Sitting of 23 June 1976

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

  GRENADA (GIFT OF PRESIDING OFFICER'S CHAIR)
  THE VICE-CHAMBERLAIN OF THE HOUSEHOLD (MR. JAMES HAMILTON) reported Her Majesty's Answer to the Address, as follows:
  I have received your Address praying that I will give directions that there be presented on behalf of your House a gift of a Presiding Officer's Chair to the Houses of Parliament of Grenada and assuring me that your House will make good the expenses attending the same.
  It gave me great pleasure to learn that your House desires to make such a presentation and I will gladly give directions for carrying your proposal into effect.

ORAL ANSWERS TO QUESTIONS
  ENVIRONMENT

    Local Councillors (Attendance Allowance)
    Mr. Cartwrightasked the Secretary of State for the Environment if he will now make a statement on the future of the attendance allowance system for local authority members.
    The Under-Secretary of State for the Environment (Mr. Guy Barnett): I have nothing to add yet to the reply given to my hon. Friend on 5th May. I shall make a statement as soon as possible.
    Mr. Cartwright: Does my hon. Friend accept that the attendance allowance system has caused bitter resentment, because it allows some people who have not lost a penny piece through their local
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    government service to claim substantial sums, whilst others who have to lose time from work are left substantially out of pocket? In those circumstances, will my hon. Friend persuade my right hon. Friend to publish the report of the joint working party with local government, which considered the problem? That report has been suppressed for the past year. Alternatively, will my hon. Friend set up an independent inquiry to look into the whole matter?
    Mr. Barnett: I very much agree with what my hon. Friend said at the start of his supplementary question. The allowance system has thrown up many injustices and anomalies. For that reason my hon. Friend's suggestion of an independent inquiry will need to be examined.
    My hon. Friend referred to the review that my predecessor undertook. It was not written with an eye to publication, but any further review would almost certainly include the evidence acquired as a consequence of that inquiry.
    I have a great deal of sympathy with what my hon. Friend said, because undoubtedly some councillors—chairmen of committees, leaders, and so on—are doing a first-class, virtually full-time job for very little reward, while there are others for whom the allowance is possibly more than they need.
    Mr. R. C. Mitchell: Will my hon. Friend have consultations with my right hon. Friend the Secretary of State for Social Services to ensure that a mayoral allowance for the performance of a mayor's civic duties is not regarded as income for calculating eligibility for unemployment allowance or social security benefits?
    Mr. Barnett: My hon. Friend has referred to one of the grave anomalies that have cropped up. I could quote the example of the chairman of an important committee of a council who is similarly affected by the kind of problem that my hon. Friend raised. All these points are complex and difficult. That is why I welcome the suggestion made by my hon. Friend the Member for Woolwich, East (Mr. Cartwright).
    Sir John Hall: The Minister referred to an investigation initiated by his predecessor. Can he not tell the House at

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    least what conclusions were reached, if he is not prepared to publish the report?
    Mr. Barnett: I said earlier that the investigation was not conducted with the intention of publishing its results. It may be right for the evidence gathered as a result of that review to be used as part of a general review that we are now undertaking and that we shall later report to the House, or to make those facts and figures available to the sort of independent inquiry that has been suggested.

    Local Authority Associations
    Mr. Arthur Jonesasked the Secretary of State for the Environment when he next expects to meet members of the local authority associations.
    The Secretary of State for the Environment (Mr. Peter Shore): On 2nd July.
    Mr. Jones: Why did the right hon. Gentleman see only representatives from Socialist-controlled authorities at Transport House on 13th June about the possible overspending of about £400 million in the current financial year? What sanctions does the right hon. Gentleman propose against a local authority such as Haringey, which, it is reported, is likely to defy Government policy?
    Mr. Shore: As to the first part of the hon. Gentleman's question, I made very clear the Government's general concern about the potential overspend when I met the consultative council, which consists of representatives of all the local authorities, regardless of political party. I met my own local government councillors because they happened in any event to be attending a conference in London that week, and I wished to have the opportunity of meeting them and talking to them. They are a thoroughly reasonable and responsible group of local government leaders.
    While the hon. Gentleman's last point is a problem, I wish to wait until we have received the result of the further exercises and the financial returns on 16th July.
    Mr. Cant: How does my right hon. Friend hope to get over the very difficult problem in relation to the rate support grant, whereby thrifty authorities such as Staffordshire County Council and Stoke
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    District Council will be discriminated against in this context?
    Mr. Shore: I am aware of the great difficulties in dealing with problems of overspend. Should the overspend be confirmed, the problem as my hon. Friend puts it is that of treating fairly and justly different authorities. But the nature of the relationship between central and local government is such that it is extremely difficult, without changing the whole nature of that relationship, to do other than to accord rather rough justice.
    Mr. Eldon Griffiths: Will the Secretary of State explain what he means by saying that certain local authorities are his? Did he not meet the authorities as Secretary of State? Are not all local authorities his clear responsibility? Surely he should not discriminate between one group and another. If some authorities defy the Government's request for economies and get away with it, does he agree that it will be difficult for other authorities to comply?
    Mr. Shore: I am not sure whether the hon. Gentleman, in his slightly prolonged introduction to his supplementary question, was extending a careful invitation to me to address the Conservative Party local government representatives. If he was, I shall consider the matter with care. I shall not dismiss the idea. [Interruption.] I shall tell him why. It is because the evidence that I have of overspend is not confined to authorities under Labour control; it is a widespread tendency that is to be observed in councils throughout the land.
    The hon. Gentleman's second question concerned some councils that may defy the Government. I am aware that some councils—this comes as no surprise to anyone who knows anything about local circumstances—have greater difficulties than others.
    Mr. Ron Thomas: Is my right hon. Friend aware that many of his hon. Friends are concerned about the cuts in local authority expenditure? We believe that they will hit those least able to look after themselves or help themselves. As an ex-member of a local authority, I was never quite clear what sort of statistical indicator the Government use to determine whether there has been an increase in real terms. Many of us who

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    have sat on local authorities have found that there has been no increase in real terms. Those who have suggested to the working people that we represent that the party is over should realise that the pubs have not even opened for the party to begin.
    Mr. Shore: As regards my hon. Friend's last point, I cannot be asked to comment on particular choices of words. I accept that statistical indicators are extremely important. One of the things that have struck me as an incoming Secretary of State for the Environment is, in a sense, the relative paucity of information that comes to central Government from local government. In the circular that I addressed to all authorities I carefully made the point that in our view there was almost certainly an element of genuine uncertainty in the figures which, with the best endeavours, CIPFA and the Department of the Environment had jointly obtained, and which were presented to the consultative council in May.
    I understand the local authorities concern, and their difficulties, but I must correct my hon. Friend on one matter. My circular does not ask local authorities to make cuts; it asks them to live up to the figures that they themselves agreed were right and appropriate in December 1975.
    Mr. Raison: My hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) asked a serious question, which deserved a serious answer. In view of the existing overspending and the increasing signs of further public expenditure cuts, will the right hon. Gentleman now consider giving further advice to local authorities about which services they must curtail?
    Mr. Shore: I am interested to note the hon. Gentleman's approach to the problem of the relationship between national Government and local government in this difficult matter. I hope that in the context of the Layfield Report the whole House will be thinking very hard about what the right relationship should be, but I am not prepared at present to add anything to the circular that I have issued. I am not prepared to say anything before I have received the results of the additional information for which I have asked.

    Rent Act 1974 (Survey)
    Peter Bottomleyasked the Secretary of State for the Environment whether he will publish the results of the survey he has commissioned into the effects of the Rent Act 1974 in London.
    The Under-Secretary of State for the Environment (Mr. Ernest Armstrong): The results should be available by the end of the year. The form and timing of their publication will be decided then.
    Mr. Bottomley: Do the Government accept that there is urgent need for action? Will the hon. Gentleman do slightly better than saying that we have to wait for at least another six months or nine months after the two years since the Rent Act came into force?
    Mr. Armstrong: As the hon. Gentleman knows, we have instituted a fuller review of the Rent Act. However, there is no need for urgent action. The view that the Act has caused the drying up of rented accommodation is not borne out by the evidence that we have received.
    Mr. Baker: Does the hon. Gentleman agree that in central London the effect of the Act is sharply to reduce the number of furnished lettings available? Does he further agree that the Government should be encouraging the schemes put forward by some of us for short-term teases, and the proposal of the Westminster City Council for short-term council leases? The casual and complacent attitude of the Government, which suggests that there is no problem, is not acceptable.
    Mr. Armstrong: I did not say that there was not a problem, but I remind the House of the great reduction that has taken place in homelessness as a result of evictions, and in the number of people facing eviction from their dwellings. That has to be balanced against—[Interruption.] The evidence from voluntary bodies is that there has been a great reduction in stress and a great reduction in the numbers concerned. We are giving every attention to this problem.

    House Building
    Mr. Skinnerasked the Secretary of State for the Environment what are the

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    most recent house building figures both in the public and private sectors.
    Mr. Shore: House building figures for the period January to April 1976 show that in the public sector starts were up by 23 per cent. on the same period of 1975 and completions by 11 per cent. On the same comparison in the private sector, starts and completions were up by 22 per cent. and 6 per cent., respectively. This is encouraging progress and indicates that the improvement we achieved last year is being maintained.
    Mr. Skinner: Does my right hon. Friend agree that the figures are a far cry from the halcyon days in 1968, when we built the record total of 413,000 houses? Does he further agree that the £175 million planned reduction for the current financial year, according to the White Paper, is now showing the first signs of its effect in terms of the reduced number of houses being built? Is it not ironical that this is happening in a week in which the IMF bosses and the United States bankers are prevailing upon the Chancellor of the Exchequer to spend even less money this year, next year and the year after, which will result in even fewer houses being built for the homeless when we have bricklayers on the dole?
    Mr. Shore: Although in numerical terms we are a long way from what my hon. Friend described as the halcyon days of 1968, when I think we achieved the record post-war target for new house building, the figures show a situation far distant from the abysmal state of the housing programme that was reached in the last year of the Conservative Government. I do not under-estimate the importance of new house building in any sense, but in the 1970s, as opposed to the 1960s, we should consider the total provision for housing, including, for example, a proper emphasis on renovating and improving houses just as much as the building of new houses.
    Mr. Michael Latham: Will the right hon. Gentleman now give the figures that he did not give a moment ago? Does he agree that public sector housing starts between February and April of this year fell by 12 per cent. compared with the previous three months?
    Mr. Shore: I do not think that that is right. Further, if it is right, too much
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    importance should not be attached to it. As one who has spent a very long time dealing with statistics in different Departments, I learned a long time ago that one must look sensibly and realistically at trends. The more significant fact is that over the period concerned, compared with the same period last year, there is this very obvious and welcome improvement.
    Mr. Hardy: My right hon. Friend gave the latest figures in comparison with the position a year ago. Will he publish in the Official Report a comparison of the latest figures with those which were available when the present Government took office in March 1974? Further, will he comment on the fact that the Conservative Party housing policies seem to threaten a very disastrous slow-down in house building and perhaps even in house improvement?
    Mr. Shore: I shall certainly do my best to oblige my hon. Friend by making available the information for which he asks in the first part of his question.
    On the second part, during the period that preceded the recent local authority elections, there was a very conspicuous absentee item from the Opposition Front Bench propaganda, in that its Members had virtually nothing to say about the necessity for improving the number of houses available.
    Mr. Peter Walker: In view of the fact that there are 200,000 construction workers unemployed, will the Secretary of State say what stress he has placed upon house improvements, and whether this year he expects the number of house improvement grants to be one-third or one-quarter of what they were in 1973?
    Mr. Shore: In that year, as the right hon. Gentleman will well recall, there was an enormous number of improvement grants, some of which, I think we would all agree, were necessary and valuable, but a great many of which, certainly in a period of public expenditure restraint, were very difficult to justify. We therefore very properly took measures to cut back on the lavish provision that was made not against any test of need but for people who wanted second homes and all kinds of things at that time.
    I think that the present level of improvements is not entirely satisfactory, and if I can find ways of helping this

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    within the general context of the house building programme I shall be pleased to do so.
    Mr. Thorne: How can the Secretary of State possibly justify cut-backs in housing construction, in the light of yearly statements at Labour Party jamborees about how Labour would really get to grips with Britain's housing problem?
    Mr. Shore: My hon. Friend asks me how I can justify cut-backs in housing expenditure. Oddly enough, I have not had to make any justification of cut-backs in housing expenditure, first, because they have not been proposed and, secondly, because they have not taken place.
    Mr. Rossi: With regard to the very selective figures that the Secretary of State chose to give the House a moment ago, is he not aware that his own Department, in its Press release, while stating that monthly figures are variable, said that special attention should be paid to quarterly figures, and that those quarterly figures show a 12 per cent. decline in public sector starts?
    Why is the right hon. Gentleman so complacent about those figures? Does he not agree that the alibi given by his right hon. Friend the Minister for Housing and Construction—that this was due to Tory authorities coming into power—does not hold water, because this decline started three months before those elections?
    Mr. Shore: The hon. Gentleman is getting a little over-excited about this. I find it very difficult to accept the allegation that my figures were selective. I was asked about the present state of play in recent house building. I gave the House the detailed figures for starts and completions for the first four months of this year. I am not sure what else I am expected to do. If hon. Gentlemen on the Opposition Benches want to put down more pertinent and relevant Questions, which may help their propaganda, they must do the necessary work to enable them to achieve this result. I do not accept the hon. Gentleman's criticisms. I have no reason to believe that any short-term decline has set in in relation to the trends of house building which I have already reported to the House.

    M67 (Peak District National Park)
    Mr. Hooleyasked the Secretary of State for the Environment if he will report on his conversations with the South Yorkshire County Council concerning the proposed motorway (M67) through the Peak District National Park.
    The Minister for Transport (Dr. John Gilbert): My right hon. Friend has had no such specific conversations. When I met the county council in early April, the possibility of improving communications between Manchester and Sheffield was one of a number of subjects discussed. No conclusions were reached.
    Mr. Hooley: I am very glad that no conclusions were reached, and also not entirely surprised, since there are sharp differences of opinion on the county council. Does my hon. Friend agree that he would not particularly want to enjoy the political notoriety of being the first Minister of Transport in 30 years to drive a motorway through a national park?
    Dr. Gilbert: I assure my hon. Friend that I am seized of the political, environmental and economic considerations that surround this decision. I further assure him that no decision has yet been taken on the question whether a new road is needed at all, let alone the route, if it were to be decided to have a road.
    Mr. Edwin Wainwright: Will my hon. Friend bear in mind that many people think that the present road system between Sheffield and Manchester is too dangerous for traffic to use? Will he therefore give further thought to the construction of a motorway between Sheffield and Manchester? When the road is being planned, will he make certain that there is a service station somewhere along it, so that people will be encouraged to drive to it and then go on planned routes around the moors, in order to see the beautiful countryside?
    Dr. Gilbert: My hon. Friend's comments bear out those of my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) that there is considerable controversy attaching to this route. I am aware that some sections of it are particularly difficult, such as those around

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    Stocksbridge and Deepcar, which I visited in April. As my hon. Friends will appreciate, however, it is not sensible to consider separately certain elements of the route before arriving at a final view about the overall question.

    Council House Rents
    Mr. George Rodgersasked the Secretary of State for the Environment how many local authorities with responsibility for public sector housing have announced rent increases that exceed the maximum indicated by the Government's guidance on rent charges.
    Mr. Armstrong: Our guideline for this year sets no maximum, but recommends an increase of 60p a week averaged across the country. I understand that, so far, 122 local authorities in England have decided on increases exceeding 60p a week and 190 on increases of 60p or less, and that 55 have not yet decided.
    Mr. Rodgers: Is my hon. Friend aware that many recently-elected Conservative authorities have indicated that it is their intention to impose substantial rent increases on council house tenants? Does this not make a mockery of the Government's anti-inflation strategy? Does my hon. Friend accept that there is general appreciation that by Government intervention the rate of interest charged to owner-occupiers has been controlled, and reduced in some cases? Will he extend this same protection to council house tenants?
    Mr. Armstrong: We are, indeed, keeping under strict review the amount of rent increases, but I remind my hon. Friend that this Government restored to local authorities the right to fix their own rents and would be very reluctant to interfere with that.
    Mr. Peter Bottomley: Does the Minister agree that these increases are indiscriminate when compared with those that would apply under the Housing Finance Act?
    Mr. Armstrong: We have great faith in local authorities, who know their own circumstances, and it is for them to make the decisions.
    Mr. Ovenden: Is my hon. Friend aware that some local authorities intend to save
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    most of their alleged overspending by cutting the rate contribution to the housing revenue account? Is he further aware that this will place the whole burden of sacrifice on one section of the community? Will he give some guidance to local authorities to prevent their acting in this manner?
    Mr. Armstrong: Guidance has been given by my right hon. Friend. However, if my hon. Friend has any instances in mind and reports them to me, we shall consider them carefully.

    Lorries (Speed Limits)
    Mr. Gwilym Robertsasked the Secretary of State for the Environment what study he has made of the accident saving which could be achieved by lowering the speed limit of heavy goods vehicles on motorways and dual carriageways to 50 m.p.h.
    Dr. Gilbert: The speed of heavy goods vehicles on motorways is limited to 60 m.p.h. and their accident rate per mile travelled on those roads is less than half the rate on other roads. I have no evidence to suggest that there would be significant advantage in limiting their speed still further. On all other roads, including dual carriageways, they are already limited to 40 m.p.h.
    Mr. Roberts: I believe that my hon. Friend is right. However, any hon. Member who drives on motorways will find his answer quite incredible. Will he discuss with the police forces methods of ensuring that speed limits come somewhere near being maintained? Does my hon. Friend accept that the relevant statistic is that a higher proportion of these heavy motor vehicles are involved in accidents compared with the ratio of heavy motor vehicles to other vehicles driven on motorways?
    Dr. Gilbert: All that I can say is that the accident record of heavy goods vehicles is better than that of most other groups of vehicles, whether they are driven on motorways or on other types of road. I shall examine my hon. Friend's suggestion that I should have discussions with authorities about enforcement. However, my hon. Friend will have observed that the police are being equipped with a series of observation posts every three or four miles on all our main motorways,

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    and I have no doubt that these will have an effect in the direction which my hon. Friend desires.
    Mr. Dykes: Widening the question slightly but, I hope, still remaining in order, may I ask the Minister to say whether he is concerned about the absence of flashing signals when drivers change lanes on motorways, especially the drivers of heavy vehicles, who hitherto have had a good reputation in this respect? Are many accidents caused by the failure to give proper flashing signals? My impression is that the frequency with which motorists give signals before changing lanes has declined recently.
    Dr. Gilbert: I am not aware that there is any major problem of people failing to give signals when changing lanes on motorways. Certainly it is not reflected in correspondence that I have received. The accident rate for all types of vehicles per mile travelled is much lower on motorways than on any other type of road. Motorways are much the safest roads on which to travel.
    Mr. Raphael Tuck: Does my hon. Friend realise that it is no use our passing laws unless effective measures are taken for their enforcement? Is he aware that when I travel on the M1 to my constituency there is always the risk of a by-election in Watford because lorries pass me at more than 60 m.p.h. and cars at about 110 m.p.h., and the police are sadly absent? What can the Government do about it?
    Dr. Gilbert: I shall pass on my hon. Friend's comments to my right hon. Friend the Home Secretary, who is responsible, through the police forces, for the enforcement of the law. I take my hon. Friend's point that a certain number of citizens do not obey speed limits. I am afraid that that will always be the case.

    Railways (West Country)
    Mr. Waltersasked the Secretary of State for the Environment whether any proposals have been put to his Department regarding the closure of the main line to the West Country via Westbury and Exeter St. Davids.
    Dr. Gilbert: No, Sir.
    Mr. Walters: Will the Minister take this opportunity to refute categorically once and for all the rumours about the possibility of closing this major link to the West Country? Is he aware that such a closure would not only greatly damage transport to the West Country but would severely affect many important businesses in Wiltshire and acutely inconvenience very many people for whom this service is not a luxury but a necessity?
    Dr. Gilbert: No one can give an unconditional guarantee lasting for eternity with respect to any stretch of railway line. However, my original answer should reassure the hon. Gentleman's constituents about the very important considerations that he has put before the House.

    Tree Preservation Orders
    Mr. David Mitchellasked the Secretary of State for the Environment whether he is satisfied with the arrangements for the making of tree preservation orders; and, if not, what steps he is proposing to take.
    The Minister of State for Sport and Recreation (Mr. Denis Howell): Where a direction of provisional confirmation has been made under Section 61 of the Town and Country Planning Act 1971 there are sometimes difficulties in ensuring that a decision is properly made before the direction lapses. I am currently investigating possible means of overcoming this problem and will write to the hon. Member.
    Mr. Mitchell: That is not a very satisfactory situation. The position has been getting steadily worse for some time. Is the Minister aware that if the Secretary of State does not confirm an order within six months, when there is an objection, the trees can be felled? There have been two or three incidents in my constituency where orders have lapsed because of the failure of the Minister to deal with them, and the trees have been felled. What action does he propose to take to do something about this, instead of continuing to investigate it?
    Mr. Howell: If the hon. Gentleman had listened to my original reply, I think that he would have found that it was more satisfactory than the situation about which he is rightly concerned. I have

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    announced that, because I think that it is unsatisfactory, I am looking into it and intend to take action to meet the very point about which he has expressed concern. The difficulty is that, within the six-month period, we find that many local authorities and many objectors who have to be written to drag their feet in letting us have their replies and, as a result, the six-month period lapses. I agree that that is unsatisfactory, and I intend to deal with it.
    Mr. Stephen Ross: May I take this opportunity to draw attention to the large number of trees planted in the past two years which are unfortunately dying or are already dead? I think that the Minister's Department might be able to do something about this in drawing the attention of local authorities to the subsequent cultivation that these trees require—quite apart from publicising the vandalism that goes on—by means of television and the other media.
    Mr. Howell: I am glad to say that more and more attention is being given to these matters, especially as a result of National Tree Week and the activities of the Tree Council, which receives full support from the Government and co-operates with us. What is more, right hon. and hon. Members on both sides of the House support this work. But I shall bear in mind what the hon. Gentleman said and see whether we can give any further information.

    Dockland (Redevelopment Plan)
    Mr. John Huntasked the Secretary of State for the Environment what financial support he is providing for the implementation of the redevelopment plan for London's Dockland, which has now been agreed by the joint committee of the five participating London boroughs and the Greater London Council; and if he will make a statement.
    Mr. Shore: The Docklands Joint Committee has published its draft strategic plan for the redevelopment of the area as a basis for public consultation. It does not expect to take a final decision on it until next month.
    I shall be making a statement about the strategic plan and its financial implications as soon as possible after it has
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    been agreed by the Docklands Joint Committee.
    Mr. Hunt: How much longer will this go on? Is it not about time that the Government injected a sense of urgency into the redevelopment of London's decaying dockland? Will the Secretary of State explain what is the point of the Greater London Council and the inner London authorities seeking housing land in the outer London boroughs when they have 5,500 acres available for redevelopment on their doorsteps? Will the Minister also specifically say what is the Government''s position about the extension of the Underground railway system into Dockland? This seems to be an essential prerequisite for the viable redevelopment of Dockland, which should be got under way as urgently as possible.
    Mr. Shore: As a member of a party which, when in government, presided over the dereliction of Dockland for three years while carrying out the abortive Travers Morgan studies, the hon. Gentleman has a great nerve to accuse us of being dilatory. The Docklands Joint Committee has only recently published its report. It is out for consultation, and all those interested have been asked to comment so that they can go firm on it by the middle of July. We shall respond to it as soon as it is before us.
    Dealing with the one matter of substance about which the hon. Gentleman asked me, which was the transport strategy in Dockland's development, especially the Fleet and River lines, obviously I cannot respond in advance of my general consideration of the whole Dockland strategy.
    Mr. Jay: Whatever painful economies have to be made in local authority expenditure, does my right hon. Friend agree that it would be a false economy to leave this valuable land unused for very much longer?
    Mr. Shore: I wholly agree. There is here a major opportunity to contribute not only to the problems facing the hard-pressed boroughs which surround London's East End but to the solution of the general problems of the whole of our capital city. I am very anxious that we shall be able, in conjunction with the GLC and the local authorities, to proceed in our efforts to revitalise the area.
    Mr. Arthur Jones: Are the Government making central funds available for the revitalisation of this vast area of central London? If a grant is to be made, will it be done on the basis of the present joint committee, or is the Government's mind still open on the question whether a development corporation would be a more suitable instrument?
    Mr. Shore: I must tell the hon. Member that my mind is not open on a development corporation, if by this he means the kind of body that has been established to develop the various new towns surrounding our capital. I am not in favour of this, nor are the people in the area concerned. Dockland is part of the local authority areas concerned, and there is an intimate connection between these areas and their local authorities. I think it would be advisable for me to guard my response for the time being on the financial point.
    Mr. Atkinson: Does my right hon. Friend not agree that the purpose of this question is that the hon. Member for Ravensbourne (Mr. Hunt) would prefer the working peasants to live in council houses in Dockland, and not occupy land in Bromley?
    Mr. Shore: I am not sure what particular interest the hon. Member for Ravensbourne (Mr. Hunt) has, and it would be unwise for me to speculate on his motives, but his Question has given me the opportunity to make a statement of an interim character on Dockland, and I am grateful for that.

    Motor Cars (Bumper Heights)
    Sir J. Langford-Holtasked the Secretary of State for the Environment what negotiations have taken place nationally and within the Common Market with a view to introducing standard heights for car bumpers; and whether he will make a statement.
    Dr. Gilbert: Proposals for international standards for car bumpers, including their height, are being considered this week by the United Nations Economic Commission for Europe. Several European Community member States are taking part in this work. The Department is in touch with the Society of Motor Manufacturers and Traders Ltd. about
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    the British contribution to these discussions.
    Sir J. Langford-Holt: I thank the Minister for appearing to take a slight step forward in this matter. Will he not accept that although international agreement is vital in the ultimate, it is not helped by our being at sixes and sevens in this country? In the absence of international agreement, we should now decide what standard heights we are to have in this country.
    Dr. Gilbert: I disagree. I do not think that it is in anybody's interests to set a national standard which might have to be changed very shortly if we get an international agreement. That would be counter-productive. We need international agreement on a safe bumper height.

    Local Government Finance (Consultative Council)
    Mr. Arnoldasked the Secretary of State for the Environment whether he has discussed the Layfield Report with the Consultative Council on Local Government Finance; and, if so, what broad conclusions were reached.
    Mr. Shore: Not yet. The council will be having a discussion on the report at its next meeting in early July.
    Mr. Arnold: I recognise that the Secretary of State believes that a full and considered response to Layfield depends on the many submissions that he has asked people to make to him. However, will he say whether the Government are now in a position to give their views on certain matters within Layfield ahead of the consultation period, because it is essential that these matters should move ahead with all possible speed?
    Mr. Shore: No, we are not ready to do that. There are certain matters in Layfield of a very specific nature on which more progress could be made in advance of coming to a conclusion on the big central question that Layfield poses.
    Mr. Evelyn King: Does the right hon. Gentleman share the view expressed by the Home Secretary to the effect that in any democratic system expenditure by Government agencies should not exceed 60 per cent. of public expenditure? If

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    he does, does he not also agree that this implies a permanent limitation on local authority expenditure? Will he bear that in mind in any discussions he has on local government finance?
    Mr. Shore: I do not subscribe to the doctrine of a particular percentage of public expenditure posing a threat to democracy.
    Mr. King: But that is what the Home Secretary says.
    Mr. Shore: That may be my right hon. Friend's view, and he is entitled to express it. I am equally entitled to express a different view. The Government view is that we should stick within the targets that we have agreed in the latest public expenditure White Paper.

    Cesspits (Emptying Charges)
    Mr. Shepherdasked the Secretary of State for the Environment what advice he has given under the Water Charges Act 1976 to local authorities over charges for the emptying of cesspits and septic tanks.
    Mr. Denis Howell: Local authorities have been asked to ensure that services that ought to be self-financing do not run at a loss. Many have thought it right to review their charges for emptying cesspools. I have received about 100 letters, mainly through hon. Members, complaining about the increases.
    My Department has recently issued a consultation document on the water industry. The problem of sewage disposal from properties not connected to main sewerage is one of the issues on which views have been invited.
    Mr. Shepherd: Will the Minister consider allowing regional water authorities to make a charge for the removal of sewage from properties that is based only on the rateable value and regardless of whether the property is served by main drainage, septic tank, or cesspool?
    Mr. Howell: There is some confusion here. Responsibility for emptying cesspits rests with local authorities. Responsibility for the disposal of the matter emptied from the cesspits rests with the regional water authorities. Some interesting views are being put forward on this matter, one of which is that perhaps all the responsibility should be
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    taken over by the regional water authorities, which should empty the cesspits, dispose of the matter, and charge householders in the normal way. We want to hear the views of local authorities before commenting, but I must say that I am continually amazed by local authorities wanting to hang on to their responsibilities in this respect.
    Mr. Madden: The regional water authorities were set up by the Conservative Party to supply water. Will the Minister relieve customers of charges for water supplies if the authorities are unable to supply water for long periods?
    Mr. Howell: I do not think that that problem will arise.
    Mr. Crawford: Will the Minister discuss with the Secretary of State for Scotland the possibility of introducing the more equitable system into Scotland that already prevails in England and Wales?
    Mr. Howell: The Secretary of State for Scotland has been asking my advice on water reorganisation. I have told him to avoid like the plague the mechanism that the Conservative Party introduced when in Government.

    British Railways Board (Finance)
    Mr. Neubertasked the Secretary of State for the Environment if he can now make a statement on the British Railways Board's accounts for 1975.
    Dr. Gilbert: I have nothing to add to the answer that I gave to the hon. Member for Carshalton (Mr. Forman) on 26th May.
    Mr. Neubert: Does the Minister agree that when the taxpayer picks up the tab for £324 million he is entitled to see that costs and overheads are cut to a minimum and that waste is eliminated? What action is the Minister taking to encourage that?
    Dr. Gilbert: British Rail management is very well aware of the financial disciplines facing it. It is fighting a continuing battle to keep overheads down to the minimum practicable.
    Mr. James Johnson: Last week in Hull there was a public meeting organised by Transport 2000, and anxiety was expressed about the possible closure of the

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    Hull to Scarborough line. How often does the Minister meet the Chairman of British Rail about a Beeching-type examination of the national network? In the event of this happening, is the Minister prepared to meet a delegation of Hull and East Yorkshire MPs on the matter?
    Dr. Gilbert: I am always happy to meet delegations on this or any other matter. I have had no discussions with the present or future Chairman of British Rail about any Beeching-type of examination; nor do I propose to have one.
    Mr. Fry: The accounts of British Rail totally fail to give any information that would enable Parliament to make a correct judgment of the loss incurred on the various services. Will the Minister accept that we need this information before any more subsidies can be granted?
    Dr. Gilbert: I am sure that the hon. Member knows that the attempt to allocate revenue or cost was tried under the Cooper Brothers formula and proved so complex that it was abandoned because it had only limited practical value.
    Mr. Cryer: Will my hon. Friend encourage British Rail to try to reduce the deficit by carrying freight traffic? Will he take up with British Rail its decision to end the carriage of livestock on 1st July which, although it causes a light ripple of laughter in the House, is worth about £2 million? Is he aware that many people such as pigeon fanciers will be denied a service that is very much appreciated and that uses trains that are running anyway? Should not we interfere with British Rail's decision, because it will cost the taxpayer another £2 million?
    Dr. Gilbert: Representing as I do a strong pigeon-fancying area in the Black Country, I do not treat the decision by British Rail in this respect with any frivolity. I understand that it is being looked at, however, by the Central Council of the Transport Users' Consultative Committees. I am not sure whether its decision has yet been published, so I had better be careful about what I say at this stage. I know that it is fully aware of the many representations that have been received by myself and British Rail direct from many members of the public and hon. Members on both sides of the House.
    Mr. Donald Stewart: Is the Minister aware that British Rail has published an order that it will not carry unaccompanied dogs after 1st July? Dog breeders in the north-east of Scotland say that this will mean the destruction of hundreds of pups and bitches within a few weeks of the decision being implemented. As British Rail intends to carry unaccompanied dogs for research purposes, the decision appears all the more objectionable. What action will the Minister take?
    Dr. Gilbert: As I am sure the hon. Member appreciates, it is not for me to interfere in the day-to-day running of British Rail, but I do not seek to hide behind that on this occasion. The problem has arisen because British Rail, as a result of actions outside its control, has been faced with the decision by the House requiring that the carriage of livestock is undertaken with due regard to the humane treatment of that livestock. That is the situation that has produced the difficulty with which hon. Members have been faced in discussions with their constituents.
    Mr. Raison: Has the Minister received any evidence from British Rail that it is doing anything about reducing its unauthorised freight deficit?
    Dr. Gilbert: Yes.

    Offshore Developments
    Mr. Adleyasked the Secretary of State for the Environment if he is satisfied that he, or adjacent local authorities, possess adequate planning powers to control offshore developments which can have a noticeable effect on the relevant local environment; and if he will make a statement on recent proposals involving the parking of oil rigs in estuaries and other territorial waters.
    Mr. Guy Barnett: I refer the hon. Member to the answer which I gave to the hon. Member for Isle of Wight (Mr. Ross) on 8th June.
    Mr. Adley: There is a degree of muddle about the powers possessed by the Government and local authorities in territorial waters, in different stretches of those waters, and at different distances from the shore. Is the Minister aware that this muddle can be exploited for commercial ends by, for instance, people like those who wanted to park an oil

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    rig in the Solent? Will he look at the Coast Protection Act 1949 to see whether there is any possibility of an amendment to enable it to take account of environmental issues?
    Mr. Barnett: I do not think that that Act is involved in this matter. My understanding of the situation is that the mooring of an oil rig between the three-mile limit and the mean high-tide mark is a matter for the Crown Estate Commissioners, who are entitled to take environmental factors into account, and the local planning authority concerned can contact them about that. The local planning authority can also exercise planning powers where the mooring of a rig involves construction over land. Anything on the shore, therefore, very often falls within the purview of a local planning authority. I am not at the moment aware of the muddle that the hon. Member refers to. I recognise that this is a new kind of situation. If the hon. Member has any evidence from his constituency or elsewhere I shall be glad to consider it.
    Sir W. Elliott: Is the Minister aware that the parking of oil rigs in need of service or repair in the River Tyne would be most welcome, and might help to relieve the worst unemployment we have known in the North-East since the 1930s?
    Mr. Barnett: I shall bear that in mind.

    Building Societies Association
    Mr. McCrindleasked the Secretary of State for the Environment what recent discussions he has had with the Building Societies Association.
    Mr. Shore: Regular contacts continue with the Building Societies Association. These have been built up over a number of years and enable discussion to take place over the full range of issues affecting the housing market.
    Mr. McCrindle: Have any discussions taken place recently about the effect of abolishing or cutting back tax relief on mortgages for more expensive properties? Does the Secretary of State not agree that the log jam that would be likely to result from such a move would only lead to increased prices for the less expensive properties?
    Mr. Shore: This matter has not been under current discussion, but if moves were made in any way to alter the tax arrangements affecting mortgages for the purchase of houses we would have consultations with the building societies.
    Mr. Frank Allaun: Is the Secretary of State aware of the new and growing practice by many building societies of red-lining or blue-zoning the old inner city areas within which they refuse mortgages on all houses, even if they are not to be demolished? As local authorities, in contrast, provide mortgages for such houses, and particularly since the present £100 million scheme with the building societies is proving a deep disappointment, will my right hon. Friend require building societies to provide to the local authorities 10 per cent. of their advances for this purpose?
    Mr. Shore: I am interested in both the questions that my hon. Friend puts. He follows these matters very closely. I shall be glad to hear any evidence on the question whether there is in practice a red-lining of the inner cities. That is a most important point, because we wish to get the maximum co-operation from the building societies in two respects—first, to increase their lending on older properties, and, second, to increase their lending to people with average or below-average incomes.
    On my hon. Friend's second question, there is an encouraging trend in the figures for the first quarter of this year, which show that 26 per cent., by number, of new mortgages went to people whose income was below that of the average manual wage.
    Mr. Sainsbury: Is the Secretary of State aware of the considerable problems caused in certain areas, of which my constituency is an example, by the restrictions placed on the amount of money available for local authority mortgages? Following his talks with the Building Societies Association, what information has he about the extent to which the building societies have been able to fill the gap left by those restrictions?
    Mr. Shore: There was general agreement about the £100 million that the building societies were trying to make available in addition to their other lending in order to take up the reduction in

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    local authority lending enforced by the previous year's Public Expenditure Survey Committee, but the hon. Member must think carefully if he is urging me, on behalf of his constituents, to increase public spending and the public sector borrowing requirement—because that is the implication of his question.
    Mr. George Cunningham: Is my right hon. Friend aware that if tax relief on mortgage interest were restricted to the basic rate there would be a saving of £80 million a year? Does he recollect that last year we were told that the relief would not be cut back in the Budget, because of a Department of the Environment reason relating to the building industry? Has the Department of the Environment this year opposed the restriction of that relief to income tax at the basic rate?
    Mr. Shore: If there were to be a change in this area, of course it would require conversations with my right hon. Friend the Chancellor, and it would have to conform to the timing of whatever measures were put forward at the time of the next Finance Bill. Our consideration of the timetable is related much more to the housing finance review.
    Mr. Budgen: Will the right hon. Gentleman confirm, in relation to one of his earlier answers, that he has no power to direct building societies to lend to any individuals or to any sector of the housing market?
    Mr. Shore: I am not certain what my powers are in this respect, but now that the hon. Gentleman has put that question I shall inquire further. I think that by far the best way of proceeding, however, is by co-operation and good will between the Government and the building societies.
    Mr. Dalyell: Has it occurred to my right hon. Friend that, if Opposition Members in the third row below the Gangway got their way and we had a £ Scots and a £ sterling, building societies would be faced with mind-boggling problems of disentanglement and extreme cases of difficulty when an English customer was based in Edinburgh or a Scottish customer in London, or elsewhere in England?
    Mr. Shore: I agree with my hon. Friend that there are so many areas in which the Scottish, English and Welsh economies are interwoven that their separation would be so enormously complex and difficult as to be self-defeating, in terms of the objectives of those who advocate such a course.
    Mr. Loyden: Is my right hon. Friend aware that there is positive evidence that discrimination is being exercised by building societies against certain areas? Is it not time that the Government took some control of building societies, in order to ensure that money is channelled to places where it is most needed?
    Mr. Shore: I agree that it is terribly important to get as much building society money as possible into inner city areas, but we should have a basis of fact before we start drawing conclusions. If my hon. Friend has any additional information, I hope that he will send it to me.
    Mr. Crawford: Is the right hon. Gentleman aware that the £ Scots with the basis of a healthy Scottish balance of payments—and our nation is now self-supporting in terms of oil—will be very much healthier than the English pound when we gain independence?
    Mr. Shore: That question does not deserve a reply.

WATER SUPPLY
Mr. Michael Morris: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter which should have urgent consideration, namely,
"the water shortage in England and Wales".
You will be aware, Mr. Speaker, of the Private Notice Question I was granted on 3rd May. The Minister stated at that time that the problem was localised, but his assessment was subject to average rainfall this summer.
Mr. Speaker: Order. I rise for two reasons—first, to ensure that I hear the hon. Member and, secondly, to ask him to set a good example for future applications under Standing Order No. 9. I hope that he will merely state the facts and the grounds for urgency. Standing Order No. 9 applications are becoming

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very much like Ten-Minute Bills, and that is not the intention of the Order. The hon. Gentleman has not been guilty. I am just making an appeal to him in time.
Mr. Morris: The specific nature of my request is that the water shortage is self-evident to us all. The importance is even more self-evident. The domestic consumer, industry, commerce and, not least, the production of food need water.
The urgency is paramount and dictated by the escalating scale of the problem, Only a few weeks ago, it was a localised problem, but yesterday, in answer to a parliamentary Question, I was told that there are now 26 drought orders affecting 17 counties—nearly one-third of the country. The public has a right to know that the Government are making urgent contingency plans to meet this shortage.
Mr. Speaker: The hon. Member for Northampton, South (Mr. Morris) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the water shortage in England and Wales".
As the House knows, under Standing Order No. 9 I am directed to take account of the several factors set out in the Order but to give no reason for my decision.
The hon. Member was good enough to send me details of this application, and I am much obliged to him. I have given careful consideration to all the representations he has made, but I have to rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

ABOLITION OF UNEMPLOYMENT
3.55 p.m.
Mr. Anthony Steen: I beg to move,
That leave be given to bring in a Bill to permit the payment of unemployment benefit to unemployed persons engaged in work of social or community benefit.
Yesterday the Government released some disastrous and bizarre figures which revealed that more than 1,300,000 people are unemployed and that 85,000 more school leavers had joined the dole queues since last month. That catastrophic situation is an indictment of the Government's policies and at variance with their election pledges, but it is more than that. It is an example of Government obstinacy and indifference to the supreme importance of satisfying the needs of the individual and the necessity to maintain his dignity.
My Bill could make unemployment a thing of the past. If the Government willed it, unemployment would be a legend. There are serious moral implications to standing by when 1¼ million people have nothing to do.
In Monday's debate on youth unemployment, the speeches from the Government Front Bench were full of apologies and adopted a defeatist attitude. Ministers seemed confused, yet convinced that they had done everything possible. They cited the job creation programme, the recruitment subsidy, the labour mobility programmes and other measures. Clearly, none of these is enough if unemployment continues to rise. In addition, the projects are very expensive. About £55 million has been spent on the job creation programme but only 17,000 people are employed under it. Something radically new is called for. We have an extreme situation and we therefore need progressive and radical policies. More of the same thing will not do.
My Bill proposes a simple solution which the Government could put into practice overnight. It is recognised that the Welfare State cannot cope with the number of people needing help, and the size and complexity of social deprivation far exceeds the resources available. There are 8 million elderly people in Great Britain, and many of them live alone. Thousands live in miserable homes with

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rooms that need redecorating and windows that need cleaning. The lonely cry out for companionship. Single parents ask for help with the care of their children. Institutions such as hospitals and children's homes desperately search for more helping hands. There is a large reservoir of unnecessary human suffering which could be considerably alleviated if there were people available who could make the lives of others better and happier. This is work which will otherwise never get done.
My Bill will offer a challenge to unployed people by giving them, as individuals or in groups, the opportunity to do this work and to relieve the plight of others by tackling the worst problems of their neighbourhoods as they see them. The Bill invites them to develop their own programmes and to create their own jobs. In this way they would gain invaluable experience and new skills by planning and operating projects. They would participate in the identification, selection and planning of projects and, ultimately, in the performance. They would be responsible for all aspects of administration, and by dealing with local people they would develop a sense of pride in their neighbourhood and an innate sense of social responsibility. By introducing those with time on their hands to others who need their help, the human and social problems in this country could be eclipsed.
It may be that not all those who are unemployed are capable of giving personal service. The list of other projects which could be tackled is limitless. Preschool playgroups could be set up and adventure playgrounds built. The meals-on-wheels service could be assisted. Hospitals could be helped. Litter could be recycled and young people with practical skills could build furniture for low-income groups. Others could repair children's toys by setting up toy hospitals.
I am convinced that if local people were involved in redecorating public buildings in their neighbourhood, such as the school and community centre, far less vandalism would result. Indeed, for those who are not equipped to develop personal relationships and do not feel able to create their own practical work, another choice will be open to them. Each local job shop should keep a
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running list of all the supervised community jobs that require to be undertaken voluntarily. Therefore, the unemployed would have a wide range of jobs from which to choose, would be told where and what they were, and would discuss these matters with the sponsoring organisation direct. In these ways the solution to unemployment would come from the unemployed themselves. The jobs would be real and important and would offer the supreme reward of all—job satisfacton.
With regard to materials and supervision costs, the Government could act in a similar manner as they do with job creation programmes. On community jobs the unemployed could work on a four-day week basis. In return, the unemployed would be offered wages at the equivalent rate of the benefits they receive as unemployed persons. Although the payments would be relatively modest, they would act as a spur to the unemployed to seek more remunerative work elsewhere. The rates of pay would be an incentive to make projects short-term and would provide some income.
I doubt whether anybody on any side of the House would argue that it is immoral to pay wages on the current unemployed benefit level since these provide at least some basic level of subsistence. The whole philosophy of the insurance scheme is that the seven fat years should pay for the seven lean years. To continue to pay it when there is so much to be done is to make a mockery of the principles on which the system is based. Instead of going to the employment or social services offices to get the dole, those at work in the community would get their wages from the wages office.
For those who argue that the rates of pay should be at the market rate, let me say this. There can be no market rate for work that will never be carried out. By paying the inflated NALGO rates of pay for those under the job creation programme, it means that the £55 million already spent has created only 17,000 jobs. It also means that the young, when paid some £45 per week, will develop a false sense of values.
My Bill will give people a range of choices, but if at the end of the day they decide to do nothing, even though there

1601
is so much to be done, the Government should feel no obligation to pay them. If after a period of two months the unemployed person refuses to co-operate, again the Government are free to pay him nothing. If the unemployed person is ill, he will continue to receive all benefits.
In the researches which I have carried out on Merseyside, I have discovered that 75 per cent. of the 2,000 young people who are unemployed have said that they are bored stiff and will gladly undertake this work. But the Government have done nothing about the situation. Perhaps they want to keep control only of the unemployment situation.
The Bill which I propose is a radical departure, but if the Government refuse to give my proposals serious consideration they will be turning their back on this country's unemployed.
3.44 p.m.
Mr. Eric Ogden rose—
Mr. Speaker: Does the hon. Gentleman wish to oppose the Bill?
Mr. Ogden: I wish to express limited opposition, Mr. Speaker.
The constituency of the hon. Member for Liverpool, Wavertree (Mr. Steen) is a neighbouring constituency to my own division of Merseyside. But the gap betwen us in the city of Liverpool is certainly very much wider than it is across
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the Chamber. I know from experience that the hon. Gentleman has great experience of backing good causes. However, on this occasion perhaps his enthusiasm has gone too far.
The hon. Gentleman said that his Bill would make unemployment a thing of the past. I can only say that I hope that that will be the case, but my fear is that some people on Merseyside might believe that assertion—in other words, hopes might be raised unnecessarily. I ask the hon. Member not to press the Bill or to allow it to be introduced—
Mr. Speaker: Order. The hon. Gentleman must not argue on those lines but must say why he is opposing the measure.
Question put and agreed to.
Bill ordered to be brought in by Mr. Anthony Steen, Mr. Tim Renton, Mr. Leon Brittan, Mr. Tony Durant, Mr. Edward du Cann, Mr. Michael Marshall, Mr. Andrew Bowden, Mr. Peter Bottomley, Mr. Peter Morrison, Mr. Michael Neubert and Mr. David Lane.

ABOLITION OF UNEMPLOYMENT
  ABOLITION OF UNEMPLOYMENT
  Mr. Anthony Steen accordingly presented a Bill to permit the payment of unemployment benefit to unemployed persons engaged in work of social or community benefit: and the same was read the First time; and ordered to be read a Second time upon Friday next and to be printed. [Bill 176.]
ORDERS OF THE DAY
  DEVELOPMENT LAND TAX BILL
  As amended (in the Standing Committee), further considered.
  DEVELOPMENT LAND TAX BILL
    New Clause 6

      PENSION FUNDS: INTERESTS IN LAND HELD ON 12TH SEPTEMBER 1974
      (1) Development land tax which would otherwise be chargeable in accordance with section (Reduced Rate of Tax for Pension Funds) shall not be chargeable on any realised development value accruing to a pension fund on the disposal of an interest in land which—

      (a) was held by the pension fund on 12th September 1974; or

      (b) was held by another pension fund on that date and has at no time between that date and the time of the disposal been held otherwise than by a pension fund; or

      (c) is the retained interest or the granted interest in relation to a previous disposal of an interest in land which, immediately before that disposal, fell within paragraph (a) or paragraph (b) above or this paragraph and which has at no time between the time of its acquisition and the time at which it is disposed of been held otherwise than by a pension fund;

      and for the purposes of this section an interest in land shall be treated as held by a pension fund on 12th September 1974 if, under the will of a person who died before that date, the pension fund would on that date have been absolutely entitled to that interest if the administration of the deceased's estate had been completed.
      (2) Subject to subsection (3) below, in any case where—

      (a) on 12th September 1974 a lease was held by a pension fund, and

      (b) subsequent to that date, but without its ever having been held otherwise than by pensiion fund, the lease became merged in another interest (in this subsection and subsection (3) below referred to as "the greater interest"), and

      (c) after the merger the greater interest was acquired by another pension fund, without its ever having been held otherwise than by a pension fund,

      paragraph 8 of Schedule 2 to this Act shall have effect on a disposal of the greater interest by a pension fund which acquired it as mentioned in paragraph (c) above as if, immediately before the acquisition of the greater interest by the pension fund—

      (i) the lease continued to exist as a separate entity, and

      (ii) the pension fund acquired the lease for an appropriate proportion of the consideration given by it for the acquisition of the greatest interest.

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      so that the lease constitutes a part of the relevant interest for the purposes of the said paragraph 8.
      (3) Subsection (2) above shall cease to apply in relation to a lease at such time as the lease would have come to an end, had it not become merged in another interest, and, for the purpose of that subsection, references (other than in paragraph (b) thereof) to the greater interest include references to an interest in land of which on a disposal thereof by a pension fund, the greater interest was a part for the purposes of part I of Schedule 2 to this Act.
      (4) In any case where—

      (a) on 12th September 1974 a pension fund held an option falling within section 8(1) above, and

      (b) the option was subsequently exercised, without it ever having been held otherwise than by a pension fund, and

      (c) the interest acquired by virtue of the exercise of the option (in this subsection and subsection (5) below referred to as "the substantive interest") was subsequently acquired by another pension fund, without its ever having been held otherwise than by a pension fund,

      paragraph 8 of Schedule 2 to this Act shall have effect on a disposal of the substantive interest by a pension fund which acquired it as mentioned in paragraph (c) above as if—

      (i) the option had not been exercised at the time of that acquisition and the pension fund had acquired the option instead of the substantive interest, and

      (ii) immediately after its acquisition of the option the pension fund had acquired the substantive interest in exercise of the option,

      so that the option constitutes a part of the relevant interest for the purposes of the said paragraph 8.
      (5) References in subsection (4) above to the substantive interest include references to an interest in land of which, on a disposal thereof by a pension fund, the substantive interest was a part for the purposes of Part I of Schedule 2 to this Act.
      (6) If an interest in land which falls within any of paragraphs (a) to (c) of subsection (1) above ceases at any time, otherwise than on the occasion of a disposal, to be held for the purposes of a pension fund—

      (a) the interest shall be treated for the purposes of this Act (other than this subsection) as having been disposed of at that time for a consideration equal to its market value and as having been immediately reacquired at that value; and

      (b) any realised development value which accrues on the disposal referred to in paragraph (a) above shall be treated as not having accrued to a pension fund.

      (7) If, at any time after the disposal of an interest in land falling within any of paragraphs (a) to (c) of subsection (1) above, the body which made the disposal ceases to be a pension fund, then, immediately after it so

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      ceases, an amount of realised development value equal to that in respect of which the exemption in subsection (1) above applied on the disposal shall be treated for the purposes of this Act as accruing to that body, as on the disposal of an interest in land.
      (8) Notwithstanding anything in section 44(2)(a) below, an interest in land acquired by a pension fund under a conditional contract entered into on or before 12th September 1974 shall be treated for the purposes of this section as held by the pension fund on that date.
      (9) References in this Act to a pension fund are references to such a fund as is established by a retirement pension scheme approved under section 22 of the Income and Corporation Taxes Act 1970 or Part II of Chapter II of the Finance Act 1970 or a superannuation scheme approved under section 208 of the Income and Corporation Taxes Act 1970.—[Mr. Ian Stewart.]
      Brought up, and read the First time.
      3.46 p.m.
      Mr. Ian Stewart: I beg to move, That the clause be read a Second time.
      Mr. Speaker: With this clause we may also take New Clause 9 (Reduced rate of tax for pension funds).
      Mr. Stewart: We had a long debate yesterday on the situation of charities affected by the Bill. Not surprisingly, we have come across similar problems in dealing with pension funds. New Clauses 6 and 9 relate to the position of pension funds and their treatment in respect of development land tax.
      New Clause 6 seeks to bring the position of the pension funds more closely into line with that of charities purely as regard to the holding of land prior to 12th September 1974, the date of the White Paper dealing with land. New Clause 9 seeks to introduce a preferential rate of 10 per cent. for realised development value in relation to pension funds.
      In Committee we moved amendments seeking to exempt pension funds entirely from development land tax. Had we been successful, we would not have brought forward a new clause in this form. But if we cannot exempt pension funds from this tax we wish to draw attention to the damage which will be done if they have to suffer tax at the rate of 66⅔ per cent. or 80 per cent. or an even higher rate. We suggest that a very much lower rate should be applicable to pension funds because of their special circumstances.
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      Superficially, in some ways pension funds are similar to charities and many of the same arguments apply, but I must point out that there are some fundamental differences. The Minister of State, when replying to the debate on charities last night, said that not all charities were likely to invest in property or to possess property which for various reasons might in due course become subject to development land tax. That is true. Many do not invest funds in that way at all. They collect income from donations or subscriptions and distribute it, and they do not necessarily have any investments of their own. Therefore, they need to invest in property does not arise.
      In the case of pension funds we are dealing with an entirely different type of body whose function is to gather together the savings of a large part of the community and channel them into investment in various forms. One of the main areas in which these bodies have sought to invest their funds over recent years has been property and land. Therefore, they will be very much affected by the provisions of the Development Land Tax Bill.
      Before we go any further, it would be right to draw attention to some of the statistics of the pension fund movement. It is impossible to obtain up-to-date figures because the preparation of the totals is usually several years out of date. During our proceedings in Committee, the Minister drew attention to figures produced by the Government Actuary which reflected the situation in 1971. Even then 49 per cent. of employed people in this country were beneficiaries of pension funds, and it was suggested that since that time the proporion was likely to have risen. With that I would certainly agree.
      In 1974, when it was a question of whether pension funds were to be taxed for the purposes of the development gains tax legislation then under consideration in the 1974 Finance Bill, some figures of an informal hut, no doubt, accurate kind were prepared by the National Association of Pension Funds. They have been quoted at earlier stages of this Bill. However, they bear repeating again because they are dramatic. At that time—nearly two years ago—the National Association of Pension Funds

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      had over 60,000 separate pension schemes in operation. They embraced more than 12 million members, of whom, I am glad to say, I am one. Those 12 million members do not include dependants such as I have in the Gallery this afternoon. I suspect that many working peopde, both in this House and outside, also expect to benefit from their pensions in the fullness of time. The 12 million members of the pension funds represent a substantially greater figure of potential beneficiaries, and this figure is a high proportion of our total population.
      Of those 12 million members, some 2 million were estimated two years ago to be already in receipt of their pensions. Thus the pension fund movement, which did not get off to a very rapid start but built up quickly in the 1950s and 1960s, and particularly latterly, has already reached the position where it is supporting a considerable number of our fellow citizens in their retirement.
      Mr. Peter Morrison: could my hon. Friend clarify one thing? I was not quite clear about the 12 million people who are part of the pension fund movement. Is he saying that over and above that number there are perhaps another 12 million people, including wives or children, who may benefit from the pension funds?
      Mr. Stewart: I am grateful for my hon. Friend's intervention, because if there is any doubt on this matter it should certainly be cleared up. The 12 million I quoted are the actual members of the funds. As I was saying, if all those who belong to pension funds have wives, families or other dependants, we are indeed talking about a much larger figure. We might even double it if we assume that each retirement pensioner who benefits from a pension fund has at least one dependant who relies upon that same source of income. It is a considerable proportion of the working and retired population whose pensions have been invested in pension funds and are still being invested, week by week, month by month and year by year. The number of participants in the pension funds is growing.
      It is impossible to quote up-to-date figures. My attempt to do so for the
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      purposes of this debate has met the recurring problem of the difficulty of gathering statistics, except those which are considerably in arrear. This is one of the problems which the Government face as they are not able to quote figures later than those produced by the Government Actuary in 1971.
      When we turn from the number of beneficiaries to the amount of money being invested, it will be seen that the sums are also dramatically large. Again, quoting figures from 1974, my information is that at that time there was approximately £24,000 million in the pension funds. Half of this money was in respect of self-administered funds relating to particular companies, and a similar figure was in insured funds operated by insurance companies and on a contracted basis for the benefit of companies which did not wish to run a specific project for themselves. At that date it was estimated that the amount which had been invested in property was of the order of £4,000 million. Those sums represent not only a substantial proportion of the wealth of the community at large but a very significant amount of the funds available for investment in industry, property and so on.
      I have alluded briefly to the growth of the pension funds, and I should like to say a further word about this. It has been one of the interesting developments of recent years that more and more companies have decided that they wished to improve the retirement prospects of their employees. That is a desirable change for both social and financial reasons. It is true to say that the energy of the private sector in developing pension funds for its employees has been a notable factor in prompting successive Governments to introduce improved earnings-related schemes for those who are not beneficiaries of private sector pension schemes.
      It is fair to say that the initiative was taken by the private sector and that this has had an advantage not only for all those who work and who save for their retirement in the industries or companies concerned but for the community at large as a result of the effect which this movement has had on the attitude of Governments towards their responsibility for retirement pensioners.

      1609
      To levy development land tax on the assets held by pension funds in their property portfolio would breach a traditional exemption in very much the same way as we were discussing last night in the case of charities. In this respect, the tax position of pension funds is similar. Of course there are technical exceptions, as has been pointed out. If charities or pension funds were to engage in trading, they would be subject to taxation on their trading activities. However, in no other sense have pension funds been subject to taxation. We are dealing again with a major breach of principle as, I am afraid, we were faced with in the case of charities.
      Pension funds do not date back to the days of Henry VIII as charities do, simply because in those days they did not exist. I rather think that King Henry VIII had other ways of dealing with those of his dependants whose work was done. Sometimes his methods were rather sharp.
      4.0 p.m.
      Mr. Tim Sainsbury: I appreciate that his ways were sometimes rather sharp, but usually not with pensioners. There were many almshouses in existence then and that was an effective way of dealing with pensioners. Those who run them, of course, are now prejudiced in their activities by the Government's action on charities.
      Mr. Stewart: My hon. Friend's interventions are always helpful to me. He has assisted me in making the point that there is little difference between pension funds and charities in this context. I have no doubt that almshouses provided by private charities would have been suitable homes not only for the pensioners of Henry VIII but for any of his other courtiers who wished to shed their dependants. However, in terms of history, charities are not such a good precedent for pension funds, because they did not come into existence until modern times.
      Ever since the early 1920s, when pension funds became a material factor in our lives, they have been exempt from these taxes. It is an unfortunate break with tradition if we now enact legislation to impose this new tax, and at such high rates, on the assets of pension funds. I suppose that they have been exempt in the past partly because they are praiseworthy bodies helping large sections of the community, just like charities, but partly
      1610
      because the income generated from their resources is taxed in the hands of the recipients. With the increased rate of tax now biting on so many pensioners with even the most modest of other incomes, this is a matter which the Government will no doubt recognise.
      It is only two years since a Labour Government decided not to impose development gains tax on pension funds. The original proposals in the Finance Bill 1974 suggested that development gains tax should apply to the assets of pension funds, but strong representations were made and the Government, with good sense and perhaps reasonable generosity, eventually decided that pension funds should not suffer the tax.
      It is sometimes said that the development gains tax is a Tory tax. Of course, it is based in many respects on the statements of Lord Barber in September 1973, but it was brought forward by a Labour Government and any changes made between the original proposal and enactment reflect the thinking of the Labour Government of the time. They felt, I am sure rightly, that pension funds should not bear that tax. Yet development land tax is now being introduced to replace development gains tax, and it seems only right that it should inherit that exemption a pension funds.
      No doubt another reason for this exemption of pension funds is the recognition by Governments of the need for pension funds to be able to protect their incomes against the ravages of inflation. Whether it is 30 per cent., as last year, 15 per cent., as this year, or whatever it may be next year, such figures are very hard to attain. Under Governments of all complexions there have been periods of dividend control that have limited the amount of income from investment in equities and ordinary shares.
      There has always been a difficulty in achieving a yield from Government securities and gilt-edged stocks anywhere comparable with the rate of inflation. There has been a negative yield for a considerable period now when rates of inflation have been very high. Therefore, among other things, the pension funds have looked to their investment in property for one of the sources of income to support the retirement pensioners.
      Mr. Tony Durant: Would not my hon. Friend agree that part of the purpose is to guard against inflation, which is another factor to be taken into account?
      Mr. Stewart: Certainly it is to guard against inflation. Although the pension funds have a very good record in the rate of benefits which they have been able to pay, this has been made much more difficult in the last year or two and many funds have had to be topped up by contributions from the companies for which they are operating in order to maintain the flow of income.
      Mr. Nick Budgen: That is particularly so, is it not, with the large clearing banks? I think that in one instance a pension fund has had to be topped up by as much as £18 million or £19 million.
      Mr. Stewart: My hon. Friend is absoslutely right. This illustrates the difficulties of pension funds in keeping pace with their income expectations at a time of inflation. The reason that pension funds have invested a considerable proportion of their investable funds in property is that over the years, despite periods of rent control and recession, taking one year with another over a considerable period, the rents of industrial and commercial property have more or less kept pace with inflation and have sometimes even gone ahead of it. It is the expectation of rising income from rentals that has led pension funds wisely to put much of their money into the property market.
      In doing so, they have also brought great benefit to British industry and commerce. Those who build factories, offices and shops are often reviled because of the windfall profits that may be made—that is what the Bill is supposed to be all about—but those who provide long-term investment funds to create that sort of property are not making windfall gains. If they are taxed on the basis of long-term investments, their investments will produce a lower yield or they will have a lower total volume of funds available to produce an income in future.
      Many of the larger companies believe not only that their pension funds are of value to their own employees but that they are important for the provision of
      1612
      capital for the infrastructure of Brtish industry and commerce by their investment in property of this kind. After all, they have a primary duty to look after the interests of their pension fund beneficiaries. I have here a letter, addressed to my right hon. Friend the Member for Crosby (Mr. Page) from the manager of the pension fund of one of the largest companies in the country. He shows this concern very well:
      "The effect of this new tax will be that the substantial investment in property by pension funds will not make as large a contribution as expected to the provision of retirement benefits to employees, and, inevitably, this short-fall will need to be made good not only by the companies providing these retirement benefits but, in the long run, by the employees who enjoy them."
      The employees who enjoy them are of all kinds—male and female, manual and non-manual. In Committee, the Minister of State quoted figures based on the Government Actuary's totals for 1971 suggesting that there were imbalances between manual and non-manual, between male and female and so on.
      But that is in the nature of employment. The continuity of job over a long period, such as is suitable for contributors to pension funds, is greater in non-manual trades. Because of the facts of life, in spite of recent legislation, men hold jobs of this kind for longer periods than women. So these discrepancies are not surprising. They merely reflect the present pattern of employment.
      But it is important that we should not in this way reduce the available investment funds for industry. The Chairman of the Investment Protection Committee of the National Association of Pension Funds, writing to the Minister last December following the passing of the Community Land Act when proposals for the development land tax were made, put it in these words:
      "The imposition of this tax on pension fund trustees will result in a progressive depreciation of the property assets they hold. The trustees will have their long term commitments to pay retirement benefits to the 12 million or so work-people; but as a result of this legislation, a significant proportion of their assets will have been depreciated in value. The money needed to make up for this depreciation can only come from the revenue of British industry. The consequence will be, at least, reduced resources available for reinvestment in the employing industry, with all that entails for the trustees and everyone else, and, at worst, increases in the costs of goods and services

      1613
      (more per ton of steel, more per unit of electricity, more per therm of gas, etc.) thus further fuelling inflation."
      Those are serious worries about the effects of imposing development land tax on pension funds.
      The Government have adduced reasons for imposing such a tax on pension funds. One seems to be that somehow investment in property or a factory is bad, but investment in the company that conducts the industry inside the factory is good. There is a remarkable statement on record about that matter made by the then Under-Secretary of State for the Environment. He said:
      "It is far better that investment takes place in manufacturing industry and not in speculative ventures as it has done in the past. If the Bill goes some way towards redirecting pension funds into manufacturing industry, it will have a spin-off which will benefit the country".—[Official Report, 12th November 1975; Vol. 899, c. 1468.]
      That, perhaps, is the key to Socialist thinking on this matter. The Opposition believe that if it becomes impossible to build factories and offices, it will be impossible for companies to operate within them.
      The Government's second reason is that pension funds do not benefit everyone. But neither—although I say so with some trepidation—does the Letchworth Garden City Corporation, although that does a great deal of good for many of my constituents. I am delighted that it is included among the exempt bodies in the Bill.
      All kinds of local authorities, charities and pension funds bestow benefits on the community in a collective sense, although those benefits may not be available in equal amounts or in an equal way to the community as a whole. However, they all contribute—this is their common virtue—to large numbers of people. Whether those people are classified by the locality in which they live or in the industry in which they work does not seem to me to be a material difference.
      It was pointed out that a charity for the benefit of railwaymen would gain exemption for the purposes of White Paper day land but that a pension fund for the benefit of railwaymen would not gain such an exemption. Yet a pension fund is much more likely to distribute benefits broadly across all railwaymen and the charity is more likely to be selective.
      1614
      The logic of the Government's thinking is upside down.
      Early in our consideration the Minister of State said that charities were somewhere between local authorities and pension funds. He tried to imply that there was some kind of descending order of virtue in the various bodies that served the community. Local authorities have complete exemption. Charities benefit from some minor concessions in the Bill. But pension funds are very much the "tail-end Charlies" in the race. Unless we are able to do something for them in this sense, they will suffer grievous injury in the years ahead from the application of the development land tax.
      4.15 p.m.
      Separate problems are represented in the two new clauses. The first relates to land held by pension funds in 1974. In spite of a recent well-publicised case in Sussex, it is not normal for pension funds to enter into highly speculative situations. Pension funds on the whole have become a major source of finance for development on a continuing basis, including residential and other kinds of development. The expected improvement in value to which they looked through eventual development was part of the arithmetic of their original investment. They could not have anticipated the details of this legislation. Nor could they have anticipated that the Government would have been so insensitive as to impose development land tax on them. Therefore, many of the acquisitions that they made before that date could not have occurred in anticipation of the imposition of this tax.
      I stress that it is more important in the longer run that pension funds—as we have argued for charities—should either be subject to no tax on their development or to a low rate, such as the 10 per cent. that we suggested. They look towards the maintenance and improvement of their income in the longer term by means of redevelopment in due course.
      I should like to quote some remarks in this context which were made by the Chairman of the Land Sub-Committee of the National Association. He writes:
      "In the market as it was prior to the White Paper Day the prices paid by the Pension Funds generally reflected the prospect of such enhancement in income flow, and this was part

      1615
      of the background which induced the Pension Funds to invest. Except for the 10 per cent. tolerances, the present provisions of the Bill will mean that in order to obtain this enhanced flow of income on redevelopment the Funds will have to provide (as well as the building costs) an additional payment to meet the DLT which will arise on the commencement of the development."
      Yesterday the Minister said that if the charities were to suffer the tax, that was just one of those unfortunate facts about the future that they must take into account. I suspect that he might say the same about pension funds. But that is rather like saying to a condemned man, "You may have to change your thinking about the future, as you will not have time for lunch."
      The Minister said that this was a longer-term problem because the tax would not take effect until the pension funds redeveloped their properties. But this is also an immediate problem in a real sense. At the end of the day, such properties will have a lower value on the market and a lower value as investments. That means that there will be a need to amortise their value over the life of the investment out of the income that they generate in the meantime. Therefore, from now on their income will be reduced by the need to write off at least a part of the cost in the coming years. Therefore, this is not only a long-term problem. It is a problem the effects of which will begin to be felt fairly soon.
      The pension funds have become a much more important part of the scene in recent years as a result of the growing need to provide retirement pensions. But their importance has been accelerated by company tax legislation and the demise or the weakening of the position of the property companies. I cite the well-publicised case of Artagen Properties Limited, for which one of the insurance companies made a bid. It is predicted that many of the property companies might end up in the hands of insurance companies. However, insurance companies, like pension funds, are now becoming the main means of channelling private savings into investment in the private sector. That is taking place on a growing scale.
      I am delighted that the hon. Member for Liverpool, Walton (Mr. Heffer) has come into the Chamber. The hon. Gentleman missed most of these words
      1616
      of wisdom, but I promise that if he listens attentively he will be convinced of the importance of exempting pension funds from development land tax.
      Why are pension funds to be burdened in this way? They were exempted, after due consideration and careful thought by a Labour Government, from development gains tax.
      Yesterday, I felt a little sorry for the Minister of State in the debate on charities, because I thought that he was defending the indefensible. It seemed to me that sometimes he was doing so against his own personal judgment.
      Mr. Nicholas Fairbairn: If my hon. Friend reads the Minister's speech, he will see that the hon. Gentleman did not even bother to defend the indefensible.
      Mr. Stewart: I was trying to be a little more courteous than my hon. and learned Friend, but the point is not lost.
      I suspect that today, like most reasonable people, the Minister will again be with us in spirit. These proposals can only have come about because the whole of the Bill lies under the evil shadow of the community land scheme.
      Development land tax is not a genuine tax in the way that we understood taxes in the past on capital and gains. It is a transitional levy. I believe that the Government intend to make as few exceptions and exemptions as possible in case they impede the progress of the community land scheme. But the Government should think again, because by failing to respect the claims of pension funds they are again showing that they are influenced more by doctrine than by reason. To bring pension funds within the scope of this tax is not only socially retrograde but will be financially harmful to millions of beneficiaries of pension funds. Economically over the coming years it will be a far-reaching constraint on the supply of funds available for new factories, offices and shops and all the other properties in which future generations will need to work and go about the business of their daily lives.
      I hope that these new clauses will commend themselves to the House.
      Mr. Walter Clegg: Looking at the Government Benches is

      1617
      rather like looking at a desert with two palm trees. I confess that the hon. Member for Liverpool, Walton (Mr. Heffer) is a very bulky palm tree and gives plenty of shade, but I wish that more of his hon. Friends would come in to listen to the debate, because this matter affects many of their constituents just as much as it affects many of mine.
      North Fylde is a retirement area. We have not only retired civil servants—because we have a big civil service establishment there—but many people who rely on pension funds for their pensions. There is a growing difference between these two categories of pensioners. The civil servants now have inflation-proofed pension funds, as we have in the House. That is very different from the situation of others who rely on industrial pension funds.
      I must declare an interest. As well as having a pension from the House—I hope—I shall also have a self-employed pension. Therefore, I may be directly involved.
      I dare say that the Minister will say, as he said yesterday, that the objective of this legislation, as of the Community Land Act, is to return to the community the betterment value when land is sold. That was his main reason for opposing the exceptions or the deferment for charities, about which we were arguing yesterday.
      The hon. Gentleman will no doubt say that if we give this concession to pension funds, we shall be denying to the community the benefit of the betterment that the community has created. The community does not work very hard to create this particular benefit. It merely draws lines on maps. It does no more to develop the land in that way than anybody else does.
      The Minister for Planning and Local Government told us that the Bill and the Community Land Act were based on the community making great profits from the sale of land. I think that at one time the right hon. Gentleman said that for every £1 million for which the State bought land, if could expect to get £4 million when the land was sold. Those poor souls who voted for the Labour Government in the hope of getting cheaper land will be very disappointed, because the land will be the same price as if this scheme had
      1618
      not been introduced. The Government have based their plans for what they are to get out of development land tax and the profits that will flow from the sale of land on the days when land and property prices were leaping ahead.
      If the Minister argues, as he did yesterday, that it is unfair to exempt pension funds because the community will not get the benefit, we are entitled to argue, on the same lines as we did regarding charities, that many millions of people will benefit if the new clause is accepted. It would be of some comfort to them to know in these days of great inflation that there was a provision in the Bill to enable them to get better pensions.
      It is fair to say that millions of people will benefit. Those employed by the State have no need to worry about these matters, but those employed by industry have a great deal to worry about.
      In addition, the more effective the pensions given by pension funds, the less pressure there will be on the State and on public spending to make up the difference. Any move in these inflationary days that will make it more difficult for the pension funds to pay these pensions is to be deplored.
      It is common knowledge that many firms are having great difficulty in topping up their pension funds to keep pace with inflation. In some instances they expect that in a few years, if inflation continues at its present rate, they will be paying as much for pensions as for the salaries and wages of their employees. That cannot go on.
      I suggest that a good argument has been made for these new clauses. We are talking not about a tiny group but about a very wide range of people, including many trade unionists, who are looking to the House to do something that will not reduce but increase the value of their pensions.
      I congratulate my hon. Friend the Member for Hitchin (Mr. Stewart) on moving the new clause so clearly and with such modesty. I fully support him.
      Mr. Sainsbury: I congratulate my hon. Friend the Member for Hitchin (Mr. Stewart) on introducing these new clauses. I apologise for not having been present when he began his remarks. I was still in the Library and was caught

      1619
      unexpectedly by the speed with which we started today.
      I am reminded by my hon. Friend the Member for North Fylde (Mr. Clegg) that this is yet another matter in which one should declare an interest. I am the possessor of a self-employed deferred annuity and a potential beneficiary from a pension fund. The number of occasions on which we have to declare an interest under the different headings in this legislation is an indication of the large numbers of people who, much to their surprise, may find themselves adversely affected by this measure.
      I have been reflecting on what the Minister of State is likely to say in his usual charming way in reply to the debate. I suspect that he will say, as he did yesterday when we discussed charities, that there is a gulf between us. My belief in the likelihood of the hon. Gentleman saying that was reinformed when I looked at what he said in Committee. He said probably exactly what he will say today:
      "We had a long and interesting debate on these amendments. I do not want to pursue the arguments again. There is a gulf between us."
      Like the Minister, I do not wish to repeat the arguments, even if I am still left a little puzzled about the nature of the gulf between us. But, looking further forward, I find that the hon. Gentleman made the following mysterious statement, presumably about the gulf:
      "We have the local authorities at one end, pension funds possibly at the other, and Churches falling in the middle."—[Official Report, Standing Committee J, 29th April 1976; c. 730–3.]
      I do not know whether they were collapsing for want of funds in the middle of the gulf but I am interested in the words "possibly at the other". I do not know whether the Minister was still a little undecided, at least at that time, whether on reflection he could relocate pension funds at a more favourable end of this gulf, spectrum or whatever it was to which he was referring.
      The Minister and some of my hon. and right hon. Friends may be aware that I am not entirely in sympathy with the suggestion that we should have entire relief for pension funds from the provisions of this tax. There is always a risk
      1620
      in creating specially privileged classes of developer, and I expect that I might carry my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) with me on this aspect of the matter.
      4.30 p.m.
      We have to recognise, however, that with charities we have a situation that is not as satisfactory as we would have liked as a result of last night's proceedings—and charities have exemption in respect of land that they held as at 12th September 1974. As my hon. Friend the Member for Hitchin has pointed out, there is very little difference between the activities of pension funds and those of charities in the sense that pension funds are devoting their funds to a particular aspect of the much more widely-ranging activities that are carried out by charities. One could well have sheltered accommodation—as such provision would be called nowadays, rather than "almshouses"—provided by a charitable fund, and there is such provision by charities. This is almost directly equivalent to the provision for the pensioner which is made by pension funds.
      There must, therefore, be a very strong case for arguing that pension funds should have at least the same exemptions from the provisions of this tax as charities have, because, if not, we have created a privileged class the other way round. It is my impression—and I am sure that my hon. Friends will correct me if I am wrong—that whereas against that background I might find that New Clause 9 goes perhaps too far, New Clause 6 seems to be entirely logical in its wording in giving pension funds this exemption in respect of land which they held on 12th September 1974. The Minister argued, as far as he was able to do so—and I shall try to be as charitable as I can about his arguments in the debate on New Clause 1—that we must be particularly concerned with anything which could have an adverse effect on industry. May I quote his words during yesterday's proceedings? He said,
      "We do not want anyone to suggest that we might have impeded industrial development by our proposals."—[Official Report, 22nd June 1976; Vol. 913, c. 1456.]
      It was interesting phraseology. He was saying that it does not matter if we

      1621
      actually impede industrial development by these proposals but that if one suggests that that might have been done it becomes very unfortunate. But, being charitable, let us assume that in the excitement of the moment it was merely the words that were wrong and that the Minister wanted to ensure that industry was in no way impeded by his proposals. I take it by his nod that I am correct in that interpretation. Has he, therefore, reflected that to the extent that the assets of pension funds are reduced by the the imposition of DLT on their property holdings, they will have less income with which to meet their responsibilities and liabilities to pay pensions to their beneficiaries, and that as a direct result of this, many companies will have to make further transfers from their cash resources to their own pension funds to enable those pension funds to continue to meet their liabilities?
      The proposals for taxing pension funds will directly affect the cash flow of British industry adversely. One of my hon. Friends has referred to the number of occasions on which substantial industrial concerns have had to make very substantial transfers to their pension funds to enable them to meet their obligations and to continue to pay pensions. I know that the Minister has very little sympathy for retailing, but his hon. Friend beside him, the hon. Member for Edmonton (Mr. Graham), might be expected to have more sympathy with retailing even though he has not yet been able to show it in the Lobby. There was a recent example of the best known retailer in this country making a very substantial transfer to its pension fund to enable it to meet its obligations.
      I would ask the Minister, therefore, to consider that aspect of the proposals. Not only have we the aspect of the equity of the matter as between charities and pension funds on land holdings at 12th September 1974, but we have also to reflect on the adverse effect of the Minister's proposals on the cash resources of British industry and commerce because of the obligation which companies might have to meet for their pension funds as a result of this legislation.
      My final point is one on which I need not enlarge because it has been so ably covered by my hon. Friend the Member for Hitchin. In my own constituency,
      1622
      and I am sure in the constituency of everyone in the House at this time, there are many people who, although they are unaware of it, are deriving their pension from the skilled property management shown by pension funds of which they are beneficiaries. I wonder whether the Minister could say why it was that in all the frequent references by his party to their proposals in respect of the Community Land Act on this proposed form of taxation, which were always laudatory, they did not draw the attention of beneficiaries of pension funds to the adverse effects of their taxation proposals. Could it be that we ought to look again at the Trade Descriptions Act to see whether the disadvantages and reduced benefits from some of these proposals should be referred to, even if in only small print?
      I should be very interested to hear from the Minister of any statement or reference in any publication emanating from his party which drew the attention of pensioners to the adverse effect on their pensions that could result from DLT. I wait with interest to see whether the Minister will receive advice from above or below the Gangway, or from the Box, on this point. I should be very happy to give way to any hon. Member who could give me some information on this point, but I am afraid there is none forthcoming. Again we have an example of legislation presented as being in the interests of the community but which, when we look at how it affects individuals in our constituencies, is seen to have an adverse effect. To me, that alone is sufficient reason to support my hon Friend in this clause.
      Mr. Peter Morrison: I, too, must declare an interest as being a future beneficiary—I hope some way ahead—of a pension fund.
      I am rather amazed that throughout the whole debate we have had on the Government side of the House only the Minister and the Whip present—although recently we have been honoured—and still are, admittedly—by the presence of the hon. Member for Liverpool, Walton (Mr. Heller), the hon. Member for Luton, East (Mr. Clemitson) and the hon. Member for Liverpool, Garston (Mr. Loyden). When we talk about pension funds, which affect the old more than anyone else, and as the Labour Party always, quite rightly

      1623
      and understandably, makes a great play for the old and wishes to give them every possible support, it is amazing that throughout a debate such as this we should have only three Labour Back Benchers and two Labour Members on the Government Front Bench. It is quite extraordinary.
      Mr. Fairbairn: Is it not even more surprising that the Scottish National Party, which bases its advertising on the terrible plight of the old in Scotland at the hands of the English being deprived of the oil revenues, should not worry whether they get good pensions?
      Mr. Morrison: I am grateful to my hon. and learned Friend. One notices also that Liberal Members are apparently totally uninterested, for they have not been present during the whole debate. I am most surprised about the numbers on the Government Benches, because Labour Members of all people will talk about pensioners, and there are so few Labour Members present. Admittedly, those who are present make up in quality for the quantity that we are lacking.
      The point has been well put by my hon. Friend the Member for Hitchin (Mr. Stewart) that there are a substantial number of people who stand to benefit from pension funds. When I intervened in my hon. Friend's admirable speech, he pointed out that there were 12 million people who would directly benefit. But, of course, they will have at least one and possibly two dependants who will, therefore, indirectly benefit. Therefore, however one looks at it, the future of pension funds in Britain is very important, indeed. Many people will be affected.
      I would contend that the Government do not really like pension funds—exactly as I contended last night concerning charities. The Government prefer the State to do what a charity does, or what a pension fund might do for an individual or a family. That is why the arguments which have been so cogently and so well put, in Committee and certainly in the House today, fall on stony ground. At the bottom of their hearts, Labour Members do not really mind whether pension funds continue to exist.
      Mr. Durant: My hon. Friend has said that the Government do not appear to
      1624
      be interested in pension funds. Perhaps they are not aware that the coal miners have very large pension funds, most of which are in property.
      Mr. Morrison: I am certainly aware of that. Many trade unions have large pension funds invested in a multitude of different things, including property. I gather that some are buying old master paintings nowadays.
      I return to the main point. If the pension funds industry is in a healthy condition, that will inevitably save the Government money. The argument that will come from the Minister—we have heard it previously and no doubt we shall hear it again—is that Whitehall is better at taking out the money and distributing it. But that costs money and will, therefore, increase the public sector borrowing requirement. It is much better that the private sector should be coping with those who stand to benefit from pension funds rather than the public sector.
      4.45 p.m.
      Having listened to the Minister quite carefully last night, and yesterday afternoon, I have a suspicion that he is not really proud of this Bill but is a little ashamed of it. I have that suspicion because I am sure that there will be no doubt towards the end of this debate that those of us who have argued in favour of pension funds being either partially or totally exempt have won the argument, as we did with charities. To a certain extent I think that the Minister would agree.
      The reason why I say that the Minister is ashamed of the Bill is that he knows in his heart of hearts that if he made one small breach in the dam, or two or three small breaches, certain exceptions which should be made for genuine and good reasons, the principles on which he bases the Bill would come flying down and there would be no need for the Bill at all. Perhaps on this new clause the Minister will see that there is a point in making an exception. He is not very proud of the Bill. Although we shall not expect him to demolish all the arguments that he has been deploying in Committee, or to abolish the Bill, we expect him—because we think that we are winning the argument—to make an exception in this case for pension funds.
      As I have said, not least the Labour Party, in terms of getting votes, plays for

      1625
      the older vote. So let us have a decision that will substantiate that policy and not just total unwillingness to accept the new clause.
      Mr. Budgen: I must start by declaring an interest as a potential beneficiary under a self-employed person's pension scheme. The House may well reflect that for all of us there is a deep desire to combine the right personal balance between risk and security in life. In some parts of our life we want the excitement and the uncertainty of risk and endeavour. We want the excitement of knowing that perhaps at the next General Election we shall be thrown out, or that perhaps after the end of a particular building contract we may find that we have to look for another job.
      Mr. Ivor Clemitson: There is no excitement in that.
      Mr. Budgen: There may be some excitement if it is compensated for by high wages in the short term. I suspect that there are many people who are high wage earners—for instance, bricklayers in a period of boom—who would say to themselves "I do not want a steady job. I would rather be an entrepreneur and make a lot of money sometimes and on other occasions run the risk of being unemployed."
      Mr. Fairbairn: Perhaps I may advise my hon. Friend. I get absolutely no pleasure from any concept of thinking that my seat is at risk, and I prefer to make high wages all the time.
      Mr. Budgen: By his very presence in the House my hon. and learned Friend demonstrates that he does not live by the precepts that he puts forward. He left a steady job to take the risks of coming here. All of us take risks here.
      The other side of the coin is that we wish to have security. We are not alone in wishing to have security in our old age. It is a deep feeling that every human being has. The fact is that when the Government try to attack the security that all of us want in our old age, they will find that, as a compensation, each individual will be less prepared to take risks during his working life. He will be less and less prepared to be an entrepreneur, a high-wage earner—perhaps a high-wage earner at the tax Bar—or a high-wage earner in any other of the
      1626
      various activities in which those of us who take risks have to work.
      Mr. John Cope: Are not those two facets, risk on the one hand and security on the other, exemplified by the two contenders for the leadership of the Liberal Party?
      Mr. Budgen: I do not wish to comment on the characters of those two contenders. However, there is this extraordinary paradox of wanting both risks and security. If we attack the security of 12 million of our fellow citizens and say to them "We are going to take away the hope that you had of a modest competence in your old age", they will be more and more disinclined to take risks in their work. They will come more and more to the State and say "Prop up our unprofitable job", or "Prop up our particular factory or industry", and they will be less and less prepared to come out and fight vigorously for a high-wage, high-profit, high-risk economy.
      The Government's proposal cuts into the security of 12 million of our fellow citizens. As I look at the almost vacant Benches on the Government side of the Chamber, I reflect that the 12 million potential beneficiaries of those who join the 60,000 pension schemes under the National Association of Pension Funds, together with their dependants, are a greater number than all those who join the Trades Union Congress. Only 10 million people are associated directly or indirectly with the TUC. The National Association of Pension Funds did not join in the corporate State meetings that occurred at various Government places. They did not talk about the unacceptable face of capitalism. They did not talk about being unprepared to accept any cuts in Government expenditure. All they asked was to be allowed to go on providing for the security of their fellow citizens.
      Our plea is not a plea for the nabobs of the City, or for the CBI, or the gaffers. It is a plea for the ordinary working people who are prepared to work to provide for their families for perhaps 40 years. They want only the dignity and security of providing for their own old age. Such potential beneficiaries will be attacked by the development land tax.
      Let us examine the way in which the average pension fund is invested. In

      1627
      broad terms it is invested in three ways: one-third in equities, one-third in gilts, and one-third in property. Equities have become less and less valuable because of price control, dividend restraint and the vigorous attack on private enterprise and the concept of private wealth that has been the centrepiece of the present Government's extraordinary relationship with the TUC. That part of pension funds has taken a bit of a knock.
      The one-third invested in property has already taken a knock from the attitude not just of this but of the last Government. The one-third in gilts is probably the only part likely to enjoy an increased revenue in the next few years as the Government try in a non-inflationary way to fund their horrifying £12 billion borrowing requirement.
      There is a reduction both in the asset value of pension funds and in their incomes. Their liabilities are becoming infinitely greater because they are related to the going rate of inflation and they are under an obligation to pay pensions related to the going rate of inflation or to the going wages at the time of payment. They are trying to fund increased liabilities with reduced income.
      Last year the rate of inflation was about 26 per cent. This year we must anticipate that it will be between 9 per cent. and 12 per cent. It might be more, but I am trying to argue in the most charitable way and to put the case most favourable to the Government. Let us say that the rate of inflation will be 10 per cent. this year. On the average equity, a pension fund has a return of about 4 per cent. on its shares. How on earth with a return of 4 per cent. can it hope to fund liabilities that went up by 26 per cent. last year and will go up by 10 or 12 per cent. this year?
      Pension funds will either have to turn to the employers—who are caught in the vicious spiral of inflation, the Price Code and other forms of Government interference and might not be able to assist—or they will have to bite into their capital reserves. Unless pension funds are treated in a special manner, many of those who wish to retire with the security and dignity of having provided for their own old age will become no more than pensioners of the State, which so many hon. Members appear to want.
      1628
      They will be dependent not upon their own activity but on political action. By the 1980s they will be visiting the surgeries of Government Members. They will not be saying that they are relying on their own pensions but that their future security is in the hands of politicians. They will have to depend on the pressure that they can put on politicians for a modicum of comfort in their old age.
      We are talking about the independence of private wealth and when one-third of the pension funds of 12 million of our citizens is being attacked, the Tory Party, which is preoccupied with independence and freedom, should be in the forefront of the battle.
      Mr. Fairbairn: I have to declare an interest, if it is an interest. I pay £3·16p a year in order to obtain a pension for my widow under an Act passed in the days of George III when the Scots were interested in their families' welfare. I note again that Members of the Scottish National Party are absent from the debate.
      My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) put forward the real and human arguments in favour of the new clause. But there is a more realistic argument based on the ordinary practical facts of the matter which the Government constantly overlook. If one removes from pension funds part of their money, they will either not be able to discharge their obligations or they will have to obtain the money from some other source, such as Government subsidies.
      The Government's unrealism is particularly irritating. The Government attempted, through the mouth of a delightful but completely unbelieving Minister, to argue on the basis of some principle. I have re-read the speech to which I listened in Committee. It is rare in our profession to be able to re-read one's own speeches and discover how ineffective and bad they were. In this case I am sure that if the Minister re-reads the argument with which he attempted to convince his jury, he will see that it is fallacious in almost every sentence.
      5.0 p.m.
      The hon. Gentleman's principal argument—that what the community gives it

      1629
      should get back—is a nebulous concept. If it has any validity, the obverse of the coin is that what the individual creates he should be allowed to keep. But the Government's philosophy is the reverse. If the individual improves his property, he is rated higher and he must pay more tax for his effrontery; but if the community gives him planning permission to do it, it should have a benefit from that as well. The philosophy is one of "Heads I win, tails you lose."
      The Minister said in Committee:
      "The argument is that pension funds are good … I do not seek to dissent at all from that assertion."
      That is a major triumph of condescension. He went on to say:
      "However, one should get this matter into perspective. Pension funds are not the only bodies that serve the community."
      However, they happen to be one of the exempt bodies which serve the community, and the fundamental argument is that they should remain exempt and not have part of their present income removed for a spurious theory.
      The Minister added:
      "62 per cent. of male workers and only 28 per cent. of female workers were members of pension schemes. … It is in the nature of things no doubt."—[Official Report, Standing Committee J, 28th April 1976; c. 696–97.]
      I do not know in the nature of what it is that more than twice as many men do what women do, but I think that that was just said as a pause for breath. The hon. Gentleman seemed to think that it was unfair that more men were members of pension schemes, without relating the matter to the number employed or the fact that women were covered by their husbands' pension schemes.
      The Minister went on to say that the purpose was to restore to the community most of the benefits arising from betterment following planning permission. That is the supreme fallacy. We have a sort of biblical concept that the Lord gives and the Lord shall take away, that when an official in the planning office gives someone permission to put up a public lavatory, a sweet shop, or a bungalow at the bottom of his garden, that affects everybody else and is all to be taken away.
      I read the Minister's speech right through again and underlined it all. He
      1630
      was compelled to advance the wettest, most non-committal argument possible, and he clearly did not believe in it.
      Mr. Russell Kerr: The hon. and learned Gentleman should read his own speech in Hansard tomorrow.
      Mr. Fairbairn: I am glad that the hon. Gentleman is listening so carefully.
      Mr. Kerr: I always listen carefully to the hon. and learned Gentleman.
      Mr. Fairbairn: I am obliged to the hon. Gentleman.
      The Minister advanced the spurious principle that what the community gives it must take away. The practical fact is that it means removing a large part of the funds from which pensions are now paid. The Government have no answer to those who ask what will take their place or what will happen on the retirement of the 12 million people who depend on them. What is so appalling—I except the Minister from this criticism—is that they do not care either.
      The Minister of State, Treasury (Mr. Denzil Davies): I am grateful to the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) for reading my speeches and underlining the words. I try not to read my own speeches, and I shall try not to read what I said in Committee, but there will inevitably be a certain amount of repetition in this debate, as there was last night when we debated charities.
      I begin by returning to the figures that I gave to the Committee, not to prove any point but to make clear that many people were not members of occupational pension schemes. Some hon. Members have implied that we are here concerned with the vast majority of people, all of whom are in such schemes, and that the Government were depriving all of them of benefits by charging pension funds to development land tax.
      I said in Committee that in 1971, 49 per cent. of people were members of occupational pension schemes. The figure may now have gone over the 50 per cent. mark. We are concerned with half the employed population, which is a substantial number of people.
      Mr. Fairbairn: Does the Minister appreciate that in the local authority,

      1631
      which is his criterion for the community, more than half the people use less than half the services, so the same criterion applies?
      Mr. Davies: I do not dispute that, but let us look at the breakdown of employed people. Sixty-one per cent. are non-manual workers and 35 per cent. are manual workers. We are concerned with a smaller number of manual workers who are members of occupational pension schemes. I am making the point that not everyone is a member of such a scheme. We are not seeking to impose an enormous burden on the vast majority of the people by introducing this taxing provision.
      The hon. Member for Hitchin (Mr. Stewart) suggested that considerable damage would be done to pension funds. We are concerned only with taxing the betterment profit made by a pension fund. The fund will be exempt from capital gains tax on any investment that it makes. Hon. Members talk about investment. Betterment profit is not an investment, according to the normal meaning of the word. When one invests money, one receives a return from the investment. We are concerned with a betterment profit arising from the grant of planning permission. Normal investment in property and shares will still be completely exempt from capital gains tax, and pension funds can switch from one asset to the other, free of that tax. The funds have great advantages in respect of income tax, and they will continue even when the Bill becomes law.
      The hon. Gentleman rightly said that if a pension fund engages in trade it is taxable at present. If the managers of a pension fund believe that they can profit on a piece of land by buying and selling it almost immediately, my understanding of fiscal legislation is that the profit is taxable. We are not breaching a substantial principle. The principle is that where the fund makes a trading profit, possibly a fortuitous trading profit, the tax is already levied.
      We are concerned simply with the other kind of case manifested in the hon. Gentleman's example of the land in Sussex, where a fund buys land at current use value, possibly in the hope and
      1632
      expectation that planning permission will be granted, and then disposes of it at a considerably increased price. We are not concerned with the normal investment of a pension fund, because often that investment will be in property with high base values, where there is little likelihood of a betterment profit. Most cases caught by this legislation will be invested in green-field sites.
      Mr. Cope: Not only green-field sites but development in towns will be affected by the Bill. The hon. Gentleman said last night, and has again suggested, that the gains in question will be speculative, windfall gains. That is a capricious view of the way in which local authorities make their decisions, suggesting some form of a lottery.
      Mr. Davies: They are windfall gains, because they arise as a result of somebody else's action in granting planning permission. A pension fund would pay tax on the betterment profit in most cases where it had invested in land with a low value and then planning permission had been granted.
      That is the sort of situation with which we are concerned. I suggest to Opposition Members that there is a good case for saying that such windfall profit, whether it is made by a pension fund, a property company or an individual, arises not from anything done by the investor but from a purely extraneous act by the local authority.
      Mr. Fairbairn: In his concept of fairness, does the Minister agree that it would be a good idea if the Treasury were to make up the loss that a pension fund makes on an investment on the basis that it has been made a windfall loss?
      Mr. Davies: No doubt the hon. and learned Gentleman will be present at a later stage when we discuss losses in relation to development gains tax. No doubt he will be able to deploy his arguments in those discussions.
      The hon. Member for Hove (Mr. Sainsbury) felt that there would be some discrimination if we gave this relief to pension funds. He felt that there might be some discrimination between the pension fund that owns land and sells land and pays no tax, and other bodies—for example, property development companies

      1633
      which seek to develop and which would have to pay tax.
      I did not use the two-tier market argument in relation to charities, as I did not think it was the best one to deploy, but here we can use it. If we give this exemption to pension funds that are in the property business—some of them are in it in a big way—we are discriminating between the pension fund that will pay no tax and the normal property company that will have to pay tax at 80 per cent. That is the discrimination. Surely that is a distortion of the property market that Opposition Members would not wish to see.
      Mr. Sainsbury: Does the Minister recall that it was because of that effect that I said that New Clause 9 was not entirely supportable, and that New Clause 6 seemed to meet the point that I was making, and that the Minister has outlined to the House—namely, that charities and pension funds often carry out much the same operation?
      Mr. Davies: I am glad that the hon. Gentleman goes some way towards agreeing with me and crossing the gulf that at an earlier stage he did not think existed. At least he has admitted that it is a fair point. By accepting New Clause 9 we should be creating a two-tier property market that would discriminate against property companies in favour of pension funds. Surely Conservative Members would not favour that situation. It does not seem to be favoured by the hon. Member for Hove.
      Mr. Cope: Does the Minister appreciate that his argument can be used against an exemption for pension funds from income tax and capital gains tax, when earlier he gave an undertaking that those taxes would remain exempt as regards pension funds?
      Mr. Davies: That argument may well be used, but, as I have said, pension funds will not be charged income tax or capital gains tax. If we were considering these matters from scratch and considering them academically, that argument could be used in relation to those two taxes. As regards development land tax, I believe that I have put forward a strong argument, although it does not seem to have been recognised
      1634
      as such by Opposition Members, apart from the hon. Member for Hove.
      New Clause 6 seeks to give the same kind of relief to pension funds as is given to charities—namely, exemption for land owned on 12th September 1974. As I tried to argue in Committee, there is a difference between a charity and a pension fund. I accept that there is little difference between the Church of England, as a charity, when it purchases shares as an investment, and the ICI pension fund, which purchases shares or land as investments.
      However, charities, especially the Churches, hold what might be called operational land and not investment land. That is why we gave the exemption to charities. Charities have to dispose of operational land and find other land on which to work. That does not apply to pension funds, whose investments in land are purely investments and are not for operational purposes. That is why the exemption was given to charities in relation to land held on 12th September 1974. The Churches would have been especially affected if we had not brought forward that exemption. Otherwise, in terms of investment in land, there is not much difference between one and the other.
      5.15 p.m.
      To argue that the charity exemption should now be given to pension funds is to misunderstand the purpose of the exemption, which was mainly intended to benefit the Churches and religious organisations, which may have to move from one part of the community to another as the population moves.
      Mr. Budgen: Is it not right that the pension fund of the clergy will benefit because of the exemption that has been given to charities and to Churches? If that is so, what is the distinction between, for instance, the clergies' pensions and the miners' pensions?
      Mr. Davies: I make it clear that in principle there is no distinction, in terms of the investment of funds in investment property. However, charities, especially Churches, have other land, which is not investment land but operational land, on which they have to operate. I do not want to labour this point as I have tried

      1635
      to explain it before, but the exemption is to benefit those organisations which otherwise would have been adversely affected.
      We are concerned with the intention of benefiting the whole community. The hon. Member for Hove poured some scathing words on the contrast that I made between local authorities, charities and pension funds. I said that local authorities were at one end of the scale, that charities were possibly in the middle, and that pension funds were at the other end. In referring to pension funds, I had in mind occupational pension funds.
      There is a private contract between the private pension funds and the private individual. It is not a public matter, although many members of the public benefit from pension funds. The occupational pension funds arrangement is an entirely private matter. Local authorities do not benefit in the same way, as their main concern is the benefit of the public and the community. I tried to argue that in between there are charities, which can benefit private persons but have to meet the test of public interest and public purposes. That is why I drew the distinction between authorities, charities and pension funds.
      We are concerned with giving the primary benefit of gains arising from planning to the community and not to the private interest, namely, the pension fund. I can give one example that applies to my constituency, or to any other constituency, where the local authority wishes to purchase land for building a school. Under present law, if that land has betterment value the local authority has to pay 100 per cent. If this legislation is passed, the local authority will pay much less than that, because of net of tax provisions. I hasten to inform hon. Members that we have had more representations from the NUM than from any other pension fund on this matter, it being very local and voluble in its representations because it holds so much land in its pension fund. We have resisted those representations. I hope that hon. Members will give us some credit for doing that, as yesterday they were scathing about our domination, so they allege, by the unions.
      If the NUM pension fund owns a piece of land and is able to dispose of it without paying any development land tax
      1636
      the local authority suffers by having to pay much more for the land. Therefore, one has a conflict between the interests of the local authority and the interests of the pension fund. Very often the investments that are made by a pension fund have no bearing upon the interests of the local community. A pension fund may invest in land merely in the hope of making a betterment profit. We think that that is unfair. We think that primary benefit should go to the local authority. We are concerned with only a small number of pension fund investments that produce windfall gains. Normally the capital gains that they make from their investments are completely free from tax.
      The first new clause tries to equate the position of charities and pension funds, but they are not comparable in terms of the exemption. The other new clause seeks to create a two-tier market and to introduce discrimination against people whose business it is to develop property. For those reasons I ask the House to reject the new clause.
      Mr. Graham Page: By virtue of 60,000 pension schemes, there is the provision of a very extensive welfare service to 12 million people, plus their dependants, and some 2 million are already receiving pensions under those schemes. As the Minister said, 49 per cent. of the employed people come under such schemes.
      It is recognised in the Bill that many authorities which provide this kind of welfare service or social service are exempt entirely from this tax. Such bodies as district councils, county councils, parish councils, community councils, even police authorities, fire service committees, some housing associations, development boards, and the New Town Commission, are all providing public services and are allowed to be let off this tax entirely. But are they providing such a very different welfare and social service from the 60,000 pension schemes which provide these benefits of pensions to their 12 million members?
      Under the Bill some sort of relief is recognised for the BBC and the IBA, the Atomic Energy Authority and the regional water authorities. Are they more deserving than these pension schemes? Yet not a tittle of relief is given in the Bill for the provision of pension schemes.

      1637
      Pension funds benefit the public, as my hon. Friends have said already in their arguments, not only by providing pensions but by providing for a source of very valuable and useful investment to industry and commerce.
      Do the Government wish to deter these funds, and to move that money, as was suggested in earlier debates, from pension schemes and pension funds into industrial investment? Surely the trustees of a pension fund know what is the best form of investment in the interests of their beneficiaries. Indeed, investment in property has been shown by the trustees of the many pension funds to be particu-
      larly appropriate for the funds they have to administer. But still we have no concession at all in the Bill for the pension funds, and no recognition of the harm which this tax will do to the beneficiaries of pension funds and the undertakings which employ them.
      We shall show in the Lobby our disgust for the imposition of this tax upon the provision of pensions.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 267, Noes 283.

      Division No. 192.]

      AYES

      [5.23 p.m.

      Adley, Robert

      Emery, Peter

      Johnston, Russell (Inverness)

      Aitken, Jonathan

      Ewing, Mrs Winifred (Moray)

      Jones, Arthur (Daventry)

      Alison, Michael

      Eyre, Reginald

      Jopling, Michael

      Amery, Rt Hon Julian

      Fairbairn, Nicholas

      Joseph, Rt Hon Sir Keith

      Arnold, Tom

      Fairgrieve, Russell

      Kaberry, Sir Donald

      Atkins, Rt Hon H. (Spelthorne)

      Farr, John

      Kershaw, Anthony

      Awdry, Daniel

      Fell, Anthony

      Kimball, Marcus

      Bain, Mrs Margaret

      Fisher, Sir Nigel

      King, Evelyn (South Dorset)

      Baker, Kenneth

      Fletcher-Cooke. Charles

      King, Tom (Bridgwater)

      Banks, Robert

      Fookes, Miss Janet

      Kitson, Sir Timothy

      Beith, A. J.

      Forman, Nigel

      Knight, Mrs Jill

      Bell, Ronald

      Fox, Marcus

      Knox, David

      Bennett, Dr Reginald (Fareham)

      Fraser, Rt Hon H. (Stafford & St)

      Lamont, Norman

      Berry, Hon Anthony

      Fry, Peter

      Lane, David

      Biffen, John

      Galbraith, Hon. T. G. D.

      Langford-Holt, Sir John

      Biggs-Davison, John

      Gardiner, George (Reigate)

      Latham, Michael (Melton)

      Blaker, Peter

      Gardner, Edward (S Fylde)

      Lawrence, Ivan

      Boscawen, Hon Robert

      Gilmour, Rt Hon Ian (Chesham)

      Lawson, Nigel

      Bottomley, Peter

      Gilmour, Sir John (East Fife)

      Le Marchant, Spencer

      Bowden, A. (Brighton, Kemptown)

      Glyn, Dr Alan

      Lester, Jim (Beeston)

      Boyson, Dr Rhodes (Brent)

      Goodhart, Philip

      Lewis, Kenneth (Rutland)

      Bradford, Rev Robert

      Goodhew, Victor

      Lloyd, Ian

      Braine, Sir Bernard

      Goodlad, Alastair

      Loveridge, John

      Brittan, Leon

      Gorst, John

      Luce, Richard

      Brocklebank-Fowler, c.

      Gow, Ian (Eastbourne)

      MacCormick, Iain

      Brotherton, Michael

      Gower, Sir Raymond (Barry)

      McCrindle, Robert

      Brown, Sir Edward (Bath)

      Grant, Anthony (Harrow C)

      McCusker, H.

      Bryan, Sir Paul

      Gray, Hamish

      Macfarlane, Neil

      Buchanan-Smith, Alick

      Griffiths, Eldon

      MacGregor, John

      Buck, Antony

      Grimond, Rt Hon J.

      Macmillan, Rt Hon M. (Farnham)

      Budgen, Nick

      Grist, Ian

      McNair-Wilson, M. (Newbury)

      Bulmer, Esmond

      Grylls, Michael

      McNair-Wilson, P. (New Forest)

      Burden, F. A.

      Hall, Sir John

      Madel, David

      Butler, Adam (Bosworth)

      Hamilton, Michael (Salisbury)

      Marshall, Michael (Arundel)

      Carlisle, Mark

      Hampson, Dr Keith

      Marten, Nell

      Chalker, Mrs Lynda

      Hannam, John

      Mates, Michael

      Channon, Paul

      Harvie Anderson, Rt Hon Miss

      Mather, Carol

      Clark, Alan (Plymouth, Sutton)

      Hastings, Stephen

      Maude, Angus

      Clegg, Walter

      Havers, Sir Michael

      Maudling, Rt Hon Reginald

      Cockcroft, John

      Hawkins, Paul

      Mawby, Ray

      Cooke, Robert (Bristol W)

      Hayhoe, Barney

      Cope, John

      Heseltine, Michael

      Maxwell-Hyslop, Robin

      Cordle, John H.

      Hicks, Robert

      Mayhew, Patrick

      Cormack, Patrick

      Higgins, Terence L.

      Meyer, Sir Anthony

      Corrie, John

      Holland, Philip

      Miller, Hal (Bromsgrove)

      Crawford, Douglas

      Hordern, Peter

      Mills, Peter

      Critchley, Julian

      Howe, Rt Hon Sir Geoffrey

      Mitchell, David (Basingstoke)

      Crouch, David

      Howell, David (Guildford)

      Moate, Roger

      Davies, Rt Hon J. (Knutsford)

      Howell, Ralph (North Norfolk)

      Molyneaux, James

      Dean, Paul (N Somerset)

      Howells, Geraint (Cardigan)

      Monro, Hector

      Dodsworth, Geoffrey

      Hunt, David (Wirral)

      Montgomery, Fergus

      Douglas-Hamilton, Lord James

      Hunt, John

      Moore, John (Croydon C)

      Drayson, Burnaby

      Hurd, Douglas

      More, Jasper (Ludlow)

      du Cann, Rt Hon Edward

      Hutchison, Michael Clark

      Morgan, Geraint

      Dunlop, John

      Irving, Charles (Cheltenham)

      Morris, Michael (Northampton S)

      Durant, Tony

      James, David

      Morrison, Charles (Devizes)

      Dykes, Hugh

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

      Morrison, Hon Peter (Chester)

      Edwards, Nicholas (Pembroke)

      Jessel, Toby

      Mudd, David

      Elliott, Sir William

      Johnson Smith, G. (E Grinstead)

      Neave, Airey

      Nelson, Anthony

      Roberts, Wyn (Conway)

      Tapsell, Peter

      Neubert, Michael

      Rodgers, Sir John (Sevenoaks)

      Taylor, R. (Croydon NW)

      Newton, Tony

      Ross, Stephen (Isle of Wight)

      Taylor, Teddy (Cathcart)

      Normanton, Tom

      Ross, William (Londonderry)

      Tebbit, Norman

      Nott, John

      Rossi, Hugh (Hornsey)

      Temple-Morris, Peter

      Onslow, Cranley

      Rost, Peter (SE Derbyshire)

      Thatcher, Rt Hon Margaret

      Oppenheim, Mrs Sally

      Royle, Sir Anthony

      Thomas, Rt Hon P. (Hendon S)

      Page, John (Harrow West)

      Sainsbury, Tim

      Thompson, George

      Page, Rt Hon R. Graham (Crosby)

      St. John-Steves, Norman

      Thorpe, Rt Hon Jeremy (N Devon)

      Parkinson, Cecil

      Scott, Nicholas

      Townsend, Cyril D.

      Pattie, Geoffrey

      Scott-Hopkins, James

      Trotter, Neville

      Penhaligon, David

      Shaw, Giles (Pudsey)

      Tugendhat, Christopher

      Percival, Ian

      Shelton, William (Streatham)

      van Straubenzee, W. R.

      Peyton, Rt Hon John

      Shepherd, Colin

      Vaughan, Dr Gerard

      Pink, R. Bonner

      Shersby, Michael

      Viggers, Peter

      Powell, Rt Hon J. Enoch

      Silvester, Fred

      Wakeham, John

      Price, David (Eastleigh)

      Sims, Roger

      Walder, David (Clitheroe)

      Prior, Rt Hon James

      Sinclair, Sir George

      Wall, Patrick

      Pym, Rt Hon Francis

      Skeet, T. H. H.

      Walters, Dennis

      Raison, Timothy

      Smith, Cyril (Rochdale)

      Weatherill, Bernard

      Rathbone, Tim

      Smith, Dudley (Warwick)

      Wells, John

      Rawlinson, Rt Hon Sir Peter

      Spence, John

      Whitelaw, Rt Hon William

      Rees, Peter (Dover & Deal)

      Spicer, Michael (S Worcester)

      Wiggin, Jerry

      Rees-Davies, W. R.

      Sproat, Iain

      Wilson, Gordon (Dundee E)

      Reid, George

      Stainton, Keith

      Wood, Rt Hon Richard

      Renton, Rt Hon Sir D. (Hunts)

      Stanbrook, Ivor

      Young, Sir G. (Ealing, Acton)

      Renton, Tim (Mid-Sussex)

      Stanley, John

      Younger, Hon George

      Rhys Williams, Sir Brandon

      Steel, David (Roxburgh)

      Ridley, Hon Nicholas

      Steen, Anthony (Wavertree)

      TELLERS FOR THE AYES:

      Ridsdale, Julian

      Stewart, Donald (Western Isles)

      Mr. W. Benyon and

      Rifkind, Malcolm

      Stewart, Ian (Hitchin)

      Mr. Michael Roberts.

      Rippon, Rt. Hon Geoffrey

      Stradling Thomas, J.

      NOES

      Abse, Leo

      Cunningham, Dr J. (Whiteh)

      Hamilton, James (Bothwell)

      Allaun, Frank

      Dalyell, Tam

      Hardy, Peter

      Archer, Peter

      Davidson, Arthur

      Harrison, Walter (Wakefield)

      Armstrong, Ernest

      Davies, Bryan (Enfield N)

      Hart, Rt Hon Judith

      Ashley, Jack

      Davies, Denzil (Llanelli)

      Hattersley, Rt Hon Roy

      Ashton, Joe

      Davies, Ifor (Gower)

      Hatton, Frank

      Atkins, Ronald (Preston N)

      Davis, Clinton (Hackney C)

      Hayman, Mrs Helene

      Atkinson, Norman

      Deakins, Eric

      Heffer, Eric S.

      Bagier, Gordon A. T.

      Dean, Joseph (Leeds West)

      Hooley, Frank

      Barnett, Guy (Greenwich)

      de Freitas, Rt Hon Sir Geoffrey

      Horam, John

      Barnett, Rt Hon Joel (Heywood)

      Dell, Rt Hon Edmund

      Howell, Rt Hon Denis

      Bates, Alf

      Dempsey, James

      Hoyle, Doug (Nelson)

      Bean, R. E.

      Doig, Peter

      Huckfield, Les

      Benn, Rt Hon Anthony Wedgwood

      Dormand, J. D.

      Hughes, Rt Hon C. (Anglesey)

      Bennett, Andrew (Stockport N)

      Douglas-Mann, Bruce

      Hughes, Mark (Durham)

      Bidwell, Sydney

      Duffy, A. E. P.

      Hughes, Robert (Aberdeen N)

      Bishop, E. S.

      Dunn, James A.

      Hughes, Roy (Newport)

      Blenkinsop, Arthur

      Dunnett, Jack

      Hunter, Adam

      Boardman, H.

      Dunwoody, Mrs Gwyneth

      Irvine, Rt Hon Sir A. (Edge Hill)

      Booth, Rt Hon Albert

      Eadie, Alex

      Irving, Rt Hon S. (Dartford)

      Bottomley, Rt Hon Arthur

      Edge, Geoff

      Jackson, Colin (Brighouse)

      Boyden, James (Bish Auck)

      Edwards, Robert (Wolv SE)

      Jackson, Miss Margaret (Lincoln)

      Bradley, Tom

      Ellis, John (Brigg & Scun)

      Janner, Greville

      Bray, Dr Jeremy

      Ellis, Tom (Wrexham)

      Jay, Rt Hon Douglas

      Brown, Hugh D. (Provan)

      English, Michael

      Jeger, Mrs Lena

      Brown, Robert C. (Newcastle W)

      Ennals, David

      Jenkins, Hugh (Putney)

      Brown, Ronald (Hackney S)

      Evans, Fred (Caerphilly)

      John, Brynmor

      Buchan, Norman

      Evans, Ioan (Aberdare)

      Johnson, James (Hull West)

      Buchanan, Richard

      Ewing, Harry (Stirling)

      Johnson, Walter (Derby S)

      Butler, Mrs Joyce (Wood Green)

      Fernyhough, Rt Hon E.

      Jones, Dan (Burnley)

      Callaghan, Jim (Middleton & P)

      Flannery, Martin

      Judd, Frank

      Campbell, Ian

      Fletcher, Raymond (Ilkeston)

      Kaufman, Gerald

      Canavan, Dennis

      Fletcher, Ted (Darlington)

      Kelley, Richard

      Cant, R. B.

      Foot, Rt Hon Michael

      Kerr, Russell

      Carmichael, Neil

      Ford, Ben

      Kilroy-Silk, Robert

      Carter, Ray

      Forrester, John

      Kinnock, Neil

      Carter-Jones, Lewis

      Fowler, Gerald (The Wrekin)

      Lambie, David

      Cartwright, John

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

      Lamborn, Harry

      Clemitson, Ivor

      Freeson, Reginald

      Lamond, James

      Cocks, Michael (Bristol S)

      Garrett, John (Norwich S)

      Latham, Arthur (Paddington)

      Cohen, Stanley

      Garrett, W. E. (Wallsend)

      Leadbitter, Ted

      Coleman, Donald

      George, Bruce

      Lee, John

      Colquhoun, Ms Maureen

      Gilbert, Dr John

      Lever, Rt Hon Harold

      Cook, Robin F. (Edin C)

      Ginsburg, David

      Lewis, Ron (Carlisle)

      Corbett, Robin

      Golding, John

      Lipton, Marcus

      Cox, Thomas (Tooting)

      Gould, Bryan

      Litterick, Tom

      Craigen, J. M. (Maryhill)

      Gourlay, Harry

      Lomas, Kenneth

      Cronin, John

      Grant, George (Morpeth)

      Loyden, Eddie

      Cryer, Bob

      Grant, John (Islington C)

      Lyons. Edward (Bradford W)

      Cunningham, G. (Islington S)

      Grocott, Bruce

      Luard, Evan

      1640

      1641

      Mabon, Dr J. Dickson

      Parry, Robert

      Summerskill, Hon Dr Shirley

      McCartney, Hugh

      Pavitt, Laurie

      Swain, Thomas

      McElhone, Frank

      Peart, Rt Hon Fred

      Taylor, Mrs Ann (Bolton W)

      MacFarquhar, Roderick

      Pendry, Tom

      Thomas, Jeffrey (Abertillery)

      McGuire, Michael (Ince)

      Perry, Ernest

      Thomas, Mike (Newcastle E)

      Mackenzie, Gregor

      Phipps, Dr Colin

      Thomas, Ron (Bristol NW)

      Mackintosh, John P.

      Prentice, Rt Hon Reg

      Thorne, Stan (Preston South)

      Maclennan, Robert

      Prescott, John

      Tierney, Sydney

      McMillan, Tom (Glasgow C)

      Price, C. (Lewisham W)

      Tinn, James

      McNamara, Kevin

      Price, William (Rugby)

      Tomlinson, John

      Madden, Max

      Radice, Giles

      Tomney, Frank

      Magee, Bryan

      Rees, Rt Hon Merlyn (Leeds S)

      Torney, Tom

      Mahon, Simon

      Richardson, Miss Jo

      Tuck, Raphael

      Mallalleu, J. P. W.

      Roberts, Albert (Normanton)

      Urwin, T. W.

      Marks, Kenneth

      Roberts, Gwilym (Cannock)

      Varley, Rt Hon Eric G.

      Marquand, David

      Robertson, John (Paisley)

      Wainwright, Edwin (Dearne V)

      Marshall, Dr Edmund (Goole)

      Robinson, Geoffrey

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

      Marshall, Jim (Leicester S)

      Roderick, Caerwyn

      Walker, Harold (Doncaster)

      Mason, Rt Hon Roy

      Rodgers, George (Chorley)

      Walker, Terry (Kingswood)

      Maynard, Miss Joan

      Rodgers, William (Stockton)

      Ward, Michael

      Meacher, Michael

      Rooker, J. W.

      Watkins, David

      Mellish, Rt Hon Robert

      Ross, Rt. Hon W. (Kilmarnock)

      Watkinson, John

      Mendelson, John

      Rowlands, Ted

      Weetch, Ken

      Mikardo, Ian

      Sandelson, Neville

      Weitzman, David

      Millan, Bruce

      Sedgemore, Brian

      Wellbeloved, James

      Miller, Mrs Millie (Ilford N)

      Selby, Harry

      White, Frank R. (Bury)

      Mitchell, R. C. (Soton, Itchen)

      Shaw, Arnold (Ilford South)

      White, James (Pollok)

      Molloy, William

      Sheldon, Robert (Ashton-u-Lyne)

      Whitehead, Phillip

      Moonman, Eric

      Shore, Rt Hon Peter

      Whitlock, William

      Morris, Alfred (Wythenshawe)

      Short, Rt Hon E. (Newcastle C)

      Willey, Rt Hon Frederick

      Morris, Charles R. (Openshaw)

      Short, Mrs Renée (Wolv NE)

      Williams, Alan (Swansea W)

      Morris, Rt Hon J.(Aberavon)

      Silkin, Rt Hon John (Deptford)

      Williams, Alan Lee (Hornch'ch)

      Moyle, Roland

      Silkin, Rt Hon S. C. (Dulwich)

      Williams, Rt Hon Shirley (Hertford)

      Mulley, Rt Hon Frederick

      Sillars, James

      Williams, Sir Thomas

      Murray, Rt Hon Ronald King

      Silverman, Julius

      Wilson, Alexander (Hamilton)

      Newens, Stanley

      Skinner, Dennis

      Wilson, Rt Hon H. (Huyton)

      Noble, Mike

      Small, William

      Wilson, William (Coventry SE)

      Ogden, Eric

      Smith, John (N Lanarkshire)

      Wise, Mrs Audrey

      O'Halloran, Michael

      Snape, Peter

      Woodall, Alec

      Orbach, Maurice

      Spearing, Nigel

      Woof, Robert

      Orme, Rt Hon Stanley

      Stallard, A. W.

      Wrigglesworth, Ian

      Ovenden, John

      Stewart, Rt Hon M. (Fulham)

      Young, David (Bolton E)

      Owen, Dr David

      Stoddart, David

      TELLERS FOR THE NOES:

      Palmer, Arthur

      Strang, Gavin

      Mr. Joseph Harper and

      Park, George

      Strauss, Rt Hon G. R.

      Mr. Ted Graham.

      Question accordingly negatived.

    New Clause 7

      RATE OF TAX
      '(1) Subject to section 13 below, the rate of development land tax shall be such percentage between thirty and sixty as the Treasury may prescribe by statutory instrument a draft of which has been laid before and approved by a resolution of the Commons House of Parliament.
      (2) The percentage so prescribed may vary in respect of the situation of the land and the kind of development.
      (3) The Treasury shall not so prescribe any increases in such percentage more than once in any fiscal year'.—[Mr. Raison.]
      Brought up, and read the First time.
      Mr. Timothy Raison: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Mr. Oscar Murton): With this we are to discuss the following:
      Amendment No. 1, in Clause 1, page 2, line 4, leave out subsection (3).
      Amendment No. 242, in Clause 13, page 19, line 39, leave out '66⅔ per cent.' and insert:
      'one-half of the percentage rate currently prescribed under section (Rate of Tax)'.
      Amendment No. 243, in page 19, line 43, leave out '66⅔ per cent.' and insert:
      'one-half of the percentage rate currently prescribed under section (Rate of Tax)'.
      Mr. Raison: The aim of the clause is, first and above all, to provide for a realistic rate of taxation instead of the utterly deterrent rate proposed in the Bill. Secondly, the clause is designed to recognise the fairly wide variety of circumstances in which development can occur—a matter to which I shall return in a moment. Thirdly, it is, as a consequence of this, to limit the changes in tax which are permitted under the clause to once a year, because, although we argue that a greater degree of flexibility is desirable than is allowed at present, we recognise that, if the clause were to lead to constant chopping and changing in the rate, that would be adverse

      1643
      because, obviously, people want as much stability as possible in these matters, although that has to be coupled with some kind of sensitivity to market conditions.
      Amendment No. 1, which is part of the package that we are debating, would have the effect of deleting the present subsection in Clause 1 which defines the rate of 80 per cent., with the consequence that the whole of the tax rate would be dealt with in our new clause rather than, as at present, in Clause 1.
      There are also two subsequent amendments, Nos. 242 and 243, which would have the effect of altering the present reduced rate for the smaller sizes of development, which stands at 66⅔ per cent. over the interim period up to March 1979, to half the level of the ordinary rate which we are now proposing. Obviously, it would be absurd to have a level of main tax of between 30 and 60 per cent. and to have the reduced tax standing at 66⅔ per cent. The House will recognise that this is a sensible consequence of what we are proposing.
      On Second Reading I made it clear that the Opposition had a number of major objections to and doubts about the Bill and the clause that it embodied. Ever since 1973 we have accepted the principle of a tax on betterment. The then. Chancellor of the Exchequer, now Lord Barber, decided that this was right, and we still accept that principle. We also want to avoid further upheavals, if possible. Although we shall unquestionably repeal the Community Land Act, we do not want to repeal this tax if—it is a big "if"—it can be made acceptable as a structure. Looking at the tax as a vehicle, we are not necessarily committed to its repeal. We shall judge it on its merits as it stands at the end of its passage through Parliament.
      As the Bill stands at present, however, there are still a number of grave objections to the development land tax which it proposes to introduce. First, there is the objection, which has had a very full airing already, of the really absurd treatment given to charities and pension funds. I believe that my right hon. Friends and hon. Friends made an overwhelming case on this matter last night, and I cannot understand why the Minister ever resisted it. Then there is the sheer difficulty of
      1644
      valuation which I think is a very important part of the problems which this tax poses. There is also the fact that a person may have to pay tax before his money comes in. Looking at the Committee stage report on this point, I think that the Minister was misleading when he tried to argue that there was nothing essentially different in the provisions of Clause 1 and the way in which tax is generally charged in our tax system.
      It is certainly true that tax is charged before one's final income is known. I do not quarrel with that. But if one is overcharged, the money is refunded in due course. However, with development land tax we are talking about a fixed levy that does not depend on what gains are made. This is a very serious problem of the tax as it stands.
      There are other objections also which have a lot to do with Clause 1. There is the fact that the cost and complexity of the scheme are enormous. There is the fact that builders who use land as stock-in-trade could receive very tough treatment, because they in a different category from the person who makes a windfall gain. Above all, the penal rate of tax of 80 per cent. for larger developments and 66⅔ per cent. for smaller developments will have disastrous consequences.
      Not only will the 80 per cent. rate have disastrous consequences; as I should remind the House, this penal rate is only the first step in the progress towards a 100 per cent. rate of tax. Let us never forget that the essence of the Government's scheme is, in due course, that there should be no development gain at all to the person who brings land on to the market for the constructive purpose of helping to provide houses, factories, offices and shops. This is the first step on the Gadarene slide to tyranny that lies behind the whole of the Government's community land scheme. Our objections are very strong, because we are talking here about a starting point and not a final point of 80 per cent. Our new clause is designed to show that we reject the whole malign progress of this scheme. The proposed rate of 80 per cent. inevitably will be seriously damaging in its effect.
      It is true that there may be land available for building today. I do not dispute

      1645
      that the great difficulties the house building industry has faced in the last year or two, allied with bankruptcies and land being on the market, has meant that there is not a land famine at the moment. But among those who know the market best there is no question at all that in a year or two there could be a great danger of a famine. The House Building Federation, which speaks with great authority, believes that around 1978–79 we can expect the really alarming prospect of building land drying up, which will have a disastrous effect on house building. I know that this point has been referred to in Committee upstairs and on a number of other occasions in this Chamber by my hon. Friends. However, over and over again the Government have been thoroughly obtuse in brushing the matter to one side.
      I suppose the Government could say that they could meet this situation by compulsory purchase. That is, indeed, the essence of the Government's land scheme. But compulsory purchase is not the way to hurry things along. It is not the quickest way of getting land on to the market; it is just the most odious and tyrannical way. Compulsory purchase cannot do the job, even if one accepts the moral or political aspect of it.
      5.45 p.m.
      We are faced here with a practical point, as well as a political one. The point has been made with great authority and force by the Royal Institution of Chartered Surveyors in its memorandum on development land tax. The institution speaks with authority, and it has always taken a very impartial view of this question. It is not aligned with any one political party and it represents people in both the public and private sectors. This is what the Institution had to say about the 80 per cent. rate of tax:
      "We must repeat here, with all possible emphasis, that a tax at an initial rate of 80 per cent. as now proposed by the Government, is bound to retard development and to prolong the present damaging hiatus in the building of houses, factories, shops and offices. This is to be deprecated, especially at a time when the Government's land scheme will be in its early stages. It is not irrelevant to note that the first attempt to recover 100 per cent. of development value, under the Town and Country Planning Act 1947, failed. This lesson was not lost on the authors of the Land Commission Act 1967, which introduced
      1646
      a levy at an initial rate of only 40 per cent. of development value. We fear that the latest legislation in its proposed form will encounter the same difficulties as the 1947 Act."
      Those are the words of great authority and I am amazed if the Minister can repudiate them in any way.
      On the point about the community land scheme, even if it went ahead as a mechanism for buying land for development, the public expenditure situation would not allow the Government to spend the large sums of public money which would be needed to operate the scheme. In fact, the Government must be embarrassed by the cost according to the public expenditure White Paper. I beg the Minister to recognise this point and to realise that the 80 per cent. will be a deterrent.
      What is the answer? What is the right way to approach this problem? We have put forward a way in our new clause. We may be asked what we shall do about it when we come to power. This is a fair question, but it would be foolish to answer it at this stage and say what tax rate we would operate, because no one can know the circumstances that will prevail. That is why we have produced a flexible system and applied commonsense practicality to the situation. We are setting up a broad pragmatic framework within which the Government can operate.
      In Committee we put forward one approach in which we argued for a rate of 60 per cent. tax or less, subject to Statutory Instrument. There was a lot to be said for that approach. But one cannot repeat that on the Floor of the House. The approach that we are putting forward today has a great deal of merit and it will provide a viable system. We are putting forward a scheme that allows considerable flexibility and considerable opportunity for the Government to make a judgment about the existing state of the market and its revenue needs.
      There is a substantial sum of money at stake in the Bill. On Second Reading the Minister told us that the likely revenue from the Bill would be between £200 million and £300 million. I am not sure whether the Minister has elucidated this since, or whether he still sticks to those figures, but he must admit that this is quite a sum of money. Nevertheless, it is the land market about which we must

      1647
      be most concerned, and the market for housing and other forms of productive investment.
      The clause would allow the Government to propose by Statutory Instrument, which would have to be approved by the House, whatever level of taxation they believed to be right within the range between 30 per cent. and 60 per cent. That is a wide range for a tax, but it allows a sensitive approach. It allows us to consider the balance between supply and demand in the land market which is a volatile market and is subject to all sorts of extraneous factors. We say that the rate should not go above 60 per cent. because there is now a fairly strong body of opinion which says that 60 per cent. is the upper limit at which the tax could operate before beginning to deter people from putting land on the market.
      I shall not fix the precise figure for the tax, because that is the Government's job. Initially, however, it might be between 50 per cent. and 60 per cent., but I am not putting that forward specifically. It might be related to the level of corporation tax. All I am asking is for the Government to recognise that they have landed themselves in an impossibly rigid situation. The Government have never explained why they plumped for 80 per cent. Throughout, they have been very coy on that point, and the only explanation seems to be that they are aiming ultimately for 100 per cent. and therefore they have to pitch the rate high so that the final jump is not too great.
      Mr. Denzil Davies: Will the hon. Member make one point clear to the House? Am I right in assuming that he is asking us to approve the clause and to include it in the Bill? Is he saying that, because so far he has made a Second Reading Speech?
      Mr. Raison: Yes, I am asking the House to approve the clause and to include it in the Bill. It embodies a sensible approach, which is very much better than the approach adopted by the Government. There is a range of tax levels that we believe to be right. All the evidence points to the need for a far lower rate than the 80 per cent. proposed by the Government.
      The clause makes it possible to meet another objection to the Bill concerning
      1648
      the insensitivity of the Government's approach to the fact that there are quite different forms of development. The clause would make it possible to vary the tax in respect of the particular situation of the land and the kind of development proposed. That will allow a response to different circumstances, and it will give a chance to stimulate the market as a whole, or just one part of it, if necessary. There are different geographical circumstances. It may be that in one part of the country things are tight and that in another part the situation is completely different. It may be that one would apply the flexibility not just to geographical variations but to variations between different forms of development. For example, one could draw a distinction between house building and other development, or between commercial and industrial development. It is quite clear that at any given time the house building sector might be thriving while there is a slump in commercial and industrial development.
      Mr. Fairbairn: Lest the Government should burst too many blood vessels, perhaps I should explain to my hon. Friend that we have been at pains to abolish the distinction between commercial and industrial.
      Mr. Raison: I am simply putting forward the kind of possibilities that would be permitted. The proposal might help different parts of the country It might make sense to provide a lower rate of tax to encourage land on to the market for development in the urban areas. The Government are probably concerned about the prospects for development in some of our urban areas, and I would have thought that the Minister for Planning and Local Government, who is now with us, would be sympathetic and responsive to proposals that would make it possible to stimulate development in areas which at the moment look as though they will be ignored under present trends.
      I believe that the clause will achieve a desirable flexibility, which will take proper account of the variations in the market and the variations of different parts of the country. Of course, one would have to use that flexibility carefully. I do not want to end up in a position of arguing that legislation should have an endless variety of provisions to

      1649
      cover special conditions. Here, however, we are talking about wide categories of development which might be treated under our proposals rather than by the preferential interventionism which is characteristic of the Government's policy.
      Mr. Budgen: If the clause became law, what would happen in the event of a political hue and cry about one kind of development or one developer? Would it be possible to introduce, by way of Statutory Instrument, a penal rate of tax to demonstrate the political dislike of one type of development, or even one developer?
      Mr. Raison: That is something that we shall have to think about. One cannot discriminate against one developer, because that would land us in hybrid Bill difficulties, and we have been there before.
      Mr. Budgen: But would it be possible?
      Mr. Raison: It would require the approval of the House of Commons. We are talking about the affirmative resolution procedure. If the House thought that that suggestion was inappropriate it could throw it out.
      Mr. Denzil Davies: There is nothing in the clause about the affirmative resolution procedure applying to a specific situation or particular kind of development. That would be entirely a matter for executive action, which would be taken under guidelines set out by the Treasury. The matter would be left totally to the Executive, as to how to deal with certain types of development.
      Mr. Raison: Everything that was done would be done under a resolution or order of the House, and the House would be able to approve a scheme.
      I believe that our package as a whole provides a basis for pragmatic and sensible approach to a very difficult question. The Government's proposals will never work, as has been widely accepted for the last few months. If I were the Minister I would welcome the scheme that we are putting forward. It gives some chance of making the unworkable work. But, above all, I tell the Government that they must get away from the notion of an 80 per cent. tax rising to 100 per cent., because that is doomed to failure.
      6 p.m.
      Mr. Clegg: I wish to support the new clause. I think that there should be a tax on profits made out of land, but I dislike intensely the way the Bill has gone through the House and its close connection with the Community Land Act. Had the Treasury been left to introduce a tax on development without it having to be tied to the Act, we should have had a much more palatable Bill.
      I am concerned at the effect that a rate as high as 80 per cent. will have on house building. One must listen to the views of the Royal Institution of Chartered Surveyors with respect. Its members deal with these matters daily, and they feel that a tax at that rate will harm the provision of houses and industrial and other buildings. Their case is borne out by the fact that there are exemptions for the first three years and provision for a tax rate of 66⅔ per cent. It is obvious that the Government and particularly the Department of the Environment are frightened of the effect that an 80 per cent. tax would have if it were applied from the beginning.
      Developers with land banks, which are exempt, will obviously continue to develop them, but we are concerned about what will happen when the land banks run out. Builders will have to go to local authorities, who will be controlling all the land banks, and buy land at a very high price.
      Some builders and developers have made what the Minister has described as windfall gains by buying land and then getting planning permission for it. It is right that they should pay tax on part of the increased value, but we must consider the effect of an 80 per cent. rate. There must be something in it for the builder and the developer. Many outside bodies have argued that if a person goes into a risk-taking operation he should be allowed to keep a little more than 20 per cent. of the increased value of the land. Eventually, he may have to pay 100 per cent. in tax.
      These rates will obviously discourage developers from taking risks. There is a risk in every development, whether it is carried out by a local authority, a developer, or by the two together. I assume it will happen increasingly under the Community Land Act. If one does not allow the developer to keep part of

      1651
      the profits there will be less development and fewer houses. I think the country wants a tax of this sort, but people believe that it should be at a moderate rate. Otherwise the people themselves will suffer in the end.
      The rates have been fixed at 80 per cent. and 100 per cent., not for taxation, in the sense that it is generally understood by the Treasury, but in order to fund the operation of the Community Land Act. The Government are relying on high profits to pay for the 14,000 extra civil servants and the running of the scheme. This money must be raised to repay the formidable borrowing which will be needed, but there are grave and serious dangers in doing it this way.
      Mr. Michael Spicer: I support the new clause, but only as a poor second best to a commitment to repeal the tax. I must make that point in the discussion of a proposition that the tax should be lowered. My hon. Friend the Member for Aylesbury (Mr. Raison) was quite right to make general points in this context and the Minister was wrong to cast aspersions on them.
      I do not support all the wording of the new clause. I cannot go along with the argument that the tax should be written into a Bill which has the power to discriminate between different sectors. I argued passionately yesterday against the Government's intention to discriminate between different sectors. I said that the discriminatory powers in the Bill were a bad thing. Therefore I cannot go along with the whole of the new clause, but I support it because it makes the important point that, at the very least, we should be considering a much lower level of tax, even though that is a poor alternative to replacing it with a different tax.
      The Government's aim is to raise the rate to 100 per cent. and then to nationalise all development land. In their mind, this is just a transitory process. A figure of 80 per cent. is as good as any other and it is only 20 per cent. off the final objective.
      As my hon. Friend the Member for Aylesbury said, we have here not only a swingeing tax, but a totally new form of taxation. It is the combination of
      1652
      these elements which is objectionable and to which the new clause is addressed. The fundamental difference between this tax and any other is that it is a tax upon hypothetical values. In certain respects it is a tax upon nothing, and this leads proponents of the tax into very difficult paths.
      Mr. Fairbairn: Is my hon. Friend aware that it is worse than a tax on nothing? It is frequently a tax on a loss of benefit which a person did not wish to lose in the first place.
      Mr. Spicer: That is a fair and important point which underlines the seriousness of this new form of taxation.
      There are a number of problems associated with a tax based upon hypothetical values. Because these factors exist, I believe that we must seek to bring down the rate of the tax. The first point is a simple one, namely, that since the Government have introduced the tax on a somewhat hypothetical calculation of betterment they have not been able, as with other taxes, to permit it to be made possible within the legislation for the taxpayer to deduct or allow for situations where there is a loss in terms of value. Unlike every other kind of tax, where one taxes genuine gains and can identify gains and losses, the balance of loss against gain is something which a hypothetical tax of the kind envisaged in the Bill is unable to accommodate. This is a reason why we must consider very carefully the question of the rate at which the tax is to be assessed.
      Secondly, because we have this set of hypothetical notion based on hypothetical calculations, it is far more difficult than with other forms of tax to allow for the pace of inflation. Inflation in the last 20 years has run at a rate of 227 per cent. Therefore, we are talking about a tax whose calculations go well back into history.
      If we try to assess the basis of the tax we see that it is a tax not only for chartered surveyors and lawyers but for chartered historians. Because of its complexity, and because it is based on totally notional values, it will make a great deal of money for those people whose business it is to assist the taxpayer and to compute what it is all about.
      Since it is a tax based on a hypothesis, no doubt later this evening, when we

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      come to the subject of inflation, the Government will argue that, because of all the notional values associated with the assessment of tax, it is impossible in this case to allow for inflation in the assessment of the tax and of the original costs incurred by the taxpayer. That is the second reason why, in these highly inflationary times, a tax based on notional concepts of value is particularly pernicious.
      The third factor which must be allowed for in the rate at which the tax is assessed is the sheer complexity of the matter. Obviously we have a Minister who is extremely able in pushing through this Bill, but it must be said that, despite his ability and great knowledge of tax matters, in Committee he occasionally resorted to the honourable tactic of falling back on the formula "I shall take advice on the matter." Obviously, even the Minister of State has not a total comprehension of the Bill. How much more difficult will it be in the world outside for the taxpayer, the man who will be clobbered by the Bill, to understand what it is all about? Because of this situation there may be certain dangerous effects. We have in this Bill a complex piece of legislation that will result in a mass of circulars being issued after the Bill is enacted merely to explain its provisions.
      I do not wish to pursue that point, but I wish to emphasise that because of the complexity of this measure the taxpayer will face a mass of costs, most of which are not allowable, in trying to work out what on earth this piece of legislation means for him. Since it will be an extremely expensive matter for the taxpayer to assess his liability to tax—and in many cases this will affect not large corporations but individuals—taxpayers will want to work out whether they fall within the exemption.
      6.15 p.m.
      Therefore, it would seem reasonable, if the objective is to be reasonable, that a rate of tax should be set well below that which we are now contemplating. We must consider the costs to the taxpayer of working out notional values in this totally new fiscal environment. Surely for that reason alone the rates should be reduced. I repeat that with this tax we are entering a totally new world, a world of unknown values, where the gains have not been made. Indeed, we are entering a new Socialist world.
      Mr. Denzil Davies: The hon. Gentleman says that we are entering a new Socialist world, but does he not realise that if the clause were accepted we should go even further into the new Socialist world which he describes?
      Mr. Spicer: I do not like the discriminatory element in the Bill. I believe that the tax should be set at a considerably lower level. Obviously, the Government like this new world. It is a world into which they are heading with great rapidity, and consciously as part of their legislation towards a total State control of all development land. Therefore, to the Government a figure of 80 per cent. is generous and 60 per cent. is even more generous because it is that much less than 100 per cent.
      That is not how we see the matter. We see it as preventing the development in a free society, of the free use of land. What is worse is that the tax is based on concepts that are unknown in previous tax law. If we are not to repeal this tax, we must at least ensure that it is at a level that will not forever stifle private initiative.
      Mr. Durant: I intervene in this debate because I was involved in the passage of the Community Land Bill. During that hot summer a year ago we were discussing the same type of legislation as that contained in the present Bill, and indeed this is a follow-on to those provisions. Incidentally, I am surprised to see so few Labour Members present for these debates. After all, the Chamber is the coolest place in the Palace of Westminster. At least hon. Members can come in and take the fresh air.
      I support the general principles behind the clause because I believe that the rate of tax as laid down in the Bill is too high. It will stifle the bringing forward of development land. In the end, the only step that will be taken will be that of compulsory purchase, involving as it does, many inquiries, time factors and other considerations affecting development. I ask the Minister whether these considerations could form part of the budgetary procedure on an annual basis, in order to give people a regular basis on which to operate.
      Mr. Denzil Davies: Does the hon. Gentleman agree that the new clause

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      spells out different rates for different developments in different parts of the country?
      Mr. Durant: I think I do in general terms. There are different situations in different parts of the country. My hon. Friend the Member for Aylesbury (Mr. Raison) mentioned the fact that land will dry up. In my part of the country a shortage is already beginning to appear, because there has been an expansion of house building in the South. A shortage is beginning to appear in that part of the country which might not have appeared elsewhere. I do not think it is necessarily wrong to have different rates in different areas. After all, we do this in respect of housing in general and I do not see anything wrong with it.
      I think what will happen if the Bill goes through as it stands is that owners will tend to wait and sit on their land, in the hope that prices will rise so that they will virtually be able to cover the tax. They may take the attitude that if they wait for another year they will get what they originally expected. Once again we shall have a time lag, delay and lack of development. That is what worries me about the Bill.
      In respect of the builders themselves, many small builders with plots of land which have accumulated may well be told, when asking for planning permission, that the individual plots are not a good development. The planning authority may suggest that it would be better to make a more comprehensive development by acquiring more land. But there may be problems in doing that. The builder may not want to start the whole scheme. Again, there will be delay and the land will lie dormant. We have seen many examples of this. There are many areas in which there is dormant land, and that is another deterrent to getting on with development, improvements and the building of houses and factories, and so on.
      We have already had debates on charities and pension funds. I was involved with the Community Land Bill, and when I heard the debates in respect of this Bill it sounded as if we were going through the whole thing again. Almost the same arguments were put forward but at least, in respect of the Com-
      1656
      munity Land Act, we were discussing something slightly different. However, in respect of charities and pensions, I would make the point that if there were a lower rate of tax it would at least soften the blow. A lower rate of tax would not hit people as hard as would an 80 per cent. rate. We must remember that ordinary people are involved. In the end we are left with more compulsory purchase, with all the rigmarole that involves.
      It is typical of the thinking of the Labour Party that it will introduce a tax to gather money from the community in order to spend that money to do the very things that the private sector could do anyway. The only problem is that a little bit of the money is lost on the way in administration. All of it is not put into development. Somewhere along the line there are administrative expenses and, as a result, the community does not get the full benefit.
      I think that the rate of 80 per cent. is too high. I honestly believe that it will result in a shortage of land. We shall have to use compulsory purchase to get that land in order to have it developed. There will be a lack of availability of land, and builders will have difficulties in acquiring land. The whole thing will result in a slowing down of home building and of town centre development. The effect will be to create a tremendous deterrent to the very thing which all of us want to see, and that is a better society.
      Mr. Fairbairn: The question of the rate of the tax raises the whole principle upon which the Bill is founded. It arises from the fallacy on which the Minister has had to rely in trying to defend the concept of the Bill—that the community has bestowed upon members of the public something to which they are un-entitled and that it is the duty of the community, whoever they are, in the form of the bureaucracy, to take back from the individual what belongs to the generality. This inevitably has happened in all situations where bureaucracies have removed something from the individual to bestow it on the generality.
      We are running into that difficulty in one of the most complicated measures that this House has ever been stupid enough to conceive of passing. We are running into the difficulty, perhaps, of misusing the word "tax". It is a simple

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      word, three letters ending in "x". There are, Mr. Speaker, other three-letter words ending in "x", which are also simple words, and of which you may or may not have heard. I think it was Benjamin Franklin who said that
      "nothing can be said to be certain, except death and taxes."
      We are considering a tax rate of 80 per cent. which, in fact, slips decently into a tax rate of 100 per cent. I think it is a misuse of the word "tax" to call it taxation. It is confiscation. It is the removal of the whole. Let us be absolutely clear when we are considering this matter that we are doing so with all the generous Socialist principles which the Minister has so reluctantly advanced, such as "The community gives and the community takes away".
      However, this tax applies to people who receive a disadvantage from the community. If they live in a house and all around there are built coal mines, oil wells and office blocks and they spend their life's income in public inquiries objecting to each one and failing, nevertheless they will have to pay 80 per cent. and then 100 per cent. for the great benefit of having all those wretched things around them which have resulted in what is called an improvement in their property.
      Far from the community bestowing a benefit, it is a tax on disadvantage. If, for instance, a road is put through someone's garden which he does not want and he is paid compensation, that is subject to tax. He is compensated, and then the compensation is removed as if it were a benefit. That is the iniquity of this tax. It is 80 per cent., but let it never be forgotten that it is sliding into 100 per cent. That is its purpose. It is total confiscation. That is the concept, which is somehow founded on the Socialist philosophy that profit, benefit or improvement is all wrong. It is so wrong that it must be removed from individuals and squandered in public.
      I was interested in the Minister, who is an honest man—
      Mr. Budgen: He was.
      Mr. Fairbairn: No, he is a Welshman and, therefore, he is an honest man. I was very interested when he said to my hon. Friend the Member for Worcester-
      1658
      shire, South (Mr. Spicer) that the new clause would take us into an even more Socialist world. I was interested that he used the word "Socialist" as a derogatory adjective. What he said was that we would make the world "even more" Socialist, with more bureaucrats and more complications. That was the argument.
      Mr. Michael Spicer: Is not the point that there has been a certain growing defensiveness from Labour Members about their principles? When we were discussing charities and saying that they were something which fitted in with the Socialist principles of nationalisation, they seemed to show a lack of confidence in their principles.
      6.30 p.m.
      Mr. Fairbairn: I am obliged. I did not want to say anything which would cause the Minister to lose the job he is doing so well, but throughout our debates today and in Committee I have felt that he is not committed to the principles of Socialism and certainly not to the frightfulness of the Bill. But he is doing his job as we would expect every member of such a learned profession and so pure a race to do it.
      What I find particularly disturbing about the rate of the tax is that it is a rate on a piece of speculative arithmetic. People have to work out a long and complicated formula about what would allegedly have been the case if something had happened and now will be the case if something else happens in future. It is the fact that so high a rate is based on a fiction which makes it so improper.
      This Government have presided—I know they believe that it is entirely the fault of the opposition—over a rate of inflation of about 25 per cent. I regret to say that the Chancellor of the Exchequer—he is not a Welshman, although he sits for a Welsh seat—has not persuaded me that it is likely that inflation will disappear under his charm—
      Mr. Speaker: Order. I was so grateful for all the earlier complimentary remarks about Welshmen that I would not like a mistake to creep in. One would not say that the Chancellor had nothing to do with Wales, but he does not directly represent it.
      Mr. Fairbairn: I apologise. I was thinking that he sat for Leek when, of course, he sits for Leeds.
      I think that the inflation rate will continue at a high level. I do not see how, on any of the calculations in the Bill, the house owner, the property owner, the small business man or the shopkeeper can sensibly be protected against inflation if we leave him only 20 per cent., over however many years it may have developed, of what is said in Clause 1 to be the development value of the land. That is a spurious concept which may have been created by one's neighbours or by authorities or even against one's will. Yet one is to be taxed at this absurd rate for the privilege.
      It is a dangerous innovation to introduce a standard fixed high rate of tax in a Bill which would require to be amended or repealed if the rate were to be changed. There is no provision for any change in the tax apart from the fact that it will become 100 per cent. on that wonderful deemed day, no doubt in 1984, when we shall all live happily ever after on Animal Farm. It seems to me to be infinitely more sensible—I ask the Minister to consider this as he has considered previous new clauses—to regulate this matter in the Finance Bill from year to year. It is arrogant of us to assume that we comprehend what the property market, the development of land and the effect of the Bill will be so far ahead that we can base a statute on a particular rate for all time.
      The 80 per cent. rate is simply a figure picked from the air. No one said that 79 would be too low and 81 would be too high, or that 60, 63 or 66 would not be good. It is purely a rate picked from the air with no sensible consideration, argument or justification—except that it is nearer to 100 per cent. than any figure below it.
      Mr. Denzil Davies: The hon. and learned Gentleman, as usual, is making an interesting speech. Will he now tell us whether he supports the new clause?
      Mr. Fairbairn: I am disturbed to think that the Minister should be worried about whether I support the new clause. Indeed I support it, because it makes it possible to vary, though not to raise,
      1660
      the tax more than once a year, according to circumstances. It could be put down more than once a year. That is a habit that Treasury Ministers might adopt to advantage. It is not a new idea, but, if the Minister is willing to take it up, the idea of putting tax down more than once a year and never raising it more than once a year might even commend itself to the electors. One might run into difficulties if one made different selections of land, but I am happy that the Minister should have a nil rate in Wales if he is willing to acknowledge a nil rate in Scotland.
      The rate of tax was won by the Government in Committee on only one vote, in the magnificent absence of the hon Member for Perth and East Perthshire (Mr. Crawford), who once again is so concerned for the fate of the rate which is to be paid in his constituency, which consists of little other than land, that he is not here today. He is away with all his colleagues concerning himself with all the matters which constantly keep them out of Committee and out of this Chamber. Devoted to their diligence, we are reluctant to have to note their absence.
      It is not sensible to have the same rate for Tottenham Court Road as in the wilds of my constituency. We are taxing totally different concepts. I hope that the local authority in my area will have as much difficulty as I have in understanding any part of the Bill and that, therefore, the tax will never be collected.
      This is a bad and incomprehensible Bill, based on a bad and bogus principle in which the Minister does not believe. I give him credit for pretending to do so occasionally. I hope he will ensure that the rate is reduced or varied.
      Mr. Stephen Ross: We seem to have had some peculiar speeches from this side of the House, both yesterday and while I have been here today—particularly that of the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn). We are now hearing from the Opposition a suggestion for a further variation of the rate of tax which should be applied.
      Originally, I understand, the Opposition went along with the figure fixed by the chartered surveyors of 66 per cent. in their publication, which has been

      1661
      recognised as a worthy contribution to the land problem. Later they reduced it to 60 per cent. On Second Reading the percentage was suddenly reduced by them to 52. Now, it is varying between 30 and 60. We are entitled to know the Tory solution to the problem of betterment in land.
      Mr. Budgen: What is the Liberal one?
      Mr. Ross: I will give that with pleasure in a moment.
      Do the Tories really want to return to the situation of three years ago? Do they believe that the public would accept similar massive gains on land transactions? During that period, clients were coming to me with queries about land transactions. One had had an offer of £280,000 for a five-acre plot in the New Forest. When I said that he would be taxed at £70,000, he said he would not sell it. I pointed out that he would make a clear gain of over £200,000, which was surely enough to be going on with, but he did not agree.
      Mr. Fairbairn: Does not the hon. Gentleman appreciate that the purport of the Bill is to put an 80 per cent. tax on development in Mrs. MacGregor's garden, and that of anyone else, to prevent any abuse?
      Mr. Ross: That is not correct. The hon. and learned Gentleman obviously does not understand all the provisions of the Bill. There are exemptions. There is a £10,000 exemption on gains, which are not taxed. There are exemptions in respect of small builders. There is a 66⅔ per cent. rate for three years on gains of up to £150,000. I suggest that £150,000 is a big gain. The hon. and learned Gentleman may not agree. I do not understand why there should be a variable tax. How would a professional person face up to a client who had just sold a parcel of land which it was known would be subject to the 66⅔ per cent. rate and who found that the Government had suddenly reduced the rate to 35 per cent.? I would be indignant if I found myself in that position. There will be all kinds of gambles and swindles to try to change the date of the transaction.
      Mr. Durant: I accept the underlying view on the matter of the change in rate It is not unknown for Governments to change tax rates. That occurred with VAT.
      Mr. Ross: I could not agree more. But surely all Members of Parliament agree that we want stability. People want to know where they stand—especially those in property development.
      I think that people are beginning to accept the concept of the Community Land Act. However, I was sad to hear the hon. Member for Aylesbury (Mr. Raison) say that the Conservatives would repeal that Act. If we are to go over all this again, that is a dismal prospect. The hon. Gentleman said that the Conservative Party might be able to go along with the development land tax, but with some amendments. I welcome that. However, if it is intended to repeal the Community Land Act, the future is grim. I do not agree with some aspects of the Community Land Act, although I think that the Act may work in a regional context. It would be possible to have a variable tax if there were a regional government structure in this country. Presumably there might be a variable tax if there were Scottish or Welsh Assemblies.
      Mr. Fairbairn: No, Sir.
      Mr. Ross: The hon. and learned Gentleman appears to be against a Scottish Parliament—although there might be a different rate of taxation in Scotland. I am all for giving a further choice in these matters to local areas.
      Mr. Michael Spicer: Is the hon. Gentleman saying that the Liberal Party is in favour of the nationalisation of all development land? If not, will he say what the Liberal Party is in favour of doing?
      Mr. Ross: The policy of the Liberal Party has been known for more than 50 years. We advocate site value taxation.
      I said in my speech on the Community Land Act that the right way to solve this problem was to impose a site value tax immediately planning consent was given. That would have the desirable effect of bringing the land on to the market. The tax might be levied at a variable rate according to the time the

      1663
      and was left undeveloped. There might be delays in its imposition according to whether the services were available or whether there was a slump in land sales. There would be an appeals procedure. The tax could be levied at the rate of 30 per cent. on the annual value, and the local authorities would receive the money. That would be a far better solution. Neither of the two principal parties has ever been prepared to accept that.
      The Community Land Act is now on the statute book and we are faced with this problem. I do not think that we can turn the whole matter upside down. Therefore, I accept this measure.
      I think that the Government would be better off to stick to the rate of 66⅔ per cent. all the way through, for as far ahead as we can see. I think that 80 per cent. is probably too high a rate, but I do not deny the Government's view that land ultimately should change hands at existing use value.
      6.45 p.m.
      Mr. Raison: Will the spokesman for the Liberal Party place on record whether he accepts the principle that local authorities should have a duty to acquire development land?
      Mr. Ross: I made clear in the debate on the Community Land Act that I did not like the situation whereby local authorities were planners, purchasers and vendors. I accept that the proposals may work in a regional context. It is known that the Liberal Party believes in a regional government structure.
      Mr. Fairbairn: The hon. Gentleman suggested that I was not in favour of a Scottish Parliament. I do not know what he meant by that. I am president of the Bangla Fife political party which believes in independence if the regional policies ever get off the ground.
      Mr. Ross: If the hon. and learned Member ever becomes Prime Minister, I shall join the Vectis National Party, as I would be all for independence for the Isle of Wight.
      The arguments adduced by Conservative Members of Parliament do not stand water. We are entitled to know a great deal more about what the Opposition, if they ever become the Government, will
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      do about taxing betterment. Their proposal for a variable tax is about the worst proposition that has come forward so far.
      Mr. Budgen: I have listened with great interest to the debate. The Opposition's approach to the new clauses and amendments is based on two points. I entirely agree with the first. It is one to which I have always given my consistent and wholehearted support. It is based on the proposition that a rate of tax of 80 per cent. is a nonsense. My support is based on the proper Tory belief that we should attempt to work with people, not against people. It is based on the belief that people act according to their selfinterest—not their narrow self-Merest, but their long-term self-interest. If people discover that 80 per cent. of the development value of their land will be taken away from them, they simply will not sell the land.
      It is not for us to argue whether 50 per cent. or 60 per cent. is the right tax rate. However, there is no doubt that 80 per cent. is too high a rate. It is so high that no normal person would be likely to sell his land unless it were extracted from him by the force of compulsory acquisition.
      My hon. Friend the Member for Aylesbury (Mr. Raison) put the matter very well when in his speech on Second Reading he referred with his customary erudition to the works of Adam Smith. He said:
      "Every tax ought to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay it."
      The second of Adam Smith's precepts quoted by my hon. Friend was the following:
      "High taxes, sometimes by diminishing the consumption of the taxed commodities, and sometimes by encouraging smuggling, frequently afford a smaller revenue to Government than what might be drawn from more moderate taxes. When the diminution of revenue is the effect of the diminution of consumption there can be but one remedy, and that is the lowering of the tax."—[Official Report, 15th March 1976; Vol. 907, c. 967.]
      In that Second Reading debate I expressed my admiration for the works of Adam Smith. I reminded my hon. Friend of some of the other precepts of Adam Smith about the levying of taxation. When I heard him make his second point. I felt obliged to look at those

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      precepts again. With the greatest reluctance I found myself in less than wholehearted agreement because Adam Smith said:
      "The tax which each individual is bound to pay ought to be certain, and not arbitrary. The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor, and to every other person. Where it is otherwise, every person subject to the tax is put more or less in the power of the tax-gatherer, who can either aggravate the tax upon any obnoxious contributor"—
      think of that, Harry Hyams—
      "or extort by the terror of such aggravation, some present or perquisite to himself. The uncertainty of taxation encourages the insolence and favours the corruption of an order of men who are naturally unpopular, even where they are neither insolent nor corrupt. The certainty of what every individual ought to pay is, in taxation, a matter of so great importance, that a very considerable degree of inequality, it appears, I believe, from the experience of all nations, is not near so great an evil as a very small degree of uncertainty."
      Unhappily, however, I must concede that when I look at New Clause 7 an extraordinary degree of uncertainty seems to be proposed. I am grateful to my right hon. and hon. Friends for the procedural device upon which they have hit in raising this proposal for a variable tax as a means of bringing before the nation our deep distaste for this high and punitive rate of taxation. None the less, if we succeeded tonight this proposal would go on to the statute book and we should be left with what I call the 1972 Industry Act argument—"But it would be used only by people like us." The sad fact is that the insolence and the insolent power of the Government is something from which we should all attempt to protect the citizen.
      I am against pragmatism in taxation. I am against flexibility in taxation. I am against a variable rate of tax which could be changed for than once in a fiscal year in relation to an industry with a production cycle of over five years.
      For those reasons, though I agree wholeheartedly with all that my right hon. and hon. Friends have said about the rate of tax, I regret the procedural necessities that have obliged them to support a variable rate of tax. Therefore, I shall be unable to support my right hon. and hon. Friends in the Lobby.
      Mr. Denzil Davies: I welcome the hon. Member for Aylesbury (Mr. Raison) to our debates again. He appeared at some time on Second Reading, or perhaps it was on the Ways and Means Resolution—I cannot remember—but he was not to be seen in Committee. Now he has come back, but he has brought with him a very strange animal. Perhaps if he had the benefit of studying our Committee deliberations he would not have brought the new clause before us.
      I should like to put on record what the new clause stands for, because I gather that this is official Opposition policy and that the hon. Member for Aylesbury and his right hon. and hon. Friends will vote upon it, since I cannot possibly accept it. It is only right that those who read our debates should clearly see the present policy of the Opposition—it may not last very long—on the problem of taxing betterment.
      I disagree with anybody who suggests that 80 per cent. is too high a rate, but we can sensibly argue about that. The new clause not only argues about the rate but now fixes different rates for different parts of the country and for different kinds of development.
      I should remind the House how the Opposition seem to have moved regarding rates of taxation during the last four or five years. Originally it was 30 per cent. in the capital gains tax legislation. Lord Barber proposed a top rate of 75 per cent. for development gains tax. In the debate on Second Reading—or was it the Ways and Means Resolution?—it went down to 52 per cent. It was then 52 per cent. plus an infrastructure charge. It went up to 60 per cent. and again it went down. Now it is apparently between 30 per cent. and 60 per cent. The Opposition still have not made up their mind. Although the rate will have to vary from year to year, according to economic circumstances, the rate is important because to some extent it indicates the kind of tax that we want on the statute book to deal with the situation. It is not purely academic. It is bound up with the framework of the kind of tax that we believe to be right.
      The Opposition now want a variable rate between 30 per cent. and 60 per cent. They also seem to want to change that rate by Statutory Instrument. Normally

      1667
      we tax individuals through the legislative process. Now, however, the 90-minute debate on an affirmative resolution will be sufficient, according to the Opposition. Such 90-minute debates will be late at night. The official policy of the Opposition is to change the tax on development land up or down from 30 per cent. to 60 per cent. or from 60 per cent. to 30 per cent. or an intervening rate.
      The affirmative resolution would contain not only a change of rate but other things. It would designate the rate for Aylesbury. Apparently it will be 30 per cent. for Aylesbury and 40 per cent. for Wolverhampton, South-West. The hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) is not in his place. I was going to say that the rate would be 60 per cent. on burgage property in that area. Land in Wales will carry a rate of 30 per cent. [Interruption.] I assure the Opposition that I am being serious. This is the new clause upon which the Opposition will vote in a few minutes' time. This is the kind of tax that has been proposed. The rate could be varied for different parts of the country.
      I can imagine the lobbying that would go on. There would be queues of Members outside the Treasury. They would all suggest that, for example, 40 per cent. should be changed to 30 per cent. A great deal of bargaining would go on between representatives of pressure groups and the Executive about the rate of tax that should apply to development land in particular areas. Apart from the constitutional implications, which are enormous, great uncertainty would be created if there was flexibility regarding the betterment of land in this country. I cannot think of anything more disastrous.
      Mr. Fairbairn: I am not sure that I understand the logic of this argument. The Treasury has differential taxation rates in different parts of the country for regional policies and so on. Therefore, it seems a little odd that the Minister should say that the Treasury's policy has always been against regional variations.
      Mr. Davies: We are talking not about regional variations but about the ability, by affirmative resolution, to change the rate of tax between different areas. How
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      would bids for burgage property in Kinross and West Perthshire be resolved? The hon. and learned Gentleman would no doubt endeavour to bring pressure on the Treasury to get the rate down to 40 per cent. That is the kind of situation we should face if we gave the Executive, albeit by affirmative resolution, power to fix different rates of tax.
      Subsection (2) refers to "the kind of development,". The hon. Member for Aylesbury honestly said that we could draw a distinction between industrial and commercial development. I should not disagree too much about drawing a distinction between industrial and commercial development, but I do not think that it can be done by affirmative resolution.
      Yesterday hon. Gentlemen on the Front and Back Benches argued that our differential between industrial and commercial development discriminated against commercial property. That is a small difference. The hon. Member for Aylesbury is now saying that we can have 30 per cent. for commercial development in the City of London and 60 per cent. for industrial development in Manchester, or vice versa. That is the kind of situation that he wishes the House to accept.
      The hon. Gentleman said that a change could be made only once a year. According to the new clause, it could be increased only once a year. However, there is nothing to prevent it being decreased more than once a year. Therefore, within a particular fiscal year the rate could be changed from 60 per cent. to 50 per cent., for example, on burgage property in Scotland.
      That is the kind of constitutional monstrosity that the Opposition now have as their official policy. This is not a Back Bench proposal. Back Benchers are meant to be irresponsible, and they should be irresponsible. But hon. Gentlemen who are seeking office and the confidence of the country are now putting forward a constitutional monstrosity. The new clause, if accepted, would irretrievably damage the property market by creating uncertainty and difficulty for anybody who wished to plan the development of land in a sane and rational manner.
      I could go on about the lack of virtue of the new clause. I have been accused of standing at this Dispatch Box trying

      1669
      to defend the indefensible. Whatever I have had to defend has not been half as bad as what the hon. Member for Aylesbury tried to defend when he came into the debate at a late stage.
      It is clear that the Opposition do not know where they stand on the taxing of betterment. Some hon. Gentlemen honestly and forthrightly said that they did not want this kind of betterment tax. I respect that view. But the Opposition Front Bench wants a betterment tax. Hon. Gentlemen do not know what rate they want or how they intend to operate the tax. I suggest that acceptance of the new clause would give massive power to the Executive to determine the taxation of individuals.
      Mr. Raison: Before the hon. Gentleman sits down, will he try to justify the 80 per cent. rate? One feature of Second Reading and, indeed, of the Committee stage was that the Minister never seriously tried to justify the 80 per cent. The essence of our argument is that 80 per cent. is wrong. Will the hon. Gentleman tell us why he believes it to be right?
      Mr. Davies: The hon. Gentleman must not seek to regain some of the initiative he has so disastrously lost by putting this new clause on the Notice Paper. We are debating his new clause and he asks me to justify 80 per cent. But he has to justify this monstrosity of a new clause that he has put down, which would cause a great deal of damage. This is not an academic debate. The new clause would cause more damage to property development than would anything under DLT. I ask the House to treat the new clause with the scorn and derision that it deserves.
      7.0 p.m.
      Mr. Hugh Rossi: As my hon. Friend the Member for North Fylde (Mr. Clegg) has mentioned, this tax is closely linked with the land scheme under the Community Land Act. Most of us who were concerned with that Act formed the impression that the tax that was to be introduced by this Bill was more an instrument of land policy than primarily a fiscal measure for the purpose of raising revenue. It is in the context of this tax as an instrument of land policy that we must regard it.
      As I understand it, the object of this tax, in a sense, is twofold. First, there
      1670
      is the intention to enable local authorities to buy land more cheaply than they otherwise would, because they will be buying, certainly up to the second appointed day, net of whatever the DLT will be. Secondly, there is the intention to tax what are considered to be unconscionable gains through betterment of land as a result of planning permission.
      The Government have formed the view, with which we profoundly disagree, that the right level of tax necessary to attain this object is 80 per cent. upon the development value of the land in question. However, from the representations that we on the Opposition side of the House have received, and also from the representations that we know the Minister has received, 80 per cent. is far too high. It will cause a drying up of the availability of land for development purposes. The Government have themselves conceded this, because at the last minute, just before the introduction of this Bill, after speaking for many months of a rate of 80 per cent. rising to 100 per cent., the Paymaster General, in answer to a parliamentary Question that I tabled asking him what representations he had received on this topic, announced the lesser rate of 66⅔ per cent. for an initial period of three years on a first tranche of development value. The representations that the Government received were the same as those that we had received from the construction industry, and from house builders in particular.
      The situation has changed. As my hon. Friend the Member for Aylesbury (Mr. Raison) said, we are still faced with the prospect that in about two years' time no land will be available for essential and necessary development. We are advised that at the moment there are between 18 months' and two years' stock of land in the hands of house builders, and no more; and they are not getting any more because, since the inception of this legislation, people have not been selling land for development purposes. They have not been applying for planning permissions either, because they realise that mere application for planning permission, certainly since the enactment of the Community Land Act, results in local authorities immediately having power to acquire that land for themselves. Therefore, once the existing stocks, which will last for between 18

      1671
      months and two years, are used there will be virtually no land for development unless local authorities exercise the Draconian powers of compulsory purchase that the Community Land Act has given them.
      That again depends, however, upon local authorities having, first, the manpower resources to go out and identify for themselves land suitable for development. It also needs resources in terms of money—public sector borrowing—to bring that land in for this purpose. We feel that this measure, with this tax pitched at the rate of 80 per cent., is absolutely disastrous for this country and for the needs and ambitions of our people for better homes. The Minister has sought to make great play of the fact that the Opposition have tried at various stages to propose to the Government different rates of tax that we know would be acceptable. On Second Reading I believe I suggested 52 per cent. in line with corporation tax for closed companies. We are advised that a tax at that rate would achieve the objectives of the hon. Gentleman in relation to the acquisition of land cheaply by local authorities, and would avoid unconscionable profits being made from windfall gains, and yet at the same time would leave sufficient incentive to land owners to bring their land forward for development voluntarily, instead of under compulsion.
      We did not succeed in persuading the Government to accept that, and so another attempt was made in Committee. There the proposal for a rate of 60 per cent. was made, and again the same arguments were adduced. Again the Government closed their ears completely and rejected the proposal. Therefore, today we are left with this question: how can we bring forward a proposal that could possibly be accepted by the Government which will produce a situation in which scarcity of land for development purposes will not be created? The two levels of tax, in the area of 52 per cent. to 60 per cent., which we believe to be right in the present economic circumstances, are totally unacceptable to the Government. Obviously, we cannot repeat those proposals on the Floor of the House today. Indeed, it is questionable whether such a proposal would be selected for debate today.
      Mr. Denzil Davies: Is the hon. Gentleman saying that he would like the Government now to accept what is in the new clause as a flexible rate of tax between 30 per cent. and 60 per cent., determined by affirmative resolution of the House, varying between different areas of the country and between industrial and commercial development, a tax that could be decreased more than once a year? Is he now asking the Government to accept that as official Opposition policy?
      Mr. Rossi: We are putting it forward merely on the basis of faute de mieux and for no other reason whatsoever. We are doing it on the basis of giving the Government a certain amount of flexibility of opportunity without the need for further legislation once they discover—as they will discover, as surely as night follows day—that they are disastrously wrong about the level they have pitched the tax. At least we are giving them an opportunity.
      Although the new clause does not endear itself to me, it is a last resort to stop damage being done, because it will enable the hon. Gentleman, when he learns his mistake, as he surely will, by a simple device to adjust tax in appropriate circumstances. It would enable him for example—and this is why is is posited in this flexible way—if he finds that no housing land is coming forward at all because of that rate, to come to the House with an order and to say "We have made a mistake. Rates of 80 per cent. and 66⅔ per cent. are driving land off the market. The level of house building is collapsing. Let us try now to put on a lower rate of, say, 52 per cent." The Minister could do that for housing, even on a regional basis if he finds that the problems exist in some areas more than others, if he finds it necessary to reduce the disincentive on the part of land owners to bring forward land for development purposes.
      This is an instrument of flexibility that does not attract me terribly, but in the circumstances it is the best possible alternative to the Government's proposals. It is on that basis that I recommend it to my right hon. and hon. Friends to save the disaster that the present Government would otherwise bring about. It has the disadvtantage of creating a degree of uncertainty. However, if it is known in the construction industry that

      1673
      the objective of the new clause is to bring in relief, either to a particular section of the construction or development industry or to a particular region of the country where that relief seems to be necessary because otherwise development will not take place, I am sure that on that basis it would be welcomed.
      I hope, therefore, that the House will accept this proposition, although we would rather see at this stage an amendment, acceptable to the Government, which would put the rate at, say, 52 per cent. to 60 per cent., and no higher, because we feel that that is right.
      As regards our views on this tax generally, we accept that there should be a tax upon windfall gains made out of the grant of planning permission, but it should be levied at a rate which leaves, as I have suggested, the incentive to the owner voluntarily to allow his land to come forward for development purposes, and not a rate that acts as a disincentive.
      We should also like to see—we are going over old ground by mentioning it, although the Minister has asked us to spell it out again—the tax utilised for the benefit of the local authorities so that they can set it off against the infrastructure
      ture costs which they invariably incur when they grant planning permission, certainly for sizeable developments. It is that element of infrastructure costs which acts as a disincentive again on the part of the local authorities giving planning permissions readily, because they are fearful of the impact upon their rate base of the infrastructure costs if they give too many planning permissions too readily and too easily. Therefore, that objection must be made. That is where we should like to see a fair tax diverted.
      I should have thought that the Opposition's view on these matters had been spelled out sufficiently in debates, on Second Reading of this Bill and throughout the proceedings on the Community Land Act, without the Minister seeking to make rather silly debating points in answer to this matter, when he knows that what he is doing, and what we are making him do, is defending this appalling rate of 80 per cent. It is on the basis of voting against that rate that I ask my right hon. and hon. Friends to support the new clause.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 264, Noes 292.

      Division No. 193.]

      AYES

      [7.16 p.m.

      Adley, Robert

      Channon, Paul

      Fookes, Miss Janet

      Aitken, Jonathan

      Churchill, W. S.

      Forman, Nigel

      Alison, Michael

      Clark, Alan (Plymouth, Sutton)

      Fox, Marcus

      Amery, Rt Hon Julian

      Clark, William (Croydon S)

      Fraser, Rt Hon H. (Stafford & St)

      Arnold, Tom

      Clarke, Kenneth (Rushcliffe)

      Fry, Peter

      Atkins, Rt Hon H. (Spelthorne)

      Clegg, Walter

      Galbraith, Hon. T. G. D.

      Awdry, Daniel

      Cockcroft, John

      Gardiner, George (Reigate)

      Bain, Mrs Margaret

      Cooke, Robert (Bristol W)

      Gardner, Edward (S Fylde)

      Baker, Kenneth

      Cope, John

      Gilmour, Rt Hon Ian (Chesham)

      Banks, Robert

      Cordle, John H.

      Gilmour, Sir John (East Fife)

      Bell, Ronald

      Cormack, Patrick

      Glyn, Dr Alan

      Bennett, Dr Reginald (Fareham)

      Corrie, John

      Goodhart, Philip

      Benyon, W.

      Crawford, Douglas

      Goodhew, Victor

      Berry, Hon Anthony

      Critchley, Julian

      Goodlad, Alastair

      Biffen, John

      Crouch, David

      Gorst, John

      Biggs-Davison, John

      Crowder, F. P.

      Gow, Ian (Eastbourne)

      Blaker, Peter

      Davies, Rt Hon J. (Knutsford)

      Gower, Sir Raymond (Barry)

      Body, Richard

      Dean, Paul (N Somerset)

      Grant, Anthony (Harrow C)

      Boscawen, Hon Robert

      Dodsworth, Geoffrey

      Gray, Hamish

      Bottomley, Peter

      Douglas-Hamilton, Lord James

      Griffiths, Eldon

      Bowden, A. (Brighton, Kemptown)

      Drayson, Burnaby

      Grist, Ian

      Boyson, Dr Rhodes (Brent)

      du Cann, Rt Hon Edward

      Grylls, Michael

      Bradford, Rev Robert

      Dunlop, John

      Hall, Sir John

      Braine, Sir Bernard

      Durant, Tony

      Hall-Davis, A. G. F.

      Brittan, Leon

      Dykes, Hugh

      Hamilton, Michael (Salisbury)

      Brocklebank-Fowler, C.

      Edwards, Nicholas (Pembroke)

      Hampson, Dr Keith

      Brotherton, Michael

      Elliott, Sir William

      Hannam, John

      Bryan, Sir Paul

      Emery, Peter

      Harvie Anderson, Rt Hon Miss

      Buchanan-Smith, Alick

      Evans, Gwynfor (Carmarthen)

      Hastings, Stephen

      Buck, Antony

      Ewing, Mrs Winifred (Moray)

      Havers, Sir Michael

      Bulmer, Esmond

      Eyre, Reginald

      Hawkins, Paul

      Burden, F. A.

      Fairbairn, Nicholas

      Hayhoe, Barney

      Butler, Adam (Bosworth)

      Fairgrieve, Russell

      Heseltine, Michael

      Carlisle, Mark

      Farr, John

      Hicks, Robert

      Carson, John

      Fisher, Sir Nigel

      Higgins, Terence L.

      Chalker, Mrs Lynda

      Fletcher-Cooke, Charles

      Holland, Philip

      Hordern, Peter

      Miller, Hal (Bromsgrove)

      St. John-Stevas, Norman

      Howe, Rt Hon Sir Geoffrey

      Mills, Peter

      Scott, Nicholas

      Howell, David (Guildford)

      Miscampbell, Norman

      Scott-Hopkins, James

      Howell, Ralph (North Norfolk)

      Mitchell, David (Basingstoke)

      Shaw, Giles (Pudsey)

      Hunt, David (Wirral)

      Moate, Roger

      Shelton, William (Streatham)

      Hunt, John

      Molyneaux, James

      Shepherd, Colin

      Hurd, Douglas

      Monro, Hector

      Shersby, Michael

      Hutchison, Michael Clark

      Moore, John (Croydon C)

      Sims, Roger

      Irving, Charles (Cheltenham)

      More, Jasper (Ludlow)

      Sinclair, Sir George

      James, David

      Morgan, Geraint

      Skeet, T. H. H.

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

      Morgan-Giles, Rear-Admiral

      Smith, Dudley (Warwick)

      Johnson Smith, G. (E Grinstead)

      Morris, Michael (Northampton S)

      Spence, John

      Jones, Arthur (Daventry)

      Morrison, Charles (Devizes)

      Spicer, Michael (S Worcester)

      Jopling, Michael

      Morrison, Hon Peter (Chester)

      Sproat, Iain

      Joseph, Rt Hon Sir Keith

      Mudd, David

      Stainton, Keith

      Kaberry, Sir Donald

      Neave, Airey

      Stanley, John

      Kellett-Bowman, Mrs Elaine

      Nelson, Anthony

      Steen, Anthony (Wavertree)

      Kershaw, Anthony

      Neubert, Michael

      Stewart, Ian (Hitchin)

      Kilfedder, James

      Newton, Tony

      Stokes, John

      Kimball, Marcus

      Normanton, Tom

      Stradling Thomas, J.

      King, Evelyn (South Dorset)

      Nott, John

      Tapsell, Peter

      King, Tom (Bridgwater)

      Onslow, Cranley

      Taylor, R. (Croydon NW)

      Kitson, Sir Timothy

      Oppenheim, Mrs Sally

      Taylor, Teddy (Cathcart)

      Knight, Mrs Jill

      Page, John (Harrow West)

      Tebbit, Norman

      Knox, David

      Page, Rt Hon R. Graham (Crosby)

      Temple-Morris, Peter

      Lamont, Norman

      Parkinson, Cecil

      Thatcher, Rt Hon Margaret

      Lane, David

      Pattie, Geoffrey

      Thomas, Rt Hon P. (Hendon S)

      Langford-Holt, Sir John

      Percival, Ian

      Thompson, George

      Lawrence, Ivan

      Peyton, Rt Hon John

      Townsend, Cyril D.

      Lawson, Nigel

      Pink, R. Bonner

      Trotter, Neville

      Lester, Jim (Beeston)

      Powell, Rt Hon J. Enoch

      Tugendhat, Christopher

      Lewis, Kenneth (Rutland)

      Price, David (Eastleigh)

      van Straubenzee, W. R.

      Lloyd, Ian

      Prior, Rt Hon James

      Vaughan, Dr Gerard

      Loveridge, John

      Pym, Rt Hon Francis

      Viggers, Peter

      Luce, Richard

      Raison, Timothy

      Wakeham, John

      McAdden, Sir Stephen

      Rathbone, Tim

      Walder, David (Clitheroe)

      MacCormick, Iain

      Rawlinson, Rt Hon Sir Peter

      Walker, Rt Hon P. (Worcester)

      McCrindle, Robert

      Rees, Peter (Dover & Deal)

      Wall, Patrick

      McCusker, H.

      Rees-Davies, W. R.

      Walters, Dennis

      Macfarlane, Neil

      Reid, George

      Watt, Hamish

      MacGregor, John

      Renton, Tim (Mid-Sussex)

      Weatherill, Bernard

      Macmillan, Rt Hon M. (Farnham)

      Ridley, Hon Nicholas

      Wells, John

      McNair-Wilson, M. (Newbury)

      Ridsdale, Julian

      Whitelaw, Rt Hon William

      Madel, David

      Rifkind, Malcolm

      Wiggin, Jerry

      Marshall, Michael (Arundel)

      Rippon, Rt. Hon Geoffrey

      Wigley, Dafydd

      Marten, Neil

      Roberts, Michael (Cardiff NW)

      Winterton, Nicholas

      Mates, Michael

      Roberts, Wyn (Conway)

      Wood, Rt Hon Richard

      Mather, Carol

      Rodgers, Sir John (Sevenoaks)

      Young, Sir G. (Ealing, Acton)

      Maude, Angus

      Ross, William (Londonderry)

      Younger, Hon George

      Maudling, Rt Hon Reginald

      Rossi, Hugh (Hornsey)

      Maxwell-Hyslop, Robin

      Rost, Peter (SE Derbyshire)

      TELLERS FOR THE AYES:

      Mayhew, Patrick

      Royle, Sir Anthony

      Mr. Spencer Le Marchant and

      Meyer, Sir Anthony

      Sainsbury, Tim

      Mr. Fred Silvester.

      NOES

      Abse, Leo

      Brown, Ronald (Hackney S)

      Davies, Denzil (Llanelli)

      Allaun, Frank

      Buchan, Norman

      Davies, Ifor (Gower)

      Anderson, Donald

      Buchanan, Richard

      Davis, Clinton (Hackney C)

      Archer, Peter

      Butler, Mrs Joyce (Wood Green)

      Deakins, Eric

      Armstrong, Ernest

      Callaghan, Jim (Middleton & P)

      Dean, Joseph (Leeds West)

      Ashley, Jack

      Campbell, Ian

      de Freitas, Rt Hon Sir Geoffrey

      Ashton, Joe

      Canavan, Dennis

      Dell, Rt Hon Edmund

      Atkins, Ronald (Preston N)

      Cant, R. B.

      Dempsey, James

      Atkinson, Norman

      Carmichael, Neil

      Doig, Peter

      Bagier, Gordon A. T.

      Carter, Ray

      Dormand, J. D.

      Barnett, Guy (Greenwich)

      Carter-Jones, Lewis

      Douglas-Mann, Bruce

      Barnett, Rt Hon Joel (Heywood)

      Cartwright, John

      Dunn, James A.

      Bates, Alf

      Clemitson, Ivor

      Dunned, Jack

      Bean, R. E.

      Cocks, Michael (Bristol S)

      Dunwoody, Mrs Gwyneth

      Beith, A. J.

      Cohen, Stanley

      Eadie, Alex

      Benn, Rt Hon Anthony Wedgwood

      Coleman, Donald

      Edge, Geoff

      Bennett, Andrew (Stockport N)

      Colquhoun, Ms Maureen

      Edwards, Robert (Wolv SE)

      Bidwell, Sydney

      Cook, Robin F. (Edin C)

      Ellis, John (Brigg & Scun)

      Bishop, E. S.

      Corbett, Robin

      Ellis, Tom (Wrexham)

      Blenkinsop, Arthur

      Cox, Thomas (Tooting)

      English, Michael

      Boardman, H.

      Craigen, J. M. (Maryhill)

      Ennals, David

      Booth, Rt Hon Albert

      Cronin, John

      Evans, Fred (Caerphilly)

      Bottomley, Rt Hon Arthur

      Cryer, Bob

      Evans, Ioan (Aberdare)

      Boyden, James (Bish Auck)

      Cunningham, G. (Islington S)

      Ewing, Harry (Stirling)

      Bradley, Tom

      Cunningham, Dr J. (Whiteh)

      Faulds, Andrew

      Bray, Dr Jeremy

      Dalyell, Tam

      Fernyhough, Rt Hon E.

      Brown, Hugh D (Provan)

      Davidson, Arthur

      Flannery, Martin

      Brown, Robert C. (Newcastle W)

      Davies, Bryan (Enfield N)

      Fletcher, Raymond (Ilkeston)

      1676

      1677

      Fletcher, Ted (Darlington)

      Lomas, Kenneth

      Rodgers, William (Stockton)

      Foot, Rt Hon Michael

      Loyden, Eddie

      Rooker, J. W.

      Ford, Ben

      Luard, Evan

      Ross, Stephen (Isle of Wight)

      Forrester, John

      Lyons, Edward (Bradford W)

      Ross, Rt. Hon W. (Kilmarnock)

      Fowler, Gerald (The Wrekin)

      Mabon, Dr J. Dickson

      Rowlands, Ted

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

      McCartney, Hugh

      Sandelson, Neville

      Freeson, Reginald

      McElhone, Frank

      Sedgemore, Brian

      Freud, Clement

      MacFarquhar, Roderick

      Selby, Harry

      Garrett, John (Norwich S)

      McGuire, Michael (Ince)

      Shaw, Arnold (Ilford South)

      Garrett, W. E. (Wallsend)

      Mackenzie, Gregor

      Sheldon, Robert (Ashton-u-Lyne)

      George, Bruce

      Mackintosh, John P.

      Shore, Rt Hon Peter

      Gilbert, Dr John

      Maclennan, Robert

      Short, Rt Hon E. (Newcastle C)

      Ginsburg, David

      McMillan, Tom (Glasgow C)

      Short, Mrs Renée (Wolv NE)

      Golding, John

      McNamara, Kevin

      Silkin, Rt Hon John (Deptford)

      Gould, Bryan

      Madden, Max

      Silkin, Rt Hon S. C. (Dulwich)

      Gourlay, Harry

      Magee, Bryan

      Sillars, James

      Graham, Ted

      Mahon, Simon

      Silverman, Julius

      Grant, George (Morpeth)

      Mallalleu, J. P. W.

      Skinner, Dennis

      Grant, John (Islington C)

      Marks, Kenneth

      Small, William

      Grocott, Bruce

      Marquand, David

      Smith, John (N Lanarkshire)

      Hamilton, James (Bothwell)

      Marshall, Dr Edmund (Goole)

      Spearing, Nigel

      Hardy, Peter

      Marshall, Jim (Leicester S)

      Stallard, A. W.

      Harper, Joseph

      Maynard, Miss Joan

      Stewart, Rt Hon M. (Fulham)

      Harrison, Walter (Wakefield)

      Meacher, Michael

      Stoddart, David

      Hart, Rt Hon Judith

      Mellish, Rt Hon Robert

      Strang, Gavin

      Hatton, Frank

      Mendelson, John

      Strauss, Rt Hon G. R.

      Hayman, Mrs Helene

      Mikardo, Ian

      Summerskill, Hon Dr Shirley

      Heffer, Eric S.

      Millan, Bruce

      Swain, Thomas

      Hooley, Frank

      Miller, Mrs Millie (Ilford N)

      Taylor, Mrs Ann (Bolton W)

      Hooson, Emlyn

      Mitchell, R. C. (Soton, Itchen)

      Thomas, Jeffrey (Abertillery)

      Horam, John

      Molloy, William

      Thomas, Mike (Newcastle E)

      Howell, Rt Hon Denis

      Moonman, Eric

      Thomas, Ron (Bristol NW)

      Howells, Geraint (Cardigan)

      Morris, Alfred (Wythenshawe)

      Thorne, Stan (Preston South)

      Hoyle, Doug (Nelson)

      Morris, Charles R. (Openshaw)

      Tierney, Sydney

      Huckfield, Les

      Tomlinson, John

      Morris, Rt Hon J.(Aberavon)

      Tomney, Frank

      Hughes, Rt Hon C. (Anglesey)

      Moyle, Roland

      Torney, Tom

      Hughes, Mark (Durham)

      Mulley, Rt Hon Frederick

      Tuck, Raphael

      Hughes, Robert (Aberdeen N)

      Murray, Rt Hon Ronald King

      Urwin, T. W.

      Hughes, Roy (Newport)

      Newens, Stanley

      Varley, Rt Hon Eric G.

      Hunter, Adam

      Noble, Mike

      Wainwright, Edwin (Dearne V)

      Irvine, Rt Hon Sir A. (Edge Hill)

      Oakes, Gordon

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

      Irving, Rt Hon S. (Dartford)

      Ogden, Eric

      Walker, Harold (Doncaster)

      Jackson, Colin (Brighouse)

      O'Halloran, Michael

      Walker, Terry (Kingswood)

      Jackson, Miss Margaret (Lincoln)

      Orbach, Maurice

      Ward, Michael

      Janner, Greville

      Orme, Rt Hon Stanley

      Watkins, David

      Jay, Rt Hon Douglas

      Ovenden, John

      Watkinson, John

      Jeger, Mrs Lena

      Owen, Dr David

      Weetch, Ken

      Jenkins, Hugh (Putney)

      Park, George

      Wellbeloved, James

      John, Brynmor

      Palmer, Arthur

      Weitzman, David

      Johnson, James (Hull West)

      Parker, John

      Wellbeloved, James

      Johnson, Walter (Derby S)

      Parry, Robert

      White, Frank R. (Bury)

      Johnston, Russell (Inverness)

      Pavitt, Laurie

      White, James (Pollok)

      Jones, Barry (East Flint)

      Peart, Rt Hon Fred

      Whitehead, Phillip

      Jones, Dan (Burnley)

      Whitlock, William

      Judd, Frank

      Pendry, Tom

      Willey, Rt Hon Frederick

      Kaufman, Gerald

      Penhaligon, David

      Williams, Alan (Swansea W)

      Kelley, Richard

      Perry, Ernest

      Williams, Alan Lee (Hornch'ch)

      Kerr, Russell

      Phipps, Dr Colin

      Williams, Rt Hon Shirley (Hertford)

      Kilroy-Silk, Robert

      Prentice, Rt Hon Reg

      Williams, Sir Thomas

      Kinnock, Neil

      Prescott, John

      Wilson, Alexander (Hamilton)

      Lambie, David

      Price, C. (Lewisham W)

      Wilson, Rt Hon H. (Huyton)

      Lamborn, Harry

      Price, William (Rugby)

      Wilson, William (Coventry SE)

      Lamond, James

      Radice, Giles

      Wise, Mrs Audrey

      Latham, Arthur (Paddington)

      Rees, Rt Hon Merlyn (Leeds S)

      Woodall, Alec

      Leadbitter, Ted

      Richardson, Miss Jo

      Woof, Robert

      Lee, John

      Roberts, Albert (Normanton)

      Wrigglesworth, Ian

      Lestor, Miss Joan (Eton & Slough)

      Roberts, Gwilym (Cannock)

      Young, David (Bolton E)

      Lever, Rt Hon Harold

      Robertson, John (Paisley)

      Lewis, Ron (Carlisle)

      Robinson, Geoffrey

      TELLERS FOR THE NOES:

      Lipton, Marcus

      Roderick, Caerwyn

      Mr. Peter Snape and

      Litterick, Tom

      Rodgers, George (Chorley)

      Mr. James Tinn.

      Question accordingly negatived.

    New Clause 11

      REPLACEMENT OF BUSINESS ASSETS
      (1) If the consideration which a person carrying on a trade obtains for the disposal of, or of his interest in, assets (in this section referred to as "the old assets") used, and
      1678
      used only, for the purposes of the trade throughout the period of ownership is wholly or partly applied by him in acquiring other assets, or an interest in other assets (in this paragraph referred to as "the new assets") which on acquisition are taken into use, and used only, for the purposes of the trade, and—

      (a) the old assets and the new assets are within the classes of assets listed in subsection (6) of section 33 of the Finance Act 1965 (replacement of business assets) and the

      1679
      old assets consist of or include land in the United Kingdom;

      (b) realised development value accrues to the person carrying on the trade in respect of the disposal; and

      (c) the amount of consideration for the disposal applied as aforesaid is greater than the difference between the whole of that consideration and the amount of the realised development value, then, if the person carrying on the trade makes a claim as respects that realised development value, the provision of subsection (2) to (5) below shall apply.

      (2) There shall be ascertained the following amounts; that is to say:—

      (a) the amount by which so much of the consideration for the disposal as has been applied as described in subsection (1) above exceeds the difference mentioned in paragraph (c) of subsection (1) above; and

      (b) the amount of the consideration for the disposal which has been so applied in acquiring qualifying assets; and in the following provisions of this paragraph "the material amount" means whichever of those amounts is the smaller (or, if they are equal, the amount which is equal to each of them).

      (3) The realised development value to which the person carrying on the trade is chargeable for the financial year in which the disposal was made shall be reduced by whichever of the following amounts is the smaller, that is to say:—

      (a) the material amount under subsection (2) above;

      (b) the amount, if any, by which chargeable realised development value exceeds allowable losses for the purpose of development land tax for the financial year.

      (4) Where a reduction falls to be made under the preceding sub-paragraph, the person carrying on the trade shall be treated for the purpose of Development Land Tax as if the relevant base value for the new assets or the interest in the new assets were reduced (or further reduced) by what is under subsection (3) above the smaller amount; but this subsection shall not affect the treatment of the other party to the transaction involving the old assets, or of the other party to the transaction involving the new assets.
      (5) If on the disposal of the new assets by the person carrying on the trade, no realised development value accrues, and the reduction in paragraph (b) of subsection (3) above does not fall to be made, a corresponding reduction shall be made so that for the purposes of capital gains tax, the amount or value of the consideration for the acquisition of, or of the interest in the new assets be reduced by the amount by which the relevant base value for development land tax purposes would have been reduced.—[Mr. Ian Stewart.]
      Brought up, and read the First time.
      7.30 p.m.
      Mr. Ian Stewart: I beg to move, That the clause be read a Second time.
      1680
      In Committee we tabled a clause in much the same terms to provide for deferment of development land tax on the replacement of business assets. We did not reach it because, to meet the timetable to which the Government wished to adhere for the Committee stage, we could not have a full debate on all the outstanding matters. This is the first time the subject has been raised. I hope, therefore, that the House will bear with me if I explain some of the technicalities involved in this difficult area.
      The purpose is to ensure that a principle which has already been established for capital gains tax and development gains tax should be extended to the development land tax. Under the capital gains tax provisions, roll-over—the preservation of relief from taxation—applies when assets in a limited group of categories are disposed of and would otherwise give rise to a charge to capital taxation. Because the proceeds are in whole or in part reinvested in a similar group of assets, the liability to tax is deferred until an event which subsequently gives rise to the maturity of that taxation.
      In this case—naturally enough, as it is a development land tax—we start with the asset consisting of land, but the clause is drafted in a way which provides for roll-over relief even if the proceeds from the sale of land or the realisation of development value are reinvested in the same groups of other assets as applied for capital gains tax. These are not only buildings and land but plant and machinery, ships and aircraft, commercial goodwill and so on. This may at first sight appear illogical, but it must be remembered that, over quite a large spectrum of transactions relating to property, development land tax will replace capital gains tax and, therefore, the base on which capital gains tax is calculated is narrowed. The part of the base which is removed will now be subject to development land tax instead. Therefore, in order to preserve the situation, it necessary to allow development land tax to have relief on replacement of assets in the same categories as capital gains tax.
      The technical provisions of the clause are complicated, as they unfortunately must be. At so many points in the Bill

      1681
      we have found that relatively simple concepts which could be expressed in the helpful explanatory notes published by the Inland Revenue have become, when converted into the terminology of the Bill very long and complex in their formulation. In drafting our new clauses we have had an insight into what the Government faced in trying to produce a compact Bill. That is not to say that we do not think that in many parts it might have been drawn up more concisely, but it is difficult to deal with these technical problems in a simple, shorthand way.
      I believe that it will be helpful if I summarise, albeit in slightly technical language, the provisions of the clause. It would grant roll-over relief in the following way. First, it applies only to persons carrying on a trade and not to people in any of the other categories who may have property which is subject to development land tax. Secondly, the original assets—in technical terms, the "old assets"—and the new assets which are acquired with the proceeds must fall within the classes I have mentioned. which are already specified for capital gains tax purposes.
      Thirdly, the amount of disposal proceeds applied to purchase new assets must exceed that part of the consideration receivable in respect of current use value of the old assets. Otherwise, there would be no development value. Fourthly, the material amount—that is the technical term—on which relief is to be given is the lesser of two figures, the amount of sale proceeds applied to purchase the new assets or the excess of the proceeds applied to purchase the new assets over the part of the proceeds which reflects the current use value.
      Fifthly, the chargeable realised development value is to be reduced by the material amount up to a maximum of the total net chargeable realised development value for the financial year.
      Finally, this relief in turn reduces the base value of the new assets for development land tax purposes. That is the form in which the deferral of tax is achieved. If, however, no development land tax arises on the sale of the new assets, this relief reverts to be available for capital gains tax purposes on the sale of those assets.
      1682
      I must apologise for the complexity of that explanation, but it is in line with, and I hope no more complex than, some of the comments which had to be made in Committee on the more technical aspects of the Bill. It has been something of a headache for us on this side of the House, and perhaps for the Minister, to deal with a Bill in which the intention of the clauses, even when one knows what they mean, is so hard to unravel or explain.
      The clause does not seek exemption from the tax. It seeks only a deferment of a liability to the tax, as has already been done with the development gains tax, which the development land tax is designed to supersede.
      There are two principal areas in which roll-over provisions are particularly needed. The first is agriculture. Farming is capital-intensive and is already suffering from a considerable shortage of working capital, partly because of the difficult years through which it has recently come but also because of the imposition of capital transfer tax and now the threat or prospect—depending on how one views it—of the wealth tax, which is waiting in the wings. Therefore, the voluntary sale of land by farmers is normally undertaken only when they have in mind reinvesting in land, buildings or equipment for the furthering of their agricultural activities.
      But not all sales of land by farmers which might give rise to the tax are made voluntarily. Indeed, one of the most serious situations will arise where land falls to be acquired under a compulsory purchase order and the farmer has no option but to sell part of his farm. There is a current case in Hertfordshire, where there are proposals to extend the new town of Stevenage into north Hertfordshire between two farming villages, Graveley and Weston. Quite a lot of good-quality agricultural land owned by local farmers and under cultivation will be required for the expansion of the new town.
      The farmers in those areas will have to farm their remaining land more intensively by improving their capital equipment or trying to increase their acreage again, so that they maintain their total farming area. Either way, they will be required to invest in the assets covered by the proposals in the clause. The

      1683
      difficulty is that if they are to buy further acres of agricultural land they will not be able to acquire them at current use value and they will have to pay over the odds for them. The land is in an attractive rural area fairly close to London. There are long-term development possibilities in some of the villages which give a potential increase above the farming value of the land.
      When farmers have to sell land to accommodate something which is imposed upon them from outside, such as the expansion of a new town, they will be able to maintain the scale of their farming activities only if they reinvest either by farming their existing smaller area more thoroughly or profitably or by acquiring new land, which itself may be available only at inflated prices. The purpose of the new clause is to give them the opportunity of deferring tax on the sale of the land for a purpose of which they do not approve so as to enable them to continue farming on the same scale.
      This provision applies to agriculture, but perhaps its most important application is to industrial companies. Under the Government's New Clause 1, which was accepted yesterday as a replacement for Clause 19, if a company builds a factory for its own use—this is the industrial purposes argument which we discussed at some length yesterday—any realised development value that would have fallen to be taxed on the deemed disposal that took place at the commencement of the material development of the factory will be deferred until the factory is sold. The purpose of my new clause is to provide that the money that is realised from the sale—if it is sold—that triggers off the disposal for development land tax purposes, if reinvested in the class of assets I have described, would allow a further deferral of the tax so that the cash flow of the company concerned will not have to bear at that point a substantial extra tax demand.
      There are a number of ways in which that could come about, and I shall give one brief illustration. If a company has expanded and it finds that its factory is too small, it may need to sell the premises and move to a larger factory. It seems entirely wrong that at that point, when the company is successful and expanding and, no doubt, needs all the working
      1684
      capital it can get, it should fall to pay development land tax, whereas a company that was less progressive and expanded less rapidly could still fit into its old factory and would not have to pay the tax while it remained there. The same could apply to other forms of activity.
      The person with an outdated factory in a residential area of a small town could stay there and redevelop it without paying development land tax as long as it was put to the same use and remained within the tolerance of 10 per cent. in area. However, if the owner wished to move to a different factory on the outskirts of the town, which might accord much better with new concepts of town planning or demographic changes, without New Clause 11 he would fall to be taxed at the very moment when he had all the other expenses of the removal of the factory.
      In my constituency the first new town in the world was built—namely, Letchworth Garden City. It was designed by Ebenezer Howard at the turn of the century. Three-quarters of a century ago, ideas about the size and shape of Letchworth were rather different from those of today. The needs of industry 75 years ago were rather different from its needs today. That is not surprising if new industrial areas are to grow up that are not so close to the centres of towns such as Letchworth, and if at the same time there is a move to use land in the centre, or nearer to the centre, of such towns for further residential development or other purposes. On the sale of a factory in the middle of Letchworth and removal to one of the outskirts, any deferred tax under the provisions of Clause 19 would be triggered unless we had a roll-over provision.
      7.45 p.m.
      Equally, if a company has been operating from a freehold factory but needs to move to a new area in which factories are available to rent but not to buy, and if it wishes to take advantage of the funds available from the disposal of its old factory to buy plant with which to equip the new premises, we feel that the roll-over provision would be helpful.
      We believe that it is essential to enable industry to continue to operate in suitable premises. It should not feel

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      constrained by the need to stay in the same place for fear of triggering off a substantial development land tax liability. That is why we believe that a roll-over provision on the lines suggested is required.
      What do the Government say? They say "All right. Stay where you are. We shall clobber you if you have to move." That is not in harmony with any of the Government's industrial objectives or with the needs of industry. The Government may say that, when the second appointed day comes along under the community land scheme, such provisions will only complicate the tax and that they should be avoided at this stage. However, on anyone's reckoning that day is a long way off. In the meantime, we have to prepare ourselves to live with this tax as it will operate.
      The Government should not seek to exclude a roll-over provision. Without one, we could starve the expanding and changing companies of working capital. By their very definition, it is those companies which have grown larger and more successful. The companies that have responded to the changing needs of our modern industrial society will be caught whereas the less active, less adventurous or more moribund companies which stay where they are will not be caught in the same way.
      A roll-over provision was provided by the Government in the formula for the development gains tax in 1974. We are seeking to perpetuate a principle which already exists for capital gains tax and which was considered to be welcome and sensible by representatives of all political parties at that time. It seems that the only reason for such a provision not being brought into the Bill is, as we always find, that it fell under the shadow of the community land scheme. That, however, makes nonsense of the reality of industrial and agricultural needs.
      I hope that the new clause will commend itself to the House.
      Mr. Nicholas Ridley: I begin by apologising to the House for having missed the last few debates, which is more than the Minister of State has done. I think it is due to the hon. Gentleman for me to say how marvellously he has stood out the
      1686
      debates alone, while palely loitering on the Government Front Bench. It is disgraceful that his senior colleagues should have left him alone to grapple with these difficult matters. As far as I can make out, he has had neither food nor drink, nor sleep.
      Mr. Denzil Davies: I have had water.
      Mr. Ridley: But nothing stronger. I am glad that at least the hon. Gentleman has had that. Surely the Minister for Housing and Construction, who is the eminence grise behind this measure, his boss the Chancellor of the Exchequer, or several other of the hon. Gentleman's senior colleagues, might have turned up to give him a bit of support. They might have taken one or two of the debates from time to time. I congratulate the hon. Gentleman on his perseverance, and sympathise with him for the lack of support—
      Mr. Deputy Speaker (Sir Myer Galpern): Order. The hon. Gentleman will address himself to New Clause 11. I shall provide the Minister of State with a sandwich in between times, but let the hon. Gentleman address himself to the new clause.
      Mr. Ridley: I am glad, Mr. Deputy Speaker, that you allowed me to pay tribute to the Minister of State before bringing me to order, quite rightly, on the new clause. I think that my hon. Friend the Member for Hitchin (Mr. Stewart) has done a great service in bringing it forward. It raises some very important points. I am sad that it applies only to industry and agriculture, and not to private individuals, as I shall demonstrate.
      I listened to the Minister yesterday telling us that industry was so desperately broke that this levy must not apply to it where it was simply developing its own land and could not afford to pay the tax. I cannot see how he will be able to justify resisting the clause, because industry will be just as broke in relation to roll-over as in the case of deferment at the time of material development.
      The Minister of State's argument yesterday will be very useful to us this time in pressing the need for industry to be able to defer tax still further if it is forced to move, either through its own volition, because it has to, having grown

      1687
      out of its premises, or through some compulsory purchase, some road-widening scheme, or whatever it may be. If industry is broke, it should not pay the tax at all. Indeed, that is the argument we had yesterday.
      But that there is more to it than that. It is quite true, as my hon. Friend said, that there were roll-over provisions of this sort in the capital gains tax, and in some senses also in the capital transfer tax. More and more in our capital taxation legislation—and that is what this tax is—there is provision that if an asset has to be realised in order to buy another one, the payment of tax can be either excused or deferred. 'That is obviously right. If a man has to move from one farm to another, why should he pay tax when his luckier neighbour is excused tax because he does not have to move?
      It seems to me that the principle underlying the new clause is that we should really tax disinvestment. It is not offensive to me if any individual has assets and uses them for the whole of his life. An individual may be worth millions. He may inherit millions and die worth millions, but throughout his life he may have lived frugally and employed those assets in business and trade of one sort or another. I cannot believe that it is this which causes the Government to want to put this sort of legislation on the statute book. The man who inherits property worth millions and then either sells it or blows it in riotous living is offensive.
      The right principle in dealing with capital taxation should be, wherever possible, to tax disinvestment rather than sound investment. This is, of course, difficult to apply in relation to development land tax, because the realisation of a development gain is often not so much the realisation of a capital asset as the realisation of a gain—as the hon. Gentleman said—whose value has been enhanced by a decision of the community. But as far as we can, we should move in the direction of restricting swingeing capital taxation to those who want to sell and get out, leaving the capital in the hands of those who may want to sell, but only for the purposes of buying another asset.
      I have always thought that the unfairest thing of all is that if a man thinks it is
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      right to change capital from one share to another, he should have to pay capital gains tax on the sale of the first, irrespective of the fact that he only wants to switch.
      Switching is one of the essential ways in which capital finds its way to the proper areas to which it should go, and in the matter of land use the same argument applies. It may well be that the good farmer finds his farm so encompassed with developments that in order to carry on he feels it necessary to switch, yet he knows that if he does so he is liable for a development gain. The same is true of business assets. If a factory has grown out of of its factory buildings, it is monstrous that the fact that it has done so well should force it to pay an arbitrary amount of tax simply because it has to move.
      These seem to me to be the worst sorts of results of a tax of this sort. I hope that the Minister of State—tired though he must be now, and weary of this Bill—will agree in principle that there is something in what I have said. Although I accept that it is not easy or practicable to apply across the whole field of capital taxation, I suggest that in this one small instance, where business assets are to be replaced either to the same extent or to a greater exetent—or, in the case of a lesser extent, to that extent—it would be fair to defer this tax.
      I have only two gentle criticisms of the clause. The first is that it applies only to business assets and not to individuals property. The second is that it is for deferral of the tax.
      It was mentioned yesterday, over and over again, that the position concerning these large and growing blocks of deferred tax in the accounts of companies is becoming ridiculous. Why can we not just waive the tax? There will be businesses and people who will in the future have far larger theoretical debts in deferred tax hanging over their heads than the value of their assets. That is a bad situation. It inhibits borrowing and it inhibits the proper use of the assets, but beyond that it is demoralising. It simply means that the Government have invented taxes that are infinitely too high for the population to bear in certain cases, and have had to resort to the device not of reducing or cancelling taxes but simply of deferring them in order to save face.

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      The Bill is full of possibilities for deferral of tax. If tax can be deferred for either the reason in the clause or the reason in New Clause 1, which we discussed yesterday, it had better be waived altogether, because it means that it is too high and that it cannot be paid. Indeed, that was the argument of the Minister of State yesterday. He said "Industry cannot pay the tax, therefore we shall not make it pay. We shall defer it." But this leaves these large blocks of taxation against the company. It would be infinitely better if, instead of "deferred", we used the word "waived".
      I strongly support my hon. Friend and congratulate him on his initiative, but in a way I wish he had been bolder.
      8 p.m.
      Mr. Denzil Davies: The clause, as the hon. Member for Hitchin (Mr. Stewart) said in moving it, is concerned to try to provide some kind of roll-over relief in respect of the disposal of land and the reinvestment of the proceeds by the vendor in land or in plant and machinery, so that he will not have to pay immediately the development land tax on that particular sale.
      The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) argued an interesting case—that we should not concern ourselves with deferral and that we should instead say immediately "You shall not pay any tax at all, rather than have this tax hanging over your head." There is something to be said for avoiding deferral as much as possible. I take the point concerning stock relief, which was debated in the Committee stage of the Finance Bill.
      There is a danger that these deferrals will cause problems in company accounts, but here we are concerned with a situation in which a person sells his land and makes a betterment profit. We are concerned with that situation and not with a situation where he makes a capital gain in the conventional sense. He can roll over that capital gain anyway under existing legislation. Therefore, a farmer who may be forced to sell his land because development encroaches closely on his sphere of operations, because a motorway is coming along or because he gets planning permission for houses, and who makes a betterment profit, will pay the tax. But he will still have
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      enough money left over to reinvest in farming land. If he wants to carry on his farming operation, presumably he will buy farming land which has no planning permission.
      The farmer, by having a capital gains tax roll-over on a current use value basis, still has sufficient funds left to buy a comparable piece of land which does not have a betterment value. If he wants to buy land with a betterment value, as a result of having 80 per cent. of that betterment profit taken from him he may not have enough left to buy other land with betterment value. But I thought that the object of the exercise was for him to get back into farming and to buy farming land which did not have planning permission. If he is concerned with farming, he gets his roll-over relief in relation to any capital gain on current use value, which should leave him enough to invest in land for farming.
      Mr. Graham Page: Is it not something of a gamble whether he will find land which has not at least some hope value? It is wishful thinking that he can go anywhere and buy land at current use value for farming.
      Mr. Davies: Some land may have very little hope value. I remember the case of a gentleman who sold his farm on the edge of a town, moved to the next town, bought land on the edge of it and thereby made quite a lot of money over a period of five or 10 years. He was buying land with the hope of development for the purpose of making a betterment profit.
      Mr. Graham Page: He would be caught under Section 884.
      Mr. Davies: If a farmer wants to reinvest in land which does not have a value in excess of current use value, he still has the capital gains tax roll-over provisions to protect him in reinvesting at current use value.
      The proposal of the Opposition is to incorporate the 1965 capital gains tax provisions into this legislation. Right hon. and hon. Gentlemen opposite are concerned with assets other than land, so that there could be a roll-over in the case of betterment profit into physical assets as well as into land. That is one reason why I cannot accept the new clause. We are dealing with a different

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      situation and a different tax which is concerned with the disposal of land, and not land and other assets as in the case of capital gains tax.
      There is the further difficulty that, whereas the 1974 legislation on development gains tax contained some provisions for roll-over, they did not provide for roll-over into bare land. I am sure that the hon. Member for Cirencester and Tewkesbury will accept that if a roll-over relief from tax is introduced it often creates an inflationary situation. There are cases in West Wales where farmers who received large sums of money for the betterment value of their land bid in the market for other land which had only current use value, and, there being more money about, prices went up. Therefore, there are dangers in giving roll-over relief at a high rate of 80 per cent. on land, because it pushes up the price of agricultural land. The 1974 legislation provided a 30 per cent. roll-over relief and did not include bare land.
      Mr. Ridley: I do not accept that that is undesirable. It seems proper and right that in those circumstances the price of land should rise. If there is no roll-over relief and the price of land remains stable, many good farmers will not get land and many less good farmers will cling on to land of which they should be dispossessed.
      Mr. Davies: The hon. Gentleman said that a good farmer would not be able to acquire land. However, this is not the case of a good or a bad farmer: it is the case of a farmer who receives a sum of money in excess of the current use value of agricultural land and who is then able to bid up and pay more for good agricultural land, as opposed to another farmer who has not been so fortunate that planning permission has been given in respect of his farm. It is the man with the money, because of a fortuitous gain, being able to bid up the market. This has happened. This is one of the reservations about roll-over relief. At 30 per cent. it is not so bad, but at 80 per cent. the problem becomes greater.
      Mr. Nicholas Winterton: Some of the betterment gain
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      could improve the agricultural land that the farmer intends to buy after being dispossessed of his existing farm for one reason or another. It would help to improve the land, buildings and farming methods and thereby increase agricultural production, which I thought was part of the Government's policy as outlined in their White Paper "Food from Our Own Resources".
      Mr. Davies: I accept that some of it could be so used, but much of it might be put into investment in other assets. Some might be used for agriculture. However, that does not detract from my argument that this pushes up the price of agricultural land. If the hon. Gentleman talks to farmers in his area, he will discover that this is the complaint made frequently in respect of large sums realised from the sale of farms which have had planning permission. The 30 per cent. roll-over provisions of capital gains tax have created this problem.
      Another reason why I cannot accept the new clause is that, quite frankly, it does not fit into our net of tax arrangements. I do not know the views of the Opposition with regard to the betterment tax. I gather that they are in favour of helping local authorities in some way whether by net-of-tax arrangements or otherwise. But presumably, even under their arrangements, we should have some kind of accounting. We should not know at any given time when the deferred tax would be paid to the local authority. We should therefore have very complicated arrangements, and roll-over relief does not fit in with the net-of-tax concept. We have tried to meet that point by having a £10,000 exemption on the betterment profit and by having a rate of 66 per cent. on the first £150,000. This compensates for the fact that we cannot introduce this kind of roll-over relief.
      There are other reasons as well. There are economic reasons why we should not roll over a high rate of tax based on an 80 per cent. rate into other land, especially agricultural land. In most cases farmers would not be prejudiced, because they would be reinvesting in land with current use value.
      I am sure that the Opposition will be happy with this explanation. This tax is different from other taxes because the arrangements for it are different, and

      1693
      local authorities are involved with net-of-tax purchases.
      For all those reasons, I cannot recommend the House to accept the new clause.
      Question put and negatived.

    New Clause 12

      ALLOWANCES FOR LOSSES
      (1) Where—

      (a) the cost of acquisition of an interest in land was not less than the consideration for which that interest might reasonably have been expected to sell in the open market, and

      (b) the disposal of the interest in land is either a deemed disposal or a disposal the consideration for which is not less than it might reasonably have been expected to be on a sale in the open market, and

      (c) the realised development value calculated in accordance with section 5 above is negative (in this section called "negative realised development value")

      then the amount of the negative realised development value shall, on a claim being made to the Board not later than six years from the end of the financial year in which the disposal occurs, be deducted from the realised development value accruing to the same owner on another disposal occurring in the same financial year and so far as that negative realised development value shall not be thereby exhausted it shall then be deducted from the realised development value aforesaid occurring in the previous financial year and if not then exhausted any subsequent financial year; and the Board shall repay any development land tax accordingly.
      (2) Subsection (1) above shall not affect the amount of any deduction which is to be made under section 39 below.
      (3) Section 12 above shall apply for determining the allowable amount of negative realised development value as it applies to determine the chargeable realised development value'.—[Mr. Ian Stewart.]
      Brought up, and read the First time.
      Mr. Ian Stewart: I beg to move, That the clause be read a Second time.
      As in the case of the previous clause, we put down a new clause in Committee concerning allowances for loss, but it was not debated upstairs and, therefore, this matter now comes up for consideration for the first time.
      The technical provisions of this new clause are that the land involved must be bought at arm's length market value or must be involved in deemed disposal at the beginning of material development.
      1694
      If, in these circumstances, the realised development value is calculated under the provisions of the Bill and produces a minus figure, it should be offsettable against other development land tax liabilities.
      I would have thought it was self-evident in a tax of this kind that there should be a provision for an offset of gains against losses. It may be that the only explanation of why such a provision was not incorporated in the Bill lies in what the Minister has just said. He emphasised that this was not the normal sort of tax, partly because of its rate and partly because local authorities have the ability to buy net of tax; and, therefore, the tax which is suffered by the chargeable person might go to the benefit of the local authority in one case and to the benefit of the Revenue in another. Surely there are practical difficulties in the interaction between gains and losses in these circumstances, but I hardly think that mechanical reasons are sufficient to justify excluding natural justice in a tax of this kind.
      The higher the rates, the more important it is that there should be an offset of losses against gains. It does not seem to be a very valid argument that, because the rate of tax is so high, to defer it would have very substantial consequences, or, indeed, to say that because the rate of tax is so high it would be a bad thing for it to be offset against loss. We have not agreed that the tax should be at 80 per cent., far less at 100 per cent. Most people outside the Government particularly those who have to ensure that we make progress towards the second appointed day of the Community Land Act, would agree with us.
      The real difficulty, if we do not have provision for losses, will be in practice with house-builders and those who have begun projects of development, such as factories, warehouses, offices and shops. In the past, the element of their profit which represented the development gain was only evident at the end of the day. At that point it is taxed—when it has already been achieved. It is not taxed at all if the same company has made a loss on other projects which have wiped out the gain in that particular case. But if the development gain is to be taxed on the basis of valuation assessed at the start of the project, surely all marginal cases

      1695
      of development will be shelved. If there is not a clear profitable element in a particular project, it will not be undertaken.
      Everyone knows that, with the changed circumstances in the property market and in different economic circumstances which arise from time to time, the value of the product of the building and development industries may be quite considerably different at the end of the day from what was expected when the development was undertaken. If taxation is charged only when a profit is realised at the end of the day, and there is an overall profit on all activities undertaken by the company in the meantime, the potential development gain serves as cash of value for the company undertaking the risk of the operation and also for the providers of finance as a margin of security of value against their borrowings of money which they will need to carry out the developments.
      8.15 p.m.
      If there is no offset for losses in this context, the practical effect will be that any case where the profitability at the end of the day is at all marginal or uncertain for any specific reason will be excluded altogether. Therefore, only the potentially profitable developments will go ahead. Obviously companies will do all they can to ameliorate this position, because if they have two parts of a development which are treated separately they will get no offset. But if they have two parts of a development which are treated as the same material development and the whole is treated as one assembly of land in the language of the Bill, only the overall profit at the end of the day, if that is when the tax is due to fall, will be charged.
      The problem is not so much one of dealing with land which can or cannot be regarded as part of the same project, but it is one where builders or developers in the course of their business have undertaken other projects at the time on the understanding that only some will be very profitable. Of course they will hope that all will be profitable, or will at least break even, but in this hazardous business the chances are that some will prove to be unprofitable. If losses which are realised for development land tax are not offsettable against the gains for develop-
      1696
      ment land tax, this must inhibit the degree of land activity and building.
      We are seeing another example in which the technical provisions of the Bill have been hedged about by the practical requirements to conform with the net-of-tax provision on the sale to local authorities. This is a levy, not a tax of the ordinary kind, and without such relief as that which we are seeking in New Clause 12 there will be more delay, fewer schemes carried out and greater costs. I cannot believe that that is what the Government want. Therefore, I commend the new clause to the House.
      Mr. Denzil Davies: I do not think that the hon. Member for Hitchin (Mr. Stewart) will be surprised if I give a negative response to the new clause. I must make it clear that what we are talking about is a tax on betterment and not a tax concerned with the profits of a development. The tax draws a distinction between profit or gain made as a result of betterment and that made at a further stage in a development where the developer makes a profit by putting up buildings which people particularly want to buy or live in.
      We are concerned with a betterment gain which arises to a farmer, a small builder or a property company as a result of the granting of planning permission. It is not a development gain; it is a betterment gain.
      The difficulty in principle of accepting the new clause, which seeks to offset loss, is that I cannot really see where the concept of betterment loss comes in. If we are to offset betterment loss against betterment gain, I cannot see where betterment loss is involved, because by definition we are concerned with betterment. If there is no betterment gain, that is the end of the situation. I cannot see how this can be turned into a negative or loss situation.
      A gain on development is taxable, and if there is a loss on other developments they can be offset against the gain, but I cannot understand the concept of betterment losses set off against betterment gains. It is also difficult to identify particular projects against which a loss should be allowed.
      If we were to accept the clause it would involve recasting the interaction provisions, because they are based upon a

      1697
      decision not to try to introduce some form of loss relief. This point was considered seriously, but the technical problems of providing loss relief with a betterment tax were found to be considerable. In addition, there was the difficulty of accepting in principle that there could be such a thing as a betterment loss with this kind of tax. These are the sort of problems encountered in incorporating a clause such as this in the Bill. For example, decreases in current use value would have to be taken into account. Because increases are brought into the base value, decreases would have to be brought in as well. There are similar provisions concerning the betterment levy, but these will be dealt with in a later amendment.
      Therefore although it appears strange not to allow a loss in a tax, we are concerned with betterment gain and that gain is isolated. There is, therefore, no such thing as a betterment loss.
      Mr. Fairbairn: It seems a very artificial concept to try to isolate a gain. A gain is not isolated. It is part of the general situation of loss and gain, and it is quite improper for the Government to rely on the concept that gains are isolated while losses are not.
      Mr. Davies: The hon. and learned Gentleman was not here when I began my speech and he perhaps therefore does not fully understand my argument. I was saying that this is not a general gain which can be set off against a general loss. A loss on development can be set off against a profit. We are concerned here with the first stage. When development commences, there is a charge to tax if there has been an increase in the betterment value of the land. If there has been no increase, there is no charge. Therefore, I cannot accept the concept of a loss at that point unless something special were to happen to the land, such as planning permission being withdrawn, and there are already provisions for that in the Bill. Therefore, we are isolating a gain. Once that is isolated, and it arises because of the granting of planning permission, I do not see how a loss can arise in that kind of situation.
      Mr. Fairbairn: I fully understand the Minister's position, but throughout our debates he has based his case on the concept of fairness. A developer who on
      1698
      an individual transaction is refused planning permission and therefore makes a loss, or who suffers a change in surrounding developments which causes him a loss, has no remedy. But if he makes a gain he is stumped. Therefore, in what the Minister calls the speculative activities of a pension fund the circumstances are similar to betting on a horse. If the horse loses, that is the punter's bad luck. But if it wins, under these proposals the Government take the winnings.
      Mr. Davies: In most circumstances it would not be a case of putting on a bet. Where there is no gain and no loss, there is no bet in the first place. We are concerned with an application for planning permission—that is, the putting on of the bet—and with the granting of permission—that is, the win. Quite apart from that, it would be extremely difficult to fit into a tax of this kind a loss relief even if the development loss could be defined. The interaction provisions would have to be entirely recast because they are based upon a no-loss situation. Decreases in current use value would then have to be taken into account because increases are taken into account in computing base values. For these reasons, I cannot agree to the clause.
      Mr. Graham Page: The Minister has shown quite clearly the unfairness of this measure. He has admitted that one would expect when one is charged a tax on betterment to be charged on the profit one makes. If one does not make a profit, or if one makes a loss, one is entitled to deduct that loss from the profit. That is fairness in taxation. Here, however, we are dealing with a levy, not a tax. It is a levy on a certain occasion, not even a levy on the gain. It is a levy on the estimate of the increased value of the property, and it is not impossible to assess a loss to set against a gain of that sort.
      It is described in the new clause as "negative realised development value". That is not an elegant phrase, perhaps, but at least the formula is well set out. I appreciate, of course, that if this principle were accepted there would have to be a lot of other amendments in other parts of the Bill. The clause was on the Notice Paper during Committee stage and the Government could have looked at it then. If they were sympathetic to losses, they could have suggested the amendments that were required elsewhere.

      1699
      Earlier in our proceedings on the Bill, the Minister saw fit to withdraw two clauses. He did not find them entirely satisfactory and said that he would reintroduce them at a later stage in a Finance Bill. I ask him tonight, because he was sympathetic to the idea of setting a loss against a gain, to look at this clause again and see whether there is some way in which fairness can be brought to the levy so that one would be able to set losses against gains. If the Minister could find some way to do this in the Finance Bill when he reintroduces his own clauses, we should be grateful. I am not encouraging any Government to increase the size of the Finance Bill, because we have spent too much time in Standing Committee on the massive Bills we already get.
      Mr. Denzil Davies: I would be very happy to look at this again, but I have to choose my words carefully. The problems seem quite insurmountable. We will look at the clause and see whether it gets round the problem. If it does, we will consider putting it into a Finance Bill, but I can see great problems.
      The hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) quite rightly spent some time in Committee talking about the phrase "realised development value". He chastised us for using the phrase "realised development value" in circumstances where there was no such thing. Now we have "negative realised development value". I am not just making a semantic point but showing how difficult it is to isolate the concept of loss.
      Without giving any undertaking, I am prepared to look at the new clause to see whether it would be possible to surmount the difficulties involved.
      Question put and negatived.

    New Clause 13

      RECREATIONAL USE OF LAND
      'In the case of land used or intended to be used wholly or mainly for the purpose of or in connection with physical recreation the carrying out of any building or other operations (other than the erection, enlargement, improvement of alteration of dwelling-houses) requisite for any of the following purposes shall not constitute material development for the purposes of this Act:—
      1700

      (a) The use of that land or any part thereof by persons when participating in that recreation;

      (b) erection or construction of a clubhouse, refreshment room, changing room or other premises to be used wholly or mainly by persons who participate in physical recreation on that land or of other buildings incidental to the use mentioned in subparagraph (a) above which may be required for the storage of apparatus and equipment used for the purposes of physical recreation or for the maintenance of the land for such purpose;

      (c) the construction on that land of anything necessary to secure the safety of such persons as are mentioned in sub-paragraphs (a) and (b) above, or of members of the public, or to prevent damage to property'.—[Mr. Fairbairn.]

      Brought up, and read the First time
      Mr. Fairbairn: I beg to move, That the clause be read a Second time.
      The purpose of the clause is to exempt from the provisions of the Bill land that will be used for recreational purposes. I hope that the Minister will agree that he cannot object to this clause on principle, or on the ground that it would be difficult to implement. Yesterday we discussed a new clause that replaced Clause 19, and the Government had no difficulty in defining "industrial purposes."
      I hope that the Minister does not think that I am being offensive if I refer to his defence of the amazing difficulties that the Government have in being fair when they do not want to be fair, yet find it easy to be fair when they want to be fair. The whole Bill is supposed to be about fairness.
      This subject, more than any other, falls within the same curtilage—if I may use that English word, with which I had such difficulty in Committee—as the new clause dealing with industrial purposes.
      8.30 p.m.
      In previous debates, the Minister explained why it would be improper and contrary to principle to except charities and pension funds. Surely we can at least say that political parties are positve or equally neutral on recreation.
      No one can argue that one part of the community rather than another will benefit. On the Minister's concept that the community is what matters, he may argue that only certain members of the community play ping-pong, soccer or darts, so they would benefit while others would

      1701
      not and the provision would consequently be grossly unfair. That argument would be even more absurd here than it has been in other parts of the Bill. Sport and recreation are, to a great extent, paid for and supported by public funds. It cannot be denied that this is partial, because not everybody indulges in sport. Some people benefit, others do not.
      I think the Minister shares my belief that funds that are extracted from those who indulge in an activity, put through Government organisations or local authorities and then reapplied to that activity, obtain an infinitely poorer return than if they had been left with those indulging in the activity in the first place. That is a universal principle, from which we cannot escape. Given that sport is now a manifestation of activity within the community which is supported, sponsored and financed by the Government, it is wrong that it should have funds removed if they fall within the ambit of the Bill and reapplied by a central authority, local authority or direct funding.
      I agree that there are other activities, such as the arts, to which this concept could apply. The fact that we do not have a new clause on the arts does not seem to me to be a good reason for denying that there is a good and unanswerable case on behalf of sport. I appreciate that the Minister may argue that if somebody is building a squash court, or tennis court, or a cricket ground, the £10,000 exemption will apply. After all, the Marylebone Cricket Club may own premises in which it wants to set up a pub, and it might make a tremendous profit from that concern. That would be unfair to members of a village cricket club.
      Let me take Scotland as an example. In Edinburgh there has been a major development of sites containing facilities used for the Commonwealth Games. That effort involved the expenditure of many hundreds of thousands of pounds, and nowadays that figure would probably involve millions of pounds. The Commonwealth swimming pool, which was built on a prime site, was a major development, the cost of which ran into millions of pounds. Therefore, lest the Minister should use the argument that we are dealing with a minor matter with which the Bill is not likely to interfere, I wish to point out that if, for instance, Glasgow
      1702
      had attempted to obtain an increase in its enormous capital debt in respect of the Commonwealth Games, that would be covered by these provisions.
      It is important that the Government should not indulge in all the bureaucracy involved in removing this theoretical tax from recreational organisations and then take the view "We shall give it back to them in another way." That is a waste of money, and is unnecessary. But it does not contradict any of the principles in the Bill if we exempt from its provisions an activity that we all believe should be supported by community funds.
      Mr. John Farr: I wish to support the clause, especially because I believe that this Government should adopt a consistent approach to legislation as it emerges from one Socialist Government to another.
      If the Minister of State has time to do so, I should like him to examine the provisions of the Land Commission Act 1967. He will find that much of the material contained in the new clause is to be found in the 1967 Regulations, relating to material development, made by the then Minister of Housing and Local Government under sections 98 and 99 of the 1967 Act. All that this new clause is seeking to do is to establish the position that was established in the Land Commission Act.
      The new clause deals with three specific purposes, for which it is proposed that land may be developed for physical recreational purposes without the payment of development land tax. Paragraph (a) relates to the use of land for physical recreational purposes. A great deal of constructional work is involved in preparing a site for such purposes, namely, levelling, drainage, landscaping, re-seeding, the laying of artificial surfaces, underground heating, and other expensive developments.
      Subsection (2) of the clause relates to the building of clubhouses, refreshment rooms and changing rooms and other premises necessary for the storage of equipment. The third subsection relates to the safety not only of those who participate in an event that takes place at a recreational ground or establishment but also those members of the public who may be spectators at such an event.

      1703
      I warmly support the clause. There are at least two important points that the House should bear in mind. The first relates to an Act of Parliament which the Minister has surely heard of although he may not have actually had a part in its formation. I refer to the Safety of Sports Grounds Act 1975. The Minister may not even be aware that this Act is on the statute book. In fact is was prepared by, and inherited from, the outgoing Conservative Government. It had all-party support and became the law of the land in 1975. The Act lays upon the operators of establishments for physical recreation many serious obligations. Section 2 states that a local authority may require the operators of a stadium or stadia to make various alternations, such as constructing crush barriers, erecting safety barriers, tunnelling, and many other additions to the stadium.
      Section 2(1) gives a local authority the power to lay down almost any conditions and, if they are not complied with, to say that the stadium, or site, will not be allowed to continue for recreational purposes. When one looks at the Safety of Sports Grounds Act, with the very onerous burdens that are placed upon those concerned with the operation of certain recreational grounds, one sees that it is not right and proper that they should be penalised by development land tax for carrying out their duties as specified in the Act.
      The other point that I wish to make concerns the whole attitude of the Government in producing this Bill and placing it before the House. It concerns the whole attitude of the Government in relation to those who have engaged in sporting activities, or recreational activities of any sort whatsoever. I hope, for instance, that the Government are not making the same mistake as that which they made in 1975 over the Community Land Act.
      The Minister may have heard of the Central Council for Physical Recreation and its responsibilities to sport in this country, in particular, in advising the sports councils. The council, in its annual report for 1974–75, had this to say about this Government and the Community Land Act:
      1704
      "This major piece of legislation was prepared by the Government without any proper consideration to its possible repercussions on Sport and Recreation."
      The CCPR, as it is known, is an entirely impartial body. It is distressing to find that when one has had a major Act, like the Community Land Act, put on the Statute Book, no attempt has been made by the Government of the day to consult those who are responsible for sport and recreation in Britain. I hope that the Minister, in bulldozing the Bill through the House has had a little concern about the White Paper on Sport and Recreation published by his Government in August 1975. I do not suppose, that he has read it—
      Mr. Denzil Davies indicated assent.
      8.45 p.m.
      Mr. Farr: I am glad that he is honest enough to acknowledge it. I shall read a couple of significant paragraphs. It is not desirable that the Minister should completely ignore the contents of the White Paper, because they give a firm indication of Government policy towards sport and recreation.
      Paragraph 5 says that
      "The Government accept that recreation should be regarded as 'one of the community's everyday needs' and that provision for it is 'part of the general fabric of the social services'."
      In paragraph 56, dealing with priorities, the White Paper talks about areas of special need and says that
      "The House of Lords Select Committee recommended that 'recreational priority areas' (inner urban areas which have suffered from environmental deprivation and have lagged behind particularly in recreational provision) should be defined and given special financial assistance for recreational projects. The Government are deeply concerned about the problems of urban deprivation and are in full sympathy with the aims of this recommendation."
      I think that the whole House is in sympathy with them.
      It is a pity that the Government have not shown more sympathy, not only with legislation of a previous Socialist Government—the 1967 Land Commission Act—but with their own White Paper, of August last year. I hope that they will accept the new clause.
      Mr. Hector Monro: I support the new clause. The Government

      1705
      seem to be cutting the throat of sport and recreation, which all Governments have been trying to help for a long time. Their attempts have not borne substantial fruit, but at least national resources do reach sport and recreation through the Sports Council and local authorities. However, an enormous amount of that money is taken out in VAT, rates and corporation tax.
      We are still awaiting a debate on the White Paper published last August, which gave encouragement but no resources to sport and recreation. This tax, in conjunction with the Community Land Act, will have a detrimental effect on sport and recreation generally.
      What consultations has the Minister had with the Central Council of Physical Recreation and the Sports Council? My inquiries suggest that they have been minimal.
      Two main propositions arise under the new clause. The first concerns major sports grounds. We want to see improvements for the sake of the game and the spectators, and to help the implementation of the Safety of Sports Grounds Act.
      Second, an announcement of the designated day is long overdue. It will inevitably come before next Session, and certainly within the next 12 months. Implementing the code and the regulations set down by local authorities will cost a substantial sum.
      One way in which this money might be raised to finance the provision of safe facilities—which we all accept and applaud—would be for the large grounds to sell off a corner site, or an acre here or there, for development. The proceeds would be taxed extremely severely, so that little cash would flow to the organisations owning the sports grounds. Therefore, little money would be available for the development of safe facilities at the sports grounds.
      The Minister must have more sympathy with the application of the new clause to small clubs. I refer to those clubs that are run mainly by voluntary organisations. These days, in view of the high cost of running sports grounds and sporting facilities, it is not infrequent for two or three clubs in a town or city to combine, pool their resources, and have one play-
      1706
      ing field, one pavilion, one set of changing rooms and stands, plus squash and badminton courts. If two of the three clubs sold their premises for development so as to obtain an enhanced income—always accepting that planning permission was available—they would be clobbered by this legislation.
      There is no point in saying that some of the clubs might be registered as charities, as I do not think that they would benefit under the provisions of the Bill.
      I have had much correspondence with the Minister of State for Planning and Local Government—who has not often been present at the discussions on this legislation—especially about the Community Land Act, which triggered off this legislation. He wrote to me in April and said that there would be an exemption in respect of the type of case to which I referred. He referred to building extensions of up to 10 per cent. of the existing facilities, or 1,000 square metres. That will not take us very far in trying to obtain money for development or for improving the facilities of sports clubs.
      The second exemption would apply to new buildings of less than 1,000 square metres. That may do for a modest pavilion and changing rooms, but it will not cover grounds or buildings sold to provide money for sport and recreation. That kind of sale would be hit comprehensively. We welcome the encouragement given for better sporting facilities. Clubs should have income-producing facilities, such as club bars, so that money may be generated for them to use for the improvement of existing facilities. However, all that the regional councils of sports and physical recreation are contemplating is being thwarted by this legislation.
      Larger sports grounds, especially cricket grounds, may wish to sell off portions of their sites so that their facilities may be developed. Sports clubs may wish to amalgamate and sell off small portions of their ground so that the proceeds may be used to the advantage of their other facilities. I hope that the Minister understands that this Bill and the Community Land Act will destroy those efforts.
      If the Minister does not accept the new clause, I hope that he will at least accept

      1707
      the principle of helping sport and recreation, and will be prepared to table his own amendment at a later date.
      Mr. Clegg: I congratulate my hon. and learned Friend the Member for Kinross and West Perthshire (Mr. Fairbairn) on introducing the new clause and join those of my hon. Friends who have argued in support of it.
      I pay tribute to the Minister for the great courtesy and stamina that he has shown. It is matched only by that of my right hon. Friend the Member for Crosby (Mr. Page). I thought at times today that the Minister looked like Horatio on the bridge. The troops are still coming up to support him, but they have not yet arrived. This particular rank of Tuscany can scarce forbear to cheer.
      This is an important new clause. I speak to it now because recently the North-West Conservative Members' Group had a deputation from the industrial areas of Lancashire—particularly Merseyside—about the lack of facilities for recreation or, as they put it, "for play." When I first heard of the deputation coming to see us and went along to meet these people, I had some doubt about their claim, especially in these days of restrictions on Government expenditure. But as I heard about the part that they were playing in the battle against vandalism and juvenile crime, I was impressed by what they said. I should hate anything in the Bill to stand in the way of proper facilities being provided in city centre areas where most of these problems exist. I am talking not of lush, professional, splendid recreation centres, but of quite primitive places.
      I am perhaps unnecessarily perturbed that, without the new clause, the development land tax, especially in city centres where land is very highly priced if it has development potential, will stand in the way of the good work that is being done by these people, who in fact work for very little. If the Bill in any way aggravated the problems of vandalism and delinquency, it would be doing an evil.
      For those reasons, concentrating not on professional or spectator sport but on the recreational use of land, there is a
      1708
      great social purpose here which could be ill-served by the Bill unless it contained the new clause.
      Mr. Patrick Mayhew: I apologise for having missed the speech made by my hon. and learned Friend the Member for Kinross and West Perthshire (Mr. Fairbairn) when he introduced the new clause.
      I excuse my short intervention in the debate on the ground that one has only to read the terms in which the clause is expressed to appreciate at once the merit of the proposal.
      What good purpose can the Government have in mind in seeking to apply development land tax to land used for recreational purposes? I suppose that the revenue that it is hoped this application will yield will be the tiniest fraction of a drop in the ocean compared with what this or any Government are likely to need, but to the sports clubs and others who are trying to play some part in improving the lot of those in inner city areas who are very short of recreational facilities, referred to by my hon. Friend the Member for North Fylde (Mr. Clegg), the money that they will have to find to pay the tax is far more than a drop in the ocean; it is a substantial component of their life blood, and it seems to me that if they are to be mulcted by DLT it will have the effect of preventing their going ahead with improvements that otherwise they would start—improvements that are necessary and for which they may have painfully gathered the necessary funds over many years.
      9.0 p.m.
      I hope that the Minister will ask himself: "What good are we really seeking to achieve? What can we hope for as a result of this application of the tax? Is there really going to be any tangible advantage to the public interest?" He will be able to say, of course, that the principle of the Bill is being applied consistently, and I concede that sometimes there is advantage in consistency and in keeping to an absolute minimum the number of exceptions.
      As one of my hon. Friends pointed out, it is Government policy to encourage those who are seeking to expand recreational and sporting facilities to mitigate the disadvantages of living in large urban concentrations. If that is

      1709
      the policy of this Government, can it be said that there is any sensible or tangible advantage to be sought from applying the principle of the Bill to those who wish land used for recreational purposes? One asks, how is the money to be found? It is a curious principle of the Bill that the tax has to be paid before one starts the development.
      Mr. Farr: My hon. and learned Friend asks how the money is to be found. The House will know that last year we passed the Lotteries Act 1975, which empowers groups of people and others to engage in lotteries for the improvement of sporting facilities, among other community projects. I put it to my hon. and learned Friend that the House should be aware that, if the Lotteries Act is brought into use in a community for the provision of, say, a new sports or recreation hall costing £20,000, by the provisions of the Bill the sum that local people will have to raise will be no less than £100,000.
      Mr. Mayhew: That is a highly relevant point and one that will never be appreciated in the country. People still have some faith in the sense of Government and Parliament. No layman could possibly assume that we would pass legislation that would have that consequence. Once it dawns upon people that that is the consequence of a Bill of this kind, one can readily imagine the effect it will have on those who hitherto have been generous in responding to charitable appeals and who have put their hands into their pockets for money to buy lottery tickets. Once they realise what my hon. Friend has just pointed out—that a proportion of that magnitude out of everything their lottery produces must go to the Revenue—they will say "That is the end of it. We are not going to subscribe to anything so stupid."
      The point is not improved by being belaboured. I merely say in conclusion, having sat last night through the debate on the application of the Bill to charities, having heard the arguments adduced by speaker after speaker on this side of the House and having heard the deafening silence on the Government Benches, whose Members at least did not seek to defend the indefensible but left that unenviable task to the Minister, who tackled it with his usual ability but without the slightest manifestation of enthusiasm—
      1710
      and who could be surprised?—that I see at least consistency here.
      Here the Government, as last night, out of considerations based solely on doctrinaire consistency, are seeking to apply to those who they realise are trying to help them, in ends that the Government themselves wish to attain, a tax the consequences of which can only be to hinder, obstruct and hamstring those voluntary organisations. In the same way as when my hon. Friends last night were able to list the categories of voluntary organisations that wish only to be able to help the Government to achieve what the Government are manifestly failing to achieve satisfactorily and sufficiently themselves, if the Government persist in objecting to this clause, they will be perpetuating their failure.
      One thinks of the Duke of Edinburgh's playing-fields scheme and the numerous charitable organisations and others of a sporting nature that seek to provide improvements for their local communities on a recreation ground that is available. They will be hamstrung, obstructed and hindered in just the same way. I beg the Minister to take this to heart and tell us, when he replies to this wholly one-sided debate, how objection to the new clause can possibly be justified.
      Mr. Denzil Davies: Hon. Members have asked me to extend an exemption, as set out in the new clause, to the recreational use of land, mainly in the case of physical recreation, which is what the new clause deals with. The main objection to the new clause—the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) touched upon this—is that here we are being asked for an exemption for one particular activity. It is an extremely worthy and good activity, but other activities are equally deserving. No doubt they would also wish exemption from the legislation. In the development of theatres or opera houses—a cultural, not sporting, activity—the case would be the same as for the development of sports grounds. Therefore, if one were to allow exemption in this case, I should have thought that one would have to give exemption to other worthy causes to be consistent. That is one of the difficulties.
      Mr. Fairbairn: Please let us not add this terrible Socialist principle that, if

      1711
      everyone does not get something, no one will be allowed to have it.
      Mr. Davies: It is not a case of no one being allowed to have this if everyone cannot get it. We come back to the basic point of whether we should use taxation to further certain causes and ends, and whether we should assist sport by a relief from a special tax, a particular tax, which is what we are being asked to do. We are being asked to relieve one particular activity from taxation in order to assist that activity. A better way of assisting sporting organisations and cultural organisations is not to be found through the tax system, which should not be used for these purposes. By and large, although there always have to be some exceptions, the tax system should have as few exemptions as possible.
      If the Government want to spend money on various activities and bodies, they must decide, by means of a debate on priorities, how they are to allocate resources. However, once one starts along the road of using reliefs from taxation to assist various causes that the Government think worthy, one finds that it is a dangerous road to travel. It has been a basic principle of public expenditure and public finance that we try not to do that. We try not to give specific relief for specific organisations. We try to deal with matters through public expenditure priorities.
      I accept that the tax is slightly different because it may be imposed on one activity in one community. But we are being asked to exempt a body, a recreation or acitivity from that tax to assist that activity. If we did that, there would be other cases and we would then be using taxation for social purposes, which I do not believe to be desirable.
      There may be some cases where the tax will have to be paid. The example was raised in Committee of the Worthing Rugby Football Club. In most cases, however, there will be no tax to pay because of the £10,000 exemption. I do not argue that a minority would not have to pay a considerable amount of tax, but because of the exemption and the base rate the small football or rugby club is unlikely to have to pay the tax. We are concerned with a minority of cases where there might be development value, but
      1712
      if we accepted the proposition it would be difficult to know where to draw the line. Other organisations would understandably ask for relief, and there would be no way to confine exemptions which would be fair to the totality.
      I ask the House not to accept the new clause, but I am in considerable sympathy with those who wish to help sport. I am not sure that the taxation system is the best way to help. It would be better to do it through public expenditure and public finance.
      Mr. Monro: The Minister is basing too much of his argument on the fact that the tax will not affect many clubs. I examine large numbers of sports clubs' balance sheets and I know what it costs to provide the minimum changing-room facilities. The sum of £10,000 is not much. One would obtain only very meagre facilities for £20,000. It would cost even more if a club wanted reasonabe social facilities in order to generate income.
      Mr. Davies: I am not only arguing about the £10,000 exemption. One has to calculate the gain one gets against the base value. Certain base values have to be deducted from the price paid for the land. The sum of £10,000 is probably sufficient in most cases. The hon. Member for Dumfries (Mr. Monro) will know that there is already a charge for development gains on clubs at the corporation tax rate of 52 per cent. That measure was introduced in 1974. I understand that there were no amendments then and that it was not considered to be a problem. There have been no representations about the development gains charge which relates to betterment if clubs want to develop. We are not imposing a completely new tax because a tax already exists, although I accept that the rates will be higher.
      Mr. Fairbairn: That must be the 114th load of sympathy that I have received from the Minister. I remind him that activities like sport are not run on sympathy; they are run on cash. It is offensive to hear the same argument again and again in which I do not believe the Minister believes. He tells us that we are absolutely right and that the Government have sympathy with the idea but unfortunately there may be other organisations in the same situation and it would

      1713
      be unfair. In order not to be unfair to them we have to be unfair in this case as well. That is the logic of the spurious argument that I have heard from the Minister in Committee and in this debate. It is a bad and wicked argument. The Minister's position is indefensible.
      9.15 p.m.
      The hon. Gentleman was saying, in effect "If we go down what I agree is a good road, there is no end to the number of good intentions that we may carry out. We may help the arts, which we help anyway. We may even help theatres, sports clubs and all sorts of other things which we never intended to help in this way but which it is our policy to help. We cannot start down such a golden road in case we do some good."
      I am concerned about the arts. If the theatres want this exemption, perhaps the Government will grant it. If the Government think that the theatres should have it too, let them give it to them; it is the Government's Bill. But let them not say "Sport shall not have it, because other organisations should have it as well." The Government can amend the Bill in another place if they wish.
      The second argument, which I have heard again and again and which I find equally offensive, is that in most cases there would be no tax. In other words, the fact that a grave injustice would be done in a significant number of cases does not matter provided a lot of people fall below the tax line. That is not a realistic concept. The ordinary football club is now in grave financial difficulties, certainly in Scotland. Incidentally, the great interest shown by SNP Members is worthy of note. They are once again absent. The football club often has to build a supporters' recreational facility in order to obtain funds from the sale of alcohol and from membership subscription that make it viable. Under the Bill, that facility is liable to tax at 80 per cent.
      My hon. Friend the Member for Dumfries (Mr. Monro) said that one cannot build much for £10,000 nowadays. One cannot build a supporters' recreational club today for less than £400,000. That must be spread over the whole ground, but the increased development value may well land the club with a tax payment of more than £100,000. What football club now compelled to comply with
      1714
      all the safety regulations will be able to find that sort of money for tax?
      Mr. Michael Spicer: Is this not a perfect example of the case where there are no genuine gains—nor are there likely to be any—but there is tax?
      Mr. Fairbairn: I am obliged to my hon. Friend. The Government seem unable to get it into their heads that there is no such thing as a charity, pension fund or sporting organisation with more money than it needs. These organisations need all the money they can obtain to carry out their functions.
      The Minister's third point was that if the Government wanted to fund such organisations it would be better done by tax. He said "We should use the taxation system to promote certain activities. It would be fair to the general totality"—
      Mr. Denzil Davies: I said that we should not use the taxation system; that there is a danger in assisting organisations by giving them exceptions in fiscal legislation. It is better to assist them through the normal channels of public expenditure.
      Mr. Fairbairn: I am grateful to the hon. Gentleman. I do not want to get his concept wrong. I think that I understand what he says, which is that if one is to be unfair enough to give facilities to those who play games and not to those who do not, it should be done through the general tax system and not by exemption.
      If I noted the Minister's words correctly, he said that it would be fair to the general totality, but it is not fair to the general totality, if fairness or equality is to be the criterion, that those who play cricket, football or ping-pong, ride horses and do all the other things recreationally, receive support, while those who play bowls, darts and other similar activities, or play nothing at all, do not get it. That is awfully unfair.
      Clearly there is discrimination. Let us not be fussy about the concept of discrimination. We discriminate in sport in favour of those who play it and in favour of the sports that need the money. We discriminate against the sports that do not need the money and against those who do not indulge in sports. Let us not talk about the absurd equation of ultimate fairness to the general totality.
      Mr. Michael Spicer: Does my hon. and learned Friend accept that this is a perfect example of how we can play the game the Minister's way? The Minister has mentioned discrimination, and we are discussing an activity that is doing badly for cash. As activities that are doing badly are subsidised by the Government—it was argued yesterday that we should discriminate in favour of the manufacturing sector, because it is doing badly—is it not possible to throw back the argument that a certain activity is doing badly and that we should therefore discriminate in its favour?
      Mr. Fairbairn: I am obliged to my hon. Friend. That is the next stage in the argument. That demonstrates the fallacy of the Minister's argument. The hon. Gentleman says that it is wiser to fund the money for sport through the Government, and to put it back into sport because it is doing badly, but that is a complete waste of money. In that way we use 100 times as much money as the original organisation would have used if left to its own resources.
      This is part of the meanness and the lack of imagination of the Government. They take the attitude that those who do not like food shall not be allowed to prevent those who do like it from eating, and that those who like it shall not be allowed to prevent those who do not like it from starving. That is the concept of the absurd generality into which the Government have placed themselves.
      This is a small clause. It deals only with recreation and sport. Sport does no one any harm. Socialists indulge in it, as well as everyone else. It would be a sensible exception. Whatever other exceptions the Government may think of, let them grant it to them, too. The Government adopt the Scrooge-like attitude and say "Because you have not thought of all the others, none shall have anything to eat". They say "If everybody does not get a lollipop, no one shall have a lollipop". That is the fallacy of the hon. Gentleman's argument.
      I believe that we are a sporting race. With great difficulty we are trying to send a team to the Olympics. For goodness sake, do not let the Government go away with the charge that their meanness, hardness and lack of imagination has ensured that sport has been deprived of
      1716
      the few sources of funds it had by this absurd, unfortunate and ruthless tax.
      Question put and negatived.

    New Clause 14

      MORTGAGEES' DISPOSAL TO EXEMPT BODIES
      'Nothing in section 39 or Schedule 7 below shall authorise a body described in paragraphs (a) or (b) of subsection (1) of section 39 when acquiring an interest in land in which a person is entitled to a security or to the benefit of a charge or incumbrance affecting that land to deduct from the amount payable by way of consideration upon that acquisition any sum in excess of the amount (if any) by which that consideration exceeds the principal, interest and costs payable to such person in order to discharge his security, charge or incumbrance; and this section shall apply to acquisitions of such land either from the owner of an interest therein or from a person who is dealing with that interest for the purpose of enforcing or giving effect to his security, charge or in-cumbrance'.—[Mr. Graham Page]
      Brought up, and read the First time.
      Mr. Graham Page: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Mr. Bryant Godman Irvine): With New Clause 14 we may take the following amendments:
      No. 94, in Clause 39, page 62, line 31, at end insert—
      'Provided that no deduction shall be made in respect of such part of the consideration as is paid to a mortgagee'.
      No. 182, in Schedule 7, page 149, line 14, leave out
      'entered into on or before 12th September 1974'.
      Government Amendment No. 183.
      No. 184, in page 149, line 24, leave out 'be' and insert 'not exceed'.
      No. 185, in page 149, line 41, leave out
      'entered into on or before 12th September 1974'.
      Government Amendment No. 186.
      No. 187, in page 150, line 6, leave out sub-paragraph (4).
      No. 189, in page 150, line 21, leave out from 'Act' to end of line 31.
      Government Amendment Nos. 190 and 191.
      Mr. Page: The new clause deals with the disposal of property to exempt bodies

      1717
      by the mortgagee. Perhaps I may put on record some matters which are familiar to those who were in Committee but which may be a little difficult to understand for those who were not involved in our deliberations at that stage.
      When property is disposed of—namely, sold—to an exempt body, including a local authority, the exempt body, in paying the purchase price of the property, can deduct the development land tax from the purchase price and pay over the balance, taking for itself the development land tax. There are formulae as to the amount to be deducted, but if the realised development value is substantial, so also may be the 80 per cent of that which will represent the tax. It may be quite a large sum. It may be a small sum which can be deducted from the purchase price by the local authority or other exempt body.
      Let us suppose that the property is mortgaged and that the mortgagor is in default. The mortgagee therefore exercises his power of sale and sells the property again to an exempt body. When the Bill emerged from Committee, there was a provision that the local authority could deduct tax which might exceed the amount of the mortgage, so that the mortgagee, exercising his power of sale and exercising the security which he had for the loan of money, might find that he was paying the tax, or Dart of the tax, of the owner of the land.
      That would have placed the local authorities in a preferential position as against secured creditors, and even the normal tax inspector does not claim to do that. Indeed, on other taxes they are preferred claims, ranking in priority over other creditors. The one who holds a security, such as a mortgage over land, is entitled to stand back from that situation and say "No, I rely on my security. I will dispose of my security, take my mortgage money out of that and pay over the balance"—where there is no bankruptcy—"to the individual owner himself", or perhaps to a second mortgagee. In the case of a bankruptcy, it would be paid over into the bankrupt's estate.
      Under the Bill as it came from Committee, the local authority could take its development land tax out of the purchase money, that is to say out of the money it had to pay—it might be paying it to a
      1718
      mortgagee who was selling—in priority without regard to the amount secured on the property. This did not apply, as the formula was devised previously, to a mortgage which had been entered into prior to 12th September 1974, the date of the White Paper. In that case the local authority could not deduct so much from the purchase price that it would be taking some of the money needed to pay off the mortgage.
      Strangely enough, the local authority is directed in that case to take the whole of the balance of the purchase price over the mortgage as the deduction of tax. I cannot really think that that was the intention, but that is how it appears in an amendment in the group which we are discussing with the clause.
      The purpose of the clause is to say that the local authority shall never deduct more in tax than the difference between the amount which is needed to pay off the mortgage and the total amount of the purchase price—that is to say, it can only look to the amount of the equity over and above the mortgage for the recovery of tax. This would restore the traditional legal position of a secured creditor—a mortgagee who had his security in the property—and make it quite certain that he would get back the amount which he had lent on the security of the property.
      9.30 p.m.
      I appreciate that, if that is the case, it is quite possible for an owner of property to mortgage his property up to the hilt and then default—the mortgagee sells, takes his mortgage out of the property secured, and leaves nothing for the local authority to deduct by way of tax. That is just too bad. This is the position in the case of any tax which is owed by a defaulter—which is owed by some profligate person who has borrowed up to the hilt on his securities.
      It is our contention that, although this is an extraordinary tax—a levy and not a tax, perhaps—it should not be given priority over and above the secured creditors. If this were a sale to a private individual—if the mortgagee was selling not to a local authority but to a private individual—there would be no question about it. The mortgagee would be entitled to take his whole mortgage money, costs and interest out of the proceeds of

      1719
      the sale. But, merely because of this system of purchase net of tax, to which we object strongly, the mortgagee is quite likely to lose part of his security when he comes to sell.
      Until now, I have been dealing with the end of the transaction—with the mortgagor defaulting and the mortgagee selling. But those who are about to lend money on the security of property will have realised that this might happen and that they might find, if their borrower defaulted, that their security might be worthless in the case of a large realised development value.
      It seems to me that by these provisions we are putting the normal process of financing in grave jeopardy. What bank will lend to its customer on the security of property if it feels that at some future time. if it has to resort to the sale of that property as a mortgagee, it might not get back the amount lent? It might be all right if it is a fully developed property. I imagine that in most cases of loans on dwelling-houses, perhaps by building societies, it is unlikely that that will happen. It means, however, that loans on farms, for example, will be put in very severe jeopardy, ase will loans on commercial or industrial property where there is a possibility of development. Therefore, if the property is sold, there might be quite substantial tax to be paid out of the realised development value. I feel that there is grave danger of disorganising and disrupting the whole business of finance to the individual borrower if this provision is allowed to remain as it stands.
      In the Government's amendments which are grouped with the new clause, the Minister has conceded a little bit. As Schedule 7 stood when it was introduced to us in Committee, what I have been describing as the possible loss of the mortgagee could not happen if the mortgage had been taken out before 12th September 1974. In the amendments now on the Notice Paper, the Minister has changed that date to the date on which we had the Committee discussions. That is the date on which this could have been known to members of the public had they taken the trouble to listen to our Committee debates.
      I pity any member of the public who has the unfortunate job of doing that. Even so, it means that from that date last
      1720
      month any mortgagee is at risk with his security if he is lending money on a property which may have a development value. This is extremely dangerous to the financing of development and to any matters of finance.
      Mr. Clegg: I support what my right hon. Friend said in moving the new clause. He is a practising solicitor, like myself, and he knows the vast changes that this Bill, if it goes through unamended, will bring to those lending money on land. It is clear that at the moment it is much better that the mortgagee who has a power of sale should sell to exempted bodies and leave the Revenue to recover the tax. It is the peculiar format of this Bill, being so closely linked with the Community Land Act, that has led to the apparent anomaly.
      I accept that this will not apply to building society mortgages on private houses. I am not raising a scare on that issue. Where it will be felt—I have had these fears expressed to me by merchant bankers—is in the area of support for financing development. Bankers are very worried about the effects of the Bill and feel that it will inhibit finance coming forward in the future.
      I am thinking particularly of the case in which a builder has a land bank and is buying land, and the mortgage comes after 11th May—the date in the Government amendment. The fear is that the finance company or the merchant bank will not lend the whole amount secured on several plots of land with development value. In future, if the Bill remains unamended, the mortgagee must look at the situation and see that the amount that he can lend on a particular piece of land is the current use value plus 20 per cent. of the development value. That will be the absolute limit of his lending. The difficulty of this figure is that at the time of the lending transaction it is not always easy to calculate how this is going to be done. As a result, there will be a degree of uncertainty and doubt in lending transactions which is not there now. The one thing that bankers and finance companies dislike is uncertainty.
      Unless the clause is accepted we shall have a hiatus in money coming forward for development—money that is badly needed, especially in industry and house-building, as the Minister pointed out.

      1721
      If we disrupt the confidence of those who lend money and lead them to believe that they are not going to get their money back, or that the State will grab their money before they do get it back, they will not lend at all. I would have thought that this was not in the Government's interest or, indeed, in the country's interest. The flow of funds should not be slowed down or put at risk by the provisions in the Bill.
      Such a hiatus could well interfere with the Government's plans for industrial expansion. It is wrong that those who lend money should find the State stepping in ahead of them and taking first grab. The State should do what it does in every normal transaction and take its place in the queue. If this had been a Department of the Environment Bill and not a Treasury Bill that is what it would have done.
      Mr. Ian Stewart: I support the clause. I do not wish to add anything of substance to what I said in Committee. The more thought that is given to the problem of mortgagees in this situation, the better. I have had discussions with fellow members of the banking profession and with those who are concerned with lending money against the security of property. They are experiencing increasing anxiety.
      Whatever the Government's reaction to our proposal, and whatever form the Bill eventually takes, I hope they will realise that if the situation remains as it is the amount of money available for lending against the security of property will be significantly reduced. That applies not only in the development of property but to lending for other purposes where property is the security involved. I hope that the Minister is fully apprised of the seriousness of the situation.
      Mr. Denzil Davies: The right hon. Member for Crosby (Mr. Page) so ably moved the new clause and explained it and the Government's amendments that I shall not have to spend long on explanation. The Government's amendments substitute the date of 11th May 1976 for 12th September 1974 as the cut-off date for the limitation of the DLT deduction. Any money lent before that cut-off date will not come within the new régime but will be dealt with in the way the right hon. Gentleman would wish all mort-
      1722
      gagees to be dealt with in relation to local authorities.
      The date of 11th May 1976 was not the date on which we discussed this matter in Committee. It was the date when the Government's amendments dealing with the tax scheme first appeared on the Notice Paper. It was felt that on that date those who watched these matters—professional advisers, for example—would know whether the net-of-tax arrangements would affect the repayment by a mortgagee of money in respect of his security. We have therefore moved the date forward.
      The right hon. Gentleman said that because of the net-of-tax arrangements we were giving a local authority priority to collect tax before the mortgagee got his money from his security. We will not be giving it to the Inland Revenue. The Inland Revenue has to go along afterwards to get its tax from the mortgagor if he sells on the open market in a private deal. If the sale is to a local authority, a curious by-product of the arrangements is that the authority acquires a right of priority in respect of tax. It gets the tax before the mortgagee gets his money if there is not enough money to pay the mortgagee.
      I recognised that this might be a problem when I dealt with the matter in Committee. We have considered it fully, and obviously we do not want to inhibit commercial lending in this area. There might be problems in using the property as a security for other loans, but beyond that I do not think that there will be great difficulties. I do not think there is a problem in borrowing money to buy land. If a farmer wants to buy a farm with a current use value and no development value, he will get a mortgage for 85 to 90 per cent. of that current use value. If a person pays a high price for land with development value and seeks to mortgage that land to secure the purchase money, he will get 80 or 90 per cent.—or whatever the percentage is—against the purchase price. Therefore, he will be getting less than the full value of the land. Again, I do not think that there will be a problem.
      9.45 p.m.
      The point made by Opposition Members is that a loan may be sought on

      1723
      the security of a piece of property, with hope or development value but without planning permission, in order to use the money for some other purpose. They say that if the local authority acquired the land and deducted 80 per cent. tax it might inhibit that kind of transaction. But is it always very sensible for transactions to be financed in this way? Perhaps this is not a very sensible or prudent way.
      I accept that in future, banks and institutions which lend money will have to take account of the fact that land which is the security of the mortgagor may be purchased by a local authority, with the danger that the mortgagee will not get his full security because the local authority will deduct tax. However, banks and financial institutions will no doubt adjust their lending to take account of this fact, which is now well known.
      We shall keep the matter under review, and if there appear to be difficulties we shall look at it again. We do not wish to inhibit commercial lending or to create problems. However, it is extremely difficult to devise wording to cover these circumstances without opening the door to the creation of artificial mortgages which would prevent local authorities acquiring net of tax. I know that the Opposition do not like the net-of-tax provisions, but this is a problem which we have to take into account. We shall keep the matter under review and reconsider it if we receive representations about problems or difficulties. At present, I can go no further than the Government's amendments and I cannot recommend the House to accept the new clause.
      Mr. Graham Page: The Minister referred to a curious by-product of the net-of-tax purchases by exempted bodies. We are getting an increasing number of by-products, and they are becoming curiouser and curiouser. We are becoming increasingly convinced that the net-of-tax procedure for purchases is wrong. There has to be an assessment of the person liable for the tax that is paid to the Inland Revenue, which accounts to local authorities for the amount that the Government think they should have out of the tax.
      1724
      If the new clause is not accepted, every institution that lends money on the security of property will lend only at current use value plus 20 per cent. It will take into account the fact that 80 per cent. of the realised development value may be taken from it by a local authority if there is a sale to that authority.
      When the second appointed day under the Community Land Act arrives, 100 per cent. of realised development value will be paid into the pockets of local authorities. Prospective lenders will have to value a property at current use value. Only that value will be the security for the mortgage. Anything else may go to the local authority.
      Mr. Denzil Davies: Current use value could be very high. It could be development value. It might reflect the granting of planning permission and could therefore be a high base value.
      Mr. Page: The Minister has forestalled me. I was using the shorthand term "current use value". I was going on to say that the lender not only has to do that if he intends to lend money; he must also look up Clause 5 to understand what is meant by "base value". He then has to decide whether the base value is likely to fall within paragraphs (a), (b) or (c). The owner makes that decision in the end. He must then work out what will be the base value over the period when a tax rate of 80 per cent. will be imposed on realised development value. It puts a mortgagee who is prepared to lend money on anything other than a fully developed property in a difficult position, and will disorganise the financing of the development of the property.
      Also included for discussion with the clause was Amendment No. 184. Since the Minister did not mention that amendment, I must deal with it. That amendment relates to paragraph 8 of Schedule 7, on page 149 of the Bill, and says that in the case of a mortgage where the mortgagee is selling and the local authority is entitled to deduct tax—I quote from lines 24 to 26—
      "the DLT deduction relevant to the material disposal shall be the amount (if any) by which the consideration for that disposal exceeds the cost of redemption of the mortgage or charge."

      1725
      That means that the local authority is to tax the whole of the balance, and indeed is ordered to take the development land tax as a deduction to be made.
      Amendment No. 184 seeks to delete the word "be" and to insert the words "not exceed". Therefore, the provision would read:
      "the DLT deduction relevant to the material disposal shall not exceed the amount (if any) by which the consideration for that disposal exceeds the cost of redemption of mortgage or charge".
      That must have been what was meant. The tax may not amount to anything like the equity or the mortgage money in the sale price. It cannot mean that the local authority is entitled to pocket the whole of that balance, regardless of the proper tax, or what the tax may be according to a formula in another part of the schedule. This must be an error in drafting, and the Minister would do no harm by accepting Amendment No. 184.
      Even with the addition of the amendment, the whole procedure is extremely damaging. I wish that the Government could accept new Clause 14, which would remove this damaging provision from the Bill.
      Question put and negatived.

    New Clause 15

      ASSESSMENT PRIOR TO DLT DEDUCTION
      Except by the consent of the chargeable person and of the relevant creditor (if any) defined in subsection (2) of section 46 below, section 39 and Schedule 7 below shall have no effect unless and until the Board have issued a notice that the material disposal does not give rise to any liability for development land tax or a notice of assessment to development land tax in respect of that disposal; nor shall the acquiring body have any right of entry (by virtue of a compulsory purchase order or otherwise) to enter on or take possession of the land the subject of the disposal'.—[Mr. Graham Page.]
      Brought up, and read the First time.
      Mr. Budgen: I beg to move, That the clause be read a Second time.
      Mr. Speaker: With the new clause we may also take the following amendments: No. 92, in Clause 39, page 62, line 21 at beginning insert—
      '(1) This section applies to a disposal in respect of which—
      1726

      (a) the chargeable person and the relevant creditor (if any) defined by subsection (2) of section 46 below have given their written consents that it shall apply; or

      (b) the Board have issued a notice that the disposal does not give rise to any liability for development land tax or a notice of assessment to such tax in respect of it'.

      No. 93, in Clause 38, page 62, line 27, at end insert:
      'if before the disposal occurs the Board make an assessment to development land tax in respect of that disposed, then'.
      Mr. Budgen: The object of this new clause—
      Mr. Speaker: Order. I am afraid that I have been a little lax, because I note that the hon. Member for Wolverhampton, South-West (Mr. Budgen) has not appended his name to the new clause.
      Mr. Graham Page: In that case, Mr. Speaker, I formally beg to move, That the clause be read a Second time.
      Mr. Budgen: The object of the new clause and the two amendments to be taken with it is to prevent local authorities from having the right to be able to deduct development land tax from the amount that they pay to those from whom they have purchased land in an arbitrary way.
      The system that would obtain in the event of the Bill remaining in its unamended form would leave to exempt bodies, that is to say, local authorities and other preferred bodies, a residual right by which they, in applying what was described by the Minister as a "strict formula", could decide the amount that they could deduct from the receipts of the unhappy former landowner. This raises a constitutional issue of considerable importance. We believe that it is vital that the individual landowner should either have the opportunity to consent to the deduction that is made or, if he does not wish to consent to that deduction, should have the deduction made only after the assessment of tax has been made by the Board of Inland Revenue.
      We wish to prevent a position arising in which the local authority is both the beneficiary of the amount of tax and also the assessor of the amount of tax. We believe it to be essential that tax assessment and tax collection should be carried out only by a body independent of the

      1727
      political process and, most of all, independent of a body that may benefit from the level of tax that it has itself fixed. I know the Minister may say that there is a strict formula. He may say that, in applying the strict formula, the exempt body will be unable to have much room for latitude, but that is not right. This tax is based upon a value judgment as to the current use value. It is not based upon any clear mathematical position as to what was paid for the land, or anything of that sort. It is to be based upon a value judgment about which honest men may reasonably disagree.
      The danger of the present arrangement is that a local authority, unhappily, will have a most important interest in making sure that the assessed amount of tax is large, so as to give it a large deduction and, thus, a small purchase price. This arrangements brings into consideration the important constitutional position of local authorities and, with them, exempt bodies as defined in the Bill.
      Before I go on to consider their particular position it is perhaps right to reflect why it is that this institution, in which we are so proud to serve, is becoming more and more the subject of disrespect thoughout the country. I suggest that one of the reasons is that it is believed that we have taken to ourselves too many powers, and too many pretensions, to the disavantage of the ordinary citizen.
      I believe the same argument applies with even greater force to local authorities. Local authorities are now the monopoly granters of planning permission. After the passage of this legislation they will become the main purchasers of development land. They already own one-third of the housing in this country. They are already substantial and resented tax gatherers, through the rating system. If we add to this the right to assess their own tax under development land tax, after they have already decided upon a process of compulsory acquisition by taking from the land owner that which is his own, we shall do irreparable damage to exempt authorities, whether statutory undertakers or local authorities. We shall find that we bring them, first, into disrespect, then into contempt, and finally into nothing less than hatred.
      1728
      10.0 p.m.
      If we do not adopt the new clause, we shall do serious damage to a structure of which most of us are proud. We surely all believe that it is vital that power should be disseminated away from the centre—away from Westminster. Many of us went to a magnificent and solemn ceremony this morning. It made me think of the difference between the history and culture of our country and those of France. The French Constitution is based upon centralised decision-making, with—perhaps I might be so offensive as to say—occasionally a slightly authoritarian tendency. Ours has been a different tendency, towards rugged independence and a system of provincial and region autonomy by which individuals make their own decisions and are proud, most of all, to be individuals—sometimes to be Englishmen, sometimes Welshmen, sometimes Scotsmen.
      Most of all, we wish to see decision-making taken away from the centre and given to locally-elected bodies and individuals. This proposal reverses that whole trend. It gives local authorities an added and dangerous power. In a consideration whether to undertake a piece of development, the amount of tax that can be deducted will be crucial to its viability. At present, the Government are trying to impose strict cash limits on local authorities. Thus, if the borough architect or the district surveyor assesses the amount of tax inaccurately, probably someone in his office will have to be sacked, because there will not be money enough to pay the increased cost of the development and also to employ the bloke whose head is nearest the chopping block.
      Important political and human considerations will be involved in deciding the amount of tax, so we say that the health of the whole structure of our local government, as well as the freedom of the individual citizen, require the House to say that any assessment for DLT should be made by an independent body—the Board of Inland Revenue—and not given to local authorities and exempt bodies who already have far too much power.
      Mr. Sainsbury: We are dealing here with one of the fundamental issues of the Bill which some of us find particularly disturbing. My hon. Friend the Member

      1729
      for Wolverhampton, South-West (Mr. Budgen) has drawn attention to the extent to which the new clause tries to alleviate this problem. The clause refers to
      "section 39 and Schedule 7".
      We are all grateful for the ochre-coloured book. I am not sure of the correct description of its colour. I refer to the booklet entitled "Development Land Tax Bill Explanatory Notes" which was issued by the Board of Inland Revenue. The explanation of Clause 38 reads:
      "Subsection (1) Where an interest in land is disposed of to certain types of local authority, or to an "exempt body" (see subsection (8)), having compulsory acquisition powers in relation to that interest, that authority or body is to make a deduction from the consideration on account of the DLT payable in respect of that disposal."
      Individuals who have their land acquired from them by a variety of bodies which have compulsory acquisition powers in respect of that land will have the compensation paid to them assessed by reference to a formula which allows the acquiring authority to deduct from the purchase price paid a sum of money calculated in accordance with a formula.
      However clever, well-intentioned and ingenious the Board of Inland Revenue may be—I have no doubt that it satisfies most of those adjectives—its formulae will give rise to occasions when the sum paid is more, or on some occasions less, than the amount that should be properly paid. If the sum paid were to be more than the amount that should be properly paid, I suspect that I might—especially if I were a member of the Government—construct an argument as to how iniquitous, wrong and improper it would be for the acquiring authority to pay to the vendor a sum greater than that to which he should properly be entitled. I might persuade my hon. Friend the Member for Wolverhampton, South-West to join me in complaining about gross extravagance in the use of public money in that sums were being laid out in compensation which should not be properly laid out in compensation.
      However, speaking from the Opposition Benches and bearing in mind the rights of individuals rather more than those of local authorities, I shall pass over that argument. I shall leave that to the Minister, if he is minded to accept
      1730
      the new clause, because it would be wrong in our current economic circumstances to think of local authorities being required to pay sums significantly in excess of those they should properly pay for the acquisition of the land which they properly require for their purposes.
      I am concerned with the reverse situation in which, as a result of the application of the formula in the Bill, a local or acquiring authority pays the purchase price to the vendor. We must remember that the vendor may not have placed his land on the market to all purchasers, one of whom may have negotiated a deal, with the result that a fair market price may be arrived at between a willing seller and a willing purchaser. The landowner's land is being acquired from him, on many occasions against his will. The tax that he is being required to pay, being calculated on a formula, may leave him with a lesser sum in respect of his asset—it may be his only marketable asset—than the money to which he is entitled.
      Mr. Fairbairn: It may leave him not only with a lesser sum but with a lesser asset as well. He would have had every right to resist the deprivation of that asset, but he may be deprived of it compulsorily and still have to pay tax.
      Mr. Sainsbury: I take my hon. and learned Friend's point entirely. The person concerned is not a willing vendor. He is being deprived of an asset which he did not want to lose in the first place and he is being left with a lesser amount of compensation than that to which he would be properly entitled under this legislation. He would have a lesser sum of money in his possession than that to which he was properly entitled. That is because the Bill, without the new clause, allows the acquiring authority to take the asset from him without there having been a proper assessment to tax.
      The Minister is far more learned in the intricacies of the tax law than I am. I hope that he will therefore draw the attention of the House to the occasions when the Revenue, for other forms of tax, is entitled to make an assessment in default of the full information that it would require to make a proper assessment. I understand that the Revenue has powers to make assessments in default of the provision by the taxpayer of the

      1731
      necessary information that would enable it to make a fair and correct assessment. That, however, is not the situation in this legislation.
      However anxious and willing the vendor might be to provide to the Revenue—the mandarins of Middlesbrough, or whatever we shall call them when the Development Land Tax Office, if it is to come into being, is fully established—or to the acquiring authority, whichever it may be, all the information and data that could possibly be required to make a proper assessment, it will be of no avail. Unless we accept the new clause, he will still have that asset acquired from him at a price calculated on the basis of a formula, not on the basis of a proper assessment of tax. It is for that reason that I hope that the new clause, which is commendably short compared with the standard of other new clauses we have discussed, will be accepted.
      The clause provides:
      "Except by the consent of the chargeable person—"
      —my hon. Friend the Member for Wolverhampton, South-West does not suggest that it should never be done—
      "and of the relevant creditor".
      I need not detain the House at this stage by enlarging upon the details of what, in Clause 46(2), turns out to be a "relevant creditor". Indeed, if I tried to do so I might not only stray from the bounds of order but get slightly lost in the complexities of identifying "relevant creditor".
      10.15 p.m.
      The House should direct its attention to the chargeable person—the vendor. The clause states:
      "Except by the consent of the chargeable person … unless and until the Board have issued a notice that the material disposal does not give rise to any liability for development land tax".
      If that is so, we have no problem. If the board can issue such notice, a chargeable person has nothing to worry about. But unless that condition is satisfied and the board has issued a notice that there is no liability any DLT, it must produce a notice of assessment to tax, unless the chargeable person is prepared to waive that requirement. This implies that the
      1732
      chargeable person shall have the right to receive the correctly-assessed sum of money, the proper compensation, the proper payment for his asset, assessed in conformity with the provisions of the Bill and with the rate of tax which is then in force—either that which is now in the Bill or any other which may be introduced in any of the numerous Finance Bills to which we appear to be subject these days.
      Unless and until that assessment has been made, the transaction cannot be proceeded with and the acquiring body shall not
      "have any right of entry (by virtue of a compulsory purchase order or otherwise) to enter on or take possession of the land the subject of the disposal."
      That seems to be a concept which should commend itself to all right hon. and hon. Members on both sides of the House. I do not suppose that the ancient tradition of an Englishman's home being his castle would entirely commend itself to the Minister, but I know that my hon. and learned Friend has a special interest in a Scotsman's home being his castle.
      Mr. Fairbairn: I should declare an interest. This Scotsman's home is his castle, and I find offensive the concept that an Englishman's home should be his castle and a Scotsman's home should not be, particularly when Scottish castles are their homes.
      Mr. Sainsbury: My hon. and learned Friend may recall that some Englishmen's homes were castles because of the depredations they suffered over the border from the ancestors of my hon. and learned Friend, which explains the large number of castles in the northern parts of England.
      However, we are drifting a little from the point. Surely it is a proper concept that somebody who is having to pay a tax—indirectly, I agree, through the process of the acquisition of land—and who is perfectly prepared, willing and able to make available to the proper authorities all the information that they require so that that tax shall be properly assessed, should not be required to pay that tax until the assessment is made. In effect, that is what the new clause means. That is why I shall strongly support my right hon. and hon. Friends in pressing it.
      Mr. Mayhew: I should be very glad not to have to support the clause for one reason at least, that coming to it as one who did not have to undergo the penance of sitting on the Standing Committee I find it so complex in its draftsmanship that I cannot make head or tail of it. But, having heard the speech of my hon. Friend the Member for Hove (Mr. Sainsbury), it seems to me that the provisions of the Bill as drafted are so offensive to any considerations of equity, justice or fair dealing that one must be obliged to support the clause, even one drafted with such complexity, not to say obscurity, as this—no doubt necessarily, and I make no criticism of it, for it would be important to do so.
      I want to make sure that I have correctly grasped the point that my hon. Friend is making. I find it difficult to believe that even a Government with the record of the present Government could seriously suppose that taxation can properly be levied, or even practicably be levied, on the principles that I think I have understood my hon. Friend to outline.
      As I understand the position, of the clause is not introduced to mitigate the effects of the Bill as drafted, there will be occasions when, by the rigid application of a formula, a property owner who does not wish to sell his property but is obliged to do so by the operation of another part of the Bill, or perhaps some other legislation, will lose a larger sum than the value of the property itself. He will not be able to retain his own property, and he will be taxed by the application of this formula to a greater extent than the sum total of the compensation he is entitled to receive by virtue of the acquisition of his property.
      That was what I understood my hon. Friend to be saying. If that is so, it cannot be justified in any way. If I have got it wrong I should be grateful to be corrected, but if that is, at any rate in outline, the nature of the clause in the Bill as drafted, it could not conceivably be justified.
      Let us suppose that it were to be brought within the jurisdiction of international law. Let us suppose that the present Government were nationalising, for example, an asset belonging to a
      1734
      foreign proprietor but located within the United Kingdom. International law would pronounce unlawful a procedure which resulted in the failure to compensate to the full value of the property thus acquired, whatever the property in question might be. It is a well established principle of international law that if one is going to expropriate from a foreign owner on must compensate him properly; that is, to the full extent of the value of the property one is taking. That is only because such a result is just and fair.
      We recognise that the complexities of life today are such that compulsory purchase orders are justifiable in certain circumstances. However, how can it conceivably be said to be fair that someone who is obliged to part with his property shall do so only on the terms that he is taxed upon the compensation he receives and taxed on such a scale that he is left with only a negative—and that not only is the compensation taken away but he is left with less.
      Mr. Fairbairn: With great respect to my hon. and learned Friend, I think he is putting the matter too wide. It is not that a person is obliged to part with his property; he is obliged to part with an interest in his property, under the clause in question—nothing more.
      Mr. Mayhew: I am grateful to my hon. and learned Friend for the benefit of his closer acquaintance with the Bill, derived from membership of the Committee. That makes the matter all the worse.
      I hope that the Minister will be able to assure us that in some way or other my hon. Friend the Member for Hove, my hon. and learned Friend the Member for Kinross and West Perthshire (Mr. Fairbairn) and I have got it wrong and that the Government do not intend that any such result shall flow from the Bill as drafted. I hope that the Minister will be able to say that somehow this interpretation has crept in by some mistake. If, unhappily, our interpretation is correct, I hope that the Minister will explain—it will need careful explanation—how this can conceivably be justified by any considerations of equity or justice. If the Minister does that, the House will listen with great attention. If that cannot be done, however, I hope that the clause

      1735
      will be accepted by the House, and by a majority of a size that will indicate the disgust that the House feels for legislation which could lead to consequences twice as unjust as those that my hon. Friends have indicated.
      As the Minister knows, I find this section of the Bill offensive for a variety of reasons but mainly because it offends against several principles of natural justice, which I presume still apply in England as they do in Scotland. The first is that the assessing authority is judex in sua re. It is judge in its own cause, it makes its own assesment, it makes its own principles, it decides upon the interpretation of its own act in its own interest. If it admits that it gets it wrong, although there is no appeal it will hand back the difference of its error.
      Persons should not be made liable to tax on the basis of a disposal of an interest in land which might only be small. It is wrong that a person should be made liable to tax by an authority which judges what that tax shall be and the tax is then in the hands of that authority. That is authoritarianism. It is contrary to natural justice and contrary to the principles upon which the Minister, I assume, was educated in the law of England.
      The clause seeks to eradicate those fundamental evils. I expect that the Minister will tell us—and I can hear his speech before he makes it—that some people might get away with it, that loopholes would be made and that terrible things would happen. Two principles of natural justice are offended, yet a party which pretends to be interested in justice allows this to occur when it could be cured by the clause. I hope that the clause will receive Government support.
      Mr. Arthur Jones: I am concerned for the relationship involved in the Government proposal between the local authority, which will implement the obligations under the Bill, and the local community. I entirely support the terms of the clause where it says:
      "nor shall the acquiring body have any right of entry".
      Under the Land Compensation Act a significant payment was required before a right of entry was given. But under
      1736
      the Bill there is no obligation to make any payment. It is almost confiscatory in its significance for someone who has a substantial interest in land. The local authority will be hesitant and reluctant to implement an obligation which means that it can enter a property without any payment.
      Many hon. Members have served in local government, and one can envisage a situation where a local authority, in furtherance of its obligations under the Bill and of its local policies—particularly in planning—wishes to acquire an area of land or a property in an area which is right for development and yet the Government are not prepared to require that the local authority shall make a significant payment on account of the cost of acquisition. If they would accept the terms of the clause the acquiring body would not have a right of entry. If it were tied up with the Land Compensation Act, it would be a much more reasonable proposition.
      I am concerned about the relationship between the elected members of the local authorities which will be responsible for the administration and the owners of property and the local community generally. The effect on that relationship is a dangerous feature of the Bill.
      10.30 p.m.
      Mr. Denzil Davies: I should like to explain briefly, because some hon. Members did not have the privilege and joy of serving on the Committee, how the net-of-tax arrangements work. The hon. and learned Member for Royal Tunbridge Wells (Mr. Mayhew) did not seem to understand the formula deduction, and I make no criticism of him for that. It is a provisional deduction of tax, not the final payment. That is determined between the individual and the Inland Revenue. The final liability may be different: the formula deduction is merely a convenient way of deducting an amount of tax. There is a limit of 50 per cent. of the consideration in any case.
      Mr. Mayhew: Must not the tax be paid in the meantime on the basis of the application of the formula? Is not one kept out of one's money for a significant time?
      Mr. Davies: Yes, but that happens to other people; for example, those who suffer deductions from their income for

      1737
      income tax purposes. My point was that it was not the final assessment, which is determined between the Inland Revenue and the individual.
      Mr. Fairbairn: There is a slight distinction. One can appeal against an income tax or surtax assessment. There is no appeal formula here.
      Mr. Davies: There is. I shall come to the point about appeal in a moment. There is an appeal against PAYE, but not before the tax is deducted. Very often with PAYE the final payment is not different, but sometimes it might be.
      The main point which has been made is that the local authority might impose on the individual a formula deduction and will not give him the opportunity of challenging it. But there are some voluntary sales to local authorities by individuals. Before the sale, the individual can obtain from the Inland Revenue a provisional assessment of tax. The Inland Revenue communicates that provisional assessment, based on the details of the proposed sale, to the local authority, which must deduct tax equivalent to that provisional assessment. That is not determined by the local authority and is not within its discretion. An alternative would be for the individual to agree with the local authority to a deduction.
      It is only when neither of those procedures is followed that the formula deduction come into being. The protection for the individual is that before any conclusion is reached he can agree with the Inland Revenue a provisional assessment which will be imposed on the local authority. It will have to deduct tax according to that assessment. Final liability will be determined later, and the figures may be different.
      The question of compulsory purchase was raised in Committee, especially by the right hon. Member for Crosby (Mr. Page). He was concerned that the compulsory purchase procedures might not be of a kind that would enable the taxpayer to obtain from the Inland Revenue a provisional assessment. The fear expressed in Committee was that the local authority, instead of allowing the vendor sufficient time to agree a specific deduction with the DLT office, would enter on the land and acquire it compulsorily, thus
      1738
      forcing his hand. If the local authority were to do that—this takes up the point raised by the hon. Member for Daventry (Mr. Jones)—it would be faced with having to make a 90 per cent. advance payment of compensation under Section 32 of the Land Compensation Act 1961 with interest from the date of entry. There is that sanction on local authorities.
      I accepted in Committee, and I accept now, that it would be serious if local authorities were to abuse the compulsory purchase powers so as to deny to the individual the opportunity to agree a deduction with the Inland Revenue. I do not believe that will happen, but if it appears that authorities are trying to use the compulsory purchase procedures for that purpose, we shall consider it to be a serious matter.
      We could amend the compulsory purchase procedures to prevent abuse by the authorities if there were evidence of abuse. They could be amended, although that would cause greater delay. If the authorities were to abuse the procedures by preventing a taxpayer from going to the Inland Revenue and obtaining a provisional assessment, we should consider amending the procedures to prevent that happening. That would be the right way of dealing with the matter, not as is suggested in the clause.
      Mr. Graham Page: This is not the right way to treat the House. Surely it is not right to say, "Some danger could arise from the clause. If it does, we shall introduce new legislation." The clause would avoid any such danger, and I ask the House to accept it.
      The clause accepts that there may be net-of-tax purchases. There may be, but they will not take place unless there has been a proper assessment by the Inland Revenue, not an assessment by the local authority. The formula in Schedule 7 leaves the local authority to assess that formula, which is based on an estimate by the local authority of the current use value of the property.
      Mr. Fairbairn: The Minister said that he would deal with the fact that there is a system of appeal, but I did not hear him deal with it. I hope that my right hon. Friend will emphasise that there is no system of appeal.
      Mr. Page: There is no system of appeal against the provisional assessment or against the formula deduction. Eventually there is an appeal against final assessment on the chargeable person. But that person is put in an extremely difficult position if the formula is applied and deduction is made, assessment being made by the local authority even on the basis of the formula, because the formula is based on an estimate made by the local authority.
      Mr. Denzil Davies: I thought I made it clear that as regards voluntary sales the individual is protected because he can agree a provisional assessment with the Inland Revenue. There is no question of a formula deduction being imposed upon him. I accepted that local authorities might seek to abuse the compulsory purchase procedures, but I do not think that will happen. If that were to be the case, we should bring in amending legislation.
      Mr. Page: If the hon. Gentleman would accept the clause, there would be no danger of abuse by the local authorities. The simple formula that the clause provides is that deduction is made either by the consent of the person who has to pay or by assessment on him of the amount he has to pay. The Minister said that as regards voluntary sales the chargeable person can—I quote his words—go along to the Inland Revenue. I hesitate to repeat what I said in Committee, but I criticised the Minister for saying that the chargeable person could go along to the mandarins in Middlesbrough and obtain an immediate provisional assessment. Of course that cannot happen. That is why we framed the clause as it appears before the House.
      Mr. Budgen rose—
      Mr. Page: The clause provides that if a person selling to the local authority wants a quick completion of his purchase, he can consent to the local authority making a deduction. This is the right way to deal with it. He can do that now. The clause recognises it. But it says that the local authority is not to take any steps to prevent such an agreement or to prevent a proper assessment of the chargeable person.
      Mr. Budgen: Will my right hon. Friend take up with the Minister the point that many injustices occur when there are voluntary sales? This is an extremely complex, and, therefore, very expensive, procedure for the small landowner, whose land is often taken voluntarily but with the threat of compulsory acquisition as a back-up. Therefore, there will be injustices, because many small landowners will not wish to avail themselves of their full right.
      Mr. Page: In a voluntary sale, where the purchaser has compulsory purchase powers, the purchaser always has the upper hand, and those powers can be used. The Minister says that he does not think local authorities will abuse the powers. Although I have criticised this net-of-tax purchase procedure throughout, I have recognised it in the clause and merely put in the precaution that it shall not be used unless the chargeable person agrees, or unless he has been properly assessed.
      I am surprised that the Minister did not rise at once and say that he would accept the clause. Since he has not done so, I hope that we can force him to accept it.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 272, Noes 281.

      Division No. 194.]

      AYES

      [10.43 p.m.

      Adley, Robert

      Blaker, Peter

      Bulmer, Esmond

      Aitken, Jonathan

      Body, Richard

      Burden, F. A.

      Alison, Michael

      Boscawen, Hon Robert

      Butler, Adam (Bosworth)

      Amery, Rt Hon Julian

      Bottomley, Peter

      Carlisle, Mark

      Arnold, Tom

      Bowden, A. (Brighton, Kemptown)

      Carson, John

      Atkins, Rt Hon H. (Spelthorne)

      Boyson, Dr Rhodes (Brent)

      Chalker, Mrs Lynda

      Awdry, Daniel

      Bradford, Rev Robert

      Churchill, W. S.

      Baker, Kenneth

      Braine, Sir Bernard

      Clark, Alan (Plymouth, Sutton)

      Banks, Robert

      Brittan, Leon

      Clark, William (Croydon S)

      Beith, A. J.

      Brocklebank-Fowler, C.

      Clarke, Kenneth (Rushcliffe)

      Bell, Ronald

      Brotherton, Michael

      Clegg, Walter

      Bennett, Dr Reginald (Fareham)

      Brown, Sir Edward (Bath)

      Cockcroft, John

      Benyon, W.

      Bryan, Sir Paul

      Cooke, Robert (Bristol W)

      Berry, Hon Anthony

      Buchanan-Smith, Alick

      Cope, John

      Biffen, John

      Buck, Antony

      Cordle, John H.

      Biggs-Davison, John

      Budgen, Nick

      Cormack, Patrick

      Corrie, John

      Jopling, Michael

      Pym, Rt Hon Francis

      Critchley, Julian

      Joseph, Rt Hon Sir Keith

      Raison, Timothy

      Crouch, David

      Kaberry, Sir Donald

      Rathbone, Tim

      Crowder, F. P.

      Kellett-Bowman, Mrs Elaine

      Rawlinson, Rt Hon Sir Peter

      Davies, Rt Hon J. (Knutsford)

      Kershaw, Anthony

      Rees, Peter (Dover & Deal)

      Dean, Paul (N Somerset)

      Kimball, Marcus

      Reid, George

      Dodsworth, Geoffrey

      King, Evelyn (South Dorset)

      Renton, Rt Hon Sir D. (Hunts)

      Douglas-Hamilton, Lord James

      King, Tom (Bridgwater)

      Renton, Tim (Mid-Sussex)

      Drayson, Burnaby

      Kitson, Sir Timothy

      Ridley, Hon Nicholas

      du Cann, Rt Hon Edward

      Knight, Mrs Jill

      Ridsdale, Julian

      Dunlop, John

      Knox, David

      Rifkind, Malcolm

      Durant, Tony

      Lamont, Norman

      Rippon, Rt. Hon Geoffrey

      Dykes, Hugh

      Lane, David

      Roberts, Wyn (Conway)

      Edwards, Nicholas (Pembroke)

      Langford-Holt, Sir John

      Rodgers, Sir John (Sevenoaks)

      Elliott, Sir William

      Lawrence, Ivan

      Ross, Stephen (Isle of Wight)

      Emery, Peter

      Lawson, Nigel

      Ross, William (Londonderry)

      Evans, Gwynfor (Carmarthen)

      Le Marchant, Spencer

      Rossi, Hugh (Hornsey)

      Eyre, Reginald

      Lester, Jim (Beeston)

      Rost, Peter (SE Derbyshire)

      Fairbairn, Nicholas

      Lewis, Kenneth (Rutland)

      Royle, Sir Anthony

      Fairgrieve, Russell

      Lloyd, Ian

      Sainsbury, Tim

      Farr, John

      Loveridge, John

      St. John-Stevas, Norman

      Fell, Anthony

      Luce, Richard

      Scott, Nicholas

      Fisher, Sir Nigel

      McAdden, Sir Stephen

      Scott-Hopkins, James

      Fletcher-Cooke, Charles

      McCrindle Robert

      Shaw, Giles (Pudsey)

      Fookes, Miss Janet

      McCusker, H.

      Shelton, William (Streatham)

      Forman, Nigel

      Macfarlane, Neil

      Shepherd, Colin

      Fox, Marcus

      MacGregor, John

      Shersby, Michael

      Fraser, Rt Hon H. (Stafford & St)

      Macmillan, Rt Hon M. (Farnham)

      Silvester, Fred

      Freud, Clement

      McNair-Wilson, M. (Newbury)

      Sims, Roger

      Fry, Peter

      McNair-Wilson, P. (New Forest)

      Sinclair, Sir George

      Galbraith, Hon. T. G. D.

      Madel, David

      Skeet, T. H. H.

      Gardiner, George (Reigate)

      Marshall, Michael (Arundel)

      Smith, Cyril (Rochdale)

      Gardner, Edward (S Fylde)

      Marten, Neil

      Smith, Dudley (Warwick)

      Gilmour, Rt Hon Ian (Chesham)

      Mates, Michael

      Spence, John

      Gilmour, Sir John (East Fife)

      Maude, Angus

      Spicer, Jim (W Dorset)

      Glyn, Dr Alan

      Maudling, Rt Hon Reginald

      Spicer, Michael (S Worcester)

      Goodhart, Philip

      Maxwell-Hyslop, Robin

      Sproat, Iain

      Goodhew, Victor

      Mayhew, Patrick

      Stainton, Keith

      Gorst, John

      Meyer, Sir Anthony

      Stanbrook, Ivor

      Gow, Ian (Eastbourne)

      Miller, Hal (Bromsgrove)

      Stanley, John

      Gower, Sir Raymond (Barry)

      Mills, Peter

      Steen, Anthony (Wavertree)

      Grant, Anthony (Harrow C)

      Miscampbell, Norman

      Stewart, Ian (Hitchin)

      Gray, Hamish

      Mitchell, David (Basingstoke)

      Stokes, John

      Griffiths, Eldon

      Moate, Roger

      Stradling Thomas, J.

      Grimond, Rt Hon J.

      Molyneaux, James

      Tapsell, Peter

      Grist, Ian

      Monro, Hector

      Taylor, R. (Croydon NW)

      Grylls, Michael

      Montgomery, Fergus

      Taylor, Teddy (Cathcart)

      Hall, Sir John

      Moore, John (Croydon C)

      Tebbit, Norman

      Hall-Davis, A. G. F.

      More, Jasper (Ludlow)

      Temple-Morris, Peter

      Hamilton, Michael (Salisbury)

      Morgan, Geraint

      Thomas, Rt Hon P. (Hendon S)

      Hampson, Dr Keith

      Morgan-Giles, Rear-Admiral

      Townsend, Cyril D.

      Hannam, John

      Morris, Michael (Northampton S)

      Trotter, Neville

      Harvie Anderson, Rt Hon Miss

      Morrison, Charles (Devizes)

      Tugendhat, Christopher

      Hastings, Stephen

      van Straubenzee, W. R.

      Havers, Sir Michael

      Morrison, Hon Peter (Chester)

      Vaughan, Dr Gerard

      Hawkins, Paul

      Mudd, David

      Viggers, Peter

      Hayhoe, Barney

      Neave, Airey

      Wakeham, John

      Heseltine, Michael

      Nelson, Anthony

      Walder, David (Clitheroe)

      Hicks, Robert

      Neubert, Michael

      Walker, Rt Hon P. (Worcester)

      Higgins, Terence L.

      Newton, Tony

      Walker-Smith, Rt Hon Sir Derek

      Holland, Philip

      Normanton, Tom

      Wall, Patrick

      Hooson, Emlyn

      Nott, John

      Walters, Dennis

      Hordern, Peter

      Onslow, Cranley

      Watt, Hamish

      Howe, Rt Hon Sir Geoffrey

      Oppenheim, Mrs Sally

      Weatherill, Bernard

      Howell, David (Guildford)

      Osborn, John

      Wells, John

      Howell, Ralph (North Norfolk)

      Page, John (Harrow West)

      Whitelaw, Rt Hon William

      Howells, Geraint (Cardigan)

      Page, Rt Hon R. Graham (Crosby)

      Wiggin, Jerry

      Hunt, David (Wirral)

      Parkinson, Cecil

      Wigley, Dafydd

      Hunt, John

      Pattie, Geoffrey

      Winterton, Nicholas

      Hurd, Douglas

      Penhaligon, David

      Wood, Rt Hon Richard

      Hutchison, Michael Clark

      Percival, Ian

      Young, Sir G. (Ealing, Acton)

      Irving, Charles (Cheltenham)

      Peyton, Rt Hon John

      Younger, Hon George

      James, David

      Pink, R. Bonner

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

      Powell, Rt Hon J. Enoch

      TELLERS FOR THE AYES:

      Jessel, Toby

      Price, David (Eastleigh)

      Mr. Michael Roberts and

      Johnson Smith, G. (E Grinstead)

      Prior, Rt Hon James

      Mr. Carol Mather.

      Jones, Arthur (Daventry)

      NOES

      Abse, Leo

      Ashton, Joe

      Barnett, Rt Hon Joel (Heywood)

      Allaun, Frank

      Atkins, Ronald (Preston N)

      Bates, Alf

      Anderson, Donald

      Atkinson, Norman

      Bean, R. E.

      Archer, Peter

      Bagier, Gordon A. T.

      Benn, Rt Hon Anthony Wedgwood

      Armstrong, Ernest

      Barnett, Guy (Greenwich)

      Bennett, Andrew (Stockport N)

      1742

      1743

      Bidwell, Sydney

      Hardy, Peter

      Noble, Mike

      Bishop, E. S.

      Harper, Joseph

      Oakes, Gordon

      Blenkinsop, Arthur

      Harrison, Walter (Wakefield)

      Ogden, Eric

      Boardman, H.

      Hart, Rt Hon Judith

      O'Halloran, Michael

      Booth, Rt Hon Albert

      Hattersley, Rt Hon Roy

      Orbach, Maurice

      Bottomley, Rt Hon Arthur

      Hatton, Frank

      Orme, Rt Hon Stanley

      Boyden, James (Bish Auck)

      Hayman, Mrs Helene

      Ovenden, John

      Bradley, Tom

      Heffer, Eric S.

      Owen, Dr David

      Bray, Dr Jeremy

      Hooley, Frank

      Palmer, Arthur

      Brown, Hugh D. (Provan)

      Howell, Rt Hon Denis

      Park, George

      Brown, Robert C. (Newcastle W)

      Hoyle, Doug (Nelson)

      Parker, John

      Brown, Ronald (Hackney S)

      Huckfield, Les

      Parry, Robert

      Buchan, Norman

      Hughes, Rt Hon C. (Anglesey)

      Pavitt, Laurie

      Buchanan, Richard

      Hughes, Mark (Durham)

      Peart, Rt Hon Fred

      Butler, Mrs Joyce (Wood Green)

      Hughes, Robert (Aberdeen N)

      Pendry, Tom

      Callaghan, Jim (Middleton & P)

      Hughes, Roy (Newport)

      Perry, Ernest

      Campbell, Ian

      Hunter, Adam

      Phipps, Dr Colin

      Canavan, Dennis

      Irvine, Rt Hon Sir A. (Edge Hill)

      Prentice, Rt Hon Reg

      Cant, R. B.

      Irving, Rt Hon S. (Dartford)

      Prescott, John

      Carmichael, Neil

      Jaskson, Colin (Brighouse)

      Price, C. (Lewisham W)

      Carter, Ray

      Jackson, Miss Margaret (Lincoln)

      Price, William (Rugby)

      Carter-Jones, Lewis

      Janner, Greville

      Radice, Giles

      Cartwright, John

      Jay, Rt Hon Douglas

      Rees, Rt Hon Merlyn (Leeds S)

      Clemitson, Ivor

      Jeger, Mrs Lena

      Richardson, Miss Jo

      Cocks, Michael (Bristol S)

      Jenkins, Hugh (Putney)

      Roberts, Albert (Normanton)

      Cohen, Stanley

      John, Brynmor

      Roberts, Gwilym (Cannock)

      Colquhoun, Ms Maureen

      Johnson, James (Hull West)

      Robinson, Geoffrey

      Cook, Robin F. (Edin C)

      Johnson, Walter (Derby S)

      Roderick, Caerwyn

      Corbett, Robin

      Jones, Dan (Burnley)

      Rodgers, George (Chorley)

      Cox, Thomas (Tooting)

      Judd, Frank

      Rodgers, William (Stockton)

      Craigen, J. M. (Maryhill)

      Kaufman, Gerald

      Rooker, J. W.

      Cronin, John

      Kelley, Richard

      Ross, Rt. Hon W. (Kilmarnock)

      Cryer, Bob

      Kerr, Russell

      Rowlands, Ted

      Cunningham, G. (Islington S)

      Kilroy-Silk, Robert

      Sandelson, Neville

      Cunningham, Dr J. (Whiteh)

      Kinnock, Neil

      Sedgemore, Brian

      Dalyell, Tam

      Lambie, David

      Selby, Harry

      Davidson, Arthur

      Lamborn, Harry

      Shaw, Arnold (Ilford South)

      Davies, Bryan (Enfield N)

      Lamond, James

      Sheldon, Robert (Ashton-u-Lyne)

      Davies, Denzil (Llanelli)

      Latham, Arthur (Paddington)

      Shore, Rt Hon Peter

      Davies, Ifor (Gower)

      Leadbitter, Ted

      Short, Rt Hon E. (Newcastle C)

      Davis, Clinton (Hackney C)

      Lee, John

      Short, Mrs Renée (Wolv NE)

      Deakins, Eric

      Lestor, Miss Joan (Eton & Slough)

      Silkin, Rt Hon John (Deptford)

      Dean, Joseph (Leeds West)

      Lever, Rt Hon Harold

      Silkin, Rt Hon S. C. (Dulwich)

      de Freitas, Rt Hon Sir Geoffrey

      Lewis, Ron (Carlisle)

      Sillars, James

      Dell, Rt Hon Edmund

      Lipton, Marcus

      Silverman, Julius

      Dempsey, James

      Litterick, Tom

      Skinner, Dennis

      Doig, Peter

      Lomas, Kenneth

      Small, William

      Dormand, J. D.

      Loyden, Eddie

      Smith, John (N Lanarkshire)

      Douglas-Mann, Bruce

      Luard, Evan

      Snape, Peter

      Dunn, James A.

      Lyons, Edward (Bradford W)

      Spearing, Nigel

      Dunnett, Jack

      Mabon, Dr J. Dickson

      Stallard, A. W.

      Dunwoody, Mrs Gwyneth

      McCartney, Hugh

      Stewart, Rt Hon M. (Fulham)

      Eadie, Alex

      McElhone, Frank

      Stoddart, David

      Edge, Geoff

      MacFarquhar, Roderick

      Strang, Gavin

      Edwards, Robert (Wolv SE)

      McGuire, Michael (Ince)

      Strauss, Rt Hon G. R.

      Ellis, John (Brigg & Scun)

      Mackenzie, Gregor

      Summerskill, Hon Dr Shirley

      Ellis, Tom (Wrexham)

      Mackintosh, John P.

      Swain, Thomas

      English, Michael

      Maclennan, Robert

      Thomas, Jeffrey (Abertillery)

      Ennals, David

      McMillan, Tom (Glasgow C)

      Thomas, Mike (Newcastle E)

      Evans, Fred (Caerphilly)

      McNamara, Kevin

      Thomas, Ron (Bristol NW)

      Evans, Ioan (Aberdare)

      Madden, Max

      Thorne, Stan (Preston South)

      Ewing, Harry (Stirling)

      Magee, Bryan

      Tierney, Sydney

      Faulds, Andrew

      Mahon, Simon

      Tinn, James

      Fernyhough, Rt Hon E.

      Mallalleu, J. P. W.

      Tomlinson, John

      Flannery, Martin

      Marks, Kenneth

      Tomney, Frank

      Fletcher, Raymond (Ilkeston)

      Marquand, David

      Torney, Tom

      Fletcher, Ted (Darlington)

      Marshall, Dr Edmund (Goole)

      Tuck, Raphael

      Foot, Rt Hon Michael

      Marshall, Jim (Leicester S)

      Urwin, T. W.

      Ford, Ben

      Maynard, Miss Joan

      Varley, Rt Hon Eric G.

      Forrester, John

      Meacher, Michael

      Wainwright, Edwin (Dearne V)

      Fowler, Gerald (The Wrekin)

      Mellish, Rt Hon Robert

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

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

      Mendelson, John

      Walker, Harold (Doncaster)

      Freeson, Reginald

      Mikardo, Ian

      Walker, Terry (Kingswood)

      Garrett, John (Norwich S)

      Millan, Bruce

      Ward, Michael

      Garrett, W. E. (Wallsend)

      Miller, Mrs Millie (Ilford N)

      Watkins, David

      George, Bruce

      Mitchell, R. C. (Soton, Itchen)

      Watkinson, John

      Gilbert, Dr John

      Molloy, William

      Weetch, Ken

      Ginsburg, David

      Moonman, Eric

      Weitzman, David

      Golding, John

      Morris, Alfred (Wythenshawe)

      Wellbeloved, James

      Gould, Bryan

      Morris, Charles R. (Openshaw)

      White, Frank R. (Bury)

      Gourlay, Harry

      Morris, Rt Hon J. (Aberavon)

      White, James (Pollok)

      Graham, Ted

      Moyle, Roland

      Whitehead, Phillip

      Grant, George (Morpeth)

      Mulley, Rt Hon Frederick

      Whitlock, William

      Grant, John (Islington C)

      Murray, Rt Hon Ronald King

      Willey, Rt Hon Frederick

      Grocott, Bruce

      Newens, Stanley

      Williams, Alan (Swansea W)

      1744

      1745

      Williams, Alan Lee (Hornch'ch)

      Wilson, William (Coventry SE)

      Young, David (Bolton E)

      Williams, Rt Hon Shirley (Hertford)

      Wise, Mrs Audrey

      Williams, Sir Thomas

      Woodall, Alec

      TELLERS FOR THE NOES:

      Wilson, Alexander (Hamilton)

      Woof, Robert

      Mr. James Hamilton and

      Wilson, Rt Hon H. (Huyton)

      Wrigglesworth, Ian

      Mr. Donald Coleman.

      Question accordingly negatived.

    Clause 2

      DEEMED DISPOSAL AT START OF MATERIAL DEVELOPMENT
      Mr. Denzil Davies: I beg to move Amendment No. 2, in page 2, line 10 leave out from "time" to "and" in line 11.
      The purpose of the amendment is to reverse Opposition Amendment No. 29 which was carried against the Government in Standing Committee. The effect of that amendment was to reduce the deemed disposal consideration by an amount equal to what would have been the incidental cost had there been an actual sale. The Government amendment restores the original position, in which the interest concerned shall be deemed to have been disposed of for a consideration equal to market value without allowance for purely notional expenses.
      The Opposition carried an amendment in Committee which would have provided that costs which had not been incurred on the deemed disposal and reacquisition would have been allowable in computing the tax at that point. Although there would not have been a conveyance of the land there was to be a deeming provision so that the costs of that conveyance would have been deducted from the calculation of tax. This is not the intention of the legislation. The amendment would often give the taxpayer a double relief because on eventual sale he would get the costs again on that conveyance but he would not pay the tax twice and would only pay the extra amount of tax on Development value over and above the value at the time of deemed disposal.
      If the amendment were to remain we would be giving double relief in respect of costs which were not incurred. I therefore ask the House to reverse the Committee's decision.
      Mr. Graham Page: I should have thought that the Minister would take his defeat graciously and not try to reinstate in the Bill the subject of a Committee
      1746
      defeat. If there is to be deemed disposal there should be deemed costs relative to that disposal so that we get the true figure. I strongly object to the Government steam-rollering out of the Bill what was put in by the Committee. I hope that my hon. Friends will support me in opposing the Government amendment.
      11 p.m.
      Mr. Ridley: I object to the treatment being meted out to the Minister by the Government Front Bench. He has been here for seven hours today—following a seven-hour stint yesterday—without relief or assistance from senior colleagues. He has had to defend the Government's lousy proposals single-handed.
      The last time I raised this matter, I said the Minister had had no food, water or rest. He replied that he had some water available, but I see that even the decanter which held the water is now empty. By the way, the decanter is not marked to show hiw much water it contained in accordance with the resolution of the House earlier this week.
      Mr. Budgen: Is my hon. Friend aware that if the Minister were an animal he would not be allowed to travel on the railways in the conditions in which he is now working?
      Mr. Ridley: When I see the stranded whales who have come to support the Minister with their presence, if not their voices, I feel that the animal analogy used by my Friend is very apt. Certainly if the Minister were a lorry driver, he would by now have driven more miles than would be lawful and would be allowed to drive the Bill into the night.
      Our sympathy is entirely with the Minister, we feel he has been badly treated. if there is another Minister within earshot who understands the Bill, I appeal to him to relieve the Minister of State and let him get a square meal. He needs some beans on toast. He cannot be expected to go on defending the Government amendment after amendment, day after day and night after night. If there needs to be a by-election

      1747
      in the Minister's constituency shortly—which is the last thing we want—it will be entirely the fault of the Government.
      The Minister is losing his grip due to extreme fatigue. His attempt to delete an amendment passed in Committee is a mistake. If we are to have a deemed disposal, we should surely have deemed costs to be chargeable against tax. I hate the word "deemed" in legislation. There should be no "deemed" anything for tax purposes. However, if it is to be fair for the Inland Revenue to deem that a gain or profit has been made, it
      must be fair for the taxpayer to deem that expenses have been incurred. In many cases they will have been incurred.
      In view of the Committee's decision and the obvious wish of the House to have the amendment retained in the Bill, I hope the Minister will think again before creating this injustice for the taxpayer.
      Question put, That the amendment be made:—
      The House divided: Ayes 288, Noes 257.

      Division No. 195.]

      AYES

      [11.04 p.m.

      Abse, Leo

      de Freitas, Rt Hon Sir Geoffrey

      Hughes, Robert (Aberdeen N)

      Allaun, Frank

      Dell, Rt Hon Edmund

      Hughes, Roy (Newport)

      Anderson, Donald

      Dempsey, James

      Hunter, Adam

      Archer, Peter

      Doig, Peter

      Irvine, Rt Hon Sir A. (Edge Hill)

      Armstrong, Ernest

      Dormand, J. D.

      Irving, Rt Hon S. (Dartford)

      Ashton, Joe

      Douglas-Mann, Bruce

      Jaskson, Colin (Brighouse)

      Atkins, Ronald (Preston N)

      Dunn, James A.

      Jackson, Miss Margaret (Lincoln)

      Atkinson, Norman

      Dunnett, Jack

      Janner, Greville

      Bagier, Gordon A. T.

      Dunwoody, Mrs Gwyneth

      Jay, Rt Hon Douglas

      Barnett, Guy (Greenwich)

      Eadie, Alex

      Jeger, Mrs Lena

      Barnett, Rt Hon Joel (Heywood)

      Edge, Geoff

      Jenkins, Hugh (Putney)

      Bates, Alf

      Edwards, Robert (Wolv SE)

      John, Brynmor

      Bean, R. E.

      Ellis, John (Brigg & Scun)

      Johnson, James (Hull West)

      Beith, A. J.

      Ellis, Tom (Wrexham)

      Johnson, Walter (Derby S)

      Benn, Rt Hon Anthony Wedgwood

      English, Michael

      Jones, Dan (Burnley)

      Bennett, Andrew (Stockport N)

      Ennals, David

      Judd, Frank

      Bidwell, Sydney

      Evans, Fred (Caerphilly)

      Kaufman, Gerald

      Bishop, E. S.

      Evans, Ioan (Aberdare)

      Kelley, Richard

      Blenkinsop, Arthur

      Ewing, Harry (Stirling)

      Kerr, Russell

      Boardman, H.

      Faulds, Andrew

      Kilroy-Silk, Robert

      Booth, Rt Hon Albert

      Fernyhough, Rt Hon E.

      Kinnock, Neil

      Bottomley, Rt Hon Arthur

      Flannery, Martin

      Lambie, David

      Boyden, James (Bish Auck)

      Fletcher, Raymond (Ilkeston)

      Lamborn, Harry

      Bradley, Tom

      Fletcher, Ted (Darlington)

      Lamond, James

      Bray, Dr Jeremy

      Foot, Rt Hon Michael

      Latham, Arthur (Paddington)

      Brown, Hugh D. (Provan)

      Ford, Ben

      Leadbitter, Ted

      Brown, Robert C. (Newcastle W)

      Forrester, John

      Lee, John

      Brown, Ronald (Hackney S)

      Fowler, Gerald (The Wrekin)

      Lestor, Miss Joan (Eton & Slough)

      Buchan, Norman

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

      Lever, Rt Hon Harold

      Buchanan, Richard

      Freeson, Reginald

      Lewis, Ron (Carlisle)

      Butler, Mrs Joyce (Wood Green)

      Freud, Clement

      Lipton, Marcus

      Callaghan, Jim (Middleton & P)

      Garrett, John (Norwich S)

      Litterick, Tom

      Campbell, Ian

      Garrett, W. E. (Walisend)

      Lomas, Kenneth

      Canavan, Dennis

      George, Bruce

      Loyden, Eddie

      Cant, R. B.

      Gilbert, Dr John

      Luard, Evan

      Carmichael, Neil

      Ginsburg, David

      Lyons, Edward (Bradford W)

      Carter, Ray

      Golding, John

      Mabon, Dr J. Dickson

      Carter-Jones, Lewis

      Gould, Bryan

      McCartney, Hugh

      Cartwright, John

      Gourlay, Harry

      McElhone, Frank

      Clemitson, Ivor

      Graham, Ted

      MacFarquhar, Roderick

      Cocks, Michael (Bristol S)

      Grant, George (Morpeth)

      McGuire, Michael (Ince)

      Cohen, Stanley

      Grant, John (Islington C)

      Mackenzie, Gregor

      Coleman, Donald

      Grimond, Rt Hon J.

      Mackintosh, John P.

      Colquhoun, Ms Maureen

      Grocott, Bruce

      Maclennan, Robert

      Cook, Robin F. (Edin C)

      Hamilton, James (Bothwell)

      McMillan, Tom (Glasgow C)

      Corbett, Robin

      Hardy, Peter

      McNamara, Kevin

      Cox, Thomas (Tooting)

      Harper, Joseph

      Madden, Max

      Craigen, J. M. (Maryhill)

      Harrison, Walter (Wakefield)

      Magee, Bryan

      Cronin, John

      Hart, Rt Hon Judith

      Mahon, Simon

      Cryer, Bob

      Hattersley, Rt Hon Roy

      Mallalleu, J. P. W.

      Cunningham, G. (Islington S)

      Hatton, Frank

      Marks, Kenneth

      Cunningham, Dr J. (Whiteh)

      Hayman, Mrs Helene

      Marquand, David

      Dalyell, Tam

      Heffer, Eric S.

      Marshall, Dr Edmund (Goole)

      Davidson, Arthur

      Hooley, Frank

      Marshall, Jim (Leicester S)

      Davies, Bryan (Enfield N)

      Howell, Rt Hon Denis

      Maynard, Miss Joan

      Davies, Denzil (Llanelli)

      Howells, Geraint (Cardigan)

      Meacher, Michael

      Davies, Ifor (Gower)

      Hoyle, Doug (Nelson)

      Mellish, Rt Hon Robert

      Davis, Clinton (Hackney C)

      Huckfield, Les

      Mendelson, John

      Deakins, Eric

      Hughes, Rt Hon C. (Anglesey)

      Mikardo, Ian

      Dean, Joseph (Leeds West)

      Hughes, Mark (Durham)

      Millan, Bruce

      Miller, Mrs Millie (Ilford N)

      Robinson, Geoffrey

      Tomlinson, John

      Mitchell, R. C. (Soton, Itchen)

      Roderick, Caerwyn

      Tomney, Frank

      Molloy, William

      Rodgers, George (Chorley)

      Torney, Tom

      Moonman, Eric

      Rodgers, William (Stockton)

      Tuck, Raphael

      Morris, Alfred (Wythenshawe)

      Rooker, J. W.

      Urwin, T. W.

      Morris, Charles R. (Openshaw)

      Ross, Stephen (Isle of Wight)

      Varley, Rt Hon Eric G.

      Morris, Rt Hon J.(Aberavon)

      Ross, Rt. Hon W. (Kilmarnock)

      Wainwright, Edwin (Dearne V)

      Moyle, Roland

      Rowlands, Ted

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

      Mulley, Rt Hon Frederick

      Sandelson, Neville

      Walker, Terry (Kingswood)

      Murray, Rt Hon Ronald King

      Sedgemore, Brian

      Ward, Michael

      Newens, Stanley

      Selby, Harry

      Watkins, David

      Noble, Mike

      Shaw, Arnold (Ilford South)

      Watkinson, John

      Oakes, Gordon

      Sheldon, Robert (Ashton-u-Lyne)

      Weetch, Ken

      Ogden, Eric

      Shore, Rt Hon Peter

      Weitzman, David

      O'Halloran, Michael

      Short, Rt Hon E. (Newcastle C)

      Wellbeloved, James

      Orbach, Maurice

      Short, Mrs Renée (Wolv NE)

      White, Frank R. (Bury)

      Orme, Rt Hon Stanley

      Silkin, Rt Hon John (Deptford)

      White, James (Pollok)

      Ovenden, John

      Silkin, Rt Hon S. C. (Dulwich)

      Whitehead, Phillip

      Owen, Dr David

      Sillars, James

      Whitlock, William

      Palmer, Arthur

      Silverman, Julius

      Wigley, Dafydd

      Park, George

      Skinner, Dennis

      Willey, Rt Hon Frederick

      Parker, John

      Small, William

      Williams, Alan (Swansea W)

      Parry, Robert

      Smith, Cyril (Rochdale)

      Williams, Alan Lee (Hornch'ch)

      Pavitt, Laurie

      Smith, John (N Lanarkshire)

      Williams, Rt Hon Shirley (Hertford)

      Peart, Rt Hon Fred

      Spearing, Nigel

      Williams, Sir Thomas

      Pendry, Tom

      Stallard, A. W.

      Wilson, Alexander (Hamilton)

      Penhaligon, David

      Stewart, Rt Hon M. (Fulham)

      Wilson, Rt Hon H. (Huyton)

      Perry, Ernest

      Strang, Gavin

      Wilson, William (Coventry SE)

      Phipps, Dr Colin

      Strauss, Rt Hon G. R.

      Wise, Mrs Audrey

      Prentice, Rt Hon Reg

      Summerskill, Hon Dr Shirley

      Woodall, Alec

      Prescott, John

      Swain, Thomas

      Woof, Robert

      Price, C. (Lewisham W)

      Thomas, Jeffrey (Abertillery)

      Wrigglesworth, Ian

      Price, William (Rugby)

      Thomas, Mike (Newcastle E)

      Young, David (Bolton E)

      Radice, Giles

      Thomas, Ron (Bristol NW)

      Rees, Rt Hon Merlyn (Leeds S)

      Thorne, Stan (Preston South)

      TELLERS FOR THE AYES:

      Richardson, Miss Jo

      Tierney, Sydney

      Mr. Peter Snape and

      Roberts, Albert (Normanton)

      Tinn, James

      Mr. David Stoddart.

      Roberts, Gwilym (Cannock)

      NOES

      Adley, Robert

      Corrie, John

      Hall-Davis, A. G. F.

      Alison, Michael

      Critchley, Julian

      Hamilton, Michael (Salisbury)

      Amery, Rt Hon Julian

      Crouch, David

      Hampson, Dr Keith

      Arnold, Tom

      Crowder, F. P.

      Hannam, John

      Atkins, Rt Hon H. (Spelthorne)

      Davies, Rt Hon J. (Knutsford)

      Harvie Anderson, Rt Hon Miss

      Awdry, Daniel

      Dean, Paul (N Somerset)

      Hastings, Stephen

      Baker, Kenneth

      Dodsworth, Geoffrey

      Havers, Sir Michael

      Banks, Robert

      Douglas-Hamilton, Lord James

      Hawkins, Paul

      Bell, Ronald

      Drayson, Burnaby

      Hayhoe, Barney

      Bennett, Dr Reginald (Fareham)

      du Cann, Rt Hon Edward

      Heseltine, Michael

      Benyon, W.

      Dunlop, John

      Hicks, Robert

      Berry, Hon Anthony

      Durant, Tony

      Higgins, Terence L.

      Biffen, John

      Dykes, Hugh

      Holland, Philip

      Biggs-Davison, John

      Edwards, Nicholas (Pembroke)

      Hordern, Peter

      Blaker, Peter

      Elliott, Sir William

      Howe, Rt Hon Sir Geoffrey

      Body, Richard

      Emery, Peter

      Howell, David (Guildford)

      Boscawen, Hon Robert

      Evans, Gwynfor (Carmarthen)

      Howell, Ralph (North Norfolk)

      Bottomley, Peter

      Eyre, Reginald

      Hunt, David (Wirral)

      Bowden, A. (Brighton, Kemptown)

      Fairbairn, Nicholas

      Hunt, John

      Boyson, Dr Rhodes (Brent)

      Fairgrieve, Russell

      Hurd, Douglas

      Bradford, Rev Robert

      Farr, John

      Hutchison, Michael Clark

      Braine, Sir Bernard

      Fell, Anthony

      Irving, Charles (Cheltenham)

      Brittan, Leon

      Fisher, Sir Nigel

      James, David

      Brocklebank-Fowler, C.

      Fletcher-Cooke, Charles

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

      Brotherton, Michael

      Fookes, Miss Janet

      Jessel, Toby

      Brown, Sir Edward (Bath)

      Forman, Nigel

      Johnson Smith, G. (E Grinstead)

      Bryan, Sir Paul

      Fox, Marcus

      Jones, Arthur (Daventry)

      Buchanan-Smith, Alick

      Fry, Peter

      Jopling, Michael

      Buck, Antony

      Galbraith, Hon. T. G. D.

      Joseph, Rt Hon Sir Keith

      Budgen, Nick

      Gardiner, George (Reigate)

      Kaberry, Sir Donald

      Bulmer, Esmond

      Gardner, Edward (S Fylde)

      Kellett-Bowman, Mrs Elaine

      Butler, Adam (Bosworth)

      Gilmour, Rt Hon Ian (Chesham)

      Kershaw, Anthony

      Carlisle, Mark

      Gilmour, Sir John (East Fife)

      Kimball, Marcus

      Carson, John

      Glyn, Dr Alan

      King, Evelyn (South Dorset)

      Chalker, Mrs Lynda

      Goodhart, Philip

      King, Tom (Bridgwater)

      Clark, Alan (Plymouth, Sutton)

      Gorst, John

      Kitson, Sir Timothy

      Clark, William (Croydon S)

      Gow, Ian (Eastbourne)

      Knight, Mrs Jill

      Clarke, Kenneth (Rushcliffe)

      Gower, Sir Raymond (Barry)

      Knox, David

      Clegg, Walter

      Grant, Anthony (Harrow C)

      Lamont, Norman

      Cockcroft, John

      Gray, Hamish

      Lane, David

      Cooke, Robert (Bristol W)

      Griffiths, Eldon

      Langford-Holt, Sir John

      Cope, John

      Grist, Ian

      Lawrence, Ivan

      Cordle, John H.

      Grylls, Michael

      Lawson, Nigel

      Cormack, Patrick

      Hall, Sir John

      Lester, Jim (Beeston)

      1750

      1751

      Lewis, Kenneth (Rutland)

      Oppenheim, Mrs Sally

      Smith, Dudley (Warwick)

      Lloyd, Ian

      Osborn, John

      Spence, John

      Loveridge, John

      Page, John (Harrow West)

      Spicer, Jim (W Dorset)

      Luce, Richard

      Page, Rt Hon R. Graham (Crosby)

      Spicer, Michael (S Worcester)

      McCrindle, Robert

      Parkinson, Cecil

      Sproat, Iain

      McCusker, H.

      Pattie, Geoffrey

      Stainton, Keith

      Macfarlane, Neil

      Percival, Ian

      Stanbrook, Ivor

      MacGregor, John

      Peyton, Rt Hon John

      Stanley, John

      Macmillan, Rt Hon M. (Farnham)

      Pink, R. Bonner

      Steen, Anthony (Wavertree)

      McNair-Wilson, M. (Newbury)

      Powell, Rt Hon J. Enoch

      Stewart, Ian (Hitchin)

      McNair-Wilson, P. (New Forest)

      Price, David (Eastleigh)

      Stokes, John

      Madel, David

      Prior, Rt Hon James

      Stradling Thomas, J.

      Marshall, Michael (Arundel)

      Pym, Rt Hon Francis

      Tapsell, Peter

      Marten, Neil

      Raison, Timothy

      Taylor, R. (Croydon NW)

      Mates, Michael

      Rathbone, Tim

      Taylor, Teddy (Cathcart)

      Maude, Angus

      Rawlinson, Rt Hon Sir Peter

      Tebbit, Norman

      Maudling, Rt Hon Reginald

      Rees, Peter (Dover & Deal)

      Temple-Morris, Peter

      Maxwell-Hyslop, Robin

      Reid, George

      Thomas, Rt Hon P. (Hendon S)

      Mayhew, Patrick

      Renton, Rt Hon Sir D. (Hunts)

      Townsend, Cyril D.

      Meyer, Sir Anthony

      Renton, Tim (Mid-Sussex)

      Trotter, Neville

      Miller, Hal (Bromsgrove)

      Ridley, Hon Nicholas

      Tugendhat, Christopher

      Mills, Peter

      Ridsdale, Julian

      van Straubenzee, W. R.

      Miscampbell, Norman

      Rifkind, Malcolm

      Vaughan, Dr Gerard

      Mitchell, David (Basingstoke)

      Rippon, Rt. Hon Geoffrey

      Viggers, Peter

      Moate, Roger

      Roberts, Michael (Cardiff NW)

      Wakeham, John

      Molyneaux, James

      Roberts, Wyn (Conway)

      Walder, David (Clitheroe)

      Monro, Hector

      Rodgers, Sir John (Sevenoaks)

      Walker, Rt Hon P. (Worcester)

      Montgomery, Fergus

      Ross, William (Londonderry)

      Walker-Smith, Rt Hon Sir Derek

      Moore, John (Croydon C)

      Rossi, Hugh (Hornsey)

      Wall, Patrick

      More, Jasper (Ludlow)

      Rost, Peter (SE Derbyshire)

      Walters, Dennis

      Morgan, Geraint

      Royle, Sir Anthony

      Watt, Hamish

      Morgan-Giles, Rear-Admiral

      Sainsbury, Tim

      Weatherill, Bernard

      Morris, Michael (Northampton S)

      St. John-Stevas, Norman

      Wells, John

      Morrison, Charles (Devizes)

      Scott, Nicholas

      Whitelaw, Rt Hon William

      Morrison, Hon Peter (Chester)

      Scott-Hopkins, James

      Wiggin, Jerry

      Mudd, David

      Shaw, Giles (Pudsey)

      Winterton, Nicholas

      Neave, Airey

      Shelton, William (Streatham)

      Wood, Rt Hon Richard

      Nelson, Anthony

      Shepherd, Colin

      Young, Sir G. (Ealing, Acton)

      Neubert, Michael

      Shersby, Michael

      Younger, Hon George

      Newton, Tony

      Silvester, Fred

      Normanton, Tom

      Sims, Roger

      TELLERS FOR THE NOES:

      Nott, John

      Sinclair, Sir George

      Mr. Spencer Le Merchant and

      Onslow, Cranley

      Skeet, T. H. H.

      Mr. Carol Mather.

      Question accordingly agreed to.
      Mr. Denzil Davies: I beg to move Amendment No. 3, in page 2, line 19, leave out 'subsection (1) above' and insert 'this Act'.
      This is a drafting amendment to make the interpretation Clause, now Clause 47, a comprehensive index of terms used in the Bill. As a result, Clause 47 now assigns to the term "major interests" the definition in Clause 2(3). The need for a comprehensive index was raised in Committee by the Opposition. We met most of their criticisms in Committee but could not do so in this case until now.
      Amendment agreed to.
      Mr. Denzil Davies: I beg to move Amendment No. 5, in page 3, line 4, leave out 'fifty' and insert 'thirty-five'.
      Mr. Deputy Speaker (Mr. Bryant Godman Irvine): It will be convenient to discuss at the same time the following amendments:
      No. 6, in page 3, line 4, leave out 'fifty' and insert 'twenty-five'.
      Government Amendment No. 7.
      No. 8, in page 3, line 8, leave out 'of less than fifty' and insert 'not exceeding twenty-five'.
      Government Amendment No. 9.
      No. 10, in page 3, line 17, leave out 'fifty' and insert 'twenty-five'.
      Government Amendment No. 123.
      No. 124, in Schedule 1, page 82, line 5, leave out '50' and insert 'twenty-five'.
      Mr. Davies: These amendments result from the debates in Committee.
      As the Bill stands, there is a major interest even though the lease to which the reversion is subject is not a long lease. Under Clause 2(4) a lease is a long lease if it has more than 50 years to run at the date of the deemed disposal. The amendment seeks to reduce this period to 35 years, thus allowing more leases to qualify as long leases.
      The other amendments ensure that the widening of relief does not affect the rule which regards reversions on leases as major interests and so subject to deemed

      1753
      disposal procedure. There was criticism in Committee to the effect that 50 years was too long a period. It was said that leases with reversions of 50 years were not worth much. As a result of those criticisms we looked at the matter again. These amendments seek to reduce the period to 35 years, which we believe is more reasonable.
      We held discussions with the Royal Institution of Chartered Surveyors. As a result of representations and discussions, we concluded that 35 years was the right period for the reversion to be a major interest for the purposes of the legislation.
      Mr. Graham Page: We considered that as the Bill stood 50 years was a ridiculous period. We therefore proposed an amendment to reduce the period of 50 years to one of 25 years, as being more consonant with the value of the reversion to a lease becoming a major interest in the property.
      At this stage of the Bill we have tried to compromise a little further—but not merely for the sake of compromise. As a result of the advice that we have received we believe that 25 years is the right period. The Minister proposed the period of 35 years. He puts the Opposition in a little difficulty. If we vote against his amendment—which seeks to substitute the figure 35 for the figure 50—it will appear that we wish to retain the period of 50 years. The only method open to us to register our objection is to vote against the Minister's amendment to insert "35". We wish to insert "25". I do not think that the Minister's proposal sufficiently meets our wishes.
      Question put, That the amendment be made:—
      The House divided: Ayes 280, Noes 266.

      Division No.196.]

      AYES

      [11. 23 p.m.

      Abse, Leo

      Cunningham, G. (Islington S)

      Graham, Ted

      Allaun, Frank

      Cunningham, Dr J. (Whiteh)

      Grant, George (Morpeth)

      Anderson, Donald

      Dalyell, Tam

      Grant, John (Islington C)

      Archer, Peter

      Davidson, Arthur

      Grocott, Bruce

      Armstrong, Ernest

      Davies, Bryan (Enfield N)

      Hardy, Peter

      Ashton, Joe

      Davies, Denzil (Llanelli)

      Harper, Joseph

      Atkins, Ronald (Preston N)

      Davies, Ifor (Gower)

      Harrison, Walter (Wakefield)

      Atkinson, Norman

      Davis, Clinton (Hackney C)

      Hart, Rt Hon Judith

      Bagier, Gordon A. T.

      Deakins, Eric

      Hattersley, Rt Hon Roy

      Barnett, Guy (Greenwich)

      Dean, Joseph (Leeds West)

      Hatton, Frank

      Barnett, Rt Hon Joel (Heywood)

      de Freitas, Rt Hon Sir Geoffrey

      Hayman, Mrs Helene

      Bates, Alf

      Dell, Rt Hon Edmund

      Heffer, Eric S.

      Bean, R. E.

      Dempsey, James

      Hooley, Frank

      Benn, Rt Hon Anthony Wedgwood

      Doig, Peter

      Howell, Rt Hon Denis

      Bennett, Andrew (Stockport N)

      Dormand, J. D.

      Hoyle, Doug (Nelson)

      Bidwell, Sydney

      Douglas-Mann, Bruce

      Huckfield, Les

      Bishop, E. S.

      Duffy, A. E. P.

      Hughes, Rt Hon C. (Anglesey)

      Blenkinsop, Arthur

      Dunn, James A.

      Hughes, Mark (Durham)

      Boardman, H.

      Dunnett, Jack

      Hughes, Robert (Aberdeen N)

      Booth, Rt Hon Albert

      Dunwoody, Mrs Gwyneth

      Hughes, Roy (Newport)

      Bottomley, Rt Hon Arthur

      Eadie, Alex

      Hunter, Adam

      Boyden, James (Bish Auck)

      Edge, Geoff

      Irvine, Rt Hon Sir A. (Edge Hill)

      Bradley, Tom

      Edwards, Robert (Wolv SE)

      Irving, Rt Hon S. (Dartford)

      Bray, Dr Jeremy

      Ellis, John (Brigg & Scun)

      Jackson, Colin (Brighouse)

      Brown, Hugh D. (Provan)

      Ellis, Tom (Wrexham)

      Jackson, Miss Margaret (Lincoln)

      Brown, Robert C. (Newcastle W)

      English, Michael

      Janner, Greville

      Brown, Ronald (Hackney S)

      Ennals, David

      Jay, Rt Hon Douglas

      Buchan, Norman

      Evans, Fred (Caerphilly)

      Jeger, Mrs Lena

      Buchanan, Richard

      Evans, Ioan (Aberdare)

      Jenkins, Hugh (Putney)

      Butler, Mrs Joyce (Wood Green)

      Ewing, Harry (Stirling)

      John, Brynmor

      Callaghan, Jim (Middleton & P)

      Faulds, Andrew

      Johnson, James (Hull West)

      Campbell, Ian

      Fernyhough, Rt Hon E.

      Johnson, Walter (Derby S)

      Canavan, Dennis

      Flannery, Martin

      Jones, Dan (Burnley)

      Cant, R. B.

      Fletcher, Raymond (Ilkeston)

      Judd, Frank

      Carmichael, Neil

      Fletcher, Ted (Darlington)

      Kaufman, Gerald

      Carter, Ray

      Foot, Rt Hon Michael

      Kelley, Richard

      Carter-Jones, Lewis

      Ford, Ben

      Kerr, Russell

      Cartwright, John

      Forrester, John

      Kilroy-Silk, Robert

      Clemitson, Ivor

      Fowler, Gerald (The Wrekin)

      Kinnock, Neil

      Cocks, Michael (Bristol S)

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

      Lambie, David

      Cohen, Stanley

      Freeson, Reginald

      Lamborn, Harry

      Coleman, Donald

      Garrett, John (Norwich S)

      Lamond, James

      Colquhoun, Ms Maureen

      Garrett, W. E. (Wallsend)

      Latham, Arthur (Paddington)

      Cook, Robin F. (Edin C)

      George, Bruce

      Leadbitter, Ted

      Corbett, Robin

      Gilbert, Dr John

      Lee, John

      Cox, Thomas (Tooting)

      Ginsburg, David

      Lestor, Miss Joan (Eton & Slough)

      Craigen, J. M. (Maryhill)

      Golding, John

      Lever, Rt Hon Harold

      Cronin, John

      Gould, Bryan

      Lewis, Ron (Carlisle)

      Cryer, Bob

      Gourlay, Harry

      Lipton, Marcus

      Litterick, Tom

      Owen, Dr David

      Strauss, Rt Hon G. R.

      Lomas, Kenneth

      Palmer, Arthur

      Summerskill, Hon Dr Shirley

      Loyden, Eddie

      Park, George

      Swain, Thomas

      Luard, Evan

      Parker, John

      Thomas, Jeffrey (Abertillery)

      Lyons, Edward (Bradford W)

      Parry, Robert

      Thomas, Mike (Newcastle E)

      Mabon, Dr J. Dickson

      Pavitt, Laurie

      Thomas, Ron (Bristol NW)

      McCartney, Hugh

      Peart, Rt Hon Fred

      Thorne, Stan (Preston South)

      McElhone, Frank

      Perry, Ernest

      Tierney, Sydney

      MacFarquhar, Roderick

      Phipps, Dr Colin

      Tinn, James

      McGuire, Michael (Ince)

      Prentice, Rt Hon Reg

      Tomlinson, John

      Mackenzie, Gregor

      Prescott, John

      Tomney, Frank

      Mackintosh, John P.

      Price, C. (Lewisham W)

      Torney, Tom

      Maclennan, Robert

      Price, William (Rugby)

      Tuck, Raphael

      McMillan, Tom (Glasgow C)

      Radice, Giles

      Urwin, T. W.

      McNamara, Kevin

      Rees, Rt Hon Merlyn (Leeds S)

      Varley, Rt Hon Eric G.

      Madden, Max

      Richardson, Miss Jo

      Wainwright, Edwin (Dearne V)

      Magee, Bryan

      Roberts, Albert (Normanton)

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

      Mahon, Simon

      Roberts, Gwilym (Cannock)

      Walker, Terry (Kingswood)

      Marks, Kenneth

      Robinson, Geoffrey

      Ward, Michael

      Marquand, David

      Roderick, Caerwyn

      Watkins, David

      Marshall, Dr Edmund (Goole)

      Rodgers, George (Chorley)

      Watkinson, John

      Marshall, Jim (Leicester S)

      Rodgers, William (Stockton)

      Weetch, Ken

      Maynard, Miss Joan

      Rooker, J. W.

      Weitzman, David

      Meacher, Michael

      Ross, Rt. Hon W. (Kilmarnock)

      Wellbeloved, James

      Mellish, Rt Hon Robert

      Rowlands, Ted

      White, Frank R. (Bury)

      Mendelson, John

      Sandelson, Neville

      White, James (Pollok)

      Mikardo, Ian

      Sedgemore, Brian

      Whitehead, Phillip

      Millan, Bruce

      Selby, Harry

      Whitlock, William

      Miller, Mrs Millie (Ilford N)

      Shaw, Arnold (Ilford South)

      Willey, Rt Hon Frederick

      Mitchell, R. C. (Soton, Itchen)

      Sheldon, Robert (Ashton-u-Lyne)

      Williams, Alan (Swansea W)

      Molloy, William

      Shore, Rt Hon Peter

      Williams, Alan Lee (Hornch'ch)

      Moonman, Eric

      Short, Rt Hon E. (Newcastle C)

      Williams, Rt Hon Shirley (Hertford)

      Morris, Alfred (Wythenshawe)

      Short, Mrs Renée (Wolv NE)

      Williams, Sir Thomas

      Morris, Charles R. (Openshaw)

      Silkin, Rt Hon John (Deptford)

      Wilson, Alexander (Hamilton)

      Morris, Rt Hon J.(Aberavon)

      Silkin, Rt Hon S. C. (Dulwich)

      Wilson, Rt Hon H. (Huyton)

      Moyle, Roland

      Sillars, James

      Wilson, William (Coventry SE)

      Mulley, Rt Hon Frederick

      Silverman, Julius

      Wise, Mrs Audrey

      Murray, Rt Hon Ronald King

      Skinner, Dennis

      Woodall, Alec

      Newens, Stanley

      Small, William

      Woof, Robert

      Noble, Mike

      Smith, John (N Lanarkshire)

      Wrigglesworth, Ian

      Oakes, Gordon

      Snape, Peter

      Young, David (Bolton E)

      Ogden, Eric

      Spearing, Nigel

      O'Halloran, Michael

      Stallard, A. W.

      TELLERS FOR THE AYES:

      Orbach, Maurice

      Stewart, Rt Hon M. (Fulham)

      Mr. James Hamilton and

      Orme, Rt Hon Stanley

      Stoddart, David

      Mr. Tom Pendry

      Ovenden, John

      Strang, Gavin

      NOES

      Adley, Robert

      Chalker, Mrs Lynda

      Fry, Peter

      Alison, Michael

      Clark, Alan (Plymouth, Sutton)

      Galbraith, Hon. T. G. D.

      Amery, Rt Hon Julian

      Clark, William (Croydon S)

      Gardiner, George (Reigate)

      Arnold, Tom

      Clarke, Kenneth (Rushcliffe)

      Gardner, Edward (S Fylde)

      Atkins, Rt Hon H. (Spelthorne)

      Clegg, Walter

      Gilmour, Rt Hon Ian (Chesham)

      Awdry, Daniel

      Cockcroft, John

      Gilmour, Sir John (East Fife)

      Baker, Kenneth

      Cooke, Robert (Bristol W)

      Glyn, Dr Alan

      Banks, Robert

      Cope, John

      Goodhart, Philip

      Beith, A. J.

      Cordle, John H.

      Goodlad, Alastair

      Bell, Ronald

      Cormack, Patrick

      Gorst, John

      Bennett, Dr Reginald (Fareham)

      Corrie, John

      Gow, Ian (Eastbourne)

      Benyon, W.

      Crouch, David

      Gower, Sir Raymond (Barry)

      Berry, Hon Anthony

      Crowder, F. P.

      Grant, Anthony (Harrow C)

      Biffen, John

      Davies, Rt Hon J. (Knutsford)

      Gray, Hamish

      Biggs-Davison, John

      Dean, Paul (N Somerset)

      Griffiths, Eldon

      Blaker, Peter

      Dodsworth, Geoffrey

      Grimond, Rt Hon J.

      Body, Richard

      Douglas-Hamilton, Lord James

      Grist, Ian

      Boscawen, Hon Robert

      Drayson, Burnaby

      Grylls, Michael

      Bottomley, Peter

      du Cann, Rt Hon Edward

      Hall, Sir John

      Bowden, A. (Brighton, Kemptown)

      Dunlop, John

      Hall-Davis, A. G. F.

      Boyson, Dr Rhodes (Brent)

      Durant, Tony

      Hamilton, Michael (Salisbury)

      Bradford, Rev Robert

      Dykes, Hugh

      Hampson, Dr Keith

      Braine, Sir Bernard

      Edwards, Nicholas (Pembroke)

      Hannam, John

      Brittan, Leon

      Elliott, Sir William

      Harvie Anderson, Rt Hon Miss

      Brocklebank-Fowler, C.

      Emery, Peter

      Hastings, Stephen

      Brotherton, Michael

      Eyre, Reginald

      Havers, Sir Michael

      Brown, Sir Edward (Bath)

      Fairbairn, Nicholas

      Hawkins, Paul

      Bryan, Sir Paul

      Fairgrieve, Russell

      Hayhoe, Barney

      Buchanan-Smith, Alick

      Farr, John

      Heseltine, Michael

      Buck, Antony

      Fell, Anthony

      Hicks, Robert

      Budgen, Nick

      Fisher, Sir Nigel

      Higgins, Terence L.

      Bulmer, Esmond

      Fletcher-Cooke, Charles

      Holland, Philip

      Butler, Adam (Bosworth)

      Fookes, Miss Janet

      Hooson, Emlyn

      Carlisle, Mark

      Forman, Nigel

      Hordern, Peter

      Carson, John

      Fox, Marcus

      Howe, Rt Hon Sir Geoffrey

      1756

      1757

      Howell, Ralph (North Norfolk)

      Moate, Roger

      St. John-Stevas, Norman

      Howells, Geraint (Cardigan)

      Molyneaux, James

      Scott, Nicholas

      Hunt, David (Wirral)

      Monro, Hector

      Scott-Hopkins, James

      Hunt, John

      Montgomery, Fergus

      Shaw, Giles (Pudsey)

      Hurd, Douglas

      Moore, John (Croydon C)

      Shelton, William (Streatham)

      Hutchison, Michael Clark

      More, Jasper (Ludlow)

      Shepherd, Colin

      Irving, Charles (Cheltenham)

      Morgan, Geraint

      Shersby, Michael

      James, David

      Morgan-Giles, Rear-Admiral

      Sims, Roger

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

      Morris, Michael (Northampton S)

      Sinclair, Sir George

      Jessel, Toby

      Morrison, Charles (Devizes)

      Skeet, T. H. H.

      Johnson Smith, G. (E Grinstead)

      Morrison, Hon Peter (Chester)

      Smith, Cyril (Rochdale)

      Jones, Arthur (Daventry)

      Mudd, David

      Smith, Dudley (Warwick)

      Jopling, Michael

      Neave, Airey

      Spence, John

      Joseph, Rt Hon Sir Keith

      Nelson, Anthony

      Spicer, Jim (W Dorset)

      Kaberry, Sir Donald

      Neubert, Michael

      Spicer, Michael (S Worcester)

      Kellett-Bowman, Mrs Elaine

      Newton, Tony

      Sproat, Iain

      Kershaw, Anthony

      Normanton, Tom

      Stainton, Keith

      Kimball, Marcus

      Nott, John

      Stanbrook, Ivor

      King, Evelyn (South Dorset)

      Onslow, Cranley

      Stanley, John

      King, Tom (Bridgwater)

      Oppenheim, Mrs Salty

      Steel, David (Roxburgh)

      Kitson, Sir Timothy

      Osborn, John

      Steen, Anthony (Wavertree)

      Knight, Mrs Jill

      Page, John (Harrow West)

      Stewart, Ian (Hitchin)

      Knox, David

      Page, Rt Hon R. Graham (Crosby)

      Stokes, John

      Lamont, Norman

      Parkinson, Cecil

      Stradling Thomas, J.

      Lane, David

      Pattie, Geoffrey

      Tapsell, Peter

      Langford-Holt, Sir John

      Penhaligon, David

      Taylor, R. (Croydon NW)

      Lawrence, Ivan

      Percival, Ian

      Taylor, Teddy (Cathcart)

      Lawson, Nigel

      Peyton, Rt Hon John

      Tebbit, Norman

      Le Marchant, Spencer

      Pink, R. Bonner

      Temple-Morris, Peter

      Lewis, Kenneth (Rutland)

      Powell, Rt Hon J. Enoch

      Thomas, Rt Hon P. (Hendon S)

      Lloyd, Ian

      Price, David (Eastleigh)

      Townsend, Cyril D.

      Loveridge, John

      Prior, Rt Hon James

      Trotter, Neville

      Luce, Richard

      Pym, Rt Hon Francis

      Tugendhat, Christopher

      McCrindle, Robert

      Raison, Timothy

      van Straubenzee, W. R.

      McCusker, H.

      Rathbone, Tim

      Vaughan, Dr Gerard

      Macfarlane, Neil

      Rawlinson, Rt Hon Sir Peter

      Viggers, Peter

      MacGregor, John

      Rees, Peter (Dover & Deal)

      Wakeham, John

      Macmillan, Rt Hon M. (Farnham)

      Rees-Davies, W. R.

      Walker, Rt Hon P. (Worcester)

      McNair-Wilson, M. (Newbury)

      Reid, George

      Walker-Smith, Rt Hon Sir Derek

      McNair-Wilson, p. (New Forest)

      Renton, Rt Hon Sir D. (Hunts)

      Wall, Patrick

      Madel, David

      Renton, Tim (Mid-Sussex)

      Watt, Hamish

      Marshall, Michael (Arundel)

      Ridley, Hon Nicholas

      Weatherill, Bernard

      Marten, Neil

      Ridsdale, Julian

      Wells, John

      Mates, Michael

      Rifkind, Malcolm

      Whitelaw, Rt Hon William

      Mather, Carol

      Rippon, Rt. Hon Geoffrey

      Wiggin, Jerry

      Maude, Angus

      Roberts, Michael (Cardiff NW)

      Wigley, Dafydd

      Maudling, Rt Hon Reginald

      Roberts, Wyn (Conway)

      Winterton, Nicholas

      Maxwell-Hyslop, Robin

      Rodgers, Sir John (Sevenoaks)

      Wood, Rt Hon Richard

      Mayhew, Patrick

      Ross, Stephen (Isle of Wight)

      Young, Sir G. (Ealing, Acton)

      Meyer, Sir Anthony

      Ross, William (Londonderry)

      Younger, Hon George

      Miller, Hal (Bromsgrove)

      Rossi, Hugh (Hornsey)

      Mills, Peter

      Rost, Peter (SE Derbyshire)

      TELLERS FOR THE NOES

      Miscampbell, Norman

      Royle, Sir Anthony

      Mr. Jim Lester and

      Mitchell, David (Basingstoke)

      Sainsbury, Tim

      Mr. Fred Silvester.

      Question accordingly agreed to.
      Amendments made: No. 7, in page 3, line 8 leave out "of less than fifty" and insert "not exceeding thirty-five".
      No. 9, in page 3, line 17, leave out "fifty" and insert "thirty-five".—[Mr. Denzil Davies.]

    Clause 3

      PART DISPOSALS
      Mr. Denzil Davies: I beg to move Amendment No. 11, in page 3, line 42 leave out "reserved" and insert "payable".
      The amendment substitutes the expression
      "rent payable under a lease"
      1758
      for the present phrase
      "rent reserved under a lease".
      The phrase in the Bill as it stands is not a term of art in Scots law. The hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) criticised us in Committee for disregarding Scots law and we are changing the term in the Bill to ensure that it applies to both Scots and English law.
      Mr. Sainsbury: We are all grateful to my hon. and learned Friend the Member for Kinross and West Perthshire (Mr. Fairbairn) for putting us right on so many occasions on the differences between Scots and English law. I am sure that the Minister, coming as he does from a particular Principality, will be grateful that he was corrected, because neither he nor I was aware that the

      1759
      term "reserved under a lease" was not used or understood in Scotland. We welcome the amendment.
      Mr. Russell Fairgrieve: My hon. and learned Friend the Member for Kinross and West Perthshire (Mr. Fairbairn) and his hon. and un-learned Friend the Member for Aberdeenshire, West accept the amendment.
      Mr. Cope: I did not have the benefit of serving on the Committee and I am not a Scot or a lawyer, but to me the word "payable" should be "receivable." The rent will be receivable and not payable. Would it not make more sense to use the word "receivable"?
      Mr. Denzil Davies: The words "reserved under a lease" mean something to an English lawyer but the words "payable under a lease" mean something to both Scots and English lawyers.
      Mr. Cope: The individual concerned, the owner of the interest, will not pay the rent but will receive it. If the clause is to mean anything to ordinary people, to accountants like myself, it should refer to rent received and not rent payable.
      Mr. Davies: I hope that the hon. Member for Gloucestershire, South (Mr. Cope) will not think that I am being offensive, but the phrase has been drafted by lawyers for lawyers. Accountants were not taken into consideration.
      Mr. Sainsbury: I think that I can go so far as to say that it would be comprehensible to surveyors.
      Amendment agreed to.
      Mr. Denzil Davies: I beg to move Amendment No. 14, in page 4, line 15, leave out from 'place' to end of line 16 and insert
      'subject to subsection (2A) below, at the time at which the sum in question is received.
      (2A) In any case where—

      (a) there is a part disposal of an interest in land falling within subsection (2) above, and

      (b) before the sum in question is received but after the right to receive it has accrued, there is a disposal, other than a deemed disposal, of that interest or of an interest of which it is a part for the purposes of Part I of Schedule 2 to this Act,

      the part disposal shall be deemed for the
      1760
      purposes of this Act to take place immediately before the disposal referred to in paragraph (b) above.'.
      Mr Deputy Speaker: With this amendment we may discuss Government Amendment No. 98.
      Mr. Davies: As the Bill stands, a sum which falls within the scope of subsection (2)—for example, on the receipt of planning permission—is taxable when the right to receive it accrues. That avoids some difficulties. However, in the "clause stand part" debate in Committee the provision was criticised as potentially harsh. The amendment alters the chargeable date to the time when the sum is received, and so meets the criticism made in Committee.
      Mr. Sainsbury: As on many other occasions, we are indebted to my right hon. Friend the Member for Crosby (Mr. Page) for alerting the Committee to the point to which the Government are responding. We are also grateful to the Minister for moving the amendment.
      Amendment agreed to.

    Clause 5

      RELEVANT BASE VALUE
      Mr. Stephen Ross: I beg to move Amendment No. 15, in page 5, line 26, leave out from 'acquisition' to 'and' in line 27.
      I am well aware that the matter was debated at some length in the Standing Committee, of which I was not a member. Perhaps I may crib from what was aptly said by the right hon. Member for Crosby (Mr. Page):
      "The absence of a complete record is no reason why one should not endeavour to assess the value of the property as at the time it was acquired."—[Official Report, Standing Committee J, 6th April 1976; c. 343.]
      Why must we still stick to the April 1965 date? I know that that was the date when capital gains tax was introduced, but those records are suspect, as I know as a valuer.
      I have argued long and hard with district valuers over, for instance, the value of farmland at April 1965. There was a decline in the four years to 1969, but then it started to rise again. The records are questionable. The Bill would be better

      1761
      if we stopped referring back to April 1965. I see no reason why we should not stop doing so.
      It is purely for the convenience of the Government and the Inland Revenue that the words are there. I ask the Minister to agree that the Bill would be better if those words were removed.
      Mr. Denzil Davies: I am sorry, since the hon. Gentleman moved the amendment in such modest tones, that I must disappoint him. The date is chosen partly for convenience. One must find out the value of the land as at 6th April 1965. If it were necessary to go back further, it would become more difficult to find the current use value. We had long debates in Committee about the difficulty of valuation.
      Some hon. Members said in Committee that we were talking about hypothetical values. If we had to go back further than 1965, we should be in a more and more hypothetical situation. The hon. Gentleman, who is a valuer and has far more experience than I have, will know that the further one goes back, the more difficult it is to find the current use value. That might not have been the cost of acquisition.
      We are concerned with the current use value of land. The further back one goes the more difficult it is to find reliable estimates of current use value. That is why 1965 was chosen. It was not chosen principally because it was the year that capital gains tax was introduced, although that was partly the reason. If we went back further, we should make it more difficult for valuers and add to the complexities of existing legislation. For those reasons I cannot accept the amendment.
      Mr. Stephen Ross: I shall not delay the House. I do not altogether accept the Minister's argument. Certain calculations and tables could be used to get a more accurate figure than basic values at April 1965, but I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      11.45 p.m.
      Mr. Graham Page: I beg to move Amendment No. 16, in page 6, line 1, leave out 'wholly and exclusively'.
      Clause 5 deals with relevant base value, in connection with which one has
      1762
      to discover the sum paid for the property when it was acquired by the person who is selling. In the previous debate we were concerned with the date in terms of the cost of acquisition. In this debate we are also concerned with the cost of acquisition, but we must have regard to the definition that is provided—namely,
      "the consideration given by him or on his behalf wholly and exclusively for the acquisition of the interest".
      It seems that the words "wholly and exclusively" are superfluous. Either it is the consideration paid for the acquisition, or it is not. If other properties are acquired at the same time—for example, if one is buying a property with goodwill or fixtures and fittings and the sum includes property that is not the interest in land—is it not confusing to have the words "wholly and exclusively"? If the consideration includes some payment for goods or something that is not an interest in land, the words are misleading. If one has to apportion the consideration to find out, again, the words are superfluous.
      Mr. Denzil Davies: We had a fairly long debate in Committee on these words. The right hon. Gentleman has reiterated some of the arguments that he advanced to suggest that they are not necessary.
      I explained in Committee that they are used quite freely in fiscal legislation but that I should consult the parliamentary draftsmen to ascertain whether they are absolutely necessary. Those consultations have taken place and I am advised—these are extremely technical matters—that if these words were left out, the omission would create more uncertainty. As this is fiscal legislation, it is undesirable to create uncertainty, especially in property matters where it is necessary to rely on a definite form of words. The words are well known and well used in fiscal legislation, and understood. There are cases involving their meaning in other aspects of tax law. I am advised that these words are better left in, otherwise we might find greater uncertainty. That would be undesirable in fiscal legislation dealing with property matters.
      Mr. Fairbairn: The Minister has confirmed our worst fears in Committee

      1763
      about these words. However, the Minister's approach is attractive in that he keeps admitting his own doubts. He tells us that we should create more uncertainty if the words were left out. Therefore, he now concedes, as we argued in Committee but as he then denied, that they create uncertainty by their presence. If he is now saying that they create more uncertainty if left out, I hope that he will now admit that the argument we advanced that they create uncertainty was sound.
      Mr. Cope: Will the Minister of State answer the question asked by my right hon. Friend the Member for Crosby (Mr. Page)? He asked "What happens if one buys an interest in a piece of property or land which includes fixtures and fittings?". Supposing one pays one sum which is in the contract and includes not only the interest in the land but the carpets and curtains, as is frequently done with houses, flats, offices, and so on; clearly, that consideration will not have been wholly and exclusively for the acquisition of the interest. It will have been in part for the acquisition of those other matters. This is the nub of the uncertainty in the clause. As a result of the Minister's consultations since Committee, can he tell us the answer to that question?
      Mr. Denzil Davies: The hon. Gentleman has posed a specific question. Even if the words "wholly and exclusively" were left out, his problem remains. If the words were "for the acquisition of land", his problem with regard to one price for fixtures and fittings and the land would remain. In most contracts there is a split between consideration for the land and the chattels. The problem is not solved by removing the words "wholly and exclusively". It is felt that the words should be in the clause in order to create greater certainty, and I should have thought that that reason would commend itself to hon. Members opposite.
      Mr. Deputy Speaker: The Question is, That the amendment be made. All those in favour say "Aye"; to the contrary "No". I think the "Noes" have it. [Interruption.]
      Mr. Graham Page: On a point of order, Mr. Deputy Speaker. You put the Question quite clearly whether the amendment should be accepted, and it was accepted. [HON. MEMBERS: "No."] Oh, yes. I heard an "Aye" from the Government side.
      Mr. Deputy Speaker: If there is any doubt, the matter must be resolved.
      Mr. Graham Page: If there is any doubt, I agree that you should put the Question again, Mr. Deputy Speaker, but I cannot imagine how there can be any doubt when the voices distinctly came from the Government side in favour of the amendment. Clearly on the Government Front Bench "Aye" was said.
      Mr. Fairbairn: On a point of order, Mr. Deputy Speaker. Since the noises came wholly and exclusively from the Government side and they wholly and exclusively said "Aye", I cannot understand that there could be whole or exclusive doubt in any form.
      Mr. Deputy Speaker: The Question is, That the amendment be made. As many as are of that opinion say "Aye"; to the contrary "No". I think the "Noes" have it.
      Hon. Members: Aye.
      Mr. Deputy Speaker: Clear the Lobby.
      The House proceeded to a Division; but no Member being willing to act as Teller for the Ayes, Mr. DEPUTY SPEAKER declared that the Noes had it.
      Mr. Denzil Davies: I beg to move Amendment No. 17, in page 6, line 36, leave out from '(iv)' to 'were' in line 37.
      This is purely a drafting correction to Clause 5(1)(a) which results from the various changes made in Committee. It does not affect the substance of the Bill and I commend it to the House.
      Amendment agreed to.
      Mr. Davies: In view of the rapid progress that we have made today, I beg to move, That further consideration of the Bill, as amended, be now adjourned.
      Question put:—
      The House divided: Ayes 229, Noes 64.

      Division No. 197.]

      AYES

      [12 midnight

      Allaun, Frank

      George, Bruce

      Park, George

      Archer, Peter

      Gilbert, Dr John

      Parry, Robert

      Armstrong, Ernest

      Golding, John

      Pavitt, Laurie

      Ashton, Joe

      Gould, Bryan

      Peart, Rt Hon Fred

      Atkinson, Norman

      Graham, Ted

      Pendry, Tom

      Barnett, Guy (Greenwich)

      Grant, George (Morpeth)

      Perry, Ernest

      Barnett, Rt Hon Joel (Heywood)

      Grant, John (Islington C)

      Phipps, Dr Colin

      Bates, Alf

      Grocott, Bruce

      Prentice, Rt Hon Reg

      Bean, R. E.

      Hamilton, James (Bothwell)

      Prescott, John

      Benn, Rt Hon Anthony Wedgwood

      Hardy, Peter

      Price, C. (Lewisham W)

      Bennett, Andrew (Stockport N)

      Harrison, Walter (Wakefield)

      Price, William (Rugby)

      Bidwell, Sydney

      Hart, Rt Hon Judith

      Radice, Giles

      Bishop, E. S.

      Hatton, Frank

      Rees, Rt Hon Merlyn (Leeds S)

      Blenkinsop, Arthur

      Heffer, Eric S.

      Reid, George

      Boardman, H.

      Hooley, Frank

      Richardson, Miss Jo

      Booth, Rt Hon Albert

      Howell, Rt Hon Denis

      Roberts, Gwilym (Cannock)

      Boyden, James (Bish Auck)

      Hoyle, Doug (Nelson)

      Robinson, Geoffrey

      Bray, Dr Jeremy

      Hughes, Mark (Durham)

      Roderick, Caerwyn

      Brown, Hugh D. (Provan)

      Hughes, Robert (Aberdeen N)

      Rodgers, George (Chorley)

      Brown, Robert C. (Newcastle W)

      Hunter, Adam

      Rodgers, William (Stockton)

      Brown, Ronald (Hackney S)

      Irvine, Rt Hon Sir A. (Edge Hill)

      Rooker. J. W.

      Buchan, Norman

      Jaskson, Colin (Brighouse)

      Ross, Rt. Hon W. (Kilmarnock)

      Buchanan, Richard

      Jackson, Miss Margaret (Lincoln)

      Rowlands, Ted

      Butler, Mrs Joyce (Wood Green)

      Janner, Greville

      Sedgemore, Brian

      Callaghan, Jim (Middleton & P)

      John, Brynmor

      Selby, Harry

      Campbell, Ian

      Johnson, James (Hull West)

      Shaw, Arnold (Ilford South)

      Canavan, Dennis

      Jones, Dan (Burnley)

      Shore, Rt Hon Peter

      Cant, R. B.

      Judd, Frank

      Short, Rt Hon E. (Newcastle C)

      Carmichael, Neil

      Kaufman, Gerald

      Short, Mrs Renée (Wolv NE)

      Carter-Jones, Lewis

      Kelley, Richard

      Silkin, Rt Hon John (Deptford)

      Cartwright, John

      Kerr, Russell

      Silkin, Rt Hon S. C. (Dulwich)

      Clemitson, Ivor

      Kilroy-Silk, Robert

      Silverman, Julius

      Cocks, Michael (Bristol S)

      Kinnock, Neil

      Skinner, Dennis

      Cohen, Stanley

      Lambie, David

      Small, William

      Coleman, Donald

      Lamond, James

      Smith, John (N Lanarkshire)

      Colquhoun, Ms Maureen

      Latham, Arthur (Paddington)

      Snape, Peter

      Cook, Robin F. (Edin C)

      Lestor, Miss Joan (Eton & Slough)

      Spearing, Nigel

      Corbett, Robin

      Lipton, Marcus

      Stallard, A. W.

      Cox, Thomas (Tooting)

      Litterick, Tom

      Stewart, Rt Hon M. (Fulham)

      Craigen, J. M. (Maryhill)

      Lomas, Kenneth

      Stoddart, David

      Cryer, Bob

      Loyden, Eddie

      Strang, Gavin

      Cunningham, G. (Islington S)

      Lyons, Edward (Bradford W)

      Strauss, Rt Hon G. R.

      Cunningham, Dr J. (Whiteh)

      McCartney, Hugh

      Swain, Thomas

      Dalyell, Tam

      McElhone, Frank

      Thomas, Ron (Bristol NW)

      Davidson, Arthur

      MacFarquhar, Roderick

      Tomlinson, John

      Davies, Bryan (Enfield N)

      Mackenzie, Gregor

      Torney, Tom

      Davies, Denzil (Llanelli)

      Mackintosh, John p.

      Tuck, Raphael

      Davies, Ifor (Gower)

      Maclennan, Robert

      Urwin, T. W.

      Davis, Clinton (Hackney C)

      McMillan, Tom (Glasgow C)

      Varley, Rt Hon Eric G.

      Deakins, Eric

      Madden, Max

      Wainwright, Edwin (Dearne V)

      Dean, Joseph (Leeds West)

      Magee, Bryan

      Walker, Terry (Kingswood)

      de Freitas, Rt Hon Sir Geoffrey

      Mahon, Simon

      Ward, Michael

      Dell, Rt Hon Edmund

      Marks, Kenneth

      Watkins, David

      Dempsey, James

      Marquand, David

      Watkinson, John

      Doig, Peter

      Marshall, Dr Edmund (Goole)

      Wellbeloved, James

      Dormand, J. D.

      Maynard, Miss Joan

      White, Frank R. (Bury)

      Douglas-Mann, Bruce

      Meacher, Michael

      White, James (Pollok)

      Duffy, A. E. P.

      Mellish, Rt Hon Robert

      Whitehead, Phillip

      Dunn, James A.

      Mendelson, John

      Whitlock, William

      Dunnett, Jack

      Mikardo, Ian

      Wigley, Dafydd

      Dunwoody, Mrs Gwyneth

      Millan, Bruce

      Willey, Rt Hon Frederick

      Eadie, Alex

      Miller, Mrs Millie (Ilford N)

      Williams, Alan (Swansea W)

      Ellis, John (Brigg & Scun)

      Mitchell, R. C. (Soton, Itchen)

      Williams, Alan Lee (Hornch'ch)

      Ellis, Tom (Wrexham)

      Molloy, William

      Williams, Rt Hon Shirley (Hertford)

      English, Michael

      Moonman, Eric

      Williams, Sir Thomas

      Ewing, Harry (Stirling)

      Morris, Alfred (Wythenshawe)

      Wilson, Alexander (Hamilton)

      Fernyhough, Rt Hon E.

      Morris, Charles R. (Openshaw)

      Wilson, Rt Hon H. (Huyton)

      Flannery, Martin

      Mulley, Rt Hon Frederick

      Wilson, William (Coventry SE)

      Fletcher, Raymond (Ilkeston)

      Newens, Stanley

      Wise, Mrs Audrey

      Fletcher, Ted (Darlington)

      Noble, Mike

      Woodall, Alec

      Foot, Rt Hon Michael

      Oakes, Gordon

      Woof, Robert

      Ford, Ben

      Ogden, Eric

      Wrigglesworth, Ian

      Forrester, John

      O'Halloran, Michael

      Young, David (Bolton E)

      Fowler, Gerald (The Wrekin)

      Orbach, Maurice

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

      Orme, Rt Hon Stanley

      TELLERS FOR THE AYES:

      Freeson, Reginald

      Ovenden, John

      Mr. James Tinn and

      Garrett, John (Norwich S)

      Owen, Dr David

      Mr. Joseph Harper.

      Garrett, W. E. (Wallsend)

      Palmer, Arthur

      1766

      1767

      NOES

      Atkins, Rt Hon H. (Spelthorne)

      Higgins, Terence L.

      Rost, Peter (SE Derbyshire)

      Banks, Robert

      Hooson, Emlyn

      Sainsbury, Tim

      Beith, A. J.

      James, David

      Scott-Hopkins, James

      Berry, Hon Anthony

      Jessel, Toby

      Shaw, Giles (Pudsey)

      Blaker, Peter

      Jopling, Michael

      Shepherd, Colin

      Boscawen, Hon Robert

      Langford-Holt, Sir John

      Silvester, Fred

      Bottomley, Peter

      Lawrence, Ivan

      Smith, Cyril (Rochdale)

      Bowden, A. (Brighton, Kemptown)

      Le Marchant, Spencer

      Spicer, Michael (S Worcester)

      Budgen, Nick

      Lester, Jim (Beeston)

      Stainton, Keith

      Bulmer, Esmond

      McCusker, H.

      Stanbrook, Ivor

      Carlisle, Mark

      Mather, Carol

      Steel, David (Roxburgh)

      Carson, John

      Monro, Hector

      Stradling Thomas, J.

      Chalker, Mrs Lynda

      Montgomery, Fergus

      Tebbit, Norman

      Cooke, Robert (Bristol W)

      Morrison, Hon Peter (Chester)

      Trotter, Neville

      Cope, John

      Osborn, John

      Vaughan, Dr Gerard

      Cormack, Patrick

      Penhaligon, David

      Weatherill, Bernard

      Corrie, John

      Rees, Peter (Dover & Deal)

      Winterton, Nicholas

      Durant, Tony

      Ridley, Hon Nicholas

      Young, Sir G. (Ealing, Acton)

      Fairgrieve, Russell

      Rippon, Rt. Hon Geoffrey

      Fox, Marcus

      Roberts, Michael (Cardiff NW)

      TELLERS FOR THE NOES:

      Glyn, Dr Alan

      Rodgers, Sir John (Sevenoaks)

      Mr. Nicholas Fairbairn and

      Goodhart, Philip

      Ross, Stephen (Isle of Wight)

      Mr. Robin Maxwell-Hyslop.

      Hawkins, Paul

      Ross, William (Londonderry)

      Question accordingly agreed to.
      Bill, as amended (in the Standing Committee, to be further considered this day.

  PETITIONS

    Experiments in Psychosurgery
    Mr. Bryan Gould: With your permission, Mr. Speaker, and that of the House, I wish to present a petition on behalf of the Southampton and Portsmouth chapter of the Citizens Commission for Human Rights.
    The Commission is concerned with the practice of psychosurgery and the petition includes 2,000 signatures. The signatories are concerned about what they see as the damage caused by the practice of psychosurgery and by the growing volume of medical opinion which casts doubt upon its efficacy and morality. The petition says:
    "wherefore your petitioners humbly pray that this honourable House will halt the use of experimental brain and psychosurgery on the National Health Service and suspend a decision on further experimentation on mental patients and establish a commission to investigate and report on the past and present use of psychosurgery in the United Kingdom."
    To lie upon the Table.

    Aircraft and Shipbuilding Industries Bill
    Mr. Robin Maxwell-Hyslop: With your permission, Mr. Speaker, and that of the House, I wish to present 19 petitions. They are all different, though they have some common points. They are all objection petitions against the Aircraft and Shipbuilding Industries Bill and in
    1768
    each case the petitioner humbly prays that the petitioner or counsel may be heard against the provisions of the Bill and:
    "that such relief may be given to your petitioners as your honourable House shall deem meet."
    Two of the petitions are from corporate bodies and 17 from individuals. If hon. Members wish, I can read them out in toto, but I propose to summarise the contents of some and to give a few as examples.
    The petition under the common seal of Dowsett Holdings Ltd., which is the majority shareholder of Brooke Marine Ltd of Lowestoft, sets out the damage which the firm has already suffered through the Government's nationalisation proposals and the ability of the firm to remain a good employer without nationalisation and prays that the House does not enact the Bill.
    The second petition is that from Bristol Channel Ship Repairers Ltd. under its common seal. It says:
    "(2) Your Petitioners are named in Schedule 2, Part 1 of the Bill and humbly beg to state that

    (i) they have been unfairly and prejudicially selected for nationalisation

    (ii) they have on numerous occasions, in writing, sought a meeting with the Secretary of State for Industry, all of which have been ref used

    (iii) the Secretary of State for Industry has failed to explain to them how their nationalisation would improve or maintain the service which has to be provided to attract and retain customers and, therefore, maintain or increase employment.

    (iv) the Secretary of State for Industry has failed to explain to them how their nationalisation could improve the employee participation programme being enjoyed by shiprepair workers in South Wales.

    1769

    (v)(a) the Minister of State for Industry when winding up the Bill's Second Reading Debate, said in your Honourable House on 2nd December 1975:

    'I hope, without difficulty, to be able to convince Bristol Channel Ship Repairers Limited of the overwhelming case for its own nationalisation'.
    (b) to your Honourable House's Standing Committee D the Minister of State for Industry said on 13th January 1976 he had already made his arrangements to visit them and that he was intending to:
    'to consult with management as well as workers…'
    (c) the Minister of State for Industry has not at any time made contact with or visited them
    (3) Your Petitioners submit that, in all the circumstances, the Bill should not be allowed to pass into law but if, in spite of the objections of your Petitioners, your honourable House sees fit to allow the Bill so to pass, your Petitioners submit that it should be amended to meet the points of concern to your Petitioners.
    Therefore, your Petitioners humbly pray that they or their counsel may be heard against the provisions of the Bill and that such relief may be given to your Petitioners as your honourable House shall deem meet. And your Petitioners, as in duty bound, will ever pray…"
    I think it may assist the House if I take the principal points from a representative selection of a few of the petitions. For instance, there is a Mr. James Tallboy, a shop steward of the Amalgamated Union of Engineering Workers, who says:
    "As a shop steward in the AUEW employed in the shiprepairing industry in South Wales, I have wanted to meet the Secretary of State for Industry in order that he can explain to me how nationalisation of the ship repair industry in South Wales would benefit me and my fellow employees, but he has refused to see me."
    Mr. Tallboy then says:
    "Your Petitioner submits that in all the circumstances the Bill should not be allowed to pass into law."
    He ends by asking that he may be heard by himself or by counsel against the provisions of the Bill.
    Mr. Tallboy is not alone among the petitioners from that distinguished union. Mr. Bernard Bulpin, also a shop steward of the AUEW, speaks in the same terms:
    "I am also very worried that due to the inevitable centralisation of the industry after nationalisation, the work which we now receive through our efficiency will be diverted to much larger yards where there are many more men employed than in South Wales; this will entail a reduction in my earnings and eventually my job will be in danger."
    1770
    Mr. Bulpin also asks to be heard in person or by his counsel by this honourable House.
    Mr. Colin Scammell, of the Plumbers Trade Union, has similar apprehensions—[HON. MEMBERS: "Read them out."] I must accede to the wishes of the House He says:
    "I am a member of the PTU and an employed in ship repairing in South Wales. I have wanted to meet the Secretary of State for Industry in order that he could explain to me how nationalisation of the ship repair industry in South Wales would benefit me and my fellow employees, but he refused to meet us."
    He asks that in all the circumstances the Bill should not be allowed to pass into law, and that he should be heard by the House either in person or by counsel praying in support of his petition.
    Then there is Mr. David Cotter of the Amalgamated Society of Boilermakers, Shipwrights, Blacksmiths and Structural Workers. He says, among other cogent and telling points to which the House ought to give consideration:
    "I believe nationalisation of the ship repair industry in South Wales will entail a reduction in the volume of work and therefore in the number of available jobs. I believe that the proposal to nationalise the ship repair industry in South Wales is wrong because many foreign owners will no longer send their ships to South Wales to repair. Nationalisation would swamp our small firm. Nationalisation without consent would be tyrannical."
    He goes on to submit that, in all the circumstances, the Bill should not be allowed to pass into law and asks to be heard, either in person or by his counsel, against the provisions of the Bill and that such relief may be afforded to him as a petitioner
    "as your honourable House shall deem meet."
    He ends by saying that he will pray for us. That is something of which this House may well be in need.
    Then Mr. Roy Pearce of the Transport and General Workers Union says:
    "I believe that the proposals to nationalise a ship repair industry in South Wales is wrong because many owners will no longer send their ships for repair to South Wales and therefore our national economy will suffer."
    Hon. Members: Why?
    Mr. Maxwell-Hyslop: If hon. Members—
    Mr. Deputy Speaker: The hon. Member for Tiverton (Mr. Maxwell-Hyslop) would be best advised to continue in the way he was going.
    Mr. Greville Janner: On a point of order, Mr. Deputy Speaker. Is it not correct that an hon. Member who presents a petition is entitled either to read it or to summarise its contents and not to make comments, contentious or otherwise?
    Mr. Deputy Speaker: That is correct, and the hon. Member for Tiverton has 19 petitions to present.
    Mr. Maxwell-Hyslop: If the hon. and learned Member for Leicester, West (Mr. Janner) wishes me to read in toto each of the 19 and thereby to keep the servants of the House up for a late night, it will be on his head and not on mine. Not to do that is my only motive for summarising the contents and not reading them in toto.
    Mr. Greville Janner: I am entitled to raise a point of order. I have no objection to the hon. Member for Tiverton (Mr. Maxwell-Hyslop) summarising the contents of the petitions. I accept that, subject to your ruling, Mr. Deputy Speaker, that is totally proper, but it is totally improper for him to make contentious comments.
    Mr. Deputy Speaker: Comment or debate would be out of order, but I am under the impression that the hon. Member was summarising 19 petitions.
    Mr. Maxwell-Hyslop: Yes. I was doing so with the object of saving the time of the House, although if the hon. and learned Member for Leicester, West finds my summary inadequate to convey to him the contents of the petitions, I shall, of course, accede to a request to read them in toto.
    This petitioner, like others, wishes to be heard in support of his petition, either personally or by counsel, and prays the House that he may be accorded that.
    Next we have Mr. Paul Ross of the Amalgamated Union of Engineering Workers. As an employee-director in the ship repair industry in South Wales, and a member of the AUEW, he expresses the same view of the danger which will be caused to the level of employment in South Wales. He says:
    1772
    "I believe nationalisation of the ship repair industry in South Wales will entail a reduction in the volume of work and therefore in the number of available jobs."
    He also asks to be heard.
    As you will see, Mr. Deputy Speaker, and as you will have noted, these are but a small proportion of the petitions, every one of which has been certified by the Journal Office as being in due form and which I present to the House on behalf of the petitioners.
    Mr. Deputy Speaker: On behalf of the House and of the Chair, I express appreciation of the way in which the hon. Member for Tiverton has presented the 19 petitions and the brevity that he has shown.
    To lie upon the Table.

  TRADE BOYCOTTS (MIDDLE EAST)
  Motion made and Question proposed, That this House do now adjourn—[Mr. Snape.]
  12.25 a.m.
  Mr. Eric Moonman: I have called for this Adjournment debate on the Arab boycott of British firms because I believe that this House should know what is happening and how it affects this country, and because I believe that it is time the Government came into the open and condemned the boycott.
  Many Members may think that the Arab boycott is hardly a matter for this House. It is, they may say, directed against Israel, and, although regrettable, not our business. But it is our business, and for three reasons. First, it is affecting employment prospects in British industry. Secondly, it is playing an increasing role on our trade policy, which will ultimately have an effect on our foreign policy. Thirdly, it is producing situations which directly contravene the Government's race relations policy.
  First, on the employment situation, to cut unemployment and promote growth in the economy we need to expand existing import—exports and find new markets. In the Middle East our opportunities for doing this are being severely limited by the boycott.

  1773
  At first sight the effect of the boycott might appear insignificant since ostensibly it is directed only at firms which engage in commercial or financial transactions which promote the economic development of Israel, but as a result of extensive inquiries which I and others have undertaken recently, it is clear that the extent of the boycott has been considerably enlarged. One reason for this is that the opportunities for exercising the boycott have increased. As a result of the oil price increases more and more British firms are interested in redressing the trade balance by engaging in trade with the Arab countries. In response to this increased interest Arabs are now "blacklisting" not only those firms which trade direct with Israel, but companies which carry on business with firms doing business in Israel.
  Companies not already trading with Israel are being asked to promise, as a precondition of developing business links with the Arabs, that they will not seek business in Israel. The process has gone so far that there are now many corporations actually volunteering to fulfil the Arab Boycott Office's demands. The huge Saudi Arabian and other Arab development schemes have given the Arabs leverage in their dealings with some of the largest industrial, chemical, communications and other corporate groups.
  Let me be more specific. This month, four leading British construction companies have turned down an invitation to tender for a £9 million project on behalf of the Israel Ports Authority at Haifa, and three others have failed to reply. The firms which refused—Leonard Fairclough, Costain International, Taylor Woodrow International, and John Mowlem—said that they
  "could not take on any new work at this time"
  or that they were
  "not operating in the territory."
  The total project is for about £140 million over five years. This is a large and important opportunity for British industry.
  Can the responses of the companies really be true? Are the building and engineering trade unions satisfied that their members are so over-employed that they cannot even look at this project?
  1774
  Can this country really turn down the prospect of earnings from abroad on a project of this size? Is it not too much of a coincidence that a similar invitation to more than a dozen British firms last year to tender for two tugboats for the same authority was received in the same way? Thirty international companies bid for the contract but not one of them was from Britain. The total order was worth £5 million.
  There are other firms which have told me that they cannot risk jeopardising their existing Arab trade by accepting contracts with Israeli customers. Johnson-Richards H. R. Tiles Limited told the Anglo-Israel Chamber of Commerce in connection with a "know-how" agreement that it considered it
  "most inadvisable to become involved with Israel in any way whatsoever."
  CETEC Systems Limited, a subsidiary of an American company, said it did not consider it
  "in our interest to appoint an Israeli representative or send supplies to Israel."
  There are, of course, many others. I have not come here to condemn individual companies or individual executives for cowardice or even to judge their choice. It is up to the Government to give them a clear lead by denouncing the boycott and recommending British businessmen to take full advantage of the excellent trade opportunities being offered by Israel. They should point to the lead given by British Leyland, which has continued to trade with Israel and hopes to go on doing so, yet has not been required by the Arab Boycott Office to give any contrary undertaking.
  In general, I have found that, whenever the Arab countries are interested and involved in a company's product and the company refuses to yield to the boycott, the Arabs blink. When the company is prepared to act resolutely and it is given some encouragement, the Arabs respond.
  It is up to the British Government to act, because we cannot afford to lose ground in our trading relationship with Israel. This is one of the most critical things for our balance of trade. In 1975, our trade surplus with Israel—£146 million—was the third largest we had with any country, but the most recent available figures show that our exports to Israel, which increased by 8 per cent. in value

  1775
  in 1975, are now 5 per cent. down on last year.
  There must be an answer to this. I suggest that the Minister should give some attention not only to the general aspects of the boycott but to what it must mean in terms of trade between this country and Israel.
  With our economy in its present condition we simply cannot afford to let this potential market slip away. We need the boost to the economy and our people need the jobs which this trade would bring. The nub of the issue is that we ought not to have to choose between the Arab and the Israeli markets. If our products are good enough, they will be bought by both, regardless of politics, if we stand firm for equal trading rights.
  Secondly, submission to blackmail in our trading practices may change the way in which we approach the Middle East in our foreign policy. It would be a very naÏve politician who did not recognise the relationship between those two aspects. But giving into trade blackmail also makes us more vulnerable to political blackmail. Have we not already had enough of that with oil? We must stand firm at some point.
  But there is another aspect of foreign policy which the Government should consider—that is, whether the blind eye which they turn to the operation of the Arab boycott in Britain is compatible with our international obligations, and especially our membership of the European Economic Community. The answer is a clear "No". The General Agreement on Tariffs and Trade, to which we subscribe, prohibits such practices under Articles 11, 13 and 20. Articles 85 and 86 of the Treaty of Rome proscribe actions such as those which make up the Arab trade boycott and prohibit the kind of "supplementary obligations" imposed on companies by the boycott offices. Further, Article 90 stresses that nationalised industries specially shall not act in contravention of the treaty.
  Those Arab countries with which the EEC recently concluded trade agreements—Algeria, Tunisia and Morocco—and another four which are negotiating such agreements—Egypt, Lebanon, Syria and Jordan—are required to accept a provision in these treaties not to discriminate
  1776
  between nationals of the EEC countries. But unless the Governments of the Nine stand united in their opposition to the boycott, loopholes will be found. The Arab countries have already declared that they would not adhere to the non-discrimination clauses where their essential security interests are involved. The EEC rejects this.
  It is not enough that the EEC Commission should make declarations against the boycott. It has done so on several occasions in reply to questions about the boycott in the European Parliament. Declarations from individual Governments are also required. The British Government must make their position clear.
  The third aspect of this delicate and urgent matter is that of race relations. I have had many tragic letters from British men and women who have applied for jobs only to be told that because of the firm's trade, or hopes of trade, with Arab countries they do not employ Jews. Many firms find that the existing employees cannot be promoted to jobs which would mean their travelling to Arab countries because their Jewish origins would prevent their being allowed entry.
  That is a monstrous situation. We do not tolerate discrimination against black people or women—we have legislation to prevent it. Why should we allow discrimination against people on religious or ethnic grounds? It is hardly surprising that I have the written support of hon. Members—Catholic, Protestant and Jew—who want to see the Government take efficient action to prevent such discrimination.
  That is the situation. What needs to be done? Three steps must be taken. First, I want a clear statement from the Minister which shows that he is aware of the anxiety felt by many people in this country about the way British interests are being damaged by the Arab boycott and which will give confidence to those companies which are confused about the proper response to suggestions that they should exercise discrimination in the companies with which they deal and the people whom they employ.
  In the United States real headway has been made by Congress this month. A report is almost ready giving directions on how to deal with the boycott which

  1777
  operates there as in most of Western Europe. Indeed, the United States has added to its armoury in dealing with this kind of abuse. The 1969 Export Administration Act provides muscle so that when companies want guidance, so as to work with parameters of confidence, there is someone to whom they may turn.
  Secondly, I urge the Government to set up a confidential and high-level inquiry to sift through the documents and to assess the extent to which representatives from one or other of the Arab embassies in Britain have used monstrous means to intimidate British management into withdrawing from trade with Israel. The question of influence on and intimidation of staff in Arab embassies in London should be investigated.
  The questions raised by the Arab boycott need answering. It is the Government's responsibility to answer them. To date the Government have found it expedient to turn a blind eye and to let the Race Relations Board deal with discrimination brought about by the boycott. But the extent of this discrimination which was revealed by the detailed evidence produced two months ago, demands a clear statement of Government policy. This House demands that.
  At the end of the day it is not just a Jewish issue or a trading issue. The Arab boycott is really a test of the meaning of democracy and of the Government's dedication to the freedom of the individual to trade, to employ, or to be employed. The Arab boycott is affecting that freedom adversely for many of our citizens and the companies for which they work.
  Freedom, as Solzhenitsyn has reminded us, is one and indivisible, and one has to take a moral attitude. What is the Government's moral attitude to the Arab boycott? British pride will deal harshly with any Government who yield to blackmail in whatever form, and that needs answering.
  12.36 a.m.
  Mr. Tim Sainsbury: I am grateful to the hon. Member for Basildon (Mr. Moonman) for providing me with this opportunity to express support from the Opposition side of the House for the concern that he has so ably demonstrated at the increasing activities of the Arab Boycott Office. Attempts to enforce a
  1778
  boycott against a friendly Power or individuals on the ground of race or religion is a detestable practice which, like any form of blackmail or threat, depends for its success on promoting uncertainty about the consequences that might result if any person or company ignores the threat.
  It is for that reason that there would be particular value in a clear and unequivocal declaration from the Government that they will, directly or indirectly, in no way co-operate with the odious objectives of the Boycott Office. If the Government make it quite clear that any company that co-operates will incur their severe displeasure, they will give great strength to those who might otherwise succumb to bullying. If, on the other hand, the Government were to give any sign of condoning the boycott, how could others be expected to resist?
  As the hon. Gentleman said, efforts are now being made to introduce what is referred to as a tertiary boycott of those who do business with those who do business with Israel or have Jewish or Zionist, as the boycotters call them, directors. That will be the next demand, and it will be encouraged and widened if we fail to make our attitude clear. That further demand will inevitably prejudice the growth of trade with the Arab world—a growth of trade that we all wish to see. If we make clear our resistance and objection now, that trade will be able to grow.
  The Government have an opportunity—and now is the moment for them to take advantage of it—to give a clear lead in resisting and condemning this odious practice.
  12.38 a.m.
  Mr. Greville Janner: I am obliged to my hon. Friend the Member for Basildon (Mr. Moonman) for giving me the opportunity to express my total agreement with what has been said from both sides of the House.
  The Arab boycott is a reprehensible and disgraceful practice which should be denounced by the Government. The Government now have the opportunity to advise British businessmen how to deal with what is neither more nor less than an attempt to blackmail those who wish to deal with the State of Israel, which, in its turn, is the only democratic

  1779
  country in that area, and with which this country has had excellent and friendly trading relations since its foundation.
  Apart from that, the dangers of creeping discrimination leading out of the boycott are too obvious to need stressing. Once people are to be discriminated against, once companies are not to be dealt with because they have people on their boards who are Zionists, friends of Israel, or Jews, we have the beginning of a practice which could lead to the kind of discrimination which this country has been so proud to avoid in the past.
  I hope that the Minister will give a clear lead to industry, to commerce, and to the British people on this subject of boycott, which is becoming more serious the more that the Arab nations take over our cities and industries.
  12.40 a.m.
  The Under-Secretary of State for Trade (Mr. Michael Meacher): My hon. Friend the Member for Basildon (Mr. Moonman) has, as always, presented his case very lucidly and very forcibly. I am very glad to have the opportunity to discuss this issue tonight because there can be no doubt that there is a very great deal of feeling in this country about it. In some quarters I think that it has generated some misunderstandings, which I hope to have the chance, briefly, to clear up.
  As has been repeatedly stated by Ministers, in the House and elsewhere, Her Majesty's Government are opposed to and deplore all trade boycotts other than those that are sanctioned by international support and international authority. We wish to see our commercial relations expanding in all markets, but we recognise that our exporters have to deal with a situation in which certain countries require certain special formalities and documentation.
  It would not be for the Government to direct or instruct firms to supply specific markets or to prevent exporters from providing whatever documents or declarations are required in respect of goods shipped to a particular country. To direct firms not to comply with requirements which are often part of the import regulations of the importer's Government could clearly bring to an end our export trade with those countries. This could be
  1780
  dangerous for this country's future economic policies, and it would be damaging to employment at home. We cannot ignore these realities.
  Thus I think that it must be for exporters to decide how they deal with the situation which they currently face in doing business with the Middle East. If choices have to be made, firms must decide their policy in the light of their own commercial interests.
  Similar principles must govern any consideration of this question by the EEC, of which my hon. Friend made mention, as this would require the agreement of all the member States. It is relevant here that the EEC has signed or is in the process of negotiating a network of commercial agreements with many Mediterranean States, including both Israel and her Arab neighbours. The principle underlying these agreements is one of improving the flow of trade. The boycott is clearly inconsistent with this. While I do not rule out discussing the problem with our trading partners, the first priority must be a peaceful solution to the fundamental political problem.
  As far as I am aware, Article 85 of the Treaty of Rome, to which my hon. Friend explicitly referred, concerns restrictive agreements between undertakings and decisions by associations of undertakings which may affect trade between member States. It has no application to steps taken by individual firms as a result of external pressures. Article 85 concerns abuse of market powers by undertakings in as far as they affect trade between member States. Again, it has no application to steps taken as a result of external pressures.
  No facts have been brought to our attention to show that any relevant articles of the Treaty of Rome have been breached in this country. Of course, if an individual firm has reason to believe that there has been an infringement of Article 85 or 86 and can claim a legitimate interest, it is open to that firm to request that the suspected infringement be investigated by the Commission of the EEC.
  My hon. Friend also referred to American legislation on the boycott. Her Majesty's Government see little purpose in adding to the already heavy burden of documentation placed on our exporters

  1781
  by requiring them to report their dealings with the boycott authorities. After all, the United States' legislation does not appear to prevent American exporters from providing declarations required by Arab importers. It is merely the reporting of their dealings with the boycott authorities that is required. Again, we judge that it is best to leave it to the commercial judgment of our own traders.
  Apart from these broad principles, however, there are considerable misunderstandings in some quarters over this issue. For example, it is not always understood that Iran, for example, has nothing to do with the boycott. It is not always understood that merely exporting non-military goods to Israel is in general compatible with a flourishing trade with Arab countries.
  In that context I emphasise that officials at the Department of Trade are available to discuss with individual firms any problems that they encounter and to offer them their knowledge and experience. It is perhaps surprising that we often discover that firms have been about to act on the basis of a misunderstanding of the boycott.
  I can place before the House a copy of a note for exporters which the Department has prepared and which has been circulated to member chambers by the Associated British Chambers of Commerce. In addition, the publication on Israel in the "Hints to Businessmen" series reminds readers to consult the Department if they have any doubts about the boycott.
  My hon. Friend drew attention to the trade prospects with Israel and suggested that Government encouragement or inducement was necessary to ensure that it was fully exploited. Neither he nor other hon. Members need fear that British companies are unaware of the opportunities for exports to Israel. Last year, when Israel's total imports fell, our exports to that country increased to £237 million and we regained our position as Israel's second largest supplier after the United States. This year we have supported a mission to Israel of the London Chamber of Commerce and today has been British Day at the International Consumer Goods Fair in Tel Aviv where we have an official British pavilion.
  1782
  There have been regular contacts between British and Israeli Trade and other Ministers. But for the current suspension of the normal arrangements for pairing, the Under-Secretary of State responsible for civil aviation and shipping would tonight have hosted a reception at our pavilion at the Tel Aviv Fair. We are in the final stages of setting up a United Kingdom-Israel joint committee to examine further ways of promoting exports in both directions. Neither the Government nor British exporters can be accused of neglecting this important market.
  My hon. Friend also referred to the contracts for the Port of Haifa. Various firms that he mentioned have explained their lack of interest by existing heavy commitments abroad and my hon. Friend begged leave to doubt that reason. But it is substantiated by the reports reaching the Departments of Environment and Trade from many of the larger companies which are having to refrain from pursuing certain overseas projects, particularly in countries where they are not already well established. The loading of particular businesses, bearing in mind all the circumstances of their prospects in a particular alternative market, is a matter for a firm's own judgment. It is not an area in which the Government have the right or ability to interfere.
  However, in that context I know that the House will be pleased to learn that earlier this week the National Coal Board signed a consultancy contract with the Israel Ports Authority covering the coal handling facilities to be installed as part of the development of Haifa port. In addition to being a valuable and important contract in its own right, the NCB's initiative goes some way to counter the criticism that British firms will not bid for Israeli business for fear of the Arab boycott.
  There is a further point on the subject of misunderstandings, which also touches on the racial discrimination to which my lion. Friend referred. Newspaper articles which sometimes confuse the implementation of the boycott by the boycott authorities with the operation of the entry visa regulations of some Arab countries serve only to increase the misunderstanding and fears of British

  1783
  exporters. I advise firms with specific problems to discuss them in confidence with Department of Trade officials.
  Mr. Moonman: Will my hon. Friend give attention to my suggestion that it is necessary to go beyond private consultations with the Department and consider an inquiry, which can go into more detail and sift the evidence? In no other way would some of the people who approached me make the evidence available. There are misunderstandings because the Government did not adopt a moral posture. Despite what my hon. Friend said, there are still grave misgivings that companies should be in the forefront of war when the Government should be taking the lead. An inquiry might help.
  Mr. Meacher: I am prepared to give a positive response to what my hon. Friend said, and to consider in depth the weight of the evidence, to see whether and how that might enable us to assist firms which might otherwise have difficulties, or whose fears might discourage them from proper trade relations.
  Mr. Greville Janner: Meanwhile, will my hon. Friend make a clear statement that the Government condemn compliance with the boycott?
  Mr. Meacher: My hon. and learned Friend made this point very strongly in his brief speech. I said at the outset that the Government strongly deplored and objected in every way they could to all trade boycotts not sanctioned by international support and authority. countries is not a trade question. The United Nations Declaration on Human
  The issue of visas to British business personnel wishing to enter certain Arab
  1784
  Rights does not apply to the criteria for entry into a country, and it would not be appropriate for the British Government to comment on entry visa regulations of another sovereign State. But a number of Arab States do not in any case require visas for British citizens. Most of the other Arab States simply require visa applicants to state their religion on the application form. Therefore, in most cases there is nothing to prevent a British Jew from travelling to most Arab countries if he wishes.. The final decision must rest with the individual in the light of the urgency of his business in the country concerned and his assessment of any risk he may believe to be involved.
  My hon. Friend also raised the question of racial discrimination. We have seen statements by the boycott authorities that the boycott is directed not against Jews or firms owned or managed by Jews but against Zionists.
  Mr. Greville Janner: There is no distinction any more.
  Mr. Meacher: I admit that it is a very fine distinction.
  Although it appears unlikely that discrimination of the latter kind falls into the strict category of racial discrimination, any complaint of discrimination in this country on grounds of race or ethnic or national origin will, if lodged with the appropriate authority, be investigated under the Race Relations Act. This is—
  The Question having been proposed after Ten o'clock on Wednesday evening, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at five minutes to One o'clock.

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

LORD GRADE
Sir Lew Grade, Knight, having been created Baron Grade, of Elstree, in the County of Hertfordshire, for life—Was, in his robes, introduced between the Baroness Burton of Coventry and the Lord Gibson.

WORLD UNEMPLOYMENT CONFERENCE
2.45 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 what conclusions were reached at the World Unemployment Conference and what proposals the British delegation made.
The MINISTER of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts)The MINISTER of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts) rose—
Lord JACQUES: I think that shows a great willingness! My Lords, the World Employment Conference concluded its session on 17th June. Its conclusions and report have not yet been published. However, the speech which my honourable friend the Joint Parliamentary Under-Secretary of State for Employment made to the conference on 11th June outlined the attitude of Her Majesty's Government to the issues under discussion. A copy of the speech has been placed in the Library.
Lord BROCKWAY: My Lords, while thanking my noble friend the Minister for that reply, may I ask him whether, even if the conclusions have not been
296
published in official form, they have been widely reported? Is my noble friend aware that many of us welcome the decisions, in contrast with those of other conferences? I have two questions that I should like to put separately to my noble friend. First, what was the attitude of the British delegation when the representatives of the developing countries and of the workers, including the Trades Union Congress, proposed that the conference should consider the employment implications of world economic conditions and the expansion of multinational companies, a proposal opposed by the employers and Governments in the West?
Lord JACQUES: My Lords, I am grateful to my noble friend Lord Brockway and very glad that he is pleased with the general outcome. The conference finally adopted a compromise document which the United Kingdom and all other delegates accepted. The document to some extent differed from the original report, Employment, Growth and Basic Needs, but substantially affirmed its agreement with the basic needs approach in the report.
On the subject of multinational companies, the position of Her Majesty's Government was made very clear. I quote:
" We strongly support the valuable work which is being initiated in the United Nations Commission on Transnational Corporations, including the voluntary codes of conduct. We also welcome the work done in the ILO on the employment and social aspects of the multinationals."
I would also add that the nine nations in the European Economic Community were in line with the speech and the voting of the United Kingdom.
Lord BYERS: My Lords, I wonder whether we might now have the Answer from the noble Lord, Lord Goronwy Roberts, to the same Question.
Lord BROCKWAY: My Lords, may I ask my second question?
Several noble Lords: No!
Lord CAMPBELL of CROY: My Lords, have the Government any comments or proposals to make today upon the announcement of an increase in unemployment in Britain of 60,000 in the past month?
Lord JACQUES: Yes, my Lords, I can comment on that. If the noble Lord, Lord Campbell of Croy, will look at the winding-up speech I made a fortnight ago today, he will find I stated that there would be a lag before unemployment figures reduced because of the action taken by the Government themselves in preserving jobs during the last 18 months.
Lord BROCKWAY: My Lords, while thanking my noble friend the Minister for his very full reply, may I put my second question. What was the attitude of the British Government to the instruction to the ILO to organise with other United Nations bodies a world survey on the nature, extent and cost of
poverty ?
Lord JACQUES: My Lords, I regret that I am unable to answer that question. I suggest that my noble friend reads the speech made by my honourable friend and then follows it up.

MOLE CONTROL: USE OF STRYCHNINE
2.50 p.m.
Lord SOMERS: 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 are going to forbid the use of strychnine in the killing of moles, and, if so, when.
Lord STRABOLGI: No, my Lords; not until the Government are satisfied that there is some alternative and viable method of mole control which would not put other species of wildlife at risk.
Lord SOMERS: My Lords, while thanking the noble Lord for that Answer, I wonder whether he could tell me what is the extent of the damage to agriculture by moles, in terms of money?
Lord STRABOLGI: My Lords, mole damage reduces the productivity of agricultural grasslands and may damage machinery. There is also some damage to arable crops.
Lord PAGET of NORTHAMPTON: My Lords, could the noble Lord tell
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us what kind of casualties occur when dogs pick up moles which have been poisoned by strychnine? It is a terribly cruel poison.
Lord STRABOLGI: I agree, my Lords: but one of the advantages of strychnine is that there is much less risk to other forms of animal life because it is put down in the mole run.
Lord BALERNO: My Lords, are the Government aware that the fertility of grassland is greatly enhanced by worms, and that a large number of worms are found in the best grassland in this country? These discoveries were made in New Zealand. Is he aware that moles are death to worms ?
The Earl of CRANBROOK: My Lords, without wanting to enter into the controversy about the harm which moles do to agriculture, which any of us who have any knowledge of agriculture know is minimal, may I ask whether the noble Lord is aware that this very painful poison is used in private gardens, on golf courses, in playing fields, to destroy moles, and there is no commercial reason for allowing that? There are traps which any one of us who lives in the country will show him how to make and how to use. Is the noble Lord aware that he has power under Section 2 of the Act to forbid strychnine to be used to kill moles on any land other than the beautiful and fertile grassland which the noble Lord, Lord Balerno, apparently has, and which is damaged. Everywhere else it can be prevented under the Act.
Lord STRABOLGI: My Lords, I agree with much of what the noble Earl has said. Trapping, of course, can be a suitable method of control where infestation is light; but it is not an economic method of coping with heavy mole infestations.
The Earl of CRANBROOK: My Lords, does the noble Lord consider it justifiable to use this poison in private gardens, playing fields, golf courses, and other places where there is no commercial reason for destroying moles?
Lord STRABOLGI: My Lords, Government research over a period of more than 10 years has not brought to light

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any adequate alternative to the use of strychnine for the control of moles.
The Earl of CRANBROOK: My Lords, I asked whether the noble Lord thinks it is justifiable.
Lord STRABOLGI: My Lords, I am afraid that we must accept that some degree of suffering is an inescapable concomitant to the use of poison against pests.
The Earl of CRANBROOK: My Lords, the noble Lord has not yet answered my question. I asked him whether or not it is legitimate to use strychnine in private gardens and places where there is no commercial reason, the use of which he can stop.
Lord STRABOLGI: My Lords, all I can say is that it is used where it is justified. The sale of strychnine, of course, is subject to the control of the Poisons Act.
Baroness SUMMERSKILL: My Lords, can my noble friend say whether this very dangerous poison has been proved lethal to animals or man?
Lord STRABOLGI: Yes, my Lords, of course; that is why a member of the public can purchase strychnine only from a registered pharmacist and must be in possession of a permit.
Baroness SUMMERSKILL: My Lords, of course I understand that. I have often given prescriptions for strychnine. What I am asking my noble friend is whether there is evidence of strychnine having been used in this way and animals or human beings being poisoned ?
Lord STRABOLGI: My Lords, all I can say is that use of strychnine against any other species is illegal.
Baroness SUMMERSKILL: My Lords, could I ask my noble friend to answer that question seriously. I wanted to know whether there is evidence that deaths have occurred.
Lord STRABOLGI: My Lords, I would need notice of that question.

PUBLIC ADDRESS SYSTEMS
2.56 p.m.
Lord FERRIER: 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 encourage British Rail and the British Airports Authority to improve the sound quality of announcements made over the public address systems in railway stations and airports either by adjustment in apparatus or by staff training or both.
Baroness STEDMAN: My Lords, these are matters for the management of the British Railways Board and the British Airports Authority, who are always willing to consider users' complaints about the quality of their services.
Lord FERRIER: My Lords, it would be discourteous of me not to thank the noble Baroness for her Answer, but it does not take us very far. May I ask a small supplementary question ? I am not saying that all stations or airports are bad or that we need worry about—
Several Noble Lords: Question!
Lord FERRIER: I am coming to my question—or that we need worry about experienced travellers like most of us. But would the noble Baroness agree that every effort should be made to beam broadcast messages of this nature to the inexperienced, often bewildered, and some times foreign people who abound in this country during this holiday period ? Can anything be done to help the railways to improve their equipment and their staff training?
Baroness STEDMAN: My Lords, it is a longstanding convention that Government do not interfere with matters concerning the nationalised industries. I understand that the British Airports Authority have already noted the Question. If they have not already done so, they are proposing to write to the noble Lord opposite and explain their procedure. I am quite sure that if he writes to British Railways they will also explain their training procedure for their announcers.
Lord FERRIER: My Lords, may I ask the noble Baroness whether she would care to meet me in the Princes Chamber, because I have some experience of this, particularly on shipboard, and I know of several simple devices which might help British Railways?
Baroness STEDMAN: My Lords, I would be delighted to meet the noble Lord.
Lord WYNNE-JONES: My Lords, could there be serious unemployment caused if unintelligibility and inaudibility were removed from these announcements?

DISARMAMENT: AD HOC COMMITTEE ON UN ROLE
2.58 p.m.
Lord KENNET: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what was the result of the work of the Ad Hoc Committee on the Role of the United Nations in the Field of Disarmament, what proposals did the British member of it make, and what advice was sought in the formulation of those proposals.
Lord GORONWY-ROBERTS: My Lords, perhaps I may preface my reply to my noble friend Lord Kennet by apologising to him and to the House for a somewhat Pavlovian reaction to the fact that my noble friend Lord Brockway was on his feet; I think it is generally understood that when he is on his feet it is expected that I should say something. My Lords, to my noble friend Lord Kennet I should like to say this in answer to his Question. The Ad Hoc Committee is not due to complete its work until September. Proposals by Her Majesty's Government were set out in a Note to the Secretary-General of the United Nations dated the 28th April. A copy is available in the Library of the House. British delegates to the committee are speaking in accordance with that reply. The proposals were formulated by the Foreign and Common-wealth Office in the normal way.
Lord KENNET: My Lords, is my noble friend aware that while one is, naturally, very glad to know that such a document is available in the House, yet one is bound to have misgivings about a conference of this sort which goes forward so fast, for so many months, before anybody hears of it at all? What is the opinion of the Government about their duty towards Parliament and the people when an international conference of intense importance is carried on without the Press noticing, and without the Government wishing to conceal anything? Do not the Government feel that they have perhaps a duty to make some statement or announcement which will attract public attention and allow those interested in the matter to form their own opinions, which might be of assistance?
Lord GORONWY-ROBERTS: My Lords, I do not quite go all the way with my noble friend when he refers to this as an international conference. It was a suggestion, to which we as a country finally agreed, that the United Nations should look, through an ad hoc Committee, at the procedures which the various Agencies dealing with disarmament used. We were rather doubtful, as my noble friend knows, as to whether there was need for yet another instrument of review for this purpose, but in the end, in conformity with the general view held by our fellow members of the UN, we agreed. Indeed, as one of the 15 countries which, in fact, returned a report to the Secretary-General—one of the 15 who did this before the deadline on 1st May—we have, of course, co-operated fully with the United Nations in this important matter. I should like to look at my noble friend's supplementary to see precisely what he has in mind, and perhaps talk to him, about an international conference on this matter. Perhaps he might elucidate further.
Lord CARRINGTON: My Lords, while this Committee may or may not be useful —and I am inclined to think that it may prove not useful —would the noble Lord not agree that the greatest contribution that could be made both to disarmament and to the relaxation of tension would be some progress in the disarmament talks in Vienna, which have been bogged down for the last two years?
Lord GORONWY-ROBERTS: My Lords, indeed bogged down for the last two-and-a-half years in Vienna; and, indeed, in the Conference of the Committee on Disarmament in Geneva. The fact that they are continuing is of course, as the noble Lord would instantly agree, a hopeful sign, but this country and others would like to see some indication among the countries of Eastern Europe, for instance, who take part in these discussions, that some advance can be made technically and otherwise in them. It is hopeful that they continue. As a distinguished former Prime Minister of this country said: "Jaw, jaw, is better than war, war ".
Baroness GAITSKELL: My Lords, is it not almost a joke to take the role of the Committee on Disarmament in the UN seriously? Would it not be true to say that at this time to use the word " disarmament " itself is ironic, because, all around us, every country in the world is not only rearming but making a very good business and selling arms to everybody else?
Lord GORONWY-ROBERTS: My Lords, I would be inclined to say that the facts, in so far as these are true as advanced by my noble friend, about the high and possibly escalating level of armaments in the world are the imperative argument for redoubled negotiation on disarmament.
Lord HARMAR-NICHOLLS: My Lords, is the noble Lord aware that continual assertion that "Jaw, jaw" being better than "war, war" gives some support to unnecessary dilatoriness on matters that ought to be brought to something like a reasonable speedy conclusion, and that this is one of them?
Lord GORONWY-ROBERTS: My Lords, I sympathise entirely with what the noble Lord says. I wonder whether this is a matter which we can bring to a conclusion. Perhaps we can agree that this is a matter on which we must make progress. The conclusion may lie very much in the future. It is a matter of control, and of achieving increased control over the very formidable technological facts of life and the use to which these are put by various nation States.
Lord PAGET of NORTHAMPTON: My Lords, was not the case for this
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committee that, although it was obviously fatuous, it was likely to be less mischievous than most alternatives of the United Nations activities?
Lord GORONWY-ROBERTS: My Lords, one naturally defers to my noble friend's views on these matters without necessarily agreeing with them.
Lord KENNET: My Lords, would my noble friend not agree that as it is 14 years since this country, which shares the third greatest destructive capacity in the world, made a comprehensive proposal about disarmament, it is now time that we should consider making another?
Lord GORONWY-ROBERTS: My Lords, I certainly do not agree that it is 14 years since this country made a constructive proposal on disarmament. One recalls a previous Government successfully proposing control over nuclear tests, supported by all Parties in the State and in the two Houses of Parliament. One recalls in 1969 the then Labour Government successfully negotiating the Nonproliferation Treaty. One recalls various advances in biological warfare control, and other instances which I shall not detain the House by mentioning. But I insist that it is not true to say that this country has been deficient in putting forward constructive proposals for disarmament, certainly for the last 14 years.
Lord KENNET: My Lords, would the noble Lord note that my question referred to disarmament, and the examples he gave did not?
Lord GORONWY-ROBERTS: My Lords, I would suggest that disarmament certainly includes control and the diminution of the nuclear threat.
Lord KENNET: My Lords, may I say to my noble friend—
Several Noble Lords: Order! Order!
Lord KENNET: The noble Lord made no mention of any proposal for the diminution of nuclear weapons.
Lord GORONWY-ROBERTS: My Lords, the non-proliferation of nuclear potential, I would suggest, comes within the definition of control of the nuclear threat.

BUCKS LAND AND BUILDING COMPANY BILL [H.L.]
Read 3a, and passed, and sent to the Commons.

NEEDS OF THE ELDERLY
3.8 p.m.
Lord STRATHCONA and MOUNT ROYAL Lord STRATHCONA and MOUNT ROYAL rose to call attention to the needs of the elderly, and in particular to the need for provision for their welfare in winter; and to move for Papers. The noble Lord said: My Lords, in introducing a discussion of the needs of the elderly I think I should begin by saying that we are talking about 9 million people in this country over the age of 65. That is, perhaps, one in six of the population. Various Government agencies are spending some£8 million annually on this section of the population. The number of elderly is increasing absolutely year by year, and unless the birth rate changes the proportion of the population is likely to increase as well. So the problem of their welfare is, I think, a self-aggravating one, unless a way can be found to arrest the effects of ageing, as was suggested last week in a most impressive maiden speech by the noble Lord, Lord Selwyn-Lloyd, in this House.
Evidence of the widespread concern that is felt about the problems of senior citizens has been evidenced to me by the volume of letters which I have had since putting down this Motion. Even though I have been somewhat overwhelmed by the volume of paper, statistics and suggestions that I have received, one of the encouraging features I have found is the number of voluntary organisations which are actively working in this field.
In a speech of reasonable length I cannot attempt to cover the whole field, so I will try to provide a matrix into which can be fitted the numerous knowledgeable and authoritative speeches which we can confidently expect this afternoon, by pointing out the ramifications of the subject and the range which it covers. In addition to pensions and social security, we shall have to refer to the Health Service, and I shall shortly be suggesting that one of the most important angles is the question of housing, the Department
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of the Environment. We have a self-evident local government interest in the matter, and towards the end of my remarks I will talk about the interest of the Ministry of Energy. And over all these Departments we have the Treasury which some people might describe as a baleful influence on any spending Department.
But the theme running through my remarks in this debate will be prevention. I want to find means of preventing the elderly from being separated from their families, of preventing the mental deterioration which is brought on and aggravated by isolation, of physical deterioration and the avoidance of undiscovered and undisclosed hardships. I want to see the prevention of waste at a time of financial stringency; we would all agree that scarce resources must be deployed to their best advantage. I was glad to see it stated in a recent publication by the Department entitled Priorities for Health Services and Personal Social Services in England that they regarded prevention as one of their priorities. I suggest however, that even in these times of truncated Government expenditure, there are ways in which the lot of elderly people could be improved by a proper understanding of their needs and their place in society.
As matters stand, things are getting worse. It is bound to be difficult for the elderly to adapt themselves to change; some do it better than others. The pace of change is accelerating all the time, unfortunately one of the causes, and of the effect, of inflation which has reached unprecedented proportions in recent years in this country. The effect of inflation on fixed incomes has been pointed out so often that I need not labour it, but it is particularly sad that those who have worked hard to save for their old age should live to see the independence and self-respect for which they have striven snatched from their grasp by circumstances totally beyond their control. I dare say it is naive of me still to hope that one day we might come to a tax régime for those who are working which will enable them to save with confidence and preserve the independence that they so earnestly seek.
I think that a little less obvious is the process of adjustment which this pace of change calls for in minds which have perhaps become a little less agile and

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flexible. It is difficult for somebody brought up to be used to the penny loaf to get used to whatever the loaf was yesterday, let alone what it will be tomorrow. I do not think it will be a very profitable exercise for us to try to allocate blame for this sort of situation, though I do not think anyone will dispute that it is the responsibility of Government to deal with it as they find it.
I would therefore like to get out of the way the one partisan comment that I intend to make this afternoon when I suggest that the Government have been guilty of slightly shabby action, almost a "con" trick, on pensions. In April they claimed to be honouring their pledges to uprate pensions in line with wages. Instead, they did a bit of statistical juggling. By using earnings instead of wages as a base and allowing for the expected forward rate of inflation, they avoided basing their calculations on the six months from March to November 1975 when, according to the Economist newspaper, prices rose by 15-8 per cent. and earnings by 14-4 per cent., and the effect of this was to make the current pension of £21.20 worth £24.50 in November rather than £25.50. I do not doubt that the Government thought that it was necessary to save the £500 million which it is suggested was achieved by that. But I believe that many of us would have had our respect for them enhanced if they had had the courage to admit what they were doing rather than performing statistical acrobatics behind a smokescreen, if I may mix my metaphors in the usual way. What I do not want to do this afternoon is to suggest that we should simply buy our way out of the problems which we face.
There is another point which it is worth making, and that is that family patterns and attitudes have changed, most particularly in the towns; it is perhaps less obvious in the country, where the rate of change is slower. In the cities we have seen an inevitable, and to me rather regrettable, gradual withering away of the community with its neighbourhood shop. It has been displaced by the supermarket, representing the contemporary accelerating and impersonal style. I also believe that the extension of State responsibility has inevitably eroded the sense of personal and family responsibility
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for the less fortunate. The creation of State institutions at great expense to provide welfare services enables us to shrug off any sense of personal obligation and involvement, often no doubt with a considerable sigh of relief. Here I am not seeking to criticise, but I hope that your Lordships will agree that that is a fair observation.
That brings me to a point which was made by the Archbishop of Canterbury in his Motion last week about the importance of the family. However, I must first say that I bridle at the shorthand expression which was used in that debate when we were referring to the three-tier family. That sounds like horribly bureaucratic local government terminology. I am not disputing the fact, but I think that we should try to find a better expression. But whatever expression we use, it is surely right that the proper place for the majority of the elderly to be cared for is in association with the family, where there are many and great benefits.
Let us not underrate the effect of social intercourse with the young in arresting the sense of isolation and frustration which can so often lead to mental decay in the old. The elderly need to be made to feel that they have a contribution to make. Too many of their lives appear to have no useful purpose and I venture also to suggest that the younger generation would profit from the broader understanding which they would gain by close contact with a past generation whose experience had been different from their own.
First, therefore, let us encourage the keeping of the elderly in the community. Let the Department of Health and Social Security work closely with local authorities to give grants for keeping the elderly with their families. The invalid care allowances are a good start. Some kind of dependant's maintenance allowance would, I believe, be a great deal cheaper than the special arrangements which frequently have to be made for the elderly and which can cost £100 a week and more. I have no doubt that we shall hear more about this from other noble Lords before the debate finishes.
Also, as my noble friend Lady Young suggested last week, let us look carefully at legislation which positively militates against the arrangements which one would like to see. Grants should be

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forthcoming for creating accommodation with some degree of independence rather than the regrettable legislation which gave rise to the shortage of rented accommodation. The result of some of the recent Rent Acts has been a consequent drying up of rooms to let. The social services would make a further gain from care in the family since there would be a reduced demand for social service visiting which I am assured now costs something of the order of £3 per visit. I think therefore that my first suggestion would take the form of a question to the Government. It is: are we satisfied that we are doing all we can to encourage old people to be cared for by their families ? Are there legal obstacles and could there be more effective financial incentives ?
The basic solution lies in making old people have a sense of purpose and usefulness. If they are herded together in institutions and treated as patients, we shall, however devoted the care they receive, have very sad results as an inevitable consequence. That leads me to the nub of the problem of the elderly, which is the question of housing. That embraces the problem of warmth in winter to which I shall refer in a moment. In the DHSS pamphlet, there is a rather surprising comment to the effect that one of their first priorities is, "To put people before buildings." I suggest that buildings, by and large, are for people, and I am not sure that the Department is getting its priorities right in saying that. It may also seem rather an inappropriate moment for us to be referring to the problems of the winter warmth of pensioners when we are experiencing what will probably be the hottest day of this summer, but the fact remains that action is needed now if we are not to be caught out in the winter. I suggest that we are not succeeding in the provision for old age pensioners unless we meet their primary needs. One of those primary needs is warmth.
That raises the question of what standard of warmth we are seeking. A certain amount of dangerous nonsense is, I believe, liable to be talked about this. Those of us who live in Scotland in unheated houses would dispute that we are necessarily less healthy than some of our more fortunately placed brethren in the South. I wonder about the standards of heating which are demanded for offices.
I admit that Help the Aged have a point when they say in an otherwise rather strident pamphlet that, in a survey as far back as 1972, they found that the morning temperature of 54 per cent. of pensioners was below the standard of 61 degrees demanded for offices in 1963, though that figure of 54 per cent. improved to 27 per cent. in the evenings. In other words, we appear to think it necessary to keep people warm in their offices but are prepared to allow pensioners to get cold in their homes.
There is a danger here. We do not want to select one group of the community for special treatment. We do not want to turn the elderly into the disabled. This is not a new problem. I believe that the public are becoming more aware of it, however, and of course it has been much exacerbated by the rise in the cost of energy, though one could argue that we did not so much enjoy the use of cheap energy as of under-priced energy. However, I believe that it is beyond dispute that energy will become more expensive in the years to come and that the problem is not one which will go away. I suggest that one of the troubles here is that we take the wrong view of housing economics. We are making two mistakes: first, the running costs of housing are not considered with the capital costs, either for new construction or for alterations. The effect is that local authorities are constrained by yardstick considerations and, therefore, tend to choose cheap construction which gives rise to poor insulation values and high maintenance costs. In the same way, there is a temptation to go for the form of heating which is cheapest to install — that is, the electric fire—which is then the most expensive to run. I am sure that many noble Lords will know of examples, but I heard of one the other day: last year, a local authority in Oxford wanted to put in gas central heating but was told that it would take the cost of the houses above the yardstick, so they put in off-peak electric heating which will be much more expensive to operate.
In a sense, therefore, there is cheese-paring by a somewhat insensitive central Government which leads to the costs being passed down the line to be incurred at the local government level, to the national detriment. Of course, the old age pensioners suffer most because they tend to be in the older, cheaper and less

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adequate housing which, almost by definition, tends to be the least thermally efficient.
The second mistake is a much more general one: standards of housing should be based more on thermal efficiency than simply on the temperature. What we tend to do is to seek to provide heating components rather than insulation components, whereas we should be thinking of the total energy system of a house and thinking in terms of some measurement such as the pound cost per square metre per hour. That sounds rather esoteric, but I believe that your Lordships will recognise that it is the proper standard of measurement to consider. It is worth mentioning in passing that we do not really know very much about how heating is done, and anybody who has sat in front of an open fire will be aware that there is at least a case to be said for a form of radiant heating which heats the people rather than the room and the environment (which it tends to do), but this is a technical subject which perhaps we should not enter into today.
What I believe we can show is that the capital cost of better insulation can frequently be recovered in the reduced cost of heating installations. The Building Research Establishment recently produced an admirable, complicated and very extensive pamphlet about this matter, suggesting that we could save 6 per cent. of our primary energy demand, which would have a value of £3,000 million. I will not attempt to go into the profit and loss of this kind of an argument. But what we do know is that discretionary heating allowances cost £31 million last year, and at that time not a single improvement grant had been applied for. Subsequently a letter went out to local authorities in March inviting them to undertake improvement schemes, and saying that extra money would be made available, and I believe that this may point the way forward. Possibly the noble Lord who is to reply to this debate will be able to tell us how many projects have been initiated under the improvement scheme which specifically mentions —and I quote:
"the value of investment in energy saving schemes ".
Could we not go further and harness some of the voluntary effort which is
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available, and the job creation schemes, to ensure that old people have houses which either have loft insulation, combined with sufficient draught sealing, or at the very least have one room made reasonably energy efficient ? Often the work is not of a very skilled or technical nature. The materials probably cost about £50, and if we could achieve a £ 10 per annum saving on a heating allowance of £40 we would be going forwards rather than backwards. The Supplementary Benefit Commission seems to have appreciated this point because I understand that it already can, and does, grant exceptional need payments for curtain linings and draught excluders; and so this is not a very great extension of that concept.
My Lords, I have been trying to say that the heating needs of the elderly inevitably drag us into the much wider issue of housing standards. But in view of the interest which has been expressed publicly on the question of hypothermia and fuel disconnections since we put down this Motion, I must say one or two words about these matters. I am very glad that the noble Lord, Lord Lovell-Davis, is to speak in the debate because he it was who was responsible for what is known as the Oakes Report, and I am sure that he will give us considerable authoritative information on the subject. But on the subject of hypothermia —and I say this with due temerity in the presence of more than one doctor in the House —I believe that we must be careful not to become hysterical.
We really do not know the facts. The reported deaths number between 100 and 200 per annum. I know that we are talking about a series of mild winters and it would be very prudent of us to expect not to continue to have mild winters. I am sure that it is likely that cold contributed to very many more deaths than 100 or 200. Figures of 50,000 a year and 200,000 a year are bandied about, and it seems to me probable that the number of deaths to which a contribution was made by cold is probably in the tens of thousands rather than in the hundreds. But the best advice that I can get is that nobody really knows.
Help the Aged suggests that three-quarters of a million people are at risk, but then a considerable doubt has been cast upon the statistical basis of that

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assertion. What I think we can say without any doubt whatever is that a number of old people endured discomfort last winter and view the approaching winter with grave misgivings, and this is a situation which should be tackled in an energetic way, in every sense of that word. I have already made one or two suggestions, and I think that such a programme would have to include the important job of identifying those who are in potential need. This is not always as easy as it might seem, and there is the well-known problem of the reluctance of pensioners to apply for assistance.
This leads me finally to the question of disconnections. Here again I think we must be careful not to let emotion cloud our common sense. Surely most of us would agree that it will greatly complicate the work of the fuel supply industries if they are to be asked to make social judgments about the needs of their customers. After all, we do not suggest that food shops or coal suppliers should be induced to extend additional credit by continuing to supply customers who are bad payers, and the sanction of refusing to supply—which is what disconnection really amounts to —certainly reduces the costs of collection and of the bad debts which would otherwise fall on all the other consumers.
Furthermore, I understand that the supply industries already go to considerable trouble to avoid overhasty disconnection in the winter and that they normally refer such cases to the social security authorities. Obviously some sad cases slip through the net. So it may be that some administrative tightening up is required. I should have thought that the kind of simple system which would be appropriate might well he that of identifying the meters and the computer accounts of the vulnerable cases by some form of positive identification —the term "risk disc" has been suggested —and then any such overdue accounts would be referred by the supplying authority direct to the social security authorities who would meet the bills and then consider whether to recover the arrears from the consumer or whether the accounts should be met from social security funds.
There is one other point to be made. When we talk about prepayment meters,
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saving stamp schemes and a number of other suggestions in the Oakes Report, it must he realised that it is an unfortunate fact that they usually involve an additional cost of collection, and properly speaking that cost should be reflected in the tariff to be charged. So, on the question of heating, I am saying do not let us try to turn the energy supply industries into welfare organisations. They have a difficult enough job to do on a very big scale, with all kinds of conflicts (which were mentioned yesterday) which it is their job to resolve. By all means let them show a little extra social concern as befits a monopoly industry in public ownership, but leave welfare to the Department of Health and Social Security, whose job it is. I think this is particularly appropriate because it will encourage that Department to question some of the basic attitudes which tend to concentrate on stop-gap measures rather than try to get to the heart of the problem, which I have suggested this afternoon is very largely a matter of housing.
I have also suggested that there are social and moral benefits to be derived from encouraging the elderly to remain in closer relations with their families. We must examine the impediments to this, to see whether there are not incentives to help in this process. I believe that we could probably save money in this way, or at any rate make better use of the slender resources we have available to us. I should like to question the DHSS priority when they say, as they do here:
"Capital expenditure will be cut back in order to allow current expenditure to rise."
I think we should not accept that overhastily; and I wonder whether the Minister, when replying, could tell us how often the DHSS meets to discuss these matters with the other Departments which I suggest should at least be concerned. I should like to remind him of a comment made in a Reith Lecture some years ago by Doctor Schonn, who said:
"Government Departments are a monument to old problems ".
I would suggest to the Minister that the needs of the elderly would possibly be an appropriate subject for the Central Policy Review Staff to study, and perhaps they could start by producing a policy for warmth; because, my Lords, what I hope we shall be doing by the end of this debate is advocating a policy for investing in the

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future, and not just pouring public money down the drain in order to subsidise waste. My Lords, I beg to move for Papers.
3.42 p.m.
Lord AMULREE: My Lords, I was very pleased to see that the noble Lord, Lord Strathcona, had put down a Motion on this very important subject, and there are just one or two brief comments I should like to make on it. The noble Lord who has moved the Motion has gone into considerable but interesting detail about heating and warmth, and I do not propose to repeat what he has said, although I agree with practically everything that he has told us. One of the things which I think one should remember about the elderly in this country is that the majority of them lead normal, comfortable, sensible lives. They live with their families or with their spouses, their children are in contact and they have friends in contact, and therefore they do not pose any particular problem now. At the same time, a very large number of people do not come into that comfortable category, and I think these are the ones that we are talking about today.
My Lords, the things that elderly persons really need can be summed up as three in number. They need a home, they need warmth and they need food. One could probably think of a great many more things they would like to have, but these I put down as the basic needs which we have to consider. Housing is a very big and important problem, and one would like to see far more building of what is now called sheltered housing and what was, I think, once upon a time, called almshouses. These were not at all well looked upon by the Government 20 years or more ago but I think are now again coming back into favour, because they allow people to live a relatively independent life with some kind of community around them, and probably with somebody there to keep a watchful eye on them in case something really goes wrong. Of course, some people need to go into large or small communal homes because they are not quite fit enough or they have no relatives near to take care of them, but I very much hope that the building of such homes will not become more common because I think there is
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something fundamentally unattractive about communal living, no matter how comfortable it is and how well it may be planned. But, as I was saying, for a certain number of people it becomes necessary.
Then, the elderly need warmth in the winter. I quite agree that today is not the sort of day one should talk about being cold, but the elderly tend to feel the cold. One knows that oneself; that as one grows older one feels the cold a great deal more than one did 20 or 30 years ago. On that, I should like to refer briefly to something the noble Lord mentioned; namely, the medical condition known as hypothermia. This has been talked about only within the last 15 or 20 years, largely I think because people did not have clinical thermometers available which could record such low temperatures. But, even so, I think the number of patients suffering from hypothermia is relatively small, and that is a very good thing because it is an extremely lethal complaint for people who suffer from it. The Registrar General puts the number of deaths per year at anything up to 200. For quite a number of years he does not record so large a number as that, so I shall not say anything more about it except that if people get cold and they are old, they are more liable to suffer from disease than they would be if they were kept at a normal temperature. That is a situation which has existed as far back as one can possibly trace, because I once did some work on the monks of Westminster Abbey before the Reformation, and I found that the incidence of sickness among the monks was far greater in the winter quarters than it was in the summer quarters; so that shows that we have not changed much in that respect.
To come to the question of warmth, my noble friend Lord Avebury, who was to have spoken here today but unfortunately cannot be present, has done quite a lot of work on methods of heating houses, and he has come to the conclusion (and I am bound to say that from the figures I have seen elsewhere I agree with him) that electricity is an expensive way to provide heat. Gas being a good deal cheaper, one wonders why council houses are now being built which are entirely electrically-heated, although I think the Electricity Council still advises

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electricity as being a very good way to heat your house. In 1974, I think about 700,000 council house tenants were living in electrically-heated houses, and one wonders whether some of these could not, with success, be converted to gas, particularly where gas mains have been laid.
The other point that has been talked about a good deal lately is conserving heat and warmth by insulation. On that, I entirely agree. That is a very good idea where you have a new bungalow being built or a room on the top floor of a house which you can insulate as well as the roof and so conserve heat. But as I have said to your Lordships many times, most of the old people living by themselves in towns tend to live on the ground floor because they avoid going up the stairs, which they find difficult. Or they live in the basements because it is cheaper to get a room down there even though it means going down the stairs.
Those are the people for whom I do not think any expensive form of insulation would be very helpful. Another thing one finds going round the country is that few elderly people have heat in their bedrooms as well as their sitting rooms. It seems to me to be just as important, if your sitting room is warm, that your bedroom should be warm too. That is why in some of the houses built for old people I should like to see the bed kept in a recess off the main room so that the heat from the main room goes into the place where the bed is kept. That would be quite a good way of keeping people warm and probably preserving their health.
My Lords, there is something else which I have seen with sorrow; but I do not know the answer to it. The noble Lord, Lord Strathcona, referred to the gradual falling off in the number of coin meters provided; so that the electricity authorities and the gas authorities send in a bill monthly or perhaps quarterly. It is far simpler for elderly people living on a pension to keep a penny or two, a 5p piece or a lop piece, to put in the meter when they require to do so rather than save up the money to pay a bill which comes in once a month or once a quarter. One would like to see that latter tendency reversed. I know it may be a rather costly way of dealing with the supply, but it might be more humane and might save
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money in the long run if people were kept warm and therefore were not going to be sick. Various other things have been mentioned, such as buying tokens to put into the meters; but these are technical points that I do not want to go into now. I think the chief reason why the old live in cold houses and cold rooms when living by themselves is because they cannot afford to pay the fuel bill. A very large proportion of the people on supplementary benefit —between 40 per cent. and 45 per cent.—apply for the heating allowance which is now available.
My Lords, that is all I want to say, except that I should like to finish with a word of advice to the voluntary bodies who work so well for the elderly people. Supposing that they wanted to give them a present at Christmas or something extra at some time, it is far better to give them either a blanket or two or a really good thermos flask in which they can keep something warm to drink, rather than to give them tins of peaches or tongue.
3.54 p.m.
Baroness HYLTON-FOSTER: My Lords, Britain has a baffling variety of welfare benefits in both cash and kind. Nevertheless, while there are some scroungers who know their way through the welfare labyrinth only too well, thousands more, and particularly the old, are too proud, scared of officialdom or bewildered by form-filling to claim their due. Therefore, those most needing help are very often those who do not get it. I should like to say a few words about those old people who live alone in their homes. I would divide them into three categories: the mobile; the semi-mobile or frail, and the home-bound.
Let us first consider the mobile. For the time being, they are not too great a worry as they can shop, play bingo, go to clubs and can be helpful in keeping an eye on their neighbours and they still —and this is most important —have a purpose in life. The frail have good and bad days. They are apt to be caught unprepared on their bad days. and therefore they need a watchful eye kept on them. Clubs can help, when they can be got to them, for they can give them something useful to do in the afternoons, some purpose in attending rather than just a social afternoon. I have had some experience of this myself. I know what a

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difference it makes; because they often say, " I did not feel like coming out this afternoon, but I know that you wanted it finished and so I came along." This makes all the difference.
The home-bound are our main concern because they are often very independent and resent too much interference; and of course, the main worry here is the cost of heating. There is the likelihood also of inadequate nourishment, too many carbohydrates and too few proteins, despite the fact that they get meals on wheels in mid-week. They do not get anything at the weekend. Another worry is that they need supervision to make certain that they continue to take tablets or the medicine that the doctor has prescribed because they are apt, when they are feeling better, to think, "I will give it up now." Then they are not so well again.
What steps can be taken to prepare the elderly themselves for the winter? I believe that many clubs and day centre leaders feed in names to the social service departments which they can get from their club members who are observant about their neighbours. I think that this should be very much encouraged. Now is the time —or it will be shortly —to check and remind the elderly to see that they have what the noble Lord, Lord Amulree, was talking about; a good thermos flask in good order for hot drinks at night. They need that all the year round but particularly in the winter. Somebody also needs to see that they have a good hot water bottle and also that there are supplies available for them for night lights rather than candles which can be so dangerous sometimes. Also, another very good thing to advise them to have is batteries for their transistor radios, because if their television breaks down or if there are power cuts they have no other means of learning about when the power is to come on again; they have no news or anything of general interest to listen to.
Another problem with the elderly is circulation. Both tight-fitting clothes and tight bedclothes are bad for the circulation. It has been suggested to me that more Continental quilts, which are featherweight and unbelievably warm and cosy, should be available for those for whom they are suitable and who are prepared to have them. I would hope that, when he
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replies, the Minister could say whether this is being considered.
I was not expecting to speak so early in your Lordships' debate today and I thought that a lot of people would have already spoken about heating. No doubt they will do so. From the investigations that I have made, all forms of heating are expensive today, because everything is expensive; but electricity is the most expensive. What is worse is that so often there is no alternative. Even the people in the electricity showroom admit that it is possible for a person to have to pay up to £1 a day for electricity for heating alone; that does not cover cooking, an electric blanket or anything like that.
Therefore, I strongly support the prepaid token scheme which Japan has most successfully pioneered and with which the Marconi company are experimenting in this country. What is the best type ? Is it the self-destroying plastic token, or the electro-magnetic charged token which can be recharged and used over again ? I would not know which is the best. I hope the noble Lord who is to reply will tell us what thought has been given to this. My reasons for supporting the token idea are that, first, they are much safer against theft —because theft is always a worry to old folk —even though there are various insurance schemes in which they can take part. Tokens would reduce the worry of money for heat or money for food. As you know, this problem can arise in some emergencies and is a very real worry.
Again, I was expecting that the noble Lord, Lord Lovell-Davis, would have spoken before me, and I am very interested in the quarterly payments idea because in the discussions that I have had —and I am hoping the noble Lord, Lord Kirkhill, will be able to reassure me —I am not sure that quarterly payments are really going to be the answer. The problem is that at the end of the week there is probably no more money in the house; therefore, just being told that you can pay quarterly if you do not have any money in the house to go on keeping warm is not very much help.
Most old people —probably all of them —budget weekly. If all meters took tokens, it would be easy to see that the vulnerable people were provided with the prepaid tokens. I know that the argu-

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ment will be that the changing over of the meters is going to be much too expensive, but the cost of the meters, I suggest would eventually be offset because there would no longer need to be a collection of money from the meters. There would be no postage to pay on the hills, and no sending out bills and asking them to be paid; and there would be no meter readings. Nobody can understand the meters except those who have been trained to read them. There would only be routine checks to make certain that the meters were in good order.
Illustrating how important heating is, at a Red Cross meeting I attended this morning, it was pointed out to me that in one London borough able-bodied old people spend the day sitting in the spectator's gallery of the local swimming baths in the winter time reading papers and chatting; and they have their meals in the swimming baths café. They sit for about five hours there and save five hours' heat. Another point the noble Lord, Lord Amulree, was making was that many old people have their beds moved into their living rooms, so that only one room need be heated. This all adds to the importance of the problem of heating.
I suggest that there ought to be far greater liaison between the hospital district management teams and the social services in order that adequate information is given to the medical social worker on the admission of the patient; so that there is no excuse for discharges to be made without warning to the social services departments, and certainly not at weekends, unless competent voluntary help has been laid on, as the social services departments close on Friday evening and reopen on Monday morning. Owing to the financial state of the country, it is unlikely that the statutory authorities will be able to afford anything like as many home helps or paid social workers as are really needed. Therefore, it would be helpful if, before the winter sets in, an analysis could be made of the likely numbers and needs of the elderly in each borough or health district, so that use could be made of properly briefed volunteers.
In many schools part of the sixth form training is the Red Cross welfare course. Surely these young people could be encouraged to put their knowledge to
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practical use under the guidance of trained social workers. What is the Government's view about using properly briefed volunteers who must be organised to prevent overlapping? Many old folk are suspicious of strangers but come to rely and trust a regular visitor who can help them with shopping. One of the problems they are worried about now is having to buy bigger packets of things owing to the metric system. Although the item may not be more expensive, it costs them more money. Indeed, in the end it may be wasted because they do not eat it quickly enough. The visitor can back up the home help —if there is one —by collecting pensions, by trying to interpret the too many, too confusing, forms and pamphlets that come through the letter box, by having a chat and, above all, being a good listener. This is why this debate is so very timely, and I should like to add my thanks to the noble Lord, Lord Strathcona and Mount Royal, for giving us this opportunity to make suggestions and to start preparations for the provision of warmth and general welfare of our old folk during the coming winter.
4.8 p.m.
Lord LOVELL-DAVIS: My Lords, there are three reasons why I am pleased that the noble Lord, Lord Strathcona and Mount Royal, has initiated this afternoon's debate. The least important —and I may say that I neither merit nor expect congratulation —is that, having had to endure my arguments from the Front Bench, he now has to listen to what is in fact my maiden speech from the Back Benches. However, the main reason why I am taking a brief role in the debate is that I am deeply concerned — as everyone here is —about the all-too-real problems facing many elderly people today in a world that becomes increasingly complex and bewildering: and, more specifically, because I am concerned about their right to fuel; their right to keep warm, particularly during the winter time, and to keep warm without worrying about the fuel bills which, even though they may face no threat of disconnection, many will know they cannot possibly meet.
Last winter my right honourable friend the Secretary of State for Energy asked the fuel boards not to disconnect pensioner households. This was a compassionate and necessary step. However,

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many elderly people, fearful of the size of the bills they could foresee ultimately being presented, restricted —no doubt dangerously in some cases —their use of heating appliances.
This month, as your Lordships will know, the Secretary of State for Energy published, Review of Payment and Collection Methods for Gas and Electricity Bills. I was asked in February to carry out this review and from that time until I left the Department of Energy I, together with the officials on the Review Body, took most of the evidence that was submitted. It represented the views and suggestions of some 52 different organisations, many of whom I saw personally at the Department of Energy. I was not able to complete the report or to draw out the conclusions arising from the evidence.
I regret this, for the mass of evidence did not support the principal recommendation —which, of course, almost completely distracted the attention of the media from the rest of the Review —that the right to disconnect should be withdrawn from the fuel Boards. I believe that to make this the main recommendation of the Report was to give too simple an answer to a complex problem; it made the fuel industries appear to be the villains of the piece and it obscured the many other findings of the Review Body —in particular all the alternative methods of paying bills which the Boards arc offering or beginning to offer, and which, ironically, the Review itself acknowledged as needing to be more widely publicised.
If by " other means of recovering outstanding debts " the Review Body means, by and large, a court order, would not this lead inevitably to the fuel Boards having to " beef up " their legal departments, with all the attendant cost, representing a bonanza for the legal profession? —which is not, I submit, the most productive use of our resources. I do not believe that the Boards ar blameless of hasty and uncaring action; they are not. There are too many documented cases of suffering caused by disconnection. Nor do I believe that they should have the right to disconnect or threaten disconnection right across the board. It is plainly wrong that there should be absolute powers to disconnect pensioner
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households, those where there are sick people, young children, and so on. There are people who simply cannot meet their fuel bills. And they are not feckless people. They either have not the money or they simply cannot budget to pay their bills in full.
Baroness WARD of NORTH TYNE-SIDE: My Lords, I wonder whether the noble Lord will allow me to intervene. Has he noticed that in speaking about this the Gas Board have already said that the price of gas will have to go up enormously, and this will add to the anxiety of the people concerned?
Lord LOVELL-DAVIS: Yes, my Lords, I have noticed that, and I accept that if that happens it will cause more worry to people, particularly those in the groups we are talking about this afternoon. As I was saying, once people get into the position where they simply cannot pay their bills and once they get into debt, the fact is that they just sink. The bill is too large for them to pay, so they are disconnected. Then, to get back to square one, they have to pay the outstanding bill, a reconnection charge and a deposit on their next bill. In that way a £50 bill can suddenly turn into a £100 one —quite suddenly. The effect is simply to put the disadvantaged person or family into an impossible situation.
It is my belief that much can be done to reduce the number of recalcitrant payers (those who can pay but will not until they are faced by a drastic choice) and to help those who want to pay but have genuine difficulty in doing so, if the methods of payment are tailored to the individual —and this is what the Boards are, and should be, trying to do. After all, they want revenue, not a lot of disconnected customers. So they are offering a wider choice of methods of payment —monthly, in some cases weekly or even irregular advance payments. There is a whole variety of schemes, many of which are set out in the Payments Review. And, of course, the prepayment meter, which has already been mentioned, can be made available where it is really needed. Meters can now be converted to take 50p pieces, which solves many, though not all, of the problems associated with this form of payment. I am thinking of theft, possible hazard to the staff collecting the money,

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and so on. It may be —although much development work has to be done on this, of course —that the prepayment token meter is a possible answer, as the National Consumer Council have suggested. That has already been referred to by the noble Baroness, Lady Hylton-Foster, this afternoon.
I think that, like many of their own customers, the fuel Boards were perhaps slow in appreciating the impact that the increased price of fuel would have. However, I believe that they now recognise that they have a responsibility to help their customers meet their bills. And, from the Boards' own points of view, I should have thought that getting away from the tradition of quarterly billing —and I am glad to say that have never had to operate a company which was constantly running three months in arrears — would have the effect of improving their cash flow and therefore reducing the size of their interest charges. My hope was that the Payments Review would give impetus to the efforts the fuel industries are making and ensure that the best practices were applied generally by all the Area Boards and that everything would be done to make it possible for people to pay their fuel bills with the least difficulty, in the way that suits them best.
We should also ensure that the practice, which the Boards say they employ now, of taking into consideration all the circumstances before disconnection takes place —that is to say, precisely who is involved, whether there is real hardship, and so on —and referring cases to the local authority welfare service, the Supplementary Benefits Commission, and so on, is strengthened and made much more binding on all the parties concerned. This must be effectively carried out and much depends upon the Boards and their staffs —who, not being trained observers, must refer the matter wherever there is the slightest doubt.
I can understand the immediate reaction of the fuel Boards when suddenly confronted with the recommendation that their power to disconnect or to threaten disconnection be withdrawn —but they must recognise that the alternative demands that disconnection be applied discriminately. The crux of the matter, it seems to me, is that the Government gave the Boards the go-ahead to charge
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realistic prices for fuel. This has meant that fuel has come into line, by a series of hefty increases, with all those other essentials of life, the price of which has soared. And, in order to forestall any political sniping, which I think would be out of place and I hope can be avoided in this debate, I should emphasise that this is a global problem. Having allowed prices to reflect the true cost of supplying fuel, it is surely up to Government to put out the safety net to catch those who cannot pay for the fuel they have to use —the fuel that is an absolute necessity of life. The problem cannot be sloughed off on to the fuel Boards —our own nationalised Boards, mark you. It must also fall to the Government Departments responsible, in particular, of course, the DHSS.
It may be that the right policy would be to give all pensioners the right to free fuel —though I imagine that the cost would be great and there are undoubtedly many who can afford to pay all or part of their fuel bills. I do not believe that there are only blanket solutions to problems. So, in my view, steps can and should be taken to ensure that no elderly person —and, although the elderly are the subject of our debate today I want to include those other groups affected : the chronically sick, one-parent families, poor families and particularly those with young children —should he allowed to suffer the hardship of disconnection or the fear of further action if they cannot pay their bills.
Perhaps the basic solution to the problem was best encapsulated in the evidence received from the National Council of Social Service. They said —and I quote:
" It may be inevitable that domestic consumers in the United Kingdom will be required to adjust to spending a higher proportion of their incomes on fuel. However, if undue hardship to vulnerable social groups is to be avoided, a strategy is required which will reduce the effects of higher fuel costs. Such a strategy would require action by the Government, crossing the boundaries of several Government Departments as well as the fuel industries."
It is sometimes tempting to believe that Government, through their Departments of State, have become a matter of territorial imperatives —carving out and defending their own territory —but surely it is not beyond the bounds of possibility for the relevant Government Departments and the fuel industries to get together to make sure that neither our elderly nor

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other groups at risk should be deprived of fuel or made to suffer because of their dependence upon it.
4.20 p.m.
Lord O'HAGAN: My Lords, I am a little surprised to find myself speaking in this debate, especially at this point. Some of my stepchildren will no doubt take it as further proof of what they believe, that I am already extremely elderly. But perhaps I could use that as a peg for asking, from the point of view of somebody of my age: who are we talking about? I agreed with everything that my noble friend said in his very comprehensive introductory speech, but to say that to be elderly is simply something that happens at a certain age must be wrong. To be young or to be old, to be youthful or to be elderly, must be an attitude and an outlook and a way of thinking, as well as a state of body or of mind. Part of the object of what we are trying to do today in this debate —and this is something that my noble friend stressed —must be prevention which, in this context, is stopping those people who would otherwise have the confidence and the courage and the determination not to consider themselves elderly, from receiving slings and arrows which suddenly push them into that category.
I know that I am taking a rather different tack from the noble Lord, Lord Lovell-Davis, whose expert knowledge and passionate views I cannot really compete with. But the problem of the elderly, looked at as one of the problems which the social services have to cope with, must surely be a more difficult one to define than the problem of dyslectic children, the problem of people with wooden legs or whatever it might be. It is such a very wide-ranging category that covers so many types of need and such a huge number of people, that in order to deal with the problems of the elderly the Departments concerned and the Government must have a strategy for the social services of which a policy for the elderly must form a part, a policy which has implications for other policies in other spheres of social service. At the end of his speech, my noble friend mentioned this and so did the noble Lord, Lord Lovell-Davis, when he talked about the territorial attitudes of some Departments. It is essential for departmental
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rights to be questioned in the context of a policy for the elderly.
President Giscard d'Estaing was very polite to us this morning. He flattered us and told us that we all respected Parliament so much in this country; and one of the reasons why we respected it so much was that it adapted itself to changing needs and circumstances. But I am afraid that he was not telling the truth. A year ago, the Central Policy Review Staff were allowed to publish —which they are seldom allowed to do —one of their reports, which was called A Joint Framework for Social Policies. There has been no debate in Parliament on this document, and there has been one Parliamentary Question. I hope that the President will not feel insulted if he hears my reply to his kind comment. We do not adapt ourselves to one of the few instances where there has been a major change in Government machinery. One of Mr. Heath's enduring monuments is the Central Policy Review Staff, which gives us the opportunity of taking an overall view, a long-term view, when it is allowed to issue reports looking at the facts behind the problems that happen to be fashionable at the moment. At one moment it is mental hospitals, at another moment it is dyslectic children and now it is hypothermia.
To look at these problems all the time, and deal with them with a proper sense of priority, we must have this continuing monitoring, and I wonder whether I may ask the Minister who is to reply if anything is to happen as a result of this document. In particular, following on what my noble friend suggested, the Central Policy Review Staff suggested very briefly at the end of their report that they should be given the opportunity to study a certain number of special problem areas, one of which was housing the elderly. This recommendation was made by the Central Policy Review Staff a year ago. I am not asking this in a Party spirit, but has anything been done about it; and if, as I suspect, nothing has, could something now be done about it?
Another thing that I wonder, especially after hearing what I might call the firsthand report from my old chief, if I may so describe the noble Baroness, Lady Hylton-Foster, is how much of the human facts, that people who work in voluntary organisations and local authorities know at first-hand, are turned into statistics which

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can be used by the policy makers. Is there sufficient machinery for assessing all the varied needs of the elderly, so that the policies are made on the basis of proper statistics? The Central Policy Review Staff put it this way, that there was a need for, " a better trans-departmental information base ", which is an expression that I hope I shall never have to use again. But, obviously, there must be an enormous amount of experience and knowledge in the possession of those organisations which are working with the problems day by day. Is the Minister who is to reply satisfied that the various Departments which deal with these problems can work out a proper co-ordinated policy for the elderly, on the basis of really good statistics?
I want to say one final word about the position of the EEC. There is a danger in Britain, because of Lord Beveridge and the great achievements of the National Health Service in the early days, of thinking that our social services are wonderful —and of course they are, but so are a lot of other people's. While it might have been true a few years ago to say that ours really were a model, it is now true to say that the United Kingdom spends less per head, and a lesser proportion of its national income, on social security and social services than any other EEC country with the exception of Ireland. We are the bottom of the league except for Ireland. So far as the elderly are concerned, we are at the bottom of the league, with the exception of Ireland and Italy. So we have done great things, but I am sure we have a lot to learn from what other countries do. Perhaps we shall not congratulate ourselves on our past achievements quite as often as we do, if we compare the figures that I have just mentioned with what happens in other States in the Common Market.
I do not take the view that, just because we are in the Common Market, we have to do the same as everybody else in social services or in many other fields. I take the view that the Common Market should set certain minimum standards —and we can all agree about how they should be defined —below which any Member State should not fall in its social provision, and those who cannot afford it should perhaps be reimbursed from a central fund. We should all keep what we have evolved ourselves, but in our pride in
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what we have evolved we should still be aware that once we led and now we lag. On that rather gloomy note, I will sit down.
4.30 p.m.
Lord MAYBRAY-KING: My Lords, as one who speaks on behalf of voluntary bodies, may I assure the noble Lord, Lord O'Hagan, that I agree with him when he says that there should be the closest liaison between the State organisations and the voluntary bodies. From my own experience —I think that the Government will bear me out in this —that liaison at both local and national level grows closer every year.
1 am grateful to the Opposition for giving one of its precious days of Parliamentary time to what I think is a very important topic. I am also grateful to the noble Lord, Lord Strathcona and Mount Royal, for his carefully prepared and broad survey of the whole picture of the problems of old people, especially in winter. As honorary treasurer of Help the Aged, perhaps I should declare an interest, except that it is not a financial interest; it is one of those minus financial interests of every noble Lord who supports any good cause.
This debate rightly focuses our attention on one of the gravest handicaps of old folk in winter. According to a piece of research that Help the Aged commissioned, it is estimated —the noble Lord gave the figure —that some 700,000 pensioners face the risk of hypothermia this winter. These are the poorer old people who are inadequately housed and clothed and have inadequate methods of heating, or heating that they cannot afford to buy. I agree with the noble Lord, Lord Strathcona and Mount Royal, that we do not mean that 700,000 people are going to die of hypothermia—
Lord STRATHCONA and MOUNT ROYAL: Thank God for that!
Lord MAYBRAY-KING: but it would be a very bad Britain if anybody died this year, as some people did die during last winter, of hypothermia, for this is a country which is supposed to care for everybody. I would pay tribute both to the present and to previous Governments, way back to Lloyd-George, for what they have done, by steadily increasing the retirement pension and now by

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providing those who are on supplementary benefit with special heating allowances. However, I believe that the country has to do much more.
The fundamental answer to this afternoon's debate is an increase in the basic pension. The newspapers were right to point out this morning that we do not so much want special favours for special heating for special cases as we want everybody to have a pension that will enable them to afford the heating which is necessary for them. As my noble friend Lady Ward of North Tyneside, in whose company I fought many battles in times past, has often pointed out, this problem becomes much more acute in the case of those people who are on fixed incomes and who have to meet the savage burst of inflation day by day.
I agree with the noble Lord who opened this debate that we want a national heating programme. I am glad to read that the discussions on energy have proved to be a fruitful beginning, at any rate. We have to consider the insulation of housing —the wastefulness of the ordinary house so far as heating is concerned —and seek methods of obtaining the maximum heat for the least money. With all this I am in agreement with the noble Lord who opened the debate. In the meantime, however, the special heating grants which we provide for those on supplementary benefit ought to be increased before next winter.
The other grave handicap of old age is loneliness, especially for the single, the widow, the widower, the spinster, the bachelor, with no family remaining to help to look after them. Help the Aged has suggested to noble Lords that there should he a Minister for Old People. After the cool reception which this House gave last week to the request of the most reverend Primate for a Minister for the Family, I am not sure that we want a Minister for Old People. On the other hand, we did set up a Ministry for the Disabled, and under the first Minister for the Disabled, Mr. Alfred Morris, MP, it has certainly made an impact on the special problems of the disabled. Therefore it might be useful to have a Minister who devoted himself to the special problems of old folk.
Policies are matters for the politicians and for the political Parties, but I speak
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from the Cross-Benches as one who believes, and knows from experience, that voluntary aid can supplement Government action; that Government action —if I may point this out to the noble Lord who opened this debate —does not mean the erosion of human charity and human values, and that voluntary aid effectively adds to the benefits of Government action day by day. The Britain that I know and love would perish overnight if it were not for the hundreds and thousands of people who give voluntary service to Britain.
I was interested to hear my noble friend Lady Hylton-Foster speak of the work of the Red Cross which goes beyond caring for the sick in war time to doing great humanitarian work for unfortunate people in peace time. The body to which I have the honour to belong is one such voluntary body. Last year it raised over £4 million in cash and in kind for good causes relating to old people not only in Britain but all over the world. At our annual general meeting on 14th April, the speaker was the Right Honourable Edward Heath, MP, who, in a moving address, said:
" One in five people over 80 have no inside lavatory and no fixed bath. Half a million people over 65 have no hot water. Three out of four pensioners have no telephone, not even access to a telephone ".
And he continued:
" What we have got to do, voluntary organisations and politicians together, is to generate a sense of outrage about poverty so that it is brought to the centre of public debate ".
Part of the answer to the problem of hypothermia, the coldness of old folk in winter, is the provision of sheltered housing: 20 or 30 flats, each individual, under the care of a warden. Every good local authority is providing some of these sheltered housing units and voluntary bodies are doing the same. Two years ago I opened for the National Union of Teachers a splendid home for retired teachers, the average age of the inhabitants being over 80. The Workmen's Clubs of Britain —the limbless ex-Servicemen themselves —provide convalescent homes for their aged disabled or sick brethren. The noble Baroness, Lady Young, recently headed a project in Oxford which has provided such sheltered accommodation for over 40 old people who will live independently but under the supervision of a warden. The recent figures of the Anchor Housing Association with which I am associated show that it has provided

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4,000 flats, with 4,000 under construction and 1,000 at tendering stage —all of which are sheltered housing units of accommodation. The Churches are providing sheltered housing. I have spoken to enlightened employers in big industries, and as part of the great industrial complexes to which they belong they are providing not merely pensions for their retired workers but sheltered housing accommodation for retired pensioners. Therefore I hope that this debate will not only congratulate the Government upon what they are doing in many fields and the interest that they are undoubtedly taking in the very problem that we are discussing, but that it will urge them to move faster and that it will increase the number of people in Britain engaged in voluntary work for the old. Those who help in Meals on Wheels, those who give their clothing to the shops which provide clothing for old people under the WRVS, those who work in day centres, those who know day centres to which old folk can come for the day, probably every day of the week in some cases, know as I know that in the winter the old folk are queuing outside the door before it is opened, because that is the place where they can get comfort and warmth.
In my own city of Southampton we have a number of these day centres, some of them one day only, usually in the church; and I pay tribute to the Churches. Some of them open every day; some of them provide a cheap meal at cost price. I believe the day centres are part of the answer to the problem of the lonely old man, the lonely old woman, and our own work in Help the Aged has shown the value of these centres. Democracy is not only the Government; it is all of us, and the task of all of us is to work for a rapid expansion in the programme of sheltered housing —not merely to wait for the Government to do it —and to work for a winter heating programme. I learn that the Republic of Eire provides 1500 heating units to the old folk of pensionable age as part of its contribution to their winter needs. We must have a national drive for house insulation and a register of the specially needy old folk in the same way as over the past four years we have compiled a register of the disabled.
I am delighted at the campaign which has been launched by the Lord Mayor of
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London —described so eloquently by my noble friend Lord Selwyn-Lloyd in his maiden speech some days ago —for research into the causes of old age, into the disabilities of old age and the way in which we can tackle some of those problems. I for one have been enormously encouraged by the number of young folk who are working and giving in service to old people. In my own organisation 100,000 Christian youngsters raised money last year for old people. In my own city one group of youngsters goes round visiting old folk and offering to do jobs in the house free; youngsters go shopping for lonely old people. Every one of us can make the lonely less lonely.
We are living in an age when the steady development of geriatrics is noteworthy. Old people are not only living longer but they are not so old. Their life span is not only longer but their useful life span has increased. This is a remarkable feature of our time. I wish to end on one experience I have had. I went to the United States of America and there I met a brotherhood called The Moose, of which I am a member. Fifty years ago they decided to build a city for old folk and in Florida there is the most Utopian city of old people that exists on this planet. Community facilities, sheltered accommodation, the individual flat —the best geriatric unit in America —and all this by the free gift of American citizens wanting to help their aged brothers and sisters. I believe there is a place for similar voluntary efforts in this great Welfare State of ours, even more now than ever before. I hope this debate will do something to encourage such endeavours.
4.46 p.m.
Baroness ROBSON of KIDDINGTON: My Lords, I should like to join all the other speakers in thanking the noble Lord. Lord Strathcona and Mount Royal, for giving us this opportunity to discuss a problem which, from what has been said so far, obviously arouses deep emotional feelings in all of us. I am grateful to him for having given the subject such a wide approach. I am particularly happy that until a slip of the tongue by the noble Lord, Lord Maybray-King, the word " geriatrics " has not been used in this House today, because I have always found it difficult to understand why, when you

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reach the age of 65, you suddenly change in some peculiar way and become something quite different. What we are concerned about, and where I agree with every speaker who has spoken before me, is that our aim in society must be not to create people who need institutionalised care but to create the kind of conditions in the community so that people can live within the community as far as this is humanly possible.
Some reference was made by the noble Lord, Lord Strathcona and Mount Royal, to the priorities document and the prevention document recently issued by the DHSS and to the reference in that document to capital expenditure accounts and running expenses in order to free more money for day-to-day revenue expenditure. He expressed some concern and suggested that we ought to look at the priorities properly. I agree with him in his concern when it deals with capital expenditure on exactly the kind of housing for the elderly that the noble Lord, Lord Maybray-King, has been talking to us about. But in the priorities document I think we are correct in looking at our capital expenditure for certain aspects of the Health Service where in the past we may have spent too much on capital and not enough on people.
I believe that to all of us who are engaged in the Health Service itself there is the obvious gap which was mentioned by the noble Baroness, Lady Hylton-Foster, between the Health Services and the social services. The machinery exists at the moment for much closer cooperation, and I think all of us are engaged in trying to prevent exactly the kind of incidents occurring that she referred to; I personally very much welcome the new idea from the Department of Health and Social Security of joint financing between the social services of local authorities and the Health Services themselves. In so many cases the only way in which we can effect real economies is for the two arms of the service that are looking after the people in the community to the best of their ability to work much more closely together so that we do not have overlapping and therefore greater expenditure.
If our aim is —it should be, and I am sure it is —to keep as many as possible of our elderly citizens living within the community, then the kind of problem that
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we have been discussing today, the problem of hypothermia, is one that we must consider very seriously. Reference has been made to the difficulty of assessing to what extent it is a killer among older people. In 1965 the Royal College of Physicians instituted a study. They used 10 hospitals for their survey and they surveyed the body temperature of all patients admitted between 1st February and 30th April. They came to the conclusion that hypothermia in hospital admissions is common and is associated with high mortality. They also concluded that, on the percentage of their findings in 10 hospitals over a period of three months, there could be as many as 9,000 patients admitted to hospitals throughout the country whose basic problem was hypothermia.
That is quite a different figure from the one mentioned by the Office of Population Censuses and Surveys which puts the figures at those levels which have been mentioned previously in this debate. But, of course, the discrepancy is explained by the number of people who already suffer from serious diseases before they are exposed to hypothermia, and also by the number of people who, through exposure to cold, contract pneumonic diseases or bronchial problems. I make an appeal because I think all of us would want to know a little more about how great this problem is. For instance, I understand that in the case of a person in hospital who has died of pneumonia, perhaps as a result of original hypothermia, only " pneumonia " appears on the death certificate. I wonder whether in some way we cannot find a method of recording this so that we would have a better knowledge of how many people are actually suffering from this horrible disease.
I have been told by the medical profession that there are certain medical factors which can lead to hypothermia. I am not an expert on that, but I should think most people will agree that cold living conditions is the danger in these cases. Many references have been made to the temperatures in old peoples' housing today. In 1973, a survey was made by the Medical Research Council which came out with exactly the kind of figures which have already been quoted. What I found horrifying was that out of a sample of 1,000 houses, 106 —that is, slightly over

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10 per cent.—had living-room temperatures at or below 12 degrees, which is not a temperature in which you could expect even a young, healthy person to keep reasonably warm. When these 1,000 people in the survey were questioned, they all replied that they would like to have warmer housing, but that the problem was the cost. Comparatively few seemed aware that they were entitled to a supplementary fuel allowance, so there seems to be a lack in our being able to publicise to the people in need the kind of benefits to which they are entitled.
What worries me about the supplementary fuel allowance is that it is a fluctuating allowance, irrespective of the type of heating the old person has in the home. As we know from figures quoted in the newspapers, and as we know from figures quoted here today in this debate, the difference in the cost of heating is quite enormous as between electricity, gas, oil, coal and coke. It seems to me that something should be done about a scale of supplementary fuel allowance, depending upon the form of heating that the person has to use.
My Lords, the problem of hypothermia in old people in some ways has focussed our attention also, as has been mentioned by the noble Lord, Lord Strathcona and Mount Royal, on the problem of housing as a whole and on energy conservation as a whole. It is a tragedy in many ways that it takes suffering on behalf of some people before we begin to look at the real problem that faces us. It is a tragedy that the installation of heating systems which are very expensive to run year by year, is much cheaper, and as a result these systems are often chosen. It seems to me particularly sad that this should happen in local authority housing where, if extra money had been spent and perhaps the rent of the house had been a little greater, at least these old people in difficulties would find it perfectly easy to obtain a rent allowance, and the high running cost would not have fallen unevenly on the members of society who could not afford to pay for the heating they require. I also think that in view of the enormous increase in electric heating, particularly night storage heating, it is a tragedy that the Electricity Council should have spent something like £200,000 on advertising storage heaters, without explaining to people the higher running costs they are
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letting themselves in for, although at the same time being allowed to explain that this system is cheaper to install. Then, at least, the person taking the decision would take it on the knowledge of what he is doing.
Many of the previous speakers have highlighted the problems of the conservation of energy, both from the point of view of the whole nation, and from the point of view of the cost to people of heating their own homes. I do not know of any nation in the world —and I was not born here —which heats so much for the birds as we do. We have gone on doing it year in year out, telling ourselves that we do not live in a cold country. We live in a very cold country, and the existing lack of insulation in British housing is a disgrace. It certainly should be the priority in all new house-building that the insulation of those houses is correct and provides the maximum energy saving that we can achieve.
My noble friend Lord Amulree mentioned the problems of insulating older houses, houses which maybe did not have lofts, and problems with houses where many elderly people live. My noble friend suggested that there was nothing much that could be done. I believe a great deal could be done. First, even before you start insulating the roof, sealing the windows so that there is no draught, putting a threshold on a front door so that the draught does not whistle round the old peoples' feet, are all things which could be done reasonably economically. This is what we should concentrate on; this is what we should keep in front of our minds when we are building houses in the future.
However, these things will not happen before next winter. We shall not be able to insulate all the houses of the 750,000 people at risk next winter —of course not. That is why I agree with the suggestions made so far, that we should do our utmost to see that these things are implemented. First of all, I should like to see supplementary fuel benefits on a sliding scale, which I think is possible to implement before next winter. I should also like the safeguards against cut-offs suggested by the noble Lord, Lord Strathcona and Mount Royal. I would go even further, I think, and make it mandatory on the energy companies to inform the Department of Health and Social Security in the

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case of non-payment of hills by elderly people and families already living on social security. No cut-off of any premises of that type should be allowed without the information being available to the social services.
I believe, too, that magistrates' courts, for instance, should be told not to grant the right of entry to cut off electricity without reference first to the social services, because there are many poor families already living on social benefit who absent themseles in order to prevent the electricity services being cut off, so the house is shut and the electricity company has to go to court to ask for the right of entry. I believe that on those occasions —there are not many, but they do exist —the magistrates should be enforced to inform the social services before granting such a right of entry.
Then the noble Baroness, Lady Hylton-Foster, spoke at length about the various types of tokens for pre-payment meters. I believe that is one of the most important solutions for next winter. I think it would be preferable to use tokens, because this would not necessitate so many visits by the electricity company to empty the boxes. It would help safeguard the old people against the fear of having money on the premises. But it may not he possible to achieve that solution by next winter. If it is not, and if we cannot make up our minds what kind of tokens to have, let us, at least, have pre-payment meters if the old people so wish, because to many of them that is the way they have been brought up, paying as they go along. It is very difficult for them to change and to be able to meet a bill on a quarterly basis. If we did these things I think we should be helping to a great extent by next winter, and we would avoid our old people having to pay off last year's winter electricity bills on a day like today.
5.2 p.m.
Lord AUCKLAND: My Lords, I must first apologise to the noble Lord, Lord Kirkhill, because, due to a very long-standing business engagement this evening, I may well have to leave your Lordships' Chamber before he winds up. When my noble friend Lord Strathcona asked me a few days ago whether I would speak in this debate I
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was somewhat diffident, because I took part in the debate last week so ably moved by the most reverend Primate the Archbishop of Canterbury, when many of the points relevant to this debate were discussed. But I think that today we have a subject of increasing importance, because the elderly proportion of the population of this country is undoubtedly increasing, although by no means all of them are infirm. Far from it, many are very active. They contribute enormously to all walks of life, particularly the voluntary services. Indeed, many of our services would not operate if it were not for the tremendous work put in by what is so often termed the elderly population of this country. That is often very much a generalisation. I have just today reached the age of two score years and ten, so I suppose that in this House we have ages right across the board taking part in this debate.
When my wife and I were in New Zealand four years ago, we visited a splendid bungalow scheme for the elderly —mostly, I might add, for the ambulant elderly which was right by the sea, near Auckland harbour. The residents were beautifully looked after by a most conscientious staff, a number of whom were British, and they were immensely happy. They contributed according to their means. I thought then, that if only we could do more in this country on those lines how many of our problems could be solved. Of course one must get things into proportion. New Zealand is a country of about 3½ million people, of whom I suppose a third might be elderly. I do not know the exact figure; I am merely guessing. In this country we have a population 15 times that number, so it is not so easy here to run things quite on those lines.
Very largely through the many voluntary organisations, such as Help the Aged and Age Care and others which have been mentioned, the plight of the elderly has been made a great deal happier than would otherwise be the case. The British Legion is another organisation which has done a great deal, particularly for those in the Services. One must remember that there are still many veterans of the First World War, some of whom are badly disabled, living in homes, some of them manned by the British Legion, others in other homes

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which are helped and visited by the members of that very splendid body.
My Lords, I wonder whether there has been any recent survey of the number of elderly patients—I will not use the word "geriatric"; I will use the word " elderly " —particularly in our mental hospitals. As many of your Lordships know, this is one of my main interests, and I have mentioned it in your Lordships' House on a number of occasions. At the risk of repeating myself, I would add that I live in an area of Surrey where there are a large number of mental hospitals, populated by quite a large number of elderly people, who are by no means senile or what one might describe medically as mentally defective, still less mentally retarded. One can speak with many of them and carry on a most interesting conversation.
But, of course, there is the problem—and this goes back to the fundamental problem of housing—that very often their families are not able to look after them. Of course, it can be argued, and rightly, that it is the duty of the family to look after those who have helped to bring them into this world and educated them and looked after them. But in these days that is sometimes physically not possible. Often, the dilemma arises as to who should get the priority, the elderly grandmother or the elderly great-aunt, or the young four- or five-year-old child, who is always getting into mischief, always putting its fingers round the electric light plugs and getting into other dangers. The finest parents in the world only have two eyes and two ears, so they cannot be everywhere looking out for these problems.
My Lords, when it is possible for more money to be devoted to mental health services—and in these difficult times the social services, including the mental health services, have to accept their share of economies—and when the time comes when improvements can be made, it is to be hoped that a really deep survey can be carried out to discover whether more can be done for these elderly men and women. They are, in the main, ably looked after in these hospitals (the staff deserve every credit) but they may well be occupying places which those who are younger, and who may need new treatment, ought perhaps to have. This is a major problem, and it is not one which any government can solve easily.
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I come to the matter of safety. As an honorary vice-president of the Royal Society for the Prevention of Accidents, I have come into contact with the problem of elderly people, perhaps living on their own in houses where wiring for electricity is by no means safe, where cooking appliances are far from safe and where terrible accidents can occur. Organisations such as Meals-on-Wheels, the Women's Royal Voluntary Service, the Red Cross and others often do sterling work in visiting these homes. However, in the rural areas, and particularly in Scotland where houses may be many miles apart, the problem is particularly acute.
I have in your Lordships' House moved and talked on debates on this question of home safety. I wonder whether the Government have any recent figures—I have not given notice of this question, so I do not expect an answer now, but eventually—as to how many accidents have occurred to elderly people through such dangers as inadequate earthing of plugs, stoves designed so that when a saucepan is put on it can so easily fall off and scald them, and that kind of thing. These are points which are germane to this debate. Elderly people are naturally particularly vulnerable to such accidents, and I know that everybody would wish to see this toll cut down.
I turn finally to a question which has not been too highly ventilated, that of entertainment. One of the newest repertory theatres was recently built at Leather-head, very near my home, and named after that great lady of the theatre who died recently, Dame Sybil Thorndike. She was a person who may have been old in years but, as the tributes to her indicated, she was always young in heart. As one who had the pleasure of speaking to her on one or two occasions at the theatre of which I was a trustee for several years, I can certainly hear that out. Thanks very largely to, I think, Mr. Alf Morris in the other place, the Member for one of the Manchester constituencies, and to the Act concerning disabled persons, the Thorndike Theatre, and indeed all new theatres, are or should be equipped with lifts, ramps, and special washing and lavatory arrangements so that these people can enjoy a show at the theatre, whether it be a comedy or a serious show, and not only pass the time away if they are living on their own, but keep their minds young.

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What we have most of all to bear in mind when discussing elderly people is that the minds of many of them are very young. From experience of my own children, who have come into contact with elderly people and who have read to them, and so on, and who have taught, I know what enormous inspiration has been given them and how much one learns from the other. I hope that this kind of thing will continue, and that these people, who have given so many years of service to the community, will not have to sit alone, as many do, with few people to visit them, but will not only be properly locked after, as has been stressed in this debate, but be given the facilities for keeping their minds and their bodies young so that they can enjoy many more years of their life to come.
5.16 p.m.
The Countess of LOUDOUN: My Lords, I should like to mention briefly the mobility needs of elderly handicapped people. We all accept that age brings a general slowing down. It may well be generally true that the handicapped elderly person is at a lesser disadvantage in comparison to his peer group than the handicapped young person, but his special needs must not be overlooked. Most people, when they reach retirement age are still very active, and looking around this House some may even he said to be in the prime of life. We must not, however, forget those who were either handicapped from childhood or early in life, or those who are severely crippled by all too prevalent conditions, such as arthritis.
What I wish to draw to your Lordships' attention today is the fact that at present, although the Government have introduced a wide-ranging scheme to give mobility assistance to the younger handicapped person, the only assistance available to the elderly is paradoxically confined in practice to the non-handicapped. I do not think there is any need to go into details over the previous vehicle scheme and the new mobility scheme, both of which I am sure your Lordships are fully aware, as we have had many Questions and debates on them here in this House—for example, the controversial question of the invalid tricycle.
The old criteria have been scrapped, and the only criterion now for entitlement to a
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mobility allowance of a taxable £5 per week or the option of an invalid tricycle in its place is inability, or virtual inability, to walk. The major advance is the extention of help to people too severely disabled actually to drive a vehicle themselves. This I welcome unreservedly. But the major defect is that under the legislation the scheme is limited to men under the age of 65 and women under the age of 60. But I should also mention that anybody who originally qualified under the old scheme may still retain reserved rights under that scheme.
There are many anomalies under the mobility allowance scheme, and still more teething problems during its phasing in. But the only one I wish to bring to your Lordships' attention today is the absence of any help for those over retirement age. In my view there should be a top age limit, certainly not over 70 years, possibly earlier, but I consider retirement age is not the right one to choose. If a person has been in work it will coincide with, and exacerbate, a probable loss of income. It will also be withdrawn at a time when a person has greater opportunities for its use. This opportunity, this leisure, can in fact weigh very heavily on recently retired people and if they are also handicapped or confined through lack of money to their own homes the effect can be very sad indeed. Mobility increases independence, which in turn prevents deterioration and renders people less likely to become a burden on the State. The allowance would therefore be a good investment at this critical age.
I mentioned earlier the paradox that the assistance given to pensioners is in practice confined to the non-handicapped. This is because the assistance is given through free or concessionary travel on public transport. But the essence of the mobility allowance is that its recipients are those who, in the main, are unable to use buses or tubes, even if it is possible for them to travel by train. I regret that I do not have the latest figures for the cost of such concessionary fares, but the estimate for 1975-76 given on 7th April 1975 in another place was about £35 million. The estimate of the cost of the mobility allowance scheme is about £39 million, so it appears that about the same amount of money is being spent on the younger handicapped as on the elderly non-handicapped, while nothing is being done

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for the elderly handicapped. This is most unjust.
I would urge the Government to consider three courses of action most carefully. The first, which by its nature cannot be immediate, is to allow the mobility allowance to continue to be paid to recipients until, say, 68 or 70 years of age. Secondly, if there has to be an age limit, then it should be the same for both men and women. Perhaps the noble Lord, Lord Kirkhill, will be able to give some idea of the cost of paying the mobility allowance to all handicapped people who would qualify below the age of 70. My third suggestion does not directly concern the mobility allowance. I believe that the Government should pass enabling legislation allowing local authorities to provide for elderly handicapped people who need mobility assistance. At present, under the Transport Act 1968 assistance can be given with the cost of public transport for those able to use it. Unfortunately, under the terms of that Act assistance cannot be given with items such as taxi fares or private car hire, and under Section 29 of the National Assistance Act 1948 financial assistance cannot be given in this respect, either.
I am advised by the Central Council for the Disabled that, although such assistance by social services authorities is illegal, it is possible for non-metropolitan district councils or other non-social services authorities to use their powers under Section 137 of the Local Government Act 1972 which allows the council to spend a 2p rate for any purposes outside their statutory duties. The authority in the best position to assess need is of course the social services authority and it is anomalous that they should not be allowed to do so. To extend this power to them—and I do not suggest that it should he made a mandatory requirement—would allow them the opportunity of offsetting in part the harm which the restriction the Government have imposed on the mobility allowance scheme will undoubtedly cause.
To sum up, my Lords, I urgently beg the noble Lord, Lord Kirkhill, to reexamine the mobility needs of the handicapped elderly and to grant them assistance equivalent to that afforded to their more fortunate peers. I have offered three temporary palliatives. I hope not only that in his reply the noble Lord will be
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able to cost them but that they will encourage him to expound the Government's solution to a problem of which I am sure they are fully aware.
5.25 p.m.
Lord HUNT of FAWLEY: My Lords, we were told following the last Census that about 250,000 old people in Britain today live alone in single rooms, and we know that a great number of them seldom, if ever, leave these. As a practising doctor, it is the medical aspects of some of these needs that I will mention briefly this afternoon. We are now told that one in six of all people in this country are over retirement age. Many elderly people are partially blind or deaf, suffer from rheumatism or are unsteady on their legs. Some of them are hard to help because they are selfish, difficult or obstinate. One of the saddest and most pathetic things is when their memories are bad and they may scarcely appreciate, then, what is happening around them. One old lady who had brought up a family of five asked me one day to tell her whether she had ever had any children. Alcohol may make their memories even worse and doctors are sometimes asked whether alcohol is good or bad for old people. It supplies them with calories and may help the thin ones to gain a little weight. Alcohol is a good tranquilliser—one of the best the human race has ever known—and it may help the elderly to sleep. I seldom try to dissuade anybody over 70 from taking it moderately, but there is little doubt that in large amounts it does affect the memory badly. One old man of 80 who drank rather heavily once told me " Nowadays the only two things I always remember clearly are your telephone number and where I left my drink "! I said that anyway he had his priorities right.
More purpose-built blocks of flats and housing units for old people with a resident warden are wanted. About 5 per cent. of the retired population, we are told, need them now. We want more day centres and I agree with all that the noble Lord, Lord Maybray-King, said about that. We also need a few more hospitals for old folk and I agree with what the noble Baroness, Lady Robson of Kiddington, said about the term "geriatric ". We want only a few of these hospitals,

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because the modern aim is to keep as many people as possible out of hospital.
The ordinary daily needs of old folk are innumerable, but it is our responsibility to supply them with as many as is reasonably possible, especially during the cold weather when they are liable to suffer the most. Hypothermia, the loss of body temperature, can be a killer at any age; it kills the young on mountains, as we know. But this is especially so with the elderly, whose body temperature-regulating mechanisms are often poor. Their temperatures are likely to drop too low, much more quickly than in the case of the young, in a draughty room with ill-fitting windows or doors, because they are insufficiently clothed, or through having too little artificial heating. Such heating can be provided by an open coal fire, an electric or gas fire, a night storage heater, a paraffin heater, central heating, hot water bottles or an electric blanket. Almost every one of those can be dangerous, and many old people need supervision when using them.
It is salutary to remember that in 1974, the last year for which figures are available, the statistician of the Royal Society for the Prevention of Accidents, a body which has done such good work over the years, told us that nearly as many people died in Britain from accidents in their homes as died on the roads. The provisional figures were 6,473 in homes and residential institutions (two-thirds of them from falls) and 6,876 on the roads. The old saying " Safe as houses " certainly does not apply here.
Inadequately protected open fires can cause severe burns. Other injuries, such as a fractured skull or a broken hip, can occur when accident-prone old people with poor eyesight, weak or unsteady legs, giddy fits or black-outs fall into them or over them, upset a paraffin heater or trip up over electric flexes. Slippery floors, loose rugs, staircases badly lit or with inadequate banisters, and shallow, unexpected steps are additional hazards when old people are about, especially those who have taken alcohol, tranquillisers, sleeping tablets or anti-allergy pills. Hot water bottles with caps not properly screwed up or with their rubber insufficiently covered can cause scalds or burns in old people in bed with numb
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legs. One of my patients took her own electric blanket into a nursing home and managed to set her bed alight with it even there.
Central heating should not often do much damage, but one of the worst burned hands I have ever seen was in an old lady who had a stroke and had caught hold of her radiator to steady herself but could not let go. Some elderly people warm themselves up on a cold morning or evening in a hot bath, but even that has its dangers. One of my old patients could not turn off the tap or get out of her bath and unfortunately died of her scalds. Some with poor memories turn on gas rings and fires and forget to light them when their attention has been diverted temporarily elsewhere. I was called to one who had lost her sense of smell and who had gassed herself in this way. Loss of taste can contribute to poisoning by household cleaning fluids kept in unlabelled or wrongly-labelled bottles.
I mention these accidents because they can all occur as a result of inadequate attendance on and supervision of old people, many of whom need a great deal of attention. Patients' relatives and friends, doctors, nurses, district nurses, social and welfare workers of all kinds, health visitors, home helps, the clergy, all the young folk mentioned by the noble Lord, Lord Maybray-King, and many others do an enormous amount for the elderly which I shall not enlarge upon now.
However, I should like to mention one of the most imaginative recent developments in our social services. It is the so-called " attendance allowance " for helping the old and disabled in their homes in order to keep as many as possible out of hospital. The noble Lord, Lord Amulree, who has been chairman of the Attendance Allowance Board since it was appointed, has had much to do with the introduction of this splendid scheme through which any old, disabled or chronically ill person can, on application to a local social security office, and after filling up a rather long form which carefully assesses the situation, be given, free of tax, £370/£550 a year now (which will increase to £420/£630 next November) with which to pay a nurse or other attendant for some hours a day or night when relatives or friends are not available.

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Over a period of 10 years or so, this tax-free allowance adds up to quite a considerable sum of money. To obtain it, there is no means test. I suspect that many families, including those of several of your Lordships here today, may have ill or old friends, relations or retainers who would benefit from such an attendance allowance, but who have not applied for it so far because they have not known that they were eligible.
Pride sometimes keeps old people from accepting help. About 20 years ago, a kind and generous American patient of mine offered me £200 a year for five years to distribute personally and in small amounts to any really deserving old people whom I knew. To my surprise, it was not so easy to give away as I had expected. I well remember one poor woman in my village who, during a very cold winter, refused point blank my offer of a few hundredweight of coal, saying that she was not accustomed to living on charity. Obstinacy, too, sometimes makes it hard to help old people in the way they really need. The other day, my wife, during her visiting work for the Royal Medical Benevolent Fund, found a doctor's widow living alone in terrible squalor. She obstinately refused all offers to rehouse her as she would not leave the wretched room which she has known for so long as her home.
The difficult question which has received much publicity recently and which several noble Lords have already mentioned, is whether or not old people who do not pay their fuel bills should have their supply cut off? Circumstances vary a great deal. So much depends on where and how they live, the reason why they have not paid, whether they really cannot afford to pay, whether they have alternative methods of heating and cooking, and whether they have taken the trouble to apply for supplementary benefit or rent rebate. As my noble friend Lord Strathcona and Mount Royal has pointed out, building standards, fuel policy, local government policy and pensions are all involved. Some old people are prudent and provident; others are not. Some buy special stamps to cover their fuel bills. If the weather is very cold, a pensioner who is living in a draughty room, who has no alternative source of heating, and who really cannot afford to pay, may soon die of cold if his fuel
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supply is suddenly cut off. Surely, under those unusual circumstances, some help must be given along the lines of a grant to cover at least some part of the fuel bill which is owed.
A generous Welfare State, benevolent institutions and other charities such as Help the Aged, and kind friends and relations may supply old people with much that they need—a room, furniture, food (Meals on Wheels), light and heat, medical care, spectacles, deaf aids, mobile physiotherapy and walking aids, rehabilitation units, chiropody, some sort of occupation such as knitting, sewing or embroidery, books to read (perhaps with special large print for the partially blind which most public libraries supply nowadays), talking hooks, radio, and television. I offered to hire a television set for my old housekeeper who had worked for us for 35 years. She is now retired and lives alone in a small flat which she seldom leaves. At first she resolutely refused to take this present. In the end, however, she accepted and it has made all the difference to her life, as it does for many other old people whether the set be a private one or one in a communal sittingroom in an old people's home, a block of flats or an old people's hospital. She often says to us, enthusiastically " I saw the big fight (or perhaps the Trooping the Colour) today—were you there?" It does old folk good to know that they have seen something exciting or spectacular which other people may have missed.
One last point. It has been suggested that too little publicity is given to tell the elderly how they can obtain some of the benefits to which they are entitled. That is probably true but, however great the creature comforts they receive, a great number of them are desperately lonely. They miss contact with the young and love young people calling in on them. It is friendship, kindness, sympathy, companionship and good neighbourliness which so many of them need and long for most of all. Family doctors see this often and very clearly. One of my wise teachers once said to me " However ill or hopelessly incurable (either physically or mentally) your patients may be, however old they become and however little you can do for them medically, you should always be able to give them a little of your time." That is one of the most worthwhile but at the same time one of the most difficult things for

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many of us to do in the hectic and over-busy life which we lead today.
5.40 p.m.
Baroness FAITHFULL: My Lords, I am grateful to the noble Lord, Lord Strathcona and Mount Royal, for initiating this debate today, particularly since this time last week we were debating in the House the continuing importance of the family in the changing circumstances of Britain today. I believe, and I think it has been shown in the debate today, that the need to provide warmth for the elderly this winter is symptomatic of deeper, far-reaching and more basic problems. Looking at the heating needs in isolation is shown not to be enough, and in the long run, on its own, it is not as effective as it might be. The noble Lord, Lord Strathcona and Mount Royal, and other speakers have shown this in what they have said on housing.
In assessing the needs of any one sector of society I suggest that a balance should be struck between, on the one hand, an awareness of the needs of a specific group (in this case the elderly) and, on the other hand, not segregating the group from the mainstream of society. We should surely not offer a service to the elderly in such a way that it savours of help to the deserving poor and creates what one might almost call an apartheid group. This could tend to divide them from their families and their communities.
My Lords, there are the elderly and there are the elderly elderly. Of the latter there are in this country a few aged 107 years. Some of us are very elderly at 65, others are very young at 90, depending on the physical and mental condition, and circumstances of environment. I should like to concentrate on the elderly. In our effort to help the elderly we have too often forced them into the elderly elderly bracket. I remember when I first became a director of social services being offered tickets for Wembley Ice Rink, and I rang up the matron of one our old people's homes —and I think that the noble Lord, Lord Auckland, will agree with the point I am making here —and suggested that 20 of the old people should go to the ice rink. The matron said that they could not possibly go, that they would die. I replied, " How can man die better than facing
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fearful odds?" They all put on their new hats, the men had their suits cleaned, and they went to the ice rink —and they did not die.
For the elderly to stay in that bracket as long as possible they need independence, mobility, a sense of giving —not always receiving —a sense of being positive, effective members of their families and their communities; and they must not be regarded as a burden. Furthermore, the needs and wants of each individual are different, and the elderly seek to make their own decisions.
I should like to follow what the noble Lord, Lord Maybray-King, said on the question of financial independence. The majority of elderly people greatly fear debt. Being disconnected from gas and electricity supplies is bad enough, but the fear of debt is worse. Surely no elderly person wants to be dependent financially on his family. No elderly person, having worked hard all his life, wants to be regarded as the deserving poor. Each normal elderly person wants to be responsible for his own decision-making as to expenditure. Some prefer to eat more; other prefer to have more heat; and other prefer to have clothes.
I submit that there is a long-term solution and a short-term solution. The long-term solution will not, alas! deal with next winter, as it is tied to the whole system of benefits and the poverty trap. Throughout their lives most people have worked hard but have not been able to save, due in part to low wages and the low taxation threshold. What the elderly want is a pension rate as of right which will meet their total needs. They do not want to apply for discretionary grants, except in exceptional circumstances —and I understand and appreciate that the mobility allowance is one. They do not want to spend their time applying for supplementary benefits for heating and fuel. Forty-two per cent. of old-age pensioners are drawing discretionary grants from the Supplementary Benefits Commission, and many more do not apply.
Administrative costs could be saved by a pension rate which included heating. I think I am right in saying that the amount of the first National Assistance benefit in 1948 was an arbitrary proportion of the average working wage, and the heating element was an arbitrary proportion of

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that amount. This has been upgraded in time in relation to the average working wage. This matter needs research in depth, and I believe I am right in saying that it is being looked into by the National Consumer Council, by the Child Poverty Action Group, and by the Royal Institute of Consumer Affairs, and no doubt we look forward to this report.
With regard to the short-term solutions, everything I have listed has been covered, and therefore I shall not take up your Lordships' time. But there is one point I should like to make, and it is this. I do not think that the responsibility should rest with the gas or electricity Boards. I think that they might install a computer system through which, when the debt was still low it could be referred to the Supplementary Benefits Commission or to the social services. I underline the phrase " when the debt was still low " because that would be the red light showing in relation to future problems which would arise. Once the debt has become a high debt it is very difficult to help the family to right the situation, either through supplementary benefits or through the social services. If the debt is low the situation can be righted and dignity can be restored.
Much has been said about housing and what could be done in this field. I wish to take up just two points, concerned with planning —not housing —and wardened accommodation. I suggest that wardened accommodation for 30 people is of inestimable value, but I suggest also that there should be flexibility and smaller units because, for instance, in a population of 110,000 a wardened unit for 30 people is often sited in a place a long way from the neighbours, the communities and the families who are known to the old people. I would suggest that we should also think in terms of small units of five or six flats, with perhaps one flat rent-free to a couple who would befriend and look after the people in those flats; and that in the planning of our cities it ought to be possible to help an old person, not to be next door, though some people like to be next door, but at any rate to be within 10 minutes' walk of those they know and those they love.
May I pay a tribute to the home helps? There are 80,000 home helps in this country who visit 500,000 old people.
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The home helps, to me, are the backbone and the salt of the earth. They give much more than is ever demanded of them, and I think it is deeply worrying to see from the estimates of local authorities for next year that the money allocated for home helps has in some instances been cut. It is very expensive to run an old peoples' home; it is very expensive, though not as expensive, to have wardened accommodation ; and it is false economy to cut the home helps, both in terms of happiness and in terms of finance.
Just one word about Meals on Wheels. This is one of the great pieces of voluntary work that is carried out quietly in this country, and many of the volunteers that carry out the Meals on Wheels service do much more for the elderly whom they visit. But I would wish to follow up the suggestion made by the noble Baroness, Lady Hylton-Foster, that we should use some of our juveniles who are willing to be used and who are out of work. Two juveniles could not carry the heavy containers, but there are not enough Meals on Wheels volunteers. The Red Cross, the WRVS and others are giving wonderful service, but there are not enough Meals on Wheels because in some cases there are not enough volunteers. So, my Lords, the tenor of my plea today is that we should regard, not the elderly elderly but the elderly, as people of independence, as people able to make a decision, and as people who are able to give to the community as well as to receive.
5.53 p.m.
The Lord Bishop of MANCHESTER: My Lords, I trust that we have passed through that phase of recent history when it was common for elderly people to be regarded as the new poor of our country; as an essentially passive class to be pitied and done good to when they were not actually neglected. We have come through, I believe, to a better understanding, as this afternoon's debate has borne witness, that the policies of Government and the attitudes of younger age groups should be based upon respect. That implies the best use of the initiative and inner resources which men and women possess in the latter stages of their lives. Such respect, after all, is a very old feature indeed of human society, as this House could no doubt bear witness. The question now is how to maintain

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that respect in a technological age which has given a much greater expectation of life to a very large number of people, while at the same time depriving them of an obvious role in that society. The Manifesto on the place of the retired and elderly in modern society, published by Age Concern, puts its succinctly:
"The elderly need to have sufficient income to meet their needs for social, physical and emotional wellbeing; accommodation which assures their right to privacy and the retention of their own material possessions; and the freedom to exercise those preferences and prejudices which express their individuality and sense of the past ".
No doubt, my Lords, none of these high-sounding phrases has much meaning unless there can be adequate warmth in cold weather —and in these Islands I submit that that does not necessarily mean winter —for older people, and particularly those who live alone, for nothing paralyses thought and initiative more than being cold. Anybody who lives in an episcopal house, even in the modern era, can claim a nodding acquaintance with the problem of potential hypothermia, but at least we are kept on the move for most of the time. The hardship to those who sit still and shiver is of quite a different order.
I feel convinced, my Lords, that one line of attack on this problem is closely connected with the matter of bills. Many elderly people have a real fear of bills of any kind, sometimes as a result of previous experience of debt and sometimes from an exaggerated fear of falling into debt from which recovery may seem to them impossible. Indeed, younger people could testify to the incomprehensibility of many fuel bills today. The huge increases in them are very largely taken on trust by most of us, not willingly but because in querying them we start at such a disadvantage. How much more must this be true for an elderly person living alone! We should surely ask our public utilities to look as carefully as they can at the availability of some simple explanatory literature, and we should at least request them to consider whether a quarterly bill is always the most satisfactory method of collecting payment, as compared, for example, with prepayment meters —and here I support the remarks of the noble Baroness, Lady Robson.
Of course, we are up against the familiar problem of our time, that when administrative processes have been computerised
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they become correspondingly lacking in humanity, which must include sensitivity to the needs of older people and flexibility in dealing with these relics of a simpler age. All the more, then, should we be looking for a satisfactory liaison between the fuel Boards and the many statutory or voluntary agencies which are there to attend to the needs of elderly people; and it seems from reports received that such liaison is extremely patchy. That may sound like a technical problem, but those of us whose regular business it has been to visit old and house-bound people in their homes are aware just how much suffering can be caused by the loneliness and the sometimes unnecessary fears of such people, who have too much time to think and too much cold and darkness in which to do it.
Neighbours and visitors can certainly do much to mitigate these ills; we ought not, in the modern style, to thrust all responsibility on to official agencies. Yet for them this is surely an area where sympathetic imagination and co-operation are constantly called for, and not least in order to help the elderly to help themselves, as is their desire in the vast majority of cases. I hope, my Lords, that the effect of this debate may indeed be to stimulate such imagination and co-operation between Government Departments, for a start, as the noble Lord, Lord Strathcona, suggested, and that the same process may be repeated down to the local level, so that we may have always as much accurate information and as much enlightened action as possible.
5.59 p.m.
Lord SANDYS: My Lords, in opening my remarks I should like to say what a very real pleasure it is to follow the right reverend Prelate the Bishop of Manchester in his, if I may say so, commendably brief and particularly lucid address on this vitally important subject. His very telling phrase, "too much time to think and too much cold and darkness in which to do it ", is really the kernel of the subject which we are discussing. So I join your Lordships in expressing our gratitude to my noble friend Lord Strathcona and Mount Royal for introducing this subject at a very appropriate moment, when there is still time before the winter for local authorities and other bodies to consider carefully the range of priorities that they

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would feel necessary in combating these matters, which your Lordships have so professionally discussed this afternoon. I am keenly aware, standing before your Lordships, how each one of you has a very special professional interest in some aspects of it. If I am able in my brief remarks to draw together some of the threads, it will have been a success.
My Lords, I think that the argument of my noble friend Lord Strathcona was centred on basing a policy not on vastly increased public expenditure which we know is totally impossible in the present circumstances —indeed, the Chancellor of the Exchequer has only today received warnings about this from our overseas creditors —but on the importance of making better use of such resources as are available and to set about reorientating our priorities. My noble friends all mentioned prevention, and perhaps I might set out the preventions that we wish to achieve: the prevention of illness through the family doctor, and there is no better doctor than my noble friend Lord Hunt of Fawley, who is so particularly experienced in this field; the prevention of accidents in the home, which was mentioned at considerable length by both my noble friend Lord Hunt of Fawley and my noble friend Lord Auckland; the prevention of mental deterioration, again mentioned by my noble friend Lord Auckland; the prevention of isolation, through the use of day centres and other social activities, many of them mentioned by the noble Baroness, Lady Hylton-Foster, and others; and, above all, in relevance to this particular debate, the prevention of hypothermia based on advice coming from many voluntary bodies and, perhaps, especially through the agency of Help the Aged. In this regard, we have been fortunate enough to listen to the advice of the noble Lord, Lord Maybray-King.
Perhaps, in addressing your Lordships, it would be a suitable moment now to mention those services which perhaps have not received sufficient attention. I would put high on my list the broadcasting services of the BBC and ITV and the enormous range of entertainment and interest which they provide to the old people. I should particularly like to stress the concessionary rates of television and broadcasting receiver licences allowed to old people, to commend strongly that
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these be maintained in the future and that, if it should be possible, they be further reduced. I should like further to refer to the library services so ably carried out by the local authorities and by many charitable bodies. Some of your Lordships have mentioned the library service. This, in itself, is a source of great solace, entertainment, interest and, no doubt, home study; for I believe that one of the first graduates of the University of the Air was an old-age pensioner.
I should like, further, to refer to the very basic problem referred to by several of your Lordships, and especially by my noble friend Lady Faithful], in regard to the review, which is undoubtedly necessary, of the level of old-age pensions. My noble friend stressed that this is a longterm review, and I think she acknowledged the fact that in present circumstances it is particularly difficult to envisage an increase beyond the very substantial increase which is about to take place in November. If I may say so, I think that her argument was a solid one, based on what has been said by many of your Lordships and on the level of the social benefits obtainable in other countries in the Common Market. In that connection, the noble Lord, Lord O'Hagan, is particularly experienced and he referred to the fact that we are no longer the leaders, but perhaps the losers in the present situation.
My Lords, I should like further to stress that the situation so far as the present mobility allowance is concerned is one which is a matter of grave concern both to the elderly handicapped and to all handicapped people. That this debate should prove an opportunity for ventilating this has been particularly fortunate. The Attendance Allowance Board and its activities were mentioned at some length by my noble friend Lord Hunt of Fawley and we were glad to have the constructive speech of the noble Lord, Lord Amulree, who did not refer to his own particular speciality. There is one point in his speech which I should like to pick out at this point as I am about to go to the question of housing. I think that the noble Lord, Lord Amulree, was not, perhaps, intending to say what he did about the lack of opportunity over improving the older homes. If that was the case, what he did say was more than corrected by his noble friend Lady

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Robson who gave us a breath of fresh air from her experience as one born outside Britain. She made a strong commendation to the Government, repeating one by my noble friend, in regard to insulation. If anything can be achieved in the next three or four months before the arrival of winter and the cold weather, this massive programme of house insulation is one which would be most strongly commended to your Lordships.
I should like to tell your Lordships about a meeting I had last winter with an old-age pensioner who had had the very unforunate experience of having his electricity supply cut off in the month of February. He told me that the temperature outside was 32 degrees and inside was 32 degrees also. He decided, in those circumstances, to go and sit in the showrooms of his local Electricity Board. After two days of considerable disquiet by the staff over this, they sent for the police. I hope —and I mean this seriously —that, should there be a recurrence of a situation like this, the Electricity Boards, rather than to send for the police, will perhaps show a little more kindness and possibly will venture to suggest other places to go to those who come to visit them for rather prolonged periods. I suggested to my friend on this occasion that perhaps his best course of action would be to ventilate this affair through his Member of Parliament. The only remedy that I myself could suggest was to offer him a drink. In that, I was carrying out what my noble friend Lord Hunt of Fawley recommended to his patients; so that I feel that I was on the right lines.
Many noble Lords mentioned medicine, and I was glad that the noble Baroness, Lady Hylton-Foster, mentioned the question of tablets and how frequently old people who have a series of tablets of different sizes and sorts become muddled. A document published by Help the Aged and entitled No one to blame? has come into my hands. This very fact is brought out when it says:
"It is terrifying to see dangerous substances handled by elderly confused people with poor eyesight, struggling to get tiny tablets out of small containers. As the lids are impossible for arthritic fingers to manipulate, tablets are decanted into egg cups, old tins etc., and separated from their labels. Equally alarming is the fact that 54 per cent. of elderly people were also found to be taking self-prescribed medicines: aspirin, cough linctus,
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antacid, laxatives and vitamins which might well combine badly together or with doctors' drugs."
I believe the medicines scene is a serious one. The question of packaging of medicines is a subject worthy of debate. I was particularly sad when the noble Lord, Lord O'Hagan, who had down a debate in the " No Day Named " section of the forthcoming Parliamentary Business for a prolonged period on the over-packaging of goods should see this Motion die of old age. I hope in due course he may think of bringing it forward to your Lordships' attention. Not only is it a matter of economy, it is a matter of serious consideration —in fact, possibly life and death in certain cases.
I should like to turn now to transport, which I think a few of your Lordships have mentioned in this debate. Transport is one of the needs of old people. Here I turn to the Government's orange paper which was introduced to your Lordships a few weeks ago and debated in this House. Volume 1 of the Annex to Chapter 3, on page 38 of the document, says:
"Concessionary fares for well-defined groups of vulnerable individuals such as the elderly, blind and disabled, are well justified."
That is a very definite statement and I hope that both the Railway Board and the bus companies, and those concerned with the fixing of fares, will recognise this. The document goes on:
"The importance of concessions is reinforced by the rising cost of fares inherent in a policy of reducing the general subsidies which will bear hardest on such groups who are least able to look after themselves."
The document says that it is the poor, the old, the infirm and the young who cannot make use of declining public transport. Of course in rural areas of Britain some bus services have gone to pieces so badly that people without cars are almost immobile. This came out in our debate on the orange paper.
I return to the question of the primary needs of housing and warmth. On the issue of housing, I can claim some experience because when I am not in your Lordships' House, I take a very great interest in restoring old buildings in the Midlands, bringing them up to a high standard of insulation in order that people can live in what previously were totally derelict buildings. I cannot claim that over the course of the past few years many

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buildings have been restored because it is a particularly slow and difficult task. Nevertheless, it has a contribution to play towards the total problem with which we are concerned. The noble Baroness opposite, Lady Robson, highlighted the very large number of houses in this country. In our estimation, there are over 2 million such houses which deserve attention. Much of what is in the Paper which your Lordships have discussed previously, Our Older Homes—A Cause for Action, has been achieved already. Nevertheless, this is one of the focal points where further Government attention and further reorientation of resources could take place to the great benefit of old people, particularly those who are resident in those self-same houses at the present moment.
The standard of thermal efficiency is the central issue, and I thought that my noble friend Lord Strathcona made a most convincing point when he said one room in the house should be made thermally efficient. Even if in the larger, older houses all the rooms cannot have well-fitting windows, at least one could have one room with well-fitted windows and a well-fitted door. Surely here is an area where both voluntary groups and local authorities—if they are able to do so in a joint programme—could play an important part. I am perfectly certain that the do-it-yourself industry has a major part to play, as indeed the technical colleges and other bodies, which are much given to having both expertise and projects outside their own college activities and within the community.
Finally, I should like to come to the Consultative Document, Priorities for Health and Personal Social Services in England. Both my noble friend Lord Strathcona and the noble Baroness, Lady Robson, referred to the introduction on page 2 of the Document, and the very telling sentence to which I must return again. I make no apology for it, because I think it is basic to the argument:
" The first essential is to maintain the standard of services, to put people before buildings. Within the overall increase in the programmes, capital expenditure will be cut back in order to allow current expenditure to rise from 1976-77 by 1.8 per cent. a year for the National Health Service and 2 per cent. a year for the personal social services."
We are not saying from this side of the House that we must start on a massive hospital rebuilding programme, knowing
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full well that however desirable this would be this is totally impossible in the present circumstances; but we are saying that a building insulation programme, a housing renewal programme and a programme based on the repair and renewal of our older homes would be highly desirable in the present circumstances.
6.18 p.m.
The MINISTER of STATE, SCOTTISH OFFICE (Lord Kirkhill): My Lords, I am grateful that this Motion gives me the opportunity of telling the House something of what the Government arc doing to meet the needs of old people. I know that the whole House—not least noble Lords who have spoken this after-noon—share the concern of the noble Lord, Lord Strathcona and Mount Royal, for the welfare of the elderly. I am pleased to be able to say that the Government's record testifies to the fact that they too share that concern. Since they took office they have consistently regarded the elderly as a group deserving of special consideration in their overall policy programme. In pensions policies and in plans for development of health and social services we have demonstrated our conviction that a society should be judged by its attitude to those of its members who are particularly vulnerable. The elderly, all too frequently, fall into this category.
Let me hasten to add however that many old people would bitterly resent the suggestion that they need any sort of special protection. This House is evidence in itself of the fact that many people who would be regarded as elderly, are fiercely independent and very far from being vulnerable. And the Government would in no way wish to reduce the individual's independence. But the fact remains that most people when they become old no longer wish to work and therefore inevitably lose a large measure of independence. And alas! a small proportion of old people can no longer manage to live without outside help of some sort. We know that people aged 65 and over make proportionately greater demands on almost all health and social services than younger people. People aged 75 and over make even greater de-mands, and people over 85 even greater. Any growth in the numbers of these groups therefore inevitably leads to in-creased need for a whole range of care

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services. In their plans for developing these services over the next 10 years, therefore, the Government have had to recognise that such a growth would take place. By 1985, the over-75s population will probably by 20 per cent. greater than today. The over-85s will be up by 16 per cent. By the turn of the century, well over 1 per cent. of the population will be over 85.
The contribution made by families in looking after their elderly relatives is enormous and we would all applaud this. Indeed, the underlying theme of the first question put to me by the noble Lord, Lord Strathcona and Mount Royal—quite generously, I agree—is the need to encourage the elderly to live within the community. However much it may he possible for the statutory services to provide, most elderly people will wish to look first to their family for help. Unhappily, the present pattern of our society—in particular the development of the restricted family unit at the expense of the extended family, limitations in housing, and mobility of labour—can make it difficult to give. In a recent Consultation Paper on Housing for Old People, the Government have suggested that housing authorities might consider whether it is right to set aside the need for residential qualifications in tenancy allocation policies in order to enable old people to be housed near relatives who are anxious to care for them. But whatever it may he possible to do to expand the amount of help and support provided by families, in the Government's view there are limits to this. Many old people have no families—a point well made by the noble Lord, Lord Amulree. It is estimated that a quarter of all people aged 65 and over have no children to assist them in time of need. About 34 per cent. of people aged 75 and over live alone. We must also bear in mind that many of the children of the very elderly will themselves be past retirement age. Thus we have to recognise a sizeable, and growing, need for outside help.
The form of this help is as varied as the wide spectrum of need it is aimed to meet. It covers each provision; help from doctors, nurses (either in hospital or in the community), social workers, home helps; provision of meals and many other services; also suitable housing. I
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should like to say something about how the Government are meeting some aspects of the vast range of needs within the limited resources available—I would emphasise that at the present time.
The noble Lord suggested that in fixing the pension increase proposed for November 1976, the Government have not played strictly fairly in changing the method by which the increase was calculated. Let me therefore set the record straight and make my partisan point, as the noble Lord made his. In fixing the November rates, the Government have more than met their moral and statutory commitments. In their Manifesto at the time of the February 1974 Election, the Labour Party said that they would immediately raise pensions to £10 for a single person and £16 for a married couple and, thereafter, increase those figures annually in proportion to increases in average national earnings. The £10/£16 pension was introduced in July 1974—an increase of 29 per cent., which was the highest in both money and real terms since the present insurance scheme was introduced in 1948. The relevant statutory provisions, now in the Social Security Act 1975, were amended to provide that pensions shall be increased by an amount sufficient to restore their value in relation to the general level of earnings or prices, whichever is the more advantageous to pensioners, within 12 months of the previous uprating.
This has been done. Pensions were increased in April 1975 and November 1975 and, over the period from July 1974 to November 1975, pensions rose by 33 per cent. whereas both prices and earnings rose by 31 per cent. By November 1975, therefore, the real value of the pension was higher even than in July 1974. The Government are confident that the increase of 15 per cent. proposed for November 1976 will be more than the increase in prices or earnings since November 1975 and will raise the real value of the pension to a new high level. The Government consider, therefore, that they have more than met their commitments.
As to the change in the method of determining the increase, to which the noble Lord, Lord Strathcona, referred, the position is this: The Act says that the Secretary of State for Social Services shall

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estimate the levels of earnings and prices as he thinks fit. When the Government came to estimate the movements in these levels for the upratings in April and November 1975, they foresaw great difficulty in forecasting future earnings and prices movements in a period of high inflation and rapidly increasing earnings, and decided to use movements over a past period.
For the April 1975 uprating, movements over the period from November 1973 to August 1974 were chosen—a period of 9 months corresponding to that between July 1974 and April 1975—and for the November 1975 uprating, movements over the period from August 1974 to March 1975. There were disadvantages in this method, in that past movements were used, including movements which began in November 1973—before the introduction of the £10/£16 pension whose value the Government were committed to maintain. But at the time it was thought the most appropriate method to use.
However, now that inflation is clearly coming under control—the annual rate has fallen from 25 per cent. last year to 15 per cent. Now—the Government did not feel justified in continuing to use past periods, particularly one in which inflation was untypically high. The proposed increase in November 1976–15 per cent.—is therefore related to the anticipated increase in earnings and prices since the last increase in November 1975 and, as I have said, will be more than sufficient to cover those increases. This forecasting method has been used at all past upratings except those of April and November 1975. Of course, I do not dispute that, if past movements had been used again, the increase in pensions in November 1976 would have been higher—some 21 per cent. instead of 15 per cent. But this would have been considerably ahead of the Government's commitment, and the additional cost would have been of the order of £500 million a year.
Would that circumstances were such that this could have been done; but the present economic situation and the need for restraint in expenditure meant that the overriding constraints put it out of the question. Let me reiterate that the November 1976 rates will more than maintain the value of the July 1974 pension
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rates and that pensioners will not suffer a drop in their standard of living as a result of the change in the basis of the uprating.
For those pensioners and other retired people who need additional financial help there is the supplementary pension payable under the Supplementary Benefits Scheme. A supplementary pension is intended to bring whatever other resources a person may have up to the levels which are, for supplementary pensioners, guaranteed by the Act, and which are uprated by regulations approved by both Houses of Parliament. The proportion of retirement pensioners who have recourse to the additional help provided by a supplementary pension has declined in recent years, from 29 per cent. in 1966 when supplementary pensions were introduced, to about 20 per cent. This is, I think, a cause for satisfaction and it remains the aim of this Government to reduce dependence on means-tested benefits for elderly people. But the position of those who still need additional help is being protected. So much for our provisions for existing pensioners. As for the future, the Government's new pensions scheme, which is due to commence in April 1978, will, for the first time, provide earnings-related pensions which are comparable to those available to members of good occupational pensions schemes and which will also he fully protected against inflation.
Cash benefits are, of course, only part of the overall provision for old people. The Government are mindful of the need for practical help. The noble Baroness, Lady Hylton-Foster, emphasised this point. The extent of our awareness of this is amply demonstrated by the recent expansion in those health and social services used mainly by old people. Between 1974 and 1975, for example, the number of Meals on Wheels and club meals served to old people in England went up by 13 per cent.: between 1973 and 1974 the number of old people receiving treatment from a home nurse rose by 6 per cent.; an increase of about 25 per cent. took place over the same period in numbers receiving chiropody treatment; and between 1974 and 1975 the number of old people benefiting from the home help service increased by almost 10 per cent. Thus at the latest count some 930,000 old people in England were receiving treatment from a home

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nurse each year, 1¼million from a chiropodist, and over half a million had the services of a home help. Some 38 million meals are served by Meals on Wheels or in clubs each year, and there are no fewer than 14,000 places available to old people in day centres.
The Government propose to maintain this momentum to the extent that resources will allow. Noble Lords will be aware that they have published a series of Consultative Documents on Health and Social Services Provision in England, Scotland, Wales and Northern Ireland. Perhaps I could draw on the English publication to demonstrate the priority the Government wish to give to services used mainly by old people. In their Consultative Document, Priorities for Health and Personal Social Services in England, the Government made proposals for giving special priority to growth and improvement in these services. The main objective of such services is to help old people remain in their own homes as long as possible. There are few people who would argue with this objective, and indeed this point has been emphasised by many noble Lords this afternoon.
The Document recognises that desire for independence which most old people have, and their right to pursue it as the rest of us do. That is why our proposals in this Document are slanted towards continued growth and development in the domiciliary services. We are suggesting an expansion in home nursing services of 6 per cent. a year up to 1980, of home helps and meal services of 2 per cent. a year and chiropody services of 3 per cent. Aside from domiciliary provision, we wish to ensure that hospital services for old people are more geared w active treatment and rehabilitation than they are at present. When young people go into hospital, they expect to come out as quickly as possible. Old people should be no different. If they need hospital treatment, they should receive it and get back to the business of living within the community.
Some four years ago new guidance was issued by the Department of Health and Social Security about the pattern of hospital provision required for an effective service for the elderly. This suggested that at least 50 per cent. of beds for the elderly should be sited in general hospitals
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for those patients needing investigation, immediate treatment and faster-stream rehabilitation. I hope the noble Lord, Lord Auckland, will recognise that the Government are aware of the problem which he himself in part high-lighted.
Unhappily, progress towards this level of provision has been slow. In the Consultative Document we have therefore suggested interim targets for the provision of beds for the elderly in general hospitals over the rest of this decade, so that better headway may be made in securing this change in the structure of provision. We see this as a major priority not only in order to secure the most effective and economic deployment of resources, but also as an important part of our basic strategy designed to enable elderly people to continue living in the community for as long as possible. The idea of automatically putting old people into institutions for the last part of their lives, once they have difficulty in managing on their own, is as obnoxious to all of us as the image of the workhouse it evokes.
But, inevitably, there will always be some elderly people for whom there is no alternative to long-term hospital care. And it is unhappily true that all too frequently the beds available for their care are sited in old and unsuitable accommodation. Much effort has been devoted to improving these conditions, but we are in no doubt that much remains to be done. The Consultative Document therefore proposes that health authorities should continue to set aside capital resources to enable substandard accommodation to be improved or replaced at the rate of about 1,000 beds per annum.
Equally, with the prospective increase in numbers of the very elderly, there is bound to be a continuing requirement for residential accommodation for those elderly people who are not in need of constant medical and nursing care, but who cannot manage on their own even with the support of the domiciliary services. At present, some 110,000 elderly are living in residential accommodation provided by local authorities, an increase of some 10 per cent. over the past five years. The Government propose that up to 1979-80 there should be an increase of some 2,000 places a year largely concentrated in those areas where needs are greatest.

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All these services, and the effectiveness with which they are planned, organised and delivered to those who need them, depend fundamentally on co-operation between the various authorities at local level. The elderly, possibly more than any other group, require an integrated service. Collaboration is therefore the keynote, as the noble Lord, Lord Sandys, so very clearly recognised. That means collaboration between health authorities and social service departments and—possibly as important—housing departments. Without this we can never hope to make the best use of resources or provide truly effective services. That is why this Government have taken steps to improve collaboration. We have increased local authority representation on National Health Service authorities; we are creating special joint-care planning teams—a concept welcomed earlier by the noble Baroness, Lady Robson—and we have introduced a new " joint-financing " scheme under which some health money could be used to finance social service projects. But even if we—in the various levels of government—use what we have to the utmost efficiency, we shall still need the invaluable services of voluntary bodies.
It may well be that we shall need the appointment of a Minister for the Aged, as was suggested by the noble Lord, Lord Maybray-King. This suggestion has been seriously considered by the Government and has, dare I say, a certain superficial attractiveness. Furthermore, I am sure it is made with the best interests of the elderly in mind. However, the possibility of such an appointment has been rejected on the very good grounds that, in the Government's view, it would not ensure an improvement in meeting the needs of the elderly. I do not have to emphasise that the elderly are not a homogeneous small group to be treated separately from the rest of society. They comprise over 40 per cent. of the population and exhibit the same variations, individualities and eccentricities as other people. Most of them live full and active lives, and the Government feel that their needs are best dealt with as they are now.
We are indeed fortunate in this country in the quality and range of volunteer effort offered for the elderly and other vulnerable groups, and many noble Lords have paid just tribute to the various voluntary bodies
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concerned. The Government will continue to support this effort and will encourage health and local authorities to do so, particularly the young. If the young can be encouraged to involve themselves in rehabilitative work, the Government will do all they can to encourage them.
Perhaps their most valuable and appropriate help is in activities which involve a high input of personal time of volunteers—voluntary visiting, good neighbour and street warden schemes, night sitter services, handyman type of help and a wide miscellany of assistance of a kind which requires a very personal contribution which can mean a tremendous amount to the quality of life of an old person and which would not be suitable for statutory services to provide. In such volunteer effort the younger elderly have much to offer. Voluntary bodies are in the forefront of recognising that the recently retired have the time, the wisdom and often the expertise to be ideally placed to help older people.
My Lords, at this point I would dwell a little on the question of housing for the elderly, a point aptly emphasised, I thought, by the noble Lord, Lord Amulree. This is an important issue. There will be old people who will want to stay in the home in which they have spent most of their lives and who will have the physical and mental strength to do so. Others would prefer to move, if offered the right alternatives, and so contribute to the mobility which is necessary to the full use of the country's housing stock. Of special significance is the concept, alluded to earlier this afternoon, of sheltered housing which has gathered momentum since the last war, with encouragement in the form of special subsidies and otherwise from successive Governments to local authorities and, more recently, housing associations.
The most common form is a group of easy-to-manage and adequately heated flatlets fitted with an alarm system by which a warden on the site can be summoned in an emergency, but with emphasis on as much independence for tenants as possible. The concept has been a very successful one and there has been a gradual increase in the stock, but we are taking the opportunity to review the standards the Government lay down. But

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other forms of housing will meet the needs of more active old people. A small unit on a level site and near essential services such as shops, public transport and libraries may be adequate. The Government have stressed the need generally for local authorities to build a greater proportion of smaller homes to match the trend towards smaller households.
However, sheltered or special housing cannot by itself provide for the wide range of needs that are thrown up by the many physical, mental and social vicissitudes that affect an ageing population. Like the other forms of care, sheltered and special housing must be seen in its place as one element in the spectrum of available provision, to be used when appropriate to individual circumstances. It is therefore particularly important that authorities set up effective methods of assessing the needs of old people who come to their attention and establish ways of collaborating together so as to ensure that the range of services available, including the health and personal social services and housing, may be deployed to best effect. This point was made very effectively earlier in the debate by the noble Lord, Lord O'Hagan. The noble Lord asked about the Central Policy Review Staff report on the joint framework of social policies. I can state that when the report was published Ministers agreed that a work programme should be put in hand. This has been done, and I hope that that assurance will go some way towards meeting the point which the noble Lord raised.
Lord O'HAGAN: My Lords, can the noble Lord say anything about the specific recommendation regarding housing for the elderly which was included in that report? The noble Lord has spoken a great deal about housing for the elderly. Can he link the two?
Lord KIRKHILL: No, my Lords, I could not link those two questions without prior notice.
However, there are dangers in encouraging old people to pursue independent lives. The process of ageing often impairs physical and psychological mechanisms which enable us to live safely alone and to fend for ourselves. Thus, old people sometimes get into difficulties when they live alone. They have accidents or sudden
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illnesses and are unable to summon help, a point that was very clearly made by the noble Lord, Lord Hunt of Fawley.
To come to the core of the debate, they sometimes find it difficult to keep warm. Before I explain to noble Lords what the Government are doing to prevent this danger, perhaps I can clear up a few misconceptions. We see a lot in the Press about hypothermia. Every winter we hear reports that large numbers of old people are dying from hypothermia, but my information is that there is no evidence to support these claims. Indeed, the noble Lord, Lord Strathcona and Mount Royal, urged us to be cautious in our assessment of this situation. I understand that according to information from death certificates, the number of deaths attributed solely or mainly to hypothermia in a year is rarely more than a score. So why are there these exaggerated claims? I suspect, my Lords, that there is considerable confusion about what hypothermia is. There are few who would pretend that it is pneumonia or bronchitis, but it is almost certain that many of the deaths said to have been caused by hypothermia are in fact attributable to diseases such as these.
So what is hypothermia ? I am advised that, contrary to popular belief, it is not a subjective feeling of cold. What little we know of hypothermia suggests that this feeling may be dangerously absent from those suffering from it. Briefly, I am advised by medical people that hypothermia is defined as a condition in which the deep body temperature (as distinct from mouth temperature) is less than 35°C. Apparently, there is no firm evidence on how common the condition is, among either young or old, what causes it, or precisely how dangerous it is. This being so, I make a plea to the Press and other media to use the term " hypothermia " sparingly. It is essentially a technical term which is, I understand, little understood by the experts, let alone laymen. Evidence to suggest that it is a significant danger to our old people is lacking.
This is not to say that old people do not sometimes get into difficulties through failing to keep warm in winter, a point made by the noble Baroness, Lady Robson, and also by the noble Lord, Lord Strathcona and Mount Royal. For a variety of reasons, some old people are

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particularly vulnerable to suffering in this way. They may be forgetful, or find it physically difficult to operate certain heating appliances. As in previous years, the Government will therefore take steps this winter to ensure that health and social services personnel who come into contact with the elderly are vigilant to the dangers of some of them suffering from the effects of cold and do what they can to help within the resources available to them. Old people themselves need to be reminded of the need to avoid getting too cold. In addition to any advice given them by the professionals, therefore, the Government plan to publish a leaflet later this year, and in good time, giving simple hints on how to avoid the dangers of cold. This will be widely circulated so that it reaches those old people who might not come into contact with health and social services personnel.
Old people may get into financial difficulties and feel they cannot afford fuel. As your Lordships will know, the supplementary benefit scheme provides a degree of flexibility through the discretionary powers of the Supplementary Benefits Commission to increase the amount of supplementary pension where there are exceptional circumstances. This power is used most notably where elderly people require extra heating because, for example, they suffer ill health or a lack of mobility. Information about discretionary additions, particularly extra heating additions, is made known in a number of ways. The need for such additions is considered automatically in each new claim for supplementary benefit and on the review of every existing case which takes place at least annually. The number of supplementary pensioners receiving extra heating additions has increased considerably in recent years. In November 1973 the number was 445,000 and by February this year this had nearly doubled to 849,000. There are currently some 51 per cent. of supplementary pensioners in receipt of these additions.
There are perhaps two ways of looking at these figures. There are those who will say that the incidence of discretionary additions reflects on the adequacy of the basic supplementary pension rates. I would prefer to see the rise in the number as a reflection of the concern felt for elderly
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people in a scheme which allows for account to be taken of individual variations in circumstances.
As I said before, the proportion of retirement pensioners who have recourse to the additional help provided by a supplementary pension has declined in recent years. This is, I think, cause for satisfaction and it remains the aim of this Government to reduce dependence on means-tested benefits for elderly people. But the position of those who still need additional help is being protected. Both supplementary pension rates and the levels of extra heating additions are to be increased in November when retirement pensions are raised, extra heating additions being increased by some 27 per cent. This will give them, since October 1973, an overall increase of 133 per cent.; the increase in fuel prices generally from that date until May this year, which is the most recent date available, was 87.3 per cent., but there will clearly be a margin to meet further price rises.
The Government are of course concerned about the impact of high fuel bills on poor consumers, many of whom are old. That is why my right honourable friend the Energy Secretary secured the suspension of disconnection procedures for old people during the winter and set up a review body to look at payment and collection methods for gas and electricity bills. This body initially chaired by my noble friend Lord Lovell-Davis and latterly by my honourable friend Mr. Gordon Oakes, has now reported. Most attention has inevitably been drawn to its recommendations about disconnections, as my noble friend Lord Lovell-Davis earlier emphasised. However, I should emphasise to your Lordships that the Government will consider this recommendation with great care in the light of the views of interested organisations and individuals with whom they will consult—naturally including the nationalised industries which are worried about the impact on their financial obligations. In addition to this somewhat headline catching recommendation, the Oakes report has also made much less controversial recommendations about improved payment systems et cetera, and many of these have been mentioned in this debate. These recommendations, too, will be considered, together with comparable recommend

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ations from the Commons Select Committee on the Nationalised Industries and the National Consumer Council.
Apart from improvements in payment procedures, other proposals have been made from time to time, such as free fuel allowances, fuel tokens, rebate schemes and tariff changes all of which I thought were fully explained by the noble Baroness, Lady Hylton-Foster. The Press recently gave much prominence to Mr. Arthur Scargill's idea for giving away the National Coal Board's coal stocks in order to generate cheap electricity. The Government are prepared to look at any proposals, but all these schemes—at least the latter—have their limitations and could expensively duplicate existing social security provisions. A Department of Energy booklet entitled Energy Tariffs and the Poor was published in February which inter alia analysed the effects of various general adjustments to electricity and gas tariffs. This analysis goes into great detail, but the fundamental point to emerge is that if arrangements are made to benefit small consumers at the expense of large, there is inevitably an adverse impact on the considerable number of poor people who are large fuel consumers because they have large families or inconvenient accommodation or are disabled or are simply elderly people who feel the cold. These large poorer consumers are in many ways the ones who most need help. So leaving aside any economic considerations—such as the desirability in general of allocating appropriate costs to consumers in order to encourage energy conservation—it is clear that no simple and satisfactory answer to the social problems can be found by making general tariff adjustments.
The noble Countess, Lady Loudoun, posed to me—and I intervene to reply to her on this point—two major specific questions. She asked me to state the provisional estimate for spending as it relates to concessionary fares for the elderly, blind and disabled in 1975/76 for England and Wales at November 1975 prices, and the figure is £75 million. In the light of her quite understandable criticism, which in part I reject because of the limitation of resources, about the concept of mobility allowance, I could say to her that unquestionably the scope of the
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mobility allowance scheme has been restricted and we have not been able to achieve all that ideally we should have wished to do. As your Lordships may know, we are trebling the previous annual expenditure of £13 million on mobility help for the disabled, but even so, in order to provide a reasonable sum of money for each individual, a limitation on the numbers who are eligible was inevitable. In fact it comes down to a question of cash and how we should deploy our resources.
Perhaps before I leave the subject of fuel usage I could touch on the very important subject of house insulation. None of us can afford to waste fuel. But the elderly, being on fixed incomes, can often afford to do so even less than the rest of us, and this point was made earlier by the noble Lord, Lord Strathcona and Mount Royal. The Government are aware of this and are taking steps to help old people enjoy the benefits of good insulation in the context of their programme for bringing the country's housing stock up to standard. So far as council houses are concerned, roof insulation may attract Government subsidy when installed in the interests of an elderly, or a disabled, occupant. We propose to emphasise this in a forthcoming circular on subsidy for local authority house improvement in the public sector, since not all local authorities seem to be fully aware of the position.
Any expenditure of this kind is of course subject to the overall control on local authority expenditure on house improvements and conversions under Section 105 of the Housing Act 1974.
Lord STRATHCONA and MOUNT ROYAL: My Lords, can the noble Lord tell us when that circular is coming out, because we are getting extremely close to the time when we ought to be taking some action, are we not ?
Lord KIRKHILL: My Lords, I do not have before me an exact date, although my brief suggests that it will be almost immediately. But I give the noble Lord an undertaking that I will make a specific inquiry and let him know. A large number of authorities have, however, been allocated additional expenditure limits for the current financial year—and it is important to emphasise this—under the counter-unemployment programme, to which

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spending on thermal insulation may be related, if it cannot be included in the normal improvement programme.
A further project on these lines is at present in preparation in the Department of Energy, who hope to present to local authorities nationally a financially attractive scheme for the insulation of local authority houses and public buildings—this would be particularly suitable for old people's homes. The Department of Energy hope to make an announcement on the subject fairly soon.
In the private sector—and I agree with the description given by the noble Lord, Lord Amulree, of the housing of many of our elderly, particularly in the private sector, where so many are living in very ill-fitted accommodation on ground floor and basement—improvement grant is not normally available, but may exceptionally be approved with the consent of my right honourable friend the Secretary of State for the Environment in the case of elderly or disabled applicants who cannot meet the cost of roof insulation without hardship. The task of carrying out insulation might indeed be one in which volunteers could play a major part. I therefore take this opportunity of commending it to any voluntary organisation currently seeking new ways of assisting old people. The noble Lord, Lord Strathcona and Mount Royal, mentioned the Job Creation Programme in the context of insulation. Perhaps I could remind noble Lords that this programme is designed to provide short-term jobs of social value for people who would otherwise be unemployed. The Manpower Services Commission pays the wage costs of projects which are organised and managed by sponsors who may be any organised group in the community. I am pleased to say that many projects so far approved involve help for the elderly, including some involving insulation of old people's houses. This is one further way, as I have been attempting to indicate, that the Job Creation Programme might be used.
In connection with the whole question of improvement schemes and energy conservation, the noble Lord, Lord Strathcona and Mount Royal, asked me earlier whether I could tell him how many authorities had used their additional allocation for energy saving purposes. I am sorry I cannot give the noble Lord
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a reply to that, because authorities do not need specific approval; thus, there is no referral to a central department and therefore the information is simply not available.
But despite all our actions in this field of heating, I fear that there will still be tragic cases of old people dying in their own homes in circumstances suggesting neglect and total isolation. In the past, the circumstances of these cases have often involved an element of lack of heating. Often, of course, the proper insulation of new housing is surely important, and with this in mind, the requirements of the building regulations were roughly doubled at the beginning of 1975. I should say at this point to the noble Lord, Lord Strathcona and Mount Royal, that as far as council housing is concerned, our view is that the housing cost yardstick is flexible enough to enable local authorities to install at higher capital cost heating appliances with low running costs.
My Lords, I am sure I do not have to express the concern which Government at all levels feel about the cases of the old dying tragically in their own homes. But it is too easy merely to express indignation that such things happen and to say that something should be done to prevent them—to say, for example, that health and social services support should be marshalled to help. The sad fact is that most people who die in these appalling circumstances seem to choose to be isolated and have actually rejected help offered them. Should we force them to accept it? If they are seemingly sane, adult people, should we insist that they accept help on our terms and conform to a type of behaviour which we think is best for them? This is surely one of the dilemmas of a caring society: The extent to which we should intervene in what we see as other people's misery when they do not want us to. I do not propose to dwell on this question, but I will say that the Government in all their policies aim to ensure that when people need help and are willing to take it, they receive it. Ultimately, however, the only answer to the social isolation of old people rests with ordinary people in the community. If everybody was willing to be a good neighbour there would be no social isolation.

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My Lords, it is not given to Governments in this country—whatever their political complexion—to take responsibility for meeting every conceivable need of the elderly or any other age group. Most people would not wish it. What Government must seek to do is accurately to reflect the wishes and attitudes of our society in how far they should go in that direction. They will end up by organising or providing help for some types of need on the one hand and leaving other needs to families, friends or volunteers on the other. This Government, like their predecessors, are attempting to strike a balance between those two options, a point taken very well earlier in the debate by the noble Baroness, Lady Faithfull. They are attempting to respect independence and freedom of action, while at the same time ensuring that help is available where it is most needed. Go too far one way and it adds up to neglect; go too far the other way, and you encroach on people's privacy. It is a difficult balance, but one which exists only because this is a basically humanitarian society.
Nobody would suggest that the balance is right at the present. The Government are only too well aware that their cash and service provision is not yet good enough. That is why Government have planned for improvements in our health and social services, and for better pensions for old people. The Government will continue to make improvements in these areas, within the resources available, and will also attempt to ensure, through our other policies, that the elderly live in a society receptive to their needs and at the same time mindful of their right to live dignified, independent lives.
7.6 p.m.
Lord STRATHCONA and MOUNT ROYAL: My Lords, with the notable exception of the two respective Front Benches who have perhaps shown some tendency towards verbosity as they get older, the authority of the speeches this afternoon has been matched by a commendable brevity. I am very grateful to all those noble Lords and Ladies who took part in the debate. I must congratulate the noble Lord, Lord Kirkhill, for dealing so sympathetically with a very wide range of matters, a large number
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of which were outside his own Department. I know the difficulty the noble Lord has been in, when most of his colleagues, I believe, are escorting the French President to the opera at this moment. He has acquitted himself magnificently, if I may say so.
However, I still do not detect quite the sense of urgency going through all the promises for future programmes and reports which he has dangled before us. This also permeates my congratulations to the noble Lord for what I can only describe as masterly evasiveness in not giving us any indication of the attitude of his Department towards the Oakes Report on the various problems, and in particular the disconnections. However, I am sure the noble Lord has the point, and I hope he will shortly put this right by making a more specific announcement. I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

EEC SUMMIT CONFERENCE, DECEMBER 1974
7.8 p.m.
Lord NORTHFIELDrose to ask Her Majesty's Government what progress has been made in implementing the detailed decisions concerning institutional progress and common policies made by the Summit Conference of the European Communities in December 1974. The noble Lord said: My Lords, I beg leave to ask the Unstarred Question standing in my name. I am delighted that it falls on a day when we have as our guest in this country President Giscard d'Estaing, who, if I may say so, clearly led and inspired the Summit Conference of December 1974, and whose hand is clearly visible in the Communiqué which came out at the end of that Summit Conference. In my view, that Summit Conference was momentous and historic. That is why I chose to raise this matter this evening, and to ask my noble friend to give a report on the progress that has been made on the many decisions taken at that time.
May I make three points by way of introduction to the questions I want to ask. First of all, I would say to my noble friend that I hope he will acquit me of any charge of being a headstrong federalist expecting everything to arrive

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overnight. I am nothing of the sort. From my own work in Europe, and from my long period in politics, I understand that nine very proud and historic nations who have lived separate lives for so long, whose economies have diverged so greatly, whose ways of life are so different, whose traditions and constitutions differ so greatly, are not going to be rushed overnight into a new federalism. Therefore, I regard the building of Europe as a long process which will certainly last the rest of my lifetime before we see any final results—and even then they probably will not be final.
So I take a cautious, pragmatic view of the way in which Europe will evolve towards union. I very much agreed with President Giscard d'Estaing when he said this morning:
" A nation cannot be decreed and organised by treaty. It gradually takes shape by virtue of its deeds ".
If this is true of a nation, it is very much more true of European union. It is going to be not a question of technical, mechanical paper constitutions; it is going to be a slow process of drawing together, learning to work together and reaching common objectives in company with each other. On the other hand, if it is slow and if it is pragmatic, I think it is nevertheless important for people in politics, and in a noble House like this, to put on pressure for all possible speed.
Here I would just make two points before I pass to my second major point of introduction. I am bitterly disappointed with the Tindemans Report. It was a pathetic failure, in my view, to face up to the grand strategy of European advance. I do not believe it should only have dealt with grand strategy; it had to deal with some of the detail. But what was wrong with it was that it was all detail and no strategy. This was a great historic opportunity missed, on the morrow of this great historic Summit Conference of December 1974. I shall go on in public life, as long as I can, trying to set out the alternative to Tindemans, which is, in my view, a much stronger grasp of the strategy, a stronger grasp of the institutional framework which could evolve in Europe, on the basis not just of what is in the Treaty but of the way we have evolved in running the Treaty and the Community, which is something quite different. I will not
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stress that today. I just remain bitterly disappointed. I was one of those who was consulted by Mr. Tindemans, and I tried my hardest over many hours of consultation with him and his advisers to get him to change. I am sorry I failed.
The other point is this. If we are putting on pressure—and I was hoping it would come through the Tindeman Report—I think we have a duty to say to the British Government that, of course, after the Referendum and after the period of entry, we do not expect Her Majesty's Government to take spectacular new initiatives in Europe. We are new boys. We have to feel our way, we have to be modest; we must not be impudent on the day we enter. But we are, or at least we ought to be, encouraged by a second thing which President Giscard d'Estaing said recently, and which I venture to quote. In an article in The Times on 19th June he said:
" Britain has taken stands on current issues in the Community, she has put forward no initiatives nor expressed any very structural views on the future organisation of Europe ".
When asked what he meant by " structural ", he said this referred to the institutional life of the Community, how it would be organised, the operation of its executive, administrative and representative or Parliamentary spheres.
He went on to say and twice repeated it, in the same article in The Times:
" It would be useful to know better what the British conception of the future of Europe is".
This is a point which I feel very strongly; that our time of settling in, if I may put it that way, in the European Community is now over, and it is now up to us to begin as soon as we can to take some initiatives. That is my first point, that although I believe we should be pragmatic and slow and patient, we nevertheless must move on to the offensive soon in our proposals.
My second point of introduction is this. I think we have really got to look at the Communiqué of December 1974 against the background of our diagnosis of the Treaty of Rome and the system that has grown up under it. Here I must say I am reminded of a story—perhaps it is apocryphal, as many of these stories are—about Sir Winston Churchill, one of those stories which we all hear and probably never believe. I think this

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story will strike a chord with my noble friend, because it refers to someone whom he and I will remember very well, Sir Alfred Bossom, a very genial Member of Parliament for many years, a great friend of many of us. Sir Winston passed him in the corridor one day, and said to his advisers, " Who is that man?" The advisers said, " Sir Alfred Bossom, Sir ", and Sir Winston is reputed to have said, " Bossom? Bossom? That's very strange—neither one thing nor the other ". In many ways the Treaty of Rome is like that. The European Community is neither one thing nor the other. It is not a treaty of federation. It is a hybrid international treaty. It contains federal elements, it contains supranational elements.
Let me take them one by one; there are federal elements where we have actually got law which we apply federally at the centre. We have the rules of competition, for example, federal elements exercised and run by the Commission. It has supranational elements in it, that we have in common certain policies, like energy or agricultural policy, or freedom of movement. We agree to have common policies. The third element in the treaties, or what has grown up round the treaties, which is a purely inter-governmental element. That is to say, there is no constraint, no federalism; it is Governments co-operating together. The most notable part of that is foreign policy, which is not even in the Treaty, but which we have added into the treaty system. On that there is no federal power; it is merely Governments agreeing to act together when they can.
What is really happening in the Treaty of Rome and in the European Community now is that we are seeing a period of upgrading of these elements towards a para-federalism over the years. More and more we act in common. More and more we agree rules in common. More and more these issues will move to something like federalism at the turn of the century or beyond. We have to look at every summit conference and every great advance in European structure against a background of diagnosis of that kind. Is it upgrading the institutions. Is it pushing common policies forward so that we see the final goal, at the end of the century perhaps, or later, beginning to
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emerge. So we have to look at what the summit of 1974 decided about the institutions, the powers of Parliament, in the light of that continuous upgrading of common activity to more intense forms of joint work towards union of Europe.
That was my second point, and I come to my third, before I finally put my questions. The third point is the importance of the 1974 Summit. Summits come and go. Some are hopeless, some make no progress, some make spectacular progress. This was one of the great ones, rather like 1972. Europe will proceed like this for many more years. Sometimes it will pause, sometimes it will accelerate, sometimes it will not do one thing or the other. This Summit was a spectacular one. But is was, interestingly enough, one mainly devoted to institutional progress.
I quote for the third and last time from President Giscard d'Estaing, from a Press conference of his some years ago. I forget whether it was just after or just before this Summit Conference. He said that when one raises the subject of institutions people immediately say, " What do institutions matter ? Tell us about the substance, about the policy ". When one talks about the substance, the policy, people then turn to you and say, " You are getting bogged down in detail. What about institutions ? " He is quite right. In other words, you have to take both together, or both when they are possible.
Sometimes in Europe at particular periods we will make progress in institutional matters. At other periods we will make progress in policy matters, in common policies. We must catch the tide, whenever it comes, in either of those directions, and both will reinforce the advance towards the final construction of European union. This was what this Summit was about. It was a period at that time when the opportunity was suddenly seen for institutional advance, while the chance of policy advance was receding for a little while. I shall come to that in a moment.
I must not be too long, so I come now to my specific questions with those three points as background: the three points being the need for steady progress; the need to look for steady upgrading of the

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institutions; and the need to grab the possibilities of progress whenever they appear. When one looks at the communiqué after the 1974 Summit Conference—and I am a " Summiteer "; I believe in the immense impetus that Summits give—the proposals and the decisions fall into three groups. Paragraphs 1 to 4 of the communiqué really deal with political cooperation and foreign policy. It is agreed that Summits shall henceforth be three times a year. A very good thing indeed, and this is now taking place. We accept that, and think this will keep up the momentum, or help to keep it up.
What happened to the second one? It was agreed that there should be a secretariat for the Summit, a very important mechanism which will create a body of international civil servants who presumably will have a vested interest in keeping momentum going. I regard that as of some considerable importance. Foreign Ministers were to meet not outside the Council of the European Communities, which they had been doing before to co-ordinate foreign policy, but now, building on the earlier Davignon procedure, foreign policy, by this communiqué, is brought right into the European Community system; a landmark, if ever there was one, that the European Community system was expanded in this way. The political co-operation—" initiating and coordinating " were the words used in the communiqué—was to be done in the Council and not outside. I ask my noble friend: is that taking place? Is it working that way ? Is he satisfied that it is making progress?
Furthermore, in those paragraphs it is said that the President in office would begin to act increasingly as spokesman for the Nine; and, paraphrasing again, the countries would gradually adopt common positions and co-ordinate diplomatic action in all areas of interest in affairs which affect the interests of the European Community. How far has that gone? How much success can my noble friend register in the common foreign policy field? I think of failures like Angola, where we did not act as Nine, or failures in the Lebanon, where we certainly seem not to have acted as Nine; Cyprus too, perhaps. What about the recognition of the Palestine Liberation Organisation in the United Nations? Did we act as Nine then ? I doubt it very much.
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I know that my noble friend will have other examples of where we did manage to agree and did co-operate, but it seems to me that there are some spectacular failures in that field. I should like to hear my noble friend's reflections on them. Of course, the last part of paragraphs 1 to 4 of the communiqué dealt with the possibility of the European Parliament's putting questions about foreign policy. Another great advance. This has taken place, and I am satisfied that that is under way.
I come now to the second group of decisions in the Summit communiqué, paragraphs 5 to 12. Again this was mainly institutional advance. Referring back to my introduction, the whole problem of upgrading, and the way we work together in searching for common policies. Paragraph 5, new common policies in areas to be decided on. I have not seen any. I should like to know from my noble friend whether there has been any outcome from paragraph 5, which seemed to herald some new departures in common policies in Europe. Paragraph 6, majority voting in the Council. I know that there has been an eight to one vote on the wine lake, and they have occasionally voted on things like calf subsidies, or whatever. I asked my noble friend a question in the House the other day and he was good enough to reply. But are we really making any start on voting in the Council ? One suspects that it is not as good as it should be, and that small beginnings are not leading fast enough to a general system of voting on perhaps relatively minor issues as a means of creating mutual confidence and moving on to bigger ones.
Paragraph 7, COREPER, the permanent representatives, to be given greater latitude and brought into foreign policy coordination. Has that happened ? Is COREPER working in this way ? Is foreign policy really being co-ordinated in this active way at the level of permanent representatives of the Community ? Paragraph 8: Greater use of the Commission to implement and manage the exercise of rules made by the Council. President Ortoli told one of the European Parliament Committees the other day that he had not seen any signs of that one. So I should like to know whether any of that has been projected, and if not, why not ? What new areas outside the Treaty—this is paragraph 9—have been selected for more co-operation ? What is happening about

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the proposed European passport in paragraph 10? Paragraph 12, we know about. That was the proposal for direct elections. But the end of paragraph 12 says that the European Parliament is to be given powers in legislation. I have not seen any. When are they coming? What is actually going to be proposed? This cannot wait much longer, because the Parliament will soon be elected and will want to know a greater reality of power.
I come finally to the last group of proposals and decisions in the communiqué, and these were economic and associated policies; the whole question of greater policy co-ordination in those kinds of field. Paragraph 19 talked about permanent consultative machinery of economic Ministers. I know this exists, but how often do they meet ? How successful is it proving in co-ordinating economic policy ? There was talk of guidelines on the emergence from the recession, and a plan to get convergence of the economies of the Nine. Has there been any of that? Is there any approaching agreement on the reform of the international monetary system coming out of the Nine ? That is one thing on which we surely must be taking a lead pretty soon.
Then of course you get the remaining paragraphs. Regional policy we know has begun at a miserable level, if I may say so. A small beginning. Paragraph 25; co-ordinating employment policies. I know something has happened on this. Paragraph 26, " When the time is ripe " an increase in the Social Fund. When is the time going to be ripe? This is very important indeed if we are to get convergence of economic growth in our Community. The Social Fund and the Regional Fund must be much bigger than they are. Paragraph 28 talked of greater harmonisation of the degree of social security in each of the Nine and set that on foot, but I have not seen any results of that one, either. Lastly, the heads of Government were asking the institutions, in paragraph 33, to work out and to implement a common energy policy in the shortest possible time. Dear me! that is 18 months ago. I have not seen a great deal of progress on that one.
I apologise that inevitably towards the end of my remarks it has become a
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catalogue of questions, but they are so important. They illustrate again how historic, how momentous, if I may say so, this Summit Conference was. It was one of those occasional breakthroughs which chart the progress of constructing Europe. I hope that my noble friend will forgive me if I am slightly impatient, if I am nudging his elbow, if I am saying that against the background of my way of looking at the Community, the time is right for Britain to say, now that the Summit Conference is behind us, now that our place in Europe is assured, with the growing confidence of our European role, that every one of those parts of the communiqué matter desparately and that we will help in whatever way we can, modest though our help may be—we are not the boss of Europe; we can only contribute in a modest way to the European construction—and that Her Majesty's Government will now say clearly that we will aim to get every one of those paragraphs implemented so that the European construction can proceed apace.
7.31 p.m.
The Earl of BESSBOROUGH: My Lords, we should be grateful to the noble Lord, Lord Northfield, for asking this Question. Despite the warmth of the evening, it is a little cooler here than it is in Brussels or Strasbourg and, despite the lateness of the hour, we should be grateful to him for having raised a number of interesting points which cover a very wide field. It is difficult for us to do justice to them in the form of an Unstarred Question or indeed in any other single debate. However, it is useful to take stock from time to time of progress, or the lack of it, within the Community, and our debate is perhaps not quite the ragbag of items that was presented in another place last Thursday. Our debate is however bound to be a kind of omnibus discussion which could I think more usefully be broken down into at least half a dozen debates.
As my honourable friend said in another place last Thursday, nearly every national issue now has a European dimension. There are 37 paragraphs in the 1974 Communiqué as published in the European Community's Bulletin. It varies a little from the Stationery Office version in which the paragraphs are not numbered; I have

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been working hard on the same paragraphs as the noble Lord, but I do not know whether the noble Lord, Lord GoronwyRoberts has the same numbering. However, we can go ahead and not worry too much about the numbering of the paragraphs. The Communiqué deals with almost every aspect of Community affairs and I will therefore concentrate my remarks on certain specific areas, particularly on political co-operation, a little on the economic situation and Community policy on research and development and hope that my noble friends, Lady Elles and Lord O'Hagan, will cover other important aspects of Community policies.
Paragraph 3 of the Communiqué deals with the meetings of the European Council, a body which, as the noble Lord pointed out, is outside the Community institutions. There were three of these in 1975 and we should ask ourselves to what extent those meetings have resulted in progress in political co-operation. The meetings have been characterised by the fact that they deal with a wide variety of matters of greatly varying importance, as the noble Lord will recognise. At Dublin in March 1975, the discussion ranged from New Zealand butter to the world economic situation. Other meetings have dealt with the questions of Cyprus, the United Nations and Rhodesia, but the resulting resolutions did, I fear, little more than express either pious hopes or general desiderata in regard to co-ordinated action, or merely reaffirmed previous statements.
In my view, the European Council, this body outside the Community institutions, has singularly failed to carry out the objectives set by the 1974 Summit, and I have sometimes felt that using the European Council in this way has perhaps been a method of avoiding decision-making in the Community rather than helping it to take decisions. For example, at Brussels in July 1975 all important matters concerning the economic and monetary situation were merely passed back to the Council of Finance Ministers within the Community. Then, at Rome in December 1975 the Council was unable to reach any decision on the convergence of economic policies. At Luxembourg in April 1976 no decision was taken on the economic and social situation, on direct elections or on the Tindemans Report, about which, incidentally, I was not quite so disappoin-
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ted as Lord Northfield. It is true that there have been a few successes. The greatest of them of course was the renegotiation of the British entry terms, which was finally agreed in March 1975. At the same meeting there were useful preparations for the North-South Conference. Then, in December last, the Council made a thorough study of the control of Community expenditure and budget policy. It was also agreed in principle that direct elections should take place in 1978.
As Lord Northfield said, paragraph 4 of the Communiqué refers to diplomatic action to be co-ordinated. It refers, as he said, to the duty of the President of the Council of Ministers to express the views of the Nine, especially before the European Parliament. Unfortunately, very little of this part of the Paris Communiqué has been honoured. It is true that common positions were adopted over the Conference on Security and Co-operation, the Euro-Arab dialogue, on Portugal and on Rhodesia; but in regard to Cyprus, the Arab-Israeli dispute, the Lebanon, Angola, the Nairobi UNCTAD Conference and the co-ordination of the activities of the United Nations, the Nine have failed repeatedly either to take any action or, if a joint position has been reached, to adhere to it. The worst examples were of course Angola, when one Member State announced its policy before the others, and, perhaps the next worst, was the failure to adopt a common view on the recognition of the Palestine Liberation Organisation.
I was particularly interested to look back at paragraph 7 of the Communiqué, on page 4 of the Printed Paper, regarding the importance of the Committee of Permanent Representatives, COREPER as we call it, and its Working Parties that play such an important role in preparing for Council decisions. I agreed very much with the Communiqué when it stated that only the most important political problems needed to be discussed in the Council of Ministers, and I should like to know whether Lord Goronwy-Roberts can give examples of COREPE playing a stronger role. In one industrial sector with which I have of late been very closely concerned—that is, the Commission's proposals on aerospace, or, as the Community describes it, the aeronautical sector—I was disturbed to find less than a month ago that no COREPER Working Party even existed

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to consider this highly important document. I was gratified to learn later, after I had complained about this in the relevant Parliamentary committee, that a Working Party had now been set up and that it was awaiting with interest the views of the European Parliament, which will be discussing these proposals at the plenary session next month, having already debated them at considerable length in three of the Parliament's committees this year. I should like to know whether the Minister is happy about the functioning of COREPER and whether he considers that its role has been strengthened.
Paragraph 8 of the Communiqué also on page 4 of the Printed Paper, referred to the Treaty provisions to be used to confer on the Commission powers of management and implementation. I can confirm what Lord Northfield said; namely, that the President of the Commission, Mr. Ortoli, has told the Committee of the Parliament that the Commission has not been given such powers. I would add that I was interested to hear the President of the Council, Mr. Gaston Thorn, answer a question during our last plenary session in Strasbourg. He replied to the effect that he considered the Commission to be no more than a general secretariat to the Council of Ministers. This took the breath away from some of us. It was a very positive reply by a man who always speaks his mind in a positive manner.
Paragraph 9 of the Communiqué speaks of co-operation in areas outside the scope of the Treaties. Like the noble Lord, I should be interested to know whether the Government can give us some idea of the scope of work in these areas which, budgetarily speaking, can presumably come within the scope of non-compulsory expenditure over which the European Parliament has the final say. I know that there has been some agreement in this field on ways of dealing with political terrorism, and of course I should like to stress particularly to the noble Lord, Lord Northfield, that a coherent research and development policy which is outside the scope of the Treaties has been developed. It has been developed especially in the field of alternative energy sources. It is a pretty substantial programme, amounting to 90 million units of account in the first place and when we get to the fusion programme these sums will be vastly greater.
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The Community has an energy research policy which has been developed even if the Community has not been able to agree on oil prices and other significant aspects of energy policy. I welcome at least this not insignificant advance, even if the expenditure is only a very small percentage of the total national R and D expenditure of Member States.
As I say, I cannot in a speech short enough to fit into an Unstarred Question debate go through anything like the principal areas covered by the Communiqué. However, I hope that my noble friends will cover some of the other important sectors which have been widely and constantly under discussion since the Communiqué was issued over a year and a half ago. I hope that something more will be said about regional and social policy and even agricultural policy, the question of direct elections and the proposed passport union. In coming to the end of my remarks, I should, however, like to refer to the paragraph at the bottom of page 4 of the Stationary Office version of this Communiqué and to say that no action has been taken on the legislative powers of the Parliament; although it is true, as I know from being a member of the Parliament's Budgets Committee, that the budgetary powers of the Parliament have been increasing significantly in the past few years, even if they still represent only a relatively small percentage of the Community's total budget.
On economic and social policy, I am glad to see that, in most Member States, unemployment has been tending to diminish in recent months, even if it does not appear to be doing so in this country. I hope my noble friend Lady Elles will say more about this and that she will agree that, in the social field, the good intentions of the 1974 Summit have not been completely without effect. But I regret to note that, in terms of economic growth and units of production per man, Britain is notably behind France and Germany. To compare our deficits and the extent of our borrowing provides an appalling picture of this country. Unless we can really match up to the hard work and productivity of our principal partners, our prospects seem pretty glum. The United States Treasury warnings published today should not go unheeded.

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Certainly, in various sectors, some perceptible progress has been made. It is, however, in political co-operation and progress towards political union that results have not been conspicuous. As one shrewd observer said recently, " Europe still has no global strategy, and the Community, which offers such a tremendous potential, has barely been used so far for the great strategic tasks which individual Member States are no longer able to carry out separately ". If it is to exercise effective influence in the world, the Community must learn to speak with one voice, not only on relatively non-controversial issues but on the whole range of international political problems. I agree with the noble Lord, Lord Northfield, that this will be a long process, but, as the President of the French Republic said in the Royal Gallery this morning:
" In the political realm in which the destinies of peoples arc shaped, Europe is absent or, what may he worse, silent ".
7.47 p.m.
Lord BANKS: My Lords, for those of us who believe that the whole future of our country is bound up with the establishment of an effective European union, it is difficult to conceive a more important subject than that raised in the Question before us tonight. I, too, am grateful to the noble Lord, Lord Northfield, for having once again directed the attention of the House to these matters. I listened with great interest to the speech of the noble Earl, Lord Bessborough, who brought his great experience of Community affairs to bear on the subject.
Behind the Question on the Order Paper lie deeper questions. Do we want a genuine European union with a European level of Government, democratically controlled, but supranational, or is national sovereignty to reign supreme and the European Economic Community to be regarded as nothing more than a customs union and a loose alliance of nations—an adjunct to their normal diplomatic activity and something extra-national rather than supranational ? It is in the light of those questions that we have to consider the progress which has been achieved with regard to the decisions of the Summit Conference in December 1974.
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As we have already heard, that Conference set up the regular meetings of the European Council.
I do not share to the same degree the satisfaction of the noble Lord, Lord Northfield, with that body. Doubts were expressed at the time. Mr. Ortoli, the President of the Commission, said in a address to the European Parliament on 18th February 1975,
"Let us not close our eyes to the danger that force of circumstances, lack of courage, confusion as to who is responsible for what, expediency, may tempt us to choose the low road of intergovernmental co-operation when we should he taking the high road of integration ".
Is that not exactly what has happened ? Is the European Council anything more than an attempt to express the Gaullist idea of l Europe des Patries?
Lord NORTHFIELD: My Lords, I wonder whether that is not really a false antithesis. Have we not to learn first by inter-Governmental co-operation to work together and then, as I suggested, gradually upgrade that to supranationalism and perhaps later to federalism ? I suggest that it is a false antithesis to say that we can choose the other option right away in many spheres.
Lord BANKS: My Lords, I would not myself regard it as being a false antithesis, because it seems to me that in accepting the Treaty of Rome and its implications, we were accepting the principle of a supranational institution, a supranational authority. I think that this is implicit in the Treaty. Therefore I think we have committed ourselves to that principle and the danger is that by working through bodies that are outside the institutions which have been created under the Treaty, we may slide back from the degree of supranationality, limited though it is, which we already have.
I can see the point of having the leaders of Europe being the people who are responsible for controlling the activity of the Community. Yet at the same time, I very much doubt whether we are going to have Europe run by national leaders in their spare time, which it seems to me is what is happening at the moment, and we shall have to come to the time when there are Ministers who are spending their full time on this job. Until we get that situation, and until their jobs are

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regarded as even more important than the jobs of national Ministers, we shall not find the Community run as effectively and as efficiently as we all want to see. When we come to consider whether the European Council has produced the results, when we apply the famous pragmatic test—which is supposed to be the test which we British are so fond of—we find, for example, that John Palmer, writing in the Guardian, on the 12th of this month could say:
" The last summit conference of Common Market Heads of Government in Luxembourg last March proved so fruitless that it led one foreign Minister to remark, The more we meet, the less we agree. How long can the Community stand the strain ? ' ".
There is the passing backwards between the Council of Ministers and the European Council, as the noble Earl, Lord Bessborough, pointed out, which tends to hold matters up, rather than expedite them. That is one of the problems that we have to face at present.
Mr. Tindemans wanted to bring the European Council within the institutions, and quite clearly this is the object of that part of his report. I should like to know what the Government feel about that. Do they accept that? In particular, do they accept the statement by Mr. Tindemans that the European Council should,
"act in accordance with the forms and procedures prescribed by the Treaties "?
This would seem, among other things, to involve a move towards qualified majority voting; certainly Mr. Tindemans recommends this for the Council of Ministers. The Summit Conference in December 1974 had this to say about majority voting:
"In order to improve the functioning of the Council of the Community, they consider that it is necessary to renounce the practice which consists of making agreements on all questions conditional on the unanimous consent of the Member States ".
I wonder what progress is being made among the Nine? The noble Lord, Lord Northfield, also asked this. What plans are being worked out among the Nine to move towards majority voting where it is prescribed in the Treaties?
The Eighth Report of the Commission on the Activities of the European Communities in 1974 pointed out that the deadlock in the Community decision-making system was due to the fact that the principle of unanimity, even when not explicitly invoked, overshadowed the
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entire range of Community activity down to the smallest detail. As we have already been reminded, the Summit Meeting in December 1974 called for direct elections to the European Parliament as soon as possible, and we know about the problems which have arisen in connection with that in recent months. I wish to ask the noble Lord who is to reply whether he can give any opinion as to whether it is now likely that at the Summit Meeting in July we shall see a convention agreed for direct elections, and whether the British Government, fortified by the report of the Select Committee, feel that they can now go forward with constructive proposals of their own in this particular field ?
The Summit Conference in December 1974 spoke of the competence of the European Assembly being extended, in particular by granting it certain powers in the Community's legislative process. I am wondering whether any progress at all has been made on that. Mr. Tindemans also spoke in his report of a growing exercise of the legislative function on the part of the Parliament. Have the Government any proposals themselves to put forward as to how that might he brought about? If we are to move towards a supranational, integrated Community, then it seems to me that it is essential that we should have a move towards qualified majority voting in the European Council and in the Council of Ministers, direct elections to the European Parliament, and increasing power for the European Parliament. All these things seem to me to be essential.
Equally important is a clear interpretation of the concept of European union. The Summit of December 1974 concluded that the time had come to agree as soon as possible on an overall concept of European union. That was why a report was commissioned for Parliament, and why there were the reports involving the court of justice and the Commission, and, indeed, Mr. Tindemans' report as well. What is the Government's reaction overall to the Tindemans' report, about which the noble Lord, Lord Northfield, was not very enthusiastic, but which nevertheless contains a considerable number of proposals which, if put into effect, would take us considerably forward along the lines I have suggested in my earlier remarks? Do we accept, for example, that we should present a united front to the outside

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world on all occasions? Do we accept Mr. Tindemans' idea that we should have one person, or one country, to speak on behalf of Europe, on particular matters at particular times, to the United States of America?
If that is accepted by the Government, then how do they reconcile it with the separate representation of West Germany, Italy, France and the United Kingdom at the Puerto Rico Summit with the United States, Canada and Japan? Do the Government think that the resentment that that caused is settled by having the EEC as an additional member, or should there not be just one EEC representative and delegation at such a conference? Reference was made earlier this evening to occasions when the line had been divided, and last night in this House we were considering the UNCTAD Conference and, unfortunately, the line again divided there.
Do the Government accept Mr. Tindemans' dictum that the Member countries of the EEC have an obligation to reach agreement on all matters affecting their attitude to the outside world?—not just that they should try to reach agreement and then go their own way if they cannot, but that they should feel that they have an obligation to reach an agreement. Finally, the President of the Commission in the covering letter which he sent to the Council of Ministers with the report on union of the Commission said this:
"The Member States, tempted by purely national solutions, have faced international discussion divided. The Community institutions have been too weak, and the means at their disposal too meagre, to counteract this tendency."
Do the Government agree that that is an accurate description of the situation? If they do agree, do they agree that it is a serious situation, and what plans have they to put the matter right?
8 p.m.
Lord O'HAGAN: My Lords, I have enjoyed this debate so far, and I have enjoyed it because it has reminded me of debates in the European Parliament. Apart from the fact that it has been of high quality of itself, we have been talking about the European Commission, which is accountable to that Parliament, and we have been talking about the European Council, which should be accountable to that Parliament. But I want to talk about
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the British Government, who are accountable to this Parliament. In doing so, I do not want to look backward and complain; I want to look forward with anticipation. So in commenting on some of the failures of the past, I am trying to use those failures as a way of pointing towards what should be, and could be, the successes of the future. I have certain fixed points in my mind. We are going to have a new Federal Chancellor in Germany, a new President of the United States and a new President of the Commission in Brussels, and we are going to have the British in charge of the Council of Ministers at the beginning of next year. So when criticising quite severely the Government of the noble Lord, Lord Goronwy-Roberts, for some of what has happened since the Summit Meeting to which this debate is tied, I am not attempting to " knock " him—I am far too fond of him for that—or the Government for their own sake, but I am trying to focus our minds on the future, where we should avoid the mistakes that we have seen in the past.
I must confess to your Lordships that I spent five years of my adolescence wishing to be ordained as a priest, and if I were preaching tonight (which I am not going to do) I would choose as my text some words of the noble Lord, Lord Goronwy-Roberts, in our debate on the 20th January, when he said, at col. 454:
" Whenever this country asserts its proper national interests in its obvious national context somehow everybody falls on it and criticises it for doing what so far as I can see the rest of the Nine are assiduously doing all the time, and nobody says a thing ".
The noble Lord may have felt that and he may have been justified, but the spirit of what he said, if it represents the spirit of the Government in Community matters, is not a complaint about them; it is an epitaph on the futility of our own efforts inside the Community. Let me explain. I am overstating it to make it clear without going on for 48 minutes, as some speakers have done recently. If the French can get away with something which is in their own national interest and seem to be comniunautaire, we should be able to do the same; and if we cannot, it is a failure of our diplomacy. If we are criticised for being selfish and we cannot " get away with it " occasionally, it is sometimes our failure and not their nit-picking Anglophobia.

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My Lords, how are we going to change that? I am afraid I must explain my views as to what has gone wrong in order to point to what could go right. There are three failures. There is a failure of political will in the Cabinet. That explains itself. There can be no cohesion on many Community matters. There is a failure of co-ordination inside the Government, between the Cabinet Office and the Foreign and Commonwealth Office, I suspect but do not know. But I more than suspect that there is a failure to prepare our position in the Council of Ministers and in Brussels in time, by lobbying and by preparing the ground, as a result of the political deadlock which sometimes happens in the Cabinet, so that there is not time to do it. Above all, because of these two, there is a failure of vision. I used the metaphor of preaching. The Community is a matter for belief, faith and trust; and if we do not at least doff our hats to the sacred text that so many of the others in the Community believe in, we cannot expect them to excuse our forays into nationalism. It is the lack of vision that makes it more difficult for us to be excused. If the new Foreign Secretary can give what President Giscard d'Estaing was asking for, which is an appearance, and something of a reality, of an overall gaol towards which the Community is moving, and towards which Britain inside the Community is giving a shove, then, and then only, will it be easier and more acceptable for us to impose, if and when we want to and need to, our own particular national interest without being continuously criticised for it.
My Lords, so far as the debate this evening is concerned, I suspect that there are items in which we in Britain have a very special expertise, where we have special interests and where we could make a special contribution. In the field of agricultural reform we have a great deal to offer as long as we do not keep moaning on and on about deficiency payments and things which are part of our imperial past. We have an enormous experience of managing a highly efficient agricultural industry. The time is right for a structural reform. It would be appropriate for us to lead the way, when the Germans are able to think again seriously about Community matters, in suggesting practical
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mechanisms for dealing with the 3 million or 4 million surplus cows that there are in the Community and which give us so much trouble at times. We could do something which was in our own interests and lead the Community at the same time, because, apart from Ireland, we grow the best grass in the whole of the Community.
Then, again, in the field of employment policy, there is a tripartite conference of the two sides of industry and the social affairs Ministers tomorrow. If the noble Lord has anything to say about that, I am sure we should like to hear it. We have a highly-developed system for discussing things among unions, management and Government—so developed that it has almost taken over the role of Parliament. It may be that that is a field where we can help the Community, in bringing the unions into the construction of Europe, as Mr. Gormley and Mr. Basnett have already started to do in such a constructive way. That, again, is something special and British that we could add constructively, and not seem to be dragging our feet. Then, if we can avoid having the donkey's tail pinned on us about the European Parliament, that would be marvellous as well. I hope the noble Lord will be able to say something about the Government's attitude, if possible, to the report which has come from the Select Committee in another place today, though naturally one would not expect a great deal in detail.
My Lords, I have not tried to be rude for the sake of rudeness. I have tried to use this debate, instead of as an academic seminar, as a way of looking to see how the future could be changed to Britain's benefit and to the Community's benefit. We are going to have a special chance. The President of the Commission may have the opportunity of having some colleagues who agree on certain matters, and may have people who are able to work together for a change. He may be able to evolve certain policies that they all want to achieve inside the Commission—something which has never been heard of before. He may even be able to reorganise the Commission inside, so that the Directors-General occasionally speak to each other. One Director-General may dare to discuss, and he allowed to discuss by the Cabinet, before it gets to Cabinet

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level, the overall implications of any particular sectional policy. This is something which I dare to mention, although it is not really relevant to the debate because the noble Lord, Lord Harris of Greenwich, is sitting opposite. But there is an opportunity to regain some of the credit we have lost through squandering the capital of the success of our referendum. We have had the success of that; we have disappointed people. Now is the chance to show that we meant this referendum and that those people, the politicians who asked for the referendum, will go and carry on what the majority of the people have asked them to do and that Mr. Wilson's words about playing a meaningful role in the Community are going to come true.
My Lords, it is always difficult, if one is talking about something about which one feels extremely intensely, to be dispassionate, especially when one has made another speech earlier in the afternoon. I apologise for any excess of enthusiasm in the way I have expressed myself, but I would hope that when he comes to answer the noble Lord will speak not only from his brief but from his heart. We know where his heart is in this matter, and that he will be able to say that, however we may differ about the past, there is a real chance that inside the Government there is real thought and serious thought going on now about what we in Britain can contribute at the beginning of next year inside the Community.
8.11 p.m.
Baroness ELLES: My Lords, the noble Lord, Lord Northfield, has done the House once more a service in drawing attention in this particular case to what is undoubtedly to my mind one of the most important foreign policy and domestic policy documents of recent times to which the United Kingdom contributed and by which developments in the United Kingdom must be influenced. I know that the Minister will be aware that there are two issues which always arise when the noble Lord, Lord Northfiled, puts down these Unstarred Questions on Europe. The first is that, arising from the one Question, the Minister is almost bombarded with a series of further questions to which, of course, we hope that answers will be given but, nevertheless, do not always expect
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them to be given. But I think he will also be aware that each time the noble Lord has put down such a Question, every Member of this House, from whichever side of the House, has spoken with the deepest concern for the future of our country, with the deepest concern for the future of our country in Europe and even more so with very deep concern as to the views of the Government on the future of Europe in the world ; and, furthermore, in order that the Government should have a chance to be able to state their views so that the people of this country should know what those views are and how the Government see our future bound in with Europe.
My noble friends Lord Bessborough and Lord O'Hagan have touched on many important issues, as has the noble Lord, Lord Banks; so that I shall try not to overlap any more than is necessary the points to which they have already referred. But there are very considerable and important issues connected with the progress of the institutions and on the convergence of policies so that it is almost impossible at some stage not to cover some of the points that have already been referred to. I understand that so far as the issues of direct elections and the Tindemans' Report are concerned, we might have an opportunity to discuss these in greater detail when we have the chance of debating the White Paper on the developments in the Community over the last six months. If I do not touch on these two aspects noble Lords will understand that it is not because I underrate their importance in the policies of the development of Europe but because we shall have this opportunity later.
My Lords, the Communiqué provides practical guidelines, as I see it, for all future co-operation both within and outside the terms of the Treaty of Rome, and I must say that I consider that it was a traumatic episode for the Community as a whole that this spirit of co-operation which should have and could have contributed to progress both in the development of the institutions of the Community and its policies was completely halted by the United Kingdom and by the Referendum. Noble Lords will understand that I do not want to rake over old history. This is not the purpose of the discussion and I do not think it will be helpful, but I think that it should be said that if ever institutions

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were put to the test, as a test of the quality of the individuals concerned, it was in the period leading to the Referendum.
It is my personal opinion that the Commission and the other institutions of Europe—the Council of Ministers and the European Parliament—composed of members of the Nine Member-States all of whom are directly concerned, some even with their own jobs, never received the recognition that they deserved for their patience, tolerance, understanding and, above all, their evident deep desire that Britain should remain in the European Community. I would refer to paragraph 35 of the Communiqué which is directly relevant here. It is referring to Britain's membership of the Community and it is stated:
"that if unacceptable situations were to arise, the very life of the Community would make it imperative for the institutions to find equitable solutions '."
I think that we may all be grateful to the institutions that equitable solutions were found to the satisfaction of the United Kingdom Government, its people and the other peoples of Europe.
After the Referendum, as we all know, 67 per cent. of the electors decided that it was in Britain's interest to stay in Europe. We have all looked for British initiative and co-operation in developing the institutions and in the formulation of policies. We looked first, as my noble friend Lord Bessborough has already said, to the role of the European Council and Britain's own role in that body. It was set up, as is said in paragraph 2 of the Communiqué, because the Heads of Government recognised:
".…the need for an overall approach to the internal problems involved in achieving European unity and the external problems facing Europe …".
I will not go into detail which has already been covered by other speakers, but I think that it would be interesting to know how far the European Council has had an overall approach on major issues and what role the Government see the European Council should play.
It has been said in another place by my honourable friend Sir Peter Kirk that the European Council has acted not as the spur that was intended but as a brake, because it was dealing with so many varied subjects and asked to make decisions
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not because decisions were needed at that level but because, and only because, bodies at lower levels had failed to make the necessary decisions. I would ask the Government how they view the role of the European Council, whether it is to discuss major policy for the future or everything from butter to world problems.
Yet, not only for Europe as a whole but also for Britain as one of the Western industralised countries, economic issues are even more important, not only in domestic but also in foreign policy. The economic independence is gradually developing the whole time, but what joint actions are being initiated? What joint commercial ventures do the Government encourage? Are the massive sums we are receiving from the European Community to assist in our own economic restructuring being considered on an overall basis or just on a piecemeal basis by different Departments without sufficient consultation between Government and local bodies? We only have to think of all the numerous European foundations—the European Social Fund, the European Investment Bank, ECSC, CAP, to mention only some of them—to see that last year we had a plus of £57 million from all these sources. Are we using them in a spirit of co-operation with Europe? Are we trying to improve our economic growth in order to catch up with other countries from whom we are getting ever further away?
Then we turn to paragraph 19 which refers to the economic convergence. It will only be meaningful if it works towards Community solidarity and is based on effective consultation machinery. Does that consultation machinery exist ? Is it in action ? Is it functioning well ? Might we know more about it? I accept that the Minister may not be able to answer the question specifically now. At some stage I think we should have the right to know what the Government are doing on this particular action, whether we are in fact co-operating in the economic field. It is the economic structure of the Community on which all our co-operation is based.
There is another area in which co-operation has been evident. I say this with the greatest of pleasure because all share the deep concern of the Western industrialised countries for less developed countries. It is not specifically mentioned in the

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Communiqué. We should recognise that one of the great achievements of the Community was the Lomé Convention. If ever there was a spirit of co-operation, recognising a need for vast numbers of the world's population, it was shown by the conclusion and adoption of that Convention.
The development of political co-operation, however desirable, will not be achieved without proper co-ordination of diplomatic action envisaged in paragraph 4, which says:
"With a view to progress towards European unity, the Heads of Government reaffirm their determination gradually to adopt common positions and co-ordinate their diplomatic action in all areas of international affairs which affect the interests of the European Community."
Where is that diplomatic action which is meant to be so desirable and which should have an even more desirable end? A look at the voting on resolutions at United Nations does not lead one to believe that co-ordination is 100 per cent. effective, or indeed sometimes existent at all. It should be said in fairness that President Rumor, at the United Nations special session last year, made an excellent speech, uniting, as I understood it, the policies of all the Nine. This was an example of close co-operation.
Reference has already been made to UNCTAD. My Lords, so many have had experience of working in the United Nations. What do we learn, above all, in the United Nations? It is that it is not our own individual view that matters; it is what concerns the peoples within a region of the world. Why is the Organisation of African Unity so strong? It is not because they do not have problems—they have problems which are far deeper and graver than we have in Europe. They always speak with one voice; they always vote together on a resolution. This is their strength. Why cannot we Nine nations, who claim to have the oldest civilisation in the world, manage to vote together on issues which one would have thought were our common concern ?
I should like to turn now to the Commission. Only if we have adequate representation in the institutions of the Community can we make our own policies felt, our own presence felt. I mentioned to the Minister that I would raise this question. There was an article in the Observer last Sunday which referred
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to the fact that the United Kingdom have only two-thirds of the quota to which they are entitled in post in the Commission. I telephoned the European Information Office in London and they were kind enough to give me some figures. I say this not because I doubt their accuracy, but because I have not seen the document. I should like to refer to figures which are highly relevant. "A" posts filled by United Kingdom citizens are 331; for France the figure is 476; for Germany, 558, and Italy, 573. This will give an indication of the fact that we have not by any remote figment of the imagination reached the desired number to which we should he entitled.
It may be that there are not vacancies now; it may be a hangover from the Referendum. If you are going to have a change in balance between nationals, it is well known that some people have to be demoted, pensioned-off or whatever the organisational system might be. Nevertheless, I should like to know what action the Government are taking to ensure that when vacancies are available it is people from the United Kingdom who fill those vacancies—and the best people that are available.
I suppose I shall he teaching the Minister like a grandmother, to suck eggs, but he will know better than anybody that it is the first person who prepares the draft who has the best chance of getting that draft through. We all know that nationals in the Commission—quite rightly—tend to put their own views. This is a natural instinct, without blaming them for being nationalistic or possibly having a political bias. Surely, if we are going to talk about the Commission and Brussels, the way it acts and the way people in it behave, we should have an adequate representation of United Kingdom nationals.
We should he grateful—and I do not want to make a great issue of this point but, nevertheless, it must be said in fairness—if the Minister will allay the doubts which are constantly aroused by the activities of at least one member of the Cabinet who continues to attend and apparently support the Labour Common Market Safeguards Committee. As was reported in The Times, that particular Minister, when talking of the Common Market, said it was the biggest single constraint on getting the economy back in

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order again. Is this the attitude of a Cabinet Minister in charge of energy, one of the major aspects of the economic development both for this country and for the rest of the Community ? Do we have to put up with somebody who makes that kind of statement when the Government actually signed this Communiqué talking about convergence on economic issues ? Either you believe what you sign, or ask the Cabinet Minister to do what is in accordance with the policy of the Cabinet. Perhaps, on the other hand, the Minister will say that it is not the policy of the Cabinet or the Government to look towards convergence on economic issues; but then we have a right to know it because this document was signed by the United Kingdom Government, the same Government as are now in office. We should like some reassurance on this particular issue.
My Lords, time is getting on and there are many other aspects that I know we should all like to discuss, but one has to exercise a certain self-restraint. I know it is very difficult when talking about subjects—as the noble Lord, Lord O'Hagan, said—which are very dear to our hearts. We have covered a large area of the important aspects of the Communiqué. All we ask is that we can be assured that the British Government regard it as their duty to see that the next European Summit shows that the Government are concerned with the role of the United Kingdom in the European Community, and that they undertake to play their full part in developing the Community as is envisaged in the Communiqué of December 1974.
8.28 p.m.
Lord GORONWY-ROBERTS: My Lords, Lord Northfield's Unstarred Question refers to all the points mentioned in the December 1974 Paris Summit Communiqué on institutional questions and common policies. This covers a very wide area. Your Lordships will not expect me to deal at all exhaustively with every aspect of it. Certainly you will not expect me to answer the approximately 600 questions which have been raised in this debate under the aegis of a perfectly inoffensive-looking Unstarred Question. The Question raises a number of important matters. It should not also promote the
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proliferation of entire galaxies of other questions. Therefore I respond at once to the noble Baroness's implicit suggestion that I should listen carefully to all these questions and not, in the next ten or fifteen minutes, try to dispose of the 600 other questions which have been raised in the past hour.
The noble Baroness quite rightly said that if we are to look at the noble Lord's Unstarred Question and the important points it raises, we must apply the denying ordnance to ourselves and look to another occasion—possibly a more extended one—where at least three documents which come together can be properly debated. Those are, first, the Report of the Select Committee produced in another place and which emerged only yesterday, so that few of us, I suspect, have yet had the chance of reading and properly considering it. Secondly, there is the Green Paper. I would say that in essence the Select Committee Report matches up with the Green Paper in a great many respects. Thirdly, there is the regular report of activities in the Community—the " six-monthly report," as we refer to it, which is debated in this House. There will be a future occasion for that kind of debate which will deal with a great many of the questions which have been raised in this one.
Before I deal with the issues raised by my noble friend Lord Northfield, I should like to say this about the Tindemans Report. I agree that one of the most important decisions recorded in the Communiqué of December 1974 was the request to the Belgian Prime Minister, M. Leo Tindemans, to draw up a report to help the European Council in their search for a way forward towards an hitherto undefined goal of European union. It still remains undefined, and I am tempted to observe that there are as many varieties of ideas about the scope and nature of it in this House as there are among the Nine—and that is saying something!
We shall not reach this goal by popular rhetoric. Rhetoric offends by not using the right kind of words about what is essentially a very difficult bit of engineering—engineering plus psychology. I suppose nobody could do it better than British leaders, if sloganising and popular rhetoric would meet the case; but this is not going to do the trick. We need some hard

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thinking and hard work done about this. If I may say so, the very thoughtful book produced by my noble friend Lord Northfield, The Road to European Union, I find to be among the three or four best published contributions to proper thinking about what is after all a revolution— the conversion of age-old nationalisms into a quite new relationship.
This is the point at which not only loud shouting but hard thinking is essential. Is it enough to ask the British Government alone? I hope that the questions put to the British Government will, through the Official Record of today's debate, be considered also by the leaders of the other Members of the Community, because it is not enough to ask the British Government for answers to these questions and for initiatives, and to be asked to do something. Do what ? We are not quite sure. It is not enough always to put it on to the British Government. There are eight other Governments, and the Council of Ministers is as united, as initiative, as effective, as the will and purpose of its component national members permits it to be.
This is something we must realise, because it is only on the basis of that kind of realism that we can go forward. Otherwise we shall talk ourselves into inertia by applying to the British role in the Community the kind of incessant " knocking " that too many of us have been applying to the British role at home. This is one way of paralysing a country—a great country : the greatest in the European tradition. Of course it will give the lead, but it has a certain duty of preoccupation just now and for the next year or two to gird itself and organise its tremendous resources, mental and material. It should be allowed to concentrate a little on its own problems without being pulled and pummelled by so many kinds of insatiate demands. Give this country a chance, and it will once more astonish not only Europe but the world.
Now I go on to my noble friend's questions. He rightly asked for a progress report. We can give it. Most of us would like to see more progress made on the points he raised, but the rest of us will be glad that this much progress has been made, always remembering the nature of the task we have set ourselves,
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namely, the internationalising of a very nationalistic Continent.
The first point in the Communiqué was that the Heads of Government and Foreign Ministers should meet together at least three times a year to ensure
"progress and overall consistency in the activities of the Communities and on the work of political co-operation ".
This development has been consistently welcomed and supported by the British Government and in fact has been successfully implemented. That is a fact; a major institutional fact. My noble friend quite rightly gave us today its true value. It has now been endorsed by M. Tindemans in his report in terms with which the British Government are in agreement.
Next, my noble friend raised the question of political co-operation among the Nine. This has certainly developed since the Paris Summit, and certainly has developed at a faster pace during the past two years than it did between 1957 and 1972. When we feel a little discouraged by the pace of advance of these matters in the last two or three years—dating everything from the referendum—let us cast our minds back and note how far and how fast political co-operation and institutional integration proceeded between the founding of the Market and the time when this country joined: that is, 15 years.
The most significant institutional development, as foreshadowed in the Paris Communiqué, is the emergence of the President in Office as the spokesman of the Nine in relation to third countries and international bodies. This point was made by a number of noble Lords: how far is this a fact? It is a fact that the President now speaks on behalf of the Nine Governments. He frequently does so to a text approved by them but also often in his own words, indicating the consensus view which the Nine have achieved. There is a necessary flexibility here and an element of trust which, in the short time since the adoption of this idea at the Summit, has been justified.
The Paris decisions have also led to the erosion of some of the artificial divisions between Community business and political co-operation. While the legal distinction must be preserved, there is now a healthy co-ordination between the two spheres under the general control of the Foreign

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Ministers and the European Council. I see no reason to criticise the practice of the Council of from time to time referring to specialised Ministers the proper detailed consideration of major questions of future policy. I think this may well evolve into an inherent part of the Council, as a substantial and important part of the general constitution governing the Community, and I do not myself think that this is a point of weakness. Rather I would say that it is a point of strength of the Council as a whole. As it allows the Committee of Permanent Representatives to go a very long way indeed in discussing, and even a long way along the road of decision on important matters, so the Council should devolve to its specialised members consideration of the many important and complex matters that come before it.
So far as the development of the substance of political co-operation is concerned, I can with satisfaction report that political co-operation among the Nine has both broadened and deepened in the last 18 months. Their discussions are, of course, confidential and the House will not expect me to go into detail. But the House will be interested to know, for instance, that during the last General Assembly of the United Nations the Nine voted together more than 80 per cent. of the time. When one looks at it closely, there emerges not only an increasing amount of political co-ordination; they have also achieved a very substantial productivity, one might say. Roughly four out of five times at the United Nations they have acted and voted together. It may well be that this is not quite up to the bench mark of the OAU, but the Nine are not quite the OAU. These are the nine countries of Western Europe and 80 per cent. productivity is very well worth getting. During the 20 per cent. of the rest of the time when we did not act and vote together, it is fair to say that the issues involved reflected varying degrees of disagreement, and some of these areas—for instance, issues arising out of the situation in the Middle East—are important, and still have a residual national importance for various members of the Nine. But liaison and consultation among them is constant, and at the next General Assembly we hope and aim to improve on last year's performance, good as that was.
To give another example, the Nine have also kept in close touch over the Cyprus
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situation. They have not succeeded, any more than anyone else has succeeded, in solving the problems of that island. But I think it would be fair to say that the diplomacy of the Nine has made a contribution to preventing a serious deterioration in the situation. What has not happened is not news. Just as the United Nations itself may have prevented catastrophe more than once in the last 30 years, and because catastrophe has not happened it is not on the record and, therefore, is not counted as something in favour of the United Nations, so in the case of the Nine one cannot prove this. But it is highly probable that the démarche in more than one instance has helped to maintain a position of possibility for peace, and to prevent a catastrophic deterioration.
Last year at Helsinki, the Nine together made a major contribution, and they will continue to work together, as they are now doing, in preparation for the review conference in Belgrade in 1977. They have made a start on developing common positions on the difficult issues which we all face in Southern Africa. It would be easy, of course, to say that one or other has stepped out of ranks, or has sought to gain some illusory advantage by some diplomatic action ahead of the rest. This is the currency of change, and as my noble friend strove to show, and I think succeeded in showing, the test is not that everything has been done overnight or even in the last 18 months or two years. The test is whether, on the whole, we are advancing on this very difficult but worth while road. I think we are, even in our attitude towards the problems in Southern Africa. There are other examples of' co-operation which I could cite; for example, the Euro-Arab dialogue. These examples show that in political co-operation the Nine are succeeding in making the kind of solid progress envisaged in the Paris Communiqué.
The Paris Communiqué also records that the Heads of Government:
"…consider that it is necessary to renounce the practice which consists of making agreement on all questions conditonal upon the unanimous consent of the Member States".
We should note the carefuul wording of the Communiqué on this point, because it is not just the United Kingdom that has reservations on this question. We are all given to being very frank about the

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shortcomings of our own country, and very reserved about criticising the shortcomings of our friends and partners. That is quite right, but perhaps I may be permitted to say this much. On this, as on other points of practical reservation, the thoughtful reluctance to proceed more swiftly than many people would like the Nine to proceed is, to say the least, shared by many of our partners in the Nine. Without laying myself open to the accusation of being a bad European, I hope I can say that much.
We must note this careful wording, because it does not call for the immediate application across the board of majority voting. if it did, one would not need to raise objections. The air would resound in at least eight other languages to very practical and determined objections. In the first place, the Treaties themselves require unanimity on many major decisions, and specifically allow for majority voting in only a limited number of cases, and I am not aware that there has been an initiative from any quarter to amend the Treaty of Rome. In practice, of course, the Council has rarely resorted to formal voting. Normally it seeks to reach its decisions through the achievement of consensus. Why not? When we come to think of it, is not a decision reached by consensus more likely to be acceptable and to stick than one which may have to be forced through by vote?
Perhaps I may break off at this point to refer to the referendum, and this is only because I have been invited to do so by more than one noble Lord. Can we agree not to attribute all the difficulties of this massive experiment to the referendum ? May I ask those who are tempted to find in the referendum an alibi for all the difficulties that afflict the Common Market to ponder for one moment this proposition: would we still be in the Common Market but for the referendum? The British people are not all to be found in the milieu where these matters are habitually discussed and where certain ideas are taken for granted. I believe that the referendum made it possible for the British people to feel that they were entering the Community of their own political will. For that reason, the referendum was an inevitable and necessary bridge from a totally unacceptable situation to one which makes it possible for the British Government and people
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gradually to work towards the development of the kind of Europe that we all want.
The Communiqué also mentions the need to extend co-operation among the Nine to areas not already so covered. I was asked to indicate some of these areas. Suffice it to mention that since then the Education Ministers of the Nine have met to consider the beginnings of co-operation in educational matters and that preparations are well advanced for a meeting of Ministers of the Interior, as my noble friend will be called across the Channel, although I hope that he will continue to be called either Home Secretary or Minister of State for Home Affairs. These are two examples of moving in a coordinated European fashion into areas not previously formally co-ordinated.
On direct elections—I agree that this is a question of institutionalprogress—the House is well informed and I will not dwell upon them in the time available to me, unless, of course, I am pressed. The powers of the Assembly over budgetary matters are about to be extended when the Treaty signed on 22nd July of last year has been ratified. It is the view of the British Government, a view which is shared by others, that taking these latest amendments into account—they are important amendments and constitute one of the initiatives of Britain since its confirmed accession : namely, an improvement in the powers of the Parliament practically to control expenditure—direct elections should take place on the basis of the present powers. No doubt the European Parliament will put forward proposals for enlarged powers, including legislative powers, but we do not think that those proposals should be made before direct elections can be held. Our policy is to prepare for direct elections in the middle of 1978, and we are studying this policy practically and genuinely.
Because of their own private reservations about direct elections, I hope that nobody will endeavour to manoeuvre Britain into the position of being the one country which is dragging its feet on this matter. We are not dragging our feet. Some Members who have rendered splendid service in the Assembly—I refer to the noble Earl among others—know that elections conducted in the way that we conduct them here, related in time to local

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elections, possibly to Assembly elections and to the moveable feast of a British General Election which could be held at any time, throw up practical questions of organising and, indeed, possibly amending Statutes and regulations.
I am sure that my noble friend will allow me to say that the Home Office are studying these practical matters. We are doing so genuinely in order to cooperate with the rest of Europe in holding these elections in the middle of 1978. If other people have practical reservations about this, let them be heard and let them not be denigrated as poor Europeans. It is better to do properly these big revolutionary things, even if they prove to take a little more time than most people thought that they would, rather than to rush into them and finally have to chop and change afterwards and, perhaps, have further referenda to put things right.
These are the main institutional points in the document to which the noble Lord's Question refers. He put those points in an admirable speech and I appreciate the balance and thoughtfulness that his speech presented. The noble Lord did not hark back to the past; he looked to the future in insisting that the experience of the past should inform the experiment of the future.
There are a number of practical points—a few of the 600 extra questions—which in the next two or three minutes, although I have already taken far too long, I must try to answer. There is no formal quota for the number of people from each Community country. The Commission is expected to maintain a balance more or less approximating to the populations of Member countries. The United Kingdom is well represented in the senior posts in the Communities, but the proportion of United Kingdom nationals in junior posts does not at present correspond to the number that the United Kingdom might expect in relation to our population. I understand that one of the problems is that there are not enough United Kingdom applicants in the junior grades. This problem will probably correct itself as time goes on, and through their proper agencies the Government will certainly continue to do everything that they can to encourage and, indeed, to assist suitable people at all levels to apply for posts in the Commission.
Baroness ELLES: My Lords, will the noble Lord allow me to intervene? The figures that I have refer to senior posts in which we are very much under-represented. I explained that I did not see the document that contains these figures but I was informed that it is the senior posts where there is very much under-representation. I will not take issue now with the Minister but perhaps he will look into the matter to see whether that is correct.
Lord GORONWY-ROBERTS: By all means, my Lords. As at present advised, I am bound to say that the position is that the United Kingdom is well represented in the senior posts, but that it is in the junior posts where we fall short of what would be notionally a broadly proper proportion. Certainly, however, I will look into the question and see whether the advice that I have relates to the question that the noble Baroness has put to me.
On the question of the Tripartite Conference which the noble Lord raised, I have a good note here which I should like to read to him. He very usefully brought up this specialised point, and I should like to give him this information which I think he will find encouraging. We welcome the Tripartite Conference for the opportunity it provides for an exchange of views between Ministers dealing with financial and social affairs, representatives of the trade unions and employers' organisations and, thirdly, the Commission. I agree with him that we have in this country a background of experience in this kind of negotiation—tripartite discussion—that may prove useful in Europe. As I said, I should be glad to make available a copy of some notes I have made on this point because I know that he is particularly interested in this aspect of the matter.
On the function of COREPER—the body which is made up of the permanent officials in Brussels—a very great deal of business is settled in the Committee of Permanent Representatives. Some people think that too much is entrusted to them. It is a traditionally respectable view that not too much should be entrusted, certainly for decision, to civil servants. That is one view. I would say that the Council is very much in control but naturally extends a great deal of latitude to the Committee of Permanent Represent

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atives, always with the capacity for the Council to exercise the ultimate control and decision.
I am not myself unduly alarmed by the position there. I can well see this latitude being extended, with complete safety, in the next few years; but here we must hasten slowly because, as I have said, a substantial and respectable view is taken by many people, not just in this country but abroad, that we must not let the expertise of the adviser outstrip the control of the elected member—in short, the Ministers.
I will not deal with any of the other questions raised, but I will simply echo once more what the noble Baroness quite rightly said ; namely, that the record of this debate will be useful for Ministers in this country certainly, and, I hope, for Ministers in other countries of the Nine, because much of the criticism, the feeling of disappointment about the pace of advance, can equally be addressed to eight other Ministerial addresses and, indeed, we must learn to think in European terms, must we not, when we consider how fast Europe is progressing.
The noble Lord, Lord O'Hagan, and indeed the noble Baroness, Lady Elks, asked me for an assurance that Her Majesty's Government—and I quote the noble Lord—are " giving thought to " the present position of the Community and the way in which it should develop; and the answer, of course, is, " Certainly ". I know from my own Ministerial experience how much time and devoted energy is spent by officials and Ministers, and I know that this is true of the cognate Ministers concerned with Europe in this Government. If from time to time we raise questions of real difficulty, it is not because in any way we want to arrest the proper development of this tremendous experiment; it is because we wish to see it based firmly on proper foundations. This may sound trite. There have been one or two attempts in the history of Europe at rather idealistically thoughtless union—our Scandinavian friends have experience of this. It did not last, because the basis was not properly thought out.
We are in the Community; we are deeply attached ; we are committed. We
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are making our contribution ; we hope to make an increasingly more valuable and effective contribution, given the proper understanding of our difficulties—our temporary difficulties—and that understanding, I suggest, must not only be accorded to us by our friends in Europe, but occasionally by our own neighbours in this House.

ANGLIAN WATER AUTHORITY BILL [H.L.]
The Queen's Consent signified and Bill reported from the Unopposed Bill Committee (on Recommitment) with Amendments.
COITY WALLIA COMMONS [H.L.]
Reported from the Unopposed Bill Committee (on Recommitment) with Amendments.
  EEC: GRANT AND LOAN ALLOCATIONS TO THE UK
  EEC: GRANT AND LOAN ALLOCATIONS TO THE UK
  RABIES: CONTROL OF ILLEGAL LANDING OF ANIMALS
  RABIES: CONTROL OF ILLEGAL LANDING OF ANIMALS