I am hesitant to involve myself in an argument about the borderline between direct and indirect taxes. It is not a borderline which is well defined, and I understand that economists are departing from the use of these terms simply because of the difficulties that exist where the tax which starts with one character appears in its incidence to acquire a different character—
The Earl of SELKIRK: My Lords, I should like to ask the noble and learned Lord this. He says that it falls on the consumer. Would this also include cases of professional services, some of which are regulated not only by the prices and incomes regulations but also by the courts in certain cases?
Lord McCLUSKEY: My Lords, I happen to be aware of the kind of matter of which the noble Earl is speaking, and I would hope that the courts, in taking into account applications by those whose fees are regulated by Statutory Instruments (for which the courts are responsible) would take account of all the additional costs which they can properly bring to the attention of the courts in relation to the cost of running the businesses out of which they have to make such profit as they can in rendering their services to the public. But of course I accept that in that type of case it is not simply a question of going to the Price Commission and getting authority to raise a charge. It has to be done through this other mechanism.
Baroness ELLES: My Lords, the noble and learned Lord has been very tolerant about the way we have intervened, but I hope that he will allow me to intervene again because I really question this definition of a tax on consumption. Surely it is a tax on earnings and a tax on earnings is a tax on income. It is not just passed on to the consumer. Surely there will be a 2 per cent. tax on, for instance, the
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earnings of nurses in hospitals. Presumably the whole of the National Health Service will be affected by this surcharge. A great many services not within the field of consumers on to whom profits and prices can be passed will be affected by the surcharge. I do not want to be contentious about this; it is just a matter of querying the definition. It is not a tax on consumption that can be passed on to a consumer. It is a tax on earnings of people regardless of the kind of job they are doing.
Lord McCLUSKEY: My Lords, I do not mean nationalised industries' employees because the nationalised industries will be able to pass on the extra cost in the prices they charge, but there is the case of public employees—the case of local authorities has already been mentioned—and this extra impost is a matter which qualifies in relation to the calculation of the rate support grant. In relation to central Government employees, the central Government as employers are liable for the surcharge like any others, but their increased costs will be met by adjustments to the relevant supply estimates. We are concerned here with part of the reason why one does not get a yield which is directly related to the number of persons who are employed, as the noble Baroness plainly knew before she asked me.
I said—and I apparently puzzled my noble friend Lady Phillips—that this scheme, this form of tax, would not require extra civil servants. I think I puzzled her in the respect that she thought it must require extra work on the part of the employer. I think I can assure her on that point. The way the tax will work is this—and I shall have to come back to this in another context. At the present time, as noble Lords will be aware, the Department of Health and Social Security issues tables, and these tables are used by the employer or by his accountant, or by whoever is responsible for it, to calculate the amount which is due. At the present time, in respect of this class of contribution, the sum which is due is shown as a percentage; that is to say, 8¾ per cent. The new tables, which will be issued to take effect from 6th April 1977, will simply show the figure to be 10¾ per cent. Therefore, it is not extra work. Instead of having to calculate 8¾ per cent.,

1119
one calculates 10¾ per cent. One does not write out an extra cheque or anything of that kind; there is no extra work on the employer. Of course, noble Lords see the benefits of such a simple tax as being entirely sinister because they see that, in future, Chancellors, recognising that it is such a simple and cheap tax to operate, might be tempted to go a little further. I can express no commitment on that; it is not for me to make any statement about the attitudes of future holders of that high office.
May I, then, before 1 come to the charities, look at certain matters which were raised? Both the noble Lord, Lord Drumalbyn, and the noble Lord, Lord Banks, suggested that this was an abuse of the National Insurance system. I hope I can answer that in this way. The new tax, which is enshrined in this short but important Bill, is a tax which simply uses the National Insurance collection machinery. It is properly a surcharge. The Government have never sought to disguise the fact that this is in fact a tax. It will operate—and these are the important words, I think—as though the rate of employers' contribution had been increased by two percentage points. As I have explained, that goes for ease and cheapness of collection. But it is not using the National Insurance system; it is using the existing machinery. As I think the noble Lord will understand, the present system is that the Inland Revenue in fact collects the National Insurance contribution in the first place from the employer at the same time as it collects PAYE. Then, these two separate sums, collected together, are divided by the Inland Revenue, and the National Insurance contribution is paid over to the DHSS. That will continue; but, of course, the DHSS will simply repay the surcharge to the Treasury. So I do not accept that this is an abuse of the system; it is a use of the system. And, in so far as it avoids recruiting extra civil servants, avoids increasing bureaucratic burdens and avoids increasing staffing and other such burdens upon employers—in these respects it is surely deserving of a welcome.
Lord BANKS: My Lords, I am grateful to the noble Lord for giving way. Would he not agree that it will be exactly as if the Treasury contribution to the National Insurance Fund had been substantially
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reduced? That is precisely the effect that the measure will have, although such a proposition has not been before this House or another place.
Lord McCLUSKEY: My Lords, I would certainly not agree with what the noble Lord suggests. The Government's contribution to the National Insurance Fund is one thing; this is something entirely different. They are two separate things. The Exchequer supplement to the National Insurance Fund, as the noble Lord will be aware, is provided out of general taxation. It is some 18 per cent. of contributions at the present time. It represents the Government's contribution to the tripartite partnership of Government, employers and employees. So this sum is paid out of general taxation. The surcharge is in addition to general taxation, and thus contributes towards that very sum which provides the Exchequer supplement. Therefore, in my submission, it cannot properly and accurately be said that this is somehow subtracting from that Fund, or from that contribution.
I also take note of the suggestion that was made by the noble Lord, Lord Banks, that it would be possible to eliminate this tax altogether. I would remind noble Lords that it is calculated that the tax will bring in something of the order of £1,000 million, or a little more, in a full year. It was suggested by the noble Lord that one might raise the same sum of money by a tax upon drink or tobacco.
Lord BANKS: No, my Lords.
Lord McCLUSKEY: I think some such thing was suggested. I think the words drink and tobacco "were used; I certainly have them noted. Certainly, if one was tempted to do that one would be raising the cost of these items by a staggeringly large amount, and the effect upon the retail price index would be immediate and perhaps catastrophic for general social policies.
Lord BANKS: My Lords, may I correct the noble Lord on that point? What I was suggesting was that there should be a 2 per cent. increase in VAT and double the amount which was actually put on drink and tobacco, which is very

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much less on drink and tobacco than the whole amount. It might be a quarter of it.
Lord McCLUSKEY: Certainly, my Lords, if one increased VAT by 2 per cent. the effect on the retail price index would be the same as this; if one put the rest of the burden of the tax upon drink and tobacco, the effect upon the retail price index would be that much larger. If one raised VAT by 2 per cent., one would achieve only half the revenue yield of this particular tax.
My Lords, I would come, then, to the matter which has plainly disturbed your Lordships most of all, and that is the matter of charities and Churches. Let me say, first of all, that the right reverend Prelate the Bishop of London referred to a suggestion that the Churches had dragged their feet. I make no suggestion, and the Government make no suggestion, that the Churches have dragged their feet in the matter. The timetable which the right reverend Prelate the Bishop of London gave is entirely accurate. would seek to add only this to it, that the first request to meet the Prime Minister was made on the 5th November 1976. Of course, representations had been made to the Chancellor of the Exchequer before that, and there had been some correspondence. Those representing the Churches did not ask at any time for a meeting with any Treasury Minister; and, indeed, when the Prime Minister, in reply to the letter of the 5th November, suggested that they should meet the Chief Financial Secretary to the Treasury, who was the senior Minister in charge of introducing this tax, they would not do so. I am sorry, if I may say so, that the right reverend Prelate should refer to the proposal that they should meet the Chief Secretary to the Treasury as a proposal which they rejected because they did not want a meeting at that level. He was, after all, the senior Minister in charge of this particular tax.
The Lord Bishop of LONDON: My Lords, will the noble Lord give way? When the Archbishop of Canterbury, the head of the Roman Catholics, the head of the Jewish Church and the head of the Free Churches all ask to see the Prime Minister, that is the level at which
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they wish to have their discussions. No disrespect of any kind to Mr. Joel Barnett was intended; but when no satisfaction can be gained from the Chancellor of the Exchequer, it is surely only reasonable and proper that the heads of the Churches should have the right of access to the Prime Minister himself.
Lord McCLUSKEY: My Lords, as have already said, the Prime Minister, it is hoped, will meet representatives of the Churches in the fairly near future.
I began by saying, but I want to repeat this because it is important that we deal with the matter fully, that the National Insurance surcharge is, and is intended to be, a broadly-based tax. It is based upon consumption in so far as it will be passed through into prices, and in that respect it most closely resembles the other indirect taxes such as VAT. These indirect taxes traditionally have been—and that applies to VAT as well—generally paid by both the Churches and charities. Let me make the point which the noble Lord, Lord Allen of Abbeydale, foreshadowed; that is, that charity law does not, in fact, differentiate between different sorts of charities. Indeed an object may be a charitable object in the legal sense, notwithstanding that it will benefit the rich as well as the poor. General fiscal relief would therefore benefit all charities including, for example—and I do not hesitate to mention it—the one which the noble Lord had in mind, professional associations and public schools, just as much as the concessions would benefit organisations for the relief of poverty, of disease and other forms of personal distress.
Indeed, the noble Viscount, Lord Norwich, mentioned that one of the charities which he was interested in was the National Trust. That, in association with the other examples I have given, gives some idea of the scope of the word "charity" in English law and adopted in the whole of the tax law of the United Kingdom.
My Lords, let me make it plain—and I hope that noble Lords will take it into account—that the Department of Health and Social Security makes specific grants to certain voluntary organisations. There is selection there, not for everybody calling themselves a charity but for certain

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voluntary organisations. In 1977–78 these grants are to be increased by about 60 per cent. to a sum of some £5 million. I think that my noble friend Lady Phillips gave an example of a charity in receipt of such a grant. So that the Government give, and intend to increase, selective help to charities judged to be at present of the greatest service to the community
Baroness PHILLIPS: My Lords, this is too good an opportunity to miss getting it on the record. The noble Lord has said that there will be an increase in grants to those given under the Department of Health and Social Security. The grant that I receive comes from a different Department, the Department of Education and Science. Can I hope that they also will be increasing their grants?
Lord McCLUSKEY: My Lords, no doubt they will note what the noble Baroness has said. The announcement which I was referring to, that grants are to be increased by 60 per cent., was made in June. My Lords, I should like to say something about the Churches. At the present time, as the right reverend Prelate has made clear, the clergy are, for National Insurance purposes, regarded as self-employed; and there are the negotiations to which he referred that would lead to the result that they would become employed persons for National Insurance purposes from a date which may be April, 1977. That course has been chosen because it confers some benefits on those who chose it; although I do not suggest that the matter is one-sided. It is accepted that the National Insurance surcharge will increase the cost to the Churches of the projected change-over once it takes place. I think it is correct to say that the right reverend Prelate has asked on behalf of the Churches' main committee that the change-over should be deferred until a later date. The Government understand, and regret, that the new tax creates problems for the Churches but the fact remains that until the clergy become employees of the kind to whom the tax applies the surcharge will not apply to them.
Let me look at some of the arguments that have been put forward with such clarity by noble Lords. The first argument was that charities are, in principle and traditionally, not subject to direct
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taxes. As the right reverend Prelate has pointed out, the Churches enjoy, along with the charities, a uniquely privileged position in relation to non-payment of tax. They are relieved of taxes and he specified them; but they are not and have never been relieved of indirect taxes. Similar arguments to those heard today were put forward in respect of VAT but VAT applies to these bodies. They are not exempt, for example, from revenue duties; they are not exempt from he duty on petrol and on vehicles and they are not exempt from certain aspects of development land tax
Baroness ELLES: My Lords, would not the Government consider that the Church plays a special role in the community? You cannot consider the Church and the charities which have been mentioned in this House on the same basis as companies which are making profits. Is the argument of the noble Lord that because he is afraid that the Etonians (as have already been mentioned) should not be subject to tax, Dr. Barnardo's Homes must suffer as well? It is a curious way of arguing that because one might have to pay a tax, everybody must pay it—rather than think of those who are desperately in need.
Lord McCLUSKEY: My Lords, that was not the argument that I put forward. I accept that the Churches and the charities are in a unique position. That is why they pay no income tax, that is why they pay no corporation tax, that is why they pay no capital gains tax and no other direct taxes. The point that I made, and seek to make, in relation to charities of a kind which are entirely different—for example, the public schools and the like —is simply this. Once you recognise that you have to draw a distinction between charities for the relief of poverty and misery and so on and the so-called charities existing as charities in English law from the time of Elizabeth I, then, in order to administer a scheme which selects some of them for exemption and leaves others within the tax, then you begin to increase the administrative and bureaucratic costs both for the persons on whom the tax is or may be imposed and for central Government.

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Mention was made of SET. That was a special case because that was always intended to be and was designed as a discriminatory fiscal device. It was designed to help encourage the transfer of resources to manufacturing industry; and there was deliberately set up a system of machinery for making refunds. Accordingly, it was possible within the scope of that machinery to exempt persons or bodies from the tax. The tax with which this Bill is concerned is designed as a broad-based revenue raising instrument using the National Insurance machinery and there is to be no costly administrative machinery for refunds and exemptions.
My Lords, on the matter of selectivity, there are certain possibilities and they are being given consideration. You can have selectivity by exemption. That requires you to make judgments between those which are, as it were, deserving charities (to use an old phrase) and those which are non-deserving charities in the sense in which noble Lords have spoken and have heard this afternoon. You can have selectivity by exemption; but there arise formidable problems of definition. You can have selectivity by repayment. That also raises the same problems of definition and considerable administrative problems. Many more civil servants will be required to inspect individual deduction cards and generally to police the exceptions.
Furthermore, and this is a point of some substance, one starts off highly sympathetic as the Treasuary Ministers are, to the points made by the right reverend Prelate; but, in no time at all, those who claim exemption as a special case become wider and wider. We have gone from the extremely deserving and sympathetic cases of the blind and of Dr. Barnardo's Homes and the like to the case of the National Trust. One can then see that other groups would come forward and seek exemption, or selection to come out of the tax, on the ground of employment in the depressed areas, in parts of Scotland or Merseyside; and one could have employers of the disabled making the same point. One could have small firms claiming exemption. One would end up not with a broadly-based tax at all, but with a tax with a much heavier incidence upon certain parts of the community and one would then change the character of the tax altogether.
The Lord Bishop of LONDON: My Lords, before the noble and learned Lord moves on from this part of his speech, will he explain how it is that charities and Churches are already exempt and are perfectly clearly defined? Charities are those which are recognised by the Charity Commissioners; Churches are clearly defined. Why should it be so difficult to apply to this one tax a principle which has been universally applied for the past 400 years in protection of Churches and charities?
Lord McCLUSKEY: My Lords, I am not suggesting that it is administratively difficult to accept as a charity those bodies which are regarded as charities by the Commissioners of Inland Revenue. I am suggesting that, within that general bracket of bodies which are entitled in law to be known as "charities", there are organisations which in no popular or ordinary sense can be regarded as charities.
The Lord Bishop of LONDON: My Lords, I am sorry to interrupt again, but the noble and learned Lord has not answered my question. They are exempt at the moment and there is no difficulty about this. Why should there be difficulty applying to this one particular tax which has now been produced?
Lord McCLUSKEY: My Lords, I have tried to explain the administrative difficulties, apart from the difficulties of definition. I do not want to appear—although plainly I may be failing in this regard—as if I am saying that the mind of the Government is closed on this; I am seeking to answer particular points. In so far as I do not do so, I regret that I cannot answer them. Noble Lords will recall what I said and perhaps I should close on that. There are to be further discussions and one hopes matters can be taken further in the course of these discussions. My Lords, may I conclude by saying that the noble Baroness, Lady Elliot of Harwood, asked a question and, in so far as I followed it, I think there is no difficulty. May I be allowed to write to the noble Baroness to seek to answer her question when I have studied it in Hansard?
Baroness ELLIOT of HARWOOD: My Lords, the words of the right reverend Prelate the Bishop of London apply

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exactly. It is the Commissioners of Inland Revenue that decide which organisations are charities. To those organisations, because they do not pay any tax, great sums of money are paid out by trusts, the Carnegie Trust, Pilgrims Trust and all the others. They would be unable to do that if the money that they were giving out went in taxation.
Lord McCLUSKEY: My Lords, all charities pay some tax; I think that the noble Baroness is mistaken in supposing that some charities pay no tax. All charities pay certain indirect taxes. I will write to the noble Baroness on that matter. The noble Lord, Lord Drumalbyn, made a point in relation to competition with those who import into this country and difficulties for exports. In this regard, surely the House will acknowledge that in recent times, owing to the changes in the exchange rate, the competitive position of those who export from this country is considerably advantaged by the decline in the value of the pound; and, similarly, difficulties have been created for those who seek to import into this country. The effect of this surcharge is thought to be relatively small in relation to that effect on the exchange rate. My Lords, I should like to thank all those who have taken part in this debate. I apologise for having taken so long to reply. I hope that noble Lords will accept the length of my reply—whatever its content—as a mark of the appreciation of the lucidity, cogency and passion of the points which have been made.
On Question, Bill read 2a; Committee negatived.

EUROPEAN AERONAUTICAL SECTOR: 51ST EEC REPORT
5.15 p.m.
Lord KINGS NORTON Lord KINGS NORTON rose to move, That this House takes note of the Fifty-first Report of the European Communities Committee of last session on the Action Programme for the European Aeronautical Sector (R/2461/75). The noble Lord said: My Lords, the report is, I believe, a document of considerable importance to the development of aeronautical policies and attitudes in the Community. It is a commentary on the EEC Commission document mentioned in the Motion, the Action Programme, which was published on 3rd October, 1975.
This programme, which proposes a highly centralised control by the Community of the aircraft industry and air transport systems of the Nine, was considered in detail by Sub-Committee F of your Lordships' Select Committee on the European Communities, under the chairmanship of the noble Earl, Lord Lauderdale. As a member of the Sub-Committee, I should like to tell those of your Lordships who are not members how much the Sub-Committee owes to the outstanding quality and vigour of the noble Earl's chairmanship.
The Sub-Committee devoted nine meetings to written and oral evidence from representatives of the British aircraft industry, of the British air transport industry, and of Government Departments; and in this way a spectrum of informed opinion became available to the Sub-Committee which was further helped by the attendance at private meetings of two members of the EEC Commission.
The Action Programme document be-gins by analysing the difficulties of the aircraft industry of the Member States arising from the alleged dispersal of its resources and inadequate co-ordination of decision-making, but recognising advantages in its technological abilities and developing opportunities. It concludes that:
"the development of the industry, with its important inputs of new technology, requires clear strategies, systematic long-term planning, and coherent management. And because of the high-level of investment which must be undertaken it requires a wide capital base, secure financing, good market prospects and the avoidance of the kind of waste that arises from duplicated efforts and lost opportunities for rationalisation."
It would indeed be difficult to disagree with these sentiments.
The document then proceeds to review the market, particularly the European market. Only the civil market is within the competence of the Commission, and in the civil area the Programme commits itself to a policy of creating a "European airspace" managed at Community level. This appears to mean, ultimately, central control of the Community's airlines and of their development in ways calculated to improve the market for the civil aircraft manufacturing industry. Indeed, the manufacturing industry and the air transport industry are seen as two sides of a single coin.
The Programme recognises however that the civil market is little more than 40 per cent. of the whole and states that,
any policy designed to strengthen and develop the aircraft industry must therefore include common action in the defence equipment field. To this end the Governments of the Member States should decide to create a joint arms procurement agency, responsible for joint development and purchasing of airborne weapons, to meet the needs of the European armed forces."
As the Programme document sees it, if the Community's aircraft industry is to have any future, the framework for its management would devolve from a proposal from the Commission to the Council. The Council, after consulting the European Parliament, would make the major policy decisions on programmes, Community financing and international agreements. On the basis of those decisions, the Commission would assume the management of the common aerospace policy. This awe-inspiring conception is made a little less frightening by the statement that the Commission would organise the management of the aircraft policy in such a way as to use the maximum existing national structures and to seek the greatest possible decentralisation. Nevertheless, Community financing of the aircraft policy would not be superimposed on national financing; it would replace it.
The Action Programme document concludes with, first, a proposal to the Council of the European Communities for a decision concerning the creation of a common policy in the civil aircraft and aviation sector and, secondly, a draft resolution for the Member States to consider relating to the creation of a military aircraft procurement agency. The decision proposed for the Council is that there should be, inter alia—T am not giving them in full:
"a common programme for all activities in connection with the manufacture of large civil aircraft, common financing (to replace national financing) of research, of development and of production tooling for the common programme, a common programme of basic research receiving community financing, financial support for marketing, harmonisation of the laws, regulations and administration provisions of the Member States dealing with certificates of airworthiness, the creation of a European airspace, managed on a Community basis, involving a system of regulated competition, the aim of which would be to provide services tailored to the public need at the best possible prices, joint negotiation of the Community's agreements with other countries,
particularly on traffic rights, so improving the Community's bargaining power and leading to optimizing international routes and services."
I have tried to give your Lordships a conspectus of the document which was the basis of the deliberations of Sub-Committee F. It has necessarily been sketchy, because the document contains a dozen pages of report and a score of pages of annexes.
Now I should like to turn to the report which is the subject of my Motion. In the Introduction, the report says with, I think, commendable restraint, that the draft decision and the draft resolution, which I have tried to précis for your Lordships, would have far-reaching implications. Their full impact, according to the report, cannot be assessed until the consequential draft regulations and directives are known. The report therefore examines the general objectives of the Action Programme, their justifications and how far they can be achieved through the Commission proposals.
The first critical note is struck when the report, in its paragraph 10, deals with the concept of a Community airspace to supplant both national sovereignty in airspace and national air transport regulations. The programme talks of "European" airspace, which the report regards as misleading. Also misleading, says the report, is the term "airspace" because in aviation circles "airspace" means the area above its territory in which a country enjoys national sovereignty. The Commission uses the term in a new and wider sense, to mean the whole paraphernalia of regulations and agreements controlling air transport operations. The Commission argue that a unified Community airspace, in the new sense, would help the realisation of proposals for aircraft manufacture. But, says the report, a little unkindly, so little argument is adduced in support of this view that some witnesses suggested the air transport proposals had been included as an afterthought.
The Report, my Lords, also reviews the legal implications of the Commission's Action Programme. Broadly, if it were implemented, it would seem that United Kingdom would be lost to the Community. Furthermore, the financing of research and development, and of United Kingdom sovereignty over the airspace above the United Kingdom would be lost

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to the Community. Furthermore, the financing of research and development, and of United Kingdom airworthiness standards and certification would have to pass under Community control situations demanding modification of existing legislation. Only noble Lords with a detailed interest in the administration of aircraft construction and aviation will find time to read the minutes of evidence in the report, but I hope that most noble Lords will study the conflation of this evidence in Part IV. The ideas in it are already concentrated into a small space, and a further précis would not be comprehendsive. However, in commending it to your Lordships, I would draw attention to some points which are particularly important.
First, the evidence did not seriously challenge the Commission's broad assessment of the industrial situation, though the Commission was thought to have underestimated the difference between air frame and engine manufacture. There was, however, little support from witnesses for any of the proposed solutions. Rolls-Royce, for example, were totally opposed either to unified Community control of engine manufacture or to financial incentives for greater collaboration in the engine field. From the Minister of State, Department of Industry, and from his officials, while there was naturally support for United Kingdom collaboration with other countries, there was none for a programme in which United Kingdom policy was submerged in a Community policy and the independence of the United Kingdom aircraft and engine industries lost.
Evidence was heard about co-operation between the civil aviation authorities of the United Kingdom, France, Germany, Italy, Holland and Belgium on drawing up joint airworthiness requirements. These are well advanced for airframes and complete for engines—the other countries accepted the United Kingdom engine code. The point is made, however—and it is a very important one—that agreement on standards does not guarantee uniformity of enforcement. I intend to return briefly to the subject of airworthiness later in my speech. Official support for the idea of a military procurement agency was noticeably qualified. While the need for co-operation and the co-ordination of operational requirements was endorsed,
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it was clearly felt that progress in those directions could be made without the Commission's proposed new agency.
The Report makes clear that the concept of a European airspace was received with considerable scepticism. To quote the Report:
"The proposals rest on the assumption that the manufacturing industry requires a community airspace. This assumed link is crucial to the argument but is neither explained nor justified."
in the Action Programme. The evidence before the Sub-Committee, summarised in part IV of the report, suggested that a common EEC transport policy is not necessary for helping manufacture. Furthermore, on more general grounds, it was felt that the EEC was not the right machine to bring about the changes. The weight of feeling, indeed, was that the area for co-operation was much greater than that of the Community, and that the development of co-operation was already satisfactorily progressing through the work of the European Civil Aviation Conference, the Association of European Airlines, the International Civil Aviation Organisation and the International Air Transport Association.
The opinion of your Committee, my Lords, is given in Part V of their Report. Again, I do not intend to give a comprehensive account, but to draw attention to important parts. For instance, they say that as the United Kingdom and France together account for some three-quarters of aircraft building in the EEC the addition of further layers of Community authority could only produce a steep organisational pyramid. The intervention of seven other Member States with limited interests in the matter would hardly encourage the political accommodation required. The Committee do not believe that the Community's institutions are well adapted to making prompt decisions of the type required.
While, say your Committee, it is not clear whether the Commission is, indeed, aiming at a protected EEC market for aircraft built inside it, attention must be called to the evidence, which was almost unanimously hostile to protection. Companies have shown, continues the report, that common action across national boundaries is neither impossible nor dependent on the evolution of European company law or Community action.
Aircraft manufacturers have made good progress in voluntary collaboration under economic pressures alone.
The Committee consider however that the Commission may well be right in averring that economic forces will not alone bring airframe manufacturers sufficiently together. The Committee would welcome it if the individual Governments, particularly of the United Kingdom and France, demonstrated a policy of active collaboration so that the independent national airframe came in future to be regarded as the exception rather than the rule. The Committee appreciate, however, the force of the argument put to them by Mr. Kaufman that for defence reasons the United Kingdom must be able to design and develop airframes independently if necessary. The Committee welcome the proposal that certain areas of basic research should enjoy Community financing, because increasing costs threaten to limit national efforts, but this must not be, says the Committee, at the cost of endangering present research centres.
On airworthiness, the Committee consider it better for the Community to encourage the present action on joint airworthiness requirements, than to risk changing to the system indicated by the Commission. As I have already said, the Committee consider that the case for a European—that is to say, an EEC—airspace has not been substantiated. Its implementation would duplicate and undermine valuable work being done by existing international bodies, and it might jeopardise the United Kingdom's relatively strong position in civil aviation.
The conclusion of the Committee I must read to your Lordships in full. It is not very long. This is it:
"The Commission's aim to improve the competitive strength of the aircraft and air transport industries results in proposals for no more than organisational action. This would be taken at one remove from the industries concerned. The intention is to ' go beyond the stage of intergovernmental co-operation '. The proposals would upset present co-operation in bodies of wider scope than the Community. The Commission imply that the new organisations, if set up, would be able to find solutions to the industries' problems on such matters as aircraft types, marketing, finance, routes and fare-structure. This is not demonstrated nor is it self-evident. The Committee can even foresee matters being made worse. While they support the principle of Community finance for basic research and
marketing, they think it would be wrong for approval to be given to the other and fundamental changes proposed, even in principle."
That is the conclusion of your Lordships' Select Committee. I have done my best to give your Lordships an idea of the Select Committee's 51st Report, and an idea of the EEC Action Programme which occasioned it. May I conclude with a few remarks for which no one is responsible but myself.
First, I would draw your Lordships' attention to Appendix 6 of the Select Committee's report. in which is given the Resolution adopted by the European Parliament on 6th July last on the Action Programme. It recommends the Commission to concentrate on getting decisions of principle out of the Council on industrial policy, and on putting its common air transport proposals into concrete form. I doubt very much whether, even if this recommendation is implemented, we shall be much further advanced. But I should like to ask the noble Lord who will be speaking for the Government whether he can tell us if the proposals of the Action Programme have indeed got any further through the EEC machinery. I think we should all like to know, too, whether there is any information about the attitudes of other Member States. Indeed, we should like to know whether there is any change in the attitude of the United Kingdom Government since the Sub-Committee took its evidence.
The attitude of the Select Committee is clear. It found the Action Programme largely unacceptable. I think it could be described as, at one and the same time, didactic and naive. To what extent it is typical of what might be called the Commission approach, I am not sure but I am clear from experience of other draft papers from the Commission in scientific and technological fields that it is not unique. I feel strongly that the philosophy of centralisation—and it is that, despite the disclaimer to which I drew attention earlier—is wrong and should he resisted. I feel, too, that the Action Programme was written by people with little first-hand knowledge of aircraft and aviation.
There is a type of official operating in Brussels called an "expert". In the fields of science and technology, he does not seem to be what you or my Lords, would call an expert. He appears to be an

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administrative civil servant who depends on the advice of the true expert—the scientist or the engineer. This must make the drafting of intelligent documents relating to the fields of technology—such as aviation—unnecessarily difficult. My belief is that collaboration and harmonisation are best achieved by experts in the United Kingdom sense; not experts in the EEC sense.
A great deal of collaboration between the United Kingdom aircraft industry and the aircraft industries of Europe has been achieved. I think it was all initiated before the Treaty of Accession. It has had, so far as the United Kingdom is concerned, nothing to do with the EEC. It was achieved by experts in the United Kingdom sense, and has resulted in the Tornado, the Jaguar and the Concorde, to give the most dramatic examples, and that is the way it should continue. Any attempt to impose collaboration from Brussels just will not work.
We see another example of the result of collaboration between experts, United Kingdom style, in the remarkable progress towards agreement in airworthiness standards. The Action Programme gave no indication that the Commission was even aware of it. And Sub-Committee F learned recently of another example of successful collaboration between real experts, unassisted by EEC experts. This was in the field of molecular biology. The lesson is obvious. If the EEC is to get anywhere in matters of science and technology, it must leave negotiation in the hands of people who know.
Finally, I want to make the point, of which in fairness I must say that the Commission show that they are not unaware, that there is not a civil aircraft industry and a military aircraft industry. There is just one aircraft industry. The fact that the military industry is not within the Commission's purview is, in my opinion, just another reason for drastic modification of the Action Programme for the European Aeronautical Sector, which the Select Committee consider raises such important matters of policy and principle that the special attention of this House should be drawn to them for debate. My Lords, I beg to move.
Moved, That this House takes note of the Fifty-first Report of the European
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Communities Committee of last session on the Action Programme for the European Aeronautical Sector (R/2461/75).—(Lord Kings Norton)
5.39 p.m.
Lord CARR of HADLEY: My Lords, I am sure that we should all be grateful to our Select Committee on the European Communities, and particularly, of course, to Sub-Committee F, under the chairman-ship of the noble Earl, Lord Lauderdale, for drawing our attention to this EEC Commission document called Action Programme for the European Aeronautical Sector and for analysing its implications for us so thoroughly and yet so succinctly.
I am sure, too, that we are all grateful to the noble Lord, Lord Kings Norton, both for playing his part on that Committee and bringing his own personally great knowledge and experience in this field to bear on the problem before us and for the speech which he has just made. He has brought out for us, very clearly I think, the main objectives and recommendations that are contained in the action programme document and also the main criticisms of it which the sub-committee made.
It seems to me that the case made by the Select Committee against the Commission's main general proposals is very strong. Indeed, I believe that it is unanswerable and I hope that your Lordships and the Government will express strong agreement with the Select Committee's views. The case has been so well summarised by the noble Lord, Lord Kings Norton, that I am sure your Lordships will agree with me that I need not amplify it in any way. I should simply like to say that I agree, I think, with everything that the noble Lord has said.
One of the points which the noble Lord made was that the Committee's report showed considerable restraint. It certainly did, and so did he, and I must try to do the same, although that will not be easy. As the noble Lord has said, the proposals contained in the Action Programme are indeed awe-inspiring. In my view, they are in fact downright terrifying. Like many noble Lords, over the years I have read many plans for action which have been strong in diagnosis but weak in prescription. It seems to me, however, that this action programme is not weak in prescription; it is absolutely lethal. If the medicine were ever to be administered to

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our European aircraft industries they would be as good as dead.
From the moment it was mooted—that is, before the Treaty of Rome was finally agreed—I was a strong supporter of the European Economic Community. Then I was a strong supporter of the view that Britain should be a member of the Community. Therefore I find it all the more distressing when the Commission put forward recommendations such as those which are contained in this action programme document. Their proposals amount to centralisation run mad. Also, I fear that they typify the very worst kind of inward-looking approach which so many of the opponents of the Community feared. They feared that the Commission might develop in that way and we, the supporters of the Community, said that it must be our job to see that this did not happen. Certainly, I think that we have that job on our hands so far as this document is concerned.
Of all the industries which need to be more genuinely international in outlook and competitive power, I suppose the air transport, the airframe and the aero-engine manufacturing industries must be among the principal ones. For them to become locked in an inward-looking Community attitude, bureaucratically run from Brussels, would, I believe, be a disaster. The Community must, of course, strengthen its own aircraft and air transport industries, but it must not run fences around them either industrially, administratively or commercially.
Luckily I think that there is little danger that this Action Programme, and its proposals, will ever be implemented. Although that is fortunate in one way, it is depressing in another. To me, at least, it is extremely depressing that the Commission should put forward proposals so wildly out of touch both with the reality of the needs of these industries and also with the reality of what can and cannot be done.
What, then, should be our main conclusions about all this? Not, I think, that the Commission should keep its nose out of these matters. On the contrary, despite the great growth in European co-operation in these industries between Member countries and their aerospace industries I think that co-operation has not yet gone far enough or been made effective enough and that there is need
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for more of it. Although I have been so strongly critical of the proposals contained in the Commission's document, I strongly approve of much of their analysis, and I must quote with approval one or two of their main conclusions in that analysis of the problem.
They say that the future of the aircraft industry in Western Europe is of importance to the Community for a number of reasons; that the existing industry is a major source of employment; that it is one of the chief representatives of the type of employment—highly skilled, commanding sophisticated technologies and a high level of investment—towards which the Community must necessarily move in the future as the industrialisation of the Third World proceeds and the wider international division of labour unfolds. I believe that analysis to be profoundly true.
I agree also, and I quote again, that the research and development carried on by the aircraft industry has proved to be a major source of scientific invention and technological information across a wide range of products. I agree that Western Europe's capacity to make an appropriate contribution to its own defence must depend in large measure upon the strength of its aircraft industry. I agree, too, as the document says, that despite its importance, the European aircraft industry faces serious difficulties which have put a question mark against its future and that, in large part, these difficulties are due to the divergent policies of the Member States with regard to their aircraft industries.
The document goes on to outline in more detail the criticisms of the record in recent years and I think that we can probably all agree with the following three points. First, that resources have been spread over too many, sometimes competing, civil and military programmes; secondly, that no overall market orientated strategy to co-ordinate the various kinds of aeronautical programmes has been produced; and, thirdly, that there has been a lack of adequate support for marketing and for developing existing products.
With all of these basic points of analysis, and others which I have not quoted, I certainly strongly agree. I hope that your Lordships' House will agree with them and

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that we shall hear from the Government that they agree, too. Therefore I want to separate my praise from my criticism. I have, and I believe rightly, criticised very severely the Commission's proposals for action, but I support and agree with their analysis. Also, I want to say that we need the Commission to inquire, to report, to criticise and to suggest what needs to be done by the Governments, the aircraft industries and the airlines of the Member countries of the Community. Also, we need our own Government to play an active part and to give a strong lead to other Governments in the Community in correcting the failures and the weaknesses to which the Commission draws attention.
While, therefore, we shall be right, I hope, in condemning the Commission's proposals as to how these problems should be dealt with, I believe that we should be wrong if we turned a complacent, blind eye to the Commission's critical analysis of the situation because the present situation is potentially a dangerous one for these vital industries. We must have a European strategy for the development of our air transport industries and for the aerospace manufacturing industries which can supply the products that they need. If not, these great industries, which at the moment are creative, will end up—I say 10 years from now, although that is a guess, but at least some time from now—as no more than subcontractors. That, I believe, would be a great loss to Britain and to all the Member countries of the Community. The costs of aircraft development are now so enormous that collaboration is essential. Collaboration is essential on a wider scale than simply the European Community, and it must particularly bring in the United States of America. But it must not be just piecemeal collaboration between individual European and American companies based merely on medium-term commercial considerations because that would lead inexorably to the subcontractor status which I have just spoken about as being a danger which we must take seriously in Britain in particular and in Europe generally.
So I believe that in Britain, France, Western Germany and Holland, as the four countries in descending order of contribution which really are the heart of
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the aerospace industry in Europe, Governments and the air transport and aerospace industries themselves must now put some real heart into a European strategy, and do it urgently. We need the weight of the Community behind such a strategy and that is why, as I conclude, I want to make clear that fiercely though I criticise the recommendations for action by the Council in this document I praise their interest in it and I hope we shall tell them that we want them to continue to show that interest—inquiring, reporting, criticising, urging but, please, not establishing a great centralised bureaucracy which will defeat their own objects just as surely as ours.
5.52 p.m.
Lord LLOYD of KILGERRAN: My Lords, I should like to join with the noble Lord, Lord Carr of Hadley, in congratulating the noble Lord, Lord Kings Norton, for his masterly and comprehensive speech in relation to this, the Fifty-First Report of the European Communities Committee on the aeronautical sector. If he will allow me to say so, the noble Lord is recognised as one of the great international authorities in the field of aeronautics. It is no exaggeration to say that had it not been for his skill, both in technology and administration, many of the great advances in aeronautics during the last thirty-five years would not have taken place.
I also had the privilege of serving on the Sub-Committee which produced this report. I do not propose to follow the noble Lord, Lord Kings Norton, in the analysis he has made of the technological aspects and aspirations expressed by the Commission in their action programme. In my view a Commission's report of this kind has to be judged from an entirely different standpoint; namely, a political standpoint. After the devastating criticisms of the noble Lord, Lord Carr of Hadley, perhaps I may be able to cast, as it were, a political lifeline to the basic themes on European unity behind this Commission's action programme.
It seems to me that the main weakness of this Commission's programme is that it almost completely fails to discuss, or even to consider, most of the political realities associated with its otherwise commendable analysis of the industrial and technological situation in the EEC

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in the aeronautical sector. In my view it is not enough for the Commission to produce documents such as this, mainly with a technological and scientific content. There is a great danger to the unity of Europe for the Commission to seek as its mission in such an important industrial sector as the aeronautical sector, to set up some kind of organisation or institution without also giving some guidance as to how their proposals can be achieved from a political point of view.
Also, it seems to me to be essential for the Commission to show how their proposals can help towards the political unification of the Community. Therefore it is from that point of view that I endeavour to assess the value of this Commission's report. This Action Programme of the Commission fails to appreciate or discuss the political implications of its proposals, many of which run counter to so many diverse national interests which are bound to impede progress. Therefore I say again that it is not enough for the Commission in this Action Programme to deplore, as it does, the failure of the basic political strategy in Europe in the 1960s and at other times without expressing some view as to the present and future political situation in Europe in relation to the industry with which it is endeavouring to deal.
Of course I realise that under the Treaty of Rome the Commission is in some difficulty because it is bound to look for political guidance to the European Parliament rather than national Governments, and at least until direct elections to the European Parliament are achieved the European Parliament cannot be said to be a very effective political instrument. But as the noble Lord, Lord Kings Norton, and also the noble Lord, Lord Carr of Hadley, have pointed out, the Commission's broad assessment of the industrial situation was not greatly challenged in the evidence recorded in the report of the Select Committee. I entirely endorse the general proposals in the Commission's programme urging a European strategy in the aeronautic sector, and in particular the proposals for an EEC package in certain market slots. These relate to the size of civil aircraft and are set out at pages 24 to 27 of the Action Programme in the Commission's Bulletin Supplement 11/75. I agree that these suggestions should be made a key theme of important
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commercial advantage to Europe, assisted by the form of export bank for finance purposes suggested in the report.
Again, I agree with the comments of the Commission—and I believe the noble Lord, Lord Kings Norton, and the noble Lord, Lord Carr, would agree with this—that for far too long the European market for both civil and military airframes has been dominated by American firms, and that in the absence of some sort of systematic European procurement agency, market opportunities for European aircraft have been lost. Again, I would agree with the view of the Commission that the future survival of European firms in the aeronautics sector may be greatly at risk. As the noble Lord, Lord Carr of Hadley, pointed out, their position is critical because of the concentrations of industry in the United States of America and the foothold which American firms are gaining more and more in Europe through some of the agreements with firms in the Member States, thus further imposing their monopoly on Western markets. But the apparent political superficiality of the Commission's proposals in this connection were aptly illustrated when the Minister of State pointed out in evidence to the Commission —and this is recorded in paragraph 598 of the Select Committee's report:
"… it would be an absurdity to imagine that in a world which is dominated both by the American market and the American industry we can ignore the American industry and simply have a European industry and a European market."
As the noble Lords who have preceded me have pointed out, the Select Committee's reports have supported the Commission's views that certain areas of basic research should enjoy Community financing because mounting costs threaten to limit national efforts. There appears to be little political controversy of significance likely to arise in this field. I have also noted the Commission's sympathy to the desirability of encouraging innovation in the aeronautical field.
I could continue to quote areas of the Commission's proposals where it would have been helpful for the Commission to indicate at least in some detail the political implications of the proposals and how they might be resolved. It might be that if they had done this, the criticisms that your Lordships have heard tonight might not have been quite so severe. Therefore,

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it seems to me inevitable, in the absence of these political assessments, that the Select Committee should have come to the conclusion it has done in paragraph 67, which has been read by the noble Lord, Lord Kings Norton. This seems to me to be an unfortunate position to have reached. It must be frustrating for members of the Commission, particularly in view of the vast amount of work they have put into their programme, to hear and to read criticisms of their report by Members of your Lordships' House without having the right to reply directly.
My Lords, I should therefore like to presume to make a suggestion to the noble Lord the Minister and, indeed, if I may, to the noble Baroness, Lady Tweedsmuir of Belhelvie, who presides over this Select Committee. My suggestion is that after this debate has been concluded, it would be politically expedient to organise a further meeting, perhaps of Sub-Committee F, under the chairmanship of the indefatigable and noble Earl, Lord Lauderdale, so as to further consider all the matters raised in the report of the Select Committee and by noble Lords in the course of this debate. In my view, these discussions should be particularly in a political context, so as to assist if possible in the furthering of the bases of the Commission's desire for some kind of uniformity in Europe in the aeronautical sector.
The Minister of State, when he gave evidence to the Select Committee on 19th May 1976, clearly stated what was his preliminary view on the proposals of the Commission. At paragraph 595, the Minister said:
"… I think it is fair to say we would have our doubts as to whether an international, bureaucratic machinery would be better equipped to take account both of the overall problem and also of the needs of individual countries".
This observation appears to me to summarise the political problems to which the Commission's programmes give rise.
I should like to say again that there is room even now for further discussion of the political problems raised by the proposals of the Commission. Where there is the political will, there must surely be a political way, even in the context of the Rome Treaty. Therefore, I feel that further discussion would be welcomed by representatives of the directorates of the
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Commission's concerned in these matters. I hope therefore that I may elicit from the noble Lord who will be replying to this debate on behalf of the Government, some sympathy for this proposal for further discussions.
6.4 p.m.
Lord BESWICK: My Lords, I have an interest to declare on which I will not elaborate, for reasons which I think your Lordships' House will understand. I am also tempted to ask for the indulgence of the House in making a maiden speech, because although I have been in this House now for something over 12 years, this is the first occasion on which I have not spoken from either Dispatch Box. I propose to restrict my remarks to the airframe manufacturing element in this report, although I should love to try to sort out some of the airspace and air transport tangles, but maybe there will be another time for that. May I express my admiration of the way in which the Select Committee assembled and analysed the evidence submitted, and for the clarity with which they expressed their opinions. I make in passing only one observation on the procedures of the Committee. I see that they had the privilege of consulting two members of the EEC Commission, but I wonder whether it might not also have been of advantage to take evidence from one of two industrialists from the Continent. I can well see the difficulty of determining whether such evidence was widely representative, and there may have been other difficulties, but if the Select Committee are to offer opinions and if they are to carry weight—and after this I believe they will —it might be relevant if they hear the views of some of our friends from across the Channel.
May I also offer my warm congratulations to the noble Lord who moved this Motion. His exposition of the contents of the Community document, of the Report of the Select Committee, and his own comments, as the noble Lord, Lord Lloyd of Kilgerran, said, were quite masterly. We shall all benefit from his own comments. Few noble Lords in this House equal the knowledge and experience on aerospace matters accumulated by the noble Lord, Lord Kings Norton. We are fortunate to have his advice at our disposal.
I say immediately that with the noble Lord, Lord Carr of Hadley, I share the

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anxiety of the noble Lord, Lord Kings Norton, at the prospect of management responsibility for European aerospace being vested in some new body sited in Brussels. I would have said that a year ago, but having had some responsibility during the past year for planning a centralisation exercise for the United Kingdom I can see even more clearly how easy it could be to build up a central bureaucracy. But that danger for Britain must and will be avoided. While pitfalls and problems of centralisation can be avoided or overcome in a national exercise, I believe it to be sheer folly to imagine that we can impose a centralised management control upon the aerospace industries of nine countries, and still retain a credible competitive manufacturing industry in Europe. Having said that, I want also to say—and here I follow the noble Lord, Lord Carr of Hadley—that I do not think this report adequately commends the Community for its wisdom in singling out the aeronautical sector as being of prime importance if the EEC is to remain an important innovative industrial area of the world. I believe that the Commission have their priorities right when they underline the importance of this industry.
Moreover, as the noble Lord, Lord Kings Norton, said—and he was supported by much of the evidence offered to the Committee—the analysis by the Commission of the shortcomings of the industry was largely correct. As the noble Lord, Lord Carr of Hadley, said, it is not their diagnosis but their prescription which one can fault. I venture to suggest further that the report rather labours the point that the Committee are opposed to protection for the manufacturing industry. They say that the evidence was
"almost unanimously hostile to protection".
It would not be entirely unfair to say there would have been similar hostility to the concept of laissez faire. "Protection" is a harsh and emotive word. But the Commission themselves did not introduce it. We are dealing with a situation which is far too complex to be considered in the context of such simple terms as "protection". In paragraph 15, the Committee say:
"The only industrial protection is to produce and to market effectively the best aircraft world-wide".
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Of course, there is much truth in that. There is also much truth in the proposition that sunshine helps the success of summer holidays. I have little doubt that our American friends would applaud these sentiments of the Committee, although in a friendly aside they might also pay tribute to the assistance, direct and indirect, of NASA and of the existence of a large domestic market. That tribute for the help they get from their own Government funding of research and development and to their large home market would be a justified tribute. The fact is that the United States manufacturer has enjoyed and now enjoys some very real advantages. These advantages have led to success. And success in this field has a certain centripetal effect. If a manufacturer sells his equipment to an airline it is that much easier to sell the next generation of equipment to that airline. And a manufacturer with many customers finds it easier to get more customers.
It is to the credit of the Commission that they recognise that something extra has to be done if Europe is to stem and then reverse this trend towards the United States of America. It is true, as the report notes, that economic factors have compelled companies to come together both in Europe and in the United States. In the United Kingdom, of all the names we knew postwar only Scottish Aviation remains. Of the others, Vickers, De Havillands, A. V. Roe, Blackburn, Handley Page, Bristol, and the rest, all are gone. I understand that this House is now prepared to see this process of strength through unity in the United Kingdom extended even further. But even with the logical extension to one United Kingdom airframe corporation we cannot say that this will suffice unless more is done on a Community scale. Collaboration on a wider scale is inevitable, and we shall see more examples both within Europe and between Europe and the United States of America. The noble Lord, Lord Carr of Hadley, can be assured of that. But we need also to ensure that the European environment within which this collaboration extends is as favourable as is practicable.
I have said already that I agree with all noble Lords who have spoken, and with the Committee whose report we are considering, that we should dismiss the chimera of centralised management.

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Sophisticated collaboration, the right permutations of partnership—they can give us opportunities which we should never enjoy under a centralised bureaucracy. So I dismiss that. As to Community financing, this would have most powerful attraction if the Community had access to some newfound pot of gold separate from national contributions. But if it is proposed merely that money now provided nationally is to be handed over to a central fund, then the attractions I agree with the Committee, are less clear. The possibility of supporting sales by a European credit institution, in my view, deserves more study than is evident in the report. If the Commission can help eliminate competitive credit terms that are unfair, uneconomical or unethical, then that help should be encouraged. On the positive side it is surely worth exploring further the possibility of some European counterpart of the United States export-import credit facilities.
My Lords, on basic research, I warmly welcome the approach of the Committee as expressed in paragraph 61. It is absolutely essential that research resources be shared in Europe if we are to maintain a significant place in Western World aerospace. But this must not mean that we seek to impose some new Community establishment independent of present national facilities. The industrial experts to whom the noble Lord, Lord Kings Norton, referred have, with a zest which is most stimulating, already come together for work on common problems. Currently BAC, HSA, MBB and Aerospatiale have a research collaboration agreement which is working and could be widened. Very wisely specific problems have been identified for study. Collaborative work on composite materials has already yielded results. If extra funds can be found by the Community for this kind of practical functional collaboration, then that would be a real step forward. If new equipment can be funded—and I have in mind, for example, a new wind tunnel—then that would really be encouraging a Community sense. But the emphasis must be upon sense and not upon prestige. It should be Community policy that such new equipment would be integrated into a research establishment now existing.
With this same idea of building upon what we have, may I refer briefly to the
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recognised need to bring the airworthiness and certification authorities into line with technical and industrial developments. As the report notes, much has been done to achieve agreed common standards. But if it is considered necessary to go further and have one authority for all the Community, could we not again build upon what we already have. The ARB, now part of the CAA, has a quite outstanding reputation in Europe. It is highly respected in the United States of America. With the careful inclusion of selected professionals from other organisations in Europe, is it quite beyond the bounds of national susceptibilities to have the presently established British Authority as the chosen instrument for Europe?
So far I have had in mind only civil aircraft, and for reasons of time I had not intended dealing with the immensely important military potential. However, one sentence in a most interesting article in today's Times by Mr. Layton of the Directorate General of Industrial and Technological Affairs of the European Commission—who has the article printed, by a most pleasing coincidence, on this day on which we are discussing his report —provokes me to make one reference. Mr. Layton points out that the selling capability of the European manufacturers would be greatly enhanced if they were
…. backed by the combined political weight of the European Community".
I believe Mr. Layton is right. But we do not have to wait for some new collaborative civil project before this Community weight is tested. We already have fine examples of collaborative effort in the military sphere. The Anglo-French Jaguar is an example. If the combined political weight of the Community was put behind the sales effort of the Jaguar we could find ourselves with a dramatic growth in European aerospace.
Finally, my Lords, may I say again that the House should feel indebted to its Select Committee for the work which went into this report, and especially for the way in which it has been explained to this House. Judging by the less ambitious theme of Mr. Layton's article today, it would seem that the report has already been carefully studied in Brussels. The objectives of the Community's Action Programme I warmly applaud. I hope

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that the Select Committee's Report and this debate will help define more realistic action towards those objectives.
6.20 p.m.
The Earl of LAUDERDALE: My Lords, by the law of averages one is bound sooner or later to follow a maiden speaker, but the law of averages is strangely distorted when I have the opportunity of congratulating such a distinguished speaker on a maiden speech, doing so from the bottom of my heart since I also regard him as a personal friend. When the noble Lord, Lord Beswick, addresses the House and brings to it such wide experience and authority, of course he commands an attentive audience. We are none of us—. those who have heard him before his maiden speech—surprised that what he had to say was thoughtful and constructive.
As chairman of the Sub-Committee, a layman—indeed, professional only as a kind of eternal gamma double-minus amid the scholars and the scientists—I must join Lord Beswick's applause for the European Commission having tackled the subject at all. This is the first major essay that the Commission has undertaken in the field of transport policy as distinct from relatively minor matters such as truck drivers' working hours and the social conditions of bargees on the Rhine. Perhaps I should say in reply to one point made by the noble Lord, Lord Beswick, that we were much tempted to go further into the industrial area. But our Sub-Committee is instructed to look at energy; transport and research and industry is really outwith our normal remit. Under that constraint, to say nothing of the pressure of time, we felt the best thing was to do what we could, so to say, from United Kingdom sources.
As chairman I must first of all thank my own chairman, the noble Baroness, Lady Tweedsmuir of Bethel vie, who presides over the whole operation of scrutiny of European proposals, and who presides in queenly fashion over no fewer than 80 of your Lordships spread among seven Sub-Committees, all beavering away with diligence but always encouraged by her smile and quite frequent attendance at our sessions—attendances that are always welcome.
I should like of course to thank the noble Lord, Lord Kings Norton, not
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only for the way he introduced this debate but for doing it at all. He is virtually a founder member of our Committee. I must thank other noble Lords who served on the Committee. I must thank our specialist advisers, Mr. Thorley and Professor Doganis, who bring acidity of wit and of pen to the benefit of our drafting sessions. Finally, one must thank our witnesses. Perhaps it is worth mentioning that it is open to any noble Lord, or indeed anybody in the country or, for that matter, abroad, to submit evidence to a Select Committee of this House, and, if they wish to be heard orally, to make a formal approach to the clerk or the chairman of the Committee. Such approaches are commonly made and invariably welcomed.
We are indeed grateful to two members of the Commission who came to give us evidence—though I think that "evidence" is not the technical word when we meet in secret under the EEC Commission's rules—or who came to attend our deliberations, both Mr. Le Goy and Mr. Christopher Layton. More is the pity that under the rules of the Commission their help cannot be published. I think they will now know what other witnesses would find when they come, that we treat witnesses gently. We have learnt from Samuel Johnson that questioning is not the mode of conversation appropriate to gentlemen. We do it as nicely as we can.
We were of course gratified this morning to find Mr. Christopher Layton's interesting article in The Times. which provided a useful trailer for this debate. Of course old lags from The Times must have smiled to themselves. I look back over 35 years since I was a staff member of that great newspaper, and I find, as I am sure other alumni of Printing House Square must find occasionally, that despite the whizkid appearance cultivated today, the old editorial and administrative muddles still go on. This report we are now debating was available to The Times five full days before it was published. The Times. was not represented at the Press conference which we took care to arrange at, I hope, a convenient time. They did give us a couple of sticks, to use the journalists' jargon, a couple of bits two inches long on an away page, and what they gave looked very much like a direct rewrite of the Press handout I had

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myself composed. The report of course goes into rather greater depth than Mr. Layton could accomplish in the three columns or so that he had at his disposal this morning.
It is important to grasp what this document proposes in the simplest terms. It invites the Nine in Council to decide on the common programme and indeed on a common airspace, and all this to be in the future subject to majority voting in the Council, which really means the Commission directly or indirectly entering the manufacturing and airlines' business as managers. If ever there was a prescription for planners to leap in the dark that would seem to have been it.
At the heart of it I think one can distinguish certainly three confusions which need to be brought out and which were ignored in Mr. Layton's article this morning. There is a confusion between the aero engine and the airframe manufacturing sides of the industry as if they were unified, as if they were single, as if their technologies were not in fact as different as male and female. And then there is the confusion which seems to identify, or seeks to amalgamate, aircraft industry policy with air transport policy. They are two very different things.
Finally, there is the fear of United States' influence. It is admitted that some 60 per cent. of all aircraft built in the United States and Europe are in fact for military purposes. So there is a consequential proposal for a Military Procurement Agency which can only be under NATO but which, in turn, is to a very great extent dependent on the United States. So there is at any rate a contradiction here too.
Then there is a general purpose, which is not stated baldly but clearly emerges from the logic of the proposal; it is that by regulated competition there should be advanced a gradual merger of airlines and co-ordination of all services and schedules so that one day nine transport markets will be merged into one. I say this is not stated baldly, but if that is not the logic of the argument then it is hard to find what it is. The background is common ground. There are too many manufacturers making too many types covering too many overlapping requirements. These
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are therefore produced on too short production runs with too high unit costs. They are so produced in order to supply too many and too small airline buyers. All this happens in a world where too many seats are chasing too few passengers. These conditions threaten the airframe manufacturers—who indeed appear to have been the inspiration behind the Commission's proposals—but not the aero engine builders, with a choice between bankruptcy and American takeover.
The common finance ideas seem so attractive at first that one rubs one's eyes and wonders whether they have not emerged from some Ministry of science fiction. Of course the two main manufacturers, Britain and France, would be likely to welcome any proposal that the other seven should help spread the provision of high risk capital. That would come as no surprise to anybody. But could it happen unless the seven increased their share of manufacture, which could only have the effect of dispersing manufacture from the two, or even the four, present manufacturing countries when the real need is concentration? This proposal seems to anticipate a genuine merging of nine sovereignties by anything from one to two decades.
Then there is all the philosophy about a common airspace, which does not appear to have been thought through really thoroughly. It would mean that the Community would take over the national oversea flying rights of the Nine, but of course the third countries concerned would be likely to seize any opportunity to renegotiate existing traffic rights in order to bargain for their airlines the opportunity to penetrate further into the Community, and goodness knows what American counteraction there might not be. Moreover, the common airspace proposal would very likely result in a Community traffic control instead of something that is already going ahead on a Europe-wide basis; at any rate, it is difficult to see how the one would fit in with the other.
On the question of airworthiness certification, to which Lord Beswick referred, here is a cardinal point both of opportunity but also of danger. Those of us who listened to the evidence about airworthiness were much struck by the explanations

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we were given of what happens in the United States; standards may be established, but their enforcement, to some degree regional, can lead to enforcement being subject to political pressures. The Civil Aviation Authority is utterly and completely independent. It must be one of the few independent bodies in the whole of this kingdom at the present time. Its independence is greatly respected not only in the United States but even in Japan and the Soviet Union, who seek to get aircraft certificated by the CAA in order to commend them in third countries. What one must fear is that were the CAA functions to be transferred to Europe, there might be unevenness in the application of their standards due to local political pressures, which would be a real step back.
Although inevitably one has needed to refer in a slightly negative way to certain points, one must again congratulate the Commission—I hope one can do this in no sense seeming to patronise—on at last making a really big essay in the field of transport policy. The proposals on rail, road and inland waterways which we have had up to now have not been great political documents, The proposal for ninefold finance of research is a positive and a useful step forward; as I have said, if United Kingdom standards and practice in airworthiness could be transferred to the EEC plane, all would benefit. I can speak only for myself on this point—the matter has been mentioned by the noble Lord, Lord Lloyd of Kilgerran, and by Lord Beswick—but surely it is time for further dialogue in this area. I know that colleagues on this Sub-Committee have always been eager for a two-way movement of ideas with the Commission, and they welcome any formal or informal steps that come along, socially or in any other way, to advance that end.
I think it is no secret that it is common practice in the Scrutiny Committee as a whole to dispatch members of Sub-Committees to Brussels for a confrontation, or at any rate a discussion or dialogue, with members of the Commission when a substantial report has emerged, particularly if there is any danger that it may raise people's hackles here and there. Not only that, but we have also surely to address ourselves—this is the purpose of debate in your Lordships' House—to the policy of the British Government. One
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hopes that the Government will recognise that Britain has a very strong base from which to contribute to the formulation of Community policy. We have the world's second largest civil aircraft and airline industry; we have the world's largest network of civil air agreements, thanks to our Imperial past. We have the world's largest and best certifier of airworthiness. And it is worth recognising that British Airways fly six out of ten of the most dense scheduled passenger routes in the Community, and carry 26 per cent. of all scheduled passenger traffic.
Despite that, when we received evidence from Mr. Kaufman we got a sense that the Government were still tentative in their approach. More than eight months after the document had been in their hands, Mr. Kaufman was quite frank in saying that the Government had scarcely considered it. Then we were told, in one of those rather incautious asides which one hopes do not represent the heart of Government thinking, that the aim of the manufacturing industry in the aircraft business was principally to provide jobs; I refer noble Lords to Question No.628 on page 118 of the evidence. It is always splendid to provide jobs, but the object of industry is not to provide jobs; it is the economic function of production to serve a need. I was rather surprised to find that Mr. Layton's article this morning began with the same sort of premise. Anyway, the Government accept the facts of life in regard to the predominance in this field of the United States—Question No.598 referred to that —and we were also reassured that the Government were determined to see an independent capability continuing, with freedom to collaborate with whoever seemed proper, whether within or outwith the Community.
Finally, I readily welcome the Government's view that they do not want all this to be submerged under the Brussels bureaucracy. But can the Government, having now had more time to think about it, go a little further? The Commission may indeed err in proposing solutions which are Community-wide to problems that are wider than the Community. This may be a mistake, but so far as one can judge thus far our own Government have appeared to take a line with a slightly Little England flavour about it, especially when the production of jobs

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rather than the production of aeroplanes seems to be thought of as a major target of purpose. We want to know the Government's strategic approach. The present is not the epoch for a provincial British attitude to these matters. Perhaps there has been too much provincialism of late in more than one quarter of Europe, and it is well to remember that all irregularity is catching.
6.40 p.m.
Lord WYNNE-JONES: My Lords, I have been a member of this Committee and have found it an extremely interesting task, enlivened by the wit and humour of our chairman which he shows on every occasion. I feel that the impression may have been left—certainly not by the noble Earl, Lord Lauderdale, but perhaps by the noble Lord, Lord Carr of Hadley—that the Commission had no business to come forward with any proposals of this sort. I believe that if this impression got about it would be rather bad because it would mean that we did not appreciate the serious nature of the problem facing the whole aeronautical industry of Europe, which is not in a good state. I do not mean to say that the industry does not do some excellent things, nor that there are not some excellent companies, but if one looks at the figures in the Commission's Report one sees that, in the proposals put forward by the Commission in 1970, the percentage of the aircraft operated within the Community which were produced by the Community's aeronautical industry was 33 per cent. In 1975, it was 22 per cent.
In Europe as a whole in 1970 the percentage of the aircraft produced by European industry was 30 per cent., whereas by 1975 it had dropped to 17 per cent. In the United States of America in 1970, 2 per cent. of all the aircraft flown were manufactured in Europe. In 1975 it was 0.1 per cent., which is really derisory. In the whole of the Western world, leaving out the Soviet Union which has a very large industry of its own, 9.5 per cent. of the aircraft flown in 1970 were manufactured in Europe. In 1975 that had dropped to 8 per cent. In today's article ill The Times Christopher Layton points out that over the next 10 years the probable market for
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civilian aircraft in the whole world will be of the order of 60,000 million dollars. If the European percentage of that figure continues to drop we shall be producing a negligible proportion of the world's aircraft.
It is in this context that the Commission came forward with its proposals. It does not make sense to turn round and merely to say that its proposals are not acceptable. I sat on the Sub-Committee, and I agree with criticism made of the proposals, but the reason for the proposals still remains and, unless we are prepared to face this and realise that there must be some method of dealing with it, I am afraid that neither aeroplanes nor jobs will be available—and the two do go together.
So it is important for us to realise that the aeronautical industry of Europe is in a dangerous position—dangerous because it has been on the slide; dangerous because, if that continues, it will disappear. Therefore, it really becomes a very serious matter for us to consider and for the European Commission to consider. I cannot pretend that I have the answer. I am no expert in these matters. I merely spent months trying to find out what other people thought. However, we have a certain amount to look at from other parts of the world. One point is that referred to by the noble Lord, Lord Kings Norton. It is that one cannot dissociate the civil from the military aircraft side. It is quite impossible to do so because it is the same people who make both types of aircraft. If one looks at the position in this country, for instance, years ago, we produced a new, original, excellent aircraft—the Comet—as a civil aircraft. It had many problems and when the problems had been resolved by civilian effort it was used for military purposes, as a transport. The Americans do not do it in that way. They start by pushing their money into military aircraft. The whole cost of the development is borne on the military budget and, when they have solved all the problems, Boeing come along and produce their splendid 707, 727 and 747. These were all produced as a result of military prototypes and more than prototypes—the aircraft were actually manufactured. The Americans have been doing this all the time but we have not done it to anything like the same extent. We work the other way round.

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When we come to look at possible co-ordination, I feel that everyone must agree—and I am sure that all the members of the Committee agree—that it is impossible to run a British aircraft industry on its own without co-operation with any other country. It is not on. What is to be done? We may co-operate with one other firm in some other country. That is done on a firm to firm basis. It may work or it may not. I think that we ought to investigate and find out where and why it works. I suggest that there is something to be said for looking at the experience of the military aircraft, the MRCA—Multi Role Combat Aircraft which is now called the Tornado. This is produced by the industries of Germany, Great Britain, Italy and Belgium working together. France would not come in, and contracted out. The countries concerned set up an organisation called Panavia in order to supervise and organise the operation. From all I can understand, it has worked well; and if this has worked well, is there not something to be said for asking why it did so, and where it may have been weak, and for seeing whether we can use it as a model for going ahead?
It seems to me that if are to have effectively different national industries in our countries—and we are going to have separate national industries whatever we like to call them; 1 can only say that I think we have done little service to our own aircraft industry, by holding up the Bill which has delayed the establishment of an effective industry and that I do not think that that delay is doing any good to anybody at all and it is a pity that it ever happened—and an aircraft industry in this country, then that aircraft industry will have to collaborate with some other aircraft industry. If it does there has to be some organisation for collaboration. I do not believe, any more than the other Members of the Committee did, or any Member of the House who has spoken tonight believes, that we ought to have a special bureaucratic organisation set up in Brussels. But I believe that we ought to see whether something like Panavia might be a model, where one might get the industries of the major countries coming together and being prepared to create an organisation which looked after the production of the aircraft—not in the sense that they told the companies exactly
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what they had to do, but that they acted as a co-ordinating body and they looked after the sales and ensured that the sales were world wide. Remember, my Lords, that we are now thinking of a market in the next 10 years of 60,000 million dollars of which at the present time Europe would not get 8 per cent., and we ought surely to aim at getting much more than that.
Therefore, the matter is not a trivial one. It is not a matter to be dismissed as a misconception on the part of the Commission. Rather, I would say that the Commission are to be applauded for having put forward ideas that we have put forward from the Sub-Committee; we put forward certain criticisms of these ideas. But I think I can say that no member of the Committee would wish your Lordships to feel that we did not regard the matter as something which had to be pursued actively, and that some encouragement had to be given in order to get the industry working effectively.
6.52 p.m.
Lord TREFGARNE: My Lords, I, too, had the honour to be a co-opted member of Sub-committee F and in that capacity I would wholly endorse and agree with the conclusions of the Sub-Committee expressed in the report. I should also like to be associated with the words of the noble Lord, Lord Kings Norton, and others relating to the chairman, the noble Earl, Lord Lauderdale, who has presided with such skill over that Sub-Committee, I believe since its inception. I want to make only one particular point tonight, and that relates to the Concorde and to its sales prospects. Mr. Kaufman gave evidence to Sub-committee F and he was asked about the financing of Concorde sales and was not I think able to be very helpful on that occasion. In my view—and I believe that this is a view held by others—the disappointing sales of the Concorde thus far are due in part at least to the difficulties in financing the sales. I do not want to minimise the other difficulties, such as landing rights in New York and elsewhere, and over flight rights in the Far East, but the problems of selling the aeroplane seem to be concentrating around the areas of finance, and I hope that the Government will be able to give some urgent attention to this problem.

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There are a number of possible solutions. The first has, I know, been canvassed and has been called leasing. The kind of leasing envisaged in these reports is not really leasing at all. It is a time charter arrangement whereby British Airways or Air France would purchase the aeroplane, or have it purchased on their behalf by the Government, and would hire the aeroplane by the hour or by the mile to smaller airlines which could not afford perhaps even to utilise a whole Concorde and would perhaps need one for only half of the time. A time charter arrangement such as this is widely used in civil air transport and it would, I think, indeed I know, have considerable attractions to a number of airlines, particularly in the Far East, like Philippine Airlines and Singapore Airlines.
I want to ask the Government whether they and their French colleagues have actively considered this proposal and whether it has been established that British Airways, and Air France if necessary, would be willing to perform this kind of service. I think that the smaller airlines would be well advised to embark upon supersonic transport by this fairly modest means. I think that the manufacturers of the aeroplane ought to be hesitant about pressing sales upon smaller airlines which may find the provision of ancillary support services difficult to meet. We have all read of the criticisms of the McDonnell Douglas Corporation, as to how it "sold"—and I use the words in inverted commas—the DC10 to an airline in the Eastern Mediterranean, which in the end, it was alleged, were not specially well able to operate it, and indeed an accident ensued. We want to try to avoid exposing ourselves to criticism of that nature in respect of the Concorde. Therefore I hope that British Airways and Air France will join with the manufacturers in offering a time charter service for some smaller airlines which might not be able to justify, or support, the purchase of one or more complete aeroplane or aeroplanes.
Then one must look at the problem of selling the aircraft to those larger airlines which are able to justify the use of at least one aeroplane. The difficulty at present seems to he centring on the rate and time of the finance offered. I am informed
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that prime purchasers of American equipment can, through the American Export-Import Bank, hope to secure credit terms of between 8 and 9 per cent. interest per annum and repayments over 10 years. I am also informed that the Concorde sales team cannot offer terms anything approaching those. The best that they can offer is 10 or 11 per cent. interest and only seven or eight years' repayment terms. As the Concorde is substantially more expensive than, for example, a Boeing 747, this means that the finance burden on the airline is very large indeed.
Of course, the Concorde is not such a productive aeroplane as the 747; that is to say, that the seat-miles it produces, given typical utilisation, are not as great as those of the Boeing 747, and therefore the financial terms have to be at least as attractive. Of course the seat-mile yield of a Concorde is higher than that of a 747 because of the premium fares that are presently charged. But I do not think that one can hope or expect that the premium rates attracted by the Concorde, or at least demanded by the Concorde, at present can be read across to provide a similar yield when the aircraft goes into service on some of the other routes.
I believe that the only way that this requirement can be met—and I believe it to be in the national interest of both this country and France that it should be—is by the establishment of a joint Anglo-French finance company which would, initially at least, have to be partially Government financed. We are already involved in Concorde finance to an enormous extent, but I fear that if we are to see the project come to full fruition by achieving a reasonable number of sales this course of action is the only one open to us. I recognise that it would cost a good deal of money to set up this project, but no more money I believe than has been involved in setting up the National Enterprise Board to date; and in any event, once it was running it would be self-financing.
Such a company could offer a number of different possibilities which would have to be tailored according to the customer's taxation position and requirements generally. It would have to provide a straightforward lease where the operating company did not require to depreciate the aircraft for tax purposes. That would be a lease in the true sense, I believe;

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namely, a monthly or annual rental arrangement. It would have to provide a lease-purchase arrangement for companies which wanted to take advantage of tax arrangements similar to those applying in this country; and it would also, I fear, have to provide finance facilities for the very expensive ancillary equipment that one needs to operate such an aeroplane as this successfully. I mean, of course, the ground-starting equipment, the baggage-handling equipment and possibly, for larger customers, even ground simulators.
The final point I would make in this context concerns the question of crew training. The Concorde heralds a new generation of aeroplanes. It is wholly more complex to operate than the conventional range of subsonic aeroplanes, and I think it essential that the crew training facilities which can he offered ought to be clearly underwritten by British Airways or Air France, or perhaps both. British Airways have had some difficulties of their own in crew training recently, but these have not, I believe, been anything more than of an industrial relations nature, and have anyway now been resolved. I think that the future of the Concorde project is dependent upon decisive action now to push the sales forward. I think that the upturn in the civil air transport industry is coming very shortly now, and we must be ready to take advantage of this with the aeroplane when it happens.
7.2 p.m.
Lord WINTERBOTTOM: My Lords, I should like to preface my remarks by complimenting the Select Committee and its chairman on the work they have put into examining the Commission's Action Programme and into taking evidence from interested parties, and into their report of this work. I know that your Lordships will agree with me when I say that the report, quite apart from its value in its own right, has contributed greatly to the interest of this afternoon's debate; and I know, too, that your Lordships would not wish me to pass on, in part to reply to the debate and in part to state Her Majesty's Government's attitude toward the report, without, on behalf of the House, thanking the noble Lord, Lord Kings Norton, for the admirable opening speech with which he started our discussion. I thought it was a model of
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clarity and moderation; and, whether it encourages him or depresses him, it is very much in line with the thinking of Her Majesty's Government.
My Lords, may I clear out of the way the question which the noble Lord put to me towards the end of his speech concerning the progress to date in Brussels on the Action Programme, which is of course a matter of interest to us all. The Council have yet to discuss the Action Programme, but there have been procedural discussions in COREPER. I understand that noble Lords who take part in the activities at Brussels know what COREPER is. COREPER have asked officials of the Member States who are working under the auspices of the Economic Questions Group to establish the scope for future collaboration on future civil projects. Further discussions in COREPER appear unlikely until they have had the European and Economic Questions Group's report, and this should be completed by the end of the year. The Action Programme itself was, as noble Lords will know, the subject of a long and, at times, very confused debate in the European Parliament on the 6th July. Briefly, the European Parliament approved the Commission's proposals but with certain reservations similar to, but less strongly held than, our own. Perhaps many of us are afraid of being thought bad Europeans while having some reservations on the proposal of the Community views.
My Lords, having said that, it may in fact also act as a reply to points made by the noble Lord, Lord Lloyd of Kilgerran, and the noble Earl, Lord Lauderdale, and in fact my noble friend Lord Wynne-Jones. This is clearly only the beginning of the dialogue. Obviously, in a matter of such major importance, as the noble Earl the chairman of the Committee has pointed out, discussions will continue within the framework, perhaps the over-wide framework, set by the Commission on what is basically a subject of major importance to the European industrial community. So, although the Fifty-first Report of your Lordships' Select Committee has a slightly disinheriting countenance, nevertheless I think it is true to say that the criticism is constructive and that the House as a whole welcomes the initiative of the Commission. We now have to get down to producing workable policies; and

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in an industry which has such a long time-scale from the concept of an aircraft to its appearance in the airlines or in the fighting forces of the world, we must expect a long period of dialogue. I am certain that opportunities will be given to your Lordships' Select Committee and many other individuals to take part in that discussion.
Perhaps I may also take this opportunity, before launching into the Government's view, to reply to the noble Lord, Lord Trefgarne, about Concorde financing. It is not strictly within my brief, but it might be helpful if I were to indicate in general terms the Government's position on the leasing of Concorde as of now. We are prepared to consider leasing as an alternative to a sale, and indeed proposals have been put by the manufacturers to a number of airlines. However, your Lordships will understand that it would not be approppriate to disclose the detailed proposals, which form part of commercially confidential negotiations, or to indicate our attitude on detailed issues connected with leasing, which could provide commercially valuable information to our competitors. I think the noble Lord has raised an important point. However, I think that is the most I can tell him.
Lord TREFGARNE: My Lords, I am sorry to interrupt the noble Lord, and I hope he will understand that I do not want to interfere in commercial negotiations, which I recognise are confidential and private; but can he say whether the offers that he has referred to are pure leasing offers—in other words, simply financial transactions in relation to one piece of hardware—or are the offer of a service; namely, the use of the Concorde as opposed to the acquisition of it?
Lord WINTERBOTTOM: My Lords, I am afraid I cannot answer the noble Lord in detail. If he would care to put down an Unstarred Question properly phrased—that is something he would have to work out—I will see whether I can give him a wider answer than that which I have given him this evening. The Government have of course been looking at the implications of the Commission's proposals, but they have wished to hear the opinions of Parliament before reaching a final view. May t give your Lordships the Government's present thinking? As the Select
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Committee and noble Lords clearly appreciated, the proposals contained in the Action Programme have to be seen in the context of what is already taking place independent of any action by the Commission to foster closer collaboration both within the European aeronautical sector and beyond.
I will deal first with the question of civil aircraft manufacture. The Commission say that the survival of the national aircraft industries in Europe is dependent on closer collaboration, in particular so as to avoid domination by the major United States manufacturers. What concerns us is that there is in this a strong flavour that the European industries should unite to take on the Americans. Such a confrontation would be unrealistic and almost certainly financially disastrous. There is already a substantial degree of collaboration between the aerospace industries of the United States and Europe, and it is clear—and I say this in a European context—that our chances of survival will be greater if we work in association with the United States, where this is appropriate, rather than trying to compete with them head-on. We should not overlook the fact that the United States manufacturers currently supply 90 per cent. of the world's civil aircraft market—and this is a point made very strongly by my noble friend Lord Wynne-Jones—nor, indeed, as other noble Lords have said, the strong ties they have with many of the world's major airlines. Realism suggests that it would be better to try to capitalise on those ties rather than to contest them. Other countries in the EEC, notably France and Germany, are showing by their actions that they certainly do not rule out transatlantic collaboration.
I must stress that in using the terms association" and "collaboration", I am not envisaging a take-over or domination of our industry by the US companies such as the Commission seem to fear. What we seek is genuine collaboration on future civil aircraft projects to our mutual advantage. I believe the US companies are ready for such partnerships; that Boeing and their fellow manufacturers recognise, just as the European firms do, the need to spread the high risks and costs involved in launching new civil aircraft. I have no doubt, too, that they see co-operation with European manufacturers as a means of strengthening their position

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in the European market for civil aircraft which, outside the USA, is the largest in the world.
Against this background, I think the Commission's objective in seeking to promote closer collaboration within the Community in the manufacturing sector is one we can all share. But there are further qualifications which need to be entered. First, so far as the United Kingdom is concerned, I think a large majority of this House would endorse the view that collaboration must be based on the choice of commercially viable projects. It is the market which must determine which projects are launched. The choice cannot be predetermined simply by virtue of a desire to collaborate with particular partners; and certainly not by a central organisation in Brussels unable to draw on direct expertise and experience in the civil aircraft sector. A second and complementary qualification is that the interests of the United Kingdom industry and those of France, Germany and the other European countries, may not wholly coincide.
The Select Committee have said that they favour closer Anglo-French collaboration, in particular. The Government are wholly in favour, in principle, of European collaboration, either on its own, where this makes economic sense, or as a basis of transatlantic collaboration. This certainly applies to the French, whose industry is second only to our own in Europe in size and capability. My honourable friend the Minister for Industry, Mr. Gerald Kaufman, has made this abundantly clear to his opposite number in the French Government, M. Cavaille. Our situation and our problems are akin to those of France and the other European countries with major aircraft industries; that is, we all need work and recognise we can achieve greater strength in the market at less risk by collaboration. However, we are not necessarily all starting from the same basis so far as existing commitments are concerned. Collaboration on a mutually acceptable basis may be achieveable on some projects but not on others; like-wise with sonic particular partners in some cases but not in others. We each have to find the mix of projects best suited to our particular needs and capabilities and our respective long-term objectives.
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I would note in this context the opinion of the Select Committee that an important requirement from the United Kingdom point of view is to maintain an independent capability in the British industry so that it will be in a good position to take advantage of opportunities further in the future. I believe that the failure of the Commission in its Action Programme to take due account of the differences in the needs and starting positions of the various European industries is a major weakness. It is unrealistic to assume that there is any single, overall programme which could simultaneously satisfy the needs and effectively utilise the capacities of the European aircraft sector as a whole, especially if, as we should insist, profitability is the overriding criterion.
My Lords, these are some of the objectives which the United Kingdom industry is currently pursuing while at the same time seeking as large a share as it can of profitable new civil aircraft business, business which, it has been pointed out, will be worth 50 billion dollars over the next decade or so. Our industry is taking a leading role in the current round of international studies, both in Europe and across the Atlantic, aimed at defining future airline requirements and the possible industrial collaborative arrangements for producing them. There are many options and for the moment they all remain open.
The Select Committee have indicated a measure of agreement with the Commission's view that economic forces alone will not necessarily, of themselves, achieve the optimum degree of collaboration between manufacturers. I think the question of timing is the key one here. Public ownership is intended to bring about the long needed and long postponed rationalisation of the United Kingdom industry; but this is only part of the answer. Governments must urge and assist their industries to study with their counterparts in other countries all the possibilities for future collaboration. The British Government are doing all they can to encourage and help the United Kingdom industry, under the leadership of the Organising Committee, to advance their studies with the European and American manufacturers. I was glad to see my noble friend Lord Beswick here today to make his so-called maiden speech and to give us his valuable views on this subject which I am certain Her Majesty's

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Government will note with interest. The momentum of these studies has been stepped up and significant progress is being made. Our aim is to ensure that when the time comes for decisions on projects and partners, we can arrive at the best possible answers based on a thorough analysis of all the possibilities.
My Lords, I must here inject a warning about the position in which the United Kingdom industry finds itself. The airlines are not yet at the point of placing firm orders but the various technical objections are being narrowed down and refined. Important moves towards future collaborative groupings are imminent, but because of the uncertainty surrounding the future of the industry, the credibility of our manufacturers is being questioned by some of our potential partners, and ultimately the industry might for this reason be prevented from playing its full part. Opportunities missed then will affect jobs as well as the maintenance and development of our overall capability, with very serious long-term consequences.
In the Government's view—and we have had long discussions on this—the difficulties facing the industry can in the long-term only be solved by nationalisation and I would hope that this House can play its part to secure a future for the industry. To summarise what I have said so far, the Government certainly agree with the Commission that there is much to be gained by closer collaboration on civil aircraft manufacture in Europe. However, our objectives need to go wider and our approach must be different from that suggested by the Commission if we are to succeed in obtaining the maximum amount of profitable work for our industry. I have no doubt that this is also the attitude of the other European countries who, by way of their current negotiations with the US companies, have demonstrated very clearly that they also recognise the need to look beyond a purely European solution, in a pragmatic and open-minded way, with the aim of securing a work load mix which is best matched to their particular needs and capabilities.
My Lords, turning to the Commission's proposals for a military procurement agency, the Government fully support the emphasis in the Action Programme on the need to maintain healthy defence
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industries in Europe, with both design and production capability. This is to the benefit of NATO as a whole. We recognise the need for greater co-operation within Europe and we are looking to the European Programme Group as the principle vehicle for achieving this. We regard it as important to include in the Group's work the contribution of those European members of NATO who are not in the EEC, as well as the eight countries which are. This is a point stressed by at least one noble Lord today. Fortunately, the immediate industrial situation on military aircraft and guided weapons production, provided that current programmes are maintained, is nothing like so difficult as the civil aircraft question. Here, together with other interested Governments, there is time to plan for the future.
We do not support the Commission's idea of a European procurement agency. Different NATO allies often have, for example, different time-scales for replacing their equipment so that standardised procurement is not always possible. We believe that the work of the European Programme Group is the principal means by which progress towards co-operative and rationalised procurement by interested Governments can be achieved in Europe. This Group will also be working towards the development of co-operation between the United States and Europe.
My Lords, I should say a word here about the Commission's proposals on aerospace research. They propose that the Commission should take charge of all such research, whether civil or military. So far as defence research is concerned, we believe that co-ordination is handled through NATO. On the civil side, if European projects emerge, there may be a useful role for the Commission in co-ordinating associated research work by the partner countries and firms participating in the project. Moreover, although moves are already in hand towards further research co-ordination within Europe, I think it would be acceptable for the Commission to explore with Governmental and industry authorities the prospects for co-operative research activities required to fulfil the needs for the design of future civil aircraft. However, in essence, this is a matter which will largely depend upon the larger issue of collaboration on specific projects. This view is in harmony with the views expressed by your Lordships.

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The Commission also included in their Action Programme a number of recommendations with regard to civil air transport. The Select Committee has probed these closely and their views on air-worthiness, on the link between the manufacturing industry and the airline industry, and on the international regulation of air transport are in general accord with the prevailing views of the Government. I think it is fair to say that there is widespread scepticism of the need at the present time for additional institutional arrangements for the regulation of air transport and the airline industry in Europe—or that this is a necessary prerequisite to success in the manufacturing sphere.
Existing international organisations, the International Civil Aviation Organisation and the European Civil Aivation Conference, in which the Community Members play a full part, are already engaged in dealing with the problems the Commission have highlighted. The larger area covered by the 20 States which are members of ECAC, is a far more natural unit for the co-ordination of civil aviation policies than the much smaller area of the Community Members alone. Air traffic control of the upper air space in Europe is already organised under the aegis of Eurocontrol.
To conclude, I think I should be fairly summarising the views of your Select Committee and what has been said here this afternoon if I say that we see little reason to quarrel with most of the broad objectives which the Commission have set down in their Action Programme. The Commission document has served and, I am sure, will continue to serve as a valuable stimulant to international discussions of how these objectives can be achieved. On the other hand, and at this point in time, there appears to be general agreement that all that can be done to move towards those objectives is already being done —and that direct intervention by the Commission would not help.
However, their concern is appreciated and we should be grateful to them for the work they have done in focusing attention on the long-term goals, and the large scale of those goals, to which the Member States should be aiming. That position is
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broadly in accord with the preliminary views which the Government have formed, but I am sure that, in considering this matter further with a view to arriving at a fully defined United Kingdom position, they will be pleased to take account of the detailed consideration which your Lordship's House has given to the Commission's proposals. May I thank your Lordships for a most interesting debate to which I found it very pleasant to reply.
Lord KINGS NORTON: My Lords, before the noble Lord sits down, could he answer my question about the attitude of other Member States? Is it known what any of them have thought about the Commission's documents?
Lord WINTERBOTTOM: My Lords, I thought I said something; I may not have said it clearly enough. The Member Nations of the EEC—speaking, oddly enough, as Party delegations, I was interested to see—approved the Commission's proposals, but with certain reservations which were similar but less strongly held than our own. They were less strongly held because they had not so much at stake.
The Earl of LAUDERDALE: My Lords, if I may just add to that, other than what was said in the European Parliament, will the Minister give us any indication of the views of the Member Governments at Council level? We appreciate that matters have been handed down to COREPER and the Economic Group. Has the noble Lord any idea what the Belgians, Dutch, French and Germans are thinking?
Lord WINTERBOTTOM: My Lords, we are waiting on COREPER.
7.26 p.m.
Lord KINGS NORTON: My Lords, it is a pity that the other Governments have not the advantage of a Select Committee which makes reports of the kind that ours does; they do not have the same opportunities for expressing detailed views. The Select Committee will be very gratified with what the noble Lord has said about the Government's attitude. I want to study what he said in some detail; but the general impression that he has left with us is that the Government have very similar views to the Select Committee and broadly agree with what they have said.

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There may possibly have been a suspicion in some minds that I was critical of the Commission for even trying to put forward a plan; but that is not so. I think that we would all agree that it is a perfectly proper job for the Commission to do, and their objectives—as I think I said clearly—are such that we could not disagree with them. But we did, as is now clear, disagree with the detailed proposals.
I should like to thank all noble Lords who took part in this debate for their reaction to my remarks. It is very gratifying to have so many nice things said. The noble Lord, Lord Carr of Hadley, said he agreed with all I said. I agree with nearly all that he said. When he said that the diagnosis was right but the prescription was wrong, he put the whole matter in an appropriate nutshell. He said—and this is absolutely true—that we must have a European strategy. The point is how that strategy is best evolved. There is a suspicion in our minds that the present system in the Commission is probably not the best to evolve it. The noble Lord, Lord Lloyd of Kilgerran, made a point which has not been sufficeently emphasised, and that is the political aspects and the political implications of the Commission's proposals. I hope we can take the matter further in the way that he suggested.
All members of the Sub-Committee, like all Members of your Lordships' House, will be glad that the noble Lord, Lord Beswick, found it possible to come here this evening. We are all deeply interested in what he has had to say. I was particularly interested in his views on seeking the opinion of Continental industrialists. We did not do that. I do not think we will have an opportunity of doing it for the time being; but it would be worth while learning more about their attitude of mind. He emphasised, as others have done, the dangers of a central bureaucracy, and he said very wise words about those two notions, "protection" and "financeing". One remark pleased me more than anything else; it was a very daring suggestion but a highly practical one. It was that if the other European countries would like to ask the ARB to do the job of certification of airworthiness for the Nine, it would be a simple solution to an international problem.
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While it is a very daring suggestion. there is a great deal of evidence for its practicability, because all the countries in the joint airworthiness requirement group —there are six of them—have accepted the British engine code without any change whatsoever. They could perfectly well take the airframe code as well, but because they have had developments of their own in those directions there is some harmonisation (to use the current jargon) to be done. There was no harmonisation to be done on the engine side—we had the whole job finished before they had really started—but I hope they might be induced to think along the lines put forward by the noble Lord.
I was particularly glad to hear the tributes to our advisers from the noble Earl, Lord Lauderdale. We have had wonderful service from Mr. Thorley and Professor Doganis. We have got very used to them and I do not know what we should do without them. The noble Earl talked about the "three confusions" in the Action Programme document and I hope the Commission will read what he has had to say, because none of us were terribly happy about this particular contribution.
The noble Lord, Lord Wynne-Jones, gave some quantification to the diagnosis of the noble Lord, Lord Carr. The figures he quoted from the Action Programme are very disturbing indeed. I was very glad that he raised the point about the affinity of civil and military developments. The noble Lord pointed out that the Comet, a civil aircraft, has developed into the military type Nimrod. In the United States the process has been precisely the opposite. Because of their work on bombers during the War, they had no difficulty in translating it into civil transports in the early days after the War. We had no similar advantage, but in any case we do not seem to work in that way. I think something very interesting might happen in the United States in the next few years. It is my personal view that the Pentagon will select the B.I. for their next very expensive supersonic bomber, and that this will be the first step to the American SST.
What the noble Lord, Lord Wynne-Jones, said about Panavia is worthy of consideration. This is a case where people who really know how things should be

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done got together and made the best scheme for doing it. That is the best thing to do: to leave it to the experts to get the best kind of organisation, as I tried to say this afternoon. The remark of the noble Lord, Lord Trefgarne, impressed me enormously—you will notice I am wearing my Concorde tie today. I think that his views on time-charter service for smaller airlines and on an Anglo-French Finance Company should receive the greatest possible consideration.
I do not want to make a long speech. I have already ruined my record. Before I started today, my bowling average was for 14· 7, but I made a 25-minute opening speech and I have ruined it. I have now been going for seven minutes, which is more like my usual performance. I should like to conclude by saying that personally I found it extremely gratifying that the Government's general view was so much in accordance with that of the Select Committee. I am not quite sure what is going to happen next on the European front, but if it is felt in the Commission that they would like to confer with Sub-Committee F, I am sure we should be only too pleased to meet them.
On Question, Motion agreed to.

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