Sitting of 23 March 1976

Preamble
The House met at halt-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  STANDARD LIFE ASSURANCE COMPANY BILL
  Read the Third time and passed.
ORAL ANSWERS TO QUESTIONS
  SOCIAL SERVICES

    Owner-Occupied Houses
    Dr. Phippsasked the Secretary of State for Social Services whether she will exclude owner-occupied houses, which are the owner's sole dwelling, below a value of £10,000 in assessments for eligibility for social service benefit.
    The Under-Secretary of State for Health and Social Security (Mr. Michael Meacher): The value of an owner-occupied house is completely ignored in assessing entitlement to supplementary benefit, but it may affect the assessment of contributions under the legal aid scheme, the rules of which are the responsibility of my right hon. and noble Friend the Lord Chancellor, though claims are assessed by the Supplementary Benefits Commission.
    Dr. Phipps: Is my hon. Friend aware that the value of a house which is the only home of the occupier is, in most cases, unreal wealth, because there is no way in which the owner can obtain the benefit of the value of the house without selling it and thereby making himself homelesss? Is he aware that there are many people in my constituency—
    Mr. Speaker: Order. The hon. Gentleman is making out a case instead of asking a question.
    Dr. Phipps: Is my hon. Friend aware that there are many people in my constituency, particularly widows, whose only wealth is in their houses and who otherwise would be nearly destitute—who cannot claim any benefits from his Department?
    Mr. Meacher: I am aware of the point that my hon. Friend is making. It is precisely for that reason that the value of a house which is occupied by the owner is not taken into account in assessing supplementary benefit. In cases where a house is occupied by someone other than the owner, such as a close relative, it is taken into account. In those circumstances—I know this was the situation in the case which my hon. Friend referred to the Chairman of the Supplementary Benefists Commission—the Commission can exercise discretion in cases of hardship.
    Mr. Boscawen: Can the hon. Gentleman confirm that when someone is taken into a residential home of a local authority, his income and the value of his house are taken into consideration by the authority?
    Mr. Meacher: There are precise rules about how much income is taken into account when a person is admitted to a local authority home. He is permitted a proper amount for his own expenses—currently £2·65 a week.

    Mental Illness
    Mr. Whiteheadasked the Secretary of State for Social Services if she is satisfied with arrangements within her Department for monitoring cases of chronic schizophrenia and psychopathic disorders which cannot be treated within the resources of area health authorities.
    The Minister of State, Department of Health and Social Security (Dr. David Owen): No, Sir, though I am well aware of the difficulties. There is a shortage of suitable—including secure—accommodation as well as considerable uncertainty about the extent to which people with personality disorders can be effectively treated in psychiatric hospitals.
    Mr. Whitehead: Is my hon. Friend aware of the particularly tragic case of

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    a constituent of mine who would get such a place only after committing an act of violence? Can my hon. Friend say what arrangements are under way for the establishment of regional secure units in the Trent Regional Hospital Authority area, and what interim arrangements can be made until such units are established?
    Dr. Owen: All regional health authorities are currently looking at their capital programmes and revenue support. They were only recently advised by my Department that we shall both capital fund and revenue fund regional secure units. I hope we shall have proposals from the Trent area and I shall write to my hon. Friend.
    Mr. Moonman: Can my hon. Friend go a little further? This is a critical matter. What secure units will be established in East London and Essex?
    Dr. Owen: I recognise the concern of many hon. Members about this matter. We have been urging regional health authorities to provide these units for some time, but they have felt that there are complex planning arrangements to get through and there has also been some professional disagreement and some anxieties about the place of these units. I think the authoritative backing of the Butler Report on the value of the units and the fact that the Department will fund them should result in more rapid progress than we have seen in the past. I shall write to my hon. Friend about the particular problem of Essex.

    Fraudulent Claims (Prosecutions)
    Mr. Brothertonasked the Secretary of State for Social Services how many prosecutions were instigated by her Department in 1975 against persons for obtaining social security benefit fraudulently.
    The Minister of State, Department of Health and Social Security (Mr. Brian O'Malley): On provisional figures, the total number of prosecutions for all types of benefit offences instigated in 1975, including cases dealt with by the police, was 15,350.
    Mr. Brotherton: Does the right hon. Gentleman recall that in a Written
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    Answer on 4th March he said that there were 45,000 such cases in 1975. Is not the figure of 15,000 prosecutions ludicrously small, and a gross insult to the normal decent taxpayer?
    Mr. O'Malley: The hon. Gentleman does not take into account the type of case that can arise. For example, there may be very small sums involved, or we may be dealing with an estate after the death of an individual.
    Mr. Clemitson: Will my right hon. Friend say how many people do not claim the benefits to which they are entitled?
    Mr. O'Malley: My hon. Friend is right to raise that point, and the whole House should take it into account. For example, it has been estimated that up to 500,000 pensioners who have an entitlement—even if only a small one—to supplementary benefit do not apply for it. That is the principal problem of means testing, and that is why the Government's pension policies are designed to bring to an end, over a period, massive dependence on means testing, which is a characteristic of the life of too many retirement pensioners.
    Mr. Patrick Jenkin: Does the right hon. Gentleman recognise that the greatest indignation is caused by foreigners who come to this country and defraud the Supplementary Benefits Commission? Does he recollect the case of Lionel Goubin, of France, who lived at Southend for three months at the expense of the taxpayer? Why was not that discovered sooner? The man was making no serious attempt to look for work.
    Mr. O'Malley: The right hon. Gentleman must bear in mind that the entry to this country from EEC countries of people who are looking for work is expressly provided for within the terms of the Treaty of Accession. In the days when, perhaps, we had dissimilar views, I rather thought the right hon. Gentleman took the view that the Treaty of Accession was entirely acceptable to this country. I recognise the public indignation that is caused when people come into this country and defraud the system. The right hon. Gentleman will also recognise that the man to whom he referred appeared before a police court.
    Mr. George: Does my right hon. Friend agree that most hon. Members on both sides of the House wholeheartedly condemn those who scrounge off, defraud or abuse the social security system? The figures show that abuses are only an infinitesimal proportion of the 18 million claimants. Does my right hon. Friend agree that such criticisms arouse the anxiety of ordinary working people, and may deter claims? In view of recent incidents, what advice should we, in public life, give to ordinary people on morality or financial rectitude?
    Mr. O'Malley: I entirely agree with my hon. Friend's observations.

    Junior Hospital Doctors
    Mrs. Chalkerasked the Secretary of State for Social Services when she expects each area health authority to have offered the new contract to its junior hospital doctors.
    Mr. Nicholas Wintertonasked the Secretary of State for Social Services if she is satisfied with the implementation of the junior doctors' contract of service.
    The Secretary of State for Social Services (Mrs. Barbara Castle): The draft implementation circular to which I referred in my reply to my hon. Friend the Member for Ashfield (Mr. Marquand) on 9th March was agreed by the Staff Side on 11th March, and the circular was issued to employing authorities the following day. The completion of individual contracts depends on agreement locally between the junior and his authority; and authorities who have not yet completed this process have been asked now to do so with the minimum of delay.
    Mrs. Chalker: I thank the right hon. Lady for that reply. Will she give an assurance that the meeting tomorrow morning between the Hospital Junior Staffs Committee and officials of her Department will have the authority to decide upon the final contract which was, in essence, first given to her Department more than three years ago?
    Mrs. Castle: I assure the hon. Lady that we have finalised our discussions with the Hospital Junior Staffs Committee about the implementation circular, and there is no difficulty about that. It went out immediately the hospital juniors
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    had approved it. It is a matter now of getting contracts offered locally within the context of the policy we have agreed with them.
    Mr. Pavitt: Will my right hon. Friend confirm that within the last four years the pay of junior hospital doctors has doubled? The pay of a senior registrar four years ago was £71 a week, and it is now £139. Did not junior hospital doctors receive, under the Labour Government, double the rate of increase that they received under the Conservative Government?
    Mrs. Castle: I agree with my hon. Friend. There is no doubt that those working in the health service at all levels have had more generous treatment under the Labour Government than at any time in the history of the National Health Service.
    Mr. Winterton: Is the Secretary of State aware that, unfortunately, many junior hospital doctors have little trust in the Government, and that the delay in finalising the new contracts will jeopardise the recent settlement? Will the Secretary of State give a categoric assurance that no doctor will have to wait until May to obtain his overtime payment?
    Mrs. Castle: Some of the delay has not rested with my Department. The timetable shows that we have been as expeditious as we could be in getting out the circular on the new contract. As soon as the HJSC had accepted the circular—we consulted it at every stage—we sent it out, on the following day. There is no delay on our part. I am as anxious as anyone that we should continue to sustain the better relationships with the juniors that we have managed to build in the long talks we have had over their new contract. I have asked the authorities to get the payments into operation if possible by the end of April.
    Mr. William Hamilton: Will my right hon. Friend confirm that one of the grievances of junior doctors was the excessive hours they worked? If that is the case, will my right hon. Friend look closely at certain reports that have appeared in the Press and elsewhere that many doctors are going across to the Continent and receiving considerable fees for work they do there in their spare time?
    Mrs. Castle: The freedom of movement provisions of the EEC apply here. My hon. Friend is quite right about that. I agree with him that one of the problems has been the excessive hours worked by juniors. Part of the agreement that I finally reached with them was that we should proceed to a joint examination of the problem of these excessive hours. I am only too anxious to press ahead with that.
    Dr. Vaughan: Does the Secretary of State realise that it is the contract that is the difficulty, and that that has still to be settled? Would it not be much more helpful if she admitted that she has made the most appalling muddle over the payment of the junior doctors, and put some urgency into her negotiations?
    Mrs. Castle: The hon. Gentleman always hopes to sustain any reputation he may have in the House by distortion of the facts. We are well aware of that. His supplementary question does not merit an answer, in the light of what I have told the House.

    Abuses (Special Investigators)
    Mr. Geoffrey Finsbergasked the Secretary of State for Social Services how many special investigators are actually in post in following up social security benefit abuse; and how many vacancies for such officers there are.
    Dr. Owen: The number of special investigators in post on 1st March 1976 was 370, and there were 33 vacancies.
    Mr. Finsberg: I hope that the Minister of State—the right hon. Member for Rotherham (Mr. O'Malley)—who is indisposed, will soon be better. Does the hon. Gentleman feel that these special investigators pay for themselves? Does he agree that most claimants of supplementary benefit are utterly genuine? Does he share the feelings of many hon. Members that abuses should be followed through as hard as possible?
    Dr. Owen: I am grateful to the hon. Gentleman. I am sure that view is shared by all hon. Members. Efforts are being made to bring the establishment up to strength, because we agree with the hon. Gentleman that the special investigators produce value for money and perform a very useful function.
    Mr. George Rodgers: Does my hon. Friend agree that the small number of prosecutions shows the decency of most people, under financial stress, who receive benefit from the service? Does he further agree that there is greater concern in the country about the wide abuse of income tax legislation?
    Dr. Owen: A measure of even-handed-ness is the answer. There is no use in concentrating on abuses of the supplementary benefits system when there are other widespread abuses, especially taxation abuses. The small number of prosecutions indicates that the vast majority of people do not abuse the system.
    Mr. Kenneth Clarke: Does the Minister accept that one reason for the small number of prosecutions is the limited amount of investigation that can be carried out with existing resources? Will he say why, in answer to a Written Question, the Government declined to increase the establishment of special investigators who represent one part of the Civil Service that saves public money and helps to reassure the public that money is being well spent?
    Dr. Owen: It is a question of balance. We want at least to reach establishment. It is surprising how Opposition Members tend to be selective in the areas of Civil Service recruitment that they wish to increase.

    Pensions
    Mr. Dempseyasked the Secretary of State for Social Services what consideration has been given to the policy of providing weekly retirement pensions for couples at the rate of 50 per cent. of the average weekly earnings and 33⅓ per cent. for single pensions; and if she will make a statement.
    Mr. Meacher: The proposal my hon. Friend is putting forward has been discussed with the TUC on several occasions. Its cost would be very substantial. If applied to all benefits it would add more than £4,800 million a year to the cost of social security. The Government's plans for better pensions will enable workers to qualify in future for the kind of earnings-related pensions which are now only provided by good occupational schemes.
    Mr. Dempsey: Is my hon. Friend aware that most pensioners are more than

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    grateful for the very generous increases given to retirement pensioners by our Government in the shortest possible space of time? Does he not think that we should aim at something much more permanent, along the lines framed in the Question, and set our sights to achieve that objective, in view of the fact that this policy enjoys the support of a very broad section of the Labour movement?
    Mr. Meacher: My hon. Friend is quite right in saying that under the present Government pensioners have obtained a significant increase in the real value of their standard of living. As to his proposal, he will know that this is the principle underlying our own social security scheme, which is shortly to begin coming into operation, as a result of which the average paid person will indeed receive a pension of about half his average earnings, and the lowest paid will receive a pension of more than 100 per cent. of his previous earnings.
    Mr. Patrick Jenkin: Does the hon. Gentleman agree with the writer of the article in Labour Weekly of 5th March that the tax and social security systems are now "so full of anomalies" that a radical re-think is necessary,
    "including some of the sacred taboos of the Labour movement"?
    Will the hon. Gentleman and his right hon. Friend now swallow their pride, forswear their reprobate past, and admit, with the writer of the article that tax credits are the right solution to the problem?
    Mr. Meacher: The hon. Gentleman seems to be unaware of the policy of his own right hon. Friend the Shadow Chancellor of the Exchequer, who, in another article, which I should have thought the hon. Gentleman would have seen, recognised that the tax credit scheme, as proposed by the Conservative Party, was in that form a non-starter. The hon. Gentleman has to tell the House how his party would raise £3 billion, which is what that scheme would now cost.
    Mr. James Lamond: Will my hon. Friend confirm that the Government's White Paper on Public Expenditure contained an absolute commitment to maintain retirement pensions at their present level relative to the income of the community as a whole, and that there is provision
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    within it to bring about an improvement in retirement pensions?
    Mr. Meacher: My hon. Friend will know that as a Government we have committed ourselves to increasing the real value of the pension, in line either with earnings or prices—whichever is more favourable for pensioners—on a statutory basis for the first time. As to the White Paper, my hon. Friend will also know that this entailed an increase in the commitment of public expenditure for the purposes of social security.

    Ambulance Services (Basingstoke)
    Mr. David Mitchellasked the Secretary of State for Social Services if she is satisfied with the manning arrangements for the ambulance service at Basingstoke, in the light of the size of the population of that area.
    Mr. Meacher: The manning arrangements for the ambulance service at Basingstoke are a matter for the Hampshire Area Health Authority, which advises me that the ambulance services in the area are meeting my Department's recommendations on minimum national standards of service.
    Mr. David Mitchell: Is the Minister aware that the Basingstoke service covers an area from Kingsclere to Hartley Wintney, and includes also sections of the M3, so that there is a very heavy load? Is it not correct that under the Miller Report recommendations there ought to be 12 ambulances and not four? In view of the unsatisfactory position, will the Minister investigate the situation further with the area health authority, particularly to see that where ambulance men are available for overtime they are allowed to do it, so that there is better manning in the area?
    Mr. Meacher: As I have said, the Hampshire Area Health Authority advises me that the Department's recommendations on minimum standards are already covered. I assure the hon. Gentleman that there is a minimum of two manned ambulances at the Basingstoke ambulance station, on a 24-hour basis, with two additional double-manned ambulances and one single-manned ambulance in peak hours, Monday to Friday, for emergency services. I am aware that the establishment is one below the appropriate

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    number, and the area health authority is doing its best urgently to try to fill this vacancy.
    Dr. Vaughan: Is the Minister aware that there are difficulties over the provision of ambulance services in a number of different parts of the country—
    Mr. Speaker: Order. This Question is about Basingstoke.

    Benefit and Pension Rates
    Sir George Youngasked the Secretary of State for Social Services if she will announce the date of the next social security uprating.
    Mr. Canavanasked the Secretary of State for Social Services whether she will now make a statement about the next review of the retirement pension.
    Mrs. Castle: An announcement will be made at the appropriate time after the decision on the uprating is taken.
    Sir G. Young: Why cannot the right hon. Lady implement her next uprating on October 1st or April 1st, so that it coincides with the date on which the local authorities review their rent and rates, thereby minimising the administrative problems involved in revising means-tested benefits?
    Mrs. Castle: It would be totally impractical to implement any uprating for the current year on April 1st. I am sure the hon. Gentleman realises that. We certainly do not intend to hold up the next uprating until April 1977.
    Mr. Canavan: Will my right hon. Friend give consideration to the view that old-age pensioners should be entitled to the full £6 per week increase awarded to many other workers since last August? Will she take into account the fact that the pension increase may be eroded in value between the date of its announcement and the date of its implementation?
    Mrs. Castle: I am well aware that there is an erosion in the value of the pension between upratings. This always happens. I am glad to be able to tell my hon. Friend that the value of the pension since it was uprated in November 1975 has fallen by only 3·7 per cent. up to February this year. This compares with a fall of 6·8 per cent. three months after the uprating
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    last April. Therefore, we are succeeding not only in protecting the pension against inflation but, I am glad to say, bringing the inflation rate down.
    Mr. McCrindle: Have we yet reached the stage at which computerisation will help us to reduce the period between the announcement of the uprating and its actual implementation? Is the right hon. Lady aware that in such European countries as Belgium the pensioners have to wait a much shorter time before being paid what they were promised?
    Mrs. Castle: Ever since I took on this office I have been carefully examining whether it is possible to speed up the implementation of an announcement. I have visited our local offices and discussed this. I have also studied what happens on the Continent. The fact is that in other countries, which are often quoted in the House as a comparison with us, there are very different methods of payment. They are not centralised like ours. There are usually monthly payments by cheque, or something of that kind. Their systems are quite different from ours.
    I am satisfied, after detailed discussion with my staff, that if they are to have a tolerable work load there must be an adequate period between announcement and implementation, to allow all the multifarious adjustments to be made in supplementary benefits, for example, which we have always uprated in line with the basic benefits.

    Disabled Persons
    Mr. Martenasked the Secretary of State for Social Services if she will consider establishing a special retail price index which more accurately reflects the expenses of disabled people.
    The Under-Secretary of State for Health and Social Security (Mr. Alfred Morris): I am aware that there has been some support for a further index. I do not think that it would, however, add significantly to the information provided by the indices already published by my right hon. Friend the Secretary of State for Employment. The main difficulty about having a special retail price index for disabled people is that they are not, of course, homogeneous as a group. They are to be found among

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    the whole range of the population, including children, adults of working age—some of whom are employed or are housewives—and particularly the elderly. It would be wrong to assume that all disabled people incur the same extra expenses because of their disabilities.
    Mr. Marten: Nor are the general public homogeneous as a group, and they come into the retail price index. The disabled are grateful for what successive Governments have done to help them with their problems, but will the Department not set up a very small research project to look into the question of the actual cost for the disabled, in terms of heating, clothing, and so on, as I am sure that their costs have risen above those of the ordinary citizen?
    Mr. Morris: If we accept that no two disabled people bear the same additional expenses we must accept, too, that we would need not one additional retail price index but several. I am familiar with the work done by the hon. Member for Wallasey (Mrs. Chalker) in her constituency. I shall be interested in the outcome of that inquiry. If there is anything I can do to help, arising from what is learned there, or from information given by any other hon. Member, I shall be glad to do it.
    Mr. Carter-Jones: Will my hon. Friend have another look at this matter? It may be difficult to arrive at a figure that applies to all cases, but will he not give a percentage increase? The disabled have problems over such things as flooring, paintwork, furniture, laundry, incontinence and special foods. If my hon. Friend were to give a percentage in addition to the average, it would be helpful.
    Mr. Morris: I shall be glad to keep the proposal under constant review. As I have already said, I shall be interested in the outcome of the local survey to which I referred. The Government have increased expenditure on the chronically sick and disabled by £1,000 million. That includes increased expenditure for the elderly disabled, who represent a very high proportion of the elderly.
    Mr. Evelyn King: Has the Minister noticed the unfortunate decision of the House of Lords in overturning a decision of a lower court under which rating relief was given to disabled persons who
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    had had their houses specially adapted? Is he aware of the disadvantage caused to the disabled by that result, and will he undertake to restore their position by legislation?
    Mr. Morris: I cannot undertake to introduce legislation. I am familiar with the case. The person who took it through the courts is in touch with me, and I shall be replying to him at the earliest possible date.

    Invalidity Pension
    Mr. Gouldasked the Secretary of State for Social Services what progress has been made in establishing methods of identifying those housewives who will be eligible for the non-contributory invalidity benefit.
    Mr. Alfred Morris: I am glad to say that good progress is being made in the search for a fair and workable scheme for the housewives' non-contributory invalidity pension, and I am grateful to all those, including hon. Members on both sides of the House, who have been giving me their help. A small pilot exercise to assess the effectiveness of possible procedures for establishing incapacity for normal household duties is now in progress.
    Mr. Gould: Has my hon. Friend considered the valuable work done by Dr. Margaret Agerholm on the classification and evaluation of intrinsic handicap, and does he agree that it is very important to establish a simple and workable criterion of eligibility, not just for the non-contributory invalidity pension but for every benefit, particularly the attendance allowance?
    Mr. Morris: I am, of course, familiar with the important work that Dr. Margaret Agerholm has been doing on assessment. I am grateful for this opportunity to pay tribute to her and others who are doing this important work.
    Mr. Kenneth Clarke: Does the Minister agree that the difficulty arises out of the piecemeal and complicated approach that the Government have adopted to income for the disabled, so that this non-contributory invalidity pension to housewives, when it is paid, will be the fifth cash payment arising from disability? We appreciate the worthwhile progress that is being made, but does the hon.

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    Member not regret having abandoned an approach to disability income based upon the degree of incapacity for all possible claimants?
    Mr. Morris: I could await the millenium. I could hope that it would be possible at one moment to remove all income problems for disabled people. In the present economic situation piecemeal progress has been the only option open to me. I take pride in the fact that in the next financial year we shall be introducing our fourth brand-new cash benefit for severely disabled people. The hon. Member, who takes a very great personal interest in these matters, will appreciate that I would have preferred to go faster, but he will agree that we have made considerable progress.

    Community Care Services
    Mr. Luceasked the Secretary of State for Social Services whether she has yet consulted the voluntary organisations on implementing the proposed cuts in community care services.
    Dr. Owen: The public expenditure White Paper provides for some 3·9 per cent. growth in this coming year on personal social services expenditure and 2 per cent. growth for future years, but it is essential that the best use should be made of scarce resources, and voluntary organisations have an extremely important part to play. There will be continuing consultation with them both nationally and locally, and we shall not cut back our departmental budget for helping the voluntary organisations.
    Mr. Luce: In view of the inevitable need to contain public expenditure for the foreseeable future, does the Minister agree that the voluntary organisations will have to play an increasingly important rôle in community care services? What are the Government doing to mobilise greater voluntary effort and tap the voluntary spirit that exists?
    Dr. Owen: We all agree about the need to contain public expenditure, but we believe that within any given level of public expenditure there must still be priorities. We have chosen to give a high priority to health and personal social services. I do not disparage the contribution of the voluntary organisa-
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    tions. The one thing that we have refused to cut in the Department is the budget with which we help voluntary organisations. The figure is currently running at £2·7 millions a year.
    Mr. Steen: Is the Minister aware that voluntary organisations can perform services identical to those of the local authorities, but at half the cost? If the Minister appreciated that we would not need cuts at all.
    Dr. Owen: None of us has a monopoly of wisdom about the contribution of voluntary organisations, and hon. Members on both sides of the House have a long record of working with them. They can sometimes replace statutory bodies, but more often than not they can work in close partnership with them and buttress their facilities. It is to the working partnership between statutory and voluntary bodies that my right hon. Friend and I have attached a great deal of importance.
    Mrs. Chalker: Will the Minister intercede with other Government Departments and persuade them not to cut their Departmental budgets for voluntary organisations? Does he accept that we need a co-ordinated approach, but that at present the approach of Government Departments is fragmented?
    Dr. Owen: I do not know about other Departments individually, but overall Government help is running at £20 million a year, and that is a very sizeable contribution.
    Mr. Molloy: Will my hon. Friend consider that one way to satisfy the aspirations of the Conservatives, many of us on the Labour side and those in local organisations who depend upon public finance, is to urge the Chancellor to get cracking with the wealth tax. That would provide the money to implement all these admirable schemes.
    Dr. Owen: We always try to satisfy the aspirations of the Conservatives. I take note of my hon. Friend's suggestion.

    Pay Beds
    Sir T. Kitsonasked the Secretary of State for Social Services whether she proposes to hold further consultations with the medical profession on the abolition of private pay beds.
    Mrs. Castle: I have already had an exchange of views with representatives of the professions on various aspects of the proposals of 15th December, and my Chief Medical Officer will shortly be meeting a sub-committee of the Joint Consultants Committee for discussions on the list of 1,000 pay beds which the Government are committed by the proposals of 15th December to publish as a schedule to the forthcoming Bill.
    Sir T. Kitson: How did the Secretary of State come to the conclusion that private pay beds are bad for the British but good for foreigners?
    Mrs. Castle: The hon. Member is quite wrong in his interpretation of the situation. There is a further Question on this point later on the Order Paper.
    Mr. Raphael Tuck: I do not wish to nobble my right hon. Friend, but does she not agree that her proposal to increase the price of pay beds can only serve to put them out of the reach of those of modest means, so that only those of ample resources can use them? Is that not defeating the philosophy of Socialism?
    Mrs. Castle: I afraid that my hon. Friend does not understand that I am bound by statute to review the charges for pay beds every year, in the light of rising costs, and to adjust them accordingly. No decision on the figure has yet been made and therefore reports in the Press are pure speculation.
    Mr. Patrick Jenkin: Is the right hon. Lady aware that she has now dodged the question twice? Will she now explain why it is immoral for the British to be in pay beds but perfectly all right for Arab Sheikhs?
    Mrs. Castle: I have not dodged the questions. I am always sorry when Questions put to me on this matter are not reached. The procedures of the House put me in some difficulty. I have set out in detail for many hon. Members exactly what I said in the Middle East. I have made it clear that I am not proposing a policy for overseas patients which is different from that for the British.

    Mentally Handicapped Persons
    Mr. Michael Robertsasked the Secretary of State for Social Services what
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    steps she is taking to keep mentally handicapped children and adults apart in mental hospitals.
    Dr. Owen: I have publicly reaffirmed the philosophy and general principles of the White Paper "Better Services for the Mentally Handicapped", which indicated that there should be separate facilities for mentally handicapped adults and mentally handicapped children.
    Mr. Roberts: Does the Minister accept that many of the 8,000 children in mentally handicapped hospitals are there because there is no other place for them? Will he consider fostering schemes to give these children a better chance in life?
    Dr. Owen: Yes, I will. In fostering, I think that the movement away from the attitude that accepts normal children to one that embraces mentally and physically handicapped children is one of the most encouraging social developments for a decade. We are doing everything we can to encourage it.
    Mr. Nicholas Winterton: Has the Minister noticed the glaring lack of facilities for young mentally handicapped adults outside official training centres? Will he sympathetically consider any proposals for grant aid by voluntary organisations which are planning to provide places for such young people in agricultural or horticultural centres?
    Dr. Owen: I am only too well aware of it. I do not make the point in a party political sense, but it is time that the country realised that it is no good making demands for better services for the mentally handicapped and the mentally ill and then demanding cuts in public expenditure.

    Hospitals Services (Wolverhampton)
    Mrs. Renée Shortasked the Secretary of State for Social Services if she will pay a visit to Wolverhampton in order to see hospital facilities there.
    Dr. Owen: I have to visit Cosford, and I hope to visit Wolverhampton also.
    Mrs. Short: I am much obliged to my hon. Friend for that reply. I hope that he will let me know when he is going to Wolverhampton, because I am anxious

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    that he should see the inadequate situation there, with phase one of a new hospital in operation and six other old hospitals in the same town. That situation makes the deployment of medical services very difficult. Will my hon. Friend bear in mind that these old hospitals will need another £2,500,000 spent on them if the new hospital is not completed? That is very bad housekeeping.
    Dr. Owen: I am sympathetic about the situation. The area will have a net development addition, because it is one of the deprived regions. I hope that the extra money will correct the deprivation.
    Mr. Jasper More: When the Minister visits Cosford, will he ensure that there is no decision to close that hospital until the completion of the hospital at Telford?
    Dr. Owen: I shall consider all the factors, including the representations made by the regional health authority.
    Mr. Cormack: Will the Minister discuss with the Wolverhampton Community Council its urgent representations that the hospital must not be closed until adequate provisions are provided?
    Dr. Owen: It is striking how the party that has constantly clamoured for cuts in public expenditure is now resisting any closures or rationalisation in current expenditure.

    West Midlands Regional Health Authority
    Mr. Hal Millerasked the Secretary of State for Social Services what priorities the West Midlands Regional Health Authority has determined for capital expenditure in each of the years 1976–77 to 1979–80; and if she will visit the projects included in its programme.
    Dr. Owen: The West Midlands Regional Health Authority has not yet submitted any detailed annual programmes, but at its meeting on 17th March the authority decided that its immediate priorities for capital developments, costing over £1 million, were district general hospital developments at Stafford and Dudley and a geriatric hospital development in Wolverhampton. My right hon. Friend hopes to visit Dudley
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    later this year. I have no firm plans to visit Stafford.
    Mr. Miller: In view of the lack of provision for a hospital in Bromsgrove and Redditch, will the Minister accept that I am not asking for an increase in public expenditure? I am saying that a Bromsgrove hospital will have to be completely refurbished. Will he look again at the matter, in the light of the need to make provision for new towns before they become deprived areas?
    Dr. Owen: I have visited Redditch with the hon. Gentleman. I recognise that there is a need, but the regional health authority has made an assessment, which I am bound to consider seriously.

    PRIME MINISTER (PUBLIC CORRESPONDENCE)
    Mr. Teddy Taylorasked the Prime Minister if he will make it his practice to issue a public monthly summary of the subjects about which members of the public write to him.
    The Prime Minister (Mr. Harold Wilson): No, Sir. Like my predecessor, I do not maintain a detailed statistical record of my correspondence: the cost of doing so would be disproportionate.
    Mr. Taylor: Is the Prime Minister aware that but for the extortionate postal charges many people would have written to him from Scotland about the delays in the programme for transferring the staff of the Ministry of Defence and other Civil Servants to Scotland? Before he leaves No. 10 will he persuade his Ministers to fix a date for the building of these new offices, which will bring jobs to Glasgow?
    The Prime Minister: As I told the hon. Member on 12th February, the Government are fully committed to the programme of dispersals announced in July 1974 and to the completion of that programme within the period that we have set ourselves. The sites for the main Ministry of Defence and Ministry of Overseas Development dispersals to the Glasgow area have now been chosen and announced. We shall continue to press ahead with all possible speed with the detailed planning of the moves, including

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    the choice of locations for the remaining balance of the jobs.
    Mr. Atkinson: Does the Prime Minister recollect the excellent work he did in preparing the report arising from the investigation that he made into the Labour Party organisation some years ago? In view of recent correspondence from those constituencies which were unable to take part in the election of a new leader for the Labour movement, will my right hon. Friend consider, when he vacates his office, making yet another inquiry into the organisation of the movement?
    Mr. Speaker: That question cannot possibly come under the heading of a public monthly summary.
    Mr. William Hamilton: Of course it can.
    Mr. Speaker: It is no good the hon. Gentleman shouting "Of course it can". I must interpret the matter.
    Mr. Atkinson: On a point of order, Mr. Speaker.
    Mr. Speaker: If the hon. Gentleman will be good enough to raise this matter at the end of Question Time we shall save time. He may complete his question to the Prime Minister.
    Mr. Atkinson: Will my right hon. Friend conduct an inquiry to see whether it is possible to devise a system that will enable those disfranchised constituencies to take part in the ballot?
    The Prime Minister: There is no ministerial responsibility in respect of reports for the national executive particularly those which reported 21 years ago. In any case, that report did not deal with the question posed by my hon. Friend. I hope that my hon. Friend will re-read the report. I am sure that he will find some things in it which are pertinent to the question of organisation. I have no intention of conducting another inquiry.

    PRIME MINISTER (VISITS)
    Mr. Rostasked the Prime Minister if he will pay an official visit to Barnsley.
    The Prime Minister: I have at present no plans to do so, Sir.
    Mr. Rost: What cast-iron safeguards has the Prime Minister secured for the nation to ensure that the freedom of the Press will be preserved? Or will the right hon. Gentleman be paddling away from the sinking ship in his lifeboat, leaving freedom and democracy—
    Mr. Speaker: Order. The Question is about a visit to Barnsley.
    Mr. Rost: Will the Prime Minister be paddling away from the sinking ship in his lifeboat, leaving freedom and democracy—
    Mr. Speaker: Order. There must be some relation between the supplementary question and—[Interruption.] Order. Hon. Members are only wasting time. There must be some relation between the supplementary question and the original Question on the Order Paper.
    Mr. Rost: Will the Prime Minister be paddling away from Barnsley, leaving the sinking ship and allowing freedom and democracy to sink with his abandoned crew?
    The Prime Minister: The hon. Gentleman is even more pathetic in reaching the end of his supplementary question than he was when he started it. That is really plumbing the depths. I cannot remember whether Barnsley is on a canal, but I do not intend to paddle there. I have no immediate plans to go there. If the hon. Gentleman is referring to the answer that I gave to the right hon. Lady the Leader of the Opposition about the NUJ, he might have made it clear. I would then have had an answer ready for him.
    Mr. Madden: Does the Prime Minister accept that the greatest dangers to Press freedom in Barnsley and in other parts of the United Kingdom flow from the concentration of ownership of newspapers into fewer and fewer private hands? Does he also accept that the National Union of Journalists has done more to defend Press freedom than any Member on the Opposition Benches in recent memory?
    The Prime Minister: I am afraid that my researches into Barnsley have not led me to be in a position to say whether there is a concentration of Press ownership there. On the question raised a little time ago by the Leader of the

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    Opposition, when I joined her in expressing disapproval at what had happened, the House will be aware that my right hon. Friend the Secretary of State for Employment has made an important statement about the serious implications involved and has asked the NUJ executive to reconsider its position in this matter. I understand that the general purposes committee of the NUJ has put a recommendation to that effect to the executive.
    Mr. Whitelaw: Does the Prime Minister appreciate that my question will relate to his last answer about the NUJ at Barnsley? In view of what he said—I accept that this is a serious question for the House—does he agree that if Press freedom is to be preserved, information should be given to all journalists, whether or not they are members of a union affiliated to the TUC?
    The Prime Minister: I welcome the right hon. Gentleman and hope to hear from him again. He will recall that that was the implication of what I said to his right hon. Friend the Leader of the Opposition. That is the motive behind the action taken by my right hon. Friend the Secretary of State.

    MR. BREZHNEV
    Mr. Blakerasked the Prime Minister whether a date has yet been fixed for the visit to the United Kingdom of Mr. Brezhnev, agreed in principle in 1975.
    The Prime Minister: I refer the hon. Member to the reply which I gave to my hon. Friend the Member for Oldham, East (Mr. Lamond) on 9th March, Sir.
    Mr. Blaker: Does the Prime Minister recall that when he was in Moscow a year ago he signed a joint statement with Soviet leaders in which they pledged the efforts of their two Governments to establish detente on a firm basis throughout the world? Will he make it known to Mr. Brezhnev, through Mr. Gromyko—with whom we are glad he is having talks—that an interpretation of detente that enables the Soviet Union to behave as it has behaved in relation to Portugal and Angola is not acceptable to this Government?
    The Prime Minister: In my statement, which was the opening speech at the Helsinki Conference, I said that detente would not be very meaningful unless it went beyond the area of Europe and the North Atlantic, covered by the Conference.
    Regarding Africa, the hon. Gentleman will be aware that, as I have already told the House, in my conversation with the Soviet Ambassador on 12th March I told him that foreign intervention in Southern Africa, from whatever source, was likely to distort progress towards democratic freedom and would cause unnecessary bloodshed and suffering, particularly in the area of Rhodesia and her closest neighbours.
    Concerning Angola, the hon. Gentleman may be aware that, as a result of the initiative which my right hon. Friend and I took on that occasion, there is hope of an improvement in the situation.
    Mr. Thorpe: If the Prime Minister is not seeing Mr. Brezhnev in the immediate future, will he draw the attention of Mr. Gromyko to the fact that there are at the moment on the Order Paper two all-party motions signed by a wide variety of Members on both sides of the House, the first on the general issue of Soviet Jewry and the second on the specific case of Dr. Mikhail Shtern? If he could raise those matters it would be a humanitarian gesture that would be very much appreciated.
    The Prime Minister: I am aware of that. Mr. Gromyko, as well as Mr. Brezhnev and Mr. Kosygin, knows that I have raised these matters many times. I have always found that in trying to find out about people for whom there is concern one gets far better results by private discussion than by making resounding public declarations about them.
    Mr. Frank Allaun: In all his 30 years in Parliament, has the Prime Minister ever found the wild men and women of the Conservative Party and Press so bellicose? Is not their daily anti-Russian dose of propaganda aimed at whipping up hysteria against détente and the cutting of arms, and may it not lose us important export orders?
    The Prime Minister: The short answer to the first part of my hon. Friend's question is "Yes, Sir. I have known

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    them like this quite frequently over 30 years".
    I pay tribute to my hon. Friend and to others who are regarded, not without reason, as being on the Left of the party when they have found it necessary or right—[Interruption.] This is no laughing matter—to express in the strongest terms, at the Soviet Embassy and elsewhere, any feelings they have had about the treatment of individuals or about Soviet policy in other ways. It is only right that should be said, and, I repeat, it is not a laughing matter.
    The Conservative Party's present posture is, of course, related more to its internal problems than to world affairs. The Conservative Opposition think that they can get a few cheap meretricious Right wing Tory votes back by taking that course. Nobody in the outside world takes them seriously. The pay no attention whatsoever to the attitude and posture of NATO in these matters. But, if it makes them feel happy, I should be the last to complain.

    CHANCELLOR SCHMIDT
    Mr. Ovendenasked the Prime Minister when he next expects to meet Chancellor Schmidt.
    The Prime Minister: As the House knows, I had a series of talks with Chancellor Schmidt at Chequers on 7th February. Either I or my successor will expect to meet him at the meeting of the European Council in Luxembourg next week, Sir.
    Mr. Ovenden: If my right hon. Friend meets Chancellor Schmidt next week, will he take the opportunity of reminding him that in their decision to remain in the Common Market the British people were very much influenced by promises of changes in the common agricultural policy and that they have been very disappointed by recent developments? Will he remind Chancellor Schmidt that his support for changes is essential if we are to achieve our objective?
    The Prime Minister: Chancellor Schmidt and I have taken the same line about it, and so have my right hon. Friends the Foreign Secretary and the
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    Minister of Agriculture, Fisheries and Food. We have made some improvements in the operation of the CAP. Not only are beef premiums continuing; the Council of Ministers has agreed to consider, by the autumn, a detailed report on the merits of intervention and full premium system. That would have been unthinkable a year or two ago, without our membership. We have support for our own system from some member States. There are nonsenses about the CAP, to which attention has been drawn by Chancellor Schmidt and myself.
    Mr. Peter Bottomley: Will the Prime Miinster, at the Council of Ministers, discuss with Chancellor Schmidt and the French President the question why the level of family allowances for children up to two years of age is 10 times as high in France as it is in this country?
    The Prime Minister: Each country is free to have its own system of social services. If the hon. Gentleman wants to make comparisons, not only on that point but on many others, he will no doubt put down a Question to my right hon. Friend the Secretary of State for Social Services.
    Mr. Les Huckfield: My right hon. Friend should also recognise that in the British trade union movement there are strong feelings on certain aspects of transport policy. Will he recognise that there are particularly strong feelings on the part of the Transport and General Workers' Union about the introduction of tachographs and revised drivers' hours? The next time he meets Chancellor Schmidt, will he try to gain his support for the British attitude on these matters?
    The Prime Minister: Yes, Sir, I am aware that there are strong feelings on the question of transport, in a much wider sense. I am aware of the views of the trade unions concerned. I also feel that I am speaking for many drivers on the motorways, who see juggernauts driving at the speed they do. It is a matter about which we are all concerned. The trade union movement is fully integrated in the economic and social counsels of the EEC and has the opportunity of expressing its views directly to those concerned.

QUESTIONS TO MINISTERS
Mr. William Hamilton: On a point of order, Mr. Speaker. I had occasion to shout some words from a sedentary position on Question No. Q1 to the Prime Minister. That Question referred to correspondence conducted by the Prime Minister on various unspecified subjects. You will understand, Mr. Speaker, as much as anybody, that the way in which hon. Members table Questions to the Prime Minister and the form of wording are severely limited. Therefore, it follows that supplementary questions bear a fairly distant relationship to the matter at hand and are related only tenuously to the original Question. If I may say so with respect, Mr. Speaker, there is an increasing irritation in the House that you are interrupting too much—[HON. MEMBERS: "Oh."] I am expressing my own view, and I can express it in other ways if need be, but I put forward that view as respectfully as I can. There is an increasing irritation on this side of the House that you are seeking unduly to restrict hon. Members in the form of their supplementary questions, not only to the Prime Minister but to other Ministers.
Mr. Speaker: I am obliged to the hon. Member for his courtesy. It is my responsibility to see that supplementary questions are related to the original Question. [HON. MEMBERS: "Hear, hear."] Undoubtedly, there has been a weakening on that score. I believe that it is in the best interests of the House that supplementary questions shall be related to Questions on the Order Paper, otherwise the House will become completely disorderly.
Mr. Atkinson: Further to that point of order, Mr. Speaker. You will know, from your long experience, that this place reeks with privilege and patronage of the worst kind. [HON. MEMBERS: "Oh."] You will also know that it is not so much a matter of being above or below the Gangway as of being above or below stairs. Today's Order Paper is a dramatic illustration of the privilege accorded to Privy Councillors and others in terms of treatment given to right hon. and hon. Members. I refer to Question No. 4 to the Prime Minister relating to Chancellor Schmidt.
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Hon. Members have gone to the Table Office seeking to place a particular Question and have found that one set of rules applies to some Members and another set of rules to another set of Members. In other words, some hon. Members find their Questions ruled out of order. If an hon. Member seeks to ask the Prime Minister when he next intends to visit Barnsley, that appears to be in order, but if an hon. Member seeks to ask him to go to Barnsley to look into the NUJ situation there, or whatever it may be, that is ruled out of order, or the Prime Minister transfers the Question to the appropriate Minister. That is why I am saying that privilege applies to the Order Paper, as is clearly demonstrated today. We should surely try to ensure that Back Benchers have an equal chance to put sensible Questions to the Prime Minister and to other Ministers.
Mr. Speaker: I am grateful for the way in which the hon. Gentleman put his point. I shall do my utmost—I can do no more—to see that the rights of Back Benchers are protected. I have tried to adopt that course ever since I came to the Chair.

BUSINESS OF THE HOUSE
The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): With permission, Mr. Speaker, I will make a statement about Thursday's business.
Following my announcement of the Second Reading of the Weights and Measures &c., Bill, it has been represented that more time should be allowed for consultation. I am agreeable to this.
As a result, the business will be, until seven o'clock, a debate on Northern Ireland affairs, followed by the five coal industry Orders. Thereafter, the business will be proceedings on the Statute Law Revision (Northern Ireland) Bill [Lords], which is a consolidation measure, and the Orders on Docks and Harbours and Legal Aid (Scotland).
Mr. Whitelaw: Is the Leader of the House aware that the lovely phrase
"more time should be allowed for consultation"
will not fool me, with all my experience in these matters, nor indeed the right hon.

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Gentleman or his right hon. Friend the Chief Whip? Is he aware that what his statement means is that the Government cannot rustle up enough support for their measure and that the measure they tabled for discussion last Thursday is not to be taken this Thursday? If that is the case, is not the answer to have a full debate on the issue in Government time when these consultations can proceed on the Floor of the House?
Mr. Short: The right hon. Gentleman is the last person I would try to fool, but this Government try to govern by consent and agreement, not by confrontation, as in the case of the Government of which the right hon. Gentleman was a distinguished member. We have representations from both sides of the House that more time is required. I emphasise that that plea came from both sides of the House. That is a fair request because it is an intricate subject and it is clear that more time should be allowed.
Mr. Whitelaw: The right hon. Gentleman has not answered my main point. We on this side did not ask for more time. We made our position clear in our amendment. But now that the right hon. Gentleman agrees that there should be more time on this matter, will he go further and give Government time for a full debate on this issue in the House?
Mr. Short: No, Sir, I cannot promise that. We have a very full programme between now and the Summer Recess, and I am sure that all hon. Members wish to rise at a reasonable date this year for the Summer Recess.
Mr. Beith: Will the right hon. Gentleman say whether the newly-announced debate on Northern Irish affairs will take place on a Government motion and to what matters it will relate?
Mr. Short: The matter will be dealt with on an Adjournment motion. I take it that the debate will be on economic and defence matters in Northern Ireland.
Mr. Skinner: Will my right hon. Friend give an assurance that the Common Market metrication measure will not be put back on the Order Paper until Labour's new Leader and the nation's Prime Minister has been elected so that a fresh mind will be able to examine the matter—in respect not merely of metrica-
206
tion but of the whole attitude towards the Common Market generally?
Mr. Short: It is not a Common Market measure. Secondly, it will not be put "above the line" until a new Prime Minister is appointed.
Sir David Renton: Does not difficulty experienced by the Government over the weights and measures legislation show that there is enormous advantage in having a debate on the Green Paper or White Paper before controversial legislation, which may cut across the parties, is introduced? Would not such a debate avoid the difficulty in which the Government now find themselves?
Mr. Short: I agree with the right hon. and learned Gentleman. We are taking that course on a number of issues in this Parliament. I discussed this matter in the debate on procedure. I hope that it is one of the issues which the Committee dealing with the reform of Parliament will examine.
Mr. English: Is my right hon. Friend aware that some of us on the Government side of the House appreciate what he has done, and that we also find it a piece of intolerable arrogance when hon. Members on the Opposition Front Bench say that the business should be changed when they request it but not when Back Benchers request it?
Mr. Short: It is nice—but rare—to be appreciated by anyone in this job.
Mr. Marten: Is not this a classic case of the will and power of Parliament—not necessarily on the Floor of the House—dominating the Government of the day? In that case, should not the Bill be dropped and should not we follow my right hon. Friend's proposal that perhaps the matter could be dealt with again on a Green Paper basis?
Mr. Short: I think that it is a case of the will and power of Parliament influencing the Government. I am making no apology for that. That is an excellent thing to happen. We have had representations from many quarters about it. I thought it right and appropriate—so did my right hon. Friend—to take the matter off the Order Paper this week and to allow much more time for it to be discussed.

BILL PRESENTED
  LICENSING (SCOTLAND)
  Mr. Secretary Mr. Secretary Ross, supported by Mr. Secretary Jenkins and Mr. Harry Ewing presented a Bill to make provision as respects the licensing law of Scotland; and for connected purposes; and the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 101.]

  OBSCENE PUBLICATIONS (AMENDMENT)
  3.41 p.m.
  Mr. Tim Kenton: I beg to move,
  That leave be given to bring in a Bill to amend the Obscene Publications Acts 1959 and 1964; and for connected purposes.
  The preamble to the 1959 Act reads,
  "An Act to amend the law relating to the publication of obscene matter, to provide for the protection of literature and to strengthen the law concerning pornography."
  The preamble to the 1964 Act starts with the words,
  "An act to strengthen the law for preventing the publication for gain of obscene matter."
  Clearly, the intention expressed in those preambles is not being achieved. It is necessary only to go into any bookshop or any bookstall at any railway station to see that books and magazines are everywhere on sale that most of us, in common sense, would call obscene.
  As with prohibition in the United States in the 1920s, two courses are open to Government if the intention of an Act is being evaded—either to annul it or to amend it. I wish to take the latter course and to amend these Acts, because I believe that genuine pornography does, in the words of D. H. Lawrence, offer an insult both to sex and to the human spirit. These Acts are important for the protection of the young and of other vulnerable members of our community—the young, because the transition from childhood to normal sexual life is traumatic enough without having to cope with perversion and physical cruelty as well, and the other vulnerable people because latent abnormality can be exacerbated by obscene literature to the point of danger. The Cambridge rapist was an example of this.
  We have a particular responsibility for the young. The argument for making pornography harder to obtain is based in part on the premise that it is the duty of the mature mind to help the immature distinguish between what is normal and what is excessive. I suspect that there is no one in the House who as an adolescent did not snigger over a dirty book borrowed from a friend. But the very fact that such books were not easy

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  to get hold of created a sense of discrimination in our minds. That which was freely available was normal. That which was hard to obtain was abnormal.
  Now that hard porn, soft porn and medical sex handbooks are all equally available, how much more difficult is it for an immature mind to distinguish between normal sexual practice and that which the vast majority of society would regard as excessive and offensive?
  My amendments, therefore, have two aims, in order to restore to the law the purpose that was intended when these Acts were passed. The first is to make it harder for those who produce pornographic material to find purveyors for it. The second is to make it harder for impressionable members of the community to learn about obscene literature from the Press and other media and thus be stimulated to buy it.
  Prosecutions under these Acts have been hampered by the attempt to put a strict legal definition on the word "obscene". In dictionaries the meaning of the word varies from "repulsive" to "lewd". In the 1959 Act it is defined as
  "tending to deprave and corrupt."
  This definition has proved unsatisfactory. What member of a jury can in honesty persuade himself that he knows when the border line is crossed between disgust and depravity, or which article will lead to a continuing process of corruption of himself or of the public at large? Only by removing the precise definition of the word "obscene" can we make it possible for juries to reach decisions according to their own instinctive judgment. I do not believe that they will find this all that difficult.
  A Californian court is quoted as holding that obscenity is
  "a particular genus of speech and press which is as recognisable as poison ivy."
  Clearly, the jury's view of what is obscene will change in line with contemporary standards, and that is as it should be. I propose that the test of obscenity in the 1959 Act should be omitted and that no new definition should be inserted.
  It is, however, right that if any publisher, bookseller or author wishes in good faith to obtain advice whether a certain publication will be considered obscene, there should be someone to whom he
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  can turn. I provide in my Bill that a special committee, among the members of which will be a representative of the Director of Public Prosecutions, will be appointed by the Home Secretary to advise him on prosecutions. Anyone will be able, on payment of a fee, to seek advice from this committee whether it considers a particular article obscene. Guidance will thus be available, and unnecessary expenditure of public funds on some unsuccessful prosecutions will be avoided.
  I see no advantage to our society from the extensive Press reporting of court proceedings of prosecutions under these Acts. Although the media try their best to exercise discretion, the only effect of such reporting is to stimulate demand and to make more widely known the titles of pornographic articles. This is what Sheridan, in his play "The Critic", called the "collusive puff", guaranteed to increase sales. I propose in my Bill that the same restrictions on the reporting of judicial proceedings should apply to obscene publication cases as apply to divorce cases following the Judicial Proceedings Act 1926.
  Finally, there is the difficult problem that the defence, under Section 4 of the 1959 Act, may call in expert witnesses with the aim of establishing that publication is in the public good. This has befuddled juries between a decision on obscenity and a decision on the public good. Experts have trailed clouds of obscurity round what at times could be straightforward matters. So I provide in my Bill that the jury should first decide the basic question whether an article is obscene. Only after they have made up their minds that it is obscene will the defence have the right to plead that, none the less, the public good justifies publication, and then to call in their expert witnesses.
  I realise that this is a very complex subject, and I have approached it with trepidation, but it is a matter about which many people are gravely concerned. Public opinion has a commonsense view at any time as to what constitutes obscenity. It is that that I have tried to re-establish. I should have liked to introduce an amendment to prevent the sale of pornography and of indecent articles to those under 18, but that is

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  wider-reaching and I hope that the Home Office will take that point on board in an overdue review of the whole subject.
  The amendments that I have suggested are few and moderate. They do not interfere with our liberties, but they will diminish some of the harm that can now be done by obscenity to the young, to the disturbed members of our society and to the sad people who take part in portraying obscene acts. Hon. Members on both sides will prepare the Bill and I trust that it will command the support of the whole House.
  Question put and agreed to.
  Bill ordered to be brought in by Mr. Tim Renton, Mr. Michael Alison, Mr. Mark Carlisle, Mr. Clement Freud, Mr. Ian Gow, Mr. David Lane, Mr. Ron Lewis, M. Neil Marten, Mr. Jasper More, Mr. Eric Ogden, Mr. W. R. Rees-Davies and Mr. David Walder.

  OBSCENE PUBLICATIONS (AMENDMENT)
  Mr. Tim Renton accordingly presented a Bill to amend the Obscene Publications Acts 1959 and 1964; and the same was read the first time; and ordered to be read a Second time on 21st May and to be printed. [Bill 102].
ORDERS OF THE DAY

  NEW TOWNS (AMENDMENT) BILL
  Order for Second Reading read.
  Mr. Speaker: I should inform the House that I have selected the amendment in the names of the Leader of the Opposition and her right hon. and hon. Friends.
  3.51 p.m.
  The Minister for Planning and Local Government (Mr. John Silkin): I beg to move, That the Bill be now read a Second time.
  To those hon. Members—and there are many—to whom the new towns are a source of interest, there has been a welcome opportunity to examine progress and to re-examine our philosophy during the periodic debates on New Towns Money Bills. In the last 12 months we have had a double bonus, for today's debate enables us to build on the debate in last session's New Towns Money Bill which followed my consultation document of 1974.
  My own position is clear. I regard the present Bill as a return to one of the great principles of the original 1946 Act. For there was never any doubt in the minds of those who introduced that Act—including, and especially, my noble Friend and father—that at the end of the day, as each new town corporation was wound up, its assets should go to the local authority. Well before that, in 1898, Ebenezer Howard, the father of the garden city movement, describing his vision, said:
  "Its object is, in short, to raise the standard of health and comfort of all the workers of whatever grade—the means by which these objects are to be achieved being a healthy, natural, and economic combination of town and country life, and this on land owned by the municipality".
  So it was understood from the beginning that the life of new town development corporations should have an end and that, in the fullness of time, the houses provided by them should be transferred to the local authority.
  But, as the years went by and new towns became more and more profitable, the question of what to do with the assets was settled in a different way. In 1959 the straightforward principle of transfer of housing to the local authority was

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  changed. The Commission for the New Towns was created and the assets of four towns—Crawley, Hemel Hempstead, Hatfield and Welwyn Garden City—were subsequently transferred to it. In 1959 none of the new towns had reached any sort of maturity. If not actually in their infancy, the first generation towns had barely reached their teens. The question of their inheritance when they came of age was deliberately left vague.
  This Government do not accept that it is healthy or desirable to leave new town assets in a state of permanent limbo—with the Commission as their dwelling place, and heaven knows where as their destination. We believe that once a new town corporation has done its job, the people of the new town should have the same democratic control of their local environment as people living in Britain's other towns and cities.
  As the first step under this Bill, we are providing for the transfer of housing—and related assets such as local recreation areas and neighbourhood shops—to the local authority. The local people will benefit. They will no longer live in a divided town. No matter how good the relationship between corporation and council, a division there still must be when some families live in a local authority part of the town and others live in that part administered by the corporation. Inevitably this division creates a sense of "them" and "us". The Bill is the first important step in removing from the minds of people who live in new towns that feeling of division.
  Unified housing management can make it easier for tenants to move within the town, while at the same time cutting management costs. It will also mean that those who are responsible for the management of housing, recreation places and so on are democratically accountable to those who live in the area.
  So far I have been considering the question of the housing assets. But there are other assets not covered by this Bill—town centre shopping areas and industrial estates. These raise more complex issues, some of which were mentioned in the Government's consultation document on new towns which was published in December 1974 and to which I have referred. When a new town is created, the country as a whole finances it. Gradually, as the town grows, it becomes more and more profitable. In 1974–75,
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  for example, the New Towns Commission made a gross profit of nearly £5·3 million, Harlow Development Corporation one of £2·4 million and Stevenage £2·7 million. It is surely right that, though part of that profit should go to the local community, others—without whom the town would never have been started—should also benefit.
  Our aim will be that all concerned with the development of the new town programme—the new towns as a whole, the public in general, through the Exchequer, and the local community in each new town—should enjoy an appropriate share of the whole of the benefits created by public investment in the new towns. It was for these reasons that our consultation document envisaged a continuing—but much changed—rôle for the New Towns Commission. The transfer of housing and related assets to local authorities would free the Commission to concentrate its considerable management and financial expertise on a specialised basis.
  It is our view that the Commission would take over the long-term management of the main industrial and commercial assets as the development corporations wind up their remaining activities after the transfer of housing. But this would not inhibit consideration of arrangements for the sharing of benefits, nor would it preclude examination of a progressively increasing degree of involvement by the local communities. For example, it might be worth examining the implications of transferring to them the long-term reversion of the freeholds in the estate. These are particular aspects which will be the subject of further study and consultation over the coming months.
  In our December 1974 consultation document we looked again to see how the principles on which new towns were based were being carried out in practice, and as a result there have been a number of fresh initiatives. Because we believe that it is most important that the new towns should take their share of the disadvantaged, the handicapped, single people and the homeless, we have urged new town corporations to provide more for these groups and we have also set up a review of tenancy allocation policy to advise on altering the mix of incoming tenants.
  Mr. John Hannam: Is the right hon. Gentleman aware that, under the Chronically Sick and Disabled Persons Act, local authorities have a statutory responsibility to provide for disabled people, whereas the new towns do not, and that this Bill does not seem to deal with that problem? Would he consider this important matter which affects disabled people? Otherwise, new towns will be left with categories of housing provided only for the able-bodied rather than disabled people, whom we would normally want to integrate.
  Mr. Silkin: I have a great deal of sympathy with what the hon. Gentleman says. I have always felt that one needs to bring new towns, though on a much better level, to the same sort of grouping of population—including disadvantaged, homeless, single parent families and so on—as the old towns have. We need to look at this closely. It was presaged in the consultative document and a review committee is considering it at this moment. I agree that something must be done about that.
  Development corporations and local authorities are being brought closer together and as part of this more members of local authorities have been appointed to corporations.
  Last summer the Environment Sub-Committee of the Expenditure Committee of the House published its Report on New Towns. It is a valuable analysis of opinions and views about the new towns programme. Not surprisingly it also concluded that the housing assets of new towns should be transferred to local authorities.
  This then is the general principle with which the Bill is concerned. How do we intend to achieve it?
  The procedures to be adopted are detailed in the Bill. They include the making of transfer schemes locally in each new towns, the approval of schemes by central Government, and the implementation of each scheme when it has been approved. The first possible date for transfer will be 1st April 1977, but I am persuaded that each new town must be allowed to progress at its own pace.
  The Bill provides in Clause 2(3) that after 15 years from designation either the corporation or the district council may apply to the Secretary of State with a view to a transfer scheme being made.
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  I think 15 years is about the right time. It enables us to consider straight away the possibilities of transfer in the Commission towns and in the other first generation towns.
  There may be some such new towns which feel that they are not yet ready for transfer, so the Bill provides in Clause 7 that if he agrees that this is so, the Secretary of State must nevertheless keep the development of the new town under review.
  Clause 7 (c) provides that the development corporation and the local authority shall not be able to initiate statutory consultations preparatory to the making of a transfer scheme until three years have elapsed from the date of the initial determination not to make the scheme.
  As I said earlier, the transfer of ownership of houses under the terms of the Bill will normally take place as the new town nears completion. But the Bill does not completely close the door to a transfer before 15 years have elapsed since designation. This is because in some of the later new towns there may well be a case some time in the future for transfer of part of the housing stock to the local authority if a cohesive housing development is substantially completed in advance of the rest of the town and the financial consequences of such partial transfer can be accepted.
  As I said earlier, the assets to be transferred are essentially those planned and provided from place to place and from time to time for the use of occupiers or other inhabitants of the dwellings. They should not include assets planned and provided for the use of the inhabitants of the town as a whole. The Bill does not attempt to lay down hard and fast rules about this. It is generally something which is best worked out locally with local knowledge.
  We shall, of course, give further administrative advice to ensure that we are not bogged down in theological disputes whether this shopping centre, or that open space, or any other individual site should be associated with the dwelling transferred. Although the Secretary of State retains a discretion under the Bill to modify transfer schemes, I am sure that common sense will prevail and the need to exercise the discretion will rarely if ever be invoked.

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  Clause 3(5) sets out the statutory ingredients of a transfer scheme. First, the description of the property to be transferred is required in such a way that the transfer scheme when approved can provide good title to the property. Second, so long as the development corporation or the Commission for the New Towns retains an interest in the successful development of the town it is appropriate that it should also retain rights to nominate tenants—not least, to ensure that industrialists' needs for homes for workers are met.
  Third, a transfer scheme must include a statement on financial arrangements. Fourth, a scheme must include arrangements which properly safeguard the interests of the staff concerned.
  In addition to considering these points when deciding whether to approve a scheme, the Secretary of State will also have regard to the general stage of development of a particular town and, where the partial transfer of housing is being proposed, he will consider not only the financial effects of the proposed scheme in relation to the houses being transferred but also the effect on the remaining housing stock owned by the development corporation.
  Already people living in the first generation new towns have read articles in their local newspapers and know that something is happening. What we want to make sure of is that they know as soon as possible exactly how they will be affected. So Clause 10 provides for a notification procedure to be adopted by the development corporation both at the beginning of the exercise, when corporation and council start to make a transfer scheme, and at the end of the exercise, when the scheme has been approved. We shall look to the development corporation, with the aid of the local authority, to make sure that each family is kept fully informed at every stage and is not left to speculate about changes which may or may not happen.
  In recent years we have taken every opportunity to bring the development corporations and local authorities closer together. More members of local authorities have therefore been appointed to the boards of development corporations. But the size of development corporations is limited by Section 2 of the 1965 Act to seven ordinary members plus
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  the chairman and deputy chairman—nine in all. This limitation in a few cases frustrates the creation of a board with a sensible mixture of local involvement and appropriate expertise. So Clause 14 proposes that the number of ordinary members on a board may be increased from seven to 11. Where it is intended to increase the size of an existing development corporation the power to vary an Order contained in Section 50(3) of the New Towns Act 1965 will be used.
  It is not intended to use the power to increase the size of a board indiscriminately, but the provision will be useful, for example, in those instances where there are so many local authorities involved that it is not at present possible to combine adequate local authority membership with sufficient people of industrial, commercial or professional experience.
  Mr, Michael Latham: Before the right hon. Gentleman leaves that point, could he say whether he intends to use his power to change the balance of local authority representation on the Corporation of the New Towns, because that is something on which the Environment Sub-Committee had a good deal to say?
  Mr. Silkin: I paid a tribute to the Sub-Committee's Report, although that does not mean that I agree with every detail of it. I think I would take the hon. Gentleman with me if I said that as a town gets more and more towards completion, so those who will, eventually at any rate, take over the housing must be more and more in a position to be the governors of it—but not exclusively so, as long as development takes place. Their basis is, of course, a management one. It happens that a number of new towns, particularly the larger ones—and to avoid being invidious I shall not name the new towns, but the hon. Gentleman can work it out for himself—span the borders of a number of district councils. One of the difficulties I find with the old basis of numbers on the board, which goes back to the 1946 Act, is in trying my best to be fair and balanced to all those who are concerned in it. That is the basis of this Clause.
  One of the most important features of the Bill is the financial basis of transfer. The financial arrangements and provision

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  for the payment of grants to local authorities are dealt with in Clauses 8 and 9. The basis of transfer will be outstanding loan debt.
  Local authorities will have the benefit of the lower costs both of building and of borrowing money which obtained when the houses were built, and will be taking over in some cases only about two thirds of the original debt, the rest having already been paid off. Transfer of housing assets at outstanding loan debt is in short fair to tenants and to local authorities.
  I should like to refer briefly to the question of rents—although my hon. Friend the Under-Secretary will deal with this later as necessary. After transfer, rents will of course be a matter for the individual local authorities to decide. At present, new town corporations and the Commission receive housing subsidies on broadly the same basis as local authorities.
  After transfer, so long as the present general housing subsidy system continues, the local authorities will continue to receive the subsidies on the same basis as the corporation or Commission would have received them had they retained the housing. If the present subsidy system were changed following the report of the current housing finance review, consideration would need to be given in any new subsidy system to the position of authorities to which new town houses had been transferred.
  Where there are differences between corporation and council rents within a new town, it will be for individual local authorities to decide whether they wish to equalise between the two when the corporation housing has been transferred. But, in addition to the normal Exchequer housing subsidies, most new towns at present receive grant under Section 42 of the New Towns Act 1965. This will of course cease when the houses are transferred. However, this should not cause alarm.
  If at the end of transfer there remains a large gap between costs and rents-plus-subsidy, and if filling this gap would impose "an undue financial burden" on the council, there is power in the Bill for the Secretary of State with the consent of the Treasury to pay grant to the council to
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  relieve this burden either in whole or in part. In other words, if the transfer itself results in an undue burden on either tenants or local ratepayers, the Bill proposes that the Secretary of State should have discretion to give relief by way of grant for such period as he may determine.
  Because the future of housing finance and, indeed, local government finance generally is too uncertain, I am afraid that I cannot give undertakings at this stage as to the amount or duration of any transitional grant. But our objective will be to ease the transition to the point where the transferred houses are fully integrated under the local authority's housing stock.
  This transfer and integration of houses will inevitably have to be matched by a transfer and integration of staff. I have visited a large number of new towns now, and in all these towns I have been impressed by the energy, imagination and, above all, devotion to the ideals of the new towns which motivate the staff of the corporations. None of this energy, none of this imagination, must be lost in the changes which lie ahead, and I am glad to put it firmly on record again that the Government are determined to secure the interests of the staff. Each transfer scheme will therefore include information abut the effect on existing staff and the proposals for staffing arrangements immediately after the scheme comes into force.
  The Bill also contains some basic provisions in Clause 12 for the protection of employees and, in the making of regulations under it, we shall have the advantage of advice from the New Towns Staff Commission for which provision is made in Clause 13. Pending Parliament's approval of the Bill, the Government propose to establish an Advisory Committee.
  The Chairman of this Advisory Committee and the Chairman-Designate of the Staff Commission will be Sir Richard Hay-ward, who was Chairman of the National Health Service Staff Commission from 1972 to 1975. I also propose to appoint two other members—Baroness Fisher of Rednal, a former Member of this House, who is a member of the Warrington Development Corporation and has long experience as an elected member in local

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  government, and Mr. Philip Vine, a member of the Telford Development Corporation and a former Chief Executive of Nottingham City Council.
  I know that the Advisory Committee will approach its task realistically and with understanding of the natural anxieties felt by people whose working habits, working environment and employers are likely to change.
  Mr. Robin Corbett: I am especially concerned with this point about the Staff Commission. When does my right hon. Friend expect to be able to publish the regulations under which the Staff Commission or, before it, the Advisory Committee will operate?
  Mr. Silkin: As soon as possible after Royal Assent. I assure my hon. Friend that the gentleman in charge of the actual drafting is known affectionately as "Little Lightning Flash".
  Equally, I know that we can rely on the good sense of the parties, particularly local authorities as the main new employer, to see that the interests of staff whose jobs are affected are handled sympathetically and that recruitment policies are followed which minimise individual cases of potential hardship.
  I have not attempted to deal so far with the Opposition's amendment. This is mainly because I have as little idea what it means as the Opposition themselves. If it means that the Bill should provide that the Secretary of State may on occasion allow dwellings to be sold to sitting tenants, Clause 3(4)(a) provides exactly that. If it means anything else, I await, like the rest of us, with impatient anticipation the dialectical treasures in store for us when the hon. member for Aylesbury (Mr. Raison) explains exactly what it does mean. In either event, my hon. Friend the Under-Secretary will no doubt be able to deal with it at a later stage.
  Mr. Stephen Ross: The right hon. Gentleman referred to Clause 3(4)(a), which I intended to raise later in the debate. It is not clear. It talks about disposing "to some other person". Does that leave the door open to sales to sitting tenants?
  Mr. Silkin: It leaves the door open to sales to anyone other than district councils, as the Secretary of State may direct, and, if the case of the hon. Member for Aylesbury is as good as all that, I cannot understand why he hides it under a bushel.
  The Bill which we are debating today not only redeems the pledges given in Labour's manifesto; it recognises and fulfils the basic ideals which lay behind the New Towns Act of 1946. That Act created the new towns. This Bill starts the process of giving them to the people who live in them.
  4.17 p.m.
  Mr. Timothy Raison: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
  This House declines to give a Second Reading to a Bill which fails to provide any right for New Town tenants to purchase their homes.
  Like the Minister, I believe that this Bill marks an important stage in the development of the new towns. I believe, too, that on balance the new towns represent a considerable achievement in our life. By and large, they are becoming attractive places in which to live. However, I should qualify that by saying that I still belong to the school which says that they are attractive places in which to live as long as it is someone else who does the living. I cannot say that I have any desire to move to a new town. But I recognise that they have fulfilled very many of the purposes put forward for them when they were first started. In particular, they have served to house a fairly substantial number of people efficiently and with a reasonable degree of rapidity.
  The development corporations have shown that they are able to get a move on. That is essentially the justification for the development corporations, and overall they can be congratulated on having brought that about. I have some reservations about the housing mix in the new towns, to which I shall refer later. As the Minister indicated, however, the corporations have shown quite a bit of imagination over the years, and in many cases they have tried to achieve some sort of social balance between the different forms of housing which their towns contain.

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  It is becoming increasingly necessary to look at the state of the new towns programme as a whole. Earlier in the year I asked the right hon. Gentleman for a statement about this. His answer on 23rd January said:
  "Recent changes in demographic projections, if sustained, could affect the new and expanded town programme in the longer term. Over the next decade or two, however, this programme will reflect the housing needs of people already born. My right hon. Friend is keeping the position under review in the light of all relevant factors."—[Official Report, 23rd January 1976; Vol 903, c. 609.]
  I am not sure that answer is wholly sufficient. There are now real doubts about some aspects of the programme, and many people have raised the particular question of whether the plan is not robbing London, Liverpool, Manchester and other places of skilled population and economic vitality. I know that the recent review of the Strategic Plan for the South-East questioned this assumption and claimed that there was no basis for it, but there is more to it than this and it needs examination.
  In particular we have to look, and the Government have to look, at the question of whether the Central Lancashire New Town is fully justified. The House will know that it covers the Preston-Leyland-Chorley area, entailing a doubling of the present population to a figure of about 430,000 by the end of the century. I find from my experience that more and more people are asking whether this development really makes sense. I have not come to a view about it myself but I believe that the Government have to face this, because there is a lot of anxiety on the question.
  I would add that it is disappointing that we have not yet had a reply from the Government to the Report of the Expenditure Committee, to which reference has already been made. I know that the Committee did not report all that long ago and that the celerity with which Governments reply to Expenditure Committee Reports is not exactly outstanding. The collective indolence of Governments in this respect is appalling, but it would have been rather helpful as a background to this debate if we could have had the observations of the Government on that very valuable Report.
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  I know, however, that the Under-Secretary who normally covers local government matters—the hon. Member for Widnes (Mr. Oakes)—told my hon. Friend the Member for Northampton, South (Mr. Morris) in a letter last year that
  "In any event it seems likely that the Report and the Government's response to it will in fact be debated in the House".
  I hope that I can take that as at least a promise that when the Government respond to the Report we can expect to have a debate in this House about new town strategy generally, because it is very important. We particularly need to know the Government's long-term view. To be fair, the Minister said a little about it in the course of his speech. We need to have on record some idea of whether the Government regard the Commission as a permanent, or at least indefinite, feature of the scene. From what the Minister said about it today, it sounded as if the Commission is seen as a fixture.
  Mr. John Silkin: Perhaps I might short-circuit this a little. It is a very proper question not directly related to this particular matter. We see the rôle of the Commission perhaps as changing—that is really the basic point—to one of management of the various commercial and industrial assets.
  Mr. Raison: That is helpful but it is something we would like to see developed and argued more fully in a subsequent debate.
  We would also like a fuller discussion on what is intended about the transfer of other, non-housing assets to local authorities, to which there has been reference. I believe that there is a very good case for selling off some of these assets. I do not see why the freehold of some industrial premises should not be put on the market—[Interruption]—particularly when the Government have brought our national finances to such a parlous condition. I would have thought that they could do with the money. That is a further point that needs to be discussed. There is another point that I should like to put to the Minister, though not for immediate reply. It seems to me that it is now time to think about extending to new towns the rôle of the local government Ombudsman. I cannot see any case in logic why that should not be done.

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  I want to refer more specifically to the Bill. As the House knows, it has two aims: first to transfer housing assets, and secondly to increase the size of the development corporations. The question of the transfer of housing assets is not, in my view, an easy problem. I know that a number of my hon. Friends and people outside this House still have considerable reservations about the principle. I believe that many people are dubious about the risks of creating municipal housing monoliths or near-monoliths. Our amendment, to which I shall come later, reflects this feeling to some extent.
  Although the balance between the private and public sectors has, on and off anyway, been the theoretical objective in the new towns for much of their life, at present it is quite clear that the balance is heavily tipped in the direction of the public sector. I do not believe that the overwhelming domination of any one area by one particular form of housing is right. It is a serious weakness where the local authority housing swamps the rest, and it is one of the risks in the Bill that this will come about. There is a risk of paternalism and lack of choice. There is a risk that the municipal hand will be fairly deadening.
  Secondly, we have to look at the question whether some of the local authorities—the district councils—will always, or at any rate initially, have the ability to manage the very big housing stock which they will have as a result of the Bill. I am not saying that some do not already have substantial housing programmes of their own, but it must be true that in other cases they are fairly inexperienced and perhaps unlikely to be very strong in housing management. Therefore, there is already a risk that when they get this substantial increase the quality of management of housing could perhaps fall.
  Thirdly, I doubt whether some local authorities are as imaginative and flexible in their approach to housing management and to handling housing generally as, by and large, the development corporations have been.
  Mr. Eric Moonman: Some aspects of the hon. Gentleman's remarks are very worth while, but one is bound to ask why, apart from his dislike for living in a new town, he should think
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  that the local councils are less imaginative than those elsewhere. So far, the comparison has been in relation to councils and development corporations. Why should councils in new towns be less well managed or less well organised than those in other parts of the country?
  Mr. Raison: The direct comparison is with development corporations but it is true in some areas, because the great bulk of the housing will have been in the hands of the development corporations, that the local authority which will inherit a programme may not have the resources and the experience. Therefore, I believe that it is a real problem. Certainly, it is one which has been reported to me.
  Mr. Michael Latham: I believe that this matter is related to a Question I asked about whether a new town corporation, if it does not have local authority overall representation, was able to have a broader view than the local authority itself of the national housing problem.
  Mr. Raison: That is a valid point which my hon. Friend is likely to develop in the course of the debate. In many cases the development corporations have shown flexibility and imagination in their approach to the housing pattern in their areas. They have been willing to think in terms of co-operatives and so on and have had a good deal to contribute. They have had very lively people working for them in many cases, and those lively people have made an important contribution.
  Fourthly, there is a feeling among some people that this move may be premature and that the overall programme needs to go further before this measure is really necessary. I would certainly stress that the transfer in particular cases should not be rushed. It is basically the intention of the Bill that the transfer should normally occur at the point of fulfilment, or whatever one may call it, and to rush it would be a great error. The Minister said that there were opportunities for earlier transfer. It would be a great error to overuse such opportunities. In other words, transfer should take place only when a development is really ripe for it.
  Fifthly, some of my hon. Friends take the view that it is questionable whether taxpayers' assets should be handed over

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  to particular, fortunate groups of ratepayers. Whether this will result in a plus or a minus on the rates is something we shall probe, but inherent in what the right hon. Gentleman said was the fact that this cannot hit ratepayers. I am not sure about this, but there is a feeling that there is no special reason why a national asset which has been advanced from national funds should be distributed to selected groups of ratepayers across the country when not all ratepayers have that particular benefit. This hinges on the question of the financial implications of the Bill, to which I shall return.
  Mr. Stanley Newens: At the same time as he takes such strong objection to the local ratepayers having these assets, is the hon. Gentleman prepared to sell them off on the sort of terms that have been applied in the past? If so, does that not show a strange disparity of judgment as between ratepayers and people who are concerned only with profit?
  Mr. Raison: I can reassure the hon. Gentleman to some extent. I have said that I am reflecting the views of a number of my hon. Friends and people outside the House. It is reasonable for an Opposition spokesman to air those views in such a debate. I was about to say that I support the principle behind the Bill, but it would not be a very good debate if we did not talk about those matters, particularly as I suspect that there will be no great rush in the conduct of our proceedings.
  In spite of the reservations I have expressed, therefore, I believe that the first principle of the Bill is right. I do not believe that we should have permanently a clutch of Government-controlled towns, which is essentially what new towns are. They should be normalised, with the normal provision for local government and for different patterns of ownership. There may be difficulties, but I am confident that local government is capable of doing the job of running the new towns, and particularly new town housing. Local democracy rather than Government-appointed corporations is the right vehicle for that, and the Bill is a definite step in that direction.
  Naturally, the local authority associations take that view. The Association of District Councils, which is the one most
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  concerned with the Bill, certainly takes it in principle. It is appalling that that Association and other bodies should not have been able to see the Bill until a day or so ago. We know that there are difficulties, but there has been a minimum of time in which to read the Bill, as opposed to the consultation papers which preceded it. It is very unsatisfactory that we should have so little time. When I asked the Association for its comments, it said that it had not seen the Bill.
  The Association of County Councils, although not directly concerned, is sympathetic to the view that local authorities should hold local assets. The Association of Metropolitan Authorities takes a rather austere view. It is not prepared to tell anybody except its vice-presidents what it thinks about the matter, and certainly it is not prepared to tell Opposition spokesmen. That makes life a little difficult. I am not sure whether it is prepared to tell the Minister what it thinks. I only hope that one of its vice-presidents is here for the debate.
  I think that on balance the local authority associations are right, although I also think that local government must recognise that if it acquires the assets it has an obligation to handle them effectively and sensitively, and particularly to dispel the fear of a paternalist quasi-monopolist landlord. It must recognise that in the new towns the need is for as much choice and variety as possible, and particularly the maximum stimulus to home ownership.
  I come to our amendment. The Bill gives a splendid opportunity to encourage home ownership. We believe that new town tenants, just like council tenants, should have the right to buy their houses. The Minister said that he did not understand the amendment. He must understand the meaning of "right", which is that one is entitled to buy one's house. It is a simple proposition even if it is one with which the right hon. Gentleman disagrees.
  The exact way in which that right should be exercised is a matter that we shall pursue in Committee, but the principle is clear. It is likely that the right should be exercised before transfer takes place. That would be the natural time, but that too is a matter to argue in more detail in Committee. What is important today is to establish the principle.

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  It is interesting that reinforcement for my objective—the right of council tenants or new town tenants to acquire their own homes—comes from two different quarters. The Building Societies Association has issued a statement, and I quote from the report on it in today's issue of The Guardian by Judy Hillman, who says:
  "Council tenants should be allowed to buy their present homes and local authorities should encourage others to move out into owner-occupation to free their publicly-owned flats and houses for people in greater need, according to the Building Societies Association.
  'It seems strange that with so many council tenants wishing to become owner-occupiers, one-half of the resources of the building industry are currently going into council building,' says the BSA evidence to the Government's housing finance review. … The BSA backs its council homes sales policy by pointing to the evidence that about 70 per cent. of households would like to own rather than rent, compared with 53 per cent. at present. The trend has in recent years been satisfied not merely by new building but by transfers from the privately-rented sector. In time this source must dry up, which, unless councils sell, must mean increased pressure on the pool of homes for sale and higher prices, together with a gradual excess of council housing over demand—unless rents are kept very low."
  Mr. Corbett: I am sure that on reflection the hon. Gentleman will not subscribe to the plea, inherent in the Building Societies Association's statement, for the establishment of public housing ghettos. Does he not recognise that there is a fundamental difference between the Commission for the New Towns and local authorities? It is many years since the Commission built any housing, apart from housing for elderly people, so the stock would diminish.
  Mr. Raison: I am not clear about the second point, but the Bill treats the Commission and the development corporations together. I believe that in the new towns, as in ordinary local authority housing, an overwhelming advantage is to be derived from allowing people to purchase their council houses.
  I wish to quote next a very different source. Mr. Frank Field, director of the Child Poverty Action Group, has produced a pamphlet called "Do We Need Council Houses?", published today by the Catholic Housing Aid Society. I am sure that the Minister has already studied it or that he will do so very shortly. The pamphlet says:
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  "there is a growing sourness in the council estates themselves as tenants become more and more aware of the extent of the serfdom imposed upon them by their council tenancies."
  He adds that there should be detailed consideration of
  "making over the whole of public sector housing to the tenants".
  Mr. Field produces some interesting arguments, which come from perhaps a rather surprising source. He stresses that they come from a Left-wing source, and he makes no bones about his politics.
  The Government—including the Minister for Housing and Construction, whom I am pleased to see present—should seriously consider what is coming from the Left, even if they are sometimes not very keen overtly on listening to what comes from the Right. I do not want now to go into detailed consideration of what Mr. Field says. The passage I have quoted shows that the belief in owner-occupation of present-day public housing is by no means a Tory prerogative.
  The House today has a clear chance to vindicate the principle that Mr. Field and I advocate. He makes a particularly important point when he talks about the need to spread wealth and power throughout the community. That is a sound pluralist sentiment with which I am in full-hearted agreement.
  The case in principle for our amendment is very strong. By contrast, the Government have blocked the sale of new town houses. It is appalling that the Minister did not even refer to his own policy on the matter. In 1970 the last Conservative Government gave development corporations the power to sell at 20 per cent. below market value. In 1972 more than 15,500 such houses were sold, and in 1973 more than 7,250 were sold. Then a circular was issued by the present Government on 5th September 1974 banning the sale of new town houses. It was the height of doctrinaire folly, and I only hope that Ministers who have said that they will review the matter will ensure that the ban is lifted immediately.
  I hope that Ministers will also be prepared to encourage the spread of Housing Corporation-backed properties in the new towns. As well as allowing for the sale of new town houses to sitting tenants, we should also give a stimulus

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  to housing association activities as part of the process of transferring assets.
  The balance in new towns is unsatisfactory. At the end of 1974 there were 141,762 homes managed by development corporations and the Commission, 108,235 homes managed by local authorities in those areas and only 33,918 homes built by the development corporations in owner-occupation. That shows the enormous discrepancy between public and private sector housing in the new towns and is quite contrary to the spirit of the whole movement.
  In the early new towns, the proportion of owner-occupation is particularly low. It is rather better in the later towns, where new development has been joined on to substantial existing towns. In Harlow only 20 per cent. of all housing is privately owned and in Hemel Hempstead only one-seventh of the total housing stock built by the development corporation is owner-occupied. In Peter-lee only 908 houses are privately owned, compared with 6,800 rented homes. This cannot seem right to anybody unless he has a complete Clay Cross mentality.
  There are a number of other significant points which must be considered, including the definition of assets. Clause 1(3)(g) is not satisfactory. There is no reason why we should not have a schedule to the Bill defining more clearly the assets to be transferred. As Clause 1 stands, the Secretary of State can specify the assets to be transferred. This is not good enough.
  There has to be an Order to set out the provisions of Clause 1(3)(g), but Orders do not give us a proper chance to debate a matter, particularly if they are taken under the negative resolution procedure. We should have a schedule to define housing-related assets.
  Should housing-related assets include shops and garages? It should be possible to argue these points in Committee. In many cases, the right answer will be to sell the freeholds. I hope that the Government will be reasonable and see the force of our argument.
  We must also consider the financial considerations. The scheme in Clauses 8 and 9 is broadly reasonable unless one takes the view of some of my hon. Friends that we are transferring national assets to
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  local groups, but we need information on what is at stake. For instance, what is the rough size of the assets in each town? What will be the consequences for the ratepayer and the Exchequer?
  The Minister said a little to clarify these points, but this is a complicated matter and it was not easy to take in his statement. We need a clearer idea from the Government of the effect of their proposals on local and national balance sheets. In particular, we should have a full explanation of the Clause 9 provision for temporary grants while new town housing is assimilated with other council housing. We also need information on the levels of new town and local authority rents in the same district. Are new town rents higher or lower? What will happen when the new town housing is assimilated?
  We all understand the need to look after the interests of staff properly, and I suppose that a New Town Staff Commission may be an effective way of doing it. That was the approach used in local government reorganisation, but we must learn lessons from that reorganisation. If this exercise results in duplications and widespread upgradings, it will not be generally acceptable. We all know what happened in the local government reorganisation.
  Mr. John Silkin: I am grateful to the hon. Gentleman for giving way. This is an important point which we should make clear to the staff. Section 260 of the Local Government Act dealt with a situation where 1,200 local authorities were to be reduced to just over 400. There were bound to be enormous redundancies. In the present case, this is not so. We are dealing with the same number of housing units and the same number of new towns.
  Mr. Raison: I see that it is a different situation, but there will be a merging of development corporation or Commission housing with local authority housing and it should be possible—and must be desirable—to achieve economies of scale in that operation with a single integrated management.
  I am asking for an assurance that the protection of the staff will not be the only consideration. We want an assurance—I accept that this did not happen

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  satisfactorily under local government reorganisation—that there will be efficient and economic management. There was nothing in the Minister's speech which gave us any guarantee on this important aspect.
  The local authorities which will be the new employers have a big responsibility. They will be faced with the problem of having available new managers who, in many cases, may be of a higher quality than their own. These authorities have a duty not only to defend their own people but to look at the quality of the people coming to them and ensure that they get the best and that jobs are not given on the principle of Buggins' turn. It is vital not to create bureaucracy for bureaucracy's sake.
  It therefore seems slightly Parkinsonian that at the time we are proposing to hand over a chunk of operations to local authorities we should be increasing the size of development corporations. It is rather like Parkinson's famous statement that every time we lose a ship we gain an admiral.
  I accept that there must be a reasonable mix in the management of development corporations, but this must be justified by the Government in Committee. Of course, there is not a great deal of public expenditure at stake. We are talking only about part-time members for a number of corporations, not about sabotaging the whole Exchequer, but it is right to look prudently at any increase in public expenditure.
  Despite the reservations of many people I believe that the principle of the Bill is acceptable, but we need the maximum encouragement of home ownership on social and economic grounds alike.
  I ask the House to support our amendment in the Lobby tonight.
  4.50 p.m.
  Mr. Eric Moonman: The House should compliment my right hon. Friend the Minister on having shown tremendous determination in the Labour Party, in the House, and, no doubt, in other places in making sure that we have the Bill. It has also required a considerable exercise in patience on the part of many of my hon. Friends. It was a demonstration in the classic tradition of waiting for Godot. We have been pro-
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  mised the Bill for many a year. I would add that there is a considerable amount of support for the Bill in the Labour Party and in many of the new towns. People are interested in the type of organisational structure and decision-making which my right hon. Friend mentioned in presenting the Bill.
  New towns are unique, and that gives them strength in the way houses and jobs are related. The Bill attempts to transfer a major aspect of decision-making from a development corporation to the local council. This is a remarkable occasion. Hon. Members who are not particularly interested in new town life fail to recognise the important aspect of social change which new towns represent. Of course, the subject does not have the political overtones that can fill the House, but the Bill is an important development in recognising social change involving many levels of consultation and participation. The Bill ensures that people in new towns will have the same rights as people in the rest of the country.
  New towns are not insignificant in population. They are big business. If I resent anything in the speech made by the hon. Member for Aylesbury (Mr. Raison), it is that, although he took into account many aspects, including his amendment, he was unable to understand the spirit or the wavelength of new towns. That is an impediment which he should overcome if he wants to remain on the Opposition Front Bench.
  New towns fulfil an important part of housing policy. We are talking about 2¼ million people in 33 new towns. We are talking about the eight new towns in the London ring—including my own new town of Basildon—with a total population of half a million. We are talking about the other new towns throughout the rest of England with a population of 1 million, the two new towns in Wales with a population of 52,000 and the new towns in Scotland and Northern Ireland. The total population is thus nearly 2¼ million. There are new towns in every part of the country, and they include developments and scale of every conceivable kind. Some have been established on existing towns and others have replaced shanty-town dwellings. Yet they all reflect an important part of housing policy.

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  The hon. Member for Aylesbury misjudges the mood of the new towns. I am surprised that he moved an amendment at all to the Bill. I recall the useful and constructive discussions in the Select Committee under the chairmanship of the hon. Member for Daventry (Mr. Jones). Naturally there were arguments about the way in which the new towns should develop, but I regret that this occasion should be used to divert attention from the central core of the Bill to the old political knockabout, in which both sides have engaged in the past, by bringing in the question of the sale of council houses.
  Mr. Michael Morris: Does not the hon. Gentleman think that the central core is what shall happen to the tenant? We are, after all, primarily concerned with the tenant, and it is for that reason that my hon. Friend moved his amendment.
  Mr. Moonman: There are many reasons why amendments are put down, as there are many motives why two- and three-line Whips are issued. No doubt we shall have a full House at 10 o'clock, but that is not reflected in the Chamber at the moment. I am not quite so naïve as to imagine that the amendment was put down only in relation to the rights of the new town tenant. Of course the tenant family is critical in the new town and therefore the Bill is concerned to see that the individual tenant shall have the right which is given to every other person in the country—namely to elect and reject those who take decisions for him. In other words, if people do not like what the local council is doing, they get rid of the local council. Of course development corporations have done a fine job for their communities in the main, but we are considering other issues today.
  I am somewhat disturbed about the statement by the Opposition spokesman that he is in favour of selling off shops and industrial complexes to private developers. We had experience of that in Basildon New Town when a shopping precinct was sold. That was a disastrous step. It certainly did not reflect the needs of the community. A few people made a lot of money in the short term but did nothing to fulfil the requirements of a new town.
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  New towns are unique because their reputation is world-wide. They have been examined by industrialised nations such as the United States and Japan. The new town of Columbia, for instance, in the United States attempted to put into practice some of the ideas of our new towns. New towns are also attractive to underdeveloped countries in Asia and Africa. We tend to take them for granted and forget how widely respected are the principles which underlie the new towns. They are exciting places to live in.
  However successful the first 30 years have been, we have to look to the future. I agree with the hon. Member for Aylesbury that there should be an opportunity to examine the whole strategy of the new towns and where they are going. I should like to think that the Select Committee made a contribution in that direction. We must consider new town development in the context of the country's total housing, industrial and environmental strategy. I welcome the Bill, but it is not within its province to correlate those three aspects. Just as the responsibilities of the Department of the Environment involve planning, housing and transport, we should be able to ensure that in the new towns there is an identity of interest in these various aspects.
  One of the main aims in the new towns must be to keep housing and employment within balance. This is recognised in the various periods which it is suggested elapse before the balance is completed, Over the past decade that balance has not been achieved wihin the existing new towns, largely because there have been no special incentives to get manufacturing industry into new towns unless they are in development areas. That is what I mean when I say that new town development must be seen in terms of a total strategy. Houses without jobs make nonsense of planning, and so also do jobs without houses.
  The housing responsibility of the new towns is twofold. It is to accommodate newcomers from inner city areas and to accommodate the second generation. If the second generation is to become the responsibility of the local authority without careful handling there may be some resentment. I hope that reference will be made before the end of the debate to the rôle of the industrial selection scheme which operates in London and the way

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  in which the exporting authorities will be able to continue to arrange agreements wtih new towns, should they choose to.
  It is quite clear to me that, once the scheme has been completed, that must mean the end of the formal arrangement between the exporting authority, London, and, say, a new town such as Basildon. It would be extremely useful to hear from the Front Bench this evening exactly what is meant by the phasing out in regard to the old exporting authority agreements.
  Next, how far have the new towns succeeded in creating real communities? In terms of shops, houses, schools, factories and offices, there are enormous operations involving a capital expenditure of over £14 million. In material terms the environment in the new towns is excellent, but all too often a sense of community is lacking.
  There are many reasons for this. There is the reluctance of the older generation to move out of the cities, creating a gap in the social or home environment between those who have gone into the new town and the parents who have been left behind, perhaps in London. There is a very considerable responsibility on the part of the new councils to deal with this problem.
  It is to the credit of the development corporations that some of them have tried to understand the complex problems emerging from this extraordinary switch in the life of a family. Quite willingly, young couples and their children have been uprooted and moved perhaps 30 to 40 miles from their traditional home area. Any way of bringing the older people closer to the new town is worth analysing and pursuing.
  Then there is the lack of adequate transportation to the shopping centres and to the recreational facilities in the new towns. This has also contributed to the lack of a sense of environment. In developing new towns, we have to think about what is left behind. If there is to be a serious discussion at all, perhaps it will come up in Committee, but more likely it will be on the occasion of another debate to consider the strategy of new towns. Certainly we should examine the way in which the older communities in the cities have tackled the refurbishing of their environment.
  Those of us who are deeply committed to new towns must have regard to the
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  state of the cities left behind. One of the main purposes of Ebenezer Howard's garden cities was the reordering of the cities whose populations were driven out. This is a crucial part of any debate on new towns. We want to ensure that the environment is right and that the opportunities are right in the new towns, but we also have to reflect on the needs of the old cities.
  In Paris the thinking on this type of thinning out has been translated into action, but in Britain it has still not yet been done. There has been no more than a late mention in the Layfield Report on the Greater London Development Plan.
  The development of the vast areas opened up by the demolition of hundreds of acres of slums in Liverpool, as well as in London, is too big a burden and problem for the city authorities. We need an authority with the powers of a development corporation to plan the housing, shops, open spaces and recreational facilities, so that these areas may live again. But it is a preliminary measure and should be seen as such.
  Within the context of the Bill there are two matters that I should like to raise with the Minister. The first concerns staff. He will not be surprised if other hon. Members also speak on this issue. I am sure that, as the Minister pointed out, we want to establish a proper formula so that there is adequate security for all concerned. There is a feeling among the staff that they should have every facility and opportunity to work within the new structure.
  Clause 12(4) states:
  "The Secretary of State shall make regulations under section 24 of the Superannuation Act 1972".
  As I understand the Bill, it does not provide compensation in line with the Crombie formula, nor is it in line with the compensation paid to local authority staff on the reorganisation. I am aware that certain assurances have been given on this, but it would be helpful if we could have some statement tonight.
  Another aspect requiring qualification is Clause 9, concerning district councils and the types of grants which would be available. This again will become a contentious issue. It may be a Committee point, but I should have thought we should be prepared to talk a little now

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  on the question of grants to district councils and how the operate in the short term.
  In giving support to the Bill I recognise that it is the result of a lot of hard work, and of the effects of many Members of Parliament—and, elsewhere in the Labour Party—to maintain a pledge. But perhaps it is more than that. It is an attempt in the form of a Bill to ensure that people involved in new towns do not have to suffer the impediment or handicap of being second-rate citizens. They are entitled to the same rights and opportunities as people living in other communities. I should not want this to be minimised.
  It would be a great pity if because of the Opposition amendment we lost sight of the significance of the philosophy behind the Bill. I wish that all of us on both sides of the House could forget the amendment for the rest of the debate. It is far more impotrant to concentrate our time and thought on the most complex matter of living in and organising new towns. Many of the problems have been overcome but there are still matters that require to be dealt with.
  I do not think that the creation of the single authority will cause quite the anxiety that has been suggested. What it means is that a lot of people will start asking questions. Already my colleagues and I can give evidence of the fact that constituents in the new towns have a desire to know what the transfer will mean for them—whether for the development corporation tenant there will be an increase in the rent, and what is to be the position of the people in council houses as compared with those in corporation houses.
  There is a powerful demand for information. My right hon. Friend correctly mentioned this. When major decisions are made in industry and business, or when there is anything comparable to a merger, the most careful consideration needs to be given to communication and consultation. The need applies equally in the context of new towns at this time. Anyone who imagines that this can be done cheaply, or that it is relatively unimportant, is making a great mistake.
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  If there is a single sentence of caution and advice to give to the councils and boards which will soon have this responsibility, it is that they ought to ensure that they devote an increasing amount of time to providing full and intelligent communication to all who are affected. What is required is basic information about what it will mean to the people concerned over a period of 10 to 15 years. The councils and boards ought to have the wit and insight to understand that it is not only information for this generation that is required but information for the next generation as well.
  I welcome the Bill and am pleased that it has come up in this form and at this time so that we have a reasonable chance of seeing it on the statute book before the Summer Recess.
  5.8 p.m.
  Mr. Spencer Le Marchant: I want to speak not to what is in the Bill but to what is not in the Bill. The hon. Member for Basildon (Mr. Moonman), in his very useful contribution, said that new towns were unique. I do not believe that new towns are unique. I believe that any large collection of houses out of which a community is formed has exactly the same problems.
  I should like to address the House specifically on the problem of overspill. Whether we are talking of hundreds of thousands of people or about a community of 4,000 people, as in my constituency, they are people facing the same problems—housing and employment problems, as the hon. Member mentioned, and the need for a community feeling. The same problems arise in each kind of community. I am certain that the Minister, with his inherited talent, will be able at a later stage of the Bill to bring in the problem of overspill.
  I should like to refer to the overspill problem at Gamesley on the Derbyshire moors. There, 1,000 ft above their native Manchester and 15 to 20 miles away from it, are 4,000 people living not where they wanted, but in an isolated community. What chance do they have of being assimilated into the local community?
  Their estate is not owned and run by the local authority in whose area they live. It is run and managed from Manchester. They have no contact with the

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  High Peak council. The only contact is the informal liaison at councillor and officer level. The tenants on these sites are virtually disfranchised. They have no representatives on the Manchester authority which runs their lives and which is responsible for the money for their estate.
  However, the High Peak local authority is responsible if anyone on the estate is evicted. It has to rehouse children who grow up and move away from home but remain in the area. Manchester assumes no responsibility for that and there is no guarantee that the Manchester authority will do so.
  An information service has been formed in Manchester. High Peak has constantly fought for greater involvement with the estate, but, sadly, it is unlikely that Manchester will agree to it. The city did not take advantage of the 1974 Act. Surely this means that the Minister must ensure that the High Peak authority should act as agent, or that there should be a joint area housing committee, or a joint consultative committee.
  I agree with my hon. Friend the Member for Aylesbury (Mr. Raison), who put so clearly and concisely the case for people being able to buy council houses. We in High Peak operate such a system. Manchester does not. Therefore, it would be difficult to operate such an agency for the overspill estate.
  That need not represent an impenetrable barrier, but this is a serious social problem. If these people are to be assimilated into the local community, the estate must be run on a local basis with the tenants enjoying local representation. As the generations pass, they must be integrated into the community in which they live. Many of those involved now are unhappy and feel that they still live in Manchester.
  We realise that Manchester, with its vast housing problem and it's homeless, must go on nominating people to these estates, but that would not stop the local authority in whose area they are situated from running the estates. I am sure that I speak for hon. Members on both sides whose constituencies contain overspill estates. We all know the problem of assimilating and integrating people into a local community when they are disfranchised.
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  This afternoon the Minister said "Give the towns to the people who live in them". I say that what is right for the new towns is right for the overspill towns and estates. It is only by full participation in the areas in which they live that these people can truly be made to feel at home. I therefore ask the Minister in the name of humanity to include clauses in the Bill which will do for the people in overspill estates what he is seeking to do for those in new towns.
  5.15 p.m.
  Mr. Stanley Newens: The hon. Member for High Peak (Mr. Le Marchant) has raised the interesting issue of the rights of people in overspill towns. If he feels it necessary to appeal in the name of humanity for those people to be covered by the Bill, he should at least support the principle of the Bill and vote with us tonight to apply that principle to the people in the new towns.
  Mr. Le Marchant: I shall certainly vote for the Bill provided we have an assurance that it will give tenants the right to buy their houses.
  Mr. Newens: I shall not pursue that. Like my hon. Friend the Member for Basildon (Mr. Moonman), I warmly welcome the Bill because it embodies a major aspect of a principle with which I have been concerned for more than 20 years. I not only have the privilege of representing Harlow but I have seen it develop from its inception. I knew the area before the new town was designated. I have watched the town grow and I now live in it.
  I say to the hon. Member for Aylesbury (Mr. Raison), whose supercilious approach shocked me, that he should take a closer look at new towns and he might then not feel it necessary to deal with them so disdainfully. He began by saying that new towns were a good idea but that he did not wish to live in one. He suggested that they should sell off all their industrial assets. He then cast aspersions on the ability of new town local authorities to manage their housing adequately. Then he suggested selling off the houses to the tenants.
  Does the hon. Member realise, living as he does in a superior residential quarter, that the real problem facing people

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  living in new towns is to obtain houses to rent? The sale of new town houses to sitting tenants would at least lengthen, and in some cases double, the waiting time of those who do not command the financial resources to buy their own homes. In those circumstances, there should be strong objection to selling off new town housing to sitting tenants.
  There is, of course, no objection to people buying their own homes, but houses for sale were built in Harlow and other new towns. There is no objection to sitting tenants moving out and buying property elsewhere. If the absolute right of tenants to buy their homes is so important, why have the Conservatives not introduced a Bill to give tenants in privately rented accommodation the right to buy their homes from the private landlords? That would seem to me quite consistent with their argument.
  Mr. Stephen Ross: Since the hon. Member has personal experience of new towns, which I have not, can he say what is the waiting list at Harlow for new properties? Has he any figures for other new towns, such as Milton Keynes?
  Mr. Newens: If the hon. Member wants a serious reply to that question, I can obtain it for him, but I should not like to give it off the cuff. The number of people in the new towns who require houses to rent is very much greater than those who require houses to buy. The latter group experiences no difficulty in Harlow or the locality provided they have the necessary finance, and I imagine that the same situation applies in many other new towns.
  I turn to the real purpose of the Bill. We must remember that the original intention of the 1945 Labour Government, who created new towns, was to transfer the assets to the local authorities. My right hon. Friend's father said:
  "it is the intention when the development of a new town is substantially complete, to wind up the corporation, and, by agreement with the local authorities, to transfer the assets and liabilities of the corporation to the local authority … of the area in which the new town is situated."—[Official Report, 8th May 1946; Vol. 422, c. 1080.]
  That intention has gone through many vicissitudes.
  The 1959 New Towns Act, introduced by the present Opposition, provided for
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  transfer to the New Towns Commission. The Labour Party opposed that Act and pledged that it would return to the original concept. Failure to implement that pledge between 1964 and 1970 caused disappointment to many Labour supporters and to the new town public in general. By introducing the Bill my right hon. Friend is redeeming a pledge of long standing and will help to restore the faith of those in the Labour Party concerned with new towns that promises are kept.
  The Bill deals with the transfer of the ownership of rented dwellings and related assets held by new town development corporations and the Commission for the New Towns. That is desirable on many grounds. It is right that such assets should be democratically controlled through the local authority. It is wasteful in the long run to have separate authorities—one elected and one appointed—in the same town. By saying that I do not intend to denigrate the tremendous achievements of the development corporations.
  Harlow, like most of the other new towns, could never have been built by the original local authority. In Harlow, therefore, we recognise the great debt that we owe to the original members of the development corporation and to the general managers. But the time is approaching when the development corporations could be said to have fulfilled their rôle.
  When that point is reached, it is right that assets should be transferred to the local authority. That applies not only to the housing stock, but to industrial and commercial assets. I have never believed that residents of new towns should have the privilege of reserving profits to themselves, although I am aware of the danger that new town authorities might be played off against each other by industrial or commercial undertakings seeking suitable sites for development in new towns.
  Nevertheless, democracy should be applied to industrial and commercial assets as much as to housing assets. I advanced that notion at a statutory estates committee of the local authorities. If that is unacceptable and a re-vamped Commission is to be established as proposed in the consultative document, it must comprise democratically elected members. I hope that my right hon.

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  Friend will eventually introduce legislation to achieve that. By then there may have been some progress in the transfer of ownership of rented dwellings and related assets.
  One of the problems is bound to be the related assets issue. Perhaps it is sensible not to attempt to cover every contingency in the Bill in view of the variation in the form of these assets in different towns, especially in the shopping centres. In Committee we shall have to consider what constitutes a town centre and what a neighbourhood shopping centre. I believe that the neighbourhood shopping centre should be transferred to the housing authority along with the housing assets.
  The facilities which are owned by the development corporations at present will also cause problems, because they are sometimes used both in connection with the maintenance of houses and for other purposes, such as landscaping. The problem of demarcation will arise and it will require careful consideration. But it will be possible to consider that at greater length in Committee.
  The financial repercussions will be of great importance. I remember a Labour Party conference at which Lord Diamond, in a previous incarnation, suggested that the transfer of housing assets should be at current valuation. That caused an outburst of feeling because it was felt that it was outrageous for anyone to consider that.
  I therefore welcome the fact that the proposed transfer will be on the basis of outstanding loan debt. However, the situation, which is partly dealt with in Clause 3, is still not clear. We shall have to decide various questions during the transitional period. We shall have to decide whether the corporation or the local authority is responsible for certain residual costs.
  Even more basic is whether the transfer of housing assets will lead to a greater financial burden for the tenants of new town houses than would have been the case if the development corporations and Commission remained in existence. This will depend to a large extent on the future of existing Exchequer grants under Section 42 of the New Towns Act, 1965.
  A substantial burden could be placed upon new town tenants if these grants ceased. My right hon. Friend has said
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  that it could lead to an increase of 6p or 8p in the rates. The transfer should not result in tenants and others being made substantially worse off than they would have been if the transfer had not taken place. There is, therefore, a need for other grants if Section 42 grants are to be phased out. They must last at least for the transitional period and for long enough to prevent hardship for the tenants and residents of the new towns. Tenants and residents will undoubtedly feel bitter if the industrial and commercial interests in a new town are making a profit which is going to the Exchequer while they are obliged to pay increased rents.
  There is also the question of nomination rights with which we shall have to concern ourselves. On the whole, local authorities and development corporations have adopted a sympathetic attitude to the housing needs of all sections of the community, but the local authorities must necessarily take full account of the needs of industry concerning nominations.
  I should like to mention the staffing problems referred to by my right hon. Friend the Minister for Planning and Local Government and my hon. Friend the Member for Basildon. I welcome the decision to set up New Towns Staff Commission. We in the new towns owe a great deal to the loyal service which has been given by the Commission's staff. It would be totally wrong to cast them off without consideration. At the same time, it would be wrong unduly to inhibit the local authorities which take over from making reasonable changes of structure in due course. We must work out the proposals in each case, and the New Towns Staff Commission will certainly make that possible. In these circumstances I welcome my right hon. Friend's undertaking to safeguard the interests of all employees.
  The Bill goes a long way towards fulfilling the aspirations of many years of many residents of new towns. Anyone who meets such residents will know that there is a genuine desire at the grass roots for the local authorities to take over. Some years ago the hon. Member for Daventry (Mr. Jones) visited Harlow. The hon. Gentleman will recall the tremendous interest in and considerable respect for his contribution to that conference by those who were present. I am sure that he will

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  be aware of the strong feeling among people living in new towns that the transfer should take place.
  I am sorry that the Opposition have decided to move an amendment declining to give a Second Reading to the Bill. It will not advance the cause of the Conservative Party among new town residents. Voting against the Bill flies in the face of what new town residents on many different sides want.
  I am proud to represent Harlow—a new town which has produced a new and vibrant community which has tremendous variety and vitality. It has achieved high standards of housing, education, environment, cultural activities and community participation. Harlow is outstanding, but many other new towns have also achieved very high standards.
  I believe that Harlow and the other new towns represent one of the great achievements of a great post-war Labour Government who put the idea on the agenda. Today, in the light of the success which has been achieved in establishing these communities, we have the opportunity of fulfilling the aim of the pioneers by giving the Bill a Second Reading.
  I am delighted to have had the opportunity of expressing my support and that of a great many people in Harlow for what the Bill seeks to do. I hope that it will shortly be on the statute book.
  5.33 p.m.
  Mr. Peter Hordern: I share the admiration of the hon. Member for Harlow (Mr. Newens) for the success of the new towns. At the end of his remarks he said that the Bill gives the people of the new towns what they want. I ask the hon. Gentleman and the Government to put the matter to the test by offering to the tenants of the Commission for the New Towns the opportunity of buying their own homes before they are passed to the local authorities. That is what democracy is all about.
  We should not underestimate the importance of the Bill. It is said that the financial effects of this legislation on public expenditure will not be significant. However, housing assets worth at least £300 million for the Commission for the New Towns alone are to be handed over to the respective local authorities—and
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  handed over, it is understood, on a historic cost basis. When we consider that all four new towns representing the Commission—Crawley, Hemel Hempstead, Hatfield and Welwyn Garden City—were built at a total cost of £112 million, including the infrastructure, the factories and the industrial estates, we realise what an extraordinary bargain that represents to the local authorities concerned.
  I echo what was said by the hon. Member for Harlow in paying my tribute to the expertise and success of the Commission's staff. They have certainly done an extremely good job in Crawley. I share the concern of the hon. Member for Harlow and others who have spoken about the fate of those servants of the Commission who may or may not be taken on by the respective local authorities. We shall be interested to learn in Committee what the arrangements will be.
  In Crawley almost 10,000 houses will be handed over to the borough council. This Bill represents the largest transfer of assets owned by the nation to certain communities which has ever taken place. The question is whether this transfer can be justified.
  I was interested in what the hon. Member for Harlow said in referring to Lord Diamond, who suggested at a Labour Party conference that the assets should be handed over at current market price. I can imagine what kind of reception the noble Lord got on that occasion. I am sure that he spoke as a Treasury Minister. I am amazed that this transfer has emerged intact, despite what must have been opposition from the Treasury. It is no wonder to me why the Bill has been delayed so long. I should think that the Treasury has looked long and hard at the arrangements and has not cared for them one bit. Therefore, the assiduity and pertinacity of the Minister in presenting the Bill must be admired.
  The tenants of the Commission's houses should have been invited to say whether they wanted the council rather than the Commission as their landlord. We hear a lot from the Labour Party about participation, but it does not appear to extend to asking tenants whether they want to be tenants of the Commission for the New Towns or of the council. It is the tenants' views that should count.

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  Before the assets are handed to the councils, I think that tenants should be given the opportunity of buying their own homes at a discount on the market price. From inquiries which I have made in Crawley, I understand that 4,000 people have lived in the Commission's houses for 20 years or more. They have been paying rent for 20 years. Another 7,500 people have lived in the Commission's houses for 15 years. There is no doubt that the opportunity for people to buy their own homes would be popular with the Commission's tenants in Crawley, as was demonstrated by the fact that 2,300 houses were bought in that way in a very short time. But people who have been tenants of the Commission for many years now face the prospect of sharply increasing rents under the council. Having paid out for so many years, they should at least be offered the opportunity of buying their own homes and providing themselves with the ultimate security.
  Mr. Newens: Does the hon. Gentleman find, as I find in my new town, a continual stream of constituents who began to buy their own houses in the period to which he referred and have now got into tremendous difficulties as a result of mort gage repayments going up? When families split up, there are even greater problems. Does the hon. Gentleman agree that the selling of houses in this way produces tremendous problems of that kind?
  Mr. Hordern: The hon. Gentleman makes an interesting point. I have not met a single case, either in my surgeries or in correspondence, involving a tenant who has bought a house and who has subsequently found himself in trouble. There is a direct answer to the hon. Gentleman, because he has only to read the last report of the Commission for the New Towns to see the number of people who have bought houses as tenants, and who have asked the Commission to buy them back again.
  I was dealing with those who had lived in their houses for many years being given an opportunity to buy their own homes because otherwise they face the prospect of higher rents and of being tied to their homes for the rest of their lives. They will not be free to live somewhere else on retirement. An increasing proportion of the Crawley housing stock
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  will be occupied by pensioners, not necessarily through choice but of necessity because they will not be able to move elsewhere.
  The Commission's tenants should understand the position of the Crawley Council. Indeed this applies to all Commission tenants, wherever they may be. It is not an easy situation. New towns possess no old stock of housing to ease their problems, as is the case in older communities. The situation is rapidly growing worse. In this year, 1975–76, the Crawley Council's stock of 3,000 dwellings will cost £900 a year each to run, but the tenants provide less than one-third of that sum by way of rent. Next year, 1976–77, the cost of running 3,500 dwellings—the present figure will increase because of the large building programme in the area—will rise to £1,285 a year, or about £25 a week for every dwelling.
  Most of that sum arises from debt charges. But the cost of administration and repairs alone amounts to almost half the revenue received in rent. In the Greater London Council I understand that the cost of administration and repairs actually exceeds the rent, so that it would be cheaper to give the houses to the tenants. Plainly, this situation cannot continue. Next year, 1976–77, the average proportion over the country of costs borne by rents will be 43 per cent. In Crawley it will be about 25 per cent.
  How does this discrepancy come about? In part it arises because the stock of housing is new, but in part it must be said that it arises because of what was clearly the very high price paid by the Crawley Council for land at Bewbush. I do not dispute that the price paid by the Council to the Reed Pension Fund and others was the right price at the time. What I say is that it was clearly, in retrospect, the wrong time to buy it. It was a pity that the Council did not buy it at the time the Reed Pension Fund bought it. I do not think that this is a happy augury for the Community Land Bill.
  So far as Lord Ryder is concerned, I must say plainly that land speculation is not the activity that one normally associates with a pension fund and that the trustees of the fund should have something to say about it. One wonders whether they were even informed. I do not think Lord Ryder could have

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  satisfied himself that Mr. Brooks, the original owner of Bewbush, knew about the special payments. It was in every sense of the word a very sharp deal. I think it is extraordinary that, from beginning to end, Lord Ryder has not uttered a single word about this whole affair. I trust that he will not be so reticent in his new rôle.
  Mr. Joseph Dean: The hon. Gentleman drew attention to the different levels of rent paid in new town houses compared with the situation in regard to normal local authority housing stocks. However, is he aware that a new town tenant, on the basis of the way in which new towns are financed from subsidies, receives a far larger housing subsidy per capita than does his local authority counterpart?
  Mr. Hordern: I am grateful for that information and it is very helpful. I do not wish to minimise the difficulties of local authorities in the new towns in view of the price they have had to pay for land and their problems over housing stocks.
  The Crawley Council finds itself with a substantial building programme and a large block of building land at Bewbush which it has been trying to sell without success. Indeed, it has been capitalising the interest on the loan taken out to pay for the land, which is not a desirable practice. Meanwhile, the Government have said that they will expect rents to cover 50 per cent. of costs by 1978–79. In Crawley the proportion is about 25 per cent. Therefore, unless something happens, both rents and rates will have to rise sharply. That "something" is the transfer of the Commission's housing to the Council. This will immediately transform the situation, to such an extent that something like 60 per cent. of costs will be covered by rents from both the Commission and the Council combined.
  I am in favour of the Bill because I am quite sure that otherwise the Council in Crawley will find it difficult to manage.
  Unfortunately, this is not a static situation. The Council planned to build 2,300 houses in the next three years and this is bound to have a significant effect on the housing account. Again, if nothing is done there will have to be substantial increases in both rents and
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  rates. Indeed, it will be surprising if the Government find that they can afford even the present proposed level of subsidies when the time comes.
  What the Council needs is a substantial improvement in cash flow. It can achieve this by raising rents and rates substantially. That would be one course. Alternatively, it can do so by offering all tenants the opportunity to buy their own homes at a discount. This would be immeasurably the best solution—indeed. I think the only solution—if this acute housing programme is to be solved. What it would do would be to provide the security which a tenant seeks, and an investment at the same time. For the Council it would mean that more funds would be available for building more council houses.
  What are the arguments against doing that? The first is that selling houses would diminish the stock of housing belonging to the Council and, the second is that it is wrong to sell houses while there is a waiting list. But there is at present virtually no turnover of houses belonging to the Crawley Council. Out of a stock of 3,000 dwellings, an average of only 80 fall vacant each year. Meanwhile, even with the major building programme, the housing waiting list increased by 10 per cent. between April last year and February this year. The truth is that there will be a waiting list so long as the rent is as low as it is—far below the market level.
  If tenants in Crawley are not allowed the opportunity to buy their own homes, it is clear that either their rents will rise steeply or the Council's building programme will come to a halt. That would be disastrous. Crawley has the lowest unemployment rate in the country and is the showplace of modern industrial Britain. I only wish that those who run down this country would spend less time in the North of England and come and see what British industry can do in Crawley. I suppose that it has the highest export ratio of any place in Britain.
  It is becoming increasingly clear, however, as I have warned for some time it would, that the future development of Crawley is at risk because the demand for housing cannot be satisfied because of the expansion of Gatwick. I said at the time that the Government's decision to

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  cancel Maplin was a mistake. Now it can be shown to be so. It is absolutely vital that the extra strain imposed by this decision should be shared by the development of both Luton and Stansted, as well by Heathrow and Gatwick. What is quite clear is that the Crawley Council is in no position on its own to meet the extra demands imposed by this Government decision. It has quite enough on its hands in trying to meet the natural expansion of Crawley. Indeed, the only way in which the demand for housing from the expansion of Gatwick can be met is in Surrey—and that authority should be given special assistance to meet the demand created by national policy.
  I foresee a most difficult time ahead. The Government have said that in future they will not be prepared to provide such a high proportion of housing costs. The choice is inescapably between much higher rents and a radically reduced building programme. That is why I cannot understand why the Government do not insist that councils should offer tenants the opportunity to buy their own homes. Here is a way of giving tenants what they want while at the same time increasing cash flow to the councils. What can the Government possibly have against it? What better way can there be of bringing power to the people, of bringing about that irreversible shift of resources about which we hear so much?
  In the Financial Times today there is a most interesting article by Joe Rogaly, who reviews a book by Mr. Frank Field called "Do we need Council Houses?" Mr. Field is a declared Socialist, but what he says about the Government's refusal to sell council houses is that
  "There is a growing sourness on the housing estates themselves as tenants become more and more aware of the serfdom imposed upon them by their council tenancies."
  One cannot help but draw the conclusion from all this that the Labour Party is not interested in letting people have what they want or even in doing what is best for them. It is plainly the case that selling council houses to tenants would be what tenants would like. It is also plainly the case that it would be a much better course financially and from every point of view.
  The truth is that the Labour Party is interested not in giving power to the people but in concentrating power to the
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  State. That is what the Labour Party's housing policy is all about, and that is why I hope that the Bill will be amended.
  5.52 p.m.
  Mrs. Helene Hayman: I am very grateful for the opportunity to speak briefly in support and welcome of the Bill. As has been pointed out by many speakers in the debate, it is a measure that is long overdue and has long been on the agenda of the Labour Party.
  I fought my General Election campaign in October 1974 on this issue, in an area which has the honour of having not one but two new towns, Welwyn Garden City and Hatfield, which are both now under the Commission for the New Towns. My right hon. Friend came there during that campaign to explain Labour Party policy. I must differ from the hon. Member for Horsham and Crawley (Mr. Hordern). I remember very well that in my constituency the Conservative candidate offered the suggestion to tenants that a referendum be held on the issue of the transfer of assets. I offered them Labour Party policy. I leave the House to draw its own conclusions as to what tenants preferred in that case.
  Perhaps one explanation of this matter is to be found in something else that was said by the hon. Gentleman. I fully admit that Welwyn Garden City is unusual in that it is an older generation new town. The hon. Gentleman said that we had no housing stock that was old. That is not so. Some of the property of the Commission in Welwyn Garden City has been there for over 40 years, and people have been tenants for over 40 years. This is the housing problem that comes to me in my constituency It is not a problem of tenants wishing to buy their own homes. The problem that confronts me at my surgeries is somewhat different.
  Last Saturday an elderly couple came to see me. They wanted a transfer to be nearer to their daughter who lived in another part of the town, but the part of the town in which the daughter lived was controlled by the council rather than the Commission. There are, therefore, endless difficulties—not insoluble, but wholly unnecessary—when two housing authorities are working in the same town.

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  The case for development corporations in the start of the life of a new town is irrefutable. It is absolutely certain that they have done an excellent job in development and a job which many would feel could not be tackled by local district councils. However, in an area such as mine it is essential now that we finally grasp the problem and give a degree of democracy to the tenants of properties of the Commission.
  While not being in any way happy about the extent to which democracy operates throughout local councils around the country and in housing estates, I still feel that it is essentially a step forward if a tenant knows the name of his local councillor, for whom he has the right to vote or not to vote at the next election—depending on whether he is happy about the way in which the council has dealt with his housing problems—as compared with simply writing to the manager of a new town, when, if the manager says "No", there is nothing that can be done about it and the tenant does not have the ultimate sanction of withdrawing his vote. That is a very important sanction that we are giving to these tenants.
  The question of giving more democracy by giving tenants the chance to purchase their own homes is often posed. But that is not really the question. The question is how we can get more democracy and more local community control down on to estates that are owned by the local authorities. I agree that in many cases the restrictions are petty-minded and bureaucratic, and that some restrictions are not necessary. The restrictions ought to be determined much more locally than they now are.
  However, I cannot see how the housing problems of the 1,500 people who are on the waiting list in Welwyn and Hatfield will be solved by selling off the stock of accommodation presently owned by the Commission. That does not add a single unit of accommodation to the housing stock in that area, and that is what we need.
  In Welwyn and Hatfield we have the classic problem of the second generation new town, with all the housing difficulties such as those of young people trying to set up home on their own for the first time. There is not a legacy of slum
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  housing, because we are in a new town area. But neither is there any sort of legacy of Victorian housing now let privately. Very often, therefore, if people want to find private rented accommodation while waiting to qualify for council housing they move out of the district—with all the problems that that brings. The only other alternative is to live with parents. We have two generations and sometimes three generations living in a single home. The desperate need for these people is for more housing to be built, and at reasonable prices that they can afford. That is the essential problem in the new towns and elsewhere.
  I fully accept that we have a mix of income in council property, as we do in private owner-occupation, and, of course, there is an overlap. It would be foolish to pretend that there are not owner-occupiers who are low paid and are in low income groups and that there are not council tenants who overlap with them and earning more. I happen to welcome that situation. I do not want to see our council estates becoming ghettos of housing for the elderly, the needy and the disabled. It is essentially healthy for these estates to have a very mixed population.
  On the question of subsidy and payment, we in this House and we as a nation must get to grips with the problem of housing subsidies across the board. We must look at the subsidy that we pay to owner-occupiers through tax relief on mortgage interest, as well as the subsidy that we pay to council tenants. We must consider a unified system of subsidy that has regard to the individual and family needs rather than the types of property that the individual occupies.
  The enormous difficulty with that matter is the variance of prices and the cost of housing in different areas. I in no way underestimate that problem, but it is not an excuse for this country to continue with a system of housing finance that is so complicated and in many ways so inefficient that it militates against the best use of resources, which in this matter as in many others are extremely scarce.
  In Welwyn and Hatfield there was considerable feeling that, since the local council had waited many years for the development corporation to be replaced

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  by the Commission—which it was thought would have been the right time to transfer—the Bill should have dealt with both commercial and industrial as well as with housing aspects. However, I accept that a gradual approach is necessary. I hope that the Government will make it clear that this is a step by step approach, not the end of the road.
  We accept that the ratepayers of Welwyn and Hatfield should not be the only beneficiaries of the transfer of housing assets under this Bill and of the transfer of commercial and industrial assets which will come later. We accept that the shares suggested are equitable, however much, in our local and parochial way, we should have liked more to come to our area.
  Nevertheless, we are glad to see what the Bill will provide. We hope that ours will be one of the first authorities to take up its share of assets and that the Bill will be the first in a series to effect a wholesale transfer to a district council.
  6.2 p.m.
  Mr. Stephen Ross: I have listened with rapt attention to the previous speakers, most of whom represent new towns. As I do not represent a new town, I have some hesitation in adding my voice to theirs.
  My party greatly welcomes the Bill. Anything which returns control to democratically elected bodies is to be commended when we are all having trouble with so many non-elected bureaucratic authorities. I think that the hon. Member for Welwyn and Hatfield (Mrs. Hayman) was about to elaborate on the subject of housing credits, something which I support. If she has more information, I should be particularly glad of it at this moment. She is on the right track. This is something which Parliament should consider in greater detail.
  I am certain that the Minister would prefer the initiative in regard to local authorities taking over the management of these properties to come from the councils rather than for him to have to issue directives, as Clause 2 seems to provide. It is a little heavy-handed but I assume that it will not work out that way.
  Clause 3(4)(b) interested me when I read it this morning while considering the Opposition's amendment. It appears to leave an opening for the Minister to
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  direct that certain houses should not pass from the development corporations to local authorities but should be sold elsewhere. It is rather obscure. On a first reading it appears to mean that they could be sold to some other form of administration or management. One assumes that it does not mean that they will be sold off to private property companies, but it could mean that. It certainly does not make clear what the Minister gave as his intention when he referred to sales to existing tenants.
  I have been told by one new town that it would welcome the restoration of the right to sell to tenants. The hon. Member for Harlow (Mr. Newens) did not seem to agree and it was not evident in the speech of the hon. Member for Welwyn and Hatfield, but it is a point made by a high official in one new town.
  When the power to sell to tenants was withdrawn some years ago, waiting lists were long, but I was very surprised to learn today that in one new town the lists are now down to between six and eight weeks. That may not be the case in Crawley, but if some places have reached this point a rather different picture is presented. I was also told that many tenants would undoubtedly like to buy. When the previous scheme operated on a 20 per cent. discount of the market price, many took advantage of it. Some towns—I do not know about Crawley—build houses to sell on the open market. The town that I am talking about built over 100, which were readily snapped up. Tenants are still very interested in buying. Many industries going into new towns are anxious for their employees to own their own homes. That is another point in favour of the amendment.
  One should not have a closed mind about the sale of council houses. Each case should be considered on its merits. The figures for my own authority, with which I have been presented this week, show that as many as 52 people a month are being added to the waiting list—and I am sure that the figure is even higher in other areas. We are certainly not catching up with the problem, so I doubt whether it would be right for my council to sell. I have an open mind, but that is my impression. No doubt other hon. Members will have more up-to-date figures for the new towns, but this matter should be more clearly provided for in the Bill.

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  Unless we hear something definite from the Minister who is to reply, the Opposition amendment should be supported. As has been said, they have been lucky in striking the right note on the right day with the reports by the Building Societies Association and Mr. Frank Field. With those few remarks, I welcome the Bill from this Bench.
  6.7 p.m.
  Mr. Geoff Edge: I, too, welcome the Bill as far as it goes, but my interest is slightly different from that of some other hon. Members. I do not represent a new town in the House, but I am a new town councillor on Milton Keynes Borough Council. Naturally, I see things very much from the Borough Council's point of view and from the point of view of a member of an elected authority with a large and undemocratic corporation operating in the midst of the borough area—in our case wholly within our area, which is not the case everywhere else.
  I should like to see the speediest possible hand-over of new town assets—not only houses but recreational and social facilities—to the appropriate local authorities. There are problems, of course. There are certainly differences in rent levels, but the differences do not necessarily favour the corporations. Certainly in Milton Keynes new town rents are considerably higher than local authority rents. As soon as houses are transferred to the local authority, one can imagine people asking why they are paying different rents for similar accommodation.
  Clearly, any transfer scheme must involve a harmonisation of rent levels. I hope that this will happen at a point midway between the two levels. It would be foolish for the Secretary of State to agree to any transfer which did not provide for harmonisation. Without it, I can foresee considerable and, in many ways, natural resentment being felt by tenants in different sorts of property.
  Another problem is that new town corporations and local authorities do not necessarily operate the same maintenance standards. That also would need to be carefully considered. In my own experience with the new town of Milton Keynes, the maintenance standard is very high and I should be very unhappy to see any decline in standards.
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  But merely transferring houses is not enough. There needs to be a far greater process of consultation between the local authority representatives and the new town corporation right from the outset, because many elected representatives face the major problem of ultimately being responsible for new town corporation decisions which they have had no part whatsoever in making. In the case of Milton Keynes, for example, we are saddled with a grid road system on which it appears to be almost impossible to operate an effective public transport system without an enormous level of subsidy. We had no significant say in making the decision and, similarly, we have no significant say in the planning of recreational facilities either to serve particular housing estates or to serve the new town as a whole, while in many cases the local authority is responsible not only for the provision of recreational facilities but also for the financial costs of running them. Certainly in the case of my Council, the Milton Keynes Borough Council, we have found the increased cost, at a time of very tight financial stringency, almost impossible to bear. We have transferred one golf course back to the development corporation.
  This is the sort of problem which occurs and which occurs primarily because of the undemocratic nature of the new town development corporation. I believe that a corporation, with all the ability, talent and energy that it can command, is needed to get a new town under way, to get roads built, to get the infrastructure completed, to get the housing that is needed and so on. But it seems to me that as soon as is humanly possible the local authority should be given a say in the new town, and areas as they are completed should be transferred to it.
  Imagine the problems which face some of my colleagues in the local authority, where they represent areas which consist perhaps almost entirely of corporation housing. If there are housing complaints the people can go to the local authority and complain, but the local authority is not responsible in any way either for the maintenance of the estate or for the maintenance of the individual properties. Inevitably in these circumstances a sense of frustration arises, not only among the local councillors but also among their electors, who feel that this is an important part of their lives over which there

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  is no democratic control whatsoever. This is a very acute problem in Milton Keynes and, I am sure, in many other new towns, and it is one which ought to be dealt with.
  Two things can be done. First, the possibility of incorporating more local authority representatives in the new town board should be considered. The changes which have been made so far are far too timid. In Milton Keynes we have incorporated two extra councillors, which has not improved the decision-making in any sense whatsoever. We therefore need to look at that. Secondly, we need to try to ensure that tenants have as much say as possible as quickly as possible in the management of their own estates.
  Admittedly the Milton Keynes Development Corporation, which is the one I know, started a pilot scheme, but it is a question not only of what the corporation does but of what the local authorities do as well, and much to my disappointment my own local authority threw out a participation scheme on which I was very keen. I condemn the local authority for being far too conservative, because it seems to me that where there are large areas of housing owned by either the local authority or the development corporation the tenants should be given the maximum amount of control over the maintenance standards on the estate, the type of repairs which should be done and the general appearance of the estate, so that they feel that they have a rôle there.
  The participation of council tenants in the management of their own environment, although difficult to achieve, is very important. While one has an undemocratic corporation operating in any local authority area, it makes the process of public participation that much harder. So I should like to see the corporations disappear as quickly as possible and gradually retreat from each area as their main job of construction work is completed.
  Mr. W. Benyon: I am sure that the hon. Gentleman does not want to be misunderstood in the area about which he is talking, which I have the honour to represent. Would he not agree that there is very close co-operation between the Development Corporation and the local Borough Council on the
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  whole question of tenancies and the exchange of tenancies?
  Mr. Edge: I agree with the hon. Gentleman, who is my MP, that there is a very extensive process of consultation, but in my view it has not produced anything very significant. It has certainly not produced harmonisation of rent levels, which is one of its stated objectives. Indeed, the rent gap has widened only this week. It has certainly not produced any willingness on the part of the Corporation to discuss such fundamental things as the layout of the later stages of the new town. There has been no willingness to talk about Section 6(1) submissions, which are very important to the Department of the Environment. Therefore, while I would acknowledge that there has been extensive consultation and that the situation has improved, a check list would prove that the achievements have been very small indeed.
  As the representative of the local community for a smaller area than the hon. Gentleman's constituency, of course, I have on many occasions, as former chairman of the planning committee, argued the case for the commercial members of the community as well as the case for the residents against the Corporation, and we have received absolutely no response because the Corporation is totally undemocratic. It has no need to respond to an elected member or group of members. That is the major problem. That is why we need far greater democracy and far greater commitment to transfer estates from the Corporation to the local authority as speedily as possible.
  Let me take a longer-term view of the rôle of the new town. The hon. Member for Aylesbury (Mr. Raison) suggested in his opening remarks that the whole strategy of providing new towns had been called into question, particularly by some of the planners in Greater London, who say that our cities are being left to decay because the industries and the more dynamic elements of the population have been shipped away to new towns. I believe that to be completely false. The contribution of the new towns is very significant in helping to reduce housing needs, and by any objective assessment of the situation in London, the Birmingham—Black Country conurbation or Greater Manchester there is still need to

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  attract more people and industry out of the inner city areas.
  Where the problem arises is that the opportunity that is create by the reduction in population has not yet been used to rebuild decayed urban environments and provide effective new industries. We have concentrated totally on where to put new populations without rebuilding our inner urban areas. The failure to get an agreed scheme on the development of Dockland is a very fine illustration of exactly that sort of problem.
  What we really need to do is get a much more effective regional planning strategy which looks not only at the development of new towns—I believe that more will be needed in the future—but also at the positive rebuilding of our inner city areas, with Government aid in some cases, to encourage industry to reallocate its working sites. This is a sector which has been ignored to a very considerable extent.
  I also believe that in the new towns we need to look much more at the question of social planning. We do far better than the United States, where their new towns have almost no social balance whatsoever but consist almost entirely of upper income groups. We fall down, however, in the sense that many new towns have a very small proportion of elderly people, disabled people and people who are unskilled and on low incomes. If we are serious about using the new towns to contribute to solving the problems of London, the West Midlands and so on, we have to take a far higher percentage of the disadvantaged and try to give them better opportunities and conditions in the new towns than they have had hitherto.
  Finally, I believe that we also need to look at the economic status of residents who move. I find in Milton Keynes—perhaps the hon. Member for Buckingham (Mr. Benyon) will confirm this—that many people move and then find that their real incomes have dropped after the move because wage levels are lower or rents are higher and they have made no allowance for that eventuality. This creates problems, with people being unable to afford tenancies or wanting to return, in our case, to London. We have
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  to look more seriously at the economic consequences of moving on the individual.
  I believe that there is a great future still for the new town movement, but it must be matched by an agreement to save the inner city areas which so far we have ignored. However, once we have new town corporations under way, we should move to a system of democratic control as quickly as possible by means not only of the transfer of assets to the local authorities, towards which the Bill is a small step, but also of giving the tenants of both local authority estates and corporation estates a major say in their own affairs. In my view that is what democracy is about, it is what we must insist upon from the Department.
  6.22 p.m.
  Mr. Hal Miller: I am sure that the House is grateful to the hon. Member for Aldridge-Brownhills (Mr. Edge) for relating his experiences as a local authority member in a new town, even if we cannot all share his heroic assertion that the quality of decision-making would be improved by the addition of two or more Labour councillors to each development corporation.
  The subjects which I wish to consider in relation to the Bill concern finance, planning, tenants, corporation staff and, finally, the planned size of the new town in my constituency.
  The Minister for Planning and Local Government, who I am sorry is no longer with us, referred, when he moved the Second Reading of the New Towns Bill last year, to Nicias the Greek. I advise all those recipient authorities, especially the tenants of those authorities, to look carefully at this gift which they are being offered by the Minister, because, as we have heard from the hon. Member for Aldridge-Brownhills, there is a wide disparity in rent levels. We have also seen from the Bill that the subsidy from the Treasury is to be for such period as the Minister may determine and to be subject to Treasury consent.
  I remember drawing attention last year to the fact that one of the reasons why the Treasury might have come round to this view, contrary to the view formerly expressed by Lord Diamond, was that it had seen the opportunity to slough off

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  the continuing subsidy commitment, and that the result would be serious increases in rent levels and probably in rate levels in these towns. That is a point which I made last year in the debate on the New Towns Bill, and it has not yet been answered by the Government.
  Another point with regard to finance which was also touched on by the hon. Member for Aldridge-Brownhills is that the standards of maintenance and of open space in many parts of new towns are considerably higher than those obtaining under the local authorities. As a result, they will be much more expensive to run and there will be great pressure on local authorities from ratepayers to reduce that additional expenditure, which in turn will very quickly lead to a considerable deterioration in the natural aspect which has been one of the great benefits of living in new towns.
  There is also the further financial point about the costs of meeting rooms and other amenity provisions. The hon. Member for Aldridge-Brownhills mentioned a golf course which had to be returned to the corporation because of the cost of running it. There needs to be a careful examination of this gift horse before it is welcomed so warmly.
  I remember the first Adjournment debate that I was privileged to have in this House about a month following my election. I chose the subject of the financial burden on local authorities of new towns. Recently, the Minister received a deputation from the county of Hereford and Worcester on this very point. When he replied to my Adjournment debate, he assured me that the problem would be looked at and examined with sympathy and care and in detail. Now, two years later, the county has had to send a deputation to see him, but still we have had no resolution of the difficulty.
  A Question which I put in the House today to the Secretary of State for Social Services about the failure to provide medical facilities, particularly a hospital, in the Redditch New Town highlights how very serious the infrastructure problem is. The Question that I asked before and wish to ask again is why, under the section in the Department of the Environment dealing with the new towns, there has been no similar provision for medical
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  facilities as there has for roads and other services.
  While I am on the subject of infrastructure, let me say that I believe that the burden of local authorities will be increased very greatly by the new roads agreement which is to be concluded between the corporation and the Hereford and Worcester County Council. Because of the nature of that burden, about which its representatives came to see the Minister, this agreement has not yet been concluded, although the previous procedure has been abandoned. The net result is that a significant stretch of road in the middle of Redditch, connecting two multi-lane highways in both directions and the motorway, has not been constructed. This has led to indescribable inconvenience to those who are obliged to live along this heavily overcharged route. There are very serious financial burdens to come on the local authorities, and it is not clear from the Bill that these points have been properly hoisted on board.
  I turn now to the question of planning permission. The Bill is deficient because it says nothing about procedures for safeguarding the master plan of a new town. In my area, it is within our experience that the local council has carried out acts of development which are not in accordance with the master plan. Up till now, the corporation has acted as some safeguard for members of the public with regard to the observance of the master plan. I shall be grateful if we can hear from the Under-Secretary some remarks on this very valid point.
  As I understand it, local councils are not subject to planning permission for their own acts of development, and I shall be grateful to learn which authority is to grant planning permission in those areas and which will be responsible for safeguarding the master plan of the new town. Similar provisions would apply, for instance, to land under a new town plan which was to be designated for housing for sale. If the new authority did not believe in building for sale, there might well be changes in the master plan to the detriment of the balance of the new town about which so many hon. Members have spoken.
  I come now to the subject of tenants. In new towns at the moment there is

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  a quite highly developed social development organisation which does a great deal to smooth the path of tenants. It is not clear that this organisation will continue under the local authorities and whether, if it does, it will be rateborne, because that would be another instance of an increase in the rate burden on the existing inhabitants.
  However, the main topic concerning tenants is that nowhere is there to be any consultation with them. I read in the Bill that they are merely to be informed. Is that what this democracy and greater local control, about which we are being prated to by the Government, boils down to—just informing someone that something is to happen? In view of the consequences on rate burdens, are the tenants and residents of the local authority to be informed, let alone consulted, about what these proposals are likely to mean for them, and is their consent to them to be sought?
  If there is to be democracy and local control, why are not tenants to be given the choice of buying their houses in the new towns? This was permitted when they moved there in the first instance. Why should that right be subsequently extinguished?
  Quite apart from the politics, let us turn to the economics. I am very sorry that the hon. Lady the Member for Welwyn and Hatfield (Mrs. Hayman) has left the Chamber, because she was telling us about the desirability of social mix in rented housing and welcomed the fact that many people on high incomes were living in council houses. But the hon. Lady forgot to add that they were living at low and subsidised rents. She asked for the overall picture of mortgage interest tax relief to be taken into account as well as subsidies on rents. I would like to have given her figures for my constituency, where the subsidy on a new town house is now running at £30 per week, whereas the mortgage interest relief on a comparable private house in the same area is £300 per year. One can therefore imagine the very real indignation that arises when people see others with higher earnings getting a higher subsidy—£30 a week—and living in a rented house.
  Mr. George Rodgers: Is the hon. Gentleman aware that included in the subsidy element for council property are all kinds of features such as old people's dwellings and bungalows, and even property for the disabled, and that they are often paid for out of the housing revenue account?
  Mr. Miller: I am talking not of the housing revenue account, but of the straightforward construction costs of building a new house in the Redditch New Town. That has nothing to do with the housing revenue account. It is the straightforward cost, and there is already a £30-per-week subsidy. Therefore, when we talk about the desirability of this mix in rented housing, let us please remember who is paying for it—those who are already struggling to keep up their mortgages in owner-occupied houses.
  Mr. Corbert: Would not the hon. Gentleman acknowledge that in the new town that I represent, Hemel Hempstead, and three other completed new towns there is a totally different argument because the Commission generally has not built for rent or for sale for 10 or 12 years? The replacement costs to the local authority if the houses were "flogged off" would represent a totally different financial picture.
  Mr. Miller: Yes, indeed, that is one of the things I am trying to come to in the Bill. It is dealing with a broad brush right across the spectrum, but circumstances vary greatly and, particularly in the newer generation of new towns, the building costs to which I have referred are so high that it is a very different matter from transferring assets in perhaps the hon. Gentleman's or other hon. Members' new towns where completely different mathematics would apply. Of course I accept that, but I am pointing out that when we are dealing in such broad phrases with such a broad brush we need to be much more careful in what we are talking about.
  On the question of tenancies, there is also the very relevant point about nomination rights. The hon. Member for Basildon (Mr. Moonman) spoke of the need to maintain a balance between employment and housing in a new town, and we would all subscribe to that. But

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  the difficulty in getting industry into a new town unless there is some assurance that there will be housing vacancies for key workers in particular who are coming to start up a firm in the new town would militate against successful industrial promotion if the local authority came under such political pressure from its own waiting list that it felt unable to maintain the nomination system for the required period. One reason why waiting lists grew so dramatically from the year 1972 onwards was that the cost of buying a house increased much more than council house rents, so that the disparity between renting and owning grew wider. It is no wonder that people, including the very well off, took a decision to go for a much cheaper rented house if they were lucky enough to obtain it.
  I must move on to the subject of the size of the corporation. As my hon. Friend the Member for Aylesbury (Mr. Raison) has pointed out, it seems incredible that the corporations should be increased in size when they are about to be stripped of a major part of their functions. The Minister said that this would provide scope for bringing a great deal of experience on to the boards, which had not been increased in size since the Act was passed.
  I have lately had occasion to put down a number of Questions to the Minister about the excessively political nature of the appointments he has been making to the Redditch New Town Corporation—five committed Socialists against one Conservative in his last batch of appointments, including Socialists who have no connection whatsoever with the area. We are given to understand that his latest proposals are to appoint further Socialists from the Birmingham Corporation, which has very little to do with Redditch.
  I hope that advantage will be taken of any increase that may be found to be necessary to appoint from those who actually live and work in the area and have something to contribute from their experience, either from management or from the shop floor, of actually working and living in new towns, rather than to make political appointments from public bodies outside, in contravention of the recommendation in the Thirteenth Report of the Environment Sub-Committee, to
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  which due tribute was paid by the Minister in his opening speech.
  The size of the corporation should also be considered in relation to what is to happen to the remaining functions of the new towns after the remaining assets have been transferred, because it would seem to me to be logical that the remaining functions ought, at the time of transfer, to be transferred to the New Towns Commission and the corporation should be wound up. This would be a sensible approach to the situation, to do away with the Corporation once its housing assets are transferred. The transfer of housing assets to the local authorities will inevitably mean a reduction not only in the functions of the housing departments of the corporation, but also in its accounts, estates and maintenance departments.
  Here I come to the question of staff. The Explanatory Memorandum talks of proper protection, but the Bill refers not to Section 260 of the Local Government Act 1972 but to Section 24. This means that there will be no compensation provision for retirement for senior officers. It is quite inconceivable to me that the mergers can take place without senior officers having to retire, not only from housing departments but from other departments. I would like the Minister when he replies to be a little more specific on this question, because there will be a very bad effect on the staff if there is continuing uncertainty on these points.
  Finally, I should like to raise a constituency point. We have now been waiting two years for the Minister to take a decision on the future size of Redditch. If the housing assets are to be transferred 15 years after designation, which would approximately coincide with the completion of the target population and the original target date, it would seem that at that moment the town should be regarded as completed and no further decision should be taken to extend it. Obviously, this decision would have to be arrived at considerably in advance of that date because of the staff and the other considerations, such as the infrastructure and completion of the housing programme. Therefore, I ask the Minister to give very serious consideration now to the question of the future size of Redditch.

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  In this connection I ask the Minister to note that there is no longer a demand for West Midlands industry to move out of the conurbation. The West Midlands County Council is doing its best to obtain all possible industry in the conurbation, and representatives of the corporation have had to travel as far afield as Japan to try to attract industrial investment to the town. This shows that one of the purposes for which it was originally established—to provide for industry to move out of the conurbation—is no longer applicable. Therefore, there seems to be no justification for an expansion of the town beyond its originally designated size, and it should now be possible for the Minister to arrive at that decision.
  6.41 p.m.
  Mr. Joseph Dean: I do not represent a constituency with any connection with new towns, but I rise because I am surprised by some of the contributions to the debate by Opposition Members. I am still more surprised by the Opposition's amendment. On the whole question of the future of new towns and those who live in them, the Opposition produce an amendment dealing only with the sale of council houses, the facet of housing on which the Leader of the Opposition stomped the country at the last General Election. What a wonderful vote-catcher it is! I have never known it gain the Conservatives enough votes to win a national or local election.
  The hon. Member for Bromsgrove and Redditch (Mr. Miller) is rather politically naive when he talks about political appointments by Secretaries of State. In the past six months I have visited three or four new towns. I found that the chairman of one in the North-East was a resident of greater London. He was appointed by the last Conservative Secretary of State. I am not saying that the ratio of party support was five to one. I should not be surprised if that Secretary of State's ratio was 10 to one in view of the make-up of some of the regional health authorities and area health authorities set up under the reorganisation of local government and the health services by the previous Government. The hon. Gentleman should not behave like a political virgin. He
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  should accept the facts of life and the fact that the Conservative side of the House is different from mine.
  Mr. Hal Miller: If the hon. Gentleman looks at the composition of the West Midlands Regional Health Authority, the Hereford and Worcester Area Health Authority, the Bromsgrove and Redditch Community Health Council and the Redditch Development Board and bears in mind when they were established, he will find what the balance of political appointment has been.
  Mr. Dean: I do not wholly dispute the point, but I am glad the hon. Gentleman intervened because I missed out one section of the public sector. The hon. Member for Horsham and Crawley (Mr. Hordern) talked about the transfer of public assets, One of the biggest transfers from the local authorities to another so-called part of the public sector, but unfortunately one with no public accountability, was to the regional water boards. I know of no supporter of my party having been made chairman of one of those boards at the handsome salary of £11,000 to £13,000 a year.
  We can score points off one another on the question of appointments by successive Governments. The hon. Gentleman should not be surprised that a Labour Secretary of State is making Labour appointments. I hope that my right hon. Friend will continue to do so. Politics is about power. It is not a game. If my side has power, I expect it to use that power and I shall support it when it does.
  The hon. Member for High Peak (Mr. Le Marchant) made a very parochial speech. I touch on the subject of it because, although I do not represent the city of Manchester, I was heavily involved in the matters about which he spoke. The hon. Gentleman told only one side of the story. Some of the larger cities have had the benefit of new towns being built within a reasonable distance, with the Exchequer bearing a tremendous percentage of the cost, but some others with almost the same problems have not been so lucky. Under successive Governments they have had to fend for themselves.
  Liverpool was one of the authorities to benefit from a new town. It had Skelmersdale, and I think that there are many Liverpool people in Runcorn. I

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  belong to a city that had to decant 250,000 people outside its own borders. It was the most densely-populated area in Europe, and it was completely landlocked. Whenever it made a move with compulsory purchase orders for desirable areas within a stone's throw of the city, it was blocked by Conservative-controlled councils, most of whose decisions were upheld by Conservative Ministers of Local Government. Those councils applied their own form of apartheid against fellow countrymen.
  The Manchester authority had to obtain land where it could. The estate about which the hon. Gentleman spoke was one of the last overspill estates that the city built. He appeared to blame the city for all the shortcomings now manifest in that community. I do not lay one iota of the blame on the city of Manchester, because of the way in which it was made to operate. Without new town status, it could act only as landlord when the estate was built. The rest of the facilities should have been provided by a local Conservative authority and a county Conservative authority which collected the rates and did nothing with them. They abdicated their responsibility.
  There is talk of the stress areas in the big cities. I should like to describe the treatment that some cities have received in comparison with new town authorities. I am not suggesting that I do not agree with the spending of large sums on the new towns, but in some respects they have had privileged treatment. For example, an established local authority seeking planning approval and yardstick calculations for general periphery landscaping on an estate received £15 a house, but the new town authority received £75. Can anyone wonder that in the big cities which have had to rebuild to high densities the landscaping leaves much to be desired? They never had the money to spend on it, unless they were prepared to break the backs of their own ratepayers. They did it on their own.
  Mr. Benyon: Is the hon. Gentleman saying that the assets should not be transferred and that the exporting authority should keep the right to nominate, which I gather was the purport of what my hon. Friend the Member for High Peak (Mr. Le Marchant) said?
  Mr. Dean: The hon. Member for High Peak spoke about the appointment of people who were not answerable to the area in which they would officiate. Why is there any opposition to transferring the assets to local control?
  As the chairman of a major housing authority, I always had to be available. I am not suggesting that we did everything right, but I was certainly more available to the people in the area where I was chairman than is a man living in London who is chairman of a new town in the North-East. I am not questioning his ability. I have met him, and he is obviously able. But where there is a housing authority the assets so on should be transferred to somebody within reach. We should bring government closer to the people.
  Nearly every Opposition Member who has spoken has referred to the sale of council houses being a good thing for tenants. During the lifetime of the last Labour Government many local authorities became Conservative-controlled, just as when the Tories won the 1970 election they were almost obliterated in the next local elections. Some of the major authorities which became Conservative controlled started selling council houses with reductions of up to 20 to 30 per cent. on the so-called market price.
  Post-war council houses were sold for as low as £1,700 with the proviso that if the tenant moved within five years the council would have the option of buying back the house at the original price. The result was that as soon as the five years had passed council houses were offered back to local authorities for £9,000. What a good deal that was for the taxpayer and the ratepayer. The Conservative Party claims to be the protector of public money. It amazes me to see the haste with which it rushes to give away public assets.
  No one can deny that there is a tremendous in-built shortage of housing. When a council house is sold, somebody on the waiting list is disappointed. I do not suggest that the purchaser will move immediately, but the property has to be replaced in the stock. Wherever houses have been sold, a shortage has manifested itself. If a large authority which is building 3,000 houses a year starts selling to its tenants, its in-built

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  shortage will be made worse by what is sold to tenants.
  Houses which were built for £2,000 or £4,000 have to be replaced at a cost of £12,000, according to the figures given today by building societies. However, anyone who has been connected with housing matters knows that it can take up to two years to replace a council house, and inflation in the building industry is running at 2 per cent. a month. That will make the £12,000 look a bit sick. This is one of the nonsenses of the argument.
  The building societies have suddenly decided that they have a contribution to make, but I suggest that they should look more carefully at their own activities. Why do they not drop their interest rates more regularly when the Bank of England reduces its rates?
  The building societies have put their weight behind the sale of council houses in the hope that they will be providing some of the finance and getting some of the profits, but there are areas at the lower end of the scale where building societies should be operating now. The only way to get a mortgage on a property over 30 years old in most parts of the country is to apply to the local authority. There are very few good terraced houses which building societies will touch. That is why all the funds that local authorities can get are spoken for.
  It is nonsense that the £5,000 million which building societies say they have available should be immobilised. They should be made to use it to help people on low wages to get the type of house they need.
  We have to look at safeguards in the Bill for the staff, but change sometimes comes whether one likes it or not. In some respects, some of the top brass in local government and the National Health Service have been over-protected. I hope that staff will be taken care of, but not on the basis of some of the golden handshakes we saw during the last local government reorganisation. Some people aged just over 50 picked up cheques of £90,000 and £100,000. We wonder why we have an economic crisis, yet we pay someone £52,000 to sit in a rocking-chair for the rest of his life. In fact, he probably did not even do that. He probably
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  found himself a very handsome job to take him up to retirement age.
  The Government have made clear that there has been a change in the direction of their economic and financial strategy. There may be a surplus of staff when the housing stock is assimilated by housing authorities. If so, people will have to move and earn their living elsewhere. It is just too bad. Before I came here, it had happened to me twice. At one factory in which I worked, Sir Arnold Weinstock said that there were 10,000 too many workers and some had to move on. Nobody in this place worried about that.
  Let us ensure that staff get a fair crack of the whip, but we should not say that because they are in local government they have a job for life. There has been far too much of that in the Civil Service, the nationalised industries and the public sector generally. The sooner some people are liable to judgment on results and performance, the better.
  I have watched with deep regret the erosion of powers from elected representatives. The wheel is turning now and we are talking about giving power back to local people. Under the last Conservative Government, considerable power was taken away from local authorities and locally-elected representatives whom the people could approach.
  This is a fairly involved Bill. I hope that it will be given a Second Reading so that we can discuss it in detail in Committee.
  If large numbers of houses, mainly financed by public money, are made available to local councils, locally-elected representatives will be able to control them and be subject to the ballot box. I hope that the Bill receives a Second Reading and makes its way quickly through Committee.
  7.0 p.m.
  Mr. Mark Carlisle: We have heard an interesting speech from the hon. Member for Leeds, West (Mr. Dean), who speaks with great authority on all housing issues. I share the sentiments which the hon. Gentleman expressed towards the end of his speech when he referred to golden handshakes and the need for more performance tests on those involved in the public sector. In his capacity as a member of the Manchester City

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  Council, the hon. Gentleman said that he believed that in Runcorn New Town there might be a few Liverpudlians—
  Mr. Joseph Dean: I corrected that. I confused Runcorn with another town.
  Mr. Carlisle: The catchment area has been widened to include Greater Manchester, the West Midlands and London, as well as Merseyside, for which the new town was originally planned.
  There are two new towns in my constituency. Warrington New Town was originally planned to take in people from the Greater Manchester area, but Manchester said that its housing needs were not as great as was originally believed, and the catchment area of Warrington New Town is also being widened.
  I apologise for not being in the House to hear the Minister's opening speech, and if I raise matters which he dealt with I hope that the Minister of State will forgive me.
  Representing as I do a constituency which contains two new towns, I think that the aim of the Bill is correct. That is particularly so for Runcorn, which is much more completely developed than Warrington. In Runcorn the development corporation was set up in 1964 with a clear and specific mandate to provide a town of the relevant size by 1979. The development corporation is on target and by 1979 there will be a stock of 10,500 rented houses provided by the development corporation.
  There seems to be no advantage in a new town development corporation hanging around once its task is completed. During the growth period of a new town it is essential to have a development corporation with clear terms of reference. I question whether it is wise to have more local councillors on new town development corporations, because the task of development corporations is often in conflict with the task of the local authority and there may be divided loyalties. Once a town has been completed or its main objects have been achieved, it is right, as the Bill proposes, that the housing assets should be turned over to the local authority, which has direct democratic control, and that the development corporation should be wound up as soon as that can be appropriately done. That is particularly important in
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  relation to housing. In a new town such as Runcorn, where a second generation new town is being imposed on the existing urban area, it will help to break down the barrier between the new and the old if all the rented housing within the development corporation is brought into a single pool.
  What worries me most about the division between the old and the new is that those who live in the area, because they live in the area, are unable to obtain a tenancy in the new area but see new houses being provided for people from outside. Once the major developments are complete and all the houses are put into a central pool, that division will be broken down and greater flexibility will be provided. That is important both for the second generation of those who live in the new town and for the children of those who live in the older parts of the town.
  I am sure the Minister realises that it may be necessary to make special provision for skilled workers who come into the town to work in industry. I shall be grateful if he will explain the Department's ideas about whether the housing stock should go into one general pool or whether conditions should be placed on houses which come from development corporations.
  The financial effect of these proposals will be substantial in some areas. If adequate financial arrangements are not made by the Government, there could be considerable resentment within the local authority about the cost of taking on the housing assets of a new town. The position is different in, for example, Hemel Hempstead, which is a completed new town, and in the second- or third-generation new towns.
  Instead of receiving a rate fund contribution, I understand that a new town development corporation receives a direct grant from the Government under Sec-lion 42(2) of the New Towns Act for the purpose of balancing its housing account. On the transfer of assets, I am told that the payment under Section 42 will cease. In the Halton area, which is the old Runcorn together with Widnes, the effect of the loss of that special contribution would mean either a 9p-in-the-pound rate increase throughout the whole area or an additional l·64p a week rent for tenants in the existing new town and for

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  all tenants in houses owned by the development corporation. An increase of that nature is totally unacceptable and will do lasting harm by creating a reaction between the old and the new.
  With the enormously increased cost of building, I am told that the average loan charges for houses in the new town of Runcorn will be £705 per dwelling per annum as against £175 per dwelling per annum for the local authority stock. I ask the Minister to confirm that the local authorities which take over new town development corporation assets will be adequately compensated financially.
  As I understand it, the provisions in Clauses 8 and 9 of the Bill—I seek confirmation of this—are considerably wider than was proposed in the original consultation paper. I note in particular that Clause 9, dealing with grants for district councils, provides that if it appears to the Secretary of State as a result of a transfer that this
  "imposes or will impose an undue financial burden on the council, he may for the purpose of relieving that burden … make grants to the council of amounts and for a period determined by him with the consent of the Treasury".
  I hope that the Minister will give an assurance to me and to those on the Halton Council concerned with the financial effects of the Bill that that means that a grant would be given to councils in that type of position, and that it would not only be purely transitional, as originally proposed, but could be for a period adequate to meet the financial increase facing the Council.
  The Under-Secretary of State for the Environment (Mr. Ernest Armstrong): I ask the hon and learned Gentleman to read what my right hon Friend said. I quite understand that the hon. and learned Gentleman was not able to be here. I quote one sentence from my right hon. Friend. He said that
  "if the transfer itself results in an undue burden on either tenants or local ratepayers, then the Bill proposes that the Secretary of State should have discretion to give relief by way of a grant for such period as he may determine."
  Mr. Carlisle: I am grateful to the Minister for his intervention. I hope that the words
  "such period as he may determine"
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  may not mean purely a transitional period, which was the original proposal, but will cover a wider area.
  I now turn to the Opposition's amendment. I have had this argument before with the Minister of State's predecessor when speaking in the earlier new town debates, but I cannot understand the ideological block that prevents new town development corporations being permitted by the present Government to sell housing to tenants who wish to buy it.
  I shall not go into all the arguments one way or another which have been advanced on both sides. I content myself with reminding the House and the Minister that this is not only the view of the Conservative Party. It is not only the desire of many of the tenants. It is also the unanimous view of the chairmen of the new town development corporations themselves, who to my knowledge—I am sorry that the hon. Member for Leeds, West has gone—are not today all drawn from one political party. Certainly the two eminent chairmen in my constituency are active supporters of the Labour Party.
  I should like to remind the House of what the chairmen of the new town development corporations said in their comments on the consultative paper. I quote:
  "We strongly hope, therefore, that development corporations and the Commission will be allowed in the near future once again to offer tenants the opportunity to buy the homes they occupy. Even with a sizeable discount and tax relief on mortgage interest, the annual cost to the central Exchequer would be substantially less than the very large rent subsidies now payable. Pre-emption clauses would secure that … houses could come back into the rented stock if and when purchasers moved on."
  We are in the position that tenants wish to buy. Of that I have no doubt—in my own area, at least. Development corporations, in the considered view of the chairmen, wish to sell because they believe that this is cheaper for the nation. I believe—and I suspect that many believe—it is also advantageous for those living in the area to have a mixed type of housing development.
  It seeems that against this, for no reason which has ever convinced me, the present Government are saying not that "You may be allowed not to sell" but that "In no circumstances may you sell." This is a great pity, and I welcome

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  the Opposition's amendment. Subject to that, I certainly hope that the Bill will be passed.
  Mr. Deputy Speaker (Sir Myer Galpern): I now call Ms—with a Scottish accent—Maureen Colquhoun.
  7.14 p.m.
  Ms. Maureen Colquhoun: Thank you, Mr. Deputy Speaker. I very much admire your Scottish accent, in the same way that I admire Mr. Speaker's Welsh accent.
  I should like to welcome the Bill on its Second Reading and to thank the Minister for the work he did not only on the consultative paper, but on the Bill itself. I thank him also for the work the Department has undertaken in looking at the new towns' situation in the light of experience gained over the years.
  Perhaps I ought to begin by revealing a very special direct interest that I have in new towns. When my right hon. Friend's father, Lewis Silkin, was Minister of Town and Country Planning, I was then beginning my career in his private office as a young civil servant, and my only claim to fame was that I once by mistake locked him in his office. I was so surprised by the shouts that came out that I ran away. I consider it a privilege to have been able to serve at some time in a private office, and I am glad to have had first-hand experience of it, although it was all those years ago.
  I feel that there is no way, since I have been elected a Member of Parliament, in which I shall be patronised into taking my place in a private office, certainly not within my experience of the present Labour Government—although, of course, there may be a change when the new party leader arrives. Having travelled a bit far along this road, perhaps I ought to make it clear to the four comrades on the right who are standing for the leadership that there is no way that I would serve in their Governments.
  The Bill is of overwhelming importance to new towns, and I speak with Northampton particularly in mind. It is important to Northampton because of what many hon. Members on both sides of the House have mentioned—the widening separation between the people of town and the people of the new town. I believe that the Bill will begin to bring that to an end.
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  It will not end it at once, but it will be a beginning. I cannot add up the number of times that young people of Northampton have come into my surgery with a deep sense of grievance that they are unable to obtain a house in the town, while new town people from outside Northampton have—quite rightly, in my opinion—been getting houses from the development corporation.
  The social difficulties that these policies have revealed—the "them and us" syndrome—have been a tragedy. It has taken a long time for us to get round to putting that matter right. I find it particularly surprising in an age of planning that we should have made this fundamental mistake. The planning in many areas of social responsibility has been inclined to be disastrous. How much better it would have been if over the years the council list and the new town list could have been integrated. I hope that in the future we shall see a joint list.
  Past policies have allowed politicians rather scrupulously to set one part of the town against another. I feel that the direction given by the hon. Member for Northampton, South (Mr. Morris)—I am glad that he is in the House—and by local Tory councillors and Tory ratepayer leaders in Northampton has been very unhealthy. They have a big responsibility for having created unhappiness and division where none ought to exist.
  I read the Opposition amendment with some surprise. It seemed a very sad contribution, using old Tory philosophy in seeking to lead ordinary people astray. The only point it makes about the Bill is that council houses and new town development corporation houses should be sold. It fails, however, to spell out how ordinary people can afford to buy those houses.
  It is all very well for the Conservatives to press forward with their philosophies, but are they aware of the dangers and damage that they did in the past when thousands of tenants were persuaded by Tory propaganda to buy their homes and now find themselves quite unable to pay the high mortgage interest charges? They destest the day that Tory councils throughout the country actively participated in getting them into debt. That is the situation in Northampton.

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  Many people have come to my surgery terrified at the prospect of not being able to afford the mortgage that the Conservative Party so blithely trapped them into taking on. There is a case for the Department sending out a circular telling local authorities what action is expected of them to help these people in their genuinely difficult situation. Very well, they were sold a pup: they were not told the financial implications of their actions. They were told that they would get a discount and a bargain, that they would become home owners. The attitude that the Labour Party has adopted of seeking to devolve responsibility to tenants for estate management, giving them a say in their own lives, is far more valid than the Tory dream of home ownership, which for many tenants has turned into a debt-ridden nightmare.
  There is a great gap between what one would like and what one can afford. I should like to drive a Rolls-Royce Corniche, but I have to make do with an MG. Politicians should not lead people astray on these things. On this score the Conservatives are guilty of causing a great deal of distress.
  There is no doubt that Northampton Development Corporation has been outstanding. It has had extraordinarily good communication between itself and the local authority. Its director and staff have done the job that they were appointed to do. They have designed, contracted and built. They have made housing available for overspill families. One of my anxieties, now that their work has paused because of the economic situation and the special difficulties of attracting industry, is that the corporation might be inclined to resort in Northampton to acquiring "captive" new town residents. By that I mean that Government offices will be moved there and that industry, which is so badly needed, will not. I am particularly anxious, therefore, that, whatever happens in Northampton, we shall continue to attract industry.
  Another of our problems which could well be tackled by the Bill is the number of problem families being moved into Northampton from the London boroughs. Although I am an avid supporter of the mixed community, reports coming to me as the local Member of Parliament show
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  that the social services are already over extended. The development corporation now has a surplus of housing and these factors add up to the need for better communication between the local authorities and the new town corporation. Certainly we want to give problem families the chance to start new lives in Northampton, but if that happens, we want the London boroughs to provide the money for the social services. Northamptonshire County Council is on a nil growth policy, and the existing social workers in the town cannot add more families to their already excessive burden.
  One of the development corporation's problems was that it did not always communicate with the county council at an early stage. That was the cause of the special difficulty with the over-burdened social services. When the change-over comes, as I am certain it will, it must take place in an atmosphere of communication and fairness. I should like to see Northampton Borough Council and its elected representatives having an early say in the take-over. There must be financial help from the Government to effect the change-over to avoid any additional burden on Northampton ratepayers.
  A lot of the propaganda that has been levelled in Northampton against the development corporation and at the ideal of new towns by the Tory Party and the Ratepayers' Association, which is an extended arm of the Tory Party in Northampton, has been geared to show that in some way the ratepayers are subsidising these "foreigners from London". That is a very narrow attitude. It is totally unjustified. Northampton has benefited and will continue to benefit enormously from its new town. But the Government must recognise this time that if they are to transfer assets and improve the situation of the new town, they must be prepared to provide a certain amount of money to ensure that that happens.
  The great Socialist thinking and ideal that went into the new towns has worked. In Northampton the ideal that families should be brought out of the cities to live in the fresh air, to have recreational facilities, space and decent living conditions has in the last analysis been an overwhelming Socialist achievement. I thank my right hon. Friend for bringing the Bill forward to deal with the anomalies. I know that he will continue the

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  work that his father began to make the new towns more democratic, better for people to live in, with more tenant control of the bureaucracy and thus tenants having a greater say in running their lives. I commend the Bill to the House.
  7.30 p.m.
  Mr. W. Benyon: I enjoyed hearing about the experiences as a private secretary of the hon. Lady the Member for Northampton, North (Ms Colquhoun). We shall all watch her career under the new régime with interest. But I cannot say that I enjoyed the rest of her speech as much. The natives of Milton Keynes are subsidising the foreigners as they are in Northampton.
  I generally welcome the Bill, particularly those aspects concerning the transfer of assets. The hon. Member for Aldridge-Brownhills (Mr. Edge), who spoke about my new town, gave the wrong impression. Milton Keynes will not be affected by the Bill, because it has only just started. It will be a long time before that sort of transfer takes place there.
  I listened with interest to the Minister when he spoke about the transfer of part of the assets of a new town. I shall read the Official Report carefully tomorrow to see exactly what he said. What did he mean when he said that part of a new town could be transferred if agreement were reached by the two parties?
  I also welcome the increase in the size of the board. I have found the present number restrictive. I am glad that the Minister has made these changes, because I think that they will be better able to deal with the various interests involved. Unlike the hon. Member for Leeds, West (Mr. Dean) I have nothing but praise for the appointments so far as Milton Keynes is concerned. They are a good example of people working together. Since 1970 there has been no party political friction in the whole of the operation. If the extra members can safeguard the different interests involved in the new city—for that is what we call Milton Keynes—that is to the good.
  I support the amendment moved by my hon. Friend the Member for Aylesbury (Mr. Raison). My hon. and learned Friend for Runcorn (Mr. Carlisle) has already quoted from the remarkable evidence submitted by the Chairman of
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  the New Towns Association on the consultative document which resulted in the Bill. The Association is unanimous although the members of it are of different political persuasions. That is an important factor which should be borne in mind.
  In Milton Keynes we are labouring under a bogus prospectus. If it were a company, it would be taken to task by the Board of Trade, because everyone who has come into the town has come under the prospectus laid down by the previous Labour Administration. The overall plan for Milton Keynes published in 1970 says:
  "The Minister of Housing and Local Government"
  —that is, a Socialist Minister—
  "in his instructions to the Corporation has asked that at least 50 per cent. of householders … should own their own homes and that this ratio should be achieved as soon as possible. The Corporation endorses this aim and has accepted it as a fundamental guide to policy".
  The plan also states that mobility must be possible between the different types of tenures as the needs, resources and preferences of householders change.
  Every industrialist and citizen has come to the designated area under the impression that he will be able to purchase his home at some time. I suppose that I am verging wide of the Bill, but it seems essential that we return to this criterion, because it produces a good balance, a healthy growth and saves Government expenditure, as the Chairman of the Association made clear in the passage read to the House by my hon. and learned Friend the Member for Runcorn.
  Mr. Corbett: I know that the hon. Gentleman is trying to be fair, but will he concede that the extract that he has read from the brochure does not imply that tenants should have the right to buy their houses but that the development corporation over the period it is building the town should build roughly equal numbers of houses for sale and rent?
  Mr. Benyon: The hon. Member for Hemel Hempstead (Mr. Corbett) is wrong. I could have read more from the document, but its whole reasoning was that anyone who came within the designated area as a tenant would at some later date have the opportunity to buy his own home. That has always seemed to be

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  one of the greatest characteristics of the enterprise which is the largest public housing operation ever undertaken in Western Europe. Next year it will account for 2 per cent. of the entire public housing stock in the country. We have a right to stand on this and say that the matter must be examined again. At present about 20 per cent. of the houses are owner-occupied and 80 per cent. rented. A change must be made.
  I turn to the finance for new towns and for the transfer of assets. This is the stage where I shall deal with the points raised by the hon. Member for Northampton, North. Due to the high interest rates, the high rate of inflation and the changes in calculating Government grants, there has been a substantial imposition on the ratepayers of the country by Milton Keynes. The calculation means that the burden will be much greater for much longer. At its height, the natives—if I may describe them as such—will be paying 9·5p in the pound to get this operation on its way. The hon. Lady is right to say that this is only part of the story, because there will be benefit in the future. That is correct. One should again take note of what the chairmen's conference said when giving evidence to the Minister on the consultative document. On costs it said:
  "What must be recognised now, however, is the need for special measures to enable the local authorities to give practical expression to their avowal of support for a new town and to develop their services in pace with population growth. In our evidence to the Layfield Committee, which has been separately published, we make recommendations which we think the local authorities would support. Briefly and primarily, these call for separate capital allocations by the Government for the expansion of local authority services in pace with each new town's planned population and housing growth; and provision for development corporations to contribute to the costs of advanced provision so as to prevent any undue burden on the ratepayers as such".
  That suggestion should be adopted, not as an allocation but as a loan.
  Thus, when the top point is passed and the dividends are coming in, the foreigners will begin to pay their way and produce a profit for the natives. That is the moment when the Government should begin to take back all or part of the loan used for the town in its early stages. There is no doubt that at the moment the situation causes difficulty between existing
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  local authorities, and the new town corporation, particularly on education. For instance in my new town there is one of the largest and most interesting education experiments in the country which will involve a campus of 5,000 pupils in different units. It is a remarkable idea which should be encouraged and is now going very well.
  Elsewhere in the local authority area there is grave criticism, because it is felt that schools in the southern part of Buckinghamshire are being starved of resources to get this big experiment off the ground. That does not help to create the right atmosphere between the local authority and the new town corporation.
  I hope that something can be done soon about the yardstick provisions in new towns. Nothing contributes more to the decline in housing standards and to the whole development of a new town than this. Time and again I find the corporation going to the Department to try to obtain cuts here and new tenders there. The corporation has on its staff people of the highest calibre who, if given a block grant or loan, could go ahead and plan their city as they wish. Obviously, the Treasury does not like that. We know that there is a Treasury commitment. I maintain that the Treasury should be overruled.
  The Minister said that the great thing to be said for the Bill was that it gave democratic control to the people in the new towns. I appreciate that I am ranging wide from the title of the Bill, but I think that I am entitled to say that the same element of democratic control should apply to Parliament. I ask the right hon. Gentleman to support me in the representations which I have made to his right hon. Friend the Home Secretary. My electorate now numbers 90,000 voters. It is increasing by 10,000 voters a year. It is the fastest growing electoral division in the United Kingdom. In this, I emphasise that I am concerned not with my political health, but with my physical health.
  After the February 1974 General Election I wrote, first, to the Parliamentary Boundary Commission for England, from which I got an uncompromising reply that it had no intention of revising the boundaries of constituencies before 1979. Therefore, I wrote to the Home

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  Secretary, and I should like to quote from his reply:
  "As the Secretary to the Parliamentary Boundary Commission for England pointed out in his letter to you, there are a number of constituencies with very large electorates. Any changes in these would have repercussions over a wide area. With the general review in prospect, it would not in practice seem feasible to attempt to make interim adjustments in these large constituencies only to have further changes proposed in 1979."
  By 1979, if the worst happens and we still have not gone to the polls I shall be representing between 120,000 and 130,000 people. That will be a ridiculous situation. I spend a lot of time on this Bench, as the Minister knows. Looking through the parliamentary records, I find that my hon. Friends and hon. Gentlemen opposite represent a mere fraction of that number.
  Mr. Deputy Speaker (Mr. Oscar Murton): Order. Although the House may have great sympathy with the hon. Gentleman's problems, he is going very wide of the Bill.
  Mr. Benyon: I rather expected you to intervene before very long, Mr. Deputy Speaker. I have made my point and I hope that I shall have the Minister's support.
  Broadly speaking, I welcome this transfer of assets. I feel that much of the argument we have heard today has been somewhat unbalanced, because we are talking about new towns, not local authorities. We are talking not about local authority houses, but about new town houses. There is no reason why tenants who are transferred from one authority to the other should not have the right—that is all we are asking for—to purchase the houses in which they have lived for many years.
  7.45 p.m.
  Mr. Robin Corbett: It is a shame that the Opposition's amendment should be so narrow on a subject of such wide interest.
  Since becoming a Member of Parliament, I have learned that we all have appallingly bad memories. No one seems to recall that only 17 months ago a General Election was fought which resulted in a substantial majority for the Labour Party over the Conservative Party and in which one of the prime arguments concerned the sale of public
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  housing to tenants. If the hon. Member for Buckingham (Mr. Benyon) and his hon. Friends need this invitation, I shall be happy to see them in Hemel Hempstead to argue this matter. There is a wealth of difference between the mathematics of the exercise in a completed new town and in a developing town, particularly in the super-city of Milton Keynes.
  As far as my constituent ratepayers are concerned, to flog off public housing would be the worst possible thing for them. It would be an immensely bad bargain. It may be good for them individually, but the effect on the ratepayers would be to risk the new civic centre going up in flames.
  The 11th commandment of the Opposition seems to be that the arithmetic of what is spent on tax relief for those of us who have mortgages—by courtesy of the various building societies—and the public money which goes in subsidies for public housing means that council tenants are living off the backs of the owner-occupiers. That is not and has not been true. For example, the amount spent last year on subsidies, excluding rent rebates and allowances, was £749·4 million. The cost of tax relief last year was £815 million. In the current financial year it is estimated that £789·9 million will be expended on subsidies for public housing as against £885 million as the cost of tax allowances on mortgage interest payments.
  It is probably common ground between both sides of the House that, by and large, housing finance—I do not want to put this too strongly with my right hon. Friend the Minister for Planning and Local Government sitting there—is in a bit of a mess and could do with being looked at. Recently we were told that there were at least six, if not more, committees looking at various aspects of the matter.
  I suppose that I should declare an interest in the Bill. Like a number of my hon. Friends who have lived in new towns for some time and have had the pleasure and privilege of becoming elected Members of Parliament for those areas, I have campaigned for more than 10 years to try to have the neck of the Commission for the New Towns wrung. It was invented by the Conservative Government in 1959. I suspect that the real

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  intention was not simply to frustrate the original aim of the New Towns Act 1946, which was to transfer assets from the development corporations to the elected local authorities, but, as I have said before in this House, to act as a buffer and prevent people in new towns from having the same control over the running of their affairs as every man and woman over 18 years of age has. For a party which now proclaims its desire for more open government, the invention of the Commission for the New Towns all those years ago is perhaps a silent testimony to its past mistakes. I am gratified that to that extent hon. Members opposite have learned from those mistakes.
  Mr. Arthur Jones: Is the hon. Gentleman suggesting that the industrial and commercial assets in the new towns should be handed over under the same arrangements as are proposed in the Bill for housing assets?
  Mr. Corbett: I am coming to that point, because it has a great effect on the cash situation. I wish to make the distinction that the arguments I shall use are relevant only to a completed new town. In other words, on the question of flexibility in regard to the Bill the development corporations are in a different ball game.
  My principal opposition to the Commission for the New Towns flowed from the feeling that there was never even any attempt to put a cloak of democracy over the composition of the local committees in the way in which they went about their business. There was not, and still is not, any right of appointment. There is no right for the local authority that is playing host to a new town to be represented on those bodies. My council for a period refused to put forward more than one name and was told "You must make your choice from a list of two or three."
  My sad experience of these matters has led me to conclude that these bodies often go about their business in a bizarre way. We all think that we have the right to kick local government, but most local councils do not go about their business without at least achieving a statutory quorum. On 18th February last year—and, strangely enough, this occurred again on 19th February this year—the local committee of the Commission for the New
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  Towns called its regular monthly meeting. It did not get a quorum, went about its business and told a subsequent meeting "This is what we did. Will you endorse it?" I find that a strange way in which to run and administer a completed new town. If anybody in local government went in for such practices, I am sure that my right hon. Friend the Minister for Planning and Local Government and his colleagues would be down on them like a ton of bricks, and rightly so.
  I hope that the Minister will be able to say something in his reply on the question of the representation on local committees. I am not necessarily asking for an increase in the size and composition of local committees in completed new towns, but am asking for the right of representation in principle in respect of the host local authority. Perhaps the phrase "host local authority" is stretching things a little far, because the new town which I represent has been some 25 years in the making.
  I believe that the industrial and commercial assets of completed new towns should be handed over on the same basis as are housing and related assets. I know that the Minister takes a different view on this matter, and I am prepared to concede that there are some larger, and indeed different, considerations involved. I do not want to be misunderstood. I am not arguing that, just because people in my completed new town happen to live there, they should raid the public purse and obtain a bonus.
  In the completed new town in my constituency of Hemel Hempstead there was a surplus—as shown in the twelfth annual report of the Commission for the New Towns—in the period ended 31st March 1974 of income over outgoings, which can be crudely described as a profit, of £1,683,668. I appreciate that there are more complex arguments involving the transfer of commercial and industrial assets. Much as I should like to see this proposal adopted, my persuasive right hon. Friend the Minister for Planning and Local Government has won again and has persuaded me to welcome what we have got.
  The pledge to
  "transfer housing management and allocation to elected authorities in the new towns nearing completion"

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  was given on page 18 of the Labour Party manifesto of October 1974. It was my great privilege to be on the platform at a public meeting when my right hon. and retiring Friend the Prime Minister spoke on 30th September 1974. He repeated that pledge in public and was given a standing ovation. It is to the credit of my right hon. Friend the Minister for Planning and Local Government that, although he has had one or two other matters to deal with in the meantime, he has come forward with this legislation.
  Mr. John Silkin: In my case I am my hon. Friend's right hon. but not retiring Friend.
  Mr. Corbett: I must say that a period of 17 months elapsing between the giving of a pledge and the occasion of the Second Reading of this Bill is a good and fair wind. It is a long overdue measure. The Labour Party has fudged the issue for far too long. We have now taken the first step to transfer housing and associated assets to the elected representatives of local people.
  I wish to make four brief points. The first relates to staff who work for the Commission for the New Towns and also the staff working in district councils. I am happy to tell the Minister that amicable discussions have begun and are continuing between my local committee and the Commission. I am pleased to be able to tell him that there has been an almost complete measure of agreement. I know that the Minister is well aware, because he visited the new town last August, of the real and genuine concern of Commission staff over the transfer. I hope he will lose no time in reassuring the staff and will lay down guidelines and publish the regulations under which they will work.
  I do not believe that in this matter there is any risk of the kind of bonanza as happened over local government, as has been suggested by some Opposition Members. My right hon. Friend the Minister said in an intervention that we were now dealing with the transfer of bricks and mortar and that that situation will still have to be administered. However, we are looking for some improvements in the efficiency of management and it would be wrong to kid ourselves that
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  this can be done without any loss of staff. We must ensure that the process is completed as painlessly as possible.
  I hope that the Minister will recognise, as I am sure he does, that the differences in regard to structure between the Commission for the New Towns and the district councils are a very different kettle of fish from the situation which obtained when the district councils were created. To that extent perhaps the Commission will need more flexibility in resolving this problem.
  Will the Minister in reply make clear that the acquiring local authority before, during and after transfer will have user rights to the offices, furniture and equipment of the Commission for the New Towns? It is not just people who are needed, but also offices and other equipment to enable staff to carry out their work smoothly. In Hemel Hempstead there is a works depot situated in Paradise. I am tempted to say that there is perturbation in Paradise, but I shall not yield to that temptation. I hope also that there will be special recognition of some of the problems which the Commission for the New Towns itself may face if it is left in the position of having significant numbers of its staff for whom the local authority cannot provide work.
  My third point relates to a matter that I welcome strongly. It is a matter of great concern. From reading the Bill, it seems to me that the central principle of the financing side of the transfer is that it shall be on neither a profit nor a loss basis. That is absolutely right, because it would be very unfair if as taxpayers we in the new towns—part of whose taxes have in any event have helped to fund and found these new towns—have to pay again as ratepayers, either as tenants or as owner-occupiers.
  The fundamental point is that the democratic right to local control over our completed new towns should not depend upon the depth of the civil purse. It is a right that belongs to all of us in the new towns as to those in the other towns. I am pleased to say that my district council, in anticipation of this transfer, is already working on proposals for new, bold and very imaginative schemes of estate management with a very real effort being made to involve tenants much more in what is going on.

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  They may seem small things to many people but they affect the quality and calibre of life in some of the estates, which at times, even with the best planning decisions, can appear to be a little bleak.
  Fourthly, I turn to the cash side of the transfer. It is a fact that in the new town that I represent the repair and maintenance cost for a Commission for the New Towns house averages out at £92 a year, as against £67 a year in the case of the local authority. Lest it be thought that the local authority is mean or that the Commission for the New Towns is unduly extravagant, let me add that this is simply explained by the fact that the housing stock owned by the Commission for the New Towns is much older in general than the bulk of the stock owned by the local authority. Similarly, the average supervision and management costs of Commission for the New Towns houses has been £63 a unit as against £32 by the district council.
  I think we would have a right to expect that as part of this transfer there should be an increase in efficiency and therefore, I hope, some saving in the supervision and management costs, without in any way detracting from the service to which tenants rightly feel entitled.
  It is again one of the strange things about this place, and perhaps outside it, that too few of us have yet realised that it has been estimated that by the year 2000 one-seventh of our population will be living in a new town, either developed from a green field site or extended around an existing town centre. That is why it is important that we get this matter of transfer right.
  I believe that the new towns are a testament to caring, positive public planning. I am proud to be a member of the party which, by and large, has been responsible for them. I have said that I should have liked the Commission for the New Towns to be wound up totally as unwanted and unnecessary in the completed new towns. However, I accept that this a small first step—but an important step—towards that ultimate objective. It was Labour which saw that the new towns were built. It was a very necessary thing to do. It is a Labour Government who will now
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  ensure that the control of them is put into the hands of those who live in them, through their elected representatives. I hope that the Bill receives a well-deserved Second Reading.
  8.5 p.m.
  Mr. Michael Morris: Perhaps I may be allowed to reply to the hon. Member for Northampton, North (Ms. Colquhoun) and the hon. Member for Hemel Hempstead (Mr. Corbett) before I come to the general aspect of the Bill. If I have indeed created, to use the words of the hon. Member for Northampton, North, unhappiness and division in Northampton, I can only think that is among members of the local Labour Party and at holding the seat twice, much to their shame. In so far as the hon. Lady suggests that politicians have led tenants astray into what she termed a debt-ridden nightmare, it is interesting to note that it is the Labour-controlled Northampton council that is now encouraging the sale of council houses. Secondly, if anyone has led anyone astray, I suggest that it is the hon. Lady in her commitment at All Saints Church in February 1974 that she would move to Northampton. We are all still waiting.
  If the hon. Member for Hemel Hempstead wants a debate on the sale of local corporation houses in Hemel Hempstead, I should be happy to go there one Friday evening and to have that debate with him. I think that it would be a very interesting debate. However, enough of the parochial side of things, and on to the meat of the Bill.
  Ms. Colquhoun: Come to Northampton and have one with me.
  Mr. Morris: If the hon. Lady wishes to intervene, she may come to Northampton as often as I am there. I should be happy to see her there.
  The concept of the Bill is enormously welcome, building as it does on the legislation of the right hon. Gentleman's father, which, with the benefit of time, has turned out to be one of the more significant pieces of legislation on environmental planning. On that basis I welcome it strongly. At the same time, we all recognise that more than a generation has passed since then and that the time has now come to review the concept

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  of the new towns. Therefore, to that extent, I give only a tepid welcome to the actual content of the Bill. That is not to say that there is not good meat in the Bill, because there is. My reservation is that the Bill probably does not go as far as I should like in terms of looking to the future. However, having made that general remark, I should like to turn to one or two aspects that are covered in the Bill.
  I accept warmly the principle of the transfer of tenancies to the local authorities responsible. Although I say that I welcome it very much, I have at the back of my mind the experience of a London borough, being the chairman of its housing committee when certain responsibilities of the GLC were transferred to it. To some extent this is the second time around for me, as it may be for some other hon. Members.
  There were two major stumbling blocks involved in that transfer. The first was the financial provision. I well remember the all-party deputation from the London Boroughs Association going to the GLC and to the Minister and saying that the financial arrangements were not adequate because they were putting a burden on local ratepayers.
  The right hon. Gentleman has been at pains to say that there will be no undue burden and that it will be at the discretion of the Secretary of State to make the necessary amendments to ensure that there is no undue burden. Regretfully, I have to say to him that I do not think that this is sufficient. It is not a question of there being no undue burden. We have experienced "no undue burden" already in Northamptonshire, and that "no undue burden" amounted to several pence on the rates. That is primarily because of the infrastructure that the county council has to put in.
  I should like to quote from the observations of Northamptonshire on new towns in England and Wales which were addressed to the Minister. Talking about finance, the document said in paragraph 6,
  "The problem is that a County Council has to bear the cost of infrastructure development as a charge to existing ratepayers whilst a Development Corporation receives the benefits."
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  It goes on to say,
  "The County Council obtain no financial return for their investment in the infrastructure."
  The right hon. Gentleman knows, as does certainly the Under-Secretary who is responsible for local government, that I and other hon. Members, such as my hon. Friend the Member for Daventry (Mr. Jones), and my hon. Friend the Member for Wellingborough (Mr. Fry), who is not present, have explained ad nauseam about the rate support grant that while it may not be an undue burden, it is a burden and one that the new towns should not be asked to carry. In Committee we shall want to move some amendments in that respect.
  However, I agree that while the normal transition will be over 15 years, there may be a case for earlier transfer. In Northampton the development is split into two parts—the eastern area and the southern area. Parts of the eastern area are probably ready now for transfer, and that should happen with some speed. I am glad that arrangements will be made to allow this transfer.
  The second area of concern about the transfer of properties from the GLC was among tenants. A proportion, even in the GLC area, wanted to buy their own homes. Some wanted to run co-operative ventures and others wanted some form of co-ownership. Myriads of committees are meeting at the moment and the Minister for Housing and Construction, who was present earlier, is a devotee of co-ownership and tenant co-operatives. In the interests of tenants, we should write into the Bill a provision allowing them to run co-operatives or co-ownership schemes. We have such a scheme in embryonic form in Northampton at the moment on one of the older estates, and I hope that nothing in the Bill will prevent that scheme from reaching fruition.
  I have asked the Minister about every three months when he will allow tenants to buy their own homes. He is getting a little warmer slowly and has said that he hopes to do something in certain places some time this year. But when we know that 70 per cent. of tenants want to own their own homes and that the unanimous opinion of the Commission for the New Towns—whose composition, if anything, is inclined to the Left—is

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  that they should be allowed to do so, when we know that some of the older and more experienced Labour politicians in local government themselves want it to happen, it seems extraordinarily ostrichlike to persist in refusing to allow them to do so. I hope that the Minister will come off the fence and accept that, with this weight of opinion, there must be something in it.
  Housing associations have also been mentioned. I hope that in Committee the Minister will be open-minded about this transfer being not just to local authorities, but to other socially responsible bodies and forms of tenant. There is a tremendous opportunity in the new towns, which have a cohesion of living that is not, perhaps, common in other parts of the community. It would be a crying shame if co-ownership and co-operatives were prevented.
  However, I support the hon. Member for Northampton, North on one point—her reference to social mix and the problems of the socially disadvantaged. We all understand our responsibilities to ensure a mix, but the hon. Member for Hemel Hempstead, representing a seat near London, must know that the infrastructure of the London boroughs is far greater than that in the counties. Therefore, boroughs like Islington, Camden and Hackney, which export people to Northampton, have far better facilities for the mentally and physically handicapped and others who are socially deprived.
  Before the Minister follows the philosophy of a mix too far, he should consider what facilities there are at the receiving end. This is not a party political issue. With the best will in the world, the social services departments in a county like Northamptonshire are just not experienced enough to cope with the problems coming upon them. I have attended meetings of the Disablement Income Group at which people who have come from London have expressed great concern about the comparatively poor facilities in Northampton. Also, peripatetic hearing facilities and other services for the deaf are nowhere near as good outside London as they are inside.
  However, the new towns could take on responsibility for the elderly, because less specialised facilities are involved.
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  With the benefit of hindsight, one can say that it would have been better if the new towns had earlier taken on a fairer and larger proportion of elderly people—not least because this would have supported the concept of the "extended family". So often a wife wants to go out to work and if grandma is around the corner, she can look after the children. I hope that the Minister will seriously consider that aspect, although I would urge great caution.
  The Minister made it clear that the commercial assets in the new towns were national assets because they had been provided by central funds. There was a ring of the National Enterprise Board about his description of the rôle of the new towns in running these assets. But none of these new towns would have happened if the local populations had not been willing to allow them to happen. Like it or not, the local populations and their facilities suffered in the building phase.
  When a town like the one that the hon. Lady the Member for Northampton, North and I represent has its centre completely gutted, with large tracts redeveloped, facilities are enormously strained. So it is not just a question of the Exchequer getting a return on this investment. There should be a substantial return to the indigenous population, including those who have now moved out. A substantial part of the revenue should go to them.
  I would go further. Recent evidence suggests that companies going to Northampton come from all over the world and that they require mainly freehold property. This pressure will increase. We have lost employment potential because too few freehold sites are available. While the hon. Lady may be right to say that not all the assets should be sold off, we should weigh up the employment potential before we say too airily "In no case are we prepared to allow the freehold to be sold."
  I urge the Minister to discuss the commercial side with the Secretary of State for Industry. Indigenous companies are still having difficulty in getting IDCs in new towns, yet outside companies often come in with a floor space demand less than that of the local people and certainly with a far lower employment potential.

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  It seems nonsense that, when there is local industry in a developing area and a new town wants to expand, the Department of Industry should still be saying that the firm concerned must move to the North-East, or somewhere else. It seems a bit of a non sequitur and I hope the right hon. Gentleman will look at it.
  The right hon. Gentleman rightly mentioned the people involved. In the majority of our new towns we probably have the finest teams of development experts in Western Europe. It would be a crying shame if those teams were broken up. Where there are really first-class teams, which work together, which, as we know from evidence, can produce developments in half the time it takes local government, the Minister ought to do his best to see that they are kept together.
  It is not as though we had not got problems. The hon. Member for Aldridge-Brownhills (Mr. Edge) mentioned the dockland area in London. The right hon. Gentleman has some dockland in his constituency. Somebody has to take hold of the morass of dockland in London, and I can think of no finer body to do that than some form of new town corporation. I think that the right hon. Gentleman would accept that the same problem occurs in the centres of many of our great cities. If development teams are running down their work, I hope that the right hon. Gentleman will think seriously about transferring them to some more active service rather than putting them out to grass within a local authority.
  There must be safeguards for the transfer of those who are to be moved. I support the suggestion that the Ombudsman should have a role to play, because there are people who suffer in the transfer to local authorities. I have a case in point in Northampton on which I am not getting much satisfaction. I hope very much that the right hon. Gentleman will urge the Home Secretary to allow the Omsbudman to cover the work of the Commission.
  Secondly, one of the areas in which we shall need to see some pruning—and this will require a degree of bravery on the Minister's part—is that of the architects' department. There is no rôle in an existing local authority for large numbers of architects and associated persons to be
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  transferred. My right hon. Friend will have to be strong-minded and accept that, and there must be savings in that area.
  One other feature that continues to worry us in the specific example of a county like Northamptonshire—and I make no apology for mentioning one or two specifics—is that there appears to be a lack of liaison at the centre. We have the extraordinary situation of a new town at Corby, with a good infrastructure and a local council wishing to do all it can to attract local industry, knowing there is a bit of a cloud over the steel industry, yet the Government saying that the development corporation there should close down. At the same time, there is the enormous second phase of the expansion in Northampton on the southern side in the knowledge that locally the southern area in particular is not wanted. The evidence is increasing every day to show the lack of need. It seems to many of us at district and county level and in Parliament that there is a lack of liaison in the Department of the Environment in that respect.
  I welcome the principle of this Bill, but I again emphasise that "no undue burden" is not an adequate phrase. We want no burden at all on the local authority, because our experience of the previous arrangement was bitter and costly. Frankly, the Treasury did not pay up last time and I have grave doubts whether it would pay up in the future. The only safeguard we could have would be to have a provision written into the Bill to stipulate no extra burden at all.
  The receiving new towns have accepted with enormous good will the onslaught—and I use the word advisedly—of development and new people. There has necessarily been upset and disturbance in what were previously tranquil towns and there have of necessity been extra costs. Therefore I hope very much that when we come to debate the Bill the commercial aspect will be considered and that we shall have a firm commitment on that.
  I have persistently questioned right hon. and hon. Gentlemen about the sale of new town homes to sitting tenants. I urge them to think very seriously again about this subject. I urge them to think again about their ratio of 75 per cent. rented to 25 per cent. owner-occupied. We hear from non-political as well as political sources that the ratio of 50:50

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  was common ground between the parties until very recently; it certainly meets with the approval of local people.
  If we are to see this very exciting concept of new towns develop as most hon. Members wish and to see it have an exciting future, the right hon. Gentleman has to remove the two stumbling blocks that he has put in the way since the October election—no sale and the revised ratio. I am sure that he knows in his heart that they are probably both wrong. We shall try to let him off the hook and not be too beastly when he changes his mind about them, but I urge him to reconsider.
  8.27 p.m.
  Mr. George Rodgers: The hon. Member for Northampton, South (Mr. Morris), has made a very interesting contribution. I was especially taken with his obvious desire to see my hon. Friend the Member for Northampton, North (Ms. Colquhoun) become a resident in their area, his desire to meet her, in fact, in the area, and at one stage to support her—all very commendable.
  The Minister is to be congratulated on what is undoubtedly a very valuable Bill. Its prime and very worthy purpose is to advance the cause of local democracy. Few of us will dispute that. Its clauses are sensible and sufficiently elastic to meet changing circumstances, and we must recognise that circumstances have indeed changed.
  Before the advent of the current depression, it could be said with great accuracy that each and every new town had succeeded in its main purpose of creating decent housing, providing adjacent employment and generating prosperity. But, owing largely to the prevailing economic climate, we find that the new town of Skelmersdale in Lancashire is experiencing problems, and that many of the large firms which were tempted to that area by lavish incentives by various Governments have since folded their tents and stolen away.
  But the fault lies deeper than the new town programme, and it must be resolved. It would be quite unforgiveable if we tolerated the situation whereby people were persuaded into new surroundings and subsequently abandoned. They cannot casually fold up their tents and move
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  on. We must honour the bright promises of a new life, consistent employment and a pleasing environment. Of course the new towns are not affected by unemployment in isolation, but I think that we have a special responsibility here. We have issued a prospectus. Indeed, it has been issued not by one Government, but by Government after Government. The commitment to those who respond to it must not be neglected.
  Earlier in the debate the problem of overspill was mentioned. The concept of a new town is a much bolder and more visionary approach. I recall that in my local authority days I experienced the peculiarities of serving on an urban district council which had its population increased 30-fold by overspill development from a nearby major city. It suffered all the disadvantages of a new town without any of the compensations. There was little financial support from the Government. There was inadequate industry, inadequate transport, and inadequate leisure facilities. There was also the problem of absentee landlords as the large exporting authority paid scant heed to the tenants of its property in the overspill district and there were no elected members to the authority which provided the overspill. I do not allocate blame: there was a set of circumstances. But it was extremely unfortunate, and I should much prefer to see a new town development to meet a situation of this nature.
  My constituency of Chorley is located within the boundaries of the Central Lancashire New Town. It is a ghastly title. I wish that someone would think of a name for this project other than this conglomeration of "Central Lancashire New Town". However, it has been said that all new towns are unique. If that is so, the massive project in Lancashire is astonishingly unique. It covers some 90 square miles and embraces the three existing towns of Preston, Chorley and Leyland, and there is also a multitude of villages within its boundaries.
  It may be that this sounds a grim and soulless venture, but I do not think that that is so. The theme of the development is to enhance what already exists. Already we see that, apart from industrial development and the creation of housing stock, there are village greens and leisure facilities being provided amongst the other projects in the area. At a time of

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  great industrial stress, more than 1,000 new jobs have already been created within the new town, and many thousands of square feet of factory space have been let or are under construction. The area is well served by motorways and eventually would have attracted industrial development, anyway. But I should much prefer this attractive, well-planned programme, rather than the sprawl and squalor which have disfigured so many industrial areas of the North-West of England.
  Naturally there are complaints and queries and, because I favour the broad concept, that is not to say that I have not frequently engaged in battle with the development corporation. Individual projects within a major project must be closely scrutinised at all stages and challenged whenever necessary.
  There are other features which create problems. Many of the older residents find it difficult to adapt to the new situation. They resent change, and there are difficulties in superimposing a new population on the old. There will be special problems if the housing stock provided by the development corporation is only partially occupied while local people are homeless. These issues and many others must be and I think will be overcome if the formula of common sense is applied by all authorities at all levels.
  The Bill contains the essential ingredient of democracy. In itself, it is not sufficient to meet all the problems which will arise, certainly in my area of Lancashire, and I urge my right hon. and hon. Friends to be more generous with this ingredient of democracy. It is only by early and total community involvement that all the questions can be resolved.
  So far, I have made no reference to the curious little amendment moved by the Opposition. I find it hard to believe that this triviality has been put forward seriously. In my view, to sell to tenants is morally indefensible, certainly while a shortage of houses for rent continues. Of course it would be advantageous to some but to those in need, without a house at all, it would be utterly disastrous.
  Any hon. Member who holds a surgery frequently will surely be aware that the people who come with housing problems are not those who are already in possession
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  of property and have a home but those without a home who are in desperate need of one. I welcome the Bill and wish it well in Committee.
  8.35 p.m.
  Mr. Ronald Atkins: I follow my hon. Friend the Member for Chorley (Mr. Rodgers) in referring to the Central Lancashire New Town. I very much welcome the Bill but I am disappointed that its provisions will not start to apply to the Central Lancashire New Town for at least 10 years. But I am still more concerned over the fact that the Bill does very little to change the structure of the South Lancashire New Town Corporation. I believe that when the structures were first considered years ago there might have been more need for independent bodies of this kind. But they wield enormous power and authority. The Central Lancashire New Town Development Corporation, for instance, will have an enormous impact on the lives of half a million people, and it holds large resources and patronage as well.
  The Corporation is not accountable to the public, and everything we have seen so far shows that it is also unresponsive. It is frequently stated, for instance, that local authorities are not as responsive as they should be to the electors, but the machinery is there for them to influence the administration through their elected representatives from day to day. But there is no such accountability as regards the Corporation. If hon. Members have criticism to make of the corporations, they will be told by the Minister that he has no power to interfere in the day-today running of the corporations.
  Those bodies have enormous power, not only directly in their own sphere, in the realm of their own jurisdiction, but as regards local authorities also. Everyone who is on a local authority will know that officers from various local authorities—they form a big part of the Central Lancashire New Town, covering Preston, Chorley, Leyland and many others—discuss planning regularly with their equivalents in the Central Lancashire New Town. They reach decisions after weekly or monthly discussions. Therefore, the influence of the Corporation is greater. It spreads to the local authorities. Everyone knows the power of the local officers in the administration of the town. It frequently happens, and I

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  am sure hon. Members will have seen it elsewhere, that if the chairman in a local authority is not very strong he may be in the pocket of the local officers. If the officers have made decisions together with their relative members in the Corporation, the influence of the Corporation can spread out, and the elected representatives of the local authorities have little influence in deciding on this enormous planning undertaking.
  The first 10 or 15 years, when the design is created, is the vital stage. When this is handed over to the local authorities, they can do little to change the pattern but they may suffer if the pattern is inappropriate. They are taking over big responsibilities. This shows itself in the Central Lancashire New Town. It is true that there is consultative machinery and there are co-opted members, but they are relatively ineffective. There are public meetings at which enormous opposition is expressed to the plans to the Central Lancashire New Town Corporation, and they are even listened to, but very little notice is taken of the objections.
  To give a simple example of the attitude of the Central Lancashire New Town which sums up very well what we find in other ways, one of the hazards of being a Member of this House is that when one visits an undertaking on business one is offered hospitality. The usual kind of hospitality is "Will you have a drink?" If one says "Yes", one is offered several different kinds of drink. I visited the administration of the Central Lancashire New Town and hospitality was offered to me. Sir Frank asked quite bluntly "Will you have a gin and tonic?"
  Mr. Arthur Jones: What did the hon. Gentleman reply?
  Mr. Atkins: I am not a teetotaller—
  Mr. Deputy Speaker (Sir Myer Galpern): Perhaps I may give the hon. Gentleman some advice. On such occasions it is as well to stick to tomato juice.
  Mr. Atkins: The answer to the hon. Member for Daventry (Mr. Jones) is that gin is not my favourite drink, but I downed the obnoxious liquid in the interest of my cause. I do not say that I was not given freedom of choice. There was a simple choice—take it or leave it.
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  That has been the attitude of the Corporation at many public meetings.
  A good illustration of the Corporation's unresponsiveness to the local people and the needs of the area was shown in its decision on rented accommodation. The original decision, before the advent of the Labour Government, was a proportion of 75 per cent. house ownership and 25 per cent. rented, with an option for the tenant to take over after a number of years. That meant no addition to the rented stock in an area which badly needed it, for two reasons. One was that it was originally envisaged that many of the people coming in would be overspill from Merseyside and Greater Manchester, and the other was settlement of the area.
  There are three old towns with limited boundaries and very little land on which to build rented accommodation. Around them were areas in which there was expensive suburban development for owner-occupation. Those towns—Preston, Chorley and Leyland—suffered from long waiting lists. Despite the urgent need for extra rented accommodation, it was ruled out by the Corporation, which wanted the land entirely for house ownership.
  The reason was understood. In the early days one of the officers let slip the statement "We want the accommodation for a nice kind of executive." The planned houses were expensive and could be bought only by executives. That attitude seemed incredible. Early plans for the area had golf courses painted all over them—there seemed to be enough for the whole country—but there was no mention of football pitches.
  The plans for roads and other communications cancelled out earlier plans proposed by someone who left in desperation. Instead, roads were proposed across the town of Preston and other towns, destroying cheap accommodation and destroying in particular terraced houses by their hundreds.
  Fortunately, my right hon. Friend reversed that decision and the position is now much better than it would have been. However, I am still worried because the Corporation is as unresponsive as ever. It is an inward-looking organisation that still does not respond to the wishes, aspirations and needs of the local inhabitants. They are the experts because they know the area.

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  Unless the situation has changed recently, not one of the leading figures of Central Lancashire New Town lives in the area which they are supposed to plan. Their decision to live outside is one of the best decisions I have known them to make. What they have to plan for is in many cases not the sort of thing I would like.
  This is a splendid Bill worthy of the son of a worthy father, but I would like something done later, by special legislation if possible, to change the structure of the corporations so that the people who live in an area will have a say in what is most important in their lives, particularly as public funds have been provided for the development of those areas.
  8.45 p.m.
  Mr. Roger Stott: I apologise to my right hon. Friend the Minister and to the hon. Member for Aylesbury (Mr. Raison) for missing the opening speeches. The hon. Member for Southgate (Mr. Berry), who is here now and I have been incarcerated upstairs in a Standing Committee since some time in December. It is rather rare that we can participate in debates on the Floor of the House.
  I shall be brief because I know that my hon. Friend the Member for Keighley (Mr. Cryer) wishes to speak before 9 o'clock. I welcome the Bill. New towns have a historic significance. They have undoubtedly provided a better atmosphere and improved living standards in spacious surroundings with a fine infrastructure for many people who had previously been denied a new house. My overall view of new towns is one of support. They are an important and integral part of any planning in this country.
  I agree with what my hon. Friend the Member for Preston, North (Mr. Atkins) said about democracy in the corporations. I have always felt that democracy should be retained by locally elected people. It is strange that we have these monolithic development corporations which are often not democratic or responsible to anyone. On that ground alone the Bill is essential. At least it transfers to local elected representatives the powers they will need when they take over the assets of the corporations.
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  Perhaps I could use this debate as another opportunity to beat a drum that I have beaten in the past. I am sceptical about certain aspects of some new towns. I have known my hon. Friend the Member for Chorley (Mr. Rodgers) for a long time. We are constituency neighbours and I have no doubt that he welcomes with enthusiasm the Central Lancashire New Town.
  My constituency is split between Bolton on the north and Wigan on the south. To many people, Wigan may be a music hall joke, but the area has serious problems. It is surrounded by new towns, with Runcorn to the south, Skelmersdale to the west and the Central Lancashire New Town to the north-west. Fantastic resources have been poured into the new towns surrounding the Wigan basin. Wigan has been left to decline and rot. We have a declining population and urban deprivation.
  This has been caused by the provision of new towns on all sides of the metropolitan borough of Wigan. In Wigan and Bolton local authorities object to the monolithic growth of Skelmersdale and to the proposals for the Central Lancashire New Town. People are faced with a growing sense of despair when they compare the roads and the infrastructure of Skelmersdale, Runcorn and the Central Lancashire New Town with the decaying life style in Wigan. There is a conflict of poinion about what should be done.
  I am not against the provision or the development of new towns, but I ask the Government whenever they are planning to develop new towns to consider areas like Wigan before taking green fields and building new houses and new factories to the detriment of the older areas.
  8.51 p.m.
  Mr. Bob Cryer: The Bill is about 12 years overdue. Many years ago it was Labour policy to transfer new towns to local authorities so that control should come within the province of elected representatives. Labour policy is that there should be more control by elected representatives and less control by appointees.
  Tomorrow I shall be introducing a Ten-Minute Bill designed to bring more democracy to the nationalised boards. I regard the Commission for the New

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  Towns and the various development corporations as publicly owned industries, but they will not be a feature of my Bill, because the New Towns (Amendment) Bill covers them neatly. Many people are concerned that a tiny oligarchic élite are able to maintain a position of power over people's lives by membership of the nationalised boards and by control of the new towns.
  The Bill is to be welcomed. I hope that, with the help of the Government, district councils will go even further towards decentralising democracy. The Bill provides powers for the housing stock to be transferred from the new town development corporations to the district councils. That is a welcome first step on the road to democracy. It would be useful if the tenants were given delegated powers to organise their estates with tenants' committees, possibly including representatives of the district council. We shall not be able to achieve that until the Bill is passed and the powers transferred to the district councils.
  The local authorities will be superior to appointees, with all their airs of mystery and patronage, in controlling housing stock. We do not know how those appointees are appointed. The jobs are not usually advertised. Members of the Labour movement would like to see the system overhauled. There is no reason why a Labour Government should appoint Sir Richard Dobson to British Leyland as part-time chairman at £22,500 a year. Just as the tenants of the new towns have been pressing for democratic control, so the British Leyland workers have been looking a little askance when they hear that the man who is to guide their destiny, who left his previous job with a good-bye present of £80,000—
  Mr. Deputy Speaker: Order. I realise that the hon. Member will resume his seat at 9 o'clock, but in the meantime he should discuss the new towns, which are the subject under discussion. To discuss Leyland is wholly out of order.
  Mr. Cryer: I obey your injunction, Mr. Deputy Speaker. The principle of the Bill, which is to transfer powers from the development corporations to the local authorities, is of great advantage because those powers are being transferred to a
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  democratically elected body. The tenants of the new towns will greatly welcome this move. They want an elected representative to whom they can put their case, and if the elected representatives do not do their job properly, the tenants can get rid of them.
  The parallel case was that of British Leyland. I believe that the people in British Leyland would welcome it in exactly the same way as the tenants of the new towns will welcome the New Towns (Amendment) Bill. If my hon. Friend decides to produce a new British Leyland (Amendment) Bill, with the same pattern as the New Towns (Amendment) Bill, certainly it will be very greatly welcomed, because we seek, in exactly the same way as the tenants in the new towns, to get rid of this aura of authority.
  I do not want to criticise the Commission for the New Towns too much, because it set off with excellent intentions. It was a Labour Party development. It was a great step forward. Some of the architectural advantages which were claimed were certainly not as great as they were thought to be, but the people who were appointed no doubt set out with the best of intentions.
  The fact is—we know it very well in the House—that it makes a difference to a person if he is controlled by the people. In general, those who are appointed to positions are "safe" people. Those who tend to kick over the traces and to raise perhaps controversial or embarrassing issues are generally not the sort of people appointed to these corporations. As a result, if something arises which is the concern of tenants, they tend not to get the sort of response they would get from an elected representative.
  Although the appointees might act with the best of intentions, they still fall short of the wishes of the people. The people have no control over them, and therefore the appointees feel that there is no need to respond to the people. The appointees have a different master—the person who appointed them.
  That is why we in the Labour Party believe essentially in democracy. That is why we want to see democracy extended in a variety of ways—even to the Parliamentary Labour Party, so that, for example, we might be consulted to a greater extent than we are already.

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  In the past few weeks there have been tendencies in that direction.
  The New Towns (Amendment) Bill is a good step on the way. Tomorrow there will be a Ten-Minute Rule Bill, which I hope the Government will support as enthusiastically as they support the New Towns (Amendment) Bill, so that we may spread the spirit of democracy to all the nationalised boards.
  8.59 p.m.
  Mr. Arthur Jones: The hon. Member for Keighley (Mr. Cryer) has taken us into a rather philosophical field, in which he suggests that there are significant differences between him and some of his hon. Friends on the one hand and the establishment in the Socialist Party on the other hand. That is obvious to many of us, and it has been for some time past. It has been more in evidence in recent weeks than hitherto, but we have always been conscious of it. To try to use that analogy in terms of development corporations, however, is somewhat inappropriate.
  The value of the development corporations has been proven, and we have yet to see the hon. Member and his colleagues being given a chance to prove their worth. I think I may claim widespread support for the proposition that they may never have that opportunity.
  I add my congratulations to those which have been expressed to the Minister for having the opportunity to present the Bill. It is a credit to him that he has been able to follow in the family tradition set by his distinguished father and that he is able to speak for the Government of the day on the important issues of planning, particularly of the new towns. His distinguished father introduced and successfully piloted through the House the New Towns Act 1946. The right hon. Gentleman has followed the progress of new towns over the last 30 years and played a great part with his father during that period. His family have given very distinguished service to Socialist Administrations, to local government generally and to new towns in particular.
  I was glad that the Minister mentioned Ebenezer Howard, who was essentially a visionary who gave us the concept of new towns. I add to his name that of Sir Frederic Osborn, now over 90 years of age, who during the whole of that period
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  has played a great part in the new towns movement. It was Ebenezer Howard and Sir Frederic Osborn who conceived and implemented the new towns of Letch-worth and Welwyn Garden City, an imaginative concept which has been fulfilled, in material and social terms, remarkably for Sir Frederic Osborn, who has seen a vision become a reality.
  Those two new towns beckoned and welcomed to the green fields upon which they were built the residents of our towns and cities. They provided for those people a standard of living and amenities far beyond the expectations of many of those urban families. Letchworth and Welwyn Garden City were the two initial new towns and provided splendid living standards and good opportunitities for a full life. That was the concept which lay behind the New Towns Act, and I am glad that the right hon. Gentleman's distinguished father lived so many years to see the fruits of his endeavours.
  I criticise the hon. Members for Northampton, North (Ms. Colquhoun) and Hemel Hempstead (Mr. Corbett), who both said that the new towns were essentially a Socialist achievement. I have told of the initiation of those towns. Their fulfilment came from the right hon. Gentleman's father. However, successive Conservative Administrations have supported the concept of new towns to the full and have played their part in providing the resources essential to their development.
  By the time we have finished the debate, 20 hon. Members will have taken part. That is an indication of the wide interest which exists in the subject. Not all hon. Members who have spoken have new towns in their constituencies. That is a reflection of the interest they have in a subject which has commanded tremendous public and private resources. The sum involved must run into thousands of millions of pounds. It has had a great effect on the scene throughout the United Kingdom.
  There is a great deal of common ground in the Bill. In general terms there is only one matter which divides us—owner-occupation and the sale of new town houses to occupiers. That is the subject of the amendment which was moved by my hon. Friend the Member

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  for Aylesbury (Mr. Raison) and which I am pleased to support.
  Mr. Moonman: The hon. Gentleman knows that I have respect for his chairmanship of the Select Committee. Bearing in mind, however, that there is so much common ground, why have he and his colleagues allowed the Bill to be cluttered up with this extraordinary amendment? It is pure politics, and the matter would be better discussed during a half-day Supply debate.
  Mr. Jones: "Cluttered up" is hardly a correct expression of our view. There is a fundamental difference on the matter, and we are supported by the hon. Member for the Isle of Wight (Mr. Ross). That indicates the widespread support that exists for the concept of owner-occupation. It is fundamental to new towns. I was never satisfied with the Minister's explanation of why he denied tenants of new town corporation houses the opportunity to purchase. There is a fundamental difference of opinion between the parties. We want to see a property-owning democracy. Only individual ownership and wealth can give people personal freedom. In insisting that people shall become tenants of houses, there is a denial of personal freedom for them to own the house in which they live.
  The Bill follows the recommendations of the working party on the transfer of rented houses in new towns published in April 1975. That report was generally welcomed by all the political parties, local authority associations and the New Towns Association. Recommendation No. 3 in the Thirteenth Report from the Environment Sub-Committee of the Expenditure Committee published in August last year says:
  "In view of Government statements of policy, at an early date proposals should be brought forward for the transfer of housing and associated assets from the Development Corporations to District Councils."
  That was the unanimous decision of the Committee which I had the honour to chair. That recommendation was made in the context of the need to reconcile the different aims of local authorities, which wish to deal with housing needs in their own areas, and of development corporations, which must discharge wider duties. I subscribe to the proposition that there comes a time when housing
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  assets should, for a number of reasons, be taken over by local authorities.
  In Committee there will clearly need to be clarification of some of the definitions in the Bill—concerning, for example, flats over shops, multi-storey in some cases. Land held for the benefit of occupiers is referred to in the Bill. That will need elaboration. I am not sure whether allotments and so on will be included in that definition. There is an important reference to land awaiting development as part of an estate and set aside for the erection of dwellings.
  I wonder whether the Government are prepared to consider the transfer of neighbourhood areas as they become completed in new towns. There has been some advocacy for the idea that, when an estate of some hundreds of houses becomes a recognisable neighbourhood, that may be the time, if we are looking for the benefits which come from local authority management, for those houses to be transferred to the local authority.
  Management is an important consideration. At least, that has been my experience in Daventry. I hope to see common rent policies, which I think present difficulties to communities. I should like to see common standards of maintenance, provided that they are high standards. Standards are not always up to the level that we wish to see.
  Reference has been made to second-generation families. I am familiar with an overspill scheme in Daventry which was arranged direct with Birmingham. It has not got new town status. There is difficulty for the second-generation families of those who have moved from Birmingham. Families have grown up, got married and had youngsters of their own. There is a dichotomy, whether the responsibility lies with houses managed by the Birmingham Corporation or by the local authority. This proposal will overcome that difficulty. That is a favourable feature of these proposals.
  My hon. Friend the Member for High Peak (Mr. Le Marchant) referred to another specific problem which ties up with my reference to neighbourhood units. There is no reference in the Bill to the large stocks of local authority housing which have been built in the areas of other local authorities through town expansion schemes or overspill agreements.

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  In many cases the management of that housing has become the responsibility of the receiving local authority. However, in some areas—I think that my hon. Friend was referring to these circumstances—the management of vast council house estates is carried out by outside authorities. There is merit in the suggestion made by my hon. Friend that transfers similar to those referred to in the Bill would be appropriate in these circumstances.
  Reference has been made in a number of speeches to "other assets". These are the industrial and commercial assets in the new towns. I think I am right in saying that the Minister referred to them as national assets. Indeed they are if their development rests on the provision of resources from the central Government, and that undoubtedly is the case.
  The hon. Member for Harlow (Mr. Newens) recalled a weekend seminar which was held in Harlow. I have been trying to remember how long ago it was. I think that it may have been as long as 10 years ago. I recall that the Patronage Secretary, then Minister for Housing and Local Government, made a lively contribution to the proceedings. A remark made by the treasurer of Harlow has remained in my mind since that meeting. I do not know whether the hon. Gentleman recalls it. The great argument was whether, as has been said today, commercial and industrial assets should be transferred to the local authorities. The treasurer of Harlow said "If we had the benefit of those assets now, we should never need to levy a rate in Harlow again." That gives some idea of the immense capital value of industrial and commercial assets in Harlow.
  I do not know whether that is still the case, since the rates have increased a great deal in the last 10 years. The hon. Member for Harlow looks sceptical. Perhaps that argument does not apply today, but it certainly applied in earlier days. It gives an idea of the tremendous capital and income value of industrial and commercial assets in the new towns.
  The hon. Member for Hemel Hempstead acknowledged the difficulties involved in this subject, but with a broad brush he argued that the whole lot should be transferred. I do not see that that would be equitable, and I do not think
  318
  that it would be acceptable to the Treasury.
  The hon. Member for Basildon (Mr. Moonman) said that the new towns were big business. Certainly in capital terms they involve a vast financial commitment running to thousands of millions of pounds—mainly of public money, but involving a considerable amount of private money as well. The latest tranche of resources available to new towns which was passed by the House in recent months was in the region of £2,250 million. When the Environment Sub-Committee of the Expenditure Committee took evidence from the new towns I was interested to learn that £800 million of that total sum had already been repaid from sales and loan repayments.
  When we consider the tremendous expenditure involved in infrastructure costs, it shows the capital value of new town development. I do not think it is possible to think in terms of that sum being transferred to local authorities. What lay behind the whole concept of the Commission for the New Towns was the eventual repayment to the public purse of this large capital sum, vast increases have taken place in land values as a result of the development, and the older towns, with low values and historic costs, compare favourably with the development and building costs of today. My hon. Friend the Member for Horsham and Crawley (Mr. Hordern) gave some interesting figures relating to the new town in his area.
  We must try to ensure greater opportunities for the use of private resources in the new towns. The great problem of public funding is that resources clearly are limited. The public borrowing indebtedness into which the present Government have plunged us must be a matter of concern to everybody. If it were possible to provide an opportunity to enable private money to be put into new town schemes—for example, freehold and leasehold acquisitions by pension funds and life insurance funds—that would enable the public funds to be taken out of new towns and perhaps to be used for further housing development.
  Mr. Ronald Atkins: The hon. Gentleman mentioned the grealty appreciated capital values in the new towns and the great return on public investment. Is that

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  not inconsistent with his view about an increase in public indebtedness through investment?
  Mr. Jones: No, because the one is consequent upon the other. It must be sound practice when vast capital assets have been created to persuade others to take them over and to use available resources to fund other development. It enables the public purse to do more with the limited resources that are available. If Labour Members deny that opportunity, they are denying the capitalist and Socialist system—in other words, a joint society. What such a denial does is to say that the whole of society must go towards a Socialist economy rather than a mixed economy. The Minister's hon. Friends applaud that remark. That is the fundamental split between the parties. That is why we take the opportunity presented by the Bill of challenging the Government as to the sincerity of what is so often their lip service to owner-occupation, because in the new towns they have fundamentally denied it.
  When it was possible for tenants in new towns to purchase the house in which they lived, no fewer than 26,000 houses were sold—some 10 per cent. of the housing stock. Those people would still be tenants of those houses today had they not bought them. Many of them are still in those houses, and they would be there as tenants or owner-occupiers. However, this produced £199 million for the public purse. That is the measure by which private resources are prepared to come into new towns, in terms of housing and in terms of industrial and commercial investment.
  Mr. Newens: Was not the amount of money realised by the sale of those houses dwarfed by the amount of money that had to be paid out to replace those units of accommodation for renting purposes, particularly as many of those units were sold at a considerable discount?
  Mr. Jones: It is not always necessary to replace houses. One can use the resources that are received from the sale of an asset for whatever purposes one thinks best. This gives the Government of the day freedom of action to use those resources as best they may.
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  I want to refer briefly to the point made by the hon. Member for Westhoughton (Mr. Stott) when he was talking about Wigan being surrounded by new towns. That is a serious aspect of new town development. The hon. Member for Basildon will recall that we spent a lot of time on that matter during the new town inquiry. Our recommendation 16 to the Government said,
  "The DoE should ensure that the financial implications of a New Town development for central government and the local authorities affected are set forth much more clearly at the pre-designation stage."
  In other words, we said that the Government should have regard to the effect of a new town on the surrounding countryside.
  My hon. Friend the Member for Northampton, South (Mr. Morris) knows the essential problem in Northamptonshire, where we have four new towns in a comparatively small county. I am critical of both the county council, which allowed it, and the Government of the day, who encouraged it at that time.
  A right for tenants to buy is widely acknowledged as a sensible thing to have in economic, financial and social terms. There have been a number of references in support of that proposal from the Opposition side of the House, and no Opposition Member has contested it. The Conservative Government's New Towns Circular No. 179 of October 1970 gave the development corporations power to offer virtually all their rented homes for sale to tenants at 20 per cent. below current market value with vacant possession. Special arrangements were made with the Building Societies Association for the provision of mortgage loans for houses being sold by the corporations or the Commission. In addition there was consideration of the transfer of groups of houses, and particularly flats, to housing associations and tenants' associations. Reference has also been made to that matter.
  In particular circumstances in which tenants might welcome the idea—one could easily test opinion in this respect—it is surely worth considering the transfer of assets not to the local authorities but to the third arm of housing to which the Minister and some of his hon. Friends have paid tribute repeatedly, and it is

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  worth considering whether they should be found a part.
  The right hon. Gentleman has said that he will reconsider his decision about new towns later this year. Perhaps he does not think that this is the appropriate moment to announce his decision, in view of our amendment—
  Mr. John Silkin: That has nothing to do with it.
  Mr. Jones: It has a great deal to do with it. It is fundamental to the transfer of assets that we should give careful consideration to the situation of the tenants. It is clear that families wish to own rather than to rent. Successive opinion polls have proved that. My hon. Friend the Member for Aylesbury made it clear that in 1973 7,254 houses were sold. Sales in 1974, after the Minister's circular of 5th September, dropped to 653. It is, therefore, a change of Government policy which has dried up the sales of council houses. That is the only significant change in the circumstances of tenants.
  Purchasers will accept the increased demands which house purchase makes on their household budgets. How often it is said that, with a mortgage to service over the years, over half of what one pays is money saved. Then there are all the advantages in terms of mobility, buying and selling in the same market, living rent-free on retirement, pride of ownership, which is reflected in the level of maintenance and improvements, and the possession of a capital asset which can be passed on to the family—the present Government and capital transfer tax permitting.
  The Opposition are not voting against the main purpose of the Bill. We want to see a widening of the scope of transfer and a fulfilment of the understandable and expressed desires of tenants.
  Mr. John Silkin Mr. John Silkin indicated dissent.
  Mr. Jones: The right hon. Gentleman denies the validity of those expressed desires. Why does he not test the wishes of the tenants and allow development corporations to sell again? He is always reasonable in these matters. I know that he is concerned with the right of the individual and considers personal rela-
  322
  tions important. His decision to refuse to allow sales in new towns but to allow them by local authorities is completely contradictory; there has been no satisfactory explanation of it.
  Mr. Cryer: Does not the hon. Gentleman think that it is a little hypocritical to say that the Opposition will support the Bill but that they will vote for an amendment which says that the House declines to give a Second Reading to the Bill? Surely he cannot argue both ways?
  Mr. Jones: I have said that there is a fundamental disagreement between the two sides of the House. That disagreement is over owner-occupation, which we wish to encourage in every possible way.
  Mr. John Silkin: I shall intervene only briefly, because my hon. Friend the Under-Secretary is perfectly capable of dealing with the points that the hon. Gentleman has made. Since he is denying something, however, perhaps he can explain this. His hon. Friend the Member for Aylesbury (Mr. Raison) said that the Opposition were absolutely split in two—in fact, he went even further—in their views on this matter. In those circumstances, is it not correct to say that the amendment was the only way in which the hon. Gentleman could get all that bunch into the Lobby?
  Mr. Jones: I am surprised that the Minister should misquote my hon. Friend. When he checks Hansard tomorrow, he will find that that is what he has done. Therefore, I do not think that the question needs an answer from me.
  We wish to place an obligation on the Government to offer the sale of houses by new town corporations to tenants. We propose that it should be made mandatory, as this party intends that it shall be, on local authorities. I invite the House to decline to give a Second Reading to a Bill which fails to provide any right for new town tenants to purchase their homes.
  9.31 p.m.
  The Under-Secretary of State for the Environment (Mr. Ernest Armstrong): The hon. Member for Daventry (Mr. Jones) was kind enough to say that there was a good deal of common ground in the House on this Bill. I certainly welcome the tributes that have been paid

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  to my right hon. Friend the Member for Deptford (Mr. Silkin) and, of course, to his distinguished father. It is a remarkable record in this aspect of social legislation.
  I think that when the hon. Gentleman has time to reflect on his speech tonight, and on the amendment, in view of all that has been said today—and it has been a very good debate—he will regret that such an unworthy amendment concerning this very great development in housing policy and social policy should have been tabled. I will come to that in some detail.
  When I went to the Department of the Environment some nine months ago, my thinking about housing, its fundamental importance in creating the good society and the problem of ensuring that all our people were adequately housed was very much conditioned by my experience as a member of a housing authority in the North of England—the Sunderland Town Council. After the war, the housing situation was so desperate that for many years the overriding priority was the provision of new units of accommodation. That had to take precedence over everything else. Modernisation of old stock, housing management, the extension of choice, were all subordinated to the provision of new units of accommodation.
  Much has been done in housing over the years, but we are still far from solving the housing problem. New homes are still essential and as the Government's recent White Paper says, this is still a number one priority. But we are also developing housing management, tenant involvement, the extension of choice, home ownership and community development, with special emphasis on housing for the disadvantaged and those who still suffer from very great housing stress.
  It is in this context that the Government introduce the housing provisions in this Bill. It proceeds along the road of restoring to local authorities the power to make decisions which affect the daily life of the citizens they serve.
  I have been very interest today in the number of hon. Gentlemen opposite, including the hon. Member for Daventry in his winding-up speech, who have called
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  on the Government to make mandatory certain duties for local authorities. This is in direct contradistinction, of course, to the speeches they make at election times.
  This Bill is another step in the direction of restoring local democracy. We have had a general welcome from both sides of the House for the philosophy expressed in the Bill. The interest shown by those hon. Members who have new towns in their constituencies makes it plain that there will be a good deal of hard thinking and hard discussion in Committee. I pay tribute to the hon. Members who have had great experience of new towns. They have educated me somewhat today and I found the debate very helpful. Many hon. Members who have spoken today will realise, I am sure, that the points they have raised are essentially matters to be examined and resolved in Committee. Nevertheless, I am grateful that we have been given early warning of them. I shall deal with as many of those points which seem to me to be concerned with the principles and basic philosophy of the Bill as I can.
  Some Members, very properly have raised what are essentially constituency points on local problems, or broader questions relating to new town administration generally. I have no doubt that many of these issues are already the subject of discussion or correspondence between development corporations, local authorities and my Department.
  Reference has been made in the course of the debate to the work of the Sub-Committee of the Expenditure Committee, whose 13th Report was published last year. I think it right at this point to take the opportunity of expressing the Government's recognition of the value of the very extensive and detailed consideration it gave to the subject of new towns. The hon. Member for Daventry was its distinguished chairman, and the hon. Member for Aylesbury (Mr. Raison) asked my right hon. Friend when a reply was likely to be forthcoming.
  We treat the Sub-Committee's deliberations very seriously. We want to make a reply as soon as practicable. We are working on it. But it is a considerable document, and we want to do justice to the recommendations contained therein.

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  It is interesting to note the context in which the Sub-Committee set its recommendation that the Government should bring forward firm proposals for the transfer of housing and associated assets from development corporations to district councils. Paragraph 33 of its Report began:
  "One major area of tension between local authorities and development corporations is housing, now a local government function for which district councils are responsible."
  Some tension is inevitable where objectives differ, and this is bound to some extent to be the case during the new town's expansion period, when the local authority's main interest is the existing population and that of the development corporation is the newcomers.
  The important thing is to get rid of the tension just as soon as there can no longer be a logical reason for it and it has ceased to be "creative tension". Thus, when it is no more in the national interest for the development corporations, or the Commission, to hold the housing, it should go to the permanent local housing authority.
  We have always believed that the ownership and management of new towns' rented housing should pass to the democratically elected local authorities as soon as this is compatible with the state of development of the new towns, thus setting the seal of "normality" on those towns.
  We have created a system for new towns in this country which has not only stood the test of time but has attracted the admiration of the world. Paradoxically, having successfully created these new towns, we must now pave the way for their smooth conversion into "old towns".
  Now I come to the amendment moved by the Opposition. This would seem to advocate giving development corporation tenants a pre-emptive right to buy, at a time of their own choosing, irrespective of any other consideration. The first consideration of all public housing authorities—whether local authorities or new town authorities—must be to provide housing for those in greatest need or, in the particular case of the new towns also, for those people moving to the new town in accordance with its stated objectives. First priority in such circumstances
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  would as a general rule have to go to rented housing, and the housing authority must be able to ensure the maintenance of a sufficiently large rented housing stock for this purpose.
  Of course, this is not in any way to exclude the continued provision of houses for sale in the private sector, or, where the private sector fails to meet the need, by new town development corporations, so long as this does not impair their ability to make enough rented houses available. Similarly, it would be possible to contemplate sales to sitting tenants in new towns where this would be consistent with the maintenance of a sufficient stock of rented housing to meet the needs of the development corporations concerned.
  We are anxious to develop a community in which the new towns will not perpetuate the deep divisions which have brought so much harm to our society over the years. The doctrinal approach of the Conservative Party to the sale of council houses would seriously distort this aim.
  Mr. Michael Morris: Does not the Minister agree that the distortion comes about because of the right hon. Gentleman's directive that there is to be 25 per cent. owner-occupied and 75 per cent. rented property when the proportion in the country is about 55 per cent. owner-occupied?
  Mr. Armstrong: If the hon. Gentleman will contain his impatience, I will deal in detail with the situation, with the circular which we issued, which he criticised, and the reason for it, and I will say something about our general attitude.
  I want to take the House back to the situation that we inherited when we took office in 1974, but let us first go back to August 1967 when a Labour Government announced their intention that in new town established ince 1961 it should be the aim to achieve 50 per cent. owner-occupation by the end of the planned intake period. In the more recent towns the long-term objective could be achieved by control of the building programme, as between housing for rent and housing for sale, but in the older new towns, where the main building programme had been completed, it was recognised that

  327
  the objective could be achieved only by selling some of the existing rented homes.
  Corporations were urged, therefore, to offer their houses for sale to existing tenants once the demands of the incoming population had slackened. Sales were to be at full market value with vacant possession with a pre-emption clause if the corporation so wished enabling the house to be bought back if the purchaser wished to sell within a given period. This produced very few sales—about 800 in all by the middle of 1970.
  In October 1970, the Conservative Government asked the corporations to make available for purchase by sitting tenants virtually all their rented dwellings. The basis of sale was current market value with vacant possession less 20 per cent. subject to the sale price not being below historic cost. There was provision for the new owner to pay back a diminishing share of discount if he re-sold within five years. The discount of 20 per cent. was in line with the terms of sales by local authorities. But since the declared objective was to effect a change in the balance of tenure in new towns by increasing the proportion of owner-occupiers, it was felt that a pre-emption clause such as that used by most local authorities would be inappropriate.
  There followed a spectacular increase in sales and by early 1972 some 4,000 development corporation houses were being sold every quarter. By the end of 1972 the initial flood began to subside and in the first quarter of 1974 a total of 300 was sold. But over 24,000 had by then been sold out of a total rented stock of about 140,000 and in some towns up to 30 per cent. of the stock had gone. It was a situation which concerned us because we were concerned about people in desperate need of homes. It was the situation that ensued that compelled us to issue our circular.
  Let me give the House the facts. Faced with this situation, the Labour Government, on taking office in the spring of 1974, asked corporations not to enter into further commitments pending a review of policy, and in 1974 effectively stopped all further sales. The principal reason for this decision was the long waiting time for rented housing. In early 1972 the waiting period in eight of nine
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  of London towns within the new and expanding towns scheme was less than 20 weeks. By early 1974, as a result of the deliberate action of the Conservative Party, seven of nine of those towns had waiting periods of more than 40 weeks. That meant that the waiting period for those in most desperate need had more than doubled.
  The hon. Member for Horsham and Crawley (Mr. Hordern), whom I do not see in his place, asked my hon. Friend the Member for Harlow (Mr. Newens) what was the waiting period today.
  Mr. Stephen Ross: I asked that question.
  Mr. Armstrong: I am glad that in his short speech the hon. Member was able to put that question. The waiting period today in Harlow and Crawley, towns about which we heard such glowing reports this afternoon, is almost 50 weeks. The sale of 24,000 houses and the consequential loss of re-lets has undoubtedly been a substantial factor in extending the waiting period.
  Mr. Arthur Jones: But if the waiting period was 20 weeks in 1975 and is now 50 weeks, how can the Government claim that their policy has improved the situation?
  Mr. Armstrong: I am glad that the hon. Gentleman has given me the opportunity to correct the impression he has gained. I said that when the Tories imposed their policy, compelling authorities to sell, the waiting period was 20 weeks. It went up to more than 40 weeks while they were selling off 24,000 houses. We are now reviewing our policy. I have just given the example of two authorities.
  The Government will continue to follow a policy on sales in new towns which has regard to the circumstances, which are different in different towns. That is why I objected to the mandatory situation the Opposition created. The situation changes from time to time even in the same town, as has been described over and over again today.
  As we said in our consultation document, "New Towns in England and Wales", issued in December 1974,
  "It would be a mistake if the New Towns did not make some provision for people who

  329
  want to own their own homes. It would be an even greater mistake if the New Towns did not provide for those people whose only hope of a decent home is a house or flat for rent."
  The next question is whether, in the case of a new town where the transfer of rented housing to the local authority is imminent, the tenants in question should all be offered an opportunity to purchase as an alternative to transfer. The arguments here are not so much concerned with the policy on sales itself as with where the responsibility for that policy should lie—with the local or the national electorate, with the town hall or Whitehall.
  The Bill is an expression of the Government's belief that, once the major expansion phase of a new town is complete, it is the local community, through its locally elected representatives, which should take over the responsibility for the administration of public housing in its town. If where transfer is imminent the Government were, in advance, to deprive the local authority of the opportunity of making its own decision on such an important issue as the sale of rented homes, it would be quite out of keeping with the idea of transfer, which essentially implies confidence in the ability of the local authority to manage the public housing affairs of the town in its own best interests.
  Those who support the amendment are expressing their view that the local housing authority is not competent to make the decision.
  Mr. Carlisle: On that basis, can the Minister explain why the chairmen of the new town authorities are unanimous in the view that they should have that power? I can quote one chairman who happens also to be the chairman of a local authority.
  Mr. Armstrong: I hope that the hon. and learned Gentleman will send the chairman a copy of Hansard so that he may read my speech, in which I am trying to answer the argument.
  We have heard a great deal from Opposition Members today about giving tenants the right to purchase their homes. We used to hear a great deal about it from them when they were in Government from 1970 to 1974. They were very active then in their encouragement of selling by local
  330
  authorities and new town development corporations. I wish that they had been equally active in other and more important aspects of housing policy.
  It is as well to remember how waiting lists for council housing grew under the Conservative Administration and how public sector house building was allowed to fall to unprecedently low levels. The House knows that we had to give first priority to reversing that trend and to increasing the public sector house building programme to a much more appropriate level.
  Mr. Raison: The Minister criticises our approach, but he told us earlier that he was once a member of the Sunderland housing authority. Has he read the book by Mr. Norman Dennis, a Left-wing sociologist, who criticises the Sunderland housing authority for its mishandling and insensitivity in housing in the most devastating critique I have ever read? I wonder that the Minister has the face to criticise us.
  Mr. Armstrong: I was not referring to housing management, but to the deplorably low level of public sector housing under the last Government. I have not only read Norman Dennis's book; I hear him from time to time at my local Fabian Society.
  Though active in encouraging sales, the Conservative Government did not put a mandatory duty on local authorities to sell, which is, in effect, what they are asking for as far as the new town tenants are concerned. The Opposition would take from local authorities the right to determine policies in the light of their assessment of the local housing situation. Where do they stand on the subject of freedom of local authorities to decide their own policies?
  When the right hon. Member for Worcester (Mr. Walker) was Secretary of State for the Environment, we heard a great deal about giving local authorities greater powers. He talked about removing 1,000 Government statutory controls over local government. Vigorous local democracy was the watchword in those days. Are the Opposition saying that their official policy is now the opposite? Do they want mandatory dictation by the Government?

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  We do not accept their doctrinaire position on the sale of council houses. We do not say that selling is necessarily wrong in all situations or, unlike the Opposition, that it is right to sell whatever the local housing circumstances. This is a matter which should be decided against the background of a full and balanced assessment of council housing need.
  There are other important aspects of housing tenure to whch we have to give attention. We are concerned to ensure the widest possible range of choice and to see that tenants play a greater part in the control and management of their homes. We see promising possibilities in new forms of equity sharing and cooperative ownership. We shall be reviewing other policies again in our review of housing finance.
  One hon. Member opposite has just asked, from a sedentary position, whether all this is in the Bill. Once again, the Opposition are asking us to impose mandatory duties on local authorities. We give the choice to local authorities. That is what democracy is about.
  Where houses have been transferred from the new towns to local authorities, it is surely right that the question of their sale to tenants should be considered by the authorities in the light of their assessment of the local housing situation. This is Government policy. It is the democratic way which we propose in the Bill.
  Mr. Hal Miller: Will the Minister give way?
  Mr. Deputy Speaker: The hon. Member must resume his seat if the Minister does not give way.
  Mr. Armstrong: I hope that the House will treat the amendment with the contempt it deserves.
  Mr. Hal Miller Mr. Hal Miller rose—
  Mr. Armstrong: Whatever views hon. Members may have about the sale of new town or council houses, these are matters which should be considered quite separately. They are not relevant to the purposes of the Bill.
  Mr. Hal Miller: On a point of order, Mr. Deputy Speaker. Clause 3(4) states quite clearly that the Secretary of State
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  shall decide whether dwellings are to be transferred to a local authority. How can the Minister stand there and tell us—
  Mr. Deputy Speaker: Order. It is not for the Chair to tell a Minister how to reply to a debate.
  Mr. Armstrong: We seek to introduce flexibility for local authorities, in discussion with the Secretary of State, in a democratic way. We do not seek to lay down mandatory provisions as the Opposition would like to do.
  Mr. Raison: Will the Minister give way?
  Mr. Deputy Speaker: Order. The hon. Member knows that he must resume his seat if the Minister does not give way.
  Mr. Armstrong: I wish to reply to as many points as possible and, naturally, I had to reply to the amendment, unworthy though it was.
  As my right hon. Friend said, we are concerned with the transfer of important national housing assets from the custody of development corporations acting on behalf of central democracy to local authorities acting on behalf of local democracy. It is, therefore, important to establish beyond doubt the procedures to to be adopted for bringing about the transfers. The transfer of ownership of houses under the terms of the Bill will not normally take place until a new town is nearing completion. As well as covering houses already built, a transfer scheme will usually include arangements for the management of houses still under construction or yet to be built by the new town corporation.
  The hon. Member for Buckingham (Mr. Benyon) asked what was meant by partial transfer. I will give him an example. In the Central Lancashire New Town there may be a case in future for the transfer of part of the housing stock to one of the three local authorities involved if the housing development in one of those authorities' areas is substantially completed in advance of the rest of the town and if the financial consequences of such partial transfer can be accepted.
  We cannot force people to live where they do not want to live, and there can be little doubt that for many families, particularly those with children, life in a new town is far more attractive than life

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  in an old town. We must also grasp the opportunity which is created by the movement of people from our inner cities to make the inner cities attractive.
  I come to the position of those who will be affected most seriously by the transfer. A typical family which moves to a new town is probably still a young or youngish married couple with one or two children. The new towns as they have grown older have housed an increasing proportion of old people—usually the parents of their tenants. For example, in the older London new towns between 1966 and 1973 nearly 13 per cent. of the tenancies provided for households moving into the towns went to the elderly. As the consultative document said:
  "to allow the new towns to beggar the cities they serve by taking only the relatively fortunate members of society and leaving the least fortunate behind would be likely to increase
  rather than diminish (he social problems of those cities."
  The Bill is important for several reasons. It represents the Government's loyalty to yet another manifesto commitment. It is the redemption of promises made by a previous generation of occupants of the Front Bench who formed the Labour Government 30 years ago. The philosophy and the principle are plain for everyone to understand After the transition of a new town from growth to maturity, we want to get local democracy. I ask the House to reject the amendment and to give the Bill a Second Reading.
  Question put, That the amendment be made:—
  The House divided: Ayes 233, Noes 262.

  Division No. 96.]

  AYES

  10.0 p.m.

  Adley, Robert

  Fairbairn, Nicholas

  Johnson Smith, G. (E Grinstead)

  Alison, Michael

  Fairgrieve, Russell

  Jones, Arthur (Daventry)

  Amery, Rt Hon Julian

  Fell, Anthony

  Jopling, Michael

  Arnold, Tom

  Finsberg, Geoffrey

  Joseph, Rt Hon Sir Keith

  Atkins, Rt Hon H. (Spelthorne)

  Fisher, Sir Nigel

  Kaberry, Sir Donald

  Awdry, Daniel

  Fletcher, Alex (Edinburgh N)

  Kershaw, Anthony

  Baker, Kenneth

  Fletcher-Cooke, Charles

  Kimball, Marcus

  Banks, Robert

  Fookes, Miss Janet

  King, Evelyn (South Dorset)

  Beith, A. J.

  Forman, Nigel

  King, Tom (Bridgwater)

  Bennett, Dr Reginald (Fareham)

  Fowler, Norman (Sutton C'f'd)

  Kitson, Sir Timothy

  Biffen, John

  Fox, Marcus

  Knox, David

  Biggs-Davison, John

  Freud, Clement

  Lamont, Norman

  Blaker, Peter

  Fry, Peter

  Lane, David

  Boscawen, Hon Robert

  Gardiner, George (Reigate)

  Latham, Michael (Melton)

  Bottomley, Peter

  Gardner, Edward (S Fylde)

  Lawrence, Ivan

  Bowden, A. (Brighton, Kemptown)

  Gilmour, Sir John (East Fife)

  Le Marchant, Spencer

  Boyson, Dr Rhodes (Brent)

  Giyn, Dr Alan

  Lester, Jim (Beeston)

  Braine, Sir Bernard

  Goodhart, Philip

  Lewis, Kenneth (Rutland)

  Brotherton, Michael

  Goodhew, Victor

  Lloyd, Ian

  Brown, Sir Edward (Bath)

  Goodlad, Alastair

  Loveridge, John

  Bryan, Sir Paul

  Gow, Ian (Eastbourne)

  Luce, Richard

  Buchanan-Smith, Alick

  Gower, Sir Raymond (Barry)

  McAdden, Sir Stephen

  Buck, Antony

  Grant, Anthony (Harrow C)

  McCrindle, Robert

  Budgen, Nick

  Gray, Hamish

  Macfarlane, Neil

  Bulmer, Esmond

  Griffiths, Eldon

  MacGregor, John

  Burden, F. A.

  Grimond, Rt Hon J.

  Macmillan, Rt Hon M. (Farnham)

  Carlisle, Mark

  Grist, Ian

  McNair-Wilson, M. (Newbury)

  Chalker, Mrs Lynda

  Grylls, Michael

  McNair-Wilson, P. (New Forest)

  Clark, Alan (Plymouth, Sutton)

  Hall, Sir John

  Madel, David

  Clegg, Walter

  Hall-Davis, A. G. F.

  Marshall, Michael (Arundel)

  Cockcroft, John

  Hamilton, Michael (Salisbury)

  Marten, Neil

  Cooke, Robert (Bristol W)

  Hampson, Dr Keith

  Mates, Michael

  Cope, John

  Hannam, John

  Maude, Angus

  Cormack, Patrick

  Harvie Anderson, Rt Hon Miss

  Maudling, Rt Hon Reginald

  Corrie, John

  Hastings, Stephen

  Mawby, Ray

  Costain, A. P.

  Havers, Sir Michael

  Maxwell-Hysiop, Robin

  Craig, Rt Hon W. (Belfast E)

  Hawkins, Paul

  Mayhew, Patrick

  Critchley, Julian

  Heseltine, Michael

  Meyer, Sir Anthony

  Crouch, David

  Hicks, Robert

  Miller, Hal (Bromsgrove)

  Crowder, F. P.

  Holland, Philip

  Mills, Peter

  Davies, Rt Hon J. (Knutsford)

  Hooson, Emlyn

  Miscampbell, Norman

  Dean, Paul (N Somerset)

  Hordern, Peter

  Mitchell, David (Basingstoke)

  Dodsworth, Geoffrey

  Howe, Rt Hon Sir Geoffrey

  Moate, Roger

  Douglas-Hamilton, Lord James

  Howell, David (Guildford)

  Monro, Hector

  Drayson, Burnaby

  Howells, Geraint (Cardigan)

  Montgomery, Fergus

  Durant, Tony

  Hunt, David (Wirral)

  Moore, John (Croydon C)

  Eden, Rt Hon Sir John

  Hunt, John

  Morgan, Geraint

  Edwards, Nicholas (Pembroke)

  Hurd, Douglas

  Morris, Michael (Northampton S)

  Elliott, Sir William

  Hutchison, Michael Clark

  Morrison, Charles (Devizes)

  Emery, Peter

  James, David

  Morrison, Hon Peter (Chester)

  Eyre, Reginald

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

  Mudd, David

  Neave, Airey

  Roberts, Michael (Cardiff NW)

  Steen, Anthony (Wavertree)

  Nelson, Anthony

  Roberts, Wyn (Conway)

  Stewart, Ian (Hitchin)

  Neubert, Michael

  Rodgers, Sir John (Sevenoaks)

  Stradling Thomas, J.

  Newton, Tony

  Ross, Stephen (Isle of Wight)

  Tapsell, Peter

  Normanton, Tom

  Rest, Peter (SE Derbyshire)

  Taylor, R. (Croydon NW)

  Nott, John

  Royle, Sir Anthony

  Taylor, Teddy (Cathcart)

  Onslow, Cranley

  Sainsbury, Tim

  Tebbit, Norman

  Osborn, John

  St. John-Stevas, Norman

  Thomas, Rt Hon P. (Hendon S)

  Page, John (Harrow West)

  Scott, Nicholas

  Townsend, Cyril D.

  Page, Rt Hon R. Graham (Crosby)

  Shaw, Giles (Pudsey)

  Trotter, Neville

  Pardoe, John

  Shaw, Michael (Scarborough)

  Tugendhat, Christopher

  Parkinson, Cecil

  Shelton, William (Streatham)

  Vaughan, Dr Gerard

  Pattie, Geoffrey

  Shepherd, Colin

  Viggers, Peter

  Penhaligon, David

  Shersby, Michael

  Wainwright, Richard (Colne V)

  Percival, Ian

  Silvester, Fred

  Wakeham, John

  Pink, R. Bonner

  Sims, Roger

  Walder, David (Clitheroe)

  Price, David (Eastleigh)

  Sinclair, Sir George

  Walker-Smith, Rt Hon Sir Derek

  Pym, Rt Hon Francis

  Skeet, T. H. H.

  Wall, Patrick

  Raison, Timothy

  Smith, Cyril (Rochdale)

  Weatherill, Bernard

  Rathbone, Tim

  Smith, Dudley (Warwick)

  Wells, John

  Rawlinson, Rt Hon Sir Peter

  Speed, Keith

  Wiggin, Jerry

  Rees, Peter (Dover & Deal)

  Spence, John

  Wood, Rt Hon Richard

  Rees-Davies, W. R.

  Spicer, Michael (S Worcester)

  Young, Sir G. (Ealing, Acton)

  Renton, Rt Hon Sir D. (Hunts)

  Sproat, Iain

  Younger, Hon George

  Renton, Tim (Mid-Sussex)

  Stainton, Keith

  Ridley, Hon Nicholas

  Stanbrook, Ivor

  TELLERS FOR THE AYES:

  Ridsdale, Julian

  Stanley, John

  Mr. W. Benyon and

  Rippon, Rt Hon Geoffrey

  Steel, David (Roxburgh)

  Mr. Anthony Berry.

  NOES

  Abse, Leo

  Davies, Bryan (Enfield N)

  Heffer, Eric S.

  Allaun, Frank

  Davies, Denzil (Llanelli)

  Howell, Rt Hon Denis

  Anderson, Donald

  Davis, Clinton (Hackney C)

  Hoyle, Doug (Nelson)

  Archer, Peter

  Deakins, Eric

  Huckfield, Les

  Armstrong, Ernest

  Dean, Joseph (Leeds West)

  Hughes, Rt Hon C. (Anglesey)

  Ashley, Jack

  Delargy, Hugh

  Hughes, Robert (Aberdeen N)

  Ashton, Joe

  Dell, Rt Hon Edmund

  Hughes, Roy (Newport)

  Atkins, Ronald (Preston N)

  Dempsey, James

  Hunter, Adam

  Atkinson, Norman

  Doig, Peter

  Irvine, Rt Hon Sir A. (Edge Hill)

  Bagier, Gordon A. T.

  Dormand, J, D.

  Irving, Rt Hon S. (Dartford)

  Barnett, Rt Hon Joel (Heywood)

  Douglas-Mann, Bruce

  Jackson, Colin (Brighouse)

  Bates, Alf

  Duffy, A. E. P.

  Jackson, Miss Margaret (Lincoln)

  Bean, R. E.

  Dunn, James A.

  Janner, Greville

  Benn, Rt Hon Anthony Wedgwood

  Dunnett, Jack

  Jay, Rt Hon Douglas

  Bennett, Andrew (Stockport N)

  Edge, Geoff

  Jeger, Mrs Lena

  Bid well, Sydney

  Edwards, Robert (Wolv SE)

  Jenkins, Hugh (Putney)

  Bishop, E. S.

  Ellis, Tom (Wrexham)

  John, Brynmor

  Blenkinsop, Arthur

  English, Michael

  Johnson, James (Hull West)

  Boardman, H.

  Ennals, David

  Johnson, Walter (Derby S)

  Booth, Rt Hon Albert

  Evans, Fred (Caerphilly)

  Jones, Alec (Rhondda)

  Bottomley, Rt Hon Arthur

  Evans, Gwynfor (Carmarthen)

  Jones, Barry (East Flint)

  Boyden, James (Bish Auck)

  Evans, loan (Aberdare)

  Jones, Dan (Burnley)

  Bradley, Tom

  Ewing, Harry (Stirling)

  Judd, Frank

  Bray, Dr Jeremy

  Faulds, Andrew

  Kaufman, Gerald

  Brown, Hugh D. (Provan)

  Fernyhough, Rt Hon E.

  Kerr, Russell

  Brown, Robert C. (Newcastle W)

  Fitch, Alan (Wigan)

  Kilroy-Silk, Robert

  Buchan, Norman

  Fitt, Gerard (Belfast W)

  Lambie, David

  Buchanan, Richard

  Flannery, Martin

  Lamborn, Harry

  Butler, Mrs Joyce (Wood Green)

  Fletcher, Raymond (Ilkeston)

  Lamond, James

  Callaghan, Jim (Middleton & P)

  Fletcher, Ted (Darlington)

  Latham, Arthur (Paddington)

  Campbell, Ian

  Ford, Ben

  Leadbitter, Ted

  Canavan, Dennis

  Forrester, John

  Lee, John

  Cant, R. B.

  Fowler, Gerald (The Wrekin)

  Lestor, Miss Joan (Eton & Slough)

  Carmichael, Neil

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

  Lever, Rt Hon Harold

  Carter, Ray

  Freeson, Reginald

  Lewis, Ron (Carlisle)

  Carter-Jones, Lewis

  Garrett, John (Norwich S)

  Lipton, Marcus

  Cartwright, John

  Garrett, W. E. (Wallsend)

  Loyden, Eddie

  Castle, Rt Hon Barbara

  George, Bruce

  Luard, Evan

  Cocks, Michael (Bristol S)

  Gilbert, Dr John

  Lyon, Alexander (York)

  Cohen, Stanley

  Ginsburg, David

  Lyons, Edward (Bradford W)

  Coleman, Donald

  Golding, John

  Mabon, Dr J. Dickson

  Colquhoun, Ms Maureen

  Gould, Bryan

  McCartney, Hugh

  Conian, Bernard

  Gouriay, Harry

  McElhone, Frank

  Cook, Robin F. (Edin C)

  Graham, Ted

  McGuire, Michael (Ince)

  Corbett, Robin

  Grant, George (Morpeth)

  Mackenzie, Gregor

  Cralgen, J. M. (Maryhill)

  Grant, John (Islington C)

  Mackintosh, John P.

  Crawshaw, Richard

  Grocott, Bruce

  Maclennan, Robert

  Cronin, John

  Hamilton, James (Bothwell)

  McMillan, Tom (Glasgow C)

  Crosland, Rt Hon Anthony

  Hamilton, W. W. (Central Fife)

  Madden, Max

  Cryer, Bob

  Hardy, Peter

  Magee, Bryan

  Cunningham, G. (Islington S)

  Harper, Joseph

  Manon, Simon

  Cunningham, Dr J. (Whiten)

  Harrison, Walter (Wakefield)

  Mallalieu, J. P. W.

  Dalyell, Tam

  Hart, Rt Hon Judith

  Marquand, David

  Davidson, Arthur

  Hayman, Mrs Helene

  Marshall, Dr Edmund (Goole)

  336

  337

  Marshall, Jim (Leicester S)

  Price, William (Rugby)

  Thomas, Mike (Newcastle E)

  Mason, Rt Hon Roy

  Radice, Giles

  Thomas, Ron (Bristol NW)

  Maynard, Miss Joan

  Richardson, Miss Jo

  Thorne, Stan (Preston South)

  Meacher, Michael

  Roberts, Albert (Normanton)

  Tierney, Sydney

  Mellish, Rt Hon Robert

  Roberts, Gwilym (Cannock)

  Tinn, James

  Mikardo, Ian

  Robinson, Geoffrey

  Torney, Tom

  Millan, Bruce

  Roderick, Caerwyn

  Tuck, Raphael

  Miller, Dr M. S. (E Kilbride)

  Rodgers, George (Chorley)

  Wainwright, Edwin (Dearne V)

  Miller, Mrs Millie (llford N)

  Rodgers, William (Stockton)

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

  Mitchell, R. C. (Soton, Itchen)

  Rooker, J. W.

  Walker, Harold (Doncaster)

  Molloy, William

  Rose, Paul B.

  Walker, Terry (Kingswood)

  Moonman, Eric

  Ross, Rt Hon W. (Kilmarnock)

  Ward, Michael

  Morris, Alfred (Wythenshawe)

  Rowiands, Ted

  Watkins, David

  Morris, Charles R. (Openshaw)

  Sandeison, Neville

  Weetch, Ken

  Morris, Rt Hon J. (Aberavon)

  Sedgemore, Brian

  Weitzman, David

  Moyle, Roland

  Selby, Harry

  White, Frank R. (Bury)

  Mulley, Rt Hon Frederick

  Shaw, Arnold (llford South)

  White, James (Pollok)

  Murray, Rt Hon Ronald King

  Sheldon, Robert (Ashton-u-Lyne)

  Whitehead, Phillip

  Newens, Stanley

  Silkln, Rt Hon John (Deptford)

  Whitlock, William

  Noble, Mike

  Silkln, Rt Hon S. C. (Dulwich)

  Williams, Alan (Swansea W)

  Oakes, Gordon

  Skinner, Dennis

  Williams, Alan Lee (Hornch'ch)

  Ogden, Eric

  Small, William

  Williams, Rt Hon Shirley (Hertford)

  Orbach, Maurice

  Smith, John (N Lanarkshire)

  Williams, Sir Thomas

  Ovenden, John

  Snape, Peter

  Wilson, Alexander (Hamilton)

  Padley, Walter

  Spearing, Nigel

  Wilson, William (Coventry SE)

  Palmer, Arthur

  Spriggs, Leslie

  Wise, Mrs Audrey

  park, George

  Stallard, A. W.

  Woodall, Alec

  Parker, John

  Stewart, Rt Hon M. (Fulham)

  Woof, Robert

  Parry, Robert

  Stott, Roger

  Wrigglesworth, Ian

  Pavitt, Laurie

  Strang, Gavin

  Peart, Rt Hon Fred

  Strauss, Rt Hon G. R.

  TELLERS FOR THE NOES:

  Pendry, Tom

  Summerskill, Hon Dr Shirley

  Mr. David Stoddart and

  Perry, Ernest

  Swain, Thomas

  Mr. John Ellis.

  Phipps, Dr Colin

  Taylor, Mrs Ann (Bolton W)

  Price, C. (Lewisham W)

  Thomas, Jeffrey (Abertillery)

  Question accordingly negatived.
  Main Question put forthwith pursuant to Standing Order No. 39 (Amendment on Second or Third reading), and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  BUSINESS OF THE HOUSE
  Ordered,
  That the consideration of Lords Amendments to the Water Charges Bill may be proceeded with at this day's Sitting, though opposed, until any hour.—[Mr. Stallard.]

  NEW TOWNS (AMENDMENT) [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to provide for the transfer to district councils of dwellings and associated property of new town corporations, it is expedient to authorise the payment out of money provided by Parliament of—

  (1) grants made by the Secretary of State to district councils for the purpose of relieving any undue financial burden imposed on them by schemes providing for such transfer;

  (2) the remuneration of members of, and such sums as are necessary to defray the expenses of, the New Towns Staff Commission established by that Act;

  (3) any increase attributable to that Act in the sums payable out of money so provided under any other Act.—[Mr. Armstrong.]

PROPERTY SERVICES AGENCY SUPPLIES (TRADING FUND)
10.13 p.m.
The Under-Secretary of State for the Environment (Mr. Ernest Armstrong): I beg to move,
That the Property Services Agency Supplies Trading Fund Order 1976, a draft of which was laid before this House on 20th February, be approved.
This is the third Order to be moved under the Government Trading Funds Act 1973. The first two such Orders brought into operation the Royal Ordnance Factories Trading Fund and the Royal Mint Trading Fund. The present Order applies to what has been known as the Supplies Division of the Property Services Agency of the Department of the Environment and is now to be known as PSA Supplies. All three of these services were specifically named in the Act.
PSA Supplies is the part of the Property Services Agency which is responsible for furniture and much equipment used in Government buildings, and also for other services such as the Government Car Service, large engineering and vehicle workshops and the supply of liquid and solid heating fuel. Its main activity is procurement but where necessary it designs, purchases, supplies, installs and repairs the items it handles, and operates workshops, garages and stores. In 1976–77 its turnover will be about £167 million, but another £119 million will be spent by other bodies directly on buying items through Supplies Division's contract arrangements.
For some time it has been clear that, although PSA Supplies work is closely linked with that of the Agency, it takes the form of a separate trading activity which ought to be accounted for separately and operated on more commercial lines to achieve the best results both managerially and financially. In recognition of this, steps have been taken to separate PSA Supplies finances from those of the rest of the Agency, and it has been financed on its own Vote since 1973–74. At the same time the accounting system has been improved in order to provide a full flow of information for management and financial control and the establishment of costs and prices. It was recognised that the new accountability
340
would work most satisfactorily if PSA Supplies was to be financed from a trading fund, and developments have from the outset been geared to this end.
Articles 1 and 3 provide that the Order and the fund shall come into operation on 1st April 1976. Article 2 defines the terms used in the Order. Article 4 sets a limit of £20 million on the amount which the fund may borrow over and above its originating debt without a further Order being made. This £20 million is designed mainly to cope with the need for working capital and allows for variations in the cash flow and the effects of inflation on running costs and the replacement of assets.
It is not possible to estimate precisely the values of PSA Supplies initial assets until after the trading fund comes into operation, because the total indebtedness will be affected by the value of the net current assets on 1st April. However, the total initial capital is estimated at present to be about £17·3 million. We have made available in the Vote Office a short memorandum setting out the estimated balance sheet as at 1st April 1976 so that hon. Members can have the figures before them.
A Treasury Minute is to be laid before the House shortly specifying as a financial objective that, taking one year with another, PSA Supplies should earn an average of not less than 10 per cent. on average net assets employed at current values. This target may be reset from time to time, but in any case the fund must operate so that it covers interest on its debts. The aim is to ensure that PSA Supplies prices cover the full economic cost of its operations. The financial objective will be only one test of success and will be supplemented by measurements of performance, including comparison of prices, where practicable, or of price movements with outside equivalents.
I hope that hon. Members will join me in wishing PSA Supplies success in its new form, and I commend this Order to the House.
10.17 p.m.
Mr. Michael Latham: I am grateful to the Under-Secretary of State for describing the Order. I shall have a number of questions to ask him.

341
In discussing the Order we are dealing with a specific branch of the Property Services Agency. As the House will be aware, the PSA as a whole is now a very large and significant organisation. Thanks to the diligence of questioning by a number of my hon. Friends, especially the Members for Aylesbury (Mr. Raison), Eastbourne (Mr. Gow) and Croydon, North-West (Mr. Taylor), aided and abetted by myself from time to time, we have established a number of basic facts.
First, the PSA in this financial year as a whole will cost public funds £747 million, of which £100 million will be salaries and other administrative expenses. Secondly, the PSA employed 44,672 staff on 1st January 1976, which was slightly more than on 1st January 1975 but less than on 1st January 1974.
Some services are growing rapidly. For example, on 2nd February 1976 the Minister told me that there were then 490 architects in the PSA compared with 411 in June 1974. Eighteen months ago it had 770 chartered surveyors. The figure now is 859. The value of the new construction work which the PSA carried out in 1975 was £355 million, compared with £251 million in 1973. I shall make some brief comments later on the question of PSA office-letting, though it is not directly germane to the Order.
As the Under-Secretary of State said, within the PSA is the Supplies Division with which we are directly concerned tonight. That organisation employs 4,200 people. Its staff has remained fairly constant over the last few years. The cost to public funds this year will be £34 million compared with £21 million in 1973–74—an increase almost entirely accounted for by increased salaries and overheads.
As the House will be aware, the Order is made under Section 1(3) of the Government Trading Funds Act 1973. When my right hon. Friend the Member for Sidcup (Mr. Heath), as Prime Minister, first announced the setting up of the PSA in a Written Answer on 5th May 1972, he said:
"It is intended that wherever possible units of accounable management will be introduced."—[Official Report, 5th May 1972; Vol. 836, c. 217.]
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There were two antecedents behind the idea—the concept of accountable management in the Report of the Fulton Committee, which recommended this, and the Conservative Government's White Paper on the Reorganisation of Central Government which called for large functional departments containing within their accountable units of management.
The 1973 Act provided that a series of Crown services, including the Royal Ordnance factories and the Royal Mint, should be set up as separate trading funds if the House agreed to affirmative Resolutions. I understand that both organisations have been the subject of such Resolutions already.
To assist my understanding of the matter, I read through the parliamentry proceedings on the 1973 Act. It was an interesting experience. The Bill was first considered in a Second Reading Committee on 19th June 1973. It appears to have been rather a shambles, due partly to a strike at Her Majesty's Stationery Office and partly to the fact that some Members had been appointed to the Committee only the day before. A total of three Labour Members spoke, none from the Front Bench, and none either in favour or against the Bill.
The Committee stage on 3rd July 1973 was an absolute model of how not to explore a Bill in detail. It began at 10.30 a.m. and concluded at 10.32 that same morning. No amendments were moved and the only discussion that took place involved two Conservative Members, who thanked the Chairman for fulfilling his arduous duties so brilliantly. Not until the Report stage, and later in another place, was the Bill seriously discussed. Some 90 per cent. of the discussion revolved around the question whether the Ordnance Survey should become a trading fund, a proposal which was originally in the Bill but which the Conservative Government dropped by way of amendment in another place.
In so far as it was possible to discover the attitude in principle of the Labour Party to the Bill—a task that did not prove easy even from the most diligent study of Hansard—it seems to have been summed up by the comments of the hon. Member for Ashton-under-Lyne (Mr. Sheldon) who has now, of course, been translated to the Treasury as Financial

343
Secretary, when he said on 23rd July 1973:
"If this is a device to ensure that these are units of accountable management left on their own with a greater independence, everybody will agree that this is a useful and worthwhile development."—[Official Report, 23rd July 1973; Vol. 860, c. 1321.]
The principle of this Order must be acceptable to both sides of the House, since it was a Conservative Act and is now apparently acceptable to the Government. That is well and good, but it does not mean that the Order should be approved without the Minister answering questions about why this should be done now, how it will work and whether the staff of the PSA are able to cope with the new responsibilities.
The first and most vital question is the nature of parliamentary accountability. In the Second Reading debate on 19th June 1973, my hon. Friend the Member for St. Ives (Mr. Nott) said:
"While the trading fund organisations will no longer be directly financed from Votes … it would be open to the Expenditure Committee, or one of its sub-committees, to investigate them if it so wished."—[Official Report, 19th June 1973; Vol. 858, c. 630.]
Section 4(6) of the Act specified that there are to be accounts, and that they will be presented before 30th November each year. However, Section 4(6)(a) states that the accounts should be
"in a form approved by the Treasury".
I should like an assurance from the Minister that the accounts will be in plenty of detail and will clearly show the use of resources by the Supplies Division by way of a balance sheet and a profit and loss account, which will enable the sharp-eyed to calculate a return on capital employed. In particular, we want to know at what value the assets are being written into the new balance sheet. Will they be at market value or historic cost?
That brings me to my second question—namely, the return which is to be sought. When my hon. Friend the Member for St. Ives spoke in the Second Reading Committee on 19th June 1973, he said:
"In a case where the organisation is a sole supplier to the Government—and most of the organisations are primarily concerned with providing services and goods to the public sector—there will be a direct relationship between the trading fund and Government Departments.
344
"In this case, where we are talking about the fixing of financial targets and prices within the public sector, the principle to be observed will be that the price charged to other Government Departments should reflect the opportunity cost of using the capital. Currently that would mean that the goods sold would be priced in such a way that the organisation would obtain a return of 10 per cent. on the current value of the assets employed."—[Official Report, 19th June 1973; Vol. 858, cc. 630, 648–49.]
The Minister in opening the debate tonight said that 10 per cent. was to be the figure on this occasion. I am doubtful about that. My hon. Friend put forward that figure two and a half years ago, and the rate of inflation has changed quite a bit since then. A figure of 10 per cent. as a target could arguably be said to be a net loss in real terms. We are talking about a pretty high outlay. As I understand it, the turnover of this company, if such it could be called, as measured by the value of services provided by the Supplies Division appears to have been £248 million in 1975–76 as compared with £132 million in 1973–74.
Here I ask for the Minister's help. Despite the virtual use of a wet towel, I have not been able to reconcile those figures, which the Minister gave me in a Written Answer on 5th March, with the figures in the Estimates, Class XIV, Vote 2, for 1975–76, which appear to show a net trading surplus of £· million on receipts of £124 million. Perhaps the Minister will therefore tell us what the return has been for each of the last three years and whether it has met any target at all, let alone a 10 per cent. target. It would also be helpful to know exactly what the total receipts from all sources of the Supplies Division have been, and what the actual profit or loss was for each year.
I also notice that a considerable proportion—£110 million out of £248 million this year—of the supplies provided by the Division goes to bodies other than the Government themselves. Is a separate rate of return calculated for them? If so, what is it?
I turn next to the management structure and the question of accountability within that structure. If the new Agency is to run like a business—and the House should remember that two very successful business men, Mr. Herbert Cruikshank,

345
late of Bovis, and my hon. Friend the Member for Hove (Mr. Sainsbury), who is still very much of Sainsbury's, were greatly involved in establishing the PSA itself—it needs business thinking behind it. I note from replies to me that the Controller is to run it subject to the Chief Executive of the PSA. How much management independence will he have? Will he report direct to the Chief Executive? Will he have access to Ministers? Above all, how much discretion will he have over pricing policy? Will the Treasury determine this for him, or can he make the decisions himself in accordance with commercial considerations? If the prices are all to be determined for him, he is really not a manager at all.
Another question of detail that I should like to put to the Minister is this. Section 2(2) of the 1973 Act allows for the concept of public dividend capital to be used to match or provide the initial net assets of a trading fund rather than a loan from the National Loans Fund. My hon. Friend the Member for St. Ives made it clear on Second Reading in 1973 that whether or not this system would be used would depend on the circumstances of each individual case. Perhaps the Minister will tell us what is intended here.
That brings me to the major matter of commercial competence. In this regard I must say that I was very disturbed at the answer I received from the Minister for Housing and Construction on 5th March. I asked him,
"how many of the Supplies Division of the Property Services Agency have direct commercial experience in bulk purchasing on behalf of companies or other organisations outside the public service prior to joining the PSA; what proportion they represent of the total staff of the division, excluding secretarial and clerical grades; and what proposals he has for increasing the number with such experience if the division is set up as a separate trading fund."
The hon. Gentleman replied,
"The purchasing staff are civil servants normally without outside experience but familiar with the Government procurement and contractual policies and practice to which they are required to adhere. Generally about 40 per cent. of the non-industrial staff of the Supplies Division possess professional or technical qualifications relevant to the services provided and have had commercial or industrial experience in their field. No change in method of recruitment is envisaged."
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If the 40 per cent. of the division with commercial experience are not actually doing the purchasing, as the Minister's reply implies—which is after all, the sharp end of the business—what are they doing? Are they administering, or making great strategic decisions? Where we need the practical experience is at the buying end, where the money actually goes. I hope that the Minister will look at the question of commercial expertise again.
It was because of the need for commercial expertise in bulk buying policy that I also asked the Minister, on 5th March, which outside organisations he consulted before he made the Order. The hon. Gentleman replied:
"No such consultation was necessary or called for under the Government Trading Funds Act 1973."—[Official Report, 5th March 1976; Vol. 906, c. 779.]
That is literally true but it is a somewhat disingenuous answer when Section 1(4) of the Act specifically places a duty on the Minister to consult appropriate persons if he wants to set up a trading fund for any organisation other than funds listed in Section 1(3)(a) to (e) inclusive.
I should have thought it wise for the Minister to take wide soundings of experts in bulk purchasing before making this Order, even if he had no statutory duty to do so. All the wisdom of the universe does not reside in the PSA. The Comptroller and Auditor General has recently been critical of the Agency for spending £8·7 million on converting four newly-leased office buildings in London before it used them. We have clear evidence in the Public Expenditure White Paper that the amount of Government office space for which the Agency is directly responsible will rise from 59·5 million sq. ft. in 1975 to 65·9 million sq. ft. in 1979, an increase of nearly 7 million sq. ft. in about five years. In the development industry, the PSA is known as the developers' friend.
On the design side, the performance and morale of the PSA was so "mediocre", in the word of the Report, that the Matthew-Skillington Committee set up by my right hon. and learned Friend the Member for Hexham (Mr. Rippon), but only partly implemented by the present Government, recommended a complete shake-up of the system.

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I mention these things only as examples of how the PSA is open to sharp criticism for its management and performance and why special care should be taken to ensure that the right degree of expertise is available for Supplies Division.
That brings me finally to the question of personal accountability. In a debate on 20th March 1974, initiated by my hon. Friend the Member for Croydon, North-West on the Consolidated Fund Bill, I suggested that accountability should involve the right to hire and fire. If it did not, because the people involved were all civil servants, it was not really accountability at all.
Dealing with this point on Second Reading on 19th June 1973, my hon. Friend the Member for St. Ives said:
"Within the trading funds, there will be a strong motivation to run each trading fund successfully and to some extent the promotion of those concerned with a particular trading fund will be very closely involved with the success which they make of their work. They are members of the Civil Service, and clearly if they make a success of running a trading fund, promotion will be open to them in the Civil Service."—[Official Report, Second Reading Committee, 19th June 1973; Vol. 858, c. 648.]
That is fair enough. No doubt the Expenditure and Public Accounts Committees would deal sharply with any obvious incompetence which came to light through the Comptroller's inquiries.
But—here I emphasise that I am speaking for myself and not for my party—more thought needs to be given to this aspect. It is not satisfactory if the worst that can happen to any incompetent managers of a Government trading fund is that they are made secretaries of Royal Commissions or pushed off into a more obscure job. My hon. Friend spoke of promotion for those who succeed. I think that we need to look harder at the question of those who fail.
We are discussing an organisation with a great deal of public money at its disposal. It is being set up in a new form under a Conservative Act. Therefore, in principle we wish it well, but we reserve the right to scrutinise its progress very closely through all the normal sanctions open to Parliament. Our duty to the taxpayers demands nothing less.
10.34 p.m.
Mr. Geoffrey Dodsworth: The House is grate-
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ful to my hon. Friends the Members for Eastbourne (Mr. Gow) and Melton (Mr. Latham) for their questions and cross-examination, which have elicited some of the information that has been helpful in formulating a sensible approach to the debate.
It was clear in the remarks of my hon. Friend the Member for St. Ives (Mr. Nott) in moving the Second Reading of the Bill that the key to this matter is control. He said:
"The Appropriation Accounts by themselves do not provide an adequate basis for assessing the performance of a trading organisation, and a system of management control suitable for a trading operation is not readily reconcilable with the cash system inherent in Votes."—[Official Report, Second Reading Committee, 19th June 1973; Vol 858 c. 625.]
Amen to that. There is a great deal to be said for a total overhaul of the whole system of Government accounting.
I must say that the brief comments of the Minister rather suggested to me that there needed to be an overhaul of our procedure now. It may be that I did not catch the full sense of the hon. Gentleman's remarks, but I understood him to say that the assets to be taken over were £17·3 million, or thereabouts. He said that we would not know until 31st March what we would be taking over, but that it was that sort of figure.
I thought that the hon. Gentleman also said that it was not possible to differentiate the public dividend capital element from the loans amount. I am concerned to see that we carry out the proper provision of the Act under which the Order is made. After all, Section 2 refers to the appropriation of the assets and liabilities of the fund at values determined by the Minister in accordance with Treasury directions. It would be helpful to know what precise assistance has been received by the Minister in arriving at this arbitrary guess of £17·3 million. It would be helpful if we could have a clearer definition of the instructions which were received.
If we knew how the sum was made up, we could approach the question of the way in which the assets were valued. We had a rather brief version of what was contained in the matters to be dealt with through this Order, but if we are to take seriously our responsibilities for financial management and control, we wish to know the basis on which assets

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are being valued and the different classifications of assets. After all, it is one thing to be involved in the valuation of plant; it is quite another to be involved in the classification of work in progress, and yet another to look at the value of debtors. I cannot say that the Government's record in these matters is very happy and this is one matter about which we should like to know more.
I should also like to know how many people are likely to be affected by the Order. I understand that this is only a section of the Property Services Agency. On the last figures that I saw, it employed more than 60,000 people, some of them overseas. How many people are affected by the Supplies Division?
Then, perhaps, we should consider how good is the Government's record, in consultation with the Division, in arriving at these proposals. What degree of communication has there been? Has there been the real participation and consultation in which many members of the Government believe, as I do myself? We should like to know whether there has been a real attempt by the Department to ensure the full participation of those affected by these changes.
My hon. Friend the Member for Melton referred to the structure of management and control. The Act itself is not very demanding in the timetable that it sets out for the production of the annual statement of accounts. I take it that the year ending which we are discussing will be 31st March and that the Act itself then requests that accounts be produced on 01 before 30th November next following the end of that year, and that they be transmitted to the Comptroller and Auditor General. That seems to be yet another time delay built into the production of this information, and we are starting to be more than six months behind in the examination of the activities of what is supposed to be a financially-managed concern with clearly set financial objectives and targets. I should like to know a little more about the targets that are being set.
My hon. Friend the Member for Melton has referred to the return on capital of 10 per cent., which is very similar to the ordnance factories' rate of return—I understand that the Mint is likely to be able to produce a 15 per cent. return—but
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it will also be subject to inflation adjustments. I am surprised that, in these inflationary times, the Minister has not seen fit to be able suitably to qualify his rate of return. What is good for the Mint must be good for the Supplies Division. Perhaps 10 per cent., inflation-adjusted, would be better.
What is the Minister's current assessment of the expiry of the amount contained in the Act? Section 2(4) says that the aggregate is a limit of £250 million. Have we any estimate of when we are likely to reach close to that limit? From the figures I have, it looks as though it is probably £90 million. Does that mean that we can expect that it will be reviewed every six years? Have we any idea of the level at which it is operating?
This is merely an illustration of our need to pay close attention to the sums of money which pass through the House regularly late at night. It is a constant source of astonishment to me that, with very few Members present, we frequently pass permitting Orders almost on the nod. That should not be allowed. It is our duty to examine them as critically as we can.
10.40 p.m.
Mr. Robert Taylor: My hon. Friend the Member for Melton (Mr. Latham) was kind enough to refer to our debate exactly two years ago this week on the Consolidated Fund Bill, when I expressed concern about the ever-increasing expenditure of the Property Services Agency. Shall we still be able to examine in Consolidated Fund Bill debates the expenditure of the part of the Agency which is transferred? The answer is probably "No".
I understand that with the removal of the Supplies Division to the trading funds Parliament will be able to examine the accounts only if the Comptroller and Auditor General makes a criticism. Then they will come before the Public Accounts Committee, and the House will have an opportunity to debate the matter when we debate the Committee's reports. Is that appraisal of the situation correct?
In the helpful indication of the opening assets of the Supplies Division there is the item of £6·4 million for stocks. I was not aware that one of the Agency's objects was to build up stocks. What stocks make up that large figure?

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I am indebted to the Sunday Telegraph for an article on 22nd February which disclosed that during the past year the Agency bought 555,000 chairs. That seems an enormous number, because it must have had quite a number already. Who will sit on them all? In addition, in the past year it purchased 8,500,000 pieces of crockery. Those are large figures, involving the spending of public funds. I was not aware that it was part of the Agency's duty to invest money in stock of that nature. An explanation is called for.
I shall regret the passing of the Order. Unlike some of my hon. Friends, I regretted the coming into being of the Agency. It was introduced to the House by a Written Answer on a Friday afternoon, which was a regrettable method of setting up such a powerful and big-spending body. However, that is history. We are moving on and dividing the Agency up in a way which takes further accountability away from the House.
10.42 p.m.
Mr. Ian Gow: The draft Statutory Instrument is in many ways typical of the development of the control—or perhaps I should say "lack of control"—of the House over public expenditure. It is a serious development. The way in which the House is invited, late at night, to move from a system of annual Vote and Appropriations to the setting up of a trading fund with even less parliamentary scrutiny is a change very much for the worse.
The wording of article 3 is indicative of the attitude of successive Governments to the scrutiny by the House of public expenditure. We are being invited to replace what the Order itself describes as the means of annual Vote and Appropriation with a new trading fund.
Last year, in answer to a Question from me, the Secretary of State said that the expenditure of the Agency in the current financial year would be just under £750 million. In relation to the present level of public expenditure, that may be regarded as mere chicken-feed, and it is clearly regarded by Ministers as a matter not worthy of more than a maximum of one and a half hours' debate at the end of the financial year.
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If we are to bring public expenditure back under the scrutiny and control of this House, we should not allow Orders of this kind to pass without at least some of us protesting at the way in which the Government are seeking to erode the traditional rights of Back Benchers to protest at the level of public spending.
It is not yet sufficiently realised—certainly on the Government Front Bench—how much public expenditure will have to be pruned if we are to stop the disastrous policy of deficit financing. One of the areas at which the House should look is the Agency. One of the principle purposes of the Order is to facilitate public spending without the scrutiny of hon. Members on both sides. It is a further step down the disastrous path not only of Government profligacy, but of something more sinister—the abdication of the right and duty of this House to be the perpetual scrutineer and guardian of the public purse.
10.43 p.m.
Mr. Armstrong: With the leave of the House, I shall reply to the debate.
There is no intention to hide anything or to bring in an Order that will diminish the House's close scrutiny of expenditure.
I welcome the attitude of the hon. Member for Melton (Mr. Latham). He has certainly done his homework, and I congratulate him. I apreciate what he said about wet towels.
I have taken some interest in the Agency, as it has been my responsibility since I moved to the Dpartment. I believe we are getting value for money from this efficient organisation. Of course, that does not mean that it should not be carefully scrutinised, or criticised.
The Order is not meant to hide anything. I welcome the debate. Hon. Members have made serious contributions and deserve a little more explanation. I cannot reply to every point now, but everything that has been said has been carefully noted and hon. Members will receive a reply from me as soon as I have been able to gather together the facts.
PSA Supplies Division will be a separately accountable unit within PSA under the day-to-day management of a

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Controller, who will be directly responsible to the Chief Executive of the PSA. The Chief Executive will monitor the unit's performance, with the assistance of his Finance Directorate, through quarterly trading accounts and periodic measures of performance. Amongst the public bodies served by the Supplies Division will be other directorates in PSA. These directorates will be in the role of customers and fully responsible for justifying the sums spent on the goods and services they order from the Supplies Division.
The Supplies Division is procuring and/or supplying a wide range of goods and services—about £167 million a year—involving the use of about £17 million of fixed assets and stocks. Although it is a public body supplying other public bodies, its activities are similar in many respects to those of a number of organisations in the public and private sectors which operate a commercial basis. It was thought appropriate and more conducive to efficiency if the Supplies Division also operated on more commercial lines—covering all costs, making provision for depreciation of assets, securing an adequate return on capital employed and having its performance regularly monitored through trading accounts and performance measures, including price comparisons with outside bodies. The aim is to increase efficiency, not to maximise revenue.
The nature of the controls will change, but they will not be less effective. As an organisation the Supplies Division will still be accountable, through the PSA's Chief Executive, to Ministers and to Parliament, and its accounts will be examined and certified by the Comptroller and Auditor General. The form of accounts will bring out clearly the costs involved in its activities, and attainment of the financial objectives and measures of performance will show how effectively the business is run. The Supplies Division will have to satisfy the Treasury and the Civil Service Department on its borrowing requirements and on manpower ceilings, respectively, in the context of annual budgets and a rolling five-year plan. At the same time as the Supplies Division has in this way to account for
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its performance, Government Departments which buy from it will have to account for their expenditure in the normal way and be subject to normal public expenditure controls and to the setting of standards. Advice has been obtained from consultant accountants on management accounting systems.
Mr. Robert Taylor: Will Government Departments be able to buy from other sources, or will they be directed to buy from the Supplies Division?
Mr. Armstrong: I shall take note of that question and write to the hon. Gentleman.
There will be a 10 per cent. return on assets, valued at market value so that they are not diminished by inflation. Accounts for the years 1974–75 and 1975–76 were based on covering interest at current rates on the current value of assets, and that approximates to the new target. The number of staff in Supplies Division is slightly decreasing, despite the additional duties transferred to it. There is no public dividend capital, because the volume of business is constant.
I was asked about numbers. There are 2,070 non-industrial and 2,140 industrial staff in the Division. The total PSA staff, including the Division, is 21,140 non-industrial and 23,400 industrial. About 10,000 are locally engaged overseas. We cannot run a supplies business without stocks, and £6 million worth is a small amount of stock in relation to the total volume of business.
It will be possible to debate the provisions in the Government Departments' estimates for buying from the Supplies Division, although the Division will not be voted finance.
I am grateful for the very careful way in which the Order has been dealt with. I shall certainly give detailed replies. I hope that the House will now accept it.
Question put and agreed to.
Resolved,
That the Property Services Agency Supplies Trading Fund Order 1976, a draft of which was laid before this House on 20th February, be approved.

WATER CHARGES BILL
Order read for consideration of Lords amendments.
Lords amendments considered.

WATER CHARGES BILL
  Clause 1

    DUTY OF WATER AUTHORITIES TO REFUND CERTAIN CHARGES
    Lords amendment: No. 1, in page 1, line 12, after "date" insert "together with any associated legal costs,".
    10.56 p.m.
    The Minister of State, Department of the Environment (Mr. Denis Howell): I beg to move, That this House doth agree with the Lords in the said amendment.
    Mr. Deputy Speaker (Mr. Bryant Godman Irvine): With this we may take Lords amendment No. 2.
    Mr. Howell: These two amendments—indeed, all of them—are to meet points properly raised by the Opposition at the previous stage of the Bill—points that we undertook to examine and to table in another place, where we thought they were appropriate. I am glad to say that they received a welcome there, and I hope they do here.
    The first two amendments are concerned with the question of ratepayers who had involved themselves in legal action by taking out summonses in connection with the collection of the general service charge for sewerage when they were not connected up to the general drainage system, and which subsequently the House of Lords, in the Daymond judgment, declared to be illegal.
    On examination, we have accepted the point—particularly raised by the hon. Lady the Member for Plymouth, Drake (Miss Fookes) and others—that in that case, where people are able to relate the specific legal charges in which they have been involved with their non-payment of the general service charge, it would be right to deal with the question of their legal charges.
    I hope that the House will find these two amendments acceptable.
    Mr. Keith Speed: I should first like to thank the right hon. Gentleman very much indeed for these two
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    amendments. As he said, my hon. Friend the Member for Plymouth, Drake (Miss Fookes)—and my hon. Friend the Member for Bodmin (Mr. Hicks)—first raised this matter, because most of those concerned come from the South-West rather than anywhere else, although there are people concerned in other parts of the country. They were powerfully reinforced by my right hon. Friend the Member for Crosby (Mr. Page) when we were discussing this matter in Committee. We are most grateful for what was said in another place and certainly accept these amendments.
    I should like to ask a practical question, concerned with the way in which the money is to come back to those who disburse it, and with publicity. There has been very little publicity about the goings on in another place. Indeed, I read in the newspaper this morning that the Bill had received a Third Reading in another place, as if that were the end of the matter.
    Quite an important point is involved here, and a number of people who are to be particularly benefited by the two amendments should be told about it. It would be helpful to know whether, apart from the reports that may or may not come from our deliberations tonight, there are to be advertisements, or perhaps local authorities' advice, to assist in putting into effect what we welcome here.
    Mr. Graham Page: I am not quite sure whether Amendments Nos. 1 and 2 meet the point we raised when the Bill was passing through this House. The amendments seem to relate only to the costs awarded to the local authority in bringing the action against the defendant. Our concern at the time was not only with the costs awarded to the local authority against the defendant but with the costs that the defendant himself had incurred in defending the action.
    As far as I can see from these amendments—particularly Amendment No. 2, which defines what is referred to as the "associated legal costs" in Amendment No. 1—the costs that will be recoverable by the ratepayer will be only those which were awarded against him in the course of the proceedings, that is to say, the cost of the summons and the cost to the local authority of its legal advisers and of appearing in court and obtaining

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    judgment against the ratepayer. Surely that is rather niggling on the part of the Government. We were certainly asking that the defendant who has now been proved right, at least by their lordships in a judicial capacity, should recover the costs awarded against him, but why should he not get back the costs which he wrongly had to incur in fighting the action?
    11.0 p.m.
    Mr. Denis Howell: I am grateful for the general welcome given to the amendments. I agree with the hon. Member for Ashford (Mr. Speed) that this matter has not yet had sufficient publicity. It is difficult to embark upon publicity before the House has passed the Act, but we certainly intend to do so afterwards, and we intend to ask the regional water authorities to do the same.
    The second point raised concerned court costs. The right hon. Member for Crosby (Mr. Page) was correct in saying that the amendment will give relief to people against whom summonses had been taken out. But that is exactly what the hon. Member for Plymouth, Drake (Miss Fookes) asked for.
    Mr. Graham Page: That is not what I asked for.
    Mr. Howell: The right hon. Gentleman has always been more adventurous than his hon. Friends. I am glad to say that this was exactly what Baroness Vickers—who has a continuing and abiding interest in South-Western and Plymouth matters—had been pressing for.
    If the right hon. Gentleman thinks about it he will appreciate that if we go wider than cases that have actually found their way to court we would open a door so wide that it would be totally impossible to confirm claims against regional water authorities for engaging surveyors, solicitors and a host of other professional men, much less to enable the authorities to determine whether such claims were specifically related to the matter in hand.
    Mr. Graham Page: The Minister is referring to cases that never got to court. I agree with him entirely that it would be difficult to assess costs in those circumstances. I am talking, however, about
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    the cases which got to court, and where only the costs awarded against the defendant are recoverable under the amendments. If that defendant had been successful and had achieved what the Law Lords subsequently achieved for him he would have been awarded his own costs of appearing in court and of being represented there. He will not be able to recover those under the amendments.
    Mr. Howell: I shall endeavour to keep talking until I get further and better advice.
    Mr. Graham Page: Perhaps I may give some figures relative to the recovery which the ratepayer will be able to get added to the refund. He will get about 20p by way of fee on the summons. He may be awarded a guinea or two to cover the cost of the local authority's representation in court by its "tame" solicitor, the solicitor of the borough, or whatever he may have been. It would be a paltry sum compared to his own legal costs, which he would have got if he had won and if he had been represented, perhaps not only by a solicitor but by counsel. If he won, as he should have done according to the Law Lords, he would have been awarded some costs.
    Mr. Howell: The right hon. Gentleman has still not talked for long enough. It would be best for me to write to him to try to clear up that point. I should be surprised if he is correct and that the legal costs, as distinct from costs awarded by the court, could not be claimed. But I am not a lawyer. I speak in total ignorance. I shall look into the matter, and if I think that the situation differs from what I have said, I shall let the right hon. Gentleman know, although by that time the Bill will have received Royal Assent, which is essential if the regional water authorities are to have power to collect charges by 1st April. I am sorry that the matter was not raised elsewhere, or in the House, before tonight.
    Question put and agreed to.
    Subsequent Lords amendment agreed to.
    Lords Amendment: No. 3, in page 2, line 28, leave out "communicating directly or indirectly" and insert
    "connecting, either directly or through an intermediate sewer or drain,".
    Mr. Denis Howell: I beg to move, That this House doth agree with the Lords in the said amendment.
    Mr. Deputy Speaker: With this amendment we may take Lords amendments Nos. 4, 5 and 6.
    Mr. Howell: The amendments meet points of importance raised in Committee, when we had a lengthy discussion on what charges would be appropriate for dealing with surface water for garages, for example. We have tried to tidy up the situation to make it clear that such properties will be eligible on charge only if they are connected, for instance, by a pipe that carries effluent from the property to the public sewer. We take the point raised by hon. Members in all parts of the House that it is important to word the clause correctly to prevent further cases similar to the Daymond case coming back to the courts. I hope that we have succeeded in that endeavour.
    Mr. Speed: A good debate took place in Committee, in which the hon. Member for Leicester, South (Mr. Marshall), my hon. Friend the Member for Harborough (Mr. Farr), and others, took part.
    The Association of District Councils, in particular, was at one stage concerned about the definition. The Lords made that point, and their amendments are an improvement on the previous esoteric ways of getting rid of surplus water. A series of Daymond cases could have arisen if the matter had not been cleared up. Do I take it that those concerned—the local authority associations, in particular—feel that this is now the right solution to the problem? I suspect that they do, because that was my understanding. It would be helpful to have confirmation.
    Mr. Graham Page: It would be convenient if I could put one question to the Minister before he replies. I am sorry if I seem ungracious about these amendments.
    Reading the next line to that in which the alteration is made, it seems that it is sufficient under this paragraph if the property
    "is not drained by a sewer or drain connecting, either directly or through an intermediate sewer or drain, with a public sewer provided for foul water or surface water or both".
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    If it is connected merely with a drain for surface water and, therefore, the foul water cannot be taken away from the premises, it is apparently still connected to a sewer and the owner is obliged to pay the rate or he will not get the refund.
    There was pressure by some of the authorities concerned that the connection to a surface water drain only should not be sufficient to say that the premises had sewerage, but the Bill still provides that if there is a drain merely going to a surface water drain or a drain taking surface water, the premises are treated as having sewerage facilities and therefore will not get the refund.
    I do not know whether the Minister wishes me to talk any longer on this point. I have no doubt that he has the answer.
    Mr. Denis Howell: The answer is that the right hon. Member for Crosby (Mr. Page) is right in his interpretation of this situation, but wrong in suggesting that we should change the situation which we have brought about. It is difficult, once water and drainage are delivered into the sewerage system, to distinguish the sources from which they come. Almost all water gets into the drainage system. We have said that the water authority shall be enabled to charge only where it can specifically show that it has got into the sewerage system. If it is just running away, there will be no charge. That is what we were asked to do and that is indeed what we have done.
    In reply to the hon. Member for Ash-ford (Mr. Speed), I can say that we have now had indications from the local authority associations, as well as all the regional water authorities, that they are satisfied with the amendments that we have introduced. Their overriding concern, which goes back to a debate in Committee, is that nothing should be done which interferes with the process—almost complete—of working out the rate and the rate demands which are likely to be sent to households early in April.
    Mr. Graham Page: Do I understand that if a house has gutters to its roof and a drain pipe down from those gutters leading into the surface drains along the gutter of the pavement outside that house, and if that is the only form of drainage the house has—it has no flush toilet or

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    anything like that, and no sewerage drainage—it will be treated as having sewerage facilities?
    Mr. Howell: I do not think that the right hon. Gentleman is right. The main reason for introducing this amendment is the effect there would be on the general charges to large-scale industry if it were not there. The House will recall that we discussed at length a number of nationalised undertakings and large companies which, because they do not discharge their sewage effluent into the main drainage system, are now, as a result of the Daymond judgment, relieved of that charge. That is the principal reason why there has been such a tremendous increase this year. If we did not amend this Bill in this way, and set out this obligation clearly, it would aggravate the situation even more considerably.
    11.15 p.m.
    I can confirm that there must be a pipe from a property to the public sewers before the clause and amendment become operative.
    May I refer back to the question raised earlier by the right hon. Member for Crosby (Mr. Graham Page), about extra costs? He was asking what costs a court might award if they had to decide something that was vague and hypothetical. Our amendment creates a very hard and definite line, but I can advise the House now that regional water authorities have told us that if the amendment creates hardship in respect of costs, when a case is taken to court they will consider that sympathetically and, if necessary, make ex gratia payments in respect of them.
    Question put and agreed to.
    Subsequent Lords amendments agreed to.

  Clause 2

    WATER AUTHORITIES' POWER TO CHARGE
    Lords amendment: No. 7, in page 4, line 1, leave out from "rating" to end of line 4.
    Mr. Denis Howell: I beg to move, That this House doth agree with the Lords in the said amendment.
    Would it be convenient to take at the same time Lords amendment No. 8, Mr. Deputy Speaker?
    Mr. Deputy Speaker: I understand that that is agreed by all sides of the House.
    Mr. Howell: These two amendments are drafting amendments, although of some importance. They deal with a matter which, when we considered it, we decided we should put right. The main purpose is to ensure that the Water Authorities Order 1976 can provide for a percentage charge to the formula-rated nationalised industries—electricity, gas, the Post Office, and the water industry itself—on a similar basis to that provided for refunds. I am advised that if we did not put in the amendments we would not be able to charge these industries for refunds on the basis required by the Daymond judgment. That is not satisfactory, as I am sure the House will agree, and I hope the amendments will be agreed to.
    Question put and agreed to.
    Subsequent Lords amendment agreed to.

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

MINISTERIAL ADVISERS
11.18 p.m.
Mr. Ian Gow: I am grateful to have this opportunity to raise the subject of the employment of special advisers by the Government. There are at present 28 special advisers to Ministers. The latest estimate of the cost of their salaries alone during the current year is £196,000.
The employment of special advisers to Ministers is a legitimate matter of public interest and concern. Their salaries are paid for out of public funds. It is the duty of this House, and, above all, of Back Benchers, to scrutinise public expenditure and to be vigilant over the conduct of the Executive. The need for such scrutiny and vigilance is great at any time; with this Administration, and in the present financial circumstances, that need is paramount. It is in that spirit I approach this debate. I am sure the Minister will welcome the opportunity to tell the House and the country

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what is the Government's policy in regard to special advisers, and to answer certain questions.
For some time now Ministers have appointed professional experts and advisers of their own. These have been personal appointments by Ministers. These appointments have increased the power of the Executive and the extent and patronage of government. I do not object to the principle of the employment of special advisers, but it is reasonable to point out that the practise has been growing steadily in recent years. The present number of special advisers—about 28—and the present bill for their salaries—£196,000 a year—has been exceeded on one occasion only, namely, in October last year, under the present Administration, when the number of special advisers was 29 and the annual cost of their salaries was £205,000.
Paragraph 129 of the Fulton Report on the Civil Service, published in June 1968 said:
"We are satisfied that a Minister should be able to employ on a temporary basis such small numbers of experts as he personally considers he needs to help and advise him."
The Report continued:
"They should be men and women of standing and experience. We consider, however, that this practice should be put on to a regular and clearly understood basis."
Paragraph 278 of Fulton said that
"it is healthy for a democracy increasingly to press to be consulted and informed. There are still too many occasions where information is unnecessarily withheld and consultation merely perfunctory".
It is in the light of those remarks by the Fulton Report—remarks endorsed by the Government—that we need to consider the present, though not the past, practice of the Government in giving details of the salaries of special advisers.
On 5th November, I asked the Chancellor of the Exchequer what was the salary of Lord Kaldor, who is the special adviser to the Chancellor. The Minister of State, Treasury, replied that Lord Kaldor's salary was £14,000 a year. But when the Chancellor of the Exchequer was asked, two months later, in February of this year, what was the salary of the other special advisers, this was the answer I was given:
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"It is not the general practice to specify the salaries of special advisers."—[Official Report, 6th February 1976; Vol. 904, c. 776.]
On 22nd March I was told by the Minister of State, Civil Service Department, in answer to a Question from me:
"Ministers will continue to answer questions relating to the pay of civil servants, including Special Advisers; and indeed a great deal of information has been given to the House about the pay of Special Advisers."—[Official Report, 22nd March 1976; Vol. 908, c. 28.]
The Government cannot have it both ways. I cannot be told that the salary of Lord Kaldor is £14,000 a year on 5th November, then be told in February that it is not the general practice to specify the salaries of special advisers, and then be told on 22nd March that Ministers will continue to answer Questions relating to the pay of civil servants, including special advisers.
This reticence on the part of the Government in disclosing the salaries of special advisers is in direct conflict with the recommendation of the Fulton Report, which said that there were too many cases in which information was unnecessarily withheld.
Fortunately, some of the special advisers themselves are not as reticent about their salaries as are their employers. The special adviser to the Lord President of the Council, Miss Vicky Kidd, told The Times last month—although the Lord President declined to give this information—that her salary was £6,145 a year. Perhaps the Minister will tell the House tonight whether that figure is correct. If the special adviser herself is prepared to tell The Times what her salary is, would it not be better if the Government came clean and honoured the Prime Minister's own pledge about more open government, and told the House and the country frankly and freely what the salaries of the special advisers are?
It is not only that I have been given those answers by the Government; it is also the case that the Prime Minister has shown particular reticence in this matter. On 4th February this year I asked whether he would place in the Library
"a copy of the Memorandum of Guidance to Ministers in charge of Departments which he issued in December 1974 dealing with the appointment and conditions of service of special advisers."

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The Prime Minister replied:
"No. It has not been the practice to publish guidance to Ministers."—[Official Report, 4th February 1976; Vol. 904, c. 620.]
Why not? Why do not the Government honour their own commitment to more open government?
I turn to the second matter that I wish to raise. Are the House and the country getting value for money from these special advisers? We have been told—I am sure that it was an error on the part of the Treasury—that the salary of Lord Kaldor is £14,000 a year.
Mr. Iain Sproat: Incredible! What a waste of money.
Mr. Gow: That is £1,000 a year more than the salary of the Chancellor of the Exchequer. The Chancellor receives a salary of £13,000 a year. We may also ask what are the qualifications of Lord Kaldor, and what kind of advice he has given to the Chancellor of the Exchequer that merits a salary of £14,000 a year. We are told in the current edition of Who's Who that Lord Kaldor is special adviser to the Government on taxation. I wonder whether the British people heave a sigh of gratitude when they learn that the man responsible for imposing taxation upon them is not the Chancellor, who is a candidate for the leadership of the Labour Party, but Lord Kaldor, who is, so far as we know, not a candidate—and nominations have now closed.
Of course, the noble Lord has had certain experience in these matters. We are told, according to his own entry in Who's Who, that he was a
"Member of the United Nations group of experts on international measures for full employment, 1949."
Under this Administration, with Lord Kaldor as special adviser to the Chancellor, unemployment has reached the highest level since before the war.
The noble Lord was adviser to the Government of India in 1956, fiscal adviser to the Government of Ceylon, economic adviser to the Government of Guiana, fiscal adviser to the Government of Turkey, and special adviser to the Labour Chancellor from 1964 to 1968. Since March 1974 he has been special adviser to the Chancellor. I am bound to say that I think the Chancellor would do very much better if he did not follow the advice of the noble Lord, who is the
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high priest of deficit financing and the arch-apostle of the policy that the Government can go on borrowing and borrowing, because by the time the debts have to be repaid the noble Lord will have ceased to be a special adviser.
It is instructive to consider those Ministers who have special advisers. One wonders how the criteria are applied. The Secretary of State for Employment has no special advisers. The Secretary of State for Social Services has four. How is that reconciliation made? On what criteria are special advisers appointed to Ministers? Why does the Lord President of the Council, who does not preside over any great Department of State but who, it true, is responsible for the devolution Bill, need a special adviser?
May we take it that the right hon. Gentleman's special adviser was responsible for the White Paper on Devolution? If her advice was given in connection with the preparation of the White Paper would it not be better for the Lord President to seek another and better adviser elsewhere? I sometimes think that the quality of advice that the Government have been receiving from their selected special advisers is an indictment of the judgment of the Ministers who make these appointments. I sometimes think that it would be better if Ministers were to accept rather more advice from my right hon. and hon. Friends, which they would get free, gratis and for nothing, rather than that they should pay out £196,000 a year to get advice that is leading the country to economic disaster. I hope that the Minister will reply in the same constructive spirit in which I have made my observations.
11.33 p.m.
Mr. Iain Sproat: I am grateful to the Minister for giving me a few seconds to reinforce what my hon. Friend the Member for Eastbourne (Mr. Gow) has said. I wish to make only one point. Like my hon. Friend, I do not object to Ministers having special advisers, but if they have such advisers to keep them on the right political lines, those advisers should be paid for by the political parties, whether Labour or Conservative, and not by the British taxpayer. It is repugnant to the House and country that £196,000 should come out of the generality of taxes just to give political advice to Ministers. I hope that the

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Minister will say that it is his intention to advise his right hon. and hon. Friends to cease this practice forthwith. If they want advisers, let the Labour Party pay for them.
11.34 p.m.
The Minister of State, Civil Service Department (Mr. Charles R. Morris): I have listened closely and carefully to the hon. Member for Eastbourne (Mr. Gow). No one could accuse him of lacking in consistency on this issue. Tonight's debate follows over 30 Parliamentary Questions which the hon. Member has tabled on this subject. During a period of five months he and some of his parliamentary colleagues have waged what I can best describe as a campaign on this issue. The hon. Gentleman has rightly referred to the need to be vigilant and to scrutinise the actions of Government in this area.
I accept that it is right that Ministers should be questioned and called upon to justify the circumstances in which they appoint individuals to the public payroll, but in some respects this has been a squalid campaign. On occasion, one is left with the impression that some of the probing has been calculated to embarrass individual special advisers rather than to seek information from Ministers.
Mr. Gow: No, no.
Mr. Morris: We have had an example from the hon. Member tonight. Two public servants have been attacked by name, and they have no right of reply.
If hon. Members want to indulge in that sort of parliamentary behaviour, that is a matter for them, but, in one case, to describe a group which includes distinguished academics and professionally qualified experts as "party hacks" is offensive. It misrepresents the role and functions of the special advisers and it adds nothing to the public knowledge of the contribution that they make in the crucial area of ministerial decisionmaking.
Mr. Gow: I am sure that the Minister will recollect that I have never used the phrase "party hacks" about special advisers, and that I have not used it tonight.
Mr. Morris: I accept that the hon. Gentleman has not used the phrase, but
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it has been used. If he is looking for the source, he might discuss the matter with his hon. and learned Friend the Member for Kinross and West Perthshire (Mr. Fairbairn), who made the point in a letter to the Prime Minister, to which I had the duty of replying.
I want to deal first with salaries—a matter on which the hon. Gentleman displayed an insatiable curiosity. He justified his curiosity by quoting the Fulton Report as saying that there are too many occasions on which information is unnecessarily withheld.
Mr. Gow: Yes.
Mr. Morris: The Fulton Report did not say that in the context of the salaries of special advisers.
The hon. Gentleman said that the Government had been excessively secretive and coy about revealing these salaries to the House. He claimed that the House had a right to know. Certainly the House and the country are entitled to know the cost to public funds of this group of temporary public servants. That information has been given. The House has been told the range of salaries involved and it has been given other information about salary limits.
The question of individual salaries raises different issues, and I shall try to explain why these have not been revealed in detail. The explanation is simple. The special advisers are distinguished from the permanent Civil Service in that they hold limited period appointments which end when the Administration comes to an end. They have no security of tenure. This fact has been highlighted by the events of the last few days. Their appointments are to be terminated on the date on which the present Prime Minister's resignation takes effect.
Special advisers have left other employment to work for Ministers of the Crown for an entirely unpredictable period. About one-third of them are able to give their services only part-time, and their appointments reflect this fact. The Government believe that it would not be fair on these individuals, and, indeed, that it would be quite invidious, bearing in mind the very temporary nature of their employment, if their salaries were the subject of exchanges across the Floor of the House.

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Nor do I think that that would assist the public interest. It may be argued that some special advisers have given the Press information about their salaries. That is a matter for them. But it is not the Government's present intention to list the individual salaries of special advisers.
What emerged clearly from the hon. Gentleman's speech tonight is that he has reservations about the appointment of special advisers—at least under this Administration. He is entitled to that view, but he will need to support it with sounder arguments than he used tonight before anyone will take his case seriously.
Mr. Gow: Since the Minister has said that it is not the policy of the Government to disclose the individual salaries of their special advisers, will he say why the salary of Professor Lord Kaldor was disclosed by the Chancellor of the Exchequer in a Parliamentary Answer to me?
Mr. Morris: I am certain that in disclosing that salary my right hon. Friend consulted the individual concerned.
What I found fascinating was the hon. Gentleman's acceptance that there is nothing new in the practice of Ministers calling on people other than permanent civil servants to assist them in fulfilling their responsibilities. I accept that he is right in that regard.
The practice of employing small numbers of experts and advisers personally appointed by Ministers has been followed by successive Administrations. People with individual qualities and experience have a great deal to contribute. If their contribution serves to increase the effectiveness of political direction of the Government machine, one might have supposed that even the hon. Gentleman would see some value in the practice, at least if his own party were ever again to be entrusted with the responsibilities of government.
The hon. Gentleman referred to the Report of the Fulton Committee on the Civil Service. It is true that that Committee recognised the advantages associated with the appointment of special advisers and experts. What it said was:
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"We welcome this practice as a means of bringing new men and ideas into the Service of the State."
Exactly—and the Conservative Administration took the same view, though I accept that the hon. Member for Eastbourne was not then in the House. Not only did that Administration have political advisers; they also had a team of business men, under the then Mr. Meyjes, including the hon. Member for Hove (Mr. Sainsbury) before he joined the House. Their function was, as I understand it, to apply their business expertise to administrative problems.
Then we had very considerable numbers of advisers in industrial matters, who normally were appointed for limited periods, and consultants of various types. I believe that at one time there were 56 of these appointments, all giving the Government of the day the benefit of their experience.
Mr. Nicholas Winterton: Commercial experience.
Mr. Morris: The hon. Gentleman cannot have it both ways: either a Government should be entitled to draw upon such experience as exists or they should refrain entirely. Both this Administration and their Conservative predecessors have taken a pragmatic view. They have gone outside the Civil Service if the necessary expertise and experience could not be found within it.
The hon. Gentleman appears to take an extremely dogmatic view, and I wonder how far it is shared by his own Front Bench. Is it now official Conservative policy that Ministers should seek advice only from the permanent Civil Service? I would be the first person to acknowledge the contribution that the Civil Service makes to public administration—
Mr. F. P. Crowder: Will the hon. Gentleman give way?
Mr. Morris: Indeed, I seem to spend a great deal of my time defending the service from unjustified attack. But neither I nor permanent civil servants—nor the Civil Service trade union movement—would claim that the permanent Civil Service has a monopoly of wisdom.
Mr. Crowder: Will the hon. Gentleman give way?
Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. The hon. and learned Member for Ruislip-Northwood (Mr. Crowder) has been in the House long enough to know that if the Minister does not give way, he must resume his seat.
Mr. Crowder: I do not think that the hon. Gentleman had the advantage of seeing me. I am sure that he will give way to me.
Mr. Morris: Very briefly.
Mr. Crowder: Will the hon. Gentleman tell the House the difference between the money paid by his Government and that paid by the previous Administration to these people?
Mr. Morris: In terms of the expenditure in both categories, I shall write to the hon. and learned Gentleman.
Mr. Crowder: On a point of order, Mr. Deputy Speaker. That is not an answer to my question.
Mr. Deputy Speaker: There is no point of order that can arise out of the Minister's statement.
Mr. Morris: I was saying that neither I nor permanent civil servants—nor the Civil Service trade union movement—would claim that the permanent Civil Service has a monopoly of wisdom. On the contrary, they recognise that temporary advisers have a role to play and, moreover, that they should play this role as temporary civil servants, paid from public funds.
Mr. Sproat: No.
Mr. Morris: Perhaps the hon. Gentleman is erecting his case not on the principle of taking advice from outside the Civil Service—a principle that his Front Bench accepted when in office—but on the scale on which this has been done under the present Government. If the charge was that the number of special advisers had proliferated so tremendously that our system of government involving relations between Ministers and Members of Parliament, and between Ministers and civil servants, had been fundamentally
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changed, the hon. Member would be right to be alarmed.
Mr. Crowder: On a point of Order, Mr. Deputy Speaker. To what extent is the Minister allowed to read out this rubbish without really giving any consideration—
Mr. Deputy Speaker: Order. The hon. and learned Gentleman knows that it is a custom of this House that Ministers are allowed to use copious notes at the Dispatch Box.
Mr. Morris: I remind the hon. and learned Gentleman, through you, Mr. Deputy Speaker, that the hon. Member for Eastbourne also consulted extensively the notes that he had prepared.
Mr. Crowder: But he did not read out his speech.
Mr. Morris: Having made that point, I was about to indicate that I should share the anxiety of the hon. Member for Eastbourne in that regard. But the facts really are quite different. I should certainly not wish to see a day when the Civil Service ceased to be a basically career service. I believe that one of the strengths of our system of government is the permanence and continuity of the Civil Service. But is the hon. Gentleman seriously suggesting that while it was acceptable for his Government to employ a few advisers, together with a lot more business men, the present total of under 30 special advisers represents a threat to democracy?
In fact, the number of special advisers today is about the same as it was in November 1974. Moreover, that some Ministers have not thought it necessary to appoint special advisers is significant. This must surely indicate that the conspiracy theory, seemingly embraced by the hon. Member and about which some might think he and his parliamentary colleagues—
The Question having been proposed after Ten o'clock 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 twelve minutes to Twelve o'clock.

SOCIAL SERVICES
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  Radioactive Waste
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  Fuel Prices

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

LICENSING COMPENSATION FUND
The Earl of KIMBERLEY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the National Council on Alcoholism will be among those organisations consulted about the disposal of the £4,200,000 in the Licensing Compensation Fund.
Lord WELLS-PESTELL: My Lords, our consultations will in the first instance be with those directly involved in the operation of the funds, including the brewing industry and the licensed trade who have contributed the money. This in no way prejudices our eventual decisions about the disposal of this money and the purpose for which it should be used.
The Earl of KIMBERLEY: My Lords, I thank the Minister for that Answer. First, can he please tell me the names of the people with whom he has been consulting? Secondly, is he aware that I believe the Brewers' Society have been in touch with the Home Office over the disposal of this money, and have agreed that quite a large percentage should be set aside for licensed trade charities, such as research into alcohol abuse, and does he agree that the National Council on Alcoholism falls into this category?
Lord WELLS-PESTELL: My Lords, in reply to the noble Earl's first supplementary question, those who will be consulted include the Magistrates' Association, the Justices Clerks' Society, the Brewers' Society, the National Federation of Licensed Victuallers, the Licensed Victuallers' Society, the National Council of the Retail Trade and
536
the National Association of Licensed House Managers. I would point out to the noble Earl that, as the money has been solely contributed by the trade, it is felt right that they should be the first to be consulted about its disposal. As I understand the situation, this is to some extent a matter for negotiation; hence the reason why we are taking this step. But the noble Earl will no doubt remember that the Erroll Committee made a very strong recommendation as to how the matter should be dealt with.
Lord AVEBURY: My Lords, if a substantial proportion of this money is to be made available for research into alcohol abuse, might it not be a good idea to consult the Medical Research Council at this stage? Also, can the noble Lord say whether legislation will be required for the ultimate disposal of the funds?
Lord WELLS-PESTELL: My Lords, my understanding is that there must be legislation. With regard to the noble Lord's first point, let me say here and now that, if it is felt desirable that other bodies should be consulted, I have no doubt in my own mind that the Government will consult them. The Government are sympathetic to the suggestion which I think underlies the noble Earl's Question, that some of the Fund should be considered for the purpose he has in mind.
Lord AMULREE: My Lords, there is a second council on alcoholism, the Medical Council on Alcoholism. Does the noble Lord agree that they might get some share of the money?
Lord WELLS-PESTELL: My Lords, if any money goes to research into alcohol abuse, those who are in the best position to use it for that purpose will no doubt be considered and consulted.
Lord SEGAL: My Lords, ought not the money to be distributed where the need is greatest, since many of the bodies on that imposing list mentioned by my noble friend are already well supported?
Lord WELLS-PESTELL: My Lords, they are being consulted as to how best this money should be dealt with. It does not necessarily follow that it will be going to them. It is a question of how best to dispose of it.

SOCIAL SCIENCE RESEARCH COUNCIL FUNDS
2.43 p.m.
Lord BROWN: 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, in the light of the award to an Edinburgh University anthropologist of £6,000 to do research on "Selection of spouses in a specific population of Muslims in Delhi" and a second award to a Hull theologian to do research on "Interaction of Scientific and Religious beliefs of Thai scientists", they are satisfied that the Social Science Research Council is spending public money wisely.
The PARLIAMENTARY UNDERSECRETARY of STATE, NORTHERN IRELAND OFFICE (Lord Donaldson of Kingsbridge): My Lords, my noble friend's Question is in line with the tradition of poking fun at the various topics chosen for examination by social anthropologists, and indeed at social anthropology itself in my day, I remember that Lady Fraser's Leaves from the Golden Bough was a prime target. But I think the tendency culminated in Robert Benchley's immortal lecture on, "The Sex Life of the Polyp". In spite of this friendly ridicule, the subject of social anthropology has grown in stature and importance as a proper field of scientific research and a respectable discipline for university study, in which a number of British research workers have gained international distinction. I cannot believe that my noble friend is suggesting Government interference in the allocation of research funds by the Social Science Research Council. The Council consists mainly of highly distinguished academics, some of whom are scientists of international repute, and its allocation of about 2 per cent. of its total funds to this subject could hardly be criticised. If my noble friend wishes to discuss the value of any particular project selected for research, I suggest he applies to the Council itself, whom he will find well capable of defending its decisions.
Lord BROWN: My Lords, while thanking my noble friend for that reply,
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I am disappointed that he has cast an aura of respectability over these two awards. In the light of awards of this kind, and there are others as well, may I ask my noble friend whether he is prepared to recommend to the Secretary of State that he should consider the composition of the Social Science Research Council, over which I assume he exercises control, in order that a greater measure of wisdom may infect their decisions in future?
Lord DONALDSON of KINGS-BRIDGE: My Lords, I can say without hesitation that my right honourable friend the Secretary of State who has made these appointments is well satisfied with them.
Baroness EMMET of AMBERLEY: My Lords, may I ask the Minister whether there is a periodic review of the way that the Social Science Research Council spends money so that the tax-payer may feel that his money is being wisely used?
Lord DONALDSON of KINGS-BRIDGE: My Lords, there is a body known as the Advisory Board of the Research Councils which fulfils this role.
Lord ANNAN: My Lords, may I ask the noble Lord whether he saw on television last night a programme called "Horizon" which paid tribute to the work of the great American anthropologist, Dr. Margaret Mead, whose researches years ago in Melanesia profoundly affected the view in our society of both family life and racial minorities and whether he would agree that we should understand that researches of this kind can affect our own decisions about our way of life? Having noted that point, would the noble Lord also agree that the principle enunciated by Lord Rothschild in his Report on Scientific Research—namely, the customer-contractor principle—might with advantage be brought to the attention of both the Science Research Council and the Social Science Research Council, although it is more difficult for them to apply this principle than the Medical Research Council and the Agricultural Research Council?
Lord DONALDSON of KINGSBRIDGE: My Lords, as regards the first part of my noble friend's intervention, of course I agree. I think that social anthropology is a branch of

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science that is of the greatest importance. It happens to be rather easy to make fun of. Regarding the Rothschild principle, it is very difficult to apply it without a clear identification of the customer but I will put this matter to my right honourable friend and find out whether he thinks that he can identify the customer.
Lord WYNNE-JONES: My Lords, would my noble friend agree that the Rothschild principle was supposed to apply to contract research between Departments and universities, not the Research Councils? Would my noble friend also reassure the House that the Government have no intention of interfering with the freedom of the Research Councils?
Lord DONALDSON of KINGSBRIDGE: My Lords, I hasten to give reassurance on the second point. There is no intention whatever of interfering in this way and it is entirely wrong to suggest that there should be interference. As regards the Rothschild principle, I think that the noble Lord, Lord Annan, was using it as an analogy rather than as an exact parallel.
Lord LEATHERLAND: My Lords, when the anthropologists have concluded their investigation into the selection of spouses in Delhi, may I ask my noble friend whether the Government will undertake a similar piece of research into the selection of spouses in Britain?—without, of course, any retroactive effect.
Lord DONALDSON of KINGSBRIDGE: My Lords, I think that the appropriate direction in which to launch this appeal would be through the Social Science Research Council.
Baroness GAITSKELL: My Lords, while thanking my noble friend for his Answer to the noble Lord, Lord Brown, it is out of character in terms of its pomposity regarding the Social Science Research Council. May I say—
Several Noble Lords: No!
Baroness GAITSKELL: I beg your Lordships' pardon. May I ask my noble friend whether or not it would be much better to look at more serious questions such as racial prejudice, which is on our doorstep, and racial strife in the international field?
Lord DONALDSON of KINGS-BRIDGE: My Lords, my noble friend Lord Brown referred to two projects. Each year there are approximately 20 projects and I do not think that one wants to feel that the approach is limited in any way.
Lord BROWN: My Lords, would my noble friend take it from me—
Several Noble Lords: No!
Lord BROWN: My Lords, does my noble friend understand that my Question is not a general attack on the field of anthropological research? Secondly, would he agree that there are limits to the type of research that can be sponsored by public money and that the two researches which excited this Question are over the limit? Does his Answer imply that there are no limits to the kind of researches which can be financed by the SSRC the exceeding of which will attract Her Majesty's Government's attention to the composition of the SSRC itself?
Lord DONALDSON of KINGS-BRIDGE: My Lords, this is the same question over again. The members of the SSRC are appointed by the Secretary of State and they are given complete freedom in the allocation of its funds. As I said before, there is a body called the Advisory Board of the Research Councils, whose business it is to supervise the spread of money between the different Research Councils; that is as far as the situation goes at the moment.

DEFENCE EXPENDITURE CUTS
Lord CHELWOOD: 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 had full knowledge of the growing gap between the military capacity of the United States and the Soviet Union in trained men and weapons and the estimate that current Soviet expenditure on defence is approximate to an annual rate of 153,000 million dollars, as disclosed by the American Defence Secretary on 9th March, before announcing the latest cuts in defence expenditure.
Lord WINTERBOTTOM: My Lords, the Government are well aware of Soviet military capability, and drew attention to improvements to it in the latest Defence White Paper (Cmnd. 6432). The figure of 153,000 million dollars is from a Press report, and I do not know how it was arrived at. However the latest estimates put Soviet defence expenditure in dollar terms substantially higher than United States defence expenditure. As to the cuts in the United Kingdom, these were of support, not front-line forces, and did not impinge upon the essential elements of our contribution to NATO. They were made only after taking into account all the relevant factors, including the military balance and the state of the economy.
Lord CHELWOOD: My Lords, I am grateful for that disturbing reply. Does it in fact mean that Her Majesty's Government accept the official American view that if current trends continue the serious imbalance between Warsaw Pact forces and NATO forces will get dangerously larger? If that is the case, what on earth is the explanation of paragraph 50 of Chapter 1 of the Defence White Paper which, to help the noble Lord, I will remind him states flatly that there have been no significant changes
"in the political and military relationships between the Alliance and the Warsaw Pact"?
What can be the meaning of that other than a denial of the American analysis that the gap between the Warsaw Pact forces and the NATO forces is very large and very serious and will grow if current trends continue?
Lord WINTERBOTTOM: My Lords, Her Majesty's Government are not complacent and not unconcerned. However, the noble Lord's original Question concerned the relationship between United States and Soviet expenditure, and his supplementary question was based on the NATO and the Warsaw Pact expenditure. These two are not the same. If I may refer to a statement made by my right honourable friend the Secretary of State for Defence in the other place on 27th February, if we look again at estimated expenditure which is extremely difficult to estimate in precise terms, in 1974 NATO expenditure, not American expenditure, was 135,000 million dollars, whereas Warsaw Pact expenditure was 116,000
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million dollars, and in 1975 the comparable figures were 149,000 million dollars and 125,000 million dollars. On this estimate the expenditure of the Western Alliance is still higher than that of the Warsaw Pact countries.
Lord PAGET of NORTHAMPTON: My Lords, if that is so, is it not somewhat surprising that there should be such an enormous gap in the capacity of the Warsaw Pact and the NATO forces on the ground—a gap so large that any contribution, large or small, that we may make is totally irrelevant?—the more we provide would only mean the more we would lose in the first week.
Lord WINTERBOTTOM: My Lords, my noble friend is making his usual type of pessimistic statement. What we are doing is comparing not the position in Western Europe but the position overall throughout the world, and in my view there is no cause for undue pessimism.
Lord GLADWYN: My Lords, would the Government possibly consider inquiring of Mr. Gromyko, who happens to be here, why Marshal Grechko has recently stated that the armed forces of the Soviet Union, which admittedly already have a preponderance of power, should be further increased in view of the possible assault on the Soviet Union by the considerably inferior forces of the West?
Lord WINTERBOTTOM: My Lords, the statement of Marshal Grechko is certainly receiving the consideration of Her Majesty's Government.
Lord HALE: My Lords, would the noble Lord not agree that these figures now prove conclusively that a pacifist Britain would be militarily no weaker and morally much stronger?
Lord WINTERBOTTOM: My Lords, morals are fine, provided one can afford them. I would sooner we made our contribution to the defence of those values in which most of us believe.
Lord WIGG: My Lords, would the Minister agree that the comparisons which have been bandied about this afternoon are quite ridiculous unless one takes into account the different rates of remuneration of members of the armed forces of the United States of America and of Great Britain and the remuneration paid to the Russian forces? And is it not a

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fact that if the Conservative Party are now complaining of weakness of defence, they should be reminded that those who live in glass houses should not throw stones, because the weakness from which this country suffers is entirely due to that irresponsible, ridiculous and disgraceful Defence White Paper of 1975?
Lord WINTERBOTTOM: My Lords, I would agree with my noble friend in part of his question. Quantification is extremely difficult, particularly in terms of what one pays the private soldier. There are of course other factors which have to be taken into account. With regard to the second part of the question, I prefer to leave that until we have our defence debate.
Lord DUNCAN-SANDYS: My Lords, the noble Lord criticised the noble Lord, Lord Paget of Northampton, for his pessimism. May I ask the Minister whether he agrees that there is cause for grave concern at the growing imbalance between the forces of the West and those of the Warsaw Pact, and is he not showing a certain amount of complacency about it?
Lord WINTERBOTTOM: My Lords, concern, yes; pessimism, no.
Lord CHELWOOD: My Lords, I should like to return to my first supplementary question and ask the noble Lord to say straight out whether Her Majesty's Government accept the official American view, which I believe to be shared in NATO, that if current trends continue the serious imbalance between the NATO forces and the Warsaw Pact forces will grow dangerously larger? That imbalance is shown in Chapter 1 of the White Paper. In those circumstances, how can any responsible Government announce further defence cuts of more than £500 million over the next three financial years?
Lord WINTERBOTTOM: My Lords, we shall have an opportunity to debate this. The cuts were in the tail and not in the teeth, and this is something which the noble Lord should not forget when he considers the picture as a whole. It must be weighed in relation to the economic strength of this country at the moment.

EUROPEAN ASSEMBLY: REPRESENTATION
2.58 p.m.
Lord SHINWELL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask the Leader of the House whether members of the European Assembly selected by this House are expected to make reports on their activities and whether any reports have been made so far.
The LORD PRIVY SEAL (Lord Shepherd): My Lords, there is no formal provision for any such reports. The House is grateful for the way in which noble Lords who are members of the European Parliament have kept us informed about EEC policies by participation in debate and through their links with the Select Committee of your Lordships' House on the European Communities.
Lord SHINWELL: My Lords, may I ask my noble friend whether the noble Lords who attend the European Assembly represent your Lordships' House or the respective political Parties associated with this House, and is there any truth in the statement that has been made that the noble Lords who attend the Assembly have reported to their respective political Parties but not to this House, and if so, can he explain why?
Lord SHEPHERD: My Lords, first, those noble Lords who attend the European Parliament do not represent this House, in the same way as Members of another place do not represent the House of Commons. We fulfil our obligations under Article 138(1) that the European Assembly should consist of delegates who have been designated by the respective Parliaments from among their Members, in accordance with the procedures laid down by the Member-States. Our procedures are based very much on the system of representation at WEU where the political Parties themselves have made their own nominations, and it is for the two Houses to ratify them in order that Members can go to the European Parliament, and are seen to be a Member of that particular House or Parliament.
Lord GLADWYN: My Lords, I report to my own political Party exactly what I have been doing in the European Parliament, and I imagine that the representatives of the Socialist Party and the Conservative Party do exactly the same. I do not quite know what is the effect of the question of the noble Lord, Lord Shinwell.
Lord SHEPHERD: My Lords, the noble Lord is not required to report to his own Party, as I understand it. This is something that his own Party may require of him, but it is not imposed by this House. I think that is all I can say on the matter.
The Earl of LAUDERDALE: My Lords, would the noble Lord the Leader of the House explain to the House how it is that when our delegates to the European Parliament are appointed by this House, as they are by Resolution, they do not at the same time, and arising out of that, represent the House?
Lord SHEPHERD: My Lords, they do not represent the House, and I do not believe it has ever been expected that they did. They go as members of their political Parties; they sit with those people sharing a view with them in the European Parliament, and there must be occasions in the European Parliament when representatives from this House may take a completely different view from others coming from within this House.
Baroness ELLES: My Lords, would the noble Lord the Leader of the House agree that the members of the European Parliament play a very full role in this House whenever there is a possibility for them to take part in debate? Similarly in the Select Committee, so ably presided over by my noble friend Lady Tweedsmuir of Belhelvie, members of the European Parliament invariably go and give evidence on matters of concern to this House, the other place, and the European Parliament.
Lord SHEPHERD: My Lords, that is so, and I fully acknowledge it. I only regret that the way in which we so arrange our business means that occasionally members cannot participate in the Business because they are required to be at the European Parliament. This is something we ought seriously to look at. It
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may be that if we were to set aside certain days during a month for matters dealing with the European Parliament, we might overcome some of these difficulties. This is something which could well be considered by the Committee which I hope will shortly be set up.
Lord SHINWELL: My Lords, are we to understand from that reply that the selection of those noble Peers who attended the Assembly was not endorsed by your Lordships' House? Are we to understand that therefore we have no control whatever over them? Are we to understand from that that they are there for as long as they like, and we have no means of withdrawing them at any time?
Lord SHEPHERD: My Lords, so far as the Labour membership is concerned, the names were approved by your Lordships' House, but were also approved by the Parliamentary Party at one of their formal meetings. I feel this is a matter we could more usefully debate when we discuss the question of direct elections to the European Parliament, because we may need to take account of an interim period prior to direct elections taking place.
Lord CHELWOOD: My Lords, in spite of the fact that the dual mandate imposes a heavy strain indeed, even on Members of this House, is it not possible that a sprightly young fellow like the noble Lord, Lord Shinwell, could quite easily carry this out, and could be relied upon to make regular reports to us?
Lord SHEPHERD: My Lords, I shall leave that to my noble friend. May I draw the attention of the House to the fact that 25 minutes for Questions is even worse than the complaint made last Thursday? May I suggest we move on to next Business?
The Earl of LAUDERDALE: My Lords, I think the noble Lord is trying to dodge the question which I have tried to put three times. Can he explain why, if these delegates represent their parties, they need to be appointed by this House? Perhaps he will answer that point on Monday.
Lord SHEPHERD: My Lords, I would be most happy to do so.

COMMODITY PRICES
The CHAIRMAN of COMMITTEES (The Earl of Listowel): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved on behalf of the Committee of Selection, That the Lord Thomas be added to the Select Committee on Commodity Prices in the place of the Lord Redmayne resigned.—(The Earl of Listowel.)
On Question, Motion agreed to.

CONSOLIDATED FUND (No. 2) BILL
Brought from the Commons endorsed with the Certificate of the Speaker that the Bill is a Money Bill within the meaning of the Parliament Act 1911; read 1a.

SOUND BROADCASTING OF PROCEEDINGS
Lord SHEPHERD: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it is desirable that a Joint Committee of both Houses be appointed to consider the implementation of the Resolutions of both Houses in favour of the establishment of a permanent system of sound broadcasting of their proceedings, and to make recommendations; and that a Committee of five Lords be appointed to join with a Committee of the Commons as such a Joint Committee.—(Lord Shepherd.)
The EARL of SELKIRK: My Lords, may I ask whether it is intended that this should be a temporary Joint Committee to set the system in being, or is it intended that this should be a continuing Joint Committee to keep the system under the general observation of Parliament?
Lord SHEPHERD: My Lords, I take the view that this is a Committee which will consider the setting up of broadcasting on a permanent basis. It would then be for Parliament to consider, as a consequence of that report—because we cannot anticipate what its recommendations may be—whether a further Committee should be appointed, or whether
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this Committee should remain in existence. Parliament will be required to consider the report of this Committee and it will then be for Parliament to consider what the future organisation should be.
On Question, Motion agreed to.

POST OFFICE (BANKING SERVICES) BILL
Report received.

COMPANIES (No. 2) BILL [H.L.]
3.7 p.m.
Lord WINTERBOTTOM: My Lords, I beg to move that the Bill be now read a second time. As this Bill is essentially an interim measure designed to deal with certain immediate problems, I should begin by putting it in the context of the Government's overall programme for the reform of company law. The basic principles underlying British company law were laid down last century by Gladstone, and have changed very little since then. As business has become more complex and the number of companies has grown, the ramifications of company law have spread and the legislation has become ever more sophisticated and extensive, but there has been no change in the fundamental approach. The emphasis is still on the protection of shareholders and creditors; the interests of employees and of the wider public are barely recognised. Of course, in practice, most companies do take account of these wider responsibilities, but company law does not require them to do so.
Company law is therefore long overdue for fundamental reform. That is why this Government on coming into office two years ago decided not to go ahead with the Companies Bill introduced by the Conservative Administration in 1973, and which had just started its passage through Parliament at the time of Election in February 1974. That Bill would have perpetuated the traditional attitude on company law and would have done nothing to further the fundamental rethinking which is so badly needed. The Government therefore decided to institute a wide-ranging review of the whole of company law. This is a major exercise and is still going on. It is inevitable that

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a review of this depth should take some time to complete, as it is essential that a reform which will affect the legal framework within the whole of the private sector operates should be thoroughly examined.
Central to this review is, of course, the question of industrial democracy. This is currently being studied by a Committee of Inquiry under the chairmanship of the noble Lord, Lord Bullock. The Committee's task is to consider how an extention of industrial democracy in the control of companies by means of representation on boards of directors can best be achieved. This brings into question such basic principles as the responsibilities and duties of companies and their directors, and the structure of company boards. The Committee's recommendations will thus lead to a major change in company law, and also to a radical change in the way industry is managed.
The Committee has put out a general invitation to submit evidence, and I hope that all interested parties who have not already done so will put in their evidence as soon as possible. In a debate of this importance, which raises so many complex and relatively unexplored issues, it is vital that all those who are able to make a contribution should do so. This is not just a form of words. Your Lordships' House is a storehouse of knowledge and experience, and any individual or collective contribution to the work of Lord Bullock's Committee would be most welcome. The Committee has been asked to report by the end of this year, and the Government intend to legislate as soon as possible thereafter.
Another subject which the Government are studying is the arrangements for the supervision of the securities market. The Government have been consulting interested organisations in the City and elsewhere and are now considering the views they have expressed. One of the topics which is being examined in this part of the review is ways of stamping out such abuses as insider dealing and warehousing. Any major companies legislation must clearly await the outcome of these inquiries, but, in the meantime, there are a number of urgent matters, mainly of a technical nature, on which legislation is needed now and which cannot safely be left until the longer term inquiries have been completed. It is
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these matters, none of which will in any way prejudice the outcome of those in-inquiries, with which this Bill is concerned. The Bill's aim is thus very limited. It is not a major reforming measure. It seeks only to deal with particular problems and abuses which all parties are agreed it is essential to tackle as soon as possible. Indeed, I freely acknowledge our debt to the Party opposite. Most of the provisions in this Bill were included in the Bill which they introduced in 1973. The provisions have been the subject of intensive consultation and will, I believe, be widely welcomed as a useful step towards the improvement and tightening up of company law.
Before going on to describe the Bill's provisions, perhaps I might pause to explain why it has the somewhat curious title—Companies (No. 2) Bill. About a week before this Bill was introduced in this House, a Member in another place obtained leave to introduce a Bill. His Bill, which is concerned with non-executive directors, is also called the Companies Bill, and as he got in first, the Government's Bill has become the No. 2 Bill. The Companies (No. 2) Bill has four main objectives. These are: first, to tighten up the requirements about the filing of company accounts and the keeping of accounting records; secondly, to strengthen the position of auditors; thirdly, to give the Secretary of State for Trade power to prevent a foreign company with a place of business in Great Britain from trading here under a misleading name; and fourthly, to deal with certain other relatively minor matters concerning Companies House.
The failure by very large numbers of companies to file their annual returns and the accounts which should accompany them on time has been a serious problem—indeed, a scandal—for many years and has been a matter of grave concern both to this Government and to their predecessors. Out of some 643,000 companies on the register, 186,000 are known to be in default to some degree in filing annual returns. This is despite strenuous efforts by the Registrar of Companies and his staff. The process of pursuing companies in default has now been computerised and this makes it possible to pursue companies much more promptly. Reminder letters are now normally sent out within two months of an annual return being overdue. If the return is still not

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filed, the directors are eventually prosecuted, or, if no reply whatever is received, the company is struck off the register.
The statistics are most interesting. Last year summonses were served on 2,440 directors of 989 companies in default and already this year 700 summonses have been served. In addition, 28,000 companies were struck off in 1975, and over 5,000 have been so far this year, because they failed to respond to the reminders in any way and are presumably no longer in business. This is, of course, only the tip of the iceberg. These represent only those cases in which repeated reminders failed to secure the filing of the annual return—which is naturally the object of the exercise. The longest part of the job is sending out the reminders, which are currently running at some 10,000 a week. Inevitably, such a mammoth operation is expensive. Currently, it costs about £500,000 a year.
But despite this impressive campaign, the defects in the existing law make it virtually impossible for the Registrar to ensure the prompt filing of accounts. He can pursue failures to file annual returns, but the accounts which should be annexed to them present much greater difficulty. There are two main problems: first, the obligation to file accounts only arises after the accounts have been laid before the company. As the Registrar does not know, and cannot find out without expensive and time consuming inquiry, whether accounts have been so laid, he does not know when or even whether accounts should have been filed with him. This makes effective enforcement impossible. Second, the present provisions allow the latest accounts on file at Companies House to relate in extreme cases to events nearly 3½ years old. This is quite unacceptable. Failure to file accounts promptly is not a mere technicality. Limited liability is a privilege, and those dealing with limited liability companies are entitled to prompt and accurate information about their financial state.
The Bill seeks to remedy this situation by creating a specific obligation to file a copy of the accounts within a fixed period after the end of the company's accounting reference period or financial year, and by providing for the determination and notification to the Registrar of each com-
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pany's accounting reference period. In future private companies will have to file their accounts within 10 months of the end of their financial year, and public companies within 7 months. Companies with overseas interests will be allowed 3 months longer. In order to underline the importance of prompt filing of accounts, and to provide an incentive to companies and their directors to comply with their obligations, the penalties are to be increased substantially so that every director who fails to take all reasonable steps to ensure that the accounts are filed on time will be liable to a fine of £400, plus £40 for each day of default, and the company itself will be liable to a civil penalty which will increase with the length of default, up to a maximum of £450. Clauses 1 to 8 apply these provisions to companies registered in this country, and Clauses 9 to 11 apply similar provisions to foreign companies which have a place of business here.
These provisions will enable the Registrar to identify defaulting companies immediately the default starts and thus to pursue them much more promptly and effectively. They will, however, naturally require some additional staff to administer. It is estimated that about 70 extra staff will be required once the system is in full operation. They will be mainly engaged in pursuing and prosecuting defaulters. There will be some relatively minor offsetting staff savings as a result of other provisions in the Bill, but there will be a net increase of some 60 staff at a cost of about £150,000 a year. Naturally, this increase has been rigorously re-examined in the light of the need to make cuts in public expenditure and manpower. The Government have, however, concluded that the prompt disclosure of accounts is of such importance as to justify the staff increase and that the necessary staff savings will have to be made in other areas of work.
The introduction of the new arrangements for the filing of company accounts will, of course, involve a great deal of work for the Registrar. The exercise cannot, therefore, begin until next year, when the Cardiff office is fully established. The move of the Companies Registration Office from London to Cardiff will begin in less than two weeks' time on 5th April, The various functions of the office are to

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be transferred to Cardiff in stages. The first stage will cover the section of the office dealing with new incorporations, changes of name and name inquiries. Company files will be transferred in three batches, the first in July, the next in December, and the final one in the following June. The main part of the move should be complete by next October, and the remainder by the middle of next year.
The move to Cardiff was dictated by the vast increase in the scale of operation. Last year 1,400,000 documents were received for examination and filing and 1,900,000 searches were made by members of the public. But the move, together with the associated microfilming of company files, will enable Companies House to provide a much better service to the public with faster and more convenient search facilities. There have been extensive consultations with the major users and the services to be provided in London and Cardiff both for searches and for filing documents have been designed with their requirements very much in mind.
Returning now to the details of the Bill, the next clause, No. 12, deals with accounting records. It is, of course, essential that companies should keep records which enable the directors to ascertain the financial position of the company at any time and which show what transactions it has engaged in. It is from these records that the accounts are derived. The unforeseen financial difficulties which many companies have run into partly as a result of inadequate internal accounting systems underline the need for companies to keep proper records. This clause therefore brings up to date and clarifies the existing requirements as to the keeping of accounting records and provides that such records must be preserved for at least six years.
Clauses 13 to 17 of the Bill are concerned with auditors. Little point will be served by ensuring that accounts are made available promptly to shareholders and the public if those accounts do not give an accurate picture of the state of the company's affairs. Auditors have an essential role in ensuring that accounts do indeed give a true and fair view and that companies' financial affairs are conducted with propriety. In the light of recent events, I do not think that I need to stress this point further. The Bill
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amends the law so as to strengthen the position of auditors and to ensure that they have the necessary rights and powers to carry out their functions effectively even when they run into difficult situations.
The first requirement is that those who audit companies' accounts should be properly qualified. The normal qualification is membership of one of the four recognised accounting bodies—the Chartered Institutes of England and Wales, Scotland and Ireland and the Association of Certified Accountants—which are listed in Clause 13 of the Bill. But the 1948 Act also allows the Secretary of State to authorise individuals on the basis of adequate knowledge and experience. This provision is highly anomalous as it enables a person to become an auditor without having first passed the stringent examinations set by the recognised professional bodies or indeed having passed any examinations at all. In view of the importance of maintaining high professional standards, the Bill provides that, one year after Clause 13 comes into effect, no further authorisations shall be granted on the basis of adequate knowledge and experience. The one year delay will allow those seeking authorisation on this basis a reasonably extended last chance to apply. The second change is that under Clause 14 auditors will in future have to be appointed or reappointed every year by the company at its annual general meeting. It is not right that an appointment of this importance, or the continuation of it, should as at present be automatic.
Clauses 15 and 16 represent a major strengthening of the position of auditors who come across evidence of malpractice or are in dispute with the directors about the propriety of particular transactions. Clause 15 provides that an auditor may resign at any time if, but only if, he makes a statement either setting out any circumstances connected with his resignation which he considers should be brought to the attention of shareholders or creditors or stating positively that there are no such circumstances. Clause 16 enables an auditor who has resigned to requisition a meeting of the company at which he can explain his reasons for resignation. These provisions will give a strong auditor a very powerful and effective

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threat in the event of a dispute with the directors and will force even a weak auditor to face up to his responsibilities as he will no longer be able to evade a difficult situation by quietly resigning and saying nothing.
The final change, in Clause 17, gives the auditors of holding companies the right to require the directors and auditors of subsidiaries to supply information about the accounts of those subsidiaries. This is necessary if the auditors are to be able to reach a properly informed view on the accounts of the holding company. These provisions are among the most important in the Bill. They have been worked out in consultation with the accountancy profession and will make a valuable contribution to ensuring that auditors are in a position to do their job effectively.
The Bill does not deal specifically with any of the accounting and auditing problems which came to light as the result of the investigation into the affairs of London and County Securities. The English and Scottish Institutes of Chartered Accountants have set up a Committee to look into the lessons to be learnt from this case. The Government are keeping in touch with the accounting bodies on this subject and are examining the specific recommendations made by the inspectors. If consideration shows that further legislation is desirable, amendments can be made to the Bill at a later stage.
Part II of the Bill I can deal with rather more briefly, I am glad to say. Clauses 18 to 20 make minor amendments to the law concerning notification to the Registrar of the names of a company's directors and secretary and the whereabouts of its registered office and are, I think, self-explanatory. Clause 21 is concerned with people who continually ignore the legal requirements regarding the filing of accounts and other returns to the Registrar. It is not acceptable that such people should be free to continue to manage companies with impunity. The Bill therefore provides that if a person has demonstrated through persistent default his complete disregard for the law, the Secretary of State may apply to the courts for an order disqualifying that person from acting as a director or taking part in the
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management of a company for a period not exceeding five years. This provision supplements the existing disqualification provisions in the 1948 Act and those proposed in the Insolvency Bill. It will provide a valuable additional sanction against those who regularly fail to file their accounts and will thus complement the penalties in the earlier part of the Bill.
Clauses 22 and 23 are concerned with the problem of foreign companies which trade in this country under misleading names. Although the names of British companies are subject to control, there is at present nothing to prevent a foreign company using any name it likes and this can seriously mislead those dealing with it. The worst examples have concerned small foreign companies trading under grandiose names which suggest that they are reputable banks. The Bill therefore enables the Secretary of State to prevent a foreign company which has a place of business in this country from doing business here under a name which he considers to be undesirable.
Clauses 24 to 26 deal with administrative matters affecting the work of Companies House, such as the use of prescribed forms and requirements as to the size, durability and legibility of documents. One particular point which I might mention is that the Registrar will be empowered, when he is in a position to do so, to accept information on microfilm. Clause 27 widens the Secretary of State's powers to prescribe by regulation the fees to be paid to the Registrar for the performance of his duties. This clause makes two main changes: first, it will enable the Registrar to charge a fee for services which are not statutorily prescribed but which he provides as a convenience to users; and secondly, it removes the existing limit on the fees payable for the inspection of documents kept by the Registrar. The latter fees were fixed at a maximum of 5p in 1844 and have never been raised. The time has come when they must be reviewed, although it is intended to continue to use registration fees to subsidise search fees to some extent as it is right that most of the cost should be borne by companies which wish to obtain the benefits of incorporation and limited liability. Any new fees or increases in existing fees will be subject to Affirmative Resolution. The

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remaining clauses deal with various supplementary matters which I do not think that I need go into.
My Lords, as I explained earlier, this is largely a technical Bill. Nevertheless, it deals with a number of important matters and in the fields with which it is concerned it will achieve a valuable measure of reform. It is because I believe this that I have spoken at such length. I commend the Bill to the House.
Moved, That the Bill be now read 2a.—(Lord Winterbottom.)
3.28 p.m.
Lord LYELL: My Lords, the whole House will be grateful to the noble Lord, Lord Winterbottom, and indeed to the Government, for bringing forward this Bill. Noble Lords will be aware, as we are this afternoon after the speech by the noble Lord, Lord Winterbottom, that a Companies Bill was proceeding through its various Parliamentary stages when the General Election of February 1974 was called. That Bill set out to effect a thorough and a sound reform of company law, but sadly the Government have taken two years to carry on this important work. While we are grateful for having the opportunity to discuss this Bill, we should remember that several recent cases have shown the urgent need to bring our company legislation up-to-date in all respects.
We recognise that the Bullock Committee is due to report later this year, and that it would be unwise for us to deal with the entire spectrum of legislation as it affects shareholders, directors, auditors and creditors when fairly drastic legislation could be necessary as a result of Lord Bullock's Report. The Government will, of course, wish to keep the Bill as uncontroversial as possible and we shall assist the Bill in its onward passage. There are, however, many general and more detailed points that the noble Lord, Lord Winterbottom, could explain to us and we hope that he will be able to give us convicing reasons why the Government have not taken the Bill to cover more points than it does at the moment.
The Bill is intended, of course, to cover most of the points that the Government consider are in need of amendment, but the first and most important question that
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we want to raise is: when are the Government going to take steps to consolidate company law? Noble Lords will be aware that anybody dealing with such legislation has to dart between the Companies Acts of 1948 and 1967 and has to amend both of those Acts as a result of small measures enacted between times by regulations. Indeed, anybody looking at this Bill will discover numerous occasions when legislation is by reference. The Government will, I am sure, admit that their programme is heavy—too heavy and too ambitious, we feel—but we are sure that the noble Lord, Lord Winterbottom, will notice that it is nearly 28 years since we last consolidated company law. This subject will become yet more complicated now that we have to harmonise our laws with those of the EEC. The noble Lord, Lord Mais, will be initiating a debate on this particular subject in about two weeks' time, so we can let that subject lie for the time being.
A problem which was considered in great depth in the Companies Bill 1973, yet has been omitted from this Bill, is the classification of a public and a private company. Such divisions between these two types will become absolutely vital, possibly in 1977—and if the noble Lord, Lord Bullock, reports at the end of 1976, as we hope—and the EEC Members are proceeding with such classification. Any company with a share capital, turnover or membership of above various carefully defined limits has to set up two-tier boards of directors, and shop floor participation is often compulsory. Many awkward and time-consuming duties must be performed by the management, far and away beyond what we are even likely to regard as reasonable.
Another problem that is touched on, but in the 1973 Bill and not in the 1976 one, is that of insider trading; Lord Winterbottom did mention it. Nevertheless, where persons are closely connected with the management of a company or in a position to be closely concerned with it, and these persons can take an unfair and unreasonable advantage over the shareholders, the work force and the creditors of that company, we believe that legislation is becoming more urgently required. And of all the problems connected with company management, this, we think, is the most difficult to define and, often, to detect. The Stock Exchange

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and the Law Society are already closely concerned with this problem, while the accountancy bodies have to deal with this and with new problems arising with incredible speed and regularity. We accept that definitions of what is adequate disclosure—what should be disclosed or not, who should receive confidential information concerning a company and how and when such information is released—will receive close attention from the noble Lord, Lord Bullock, and his colleagues, but we feel that the Government have missed the opportunity in this Bill to rectify some of the abuses that have been evident so far.
We come to some more detailed and technical points that could have been covered by the Bill but which so far are not mentioned. One of the first of these points is the definition of distributable profits. The Jenkins Committee stated in one of its recommendations that before revenue profits could be regarded as distributable in, possibly, dividends, past losses had to be recouped from revenue profits. This is reasonable and it is a pity that the Bill does not deal with this particular point. Capital profits are a little more complicated in that the rate of inflation endemic in the United Kingdom now makes nonsense of balance sheet values of assets. There have been too many cases in recent history of items being revalued upwards, the profit on such revaluation accruing to the shareholders; but, owing to some utterly unconnected event, the new value turns out to be unrealistic, and since the profit may or may not have been realised, either there is a major cash shortage in that company or the share values are needlessly reduced. This may be a technical point, but it is important.
There are many more detailed points, some more important than others, but we feel that the Bill has not necessarily followed the suggested measures in the 1973 Bill; perhaps the House will forgive me if I deal with these questions as they occur throughout the Bill which is before us. In Clause 1 we find that accounts have to be delivered to the Registrar and it is stated that they have to be printed. Perhaps the noble Lord, Lord Winterbottom, could reassure us that small companies, which must of course file a copy of their accounts to the
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Registrar, need not necessarily go to the expense of having these formally printed but possibly they could be allowed to deliver accounts in an acceptable typescript form and possibly even a good quality photocopy. In Clause 2 the Registrar is empowered to decide a company's accounting reference date. I regard this as a horrid term. Is it wise to make this particular date 31st December? Would it not help the Registrar, who will have the problem of sending out to companies possibly half a million reminders in each year, to fix the date for a company's financial year end at some other date, possibly 31st March? This would have the effect of lightening the workload on the Registrar at the particular year end. Could the noble Lord who is to reply give some indication as to the Government's thinking on this small point?
Clause 3 deals with the company's financial year end and any alterations that may need to be made to this date. What, however, will be the situation where one company joins a larger group and where this group's accounting reference date is earlier than that of the individual company which is joining it, because it seems to us that there will be two options? One option is for the company which is joining the large group to carry on its accounts until the reference date coincides with that of the group. This could mean a financial period of between 13 and 18 months. The other alternative is for the individual company to change its reference date backwards so that its accounts could be made up for a period of, say, between seven and 11 months. But either way there will be a distortion in comparing the individual company's reports and accounts. I think it is agreed that financial analysts and, indeed, members of the public are not afraid of simple arithmetic.
The second option which I mentioned—that of shortening the financial period of the year—is not at present covered in Clause 3. Do the Government believe that the Secretary of State should have power to authorise a company to produce accounts for, say, 10 months instead of a normal 12-month period? We should be grateful for any indication from the noble Lord. In the same way, should the Secretary of State have power to extend the financial period to more than 18 months, again to avoid the necessity of

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sending out two sets of accounts to the Registrar and, again, when this individual company is about to become part of a larger group? I am afraid that these are niggling points but they cause concern to those of us who are responsible for company administration.
Clause 6 contains some admirable proposals concerning time limits for filing accounts with the Registrar and the suggestions contained in this clause will make the task of keeping these files at Companies House up to date. This is not always the case at present and I hope that it it not ungracious to ask why the Registrar cannot be considered as another shareholder for the purposes of filing accounts and, indeed, receiving accounts. The generous time limits proposed in the Bill—seven months for a public company and 10 for a private one—could lead to even greater delays in filing accounts than take place at present. Why would it not be feasible to have the companies file accounts within seven days of these accounts being sent to shareholders? This would make company administration much easier as well as permitting the Registrar to have the accounts filed much earlier than at present.
I come to Clause 12 and the important regulations concerning accounts and what these should contain. Recent events in the commercial world have made the modernisation of these regulations very urgent indeed. We feel that Clause 12 contains implicit requirements for adequate information to be available, but we should like to see the regulations more explicit, spelling out in considerable further detail exactly what information must be available to the management—and, in due course, probably the work force as well—so that not only do the accounts and the accounting system provide what we in the profession like to call "a true and fair view" but also these accounts and accounting systems provide management with all the information which indicates the continuing profitability of the company and, equally important, its continuing ability to pay all its debts of all sorts as they fall due.
"A true and fair view," which has, up till now, been the accepted definition of a respectable set of accounts for a company, will show what has happened, whereas we feel that more explicit details as to the form of the accounts and the
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books of account will do much to prevent companies from getting into difficulties. We acknowledge that the Government have gone a long way to filling some of the more obvious gaps. Clause 12 contains detailed references to stocks in trade. One or two points of definition will need clearing up even on this. I understand that there is considerable difficulty in the accountancy profession as to "dealing in goods". However, I hope that these definitions will be cleared up and, indeed, I am quite sure that, as the Bill proceeds through Parliament, these points can be settled.
We believe that a great effort has been made to clear up the definition of the information which is mandatory in company accounting systems. I understand that in many cases where companies are in financial difficulties and also in cases where there has been evidence of fraud, the accounting records are not only years in arrears but the systems are woefully inadequate. For these important reasons, we welcome Clause 12.
At this stage in discussing the Bill, I have to declare my own personal interest. I am a member of one of the four bodies mentioned by the noble Lord, Lord Winterbottom—the Institute of Chartered Accountants in Scotland—but it is a number of years since I was involved in the auditing of public or, indeed, private companies. Clause 13 contains very important provisions concerning the qualifications of those who may and may not audit a company. The profession is very happy with these provisions and it hopes that the Government are likewise satisfied. However, I hope that the noble Lord who is to reply will be able to reassure us that the reciprocal privileges granted to members of the profession throughout the EEC will be continued. We welcome the clear definition of auditors' qualifications, and I can assure the House that all the professional bodies concerned are very conscious of their obligations and duties to everyone—the shareholders, the creditors and the general public at large.
Clause 14 brings us to the appointment of a company's auditor. I hope that the House will bear with me briefly as there are one or two complicated and rather technical questions which we hope that the noble Lord, Lord Winterbottom, will be able to answer either now or later. We

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welcome the repeal of Section 159(2) of the 1948 Companies Act, which will put an end to the automatic reappointment of the retiring auditor. Thus, the shareholders will have to take a positive step in appointing a new auditor who will act as their watchdog. There has been a feeling on the part of some company lawyers that automatic reappointment would be invalid where a firm had undergone partnership changes during the year, but these doubts will no longer exist as the company will have the chance to appoint auditors on a year to year basis and can then ask the auditors whether there has been any change in the firm during the preceding year.
Another and more important point regarding Clause 14 concerns the annual general meeting of the company at which the auditor is of course appointed. Many of these annual general meetings are very poorly attended and it would be quite simple for a number of directors and some of the shareholders present to pass an ordinary resolution among those members of the company who were present to the effect that the retiring auditor be not reappointed. We understand that such a manoeuvre is quite possible, in that Clause 14(3) does not preclude voting an unsatisfactory auditor out of office. Clause 14 sets out rules for the appointment of an auditor and presumably a company could appoint any other person who was duly qualified as an auditor under the heading of a "casual vacancy occurring". If that happened, aggrieved shareholders could call a further general meeting to fill the casual vacancy. That case would be covered under Clause 14(2) and the company would have a further chance at that stage to consider whether or not the retiring auditor should be reappointed. However, we do not wish to preclude the appointment of a new auditor by the directors when the current auditor has died or cannot continue in office. A casual vacancy can be filled, but the company members will have their opportunity to appoint a new auditor on a year to year basis at the next annual general meeting.
Clauses 15 and 16 are, we consider, some of the most important in the Bill. At last, an auditor can take steps at any time to notify the shareholders immediately of any malpractice that he
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discovers in the management of the company. If he wishes to resign at any time between annual general meetings, he is quite free to do so; but, if he is unwilling to continue to act as auditor to a company whose directors refuse to keep the accounting systems up to date or are involved in what he believes to be flagrant commercial malpractice, he may re sign also.
In either case, he must append a statement to his notice of resignation that there are no circumstances which he considers should be brought to the notice of members of the company or, indeed, of the creditors. The alternative is that there are certain facts which should be presented to the company and, in due course, to the creditors. In that case the company is obliged, under Clause 16, to call an extraordinary general meeting so that the auditor who has resigned can explain his reasons for resignation and can answer questions from the members. This is an admirable step and the professions are full of praise for the Government in taking this measure very seriously, because it gives considerably increased strength to the auditors and, we believe, much more power to individual members of the company to be informed before the management of a company can take steps or persist in commercial malpractice.
Auditors in general welcome these measures, but is it too much to hope that the clauses covering the resignation of an auditor could be extended to cover what I shall call "passive resignation"?—that is, where an auditor declines to allow his name to go forward for reappointment at the annual general meeting. I feel that the noble Lord, Lord Winterbottom, will allow that members of the company should have the opportunity of receiving a positive statement that all is well with a company's accounts and records.
While we are finishing these clauses, can the noble Lord, Lord Winterbottom, confirm that statements sent out to shareholders are privileged, albeit in a qualified way, as far as the views which the auditor is expressing statutorily are concerned? Simply, it comes to this: could an auditor be sued for libel by directors and others who might come under implied criticism in such a statement, especially when the fears expressed by the auditor are later

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found to be true? We should be grateful to have some confirmation from the noble Lord.
Two other small points arise on Clause 25. Can the government give an indication of the standard form of accounts, together with the size and the format, and can we be assured that the regulations will not preclude the efforts of companies everywhere in the United Kingdom to make their accounts and reports to the shareholders much more amusing, interesting, and informative, with, if necessary, photographs and pictures and details of the company's operations? We believe that this is very important to many shareholders, and let us hope in future that it will be important also to the employees and to members of the public.
Clause 25 also contains a small provision giving the company 14 days to comply with the regulations as to size, legibility and format. I believe that the noble Lord will agree that the printing of new accounts might take a little longer than 14 days. I wonder if he feels that the Secretary of State could have powers to extend this limit so far as may be reasonable—possibly to a month or six weeks.
Company law is a most complicated subject. I hope that it is not boring or dull. It can contain very great dangers. We believe that the Bill is admirable so far as it goes. However, as I have pointed out, there are items which we consider important and which are not to be found in the Bill as at present drafted. Doubtless the Government and the Department of Trade are waiting with great interest for the Bullock Report, as indeed are we. There is a great need for a major consolidation of company law for, at present, the secretaries of all companies—particularly the smaller ones—have to look at at least four Acts and numerous regulations.
Lord BROWN: My Lords, if I may interrupt the noble Lord for a moment, I have noted the pressure upon my noble friend to extend the purpose of the Bill in the early part of the noble Lord's speech, as well as the emphasis upon the question of consolidation. I should like the noble Lord to bear in mind when drawing up Amendments to extend the Bill that over a period of 40 years the Party opposite has never produced any
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major legislation on companies at all. The only two major Acts which are now in existence are the 1948 and 1967 Acts, both of which were introduced by the Party of which I am a Member.
A NOBLE LORD: Who scrapped the 1973 Act?
Lord LYELL: My Lords, with the greatest respect to the noble Lord, I must say that there was one Act in 1973, which was much more far reaching than the present Bill. The present Government, for reasons which seem reasonable to them—
Lord BROWN: But, my Lords—
Lord LYELL: May I finish what I am saying? I have given way once already, and I am coming to the end of my remarks. We believe that the 1973 Bill was as far-reaching as it could have been at that time. We accept that the Bill now under discussion is admirable, so far as it goes, but there are gaps. We consider that there are other points which are not covered in the Bill, and we simply regret that this opportunity has been lost to deal with these. Commercial life is very competitive throughout the world, and often the management of companies, who are responsible for handling the public's money, can be tempted. That is quite enough; there are risks. All of us here regard the need for updating these commercial company laws as paramount, and certainly for this reason we welcome the Bill.
3.51 p.m.
The Earl of LIMERICK: My Lords, I, too, am grateful to the noble Lord, Lord Winterbottom, for the helpful way in which he introduced this small, yet very important Bill. It is a Bill which I very much welcome, and my regrets are entirely not for what is in the Bill but for what is not in it. I am not embarking on any controversial course. The noble Lord said that company law was long overdue for fundamental reforms, and there are many who would agree that reforms are needed. I do not know how fundamental a reform has to be before it qualifies. Certainly when we were drawing up the 1973 Bill there were passages in it which, at the time, were regarded as controversial to a degree where one could hardly conclude that they were not

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fundamental. Nevertheless, I know what is in the mind of the noble Lord, and we shall await the further proposals.
The noble Lord went on to say that the 1973 Bill perpetuated traditional attitudes to company law and that there was not very much rethinking in it. I am glad to learn—indeed, one has been aware of this—that there was rethinking going on and that we may expect to hear more of this subject in the not too distant future. But I have a rather sinking feeling when I hear the phrase that a "thorough-going review is proceeding". We know that company law is always the Cinderella in any legislative programme, and we must all express the hope that these reviews will not be too protracted. Thus, whatever view may be taken about certain omissions, I think that I could refer to some technical points in the 1973 Bill which many of us would have wished to see reintroduced at this stage.
One point has already been mentioned by my noble friend Lord Lyell; namely, the distinction between public and private companies. There is also, for instance, the question of interests of directors in associated companies, the prohibition of loans to connected persons, and the question of a minimum paid up capital, which I should have thought was very much bound up with the provisions for strengthening the arm of Companies House in dealing with the plethora of registrations, the policing and the maintenance of records. There is also the prohibition of non-voting shares, the question that shareholders' consent should be obtained for the disposal by directors of the whole, or a substantial part, of a business or undertaking, and many other matters which I would classify together as "the rest of Jenkins".
The Jenkins Report contained much extremely useful thinking on company law. Some of the recommendations were legislated in 1967, but many of them were not. In 1973 we felt that it was almost the last opportunity to incorporate many of those useful measures. I can imagine the type of debate that has been going on about the length of the present Bill. Nevertheless, it must be a matter for regret that the opportunity for much tidying-up is being lost.
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The noble Lord, Lord Winterbottom, used a phrase that I myself intended to use. He said that limited liability was a privilege. I believe that this is at the heart of what we are talking about in a good part of this Bill. With that privilege are carried substantial duties. It becomes essential to control and deter frivolous registrations, to prune dormant companies from the register and, most important, to enforce timely filing of accounts and information, because this grants the privilege of limited liability, behind which those who register and run these companies have chosen to operate. This is the only protection to the creditors of the company, who can decide whether they would wish to deal with these people, notwithstanding that they are trading with limited liability. That point was very amply underlined by the figures quoted by the noble Lord, Lord Winterbottom, of the numbers of companies in default and the terrifying number of reminders which have to be issued from Companies House.
I should have wished to speak in the debate if only for what I am now to say; that is to pay a very warm tribute to the Registrar at Companies House and his staff. I had the pleasure of working closely with them for two years when I was at the Department of Trade and Industry. I believe that, in difficult circumstances, they have done a very good job which deserves our recognition and thanks, and that Mr. Westley is, at the same time, one of the most over-worked and under-appreciated of civil servants—
Lord DAVIES of LEEK: My Lords, may I interrupt the noble Earl for a moment? I wish to endorse completely what he said. But I wish to add, briefly, that some of us regret the movement out of London, in view of the importance of Companies House. I believe that this move will limit the amount of inquiries and work that can be undertaken.
The Earl of LIMERICK: My Lords, I am grateful to the noble Lord, Lord Davies of Leek, for raising that point, but I do not share his apprehension. On the contrary, when the filing section of Companies House has been moved, as it will be very shortly, to Cardiff, then, with a much more efficient mechanism for information retrieval, the whole process of inquiry will be speeded up. There

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will continue to be a London search office as previously, unless there has been a variation, of which I am unaware, in the proposals which were put forward. This was a point which was very carefully gone into, and no doubt the noble Lord, Lord Winterbottom, will say something about this in his winding-up speech. But I should be both surprised and disappointed if the move is not helpful to the users of Companies House. I spent last night in Swansea, and early this morning I came through Cardiff in the train; I thought that there would be compensations in being decentralised to Cardiff.
I now wish to echo the plea by my noble friend Lord Lyell for some form of consolidation. The situation is difficult for those in practice. I should say that, like my noble friend, I am a member of the Institute of Chartered Accountants in Scotland, although of a slightly more ancient vintage than he. Some of the points I intended to make have already been taken up by my noble friend, which is not surprising; we may even have had a similar inspiration. Thus I can shorten this section of my remarks. Perhaps the best way to illustrate what I have in mind is to point out that although the aims of this Bill are modest, as the noble Lord, Lord Winterbottom, said,—it being concerned with only four areas—it nevertheless requires 35 clauses, three Schedules and 40 pages of print. Much of this will have to be looked at by reference to other Acts of Parliament. It is becoming increasingly difficult for practitioners, and still more so for laymen, to find their way around in this jungle, and I hope that the question of consolidation has some priority in Government thinking.
I have from what is left by my noble friend just three points, which do not need any immediate reply. First, I wish to echo the point made by my noble friend Lord Lyell on the question of alterations to accounting years, and to say that I very much agree there may be circumstances in which a company would have legitimate grounds (perhaps when it has been acquired by another company) for wanting to be able retroactively to change its accounting dates, and I think that some discretion in the Secretary of State might give the necessary flexibility. Likewise, possibly in similar circumstances, I think that a company might be
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allowed a specific dispensation from the normal requirement that no accounting period should exceed 18 months in duration.
I would also echo that I believe we should consider whether there should not be some specific requirement for accounting records to be maintained in sufficient detail for directors of companies to assess current trading trends and, in particular, to satisfy themselves of the ability of the company to continue paying its debts. My last point—again, it is one touched on at greater length by my noble friend Lord Lyell, but I am dealing with only one specific aspect—is on the reappointment of auditors. I agree that there is an anomaly and that if an auditor decides not to seek reappointment at an annual general meeting there should be some comparable duty on him to explain the circumstance so that shareholders and others concerned with the company may satisfy themselves that nothing is amiss.
My Lords, I end by saying this, straying a little beyond the terms of the Bill in front of us, regarding the radically new approach to which the noble Lord, Lord Winterbottom, referred: fine—let us look at it; there is much that needs looking at. But may we please have a Green Paper and ample discussion? There are going to be complexities which will not be foreseen at the earlier stages, and they will take time to become apparent; and if we get to really far-reaching legislation, changing the relationship among shareholders, directors, creditors and so on, in addition to the Green Paper, in time to discuss it, may we have a draft Bill which can be commented on by those most interested before we have to deal with the matter in Parliament?
My Lords, the Bullock Committee has been mentioned, and many of us are contributing in some way to its work and are looking forward to its findings. But I think that many of us equally feel that if the Bullock Committee confines itself, as we hope it will not, strictly to its terms of reference, then it will produce a very disappointing and in many ways an unsatisfactory document which is not going to produce any sense of completion in its work and in the way people regard its work. It is a curious situation that we are in regarding the Bullock Committee in that the only way in which it can fulfil its objective, it seems, is to exceed

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its terms of reference. I believe that the members of the committee are very much aware of this point, and we shall await with great interest to see how they are able to deal with it. My Lords, these points are for the future. This afternoon I would wish just to welcome this small but useful Bill.
4.4 p.m.
Lord MONSON: My Lords, there has been a clerical error, as they say. It is I who put my name down to speak this afternoon, and not the noble Lord, Lord Molson. In consequence of correcting this, I am afraid I missed the first three minutes of the speech of the noble Lord, Lord Winterbottom, for which I apologise. Like other noble Lords who have spoken this afternoon, I warmly welcome this Bill. I have one or two minor doubts, which I hope the noble Lord will be able to assuage, plus one tentative suggestion. The doubts concern, first, the scale of penalties proposed in Clause 4(l)—£400 plus £40 a day. Such penalties are by no means too high where fraud is involved: but where fraud is involved there will surely be a prosecution and, therefore, separate or additional penalties. Where fraud is not involved, the omission is likely to be due to laziness, forgetfulness, illness or absence abroad, and I would think these penalties somewhat on the high side—particularly for a first offence—in such cases.
My feelings about this are reinforced by the requirements of Clause 25, which gives the Secretary of State power by Statutory Instrument to require the annual returns or the accounts to be produced on paper of a certain size, weight, quality, or colour, and with a certain size type or colouring of lettering. Therefore, if directors inadvertently send in their annual returns or their accounts on paper of the wrong colour or in type of the wrong size on out-dated forms, they will be in default and hence liable to a penalty. My second doubt—and this is a simple query—is in connection with the word, "printed" in Clause 1(7)(a). It specifies that there shall be delivered to the registrar of companies "a printed copy of every document." The Parliamentary draftsmen were unable to confirm whether "printed" included "typed". If it does not, I suggest it is
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rather burdensome upon small companies to have to print rather than type their annual returns.
My suggestion is simply this. The Bill before us deals mainly with the protection of creditors or potential creditors, rather than of the shareholder. Given that it is highly unlikely that there will be time within the next months, or even the next years, for the introduction of a full-scale Companies Bill, I should like to suggest a small, modest and straightforward amendment which would be of marginal help to small shareholders in public companies. It is not by any means without precedent to introduce into a Bill a clause rectifying a matter which is not directly connected with the main subject matter of the Bill.
When the majority of blue chip companies, the majority of second line companies, the majority of third line companies and the majority of investment trusts send out their annual reports enclosing proxy forms or proxy cards so that the shareholder can indicate his consent to the adoption of the report and the re-election of the directors, or when they send out similar cards in connection with raising the authorised share capital, reconstructing the company's capital, making acquisitions or disposals of subsidiaries and so on, in nearly all cases (or in the vast majority of cases, at any rate) these proxy cards and proxy forms are reply-paid.
I have made notes on companies whose annual reports I have had to study over the past months and, confining myself to household names only, I have to concede that certain companies—namely, British American Tobacco, Grand Metropolitan Hotels, Dunlop and Carrington Viyella—do not send out reply-paid cards. On the other hand, Associated Newspapers, the National and Commercial Banking Group, Guest Keen and Nettlefold, Shell, Debenhams, Trust Houses Forte, Burmah Oil, Coats Patons, EMI, Fairey, ICI and the Rockware Group do; that is 75 per cent. of the companies concerned. The proportion is much the same among second line companies, and even greater among investment trusts, where about 85 per cent. of firms do so. There does not seem to me to be any hardship in requiring the minority to fall into line with the majority here.

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We know that postal charges have gone up enormously in the past few years and are going to go up further, and it makes it that much more difficult for the proverbial widows and orphans—the people who cannot afford it; those who live a long way from a post office or in a country district, and who may not have a stamp—to exercise any control over a remote board of directors. It also redresses the balance slightly vis-à-vis institutional shareholders. It may be said—it has been said when I have suggested this privately before—that fewer than 10 per cent. of individual shareholders reply. Be that as it may, it is the principle that counts. I realise that the noble Lord on behalf of the Government could not possibly commit himself at this stage to approval in detail; but I hope that he will indicate in principle that the Government would keep an open mind if I put down an Amendment on these lines in Committee.
4.10 p.m.
Lord REIGATE: My Lords, since this is a Second Reading debate and not a Committee stage, I will not give the noble Lord, Lord Winterbottom, my views on the minor Amendments that might be made to this Bill. So far as I am concerned, this is an excellent Bill. My complaint is that it is an excellent little Bill. I should like in particular to echo every word of my noble friend Lord Limerick as to the summary way in which most of the provisions of the 1973 Bill have been abandoned. I shall revert to that in a few minutes.
The noble Lord, Lord Brown, is not in his place now, but I thought that he made a rather maladroit interruption in the debate by trying to make a Party point about company legislation. I forget his exact statistics, but I think it is worth reminding the House that the Jenkins Committee reported in 1962 and it was only five years after that, understandably, that we had the Companies Act 1967. Then we had the Conservative White Paper in 1972—or 1973, I am not sure—and the Bill which was introduced and abandoned in 1974. It is quite obvious that the timing of companies legislation—let us leave out the partisan matters—such as might be covered by the Bullock Report, the ordinary bread and butter
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legislation, will have to straddle the life of more than one Parliament. It is absurd to try to make Party points about the presence or absence of legislation—although I think in this case when legislation has been so summarily abandoned, as it was in 1973, one is in a position to point an accusing finger at the delay which is going to ensue.
For example, the 1973 Bill was an affair of 120 clauses and 11 Schedules; this Bill has 35 clauses and 3 Schedules. Heaven forbid that I should suggest that length is necessarily a test of merit in legislation, but it gives some idea of the number of issues which have been burked. When the noble Lord says that they are awaiting a comprehensive review, I cannot believe that, although there are parts of the 1973 Act that it would have been reasonable to leave out, many other parts could not have been brought in and adopted, as they have adopted in the Bill today. I think it is a sad reflection on what I can only describe as partisan views of the Minister to choose to take this course.
I am a little fearful as to when we shall get this Bill, if the Bullock Committee which is covering the very large side of what, in shorthand, is called "industrial democracy" is to report by the end of this summer and we are told we are going to have legislation in the 1976–77 Session. Perhaps the noble Lord will correct me if I misunderstood him, but it seems to me almost incredible that we shall have only such a very short time (and apparently no White Paper or Green Paper) to consider the implications of Bullock other than the Report itself. If we call the Report a Green Paper, we should, at least, need a White Paper on the Government's views and a long period of consultation in the drafting of the Bill. That is only for what I would call the industrial democracy side. What is going to happen to all the other things that have been left out of this Bill, some of which I will come to later?
I think that what has happened is tragic. It means, if I may say so to my noble friends who urged consolidation, that that is further off than ever. It would be absurd to consolidate at this stage or until we have this lengthy Bill before us.

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My Lords, I could have given a long list of the problems which have not been tackled. My noble friend Lord Limerick gave one or two. There are one or two others that I should like to add but I am in a little difficulty. I managed to get hold of a copy of the 1973 Bill only late yesterday. It is out of print in the Stationery Office; there is one copy in the House of Commons Library and that is in my possession at the moment. So far as I know, there is no other copy available. However, I can draw attention to one or two points. First, insider dealing. Have the Government no views on that? I realise that it is a complex, difficult and contentious subject, but have they no views on anything that may occur in that field? Now warehousing—to use that quaint jargon word. Is there no view on that? Non-voting shares. Is there no view on that? Are we all waiting for—I was going to say Godot—the Bill or the Report? Is there no attempt to tackle inflation accounting? Is that too large a subject for this Government to deal with in their own lifetime?
I could give a long shopping list of omissions. I went through the whole of the text of the Bill and I noted about 12 points which seem to have been left out but which seem to have been of a reasonably non-political nature and which could have been included. I must ask the noble Lord, Lord Winterbottom, to give me a definite answer about one of them. He will speak with the noble Lord, Lord Davies of Leek, at his back. Clause 103, together with Schedule 6 to the 1973 Bill, provided for the use of the Welsh language for purposes connected with the Companies Acts by companies whose registered offices are in Wales. Why has that been abandoned? Could they not have taken the glorious opportunity of giving a sop to the Welsh Nationalist vote? Why? Was there any harm done?
Lord DAVIES of LEEK: My Lords, the noble Lord cannot blame me for that. We should like it. But I do not see that it is necessary.
Lord REIGATE: My Lords, the noble Lord, Lord Davies of Leek, knows that I would not blame him for anything. He and I are old friends and I am probably one of the very few in this House who knows that, aside from being an eminent
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Welsh-speaking Peer, he is also an honorary chieftain in Western Samoa. I was present at his installation—and I have been looking for an opportunity for years to bring that into a speech. My Lords, I think this is a thoroughly disappointing Bill in that respect.
There is one other point that I would refer to. In introducing the Bill, the noble Lord drew your Lordships' attention to the ignominious fact that this was the Companies (No. 2) Bill. I hope that all of your Lordships have furnished yourselves with copies of the original Companies Bill introduced by Sir Brandon Rhys Williams into the other place. It received its First Reading—and having been introduced seven times before, that is quite an achievement—but it has not so far reached the stage of being given a Second Reading, and it looks as though it will be blocked by the Government's efforts. That is a pity, because it is a rather good Bill. It does one or two things which I should have thought anybody with a reasonably impartial approach would think at least worth discussing or the Government considering for incorporation into this Bill.
It is the first time, I think, that the role of the outside director—that is to say, the director without any executive duties—has been taken into consideration. The purpose of the Bill is to require each company of a certain size to have at least three directors without executive responsibilities. Furthermore, it imposes on those directors certain duties which I will briefly outline. One of them is to inform the shareholders publicly of their view of the management of the company and of their use of the company's assets. This would bring into effect in this country what is sometimes known as the management audit and therefore would obtain for the shareholders—and it follows, since it would be public, for the workers as well and, indeed, for all concerned with the firm—an independent view of the efficiency with which the enterprise is being conducted. I would hazard a guess that something on the lines of this Bill will ultimately come out of the Bullock Report, and therefore I should like to know why the Government, except for reasons of loss of face, have chosen to ignore the earlier Bill and why they will not consider incorporating in this Bill at least some of its provisions. However,

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of the Bill as a whole, I think we would all say that it represents an opportunity missed.
4.21 p.m.
Lord WINTERBOTTOM: My Lords, I should like first to thank the House for the very constructive approach which has been taken towards this Bill. As I said in my opening speech, it is a technical Bill. We are not operating in areas of Party political disagreement. What we are trying to do is to carry into effect as soon as possible those proposals of the Conservative Administration which are obviously of immediate importance and which can be carried through in the present Parliament to the benefit of everyone operating in this field. My note tells me that, in fact, the original 1973 legislation covered eight particular areas, of which we are dealing with three: the filing of company accounts, auditors and administrative matters concerning Companies House. These were in the 1973 Bill and are being included in the present one. Of the other five matters, the definition of public and private companies was mentioned by the noble Lord, Lord Lyell.
Then there is insider dealing and warehousing, which I touched upon earlier and which is obviously not something which will be overlooked when we come to the main legislation. The same can be said of disclosure. The noble Earl, Lord Limerick, mentioned the implementation of most of the remaining Jenkins recommendations. These are "unfinished business", and to them we have to add the very important findings of the Bullock Committee. The noble Earl, Lord Limerick, and the noble Lord, Lord Reigate, both stressed the need for an "early warning" to both Houses of the findings of the Bullock Committee and, indeed, of the proposals of the Government concerning company law reform. Certainly these proposals should receive the earliest possible publicity—perhaps first in the form of a Green Paper, followed by a White Paper and, as soon as possible thereafter, a draft Bill. This extraordinarily important new legislation—and it is delayed because it is so important and so complex—should be studied in a dispassionate and informed manner by both Houses of Parliament. I can give the House the assurance that a Green Paper on future company legislation
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will be considered and the views of your Lordships will obviously be studied by my right honourable friend the Secretary of State. Much, obviously, will depend on the report of the Bullock Committee, but it is the Government's wish to bring forward legislation in 1976–77. That is consistent with the wish for the widest possible debate to take place over the Bullock Committee's recommendations. At this moment, I cannot say whether a Green Paper or a White Paper would be more appropriate, but I am fully seized of your Lordships' views and I will see that my right honourable friend the Secretary of State is informed.
I hope that noble Lords will excuse me if I do not, at this stage, answer the very numerous points raised by the noble Lords, Lord Lyell and Lord Monson, and by the noble Earl, Lord Limerick, which are mainly appropriate for a Committee stage. The noble Lords have kindly said that I might write to them, but it would be useful for us to have a thorough discussion at Committee stage of this Bill because many technical matters are involved. We are in agreement over our aims, and all we are trying to do is to send the best possible Bill to another place. Therefore, I, for one, would welcome a very thorough study of the Bill during its Committee stage.
The noble Lord, Lord Lyell, among other speakers, raised several points of importance. One of them concerned the question of printing in Clause 1. Although this is a comfortable phrase for the draftsman it is probably extremely inconvenient for a small company with limited resources, and I take note of what has been said by noble Lords about this. The noble Lord, Lord Lyell, raised another point of extreme importance concerning Clauses 15 and 16 on the question of whether an auditor could be sued for libel as a result of having resigned and stated his reasons, or whether his view would be privileged information. This is something which I hope the noble Lord will raise during the Committee stage, and I shall then do my best to answer his points. What we are trying to do is to strengthen the hand of the weaker brethren. Powerful auditors from powerful companies are not afraid of standing up to their clients, but I am sure there are areas where an auditor would be only

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too glad of a little backing from legislation in facing some of his rather formidable customers.
Another suggestion I found extremely interesting was that we are reaching an era where, while dealing with our domestic legislation we have also to consider parallel EEC legislation at the same time. As your Lordships may have noticed from the Order Paper, we are to take the Committee stage and a debate on EEC legislation on company law in the same week. I had hoped that the two could be interrelated, which would give your Lordships' House an interesting "first". Unfortunately, the EEC legislation which we are to discuss refers to only one very small part of the area covered by this Bill. Nevertheless, that point made during the debate is interesting and may become of greater importance when we come to what may perhaps be called the main Bill—the one we are waiting for with interest on some sides and apprehension on all, because of the massive area it is likely to cover.
The noble Lord, Lord Reigate, mentioned the Conservative Administration's proposals, and caused me some worry in case I should still be here to deal with any future legislation on these matters. May I thank the noble Lord, incidentally, for introducing a light note into our discussions. I should also welcome translation of the various company documents into some less abrasive language than English, but at the moment we have to be content with our own English tongue.
My noble friend Lord Davies of Leek made an intervention about the move to Cardiff of Companies House. I thought this was a most ungrateful attitude towards something which I should have thought he would warmly welcome. He probably knows that the original intention was to send it to Newcastle, but at the end of the day it was decided that Cardiff gave us the best advantages.
Baroness WARD of NORTH TYNESIDE: My Lords, what a pity it did not go to Newcastle.
Lord DAVIES of LEEK: My Lords, I was not denigrating Wales or my nationality. I was thinking of the most use to the greatest public. Naturally,
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thinking of the best for Britain I thought that access by smaller companies was easier in London. Nevertheless, having listened to my noble friend on the reformation that will take place, I am sure that there will be excellent service from Cardiff.
Lord WINTERBOTTOM: My Lords, I should like to assure my noble friend that London search facilities will continue, because this is obviously most important. This will be made much easier by the microfiche documentation, which will economise in space and time. It is interesting that microfiching covers 640,000 companies, so this is obviously a mammoth task which must be spread over a couple of years. But I am confident that the services supplied by Companies House at Cardiff, plus the London search facilities, will in no way hinder the individual who wishes to conduct a search, and indeed will provide an even more efficient service than at present.
I should like to thank the noble Earl, Lord Limerick, for the very kind tribute he paid to the Registrar of Companies House and his staff. He speaks from knowledge; I speak only from hearsay. But they have served the country well, and I think that this is a very appropriate moment at which to express our thanks.
My Lords, there is very little else that I have to say now. As I said earlier, I look forward to a thorough scrutiny of this Bill during the Committee stage, because, although it is not as wide as certain noble Lords have indicated it might be, it is nevertheless useful and can be improved. For that reason, I look forward to the next stage of our discussions.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

ANGLIAN WATER AUTHORITY BILL [H.L.]
4.33 p.m.
Lord DE RAMSEY: My Lords, I beg to move that this Bill be now read a second time. The new Anglian Water Authority stretches from the Thames to the Humber and from the Wash nearly to Oxford—a huge Authority, and a sitting duck for anyone to shoot at. I have a superficial knowledge of the whole area

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but, although I live in the middle of it, an intimate knowledge of only about 10 per cent., and that thanks to public work, farming, draining, hunting and a little sailing on Grafham Water. The Bill is not purely a navigation Bill, as your Lordships might think from looking at Part II, but covers all forms of sport or pleasure connected with water. Its object is to enable the Authority to carry out their responsibilities for recreation under the Water Act 1973, first by providing and improving the facilities; secondly, by holding the ring where there is a clash of interests, and, thirdly, by bringing administrative order out of chaos.
When the Authority were set up under the 1973 Act, no one anticipated that they would have to bring a Private Bill before Parliament to do these things. They therefore simply set up a recreational advisory committee, which in turn recommended local consultative panels representing all interests and covering, for example, the Great Ouse river system, Empingham Reservoir and the Essex and Suffolk Stour. But they soon received numerous representations, and it was then discovered that in nine cases out of ten nothing could be done owing to lack of powers. In other words, Parliament had placed a responsibility on an Authority without giving them the tools for the job.
Probably, many of your Lordships know more than I do about the problems involved. My main interest in water has always been land drainage and its connection with agriculture. But one interest in water impinges on another, and I have some personal experience of the problems which this Bill is intended to resolve. I will give one example. There is an area of approximately 140,000 acres in the Fens, known as the Middle Level Internal Drainage Board. It has some of the best coarse fishing in England and Wales, and busloads of fishermen come from Leeds, Sheffield and the Midlands to enjoy it, quite apart from the local associations, and on a busy day there are as many as 5,000 fishermen in the area. These fishing rights, which belong to the riparian owners—in some cases, the Board itself—are a source of sport and revenue with which other interests, particularly boating, could conflict. Agreement was arrived at between the fishermen, the boating interests and
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the land drainage interests to lay down a navigation route through the area, only to find that they did not have the powers to enforce it. This was obviously not Parliament's intention, but I will not weary your Lordships with repeated examples of frustration.
Turning to the contents of the Bill, Clauses 9, 10 and 11 in Part II deal by name with the three groups of recreational waterways, and these are set out in Schedule 1, Parts I, II and III. Part II of Schedule 1 contains the only example in the whole Bill of the Authority taking over an existing navigation body; that is, by agreement with the Middle Level Commissioners. Beyond these specified "recreational waterways", Clause 12 and Schedule 3 lay down a procedure whereby further rivers could be so classified. In all Clause 12 situations, the Secretary of State for the Environment will be the final arbiter—not the Authority—with an order procedure for a local hearing. The other substantial provisions in Part II, comprising the "navigation code" are those contained in Clause 20 covering charges, and Clause 21 covering byelaws.
To deal first with Clause 20, Charges, public money is at present wasted owing to the lack of a charges scheme; at least, that is the fair view of anyone paying the general charge who receives no benefit. The old age pensioner, the widow in her own cottage, will not be canoeing down the river, but at present she pays towards those who do, not because a canoeist is not willing to pay his way—he has categorically said that he is and wishes to do so, on the old adage of "He who pays the piper calls the tune"—but there is no means of demanding the money from him. Next year, there will be an estimated deficit of £439,000 on the water space or recreational account, which will have to go on the general charge. The cost of this Bill, if passed, will be recouped in three weeks, but the real point is equity.
With regard to Clause 21, Byelaws, all byelaws of a Water Authority are subject to confirmation by the Secretary of State for the Environment and the objection procedure. They cover all recreation, not just navigation, but they are applicable only to designated recreational waterways. Apart, therefore, from the specified waterways in the Bill, which I have mentioned

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under Schedule 1, an order will first have to be obtained from the Secretary of State to designate the waterway; then again the byelaws will have to have his confirmation—a double-barrelled safeguard. Bye-laws may not interfere with, say, the rights of riparian owners, or they become ultra vires. Subject to all these qualifications, the byelaws are none the less the sharp end of the Bill and the only means by which the Authority can hold the ring. Even the compulsory acquisition powers in the Bill are expressly limited to moorings and cannot affect other riparian owners. Falstaff declared,
"I will do nothing under compulsion."
If, however, any Petitioner or interest thinks that Clause 16 relating to compulsory purchase is not drawn tightly enough, I am authorised to say that the Authority are willing to redraft it to include any valid point.
Of the other subsidiary powers in Part II, nothing in this Bill will limit or even affect commercial users of the waterways, nor is a massive increase in staff contemplated under Clause 10, for instance, bailiffs and wardens—rather the contrary. Many of the existing ones, let alone any additions, will be paid for by the interests concerned. Incidentally, existing field staff and, above all, other water users are in practice the best gamekeepers.
Part III of the Bill seeks miscellaneous powers that are more appropriate for discussion at the Committee stage. The bulk of these miscellaneous powers have already been granted to some of the Authority's predecessors and thus apply to parts of the new area only—for instance, extending the agreed increase in the Waverley Committee's flood protection criteria along the Thames, which gives additional safety to the Palace of Westminster, to the whole of the Authority's coastline. Part IV of the Bill deals with "Miscellaneous and General", which is included in every Bill.
Nobody who really knows about the work that the Authority have put into it could accuse them of not trying to consult everyone's interests affected by the Bill. I will hand a list to the noble Earl, Lord Ferrers, who is, I know, concerned about this point. If they have failed anywhere, at least their endeavours, all made
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as long ago as last August, are on record for all to see, and they have given an assurance that local and regional interests will continue to be consulted before any of the recreational powers included in the Bill are exercised. If an association were slow to react until it came under grass roots pressure, the Authority could not be blamed. I am not claiming that the Authority are perfect. For instance, they never consulted the Harwich Port Authority or the British Docks Board, who are among the Petitioners, about existing navigation because it never occurred to the Authority that these interests could be affected.
The Petitioners as a whole raise three main points of principle. First, 12 Petitioners are concerned with navigation on estuaries. In Committee an Amendment will be introduced to Clause 12(1)(c) to exclude them. The Authority hope and have reason to believe that this will meet the objection. Perhaps the noble Lord, Lord Belstead, will be able to give us his opinion on this point. A second group of seven Petitioners fear that under Clause 12(1)(a) the Authority might seek to take over their navigation powers. The Authority have no such predatory intentions, but they are quite prepared to delete Clause 12(1)(a) at the Committee stage and to rely on existing legislation, if ever it became necessary.
The third objection of principle is raised under Clause 12(1)(d) by representatives of boating—and, they claim, of other interests also—to the effect that the Authority should not be allowed by the Secretary of State to vary or extinguish any right of navigation anywhere, regardless of anyone else's interest. I have here a letter, delivered to me on Sunday, from the National Federation of Anglers, Eastern Region, who have 40,000 to 50,000 members in the area. The letter ends:
"We hope therefore that Parliament will approve this important section of the Bill".
This is the clause which the noble Lord, Lord Harvington, is to move should be referred to the Committee for special consideration, about which I shall have more to say later.
If this Section were not agreed to, it would mean that the Authority would be incapable of holding the ring in the event of conflicting interests arising on

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some watercourses—in the interests, say, of Nature Conservancy, fishermen, scientists, or anyone else. Without this power, the only method at present available for this purpose, even on a minor watercourse where everyone agrees, is to proceed by Private Bill—a sledgehammer to crack a nut. It is the middle level example all over again. The Authority have expressed their willingness to discuss points of detail on any remaining Petitions to Part II or Part III of the Bill and to try to allay the anxieties either by explanation or by drafting alterations.
In conclusion, noble Lords will have noted that the powers sought by the Anglian Water Authority are permissive, like the greater part of all land drainage legislation. May I ask for your Lordships' patience as I pontificate for a couple of minutes on the advantages and disadvantages of mandatory and permissive legislation where water is concerned. It may surprise your Lordships—certainly it surprised me—to discover a few years ago that the first anti-pollution Acts were introduced in 1876—exactly 100 years ago—by Disraeli. They were permissive Acts. There were no votes in sewage in those days, any more than there are today, and the result was that nothing was done. It is a sad thought. We might have saved ourselves immense expenditure, loss of time, and so on, had those responsibilities been mandatory. Also, we should undoubtedly have had the cleanest rivers in Europe today. They have vastly improved, but at what a cost compared with 100 years ago. But there are votes in recreation. In fact, I have been given to understand that fishermen alone, numbering some 3 million—which is more than those who watch football at weekends—comprise the largest uncommitted vote in the country. They and other interests will bring pressure on the Authority, and that is what it is anxious fairly to be able to meet. It is not necessary, therefore, to make this legislation mandatory. On the contrary, it is far wiser to leave it permissive and to rely on consultation with all interested parties before action, if any, is taken.
Consultation gave rise to this Bill and consultation will continue to guide the Authority's actions. Local councils which have a great interest in these matters, in addition to individual consultations, have, as a group, a majority on
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the Authority. Lastly, the Secretary of State has the final say on all vital matters.
There seem, therefore, to be proper safeguards for the public interest to justify trusting the Authority with the recreation powers now sought in that interest. I beg to move.
Moved, That the Bill be now read 2a.—(Lord De Ramsey.)
4.49 p.m.
Lord STOW HILL: My Lords, I rise to move the Amendment that your Lordships will see upon the Order Paper, the effect of which would be that a Second Reading is refused to the Bill which we have had so fully and carefully explained by the noble Lord, Lord De Ramsey, who has just resumed his seat. I move this Motion in a sense rather interrogatively, for the following reason. A Green Paper has been published and it occurred to me when I studied that Green Paper—and I think it may be the view shared by some other noble Lords—that it might not be a useful occupation of time when the Government have so nearly committed themselves as they have in the Green Paper to a specific course of action (to which I will refer in a moment) to proceed further with the consideration of the present Bill. One issue therefore before your Lordships is whether or not the Bill should go further now.
A second question arises if your Lordships think that the Bill should have a Second Reading; namely, the Motion by the noble Lord, Lord Harvington, that the Committee be directed particularly to the provisions of Clause 12(1)(d) of the Bill. If your Lordships feel that the Bill should have a Second Reading, I should like to say here and now that I would support the second Motion to which I have just referred, in relation to the interests of the British Waterways Board. In this House one speaks entirely on one's own responsibility and none of us is a spokesman for any particular interest, but I have been approached by the British Waterways Board and it seems to me to be in the public interest that the point of view which they desire to express should be considered and ventilated before your Lordships' House.
In answer to what has been said by the noble Lord, Lord De Ramsey, may I start by indicating in a broad sense why the British Waterways Board feel concern

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and why if the Bill goes further they would desire to call attention to the dangers of Clause 12(1)(d). The noble Lord, Lord De Ramsey, has indicated the amendments that he and those associated with him would feel prima facie able to accept if that would allay anxieties, and I am sure those amendments would do a great deal of good. But they still leave Clause 12(1)(d) as the operative part of the Bill which occasions, at any rate in the minds of the British Waterways Board, considerable apprehension as to their own situation.
I should like to say one or two words regarding that before I return to the main object of my rising to my feet at the moment. As your Lordships will know, the Inland Waterways Board was one of the four major boards set up by the Transport Act of 1962. They had responsibilities of a very wide order, including responsibilities for inland waterways, and that was the situation until Section 104 of the Transport Act 1968 was put upon the Statute Book. Section 104 of the 1968 Act divided the waterways for which the British Waterways Board was responsible into three categories: commercial, cruising and the remainder. The Bill which your Lordships are at present considering, I would submit—and I think that I understood the noble Lord, Lord De Ramsey, to agree broadly but not entirely—as its main objective has tried to bring some more coherence and order into the administration of the recreational aspect of the waterways concerned. That means to say that the Bill is concerned with what the 1968 Act calls the cruising inland waterways. They are the ones that can be used for recreational purposes, and are so used.
If I may proceed a little further to adumbrate the anxieties which exist in the minds of the British Waterways Board, they are these: they have gone a long way in implementing their function regarding these recreational inland waterways, and they have a number in the area of the Anglian Water Authority. But it goes much further than that. Not only have they gone a long way, but there was put upon the Statute Book the British Waterways Act of 1971—three years after this division into three
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categories of waterways was brought about by the 1968 Transport Act—and the purpose of the 1971 Act was to vest specifically in them very wide-ranging duties, including registration, charges and all the rest, in relation both to pleasure boats and to house boats using the inland waterways for which that Board was responsible.
They have gone a long way in doing that and I would just add that of the waterways for which they are responsible three are recreational waterway complexes actually inside the area of the Anglian Water Authority—Fosdyke, Wytham and the Grand Junction Canal in part. Therefore the position so far as they are concerned is this: they have for years been doing their best to try to bring order and to regulate thoroughly in every sense the use of these waterways for which they are specifically made responsible, first by the 1962 Transport Act and then by the 1968 Transport Act. They engage staff, they have an elaborate organisation for that purpose and so far as one can tell that is working very satisfactorily indeed. In those circumstances they view with some not inconsiderable anxiety the provisions of Clause 12(1)(d) of the Private Bill which your Lordships are at present considering because they think that the system which they have been working upon for years, and which is functioning perfectly satisfactorily, ought not to be interfered with unless some affirmative and positive case can be brought forward to show that there should be some change in the arrangements under which the Inland Waterways Board at present regulate those recreational functions of pleasure craft and house boats. That is the general reason why I would support the Motion that the Committee's attention is specifically directed to Clause 12(1)(d) of the Bill. In a sense that is background material on the Motion that I am at present moving.
I will now turn directly to that Motion. I considered carefully whether I would be serving a useful purpose if I tabled a Motion to reject the Second Reading of this Bill, and I came to the conclusion that I would be so doing and that it ought to be done. My reasons were as follows: the Government have recently published a Green Paper I am quite conscious of the fact that a Green Paper is not the same in its intent as a White Paper. It

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does not set out decisions finally taken by the Government but it is designed to invite discussion on decisions which are adumbrated and described in the Green Paper. I respectfully submit to your Lordships that if one considers part of this Green Paper, at any rate, it is so near to the Government taking a decision of major importance in this field that it is rather pointless to go on with the Second Reading of a Bill which may turn out to be completely useless.
The gist of the decision, which I submit is of the greatest importance in this matter, is this. The Government feel that there is a good deal of disorder in the regulation of inland waterways. They have it in mind that there is a strong case for setting up a completely new authority into which the British Waterways Board will be "merged", as it is put in the Green Paper, and that the new authority is to take over and itself conduct all these inland waterways. If that is done, I should think that is obviously the most effective and sensible way of meeting the various points that the noble Lord who has resumed his seat put before your Lordships for consideration.
My Lords, I hope I will not be trespassing on your Lordships' time too much if I seek to justify what I have just said with regard to this Green Paper by reading an extract, which I am afraid is nearly a page in length, but which I hope your Lordships will think relevant. It is to be found at page 10 of the Green Paper. The passage reads as follows:
"The present arrangements for controlling navigation on rivers and inland waterways in England and Wales, which are extensively used for pleasure boating, are highly fragmented. The British Waterways Board…a nationalised industry, own or manage some 2,000 miles of waterway, about 1,000 miles of which are navigable. This includes 270 miles of navigable rivers, including the Severn and the Trent. The water authorities themselves are navigation authorities for about 500 miles of navigable river, including the non-tidal Thames. There are about another 500 miles of more or less navigable waterways, including a number of rivers and the Norfolk Broads, controlled by a variety of bodies such as local authorities and charitable trusts.
In the Government's view there is a strong case in principle for bringing together the management of most of these navigations in a new national navigation authority. Apart from the operational advantages which would result from unified management, creation of such an authority would lead to the introduction of a
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uniform registration and charging system and a national navigation code, so that boats could pass all along the waterways system on a single licence and be subject to the same regulations from one part of the system to another. At the same time, the canals controlled by the British Waterways Board form an intergral part of the water system of the country. The importance of many of them for water supply and land drainage makes it desirable to bring about a closer association between the Board and the water industry.
In the Government's view, the most promising way ahead would be to merge the British Waterways Board into the National Water Authority, which would become a national navigation authority. On this basis, the National Water Authority would be responsible initially for navigation on the whole of the British Waterways Board's present system together with those rivers on which navigation is at present the responsibility of the water authorities. It could in due course extend its control to other waterways which are important for navigation. Further consideration would need to be given to the question of the British Waterways Board's waterways in Scotland, bearing in mind that under the Government's proposals for devolution the Scottish Administration would take responsibility for inland waterways. The Government propose to start consultations immediately on the detailed implications of this proposal, in particular the financial arrangements that would have to be devised for the waterways, and the essential safeguards for the transfer of the British Waterways Board's staff; if these can be satisfactorily resolved the merger could take place as part of the general reorganisation proposed in this document. Such a merger would make it easier for the National Water Authority, in preparing a national water strategy, to give effect to the navigational and recreational elements of national water policy.
Merging the British Waterways Board into the new National Water Authority would make it necessary to consider also the future of the Inland Waterways Amenities Advisory Council, set up under the Transport Act 1968, to advise Ministers and the British Waterways Board in relation to the recreational and amenity use of the inland waterways, and the Water Space Amenity Commission, set up under the Water Act 1973 to advise Ministers, the National Water Council and the water authorities in relation to the recreational and amenity use of water space in England. There would clearly not be room for both bodies under the suggested arrangement."
My Lords, that is my case for suggesting that the Bill at this moment go no further. What is happening? The Government say that there is "a very strong case". Those are their words:
"….there is a strong case in principle for bringing together the management of most of these navigations in a new national navigation authority…. In the Government's view the most promising way ahead would be to merge the British Waterways Board into the National Water Authority, which would become a

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national navigation authority…. The Government propose to start consultations immediately on the detailed implications of this proposal….".
That is how it stands. I quite agree that the Government are not committed, but they have committed themselves to this at least: to the expression of a strong view in favour. It would be rather surprising if, presumably having given thought to the matter over a considerable period of time, they now decided that the whole thing was all wrong. Presumably they will go ahead and set up a new authority which will take unto itself all these duties and weld them together into a single, sensible, coherent whole.
If that is the situation—and I respectfully submit to your Lordships that I hope I have put it fairly and have not exaggerated—then I respectfully submit that the right course for your Lordships at the moment is to say: "That being the new situation which has now arisen, it is not expedient for this Bill at present to go any further", and that therefore its Second Reading should be refused. I beg to move accordingly.
Moved, As an Amendment to the Motion for the Second Reading, to leave out all the words after ("That") and insert ("This House declines to give a Second Reading to the Bill in view of the policy of Her Majesty's Government announced in their Consultative Document "Review of the Water Industry in England and Wales".")—(Lord Stow Hill.)
5.9 p.m.
The Earl of KINNOULL: My Lords, I rise to speak at this stage on behalf of my noble friend Lord Harvington, who regrettably is unavoidably absent at this stage of the discussions and, indeed, if he is not present at the appropriate time, I intend to move the Motion standing in his name. I regret he is not present, because my noble friend is undoubtedly a Member of your Lordships' House who brings to us a refreshing experience of water users and water lovers. He is not only vice-president of the Inland Waterways Association but, indeed, a lifetime friend of all waterway lovers.
The issue the noble Lord, Lord Stow Hill, has raised is, of course, a great deal stronger than the words of the Motion
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standing in the name of my noble friend. I always admire immensely the oratory of the noble Lord, Lord Stow Hill, as indeed exhibited today. He has put a dilemma before the House, and I very much hope that the noble Baroness, Lady Birk, will be able to throw some light on what has become a rather confusing issue. For here we have a very responsible authority who have apparently acted, in the words of the noble Lord, Lord Stow Hill, with extreme haste, and have possibly pre-empted the thinking and the future policy of the Government in setting up a National Water Authority.
The Motion standing in my noble friend's name is one which is designed not to conflict with the duties of the Select Committee, if this Bill should reach a Select Committee. It is, I hope, something which will commend itself to the House, should Lord Stow Hill's Motion fail, because I think this is a most important issue. The issue concerns the public rights of navigation, as the noble Lord, Lord De Ramsey, has indicated, under Clause 12(1)(d). It is an issue which, the House will recall, was debated at great length during the passage of the Transport Act 1968, and I apologise if I make almost the same impassioned speech now as I did then. The issue then was fought to a Division, and, indeed lost, I think, by one vote. The noble Viscount, Lord St. Davids, made a particularly powerful speech on that occasion, and I hope perhaps he will be speaking a little later.
Viscount ST. DAVIDS: My Lords, may I amend just one statement. It was actually carried to three different Divisions at different stages of the Bill. The middle one came out equal and was carried on the vote of the Lord Chancellor, and the final Division was won in this House but reversed in the other House.
The Earl of KINNOULL: My Lords, I am grateful for that intervention. I think that again shows the feeling of the House as it was then. The issue in 1968 was dealing with public rights of navigation granted by Statute which were to be transferred under that Act to the appropriate responsible authority. The reasons for the fears and the objections in 1968 were, first, that there would be discrimination of the users of the waterways—those, for instance, who used boats

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or went fishing or whatever; that there would be a discrimination by the authority responsible for the management of that waterway. It was felt that in view of the fact that there were these public rights of navigation they should not be interfered with. Secondly, and as important, there was the fear that the managing authority would levy very high charges. I think I should say that I have tried to find out whether these fears were well founded, and I am glad to say that, so far as I know, up to now there has not been a really bad case of these powers granted under Section 112 of the 1968 Act having been abused.
But the issue today is much wider, because under Clause 12(1)(d) the Anglian Water Authority may control not only the public rights of navigation granted by Statute, but they may also control another very important section, those rights which have been established by common law, established in some cases as far back as 1187, when the old maxim was "Once a waterway, always a waterway".
My Lords, there is an even more disturbing feature than that under this clause; that is, that the Anglian Water Authority may seek the permission of the Secretary of State to extinguish the public rights of navigation. This goes far beyond the Transport Act 1968, because never was the contentious word "extinguish" used at that time. I think it would be only fair to the noble Lord, Lord De Ramsey, to say that the Promoters of this Bill have tried already to meet some of the objections to the Bill. As the noble Lord will know, the Inland Waterways Association have been to discuss these points on a number of occasions, and I was glad the noble Lord made the conciliatory noise about further objection being met if necessary.
But I think it would be fair to advise the House that the issue of Clause 12(1)(d) at the present time is still an issue which has not been agreed; it is still an issue on which the Anglian Water Authority feel they cannot budge. Their argument, as I understand it—the noble Lord will no doubt be speaking later—is that they have inserted under Clause 12(1)(b) a provision that will give them power to create a public right of navigation, having just taken away or extinguished it so far as the Common Law rights are concerned;
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in other words, a quid pro quo. I do not think that is a very strong argument, and when he comes to reply to the debate I would ask the noble Lord, why do the Authority really want this power, why is it they have inserted this word "extinguish"? Is this really not too contentious, and what is wrong with the present system? I hope the onus will be on the Promoters of the Bill to show the real need. One has to remember that the Anglian Water Authority are not, as the noble Lord suggested, a "sitting duck"; I think they are an enormous autonomous elephant. The average individual, and indeed the average group of individuals, the users of waterways, will feel, I am sure, that any power as wide as extinguishing rights of users goes far too far.
I would draw the attention of the noble Lord to another objection under this clause, and that is that there is a feeling that the good work the Inland Waterways Association has done in the past, particularly in the restoration of canals, could be affected. I am sure the noble Lord knows that argument well. At the moment they have a right of navigation, a right to go in without very great legal difficulties to proceed with the restoration. It is felt that, if these rights of navigaion are withdrawn, despite the fact that the Anglian Water Authority may well be responsible and sympathetic, there may be difficulties in the future and long unnecessary delays.
The Inland Waterways Association, as the House will know, has a membership of such wide variety that they really do represent the consumers' interests. They have themselves restored a number of canals, particularly perhaps the most famous, the Lower Avon and Upper Avon, and indeed have restored a heritage back to this country. They, of course, deal all the time with their members on recreation, which, of course, is an enormously expanding interest. I hope that the House will look sympathetically at the Motion standing in my noble friend's name, if it comes to be moved. It is, I repeat, deliberately drafted not to interfere with the Select Committee's work or duties, but, with the support of the House, it could be an invaluable indication to the Select Committee of the genuine concern felt among the users of

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the waterways with regard to their ancient rights.
5.20 p.m.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk): My Lords, I intervene at this stage since I feel that it may be helpful to the House to know the Government's attitude to the proposals in the Bill. Far from even starting to be an expert on these matters on water as are so many Members of your Lordships' House, I seem to spend a great deal of time these days with "talking water" going under my many bridges. Basically our policy is to encourage recreation on and around water, and we welcome any proposals aimed at making a better use of available water space for recreational purposes.
Part II of this Bill falls broadly into three groups: the first updates very old local legislation relating to navigation already under the control of the Water Authority and of certain named navigations to be transferred to them; the second establishes an order-making procedure for creating new navigations, extinguishing others, or varying rights; the third provides bye-law making and other specific powers for the effective management of navigations under the control of the Water Authority. We have no objection in principle to purposes one and three. It is the second group of proposals, those for an order-making procedure, and more particularly its scope, which have attracted most of the objections from organisations already actively involved with recreation in Anglia. It seems to be this part of the Bill, Clause 12, which concerns my noble and learned friend Lord Stow Hill and the noble Lord, Lord Harvington, on whose behalf the noble Earl, Lord Kinnoull, has just spoken.
We have before us the proposition that paragraphs 26 to 29 of the recent Consultative Document on the review of the water industry, which favoured creating a national navigation authority, removes any need for this Bill. I do not agree with my noble and learned friend Lord Stow Hill on this, because the proposals for a national navigation authority put forward in the Green Paper are for discussion
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—and I would repeat that they are for discussion. They are not a commitment to Government policy, certainly not at this stage. No decisions have been taken and there is absolutely no Government commitment.
We have drawn attention in the Consultative Document to the point that responsibility for navigation on rivers and inland waterways is highly fragmented, as has already been pointed out. It is fragmented between the British Waterways Board, the water authorities, and a variety of bodies such as local authorities and charitable trusts. It is our view that there is a strong case in principle for bringing together the management of these in a new navigation authority. The most promising first step would be to merge the British Waterways Board into the proposed new National Water Authority which would then be responsible for navigation not only over the British Waterways Board's present system but also over those rivers on which navigation is at present the responsibility of the water authorities. In the longer term it would then be possible to extend control by the national navigational authority to other waterways which are important to navigation.
I would again stress that these matters are still in the nature of consultation, and again repeat that no decisions have been taken and that there is, as yet, no Government commitment. We intend to start immediately with the British Waterways Board a detailed examination of its implications. In my view none of this needs hinder the Anglian Water Authority's attempt to deal now with existing problems affecting navigations in their area. Nor need they hold back their longer-term proposals expounded in Clause 12; although I expect that they may want to review this part of the Bill both in the light of the very strong objections to it and bearing in mind last week's Consultative Document.
Taking all this into account, I hope that the House will decide, as is the custom of this House in any case with Private Bills, to give the Bill a Second Reading and send it to Select Committee where they will be able to examine in detail all the issues involved, taking account of the many points that have been made today, including Lord

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Harvington's proposed Instruction, if this is the wish of the House. In view of what my noble and learned friend said, I think I should point out that there are some important differences between Clause 12(1)(d) of this Bill and Section 112 of the Transport Act 1968: namely, the Act does not enable navigation law to be varied and cannot be used to deal with rights which exist by virtue of a "rule of law". Also, the Select Committee will have the added advantage of being able to hear expert evidence. My right honourable friend the Secretary of State has some reservations on the detailed provisions of the Bill, which are at present being discussed with the Promoters. He will be able to put the Department's comments to the Select Committee if the House gives the Bill a Second Reading.
5.26 p.m.
Earl FERRERS: My Lords, I have no doubt that when the noble Lord, Lord De Ramsey, and the Promoters came to look at this Bill they thought that they had a fairly harmless Bill to put forward. In fact, as the noble Lord has seen, he has a bit of a tiger by the tail. The noble Lord introduced this Bill in the clear and careful way which your Lordships would expect of him, and especially as this is very much a Bill which affects the rural countryside to which the noble Lord has devoted his life with such distinction. I suppose that I ought to declare an interest in so far as I live in an area which is covered by the Anglian Water Authority, and therefore in some measure I suppose I may be affected by this Bill, if only as a water rate payer. My noble friend Lord Belstead was here this afternoon, and the noble Lord, Lord De Ramsey, referred to him. He also lives within this area. He is sorry not to be here now and he has asked me to say to the noble Lord, Lord De Ramsey, and those with whom he had been associated, that the people involved with estuaries were particularly grateful for the attention which the Promoters have given to their particular problems.
The noble Lord, Lord De Ramsey, explained that there are many rivers within the area covered by the Bill, which are neglected and in regard to which powers for regulation are either
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inadequate or moribund. I accept that there is much strength in the argument that these rivers should be regulated by some overall authority and that the powers, where necessary, should be renewed or updated, and possibly regularised. Of course the Bill goes very much further than that. It gives the Anglian Water Authority colossal powers; ones which I venture to suggest are unreasonable and undesirable.
Although I hate to tell the noble Lord, Lord De Ramsey, this about the Bill, I think that the manner in which the Bill has been formulated leaves much to be desired, and I shall tell your Lordships why. One would have thought that if an authority wished to claim to themselves the huge powers outlined in this Bill, and to take to themselves the responsibility for navigation and, therefore, recreation on waterways, which, in many cases, is already being carried out by bodies already constituted to look after them, in order to get as much common ground as possible, great care would have been taken in consultation and negotiation before promoting such a Bill. The noble Lord, Lord De Ramsey, said that there has been a lot of consultation. I have no doubt that there has been. However, discussion is very different from seeing facts, and I wonder whether those with whom the Authority did the discussing ever saw the draft of the Bill.
This measure has in fact stoked up a nest of bees and has caused great distress among those who live in the area. No less than 25 petitions have been lodged against it. These vary from private individuals to the Friends of the Earth, yachting associations, Great Yarmouth Borough Council, Broadland, North Norfolk and Waveney District Council, Great Yarmouth Port and Haven Commissioners, British Transport Docks Board, British Waterways Board, Harwich Harbour Conservancy Board, Inland Waterways, National Coal Board, Peterborough Development Corporation and others—a formidable list, your Lordships might think, and if I were a Promoter I should not feel very proud of that. This is a list of people who are so concerned at the powers for which the Anglian Water Authority are asking in this Bill that they have felt obliged to go to the expense of petitioning Parliament against it.

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If I am critical of the Anglian Water Authority I should point out that I have been treated with the utmost courtesy by them in any discussions, letters and other correspondence I have had with them, and I recognise that they are genuinely endeavouring to carry out their responsibilities. But, as an example of the powers which are objected to, consider the powers in Clause 12(1)(a) which gives the Authority power to take over the functions and undertakings of a navigational authority, a conservancy authority or a harbour authority. This means that the Water Authority could take over the Great Yarmouth Port and Haven Commissioners, whose job, among other things, is to run the Norfolk Broads, which they do very well. The operation of the Ports of Lowestoft, Grimsby, Immingham, Felixstowe, Harwich and King's Lynn could all come under this Bill and could all be taken over by the Anglian Water Authority.
When the Great Yarmouth Port and Haven Commissioners objected to these powers they were told, as indeed the noble Lord, Lord De Ramsey, said this afternoon, "Don't worry, we have no intention of taking you over". But one wonders why they included the powers to do so. The Promoters were asked specifically if they would exclude the Port and Haven Commissioners but they declined to do so, and the provision has caused so much anxiety that I am glad that the Anglian Water Authority have decided to remove it. They wrote to my noble friend Lord Belstead and they sent a copy of the letter to me in which they explained their reasons. According to that letter, they were removing Clause 12(1)(a),
"…in the knowledge that other similar provisions were in existence should the Authority at some future date decide to avail itself of them…."
Noble Lords will perceive, therefore, that although the Promoters are prepared to exclude the offending clause, they are not prepared to exclude their intention, and in my judgment the Petitioners are completely justified in remaining apprehensive about the Authority's long-term intentions.
Of the 25 Petitioners, some are concerned with the provisions in one part of the Bill and others are concerned with the provisions in other parts of it,
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and I gather that the Promoters, seeing that the Bill has upset so many people, have been busily engaged in negotiation with the various Petitioners, and rightly so, in trying to meet their points and in trying to prepare Amendments to the Bill to satisfy them. But, of course, the Private Bill procedure, as I understand it, requires the Promoters to negotiate with the Petitioner on only that part of the Bill with which the particular Petitioner is concerned, and a Petitioner will not know what arrangements have been made between the Promoters and other Petitioners, whose interests are in other parts of the Bill, and nor do your Lordships.
There is no Marshalled List of proposed Amendments in the Private Bill Office; I make no complaint about that because the system does not allow for it. Nevertheless, I have a list of proposed Amendments to one part of the Bill, and it reads like this:'
"Page 4, line 3, at the end insert 'whether by virtue of this Act or some other enactment.'
Page 9, leave out lines 29 to 33.

line 34, leave out (b) and insert (a).

line 36, leave out (c) and insert (b).

line 39, leave out (d) and insert (c).

Page 10, leave out lines 16 and 17.
Page 34, delete lines 29 to 31."
These proposed Amendments would totally alter the effect of the whole Bill, and they are only some of the proposed Amendments to one part of the Bill. I have no reason to believe that there are not similar Amendments to other parts of the Bill.
One is bound to ask your Lordships, therefore, what it is we are supposd to be considering. This Bill, as it is, presumably is presented to Parliament, but now we find that it is only a ghost Bill of what in fact, on second thoughts, the Promoters wish to see because they realise that their Bill has caused such a row that they must alter its provisions. They have signified to individual Petitioners how they intend to alter portions of the Bill, but they have not signified this to Parliament—because they cannot.
It is clear that the Promoters have put before Parliament an ill-considered and ill-prepared Bill. They have not, to put it neatly, done their homework. What they should have done is to iron out the

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differences of opinion and they should have negotiated fully with those concerned the points of common but conflicting interest before presenting the measure to Parliament, and causing a lot of people, including themselves, to go to a lot of expense. To do otherwise, I would suggest, reflects discredit on the Promoters and treats Parliament with scant courtesy.
I have queried vigorously the justification for the Bill. The Anglian Water Authority have a number of very onerous responsibilities; they have to deal with water supply, water conservation, sewerage, land drainage and the prevention of pollution. But the Bill, which is a quite substantial measure, is about something different; it is about recreation, and that is all. It does not give the Authority powers to dispose of sewage or enable them to supply vast cities with water. It gives them huge powers just to organise boating and fishing. And even if these powers are justified—and I do not think they are—I frankly do not think that we can afford them. Lord de Ramsey said that it would not increase the cost. I think that he even said that it would decrease the cost. I am sure that he said that with great conviction, but I am bound to say that we have heard that before and, with great respect to the noble Lord, I just do not believe that it would, particularly as, when I asked how many people had been or would be taken on as a result of the Bill, I was told that no extra people had been taken on and that no estimate had been made of the numbers who might have to be taken on as a result of the proposals in the Bill.
I do not think that we can afford it and I do not think that the Anglian Water Authority can afford it. When 60p of every £1 which they receive from rates goes to pay interest on borrowings, which they inherited, I feel that they should think again and expend their energies organising those of their responsibilities which are of infinitely greater proportion. The Bill is costing the Promoters an estimated £15,000. The Yarmouth Port and Haven Commissioners alone have allowed £10,000 in their budget to petition against it and I do not know what the other 24 Petitioners have allowed.
I sometimes wonder whether our public bodies are going crazy. At a time when
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the country is in a monumental economic crisis and when public spending has, by all accounts, got out of control, nobody seems to say, "No. However good the project may be, we cannot do it now." We have walking around East Anglia at the moment three scruffy characters balancing a yellow pole on their heads, and for this some ass has given them a grant of £395. Here, we have the Authority spending vast sums of money on promoting contentious legislation and making other people spend equally vast sums objecting to it. It is no defence to say that the Water Act 1973 gives a duty to the Authority to promote the Bill. It does nothing of the sort. It allows the Authority to take such steps "as are reasonably practical" to provide for recreation.
I do not believe that the Bill can be considered reasonably practical either in cost or in content. If it goes through, it will set a precedent which other water authorities will doubtless follow. Then, to cap it all, along come the Government and, so to speak, put the boot in. Last Thursday they produced the green document to which the noble Lord, Lord Stow Hill, referred and from which he quoted. I should like to re-emphasise two points, one of which the noble Lord made and one which he did not. Paragraph 27 says that:
"…there is a strong case in principle for bringing together the management of most of these navigations in a new national navigation authority."
That is what the Government think. I accept that it is for discussion, but it is clearly what they think.
Then, in paragraph 39, they go on to say—and this is far more weighty—
"…there are very strong arguments against any further radical changes either in the authorities' powers, or in their areas, in the near future."
I thought that the noble Baroness, Lady Birk, would have reiterated that, but she did not. What she said was that the Government were quite happy to see the Anglian Water Authority go ahead with the Bill. I accept that the Green Paper is a Consultative Document, but for those strong words to be put into it would indicate that the Government at least consider that there are strong arguments as to why such a Bill should not go through.
Baroness BIRK: My Lords, what I said was that the Green Paper was a Consultative Document. As I understand it, we are tonight discussing whether the Bill should get a Second Reading and should then go to a Select Committee. We are not deciding whether it should be enacted or what should finally happen to it. All I was arguing on behalf of the Government was that since this was a Consultative Document and since the Bill was a private one, brought forward not by the Government but privately, the Government were not raising any objection or, to paraphrase what the noble Earl said, "putting in the boot" or trying to stop it. However, I am certainly not giving it any particular blessing or saying anything more or less than that.
Earl FERRERS: My Lords, I am grateful to the noble Baroness for that indication but, with the greatest respect, that is exactly what we are discussing. We are considering whether this should be allowed to go forward, even if it goes only so far as a Select Committee. I accept the noble Baroness's reasoning that the Bill should go to a Select Committee, but I should have thought that the Government would have been a little more explicit as to whether they think that the Bill, as such, is the right kind of thing for a private authority to produce when the Government's own discussion document indicates to the contrary.
The combination of the contents of the Bill and the way in which its preparation and presentation to Parliament have been, as I feel, mishandled; the fact that it has succeeded in upsetting so many people who are likely to be affected by it right across the board, and the fact that it has attracted a substantial trail of petitioners (this is almost like a veritable wailing wall), taken together with the publication of the Green Paper, makes me quite certain that the Bill should not become law. I wonder whether the most sensible course, and the cheapest in the long run, would not be for the noble Lord, Lord De Ramsey, to withdraw his Bill.
If he does not do so, I should be bound to address myself to the Amendment of the noble Lord, Lord Stow Hill. I feel that that Amendment has much force and it certainly commands my sympathy. On all counts, except one, I feel motivated to support him. The single exception is that one must recognise that this is only a
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Green Paper for discussion. It is not a White Paper indicating intention. It may take some time for such a White Paper to come along. The Green Paper therefore does not indicate the Government's committed intention though, even if it did, I am not entirely satisfied that the idea would necessarily appeal to me.
On the other hand, it is the convention of the House that Private Bills are not opposed and that the Select Committee is the place where the arguments should be thrashed out. Despite what is, to me, a waste of time and money and despite the inappropriateness of the Bill, I therefore feel that the Bill should be allowed to go forward to a Second Reading. As a result, I could not vote for the Amendment of the noble Lord, Lord Stow Hill, if he should press it to a Division. On the other hand, I am not particularly minded to see the Bill go forward if the noble Lord, Lord Stow Hill, does press the Amendment. I should therefore abstain.
5.48 p.m.
The Lord Bishop of LONDON: My Lords, my interest in the provision of amenities for water recreation stems from the many hours which I, as a young man, spent on the river. Some few of those hours provided pleasure and many others provided physical distress and discomfort. That interest was sharpened by the discussions of the Select Committee of your Lordships' House on Sport and Leisure, of which I have the honour to be a Member. One of the major matters which was impressed upon us was the importance of the provision of proper facilities for recreation on our waterways. It was recognised that in this small island which is so overpopulated we have very few opportunities for recreation on the water and that it is therefore of vital importance that we should preserve every opportunity that is available. We noticed that the desire for recreation on water was one of the major growth areas in the search for recreation.
Thus, in paragraph 172 on page lix, where we were discussing the desirability of grants in aid for water recreation, we referred to the
"upsurge in this form of recreation",
and noted that,
"The use of water for recreation is arguably the major growth point of all forms of leisure activity."

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Later in our Report we noted the great difficulties in the legal interpretation of rights of way over water and hoped that there would be a proper rationalisation of the legal requirements to control navigable waterways. Thus, we noted,
"At a time when navigation for pleasure on inland waterways has overtaken commercial carriage the rights of navigation cannot be allowed to rest on an antiquated basis which is becoming increasingly irrelevant. The Committee consider that the legal status of rights of way and rights of navigation over water should be reviewed and that the Government should investigate whether the de facto right of navigation enjoyed on cruising waterways can be converted into a right de Jure—they note that in August 1972 according to the Consultation Paper issued by the Department of the Environment it was the Government's intention to set out in legislation clear rights for the public, in suitable craft and in a suitable manner, to navigate all commercial and cruising waterways."
I understand that nothing further was done along those lines, and therefore that makes those concerned with the provision of waterways for recreation all the more sensitive to this matter of the provision of navigational rights.
I have been much perplexed as to how it would be right to vote when these issues are presented to your Lordships' House, for I have a great deal of sympathy with the Amendment which the noble and learned Lord, Lord Stow Hill, has tabled. On the other hand, generally speaking, this Bill is probably a good Bill and at any rate ought I think, as the noble Baroness suggested, be allowed the courtesy of this House not to oppose a Private Bill on Second Reading. I very much sympathise with the apprehensions of the Inland Waterways Association about the provisions in Clause 12(1)(d) which would give to the board the right to extinguish navigation rights. I can quite understand that when so many of these privileges and opportunities are in peril and in jeopardy, the very concept of one of these authorities having the power to extinguish rights gives rise to considerable anxiety.
I share the view of the noble Earl, Lord Kinnoull, to ask why the authority is insisting upon the insertion of this clause? I understand that it has been a matter of considerable negotiation, and there has been a good deal of give and take between the Inland Waterways Association, as one
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of the objectors, and the board, but they have refused to budge on this issue. I do not think that this can be regarded in any way as an unimportant issue. Not only is it applicable to the waterways controlled by the Anglian Water Authority but as has been pointed out, and as I have been reminded, this is the first Bill to be brought forward by one of the water authorities. Therefore, if this Bill becomes law, it will undoubtedly be regarded as a pattern for other authorities when they seek legal powers. Therefore, if the power to extinguish navigation rights is provided in this Bill, we shall be providing the same kind of rights all over the country for any authority which wishes to seek these powers. For that reason I shall not oppose the Second Reading, but I shall most strongly support the instruction which the noble Lord, Lord Harvington, seeks to require of the House when the Bill goes to Committee.
5.53 p.m.
Lord SOMERLEYTON: My Lords, the Anglian Water Authority Bill as deposited includes a clause—Clause 12—which inter alia enables the Secretary of State, on the application of the Authority, to
"transfer to the Authority…the functions and undertaking of a navigation authority, conservancy authority or harbour authority in relation to any waterway in so far as the functions are exercisable and the waterway is situated in the area of the Authority;"
This power, if exercised, would wholly destroy the functions conferred by Parliament on the Great Yarmouth Port and Haven Commissioners who, by their various Acts and orders obtained since 1886, have efficiently and successfully carried out these functions for well over a century. I understand that the Promoters have recently issued a statement in which certain Amendments to their original proposals are made, and whilst these may be acceptable in part there are still certain matters which need clarification.
I should declare to your Lordships' House that I am a member of the Great Yarmouth Port and Haven Commissioners, and therefore am in the area of the Anglian Water Authority, but I am greatly concerned that the powers and obligations put upon them by Parliament, and faithfully exercised over the years should be capable of being extinguished, taken over, or modified, not by another

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Private Act of Parliament, with all that that entails, but by the Minister of State making a decision as to where the Commissioners' powers start and finish and where the Anglian Water Authority may subsequently hold jurisdiction.
Surely, my Lords, what was given by Parliament should be taken away only by Parliament after the same searching, critical and procedural way in which the rights and obligations were originally and jealously conferred. The justness and correctness of this seems apparent to me, and I find it hard to understand why it is that the Anglian Water Authority should find it impossible to accede to the Commissioners' request that the navigational functions now exercised by them should not be specifically excluded from its Bill and not made subject, in any part whatsoever, to a Ministerial direction.
It cannot be that the Anglian Water Authority feel that it could improve on the way the Commissioners manage their affairs, for I have it in writing from the Authority's legal department that—and I quote:
"I see no reason why the Authority should think of seeking an Order under Clause 12 in the foreseeable future in respect of what is the largest and best managed recreational waterway in this country."
Is it right that the Commissioners' undertaking, or any part of it, should be included in the Bill just to keep things uniform, because the very size of the Anglian Water Authority demands a uniformity of action and organisation which leaves no scope at all for the individualism and flexibility which is the hallmark of an efficient, though not necessarily a giant, undertaking?
The Great Yarmouth Port and Haven Commissioners are a local body composed of many people who have a vast range of experience covering all the many aspects affecting the port of Great Yarmouth and the Norfolk Broads. It is extremely difficult for me to understand what advantages could be gained by transferring any of the navigational functions they carry out so well to an authority, the headquarters of which is situated no less than 100 miles away and which has to look after water supply, sewerage, sewage disposal, fishing and recreational interests in an area stretching from the Humber in the North, to the Thames in the South, and Westwards so
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far as Northamptonshire. In any event the water authority has been operating for only less than two years. Only a few days ago the Department of the Environment, together with the Welsh Office and the Ministry of Agriculture, Fisheries and Food, produced a Green Paper, which has already been mentioned by the noble Earl, Lord Ferrers, and other noble Lords in which great organisational changes are suggested for the future navigational and recreational functions not only of all the water authorities, but of those now exercised by other bodies throughout the country.
Paragraph 26 of this document makes specific reference to the Norfolk Broads, where the Commissioners operate, and while I do not intend to comment on the matters set out in the Paper, I am firmly of the opinion that it would not only be wrong, but highly unproductive at the present time, for the Anglian Water Authority's Bill to go on to the Statute Book when the whole structure of water navigation and recreational functions is being considered on a country-wide basis.
My Lords, the date for comments on this document's proposals is as soon as July of this year, which is only four months away, and the Government propose to examine the submissions made, and subsequently to bring forward early legislation to give effect to its various proposals. It may well be advisable for the noble Lord, Lord De Ramsey, to withdraw the Bill in its entirety until more is known of the overall national plan, and the Commissioners would certainly not be averse to this suggestion.
6.0 p.m.
The Countess of LOUDOUN: My Lords, I should like to begin with a short extract from the Civic Trust's citation when the British Waterways Board received a Special Heritage Year award in 1975 for their continuing contribution to conservation. I quote:
"It is the Board's responsibility to maintain this extensive network of canals and rivers, to improve bridges and canalside buildings and to develop the network's potential for recreation and amenity use.
"This commitment has been met and fulfilled with an exer-expanding success. Public participation in and enjoyment of the canals has greatly increased. Concurrently, the Board has pursued a continuing policy of improvements to their property, coupled with other environmental improvements.

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"It is heartening, after the long years of neglect and apathy, to see these policies now bearing fruit. The Board deserves our gratitude".
I think this demonstrates the great service the British Waterways Board are performing for the community with regard to the waterways vested in them, and we should bear this in mind when considering the Bill before us.
There have been 25 Petitions lodged against this Bill, which in itself gives some indication of the amount of opposition it has aroused. I understand that the Water Authority now propose to delete Clause 12(1)(a) from the Bill, and to exclude estuarial waters from the effect of Clause 12. But this would still leave difficulties for the British Waterways Board, who are one of the petitioners against, because parts of their system are within the area of the Water Authority, and although they have no commercial interests in this area they are concerned with recreation and amenity on these waterways; that is, the Fossdyke and the Witham Navigations and parts of the Grand Union Canal, which are all cruising waterways. There is also a part of the Grantham Canal in the area, which is a remainder waterway. Public rights of navigation do not exist on the Grand Union and Grantham Canals, as these were abolished under Section 105(6) of the Transport Act 1968. The British Waterways Board have complete control of these waterways and have a licensing system for pleasure craft which use them. But Common Law rights of navigation arising from customary usage exist on the Fossdyke Navigation, which dates from the Roman occupation, and on the River Witham Navigation. The Board have a registration scheme for pleasure craft using these navigations derived from the British Waterways Act 1971, so there seems to be no justification for the proposals of the Anglian Water Authority in Clause 12 of this Bill.
Within the limits of the resources and finance available to them, the British Waterways Board have provided adequate opportunities for recreation and amenity on these waterways in accordance with the statutory duties laid upon them by the Transport Acts 1962 and 1968. During the debate on Lord Fever-sham's Bill, the spokesman for the Department of the Environment, the noble Baroness, Lady Birk, indicated that
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she shared the British Waterways Board's view that there should be a national navigational authority. She also said that navigational needs are best served by firm co-operation among statutory bodies, volunteer groups and central Government. Now the Government have published this Green Paper, which seems to bear out the suggestions made by Lady Birk. In view of the Government's proposals in this document (which, if carried out, would make the Anglian Water Authority Bill superfluous), and in order to save both time and money, I shall support the noble Lord, Lord Stow Hill, if he should decide to divide the House.
6.4 p.m.
Lord NUGENT of GUILDFORD: My Lords, may I begin by declaring my interest in this Bill as chairman of the National Water Council? However, perhaps I should explain that that Council has no statutory responsibility for what the Anglian Water Authority do, although I might hear something about it in due course. But I think I can, without offence to the Addison convention, perhaps add a word to this interesting discussion. I should like to begin by congratulating my noble friend Lord De Ramsey (because I am sure nobody else will) on the extreme charm and clarity with which he moved the Second Reading of this Bill. I may say, as noble Lords of course well know, that all Private Bills, if they are opposed, have to be moved by a noble Lord, and that has not been a task which noble Lords are particularly enthusiastic to undertake. In this case I suspect that one or two of them were aware that there was some opposition brewing in some quarters, so again I thank my noble friend Lord De Ramsey.
All I want to say about the Anglian Water Authority can be said very quickly. They cover the largest geographical area of any water authority in the country, and I suppose they have more water recreational interests overall than any other water authority in the country, great though the others are. As my noble friend Lord Ferrers rightly acknowledged, in this huge area, which stretches from the Humber down to the Thames, there are many waters and many streams which are under no proper management or control at all. Added to the navigational interests and the fishery interests, we have

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here an area which I suppose is the richest in the country for wild fowl interests, for bird watching. Everything connected with water recreation is probably at its highest in this area.
So here this water authority, with enthusiasm for their tasks, set out with their board, consisting of 35 members, more than half of whom are elected from the local authorities in the region, and they form a water recreation committee. These people, with enthusiasm, rightly set about their job, and they see an absolute host of problems in their huge area with conflicts steadily developing—particularly, of course, conflicts between fishermen and navigation, because navigation is still an expanding recreation, and we all welcome its expansion—as more and more boats of all shapes and sizes tend to move up more and more pieces of water. The Water Authority clearly have a duty to try to cater for the interests of all these water users, and to reconcile their conflicts. So this committee, setting out to do their job effectively, think that they should promote a Private Bill in order to give themselves the necessary powers to do it. This is the background to it, my Lords, and I suggest that they deserve to be taken in good faith. They have been given the stick very hard by my noble friend Lord Ferrers for their lack of consultation. They assure me that they have consulted far and wide, but evidently they have not satisfied all interests, because there it is, they have 25 Petitions.
Here perhaps I might turn to the wise words spoken by the noble Baroness, Lady Birk, on behalf of the Government, in regard to the consultation paper, on which the noble Lord, Lord Stow Hill, rested his case for suggesting that the Second Reading of the Bill should be rejected. This is only a consultation paper, and I feel sure that your Lordships will accept the advice of the noble Baroness that a consultation paper may take some time before it turns into legislation. It may change in form before it eventually becomes legislation. Of one thing I am certain, and that is that the noble Baroness, looking at next Session's legislative programme, will see it well filled already by her colleagues here and in another place and will realise that, when the time comes to form a national
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water authority which is to be a national navigation authority, not only will the number of navigational interests affected be considerable but the length of the debates which will go on in this connection will be not inconsiderable, both in this House and in another place. Therefore, it looks to me as if the whole Session will have to be cleared in order to give sufficient Parliamentary time to get through it. That would seem to me to indicate that the legislation to implement that part of the consultation paper, at least, is likely to be at any rate further than the next Session, which possibly will put it on to the one after.
What it means—I am sure noble Lords will have taken the point—is that the Anglian Water Authority have a problem here and now and they have put before us their ideas of how they should be given additional powers to deal with it. I hope that that might be looked at on its merits in Select Committee. I would hope that we might follow the advice of my noble friend Lord Ferrers, even if it were reluctantly rung out of him, that it is our custom to give a Second Reading to a Bill and that therefore this Bill, much though he loathed it, should go to a Select Committee so that its merits may be considered. I would hope that so far as that part of it is concerned, that advice will be taken.
With regard to the Instruction—and here again we had some helpful words from the noble Baroness, Lady Birk—in fact Section 112 of the 1968 Act is not exactly the same as paragraph (d); nevertheless, I would hope that my noble friend Lord De Ramsey will be prepared to accept the Instruction for I am sure it can but be helpful to the Select Committee to look carefully at this. I think the point was made on all sides that the particular word "extinguish" in paragraph (d) was one that made everybody jump. I do not believe for a minute that the Regional Water Authority have any such intention in their mind. I would hope that, despite the fact that the Regional Water Authority have incurred some criticism in a number of quarters, they have good intentions—and this is very much in the terms of the right reverend Prelate the Bishop of London and his report. It is the responsibility of the Water Authority; they have the general responsibility for developing and

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for making clearer and more defined all the facilities for water recreation. This is what they are trying to do. Obviously, they put their foot in it, in more than one place. But I have had to deal more with East Anglia in regard to land drainage than with navigation and I have always been conscious that there you have a peculiar form of person with webbed feet; that he is a very sensitive chap where water is concerned. I think that the debate in your Lordships' House has fully confirmed that impression. I hope that your Lordships will be willing to give this Bill a Second Reading, so that it may then go to a Select Committee and any further defects that exist can be removed.
6.13 p.m.
Viscount HANWORTH: My Lords, I rise briefly to make three points. First, I would reinforce what has already been said about Clause 12(1)(d) which is the ability to extinguish navigation rights. Inland waterway recreation is a tremendous growth industry and it is not a rich man's hobby at all. A vast number of people now hire boats and a tremendous effort has been put into recovering many of our waterways. People have spent weekends and have supplied money and have done everything they possibly could to try to recover some of our waterways. It would be a tragedy—if there were not really the strongest reasons—to extinguish any navigational rights at this moment. It would be quite wrong in my opinion to give the say so on this just to this Authority. I know that it has to be approved by the Ministers, but in my opinion that is quite an insufficient safeguard. It would be only too easy for them to find that the cost of maintaining some waterway when they were suffering from a shortage of funds was such that they decided to close it. There are other competing interests and the two put together might result in a closure which should never have occurred. When we consider the River Stour, that has, up to date, been a trust and they have maintained it as far as they possibly could. There is no guarantee whatsoever that when it is taken over, as is proposed in this Bill, it will be maintained to the same standards or even that it will not be closed.
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Finally, the bylaws, which I do not think have been mentioned, are quite extraordinary. They provide almost every power that could be wanted. They enable the Authority to do almost anything and provide a virtual closure if they wanted to—and this, again, on their own. If we take another example of what has been done elsewhere, there are the most stringent precautions. The Water Resources Act 1963 provides that, first, they must publish in the London Gazette and send a copy to the local authority of what they propose; and if there is any opposition they must hold a local inquiry. Only a month after this publication can it be sent to the appropriate Minister as Ministers for confirmation. There is nothing about that in the Bill. They can do just as they like. Taking it all in all, in my opinion this is a very ill-considered Bill. I do not believe it could be satisfactorily altered in Committee, and I suggest that on balance we should do better to throw it out at Second Reading.
6.16 p.m.
Lord FEVERSHAM: My Lords, I rise towards the end of a long list of speakers, perhaps at the very tip of the tiger's tail which the noble Earl, Lord Ferrers, felt had fallen into the grasp of the noble Lord, Lord De Ramsey. I shall endeavour to be as brief as possible but I am afraid not quite so brief as the noble Viscount, Lord Hanworth. From my activity a year ago in introducing a Bill on this subject, Members of your Lordships' House will be aware of my interest in the navigable waterways of this country. I have been involved in this subject for nearly 12 years. I have been involved in my capacity as a journalist, both as a staff reporter for the magazine, Motor Boat and Yachting, and as a freelance contributor to the Daily Telegraph on waterways topics. I have been involved as a boat owner, as a member of the Inland Waterways Association, as a member and patron of the Derwent Trust and as a member of the Parliamentary Waterways Group.
From these years of involvement with the subject, I have learned two things above all else: first, that since the war the official and Governmental attitude towards navigable waterways has been inconsistent, unsatisfactory and bungling; and second, the fact that we have

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any navigable waterways left at all is due largely to the battles waged by the founders of the Inland Waterways Association—and it would be proper here for me to mention the name of Mr. Robert Aikman. The fact that we continue to have this marvellous asset is due tot the continued voluntary and enthusiastic campaign of the Inland Waterways Association, its branches, its offshoots and associated bodies.
When I talk of official and Governmental bungling I refer primarily to the attitude of Whitehall and of central Govment. In this respect I would say that whatever position Britain holds today in the international league tables of this and that, there remains one league over which we continue to reign with an Imperial majesty as we have done for the last 50 years. As a nation, we remain at the top of the league of nations which display idiotic behaviour towards inland waterways. Central Government, to use that term collectively to represent all our national leaders since the war—and this is the sort of advantage that one has on the Cross-Benches—have demonstrated constant embarrassment on this issue. This embarrassment has only been surpassed in duration by major procrastination, punctuated with the introduction of footling measures. If embarrassment, procrastination and footling measures could be entered for a competition like vegetable marrows, then post-war central Governments would win a prize for their treatment of our navigable inland waterways.
My Lords, how do they manage it? How have they succeeded in perpetuating this prolonged policy of failure? I doubt whether we shall ever learn the secret processes developed over the years in the inner sanctums of Whitehall which contribute to the breeding of such success. There are certain ground-rules to waterway bungling which have become apparent. Do not lead with the problem on its own or as a whole. Treat the waterways as part of a transport policy or leisure policy or, as in this latest case, as part of a water policy. Or, if you want to grow a really competitive bungle, mix all these matters into a truely gruesome cocktail. If any new policy shows signs of promise, as in the case of Mrs.
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Castle's efforts in 1968, then ensure that no demonstrative action is taken to carry that policy through to its logical conclusions. Under no circumstances discuss the shaping of policy with those who know anything about it—the Inland Waterways Association or other voluntary associations concerned with the matter—unless forced to do so; and bear in mind the statement that "too little and too late could be worse than never". Finally, whatever you do, never recognise the potential of our inland waterways for either transport or leisure. Do not spend any money on them. Never do more than dream for a moment that our waterways could form a kind of linear national park leading out into the countryside from the urban centres which cry out for such a link, forming key leisure arteries for our urban population. Under no circumstances consider the freight-carrying possibilities of our waterway network, as almost every other European country has done.
I felt it important to repeat once again the dismal policies of past Governments, from which stems this Bill of the Anglian Water Authority, if only to encourage the present Government to tackle the problems in a new way; and in this respect I am very glad that a number of people today have mentioned the Consultative Document, A Review of the Water Industry in England and Wales. I shall not make further mention of it today myself, except to say that it contains a very interesting word, which is "merge". I have always had my doubts about that word, and no doubt a number of people, including the British Waterways Board, will have a close look at the definition of the word "merge". There will be discussions in due course on this document and so I shall not talk about it any longer. However, I should like to encourage the Government in the views they have put forward in that document for discussion.
Let us examine the role of water authorities in these matters for the moment. The water authorities took an interest in navigation on certain waterways as a result of a bungle of bungles. In 1972 the Department of the Environment—which God preserve!—produced a wholly admirable plan to vest important functions of water provision and sewage disposal in regional water authorities. To

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these proposals they tacked a lunatic scheme, without first consulting anybody who knew anything about it, so far as I can discover, to abolish the Waterways Board and carve up the canal system between the new water authorities. Thus they hoped, at a stroke, to transfer the duties of navigation to bodies primarily concerned with water and sewage. This thinking was so muddled that it clearly exceeded the ill-defined boundaries within which muddled thinkers are allowed to operate. Hasty alterations had to be made at the last minute—and I am glad to hear laughter from the Conservative side of the House, because this measure happened to be one introduced by a Conservative Government—to the master plan. A compromise was achieved; British Waterways Board was saved, and the new water authorities assumed the responsibilities of certain well-established river authorities concerned with navigation, such as the Thames Conservancy, and a more misty role in connection with navigation on certain other waterways which came under their jurisdiction.
In, I suppose, an effort to sort out some of this mess, the Anglian Water Authority has brought this Bill before us; but the process of these developments has been unsatisfactory in the extreme or, to put it in another way, in the words of Mr. Dennis Howell, the right honourable Minister of State, Department of the Environment, as reported in The Times—though he may, of course, have said nothing of the sort:
"What the Tories did"—
and of course he would say that—
"was to create ten national industries at regional level. That was nonsense."
I agree with him so far as navigation is concerned. I am not qualified in any way to go with him further. In general, however, and in view of the Government's intention to review the structure and activities of the water industry, I submit that it would be unwise to support this private endeavour at legislation from the Anglian Water Authority at this time; for until such time as the central Government really come to grips with this problem I cannot see a national progressive policy towards the amenity use of our available water-space.
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In this connection, perhaps I might mention the National Water-Space Amenity Commission—they have not been mentioned today, so far as I am aware. This Commission was a device thrown up by the 1972 bungle of bungles. It labours on in an unfortunate position as a national advisory body which has not been given the wherewithal to pursue a national policy and which pursues an adroit public relations campaign, spearheaded by its excellent magazine, edited most expertly by my old friend Mr. Hugh MacKnight. Perhaps I might also mention the British Waterways Board, which is the nearest thing we have to a national navigation authority and which also labours on in an unfortunate position where it is not given the wherewithal either to pursue an aggressive national policy or properly to maintain, in my view, that major part of the national network it already controls.
This little private measure we have before us today merely seeks to contribute to the long and unsatisfactory history of our inland waterways. I should like to draw attention once again to Clause 12(1)(b), which embodies a proposal which further endangers the ancient rights of navigation upon our inland waterways, as a number of your Lordships have said. I suspect that such a thing should not be allowed to slip through our Parliamentary system by means of private legislation. I shall certainly support the noble Lord, Lord Harvington; and the noble Earl, Lord Kinnoull, who has spoken on this matter.
Perhaps I might also draw attention to Clause 40, which provides for the cost of this Bill to be paid by the Anglian Water Authority. The noble Earl, Lord Ferrers, had certain things to say about that. With this clause in mind, it seems to me very easy for water authorities—or, indeed, for local authorities or for any of the great corporations of the State or indeed of private enterprise—to finance private legislation or litigation out of their vast financial resources. It becomes harder and harder financially for individuals, groups of individuals, or voluntary organisations to oppose whatever is proposed by these great corporations or to put forward their own proposals. I consider this to be a great and growing injustice in our society.

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Finally, perhaps I might make some observations upon one last conclusion I draw from the appearance of this Bill and the opposition by a number of your Lordships to a certain clause in it. If the Inland Waterways Association—"the volunteers", if I may call them that—and the Anglian Water Authority had carved out an understanding between themselves embodying a measure of mutual trust and respect, I very much doubt whether we should be discussing this matter in this way today. Clearly it has not happened in this case, and I know of other areas where no understanding of this nature has been achieved. It has been said that the reorganisation of local government and of the water industry has created in these times of economic uncertainty a great deal of ill-feeling between the public and the Administration. To a certain extent, I think that is true. It is also true that within the reorganised administrative systems there exists a range of unattractive, unhealthy and costly antagonisms and power struggles. For instance, metropolitan districts do not seem to get on terribly well with metropolitan counties, and nobody I have ever met who is not a member of a water authority has ever had a good word to say about water authorities.
I have been rather harsh today, perhaps, on civil servants, or the Administration, or whatever you care to call it, whether in Whitehall or elsewhere. In one respect I make no apologies for so doing, in that it is the civil servants who are largely responsible for designing in detail these new systems. It is also up to the civil servants to make these systems work, so far as they are workable. I have the greatest respect for civil servants as individuals: they have a very difficult job to do, and by and large they undertake their tasks with great fortitude and to the best of their abilities. However, they occupy a position of great responsibility in our society, and consequently behind the scenes they occupy a position of considerable power. It is right that they should command our respect, and it is very worrying if the situation arises, as it has recently in the country, when the public seems to suffer a loss of respect for the Civil Service. It is pathetic that advertisements should appear in our national newspapers, as
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they have done recently, putting the case for the civil servants against criticisms that they feel may have been made against them. Such a move is a mis-judgment by civil servants of the situation. To regain the confidence of the public, the Civil Service must seek to create an element of human understanding which, perhaps, it has never had before, but which is required in the bureaucracy of our new administrative systems.
I will give your Lordships an example of what I mean. I live in a small town called Helmsley in the North Yorkshire Moors National Park. It is a three-road town and one of the roads enters the town round a very dangerous bend. Three years ago, the highway authority produced plans to straighten out that bend. The plan involved culverting and covering over a small, alas! unnavigable, inland waterway—a beck rambling down the centre of the street; a feaure of great and loved historical and environmental importance in Helmsley. The highway authority required to buy from me some land bordering a field, to enable them to execute their plans. I tried in every possible way to get them to alter their plans, in order to save the beck. I offered to sell them land on the other side of the road. I suggested the rerouting of the beck and so on. I resisted the sale of my land to the point immediately prior to a compulsory purchase position—to no avail. They would not alter their plans.
A fortnight ago, the bulldozers arrived and started operations, with resulting outrage and pandemonium among the citizens. The vicar offered to sit in the stream if it would help. Although I must say that I was rather tempted to do otherwise, I advised against it. Within 48 hours, in response to public opinion, the officials arrived on the site. Within another 48 hours, a formula was found for saving the beck by rerouting it. The officials visited the parish council to discuss new plans—all this in the middle of the road improvements taking place. This instance proves to me that bureaucracy need not be inflexible or inhuman. The North Yorkshire Highways official responsible was one Mr. Bishop, whose name should be set up in lights atop the Department of the Environment, because here is a man who has shown what may

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be achieved through a touch of understanding and humanity for the public by the civil servant. Here is a man who has proved that things which were not possible three years ago are possible today. Here is a man who opens up the possibilities within the grasp of those concerned with developing the amenity use of our water-space, including the Anglian Water Authority.
The development of our waterspace for recreation since the war has depended largely upon the volunteers, the amateurs, the part-timers, the clubs and the individuals. There is a vast wealth of enthusiasm and energy which can be channelled from the public into their continued development, even—and I say this to the noble Earl, Lord Ferrers—in these difficult economic times. The greatest danger of all to the future of our society in general, and today specifically to our waterways, is the capability of vast new corporate empires, embodied in local government, and organisations such as the Regional Water Authorities, to crush that great flair for initiative and self-help inherent in the British individual. So far as the Yorkshire Water Authority and the Yorkshire waterways are concerned, that danger is apparent. The fact that the noble Earl, Lord Kinnoull, has made the case today on behalf of the Inland Waterways Association reflects the fact that the danger is not entirely absent from the affairs of the Anglian Water Authority.
In the circumstances, I hope that if this Bill is to proceed through further Parliamentary processes, it will be the subject of very careful scrutiny indeed; and in view of the very powerful case made by a number of noble Lords, that even if it goes further this Bill is unlikely to be moulded into anything that will eventually pass into legislation, I support the noble and learned Lord, Lord Stow Hill.
6.34 p.m.
Viscount ST. DAVIDS: My Lords, I shall not detain your Lordships for long. I have great sympathy with the Anglian Water Authority. who have inherited a very considerable portion of a very nasty mess, and the fact that there are eight other Authorities each with some part of this mess is part of my case this evening. My view of what has been happening not only to our inland waterways
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but to all the other amenities which we now expect—angling, nature conservancy, preservation of our wild birds and so on—is that these have all been mishandled in much the same way, and they are all involved together. My view of the mess that has been made is very much that of the noble Lord, Lord Feversham, who has just been putting the point so very cogently.
I do not think we ought to let this Bill have a Second Reading tonight, and this is my reason. This is a very considerable job. It will need a great deal of doing, and we must get it right. If we leave it to the Anglian Water Authority to do it, they will no doubt have a very good shot at it and clear their own yard arm in some manner. We shall then presumably have eight more Bills from the other eight areas.
Lord NUGENT of GUILDFORD: We shall not.
Viscount ST. DAVIDS: My Lords, the noble Lord, Lord Nugent, says that we shall not. But have they no problems? Is the Anglian Water Authority the only one of the nine who have these problems? We know that it is not. In a lesser degree, these problems apply to all the other eight and, presumably, they all have to start spending money on the same process. What is more, there is a point which has not yet been made and which has brought me to my feet. I want to see the whole business done generally and nationally. I believe that in its provisional proposals the Green Paper is sensible and right. I want to see a national navigation permit for all boats. I want to see these problems sorted out between all the amenity interests. I want to see it done nationally, and the sooner the better. In my opinion, if we stop the Anglian Water Authority from doing what they intend, they will then go and knock on the door and cry on the shoulder of the noble Baroness, Lady Birk, and I am sorry to burden her with that. Not only will they do that, but so will the other eight authorities. This is what I call putting on pressure. Politics is a matter of pressure. Pressure is something which you put on in order to get things done, and the very finest pressure we can put on to get something done in this matter is by leaving these unfortunate Water Authorities to hammer on the door of Lady Birk and

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her associates until something is done. Therefore, let us say tonight "No, this must not be done in these bits and pieces. We want it done nationally, and the best way to do that is to stop it being done piecemeal now."
6.38 p.m.
Lord HARVINGTON: My Lords, if I may, I should first like to apologise most sincerely to all of your Lordships for not being here to move the Instruction standing in my name. Unfortunately, that was due to a late arrival at London Airport—something from which I am sure many of your Lordships have often suffered—but I do apologise. I should particularly like to apologise to the noble Lord, Lord De Ramsey, whose speech I missed. In fact, it was the only one I missed, because I was in hiding behind the screen where one can hear rather well.
I shall not delay your Lordships for many minutes. The case for the Instruction to be passed has been made out most ably by so many speakers this afternoon. In fact, the longer the debate went on, the more I began to like the Instruction. I thought I liked it a lot to start with, but I liked it more and more as the debate went on, and then when I heard what fell from the noble Lord, Lord Nugent, I really rejoiced,
"And even the ranks of Tuscany, Could scarce forbear to cheer."
So I think your Lordships will feel that you want to pass this Instruction this afternoon. I feel, unlike the noble Lord, Lord Nugent, that paragraphs (a), (b) and (c) of subsection (1) of Clause 12 give all the powers necessary for an Authority, such as the Anglian Water Authority, to do what they want to do in consultation with the Minister. I hope that the House will realise that fact. May I thank very warmly indeed my noble friend Lord Kinnoull for so kindly stepping into my place and moving, much more ably than I could possibly do, the Instruction standing in my name. One aspect which grieves me about our debate this afternoon is that on this occasion I feel that I cannot support—I was going to say my noble friend and only the exigencies of Parliamentary etiquette prevent me from calling him "my noble friend"—the noble Lord, Lord Stow Hill, in moving the rejection of the Second Reading of the Bill. I do not believe that would be the right course to
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take, and in view especially of what has been said by the noble Lord, Lord Nugent of Guildford, I for my part do not wish to do so. I hope, however, the House will do what has been suggested both by the noble Baroness and also by the noble Lord, Lord Nugent of Guildford: that if the Bill gets a Second Reading it should then proceed to pass the Instruction standing in my name.
6.41 p.m.
The Earl of LISTOWEL: My Lords, I am sure that your Lordships will agree that we have listened to a number of cogently argued and well-informed speeches canvassing exhaustively the merits and demerits of the proposals in this Bill. At this stage of the debate it would be difficult to add anything to these arguments and, fortunately for me, it is not my duty to the House to do so. It may, however, be for the convenience of the House if I made some observations on the procedural aspects of the Motions which the House has been discussing.
The noble Lord, Lord De Ramsey, has moved the Second Reading of the Bill. The effect of the Amendment of the noble Lord, Lord Stow Hill, is to deny the Bill a Second Reading, so I will, if I may, deal first with the Amendment of the noble Lord, Lord Stow Hill. I would say at once that for this House to refuse a Private Bill a Second Reading is not unconstitutional. The House has the power to do so but it has been done only on a very few occasions in the past—in fact, only four times in this century and never since the war. It was last done on the North Devon Electric Power Bill in 1937. To complete the information for your Lordships, I should add that the ground upon which it was rejected was that the Bill introduced a new principle. This has not been done in the present Bill.
The background to the practice which the House has almost invariably adopted in giving Private Bills a Second Reading is that, in doing so, the House is doing something qute different from what it does in giving a Second Reading to a Public Bill. In the case of a Public Bill the House is approving the principle of the Bill; but in the case of a Private Bill, when your Lordships give it a Second Reading it amounts to no more than a decision to refer all the questions raised

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by the Bill, and, of course, by any Petitions there may be against it, for consideration by a Select Committee. Such a Committee deals not only with particular matters in clauses but, if the scope of the objection is sufficient, with the whole policy of the Bill.
I should like to mention very briefly the origins of this procedure. Until about 1820—in the 18th century Private Bill business occupied Parliament more considerably than Public Bill business—it was the universal practice and the right of the Promoters of every Private Bill to appear at the Bar of the House and present their case there in person. Thereafter, for practical reasons, with the growth of public business the procedure had to be altered and the present machinery of the Select Committee was devised. These Committees are semi-judicial. They hear evidence and decide upon the evidence, just like any court of law. I venture to think that in the past this has proved a satisfactory machinery for dealing with these matters.
There are few issues on Private Bills which the House can decide satisfactorily without the benefit of hearing parties and witnesses—that is, the Promoters of the Bill, the Petitioners against the Bill and any witnesses whom they may wish to call to give evidence on their behalf. This cannot be done on the Floor of the House. It is therefore the usual practice for the House to allow Private Bills to proceed to Committee. As several noble Lords have mentioned, there are no fewer than 25 Petitions against this Bill, so there is no doubt that it will be very exhaustively considered if it is allowed to go to a Select Committee. The Select Committee will have to consider the need which the Promoters will wish to establish for the provisions of the Bill in the context of the objections which will be raised against it by the Petitioners.
This brings me to the Motion which has been moved in the name of the noble Lord, Lord Harvington, who has immense experience of these matters from his office in another place, providing that an Instruction should be given to the Select Committee. A number of these 25 Petitions deal, among other things, with
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Clause 12(1)(d) of the Bill which, as your Lordships have heard, provides for the Anglian Water Authority to make orders with regard to recreational waterways. Therefore, the Committee will in any event—that is to say, even if the Instruction had not been moved in the name of the noble Lord—consider the matters raised in the Instruction, but I can see no procedural objection to the acceptance by the House of the noble Lord's Instruction.
My advice to the House would therefore be like that of the noble Lord, Lord Nugent of Guildford, the noble Earl, Lord Ferrers, the noble Baroness, Lady Birk, and the right reverend Prelate the Bishop of London, that the Bill should be allowed to proceed to a Select Committee and, if the House agrees, that the Instruction should proceed in the same way.
6.58 p.m.
Lord DE RAMSEY: My Lords, I am very grateful to the noble Earl, Lord Listowel, for dealing so clearly with the procedural position. I had a note to say something about it, but clearly it is wholly unnecessary for me to do so. When I heard that a Green Paper was coming out I could not help wondering, like the noble Lord, Lord Stow Hill, whether or not this would make unnecessary the Anglian Water Authority Bill. Therefore I obtained a copy of the Green Paper at the earliest possible moment. I was also given to understand that there was nothing in the Anglian Water Authority Bill which pre-empted the Green Paper, and I was very grateful to hear the noble Baroness, Lady Birk, confirm this when she mentioned it. Even if this Green Paper recommendation, which will certainly cause a great deal of interest, were to be accepted as Government policy, the work that the Anglian Water Authority have done on this Bill will not be wasted; all of it will be required.
I should like to say a few words on the Instruction that has been moved in the name of the noble Lord, Lord Harvington. In the noble Lord's unavoidable absence, the noble Earl, Lord Kinnoull, dealt most ably with it. I fear that I must repeat that this is a recreation, not a navigation Bill. The

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anglers, above all, confirm that Clause 12(1)(d) is essential for the Authority to be able to hold the ring. By its sheer size and weight a boat is bound to dominate, if allowed to do so, any other interest. I feel that your Lordships have spent a great deal of time upon this matter and I do not wish to waste any more of it. Therefore, I will come quickly to the point and say that although I am convinced that the Authority must oppose the matter in Committee, if noble Lords accept that this clause requires special consideration the Authority will be happy to make their case before the Committee and will not oppose the Instruction moved by the noble Lord, Lord Harvington.
Finally, I feel that in fairness to the Authority I must answer some of the criticisms made by the noble Earl, Lord Ferrers. Clearly, he feels most strongly, most sincerely, and most indignantly on the Bill. I am not suggesting that he has engendered more indignation than he can conveniently consume, but I am suggesting that he has made mountains out of molehills. He referred to my catching a tiger by the tail, but I can only say that it was a paper tiger. Great play was made on twelve Petitions against Clause 12(1)(a) as a result of which—I think I am correct here—it was withdrawn. That is not correct. Clause 12(1)(a) was not withdrawn because of twelve Petitions. If the Association was slow off the mark and it did not get down to grass roots, then the Authority are not to blame if at a very late date the Petitions are accepted. On the contrary, they should be commended for accepting them and taking steps to meet them. I will say nothing further on the criticisms, but I felt that in fairness to the Authority I should try to defend them.
6.52 p.m.
Lord STOW HILL: My Lords, I rise only to make a very few observations. As I pointed out earlier, if your Lordships feel that the Motion is one you should not accept I will certainly myself vote in favour of the Instruction moved by my noble friend Lord Harvington. I have broken the rules of the House, but I hope your Lordships agree with me.
I want to make only one or two observations on what was said by my
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noble friend on the question of the procedure of the House. Procedure cannot be absolutely rigid. As he said, the procedure has, on occasion, been breached when necessary. The advice that he gave to the House was that if this Bill went to a Committee there could be arguments by counsel and there could be evidence given by expert witnesses which would show that the Bill ought not to proceed further in the Committee. In this particular case what on earth are the expert witnesses to say? I suppose they are to say that a Green Paper was published and in that Green Paper it was stated that the Government are very much attracted by the idea of a national authority, and because the Green Paper has indicated that as being the Government's view it is a waste of time going on in the Committee, doing what the Government wish to do under the umbrella of a national authority. If that is the procedure which is to be followed, I respectfully suggest that it should not commend itself to your Lordships. This is just one of the cases where there are special circumstances which, in my respectful submission to the House, justify making the procedure a little more elastic in order to meet a completely new situation.
In those circumstances, having listened very carefully to the debate, and being in the difficult position in which Members of your Lordships' House not infrequently find themselves, of having to ask oneself how one can best facilitate the deliberations of the House and assist the House to arrive at a conclusion that it would wish to arrive at on the balance of the arguments, I have come to the conclusion, rightly or wrongly, that I ought to invite the House to say whether the Bill should proceed further now or that it should not receive a Second Reading.
The DEPUTY SPEAKER (Lord Segal): My Lords, the original Question was, That this Bill be now read a second time, since when an Amendment has been moved to leave out all the words after "That" and insert the words printed on the Order Paper. The Question is, That this Amendment be agreed to?
6.55 p.m.
On Question, Whether the said Amendment shall be agreed to?
Their Lordships divided: Contents, 19; Not-Contents, 61.

CONTENTS

Broadbridge, L.

Hanworth, V.

Somerleyton, L.

Campbell of Eskan, L.

Inglewood, L.

Somers, L.

Colville of Culross, V.

Loudoun, C. [Teller.]

Stanley of Alderley, L.

Feversham, L.

Lyell, L.

Stow Hill, L. [Teller.]

Foot, L.

Onslow, E.

Trefgarne, L.

Greenway, L.

St. Davids, V.

Vickers, B.

Greenwood of Rossendale, L.

NOT-CONTENTS

Allan of Kilmahew, L.

Killearn, L.

Parry, L.

Amulree, L.

Lauderdale, E.

Platt, L.

Auckland, L.

Lee of Newton, L.

Rankeillour, L.

Aylestone, L.

Listowel, E.

Rathcreedan, L.

Bacon, B.

Llewelyn-Davies of Hastoe, B.

Ritchie-Calder, L.

Barrington, V.

London, Bp.

Rusholme, L.

Beswick, L.

Lonsdale, E.

St. Just, L.

Birk, B.

Mackie of Benshie, L.

Segal, L.

Blyton, L.

Macleod of Borve, B.

Shepherd, L. (L. Privy Seal)

Champion, L.

MacLeod of Fuinary, L.

Slater, L.

Collison, L.

Maelor, L.

Stewart of Alvechurch, B.

Davies of Leek, L.

Margadale, L.

Strabolgi, L.

De Ramsey, L. [Teller.]

Maybray-King, L.

Taylor of Mansfield, L.

Dulverton, L.

Mottistone, L.

Tranmire, L.

Dundee, E.

Northchurch, B.

Wade, L.

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

Northfield, L.

Wigoder, L.

Falkland, V.

Norwich, Bp.

Willis, L.

Harmar-Nicholls, L.

Norwich, V.

Wilson of Radcliffe, L.

Harris of Greenwich, L.

Nugent of Guildford, L.

Winterbottom, L.

Henley, L. [Teller.]

Oram, L.

Wynne-Jones, L.

Hylton-Foster, B.

7.7 p.m.
On Question, Bill read 2a, and committed to a Select Committee.
Lord HARVINGTON: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it be an Instruction to the Committee to whom it is committed that they should give special consideration to Clause 12(1)(d) to satisfy themselves that it does not constitute an undesirable extension of the powers and functions of Water Authorities, especially having regard to the fact that Section 112 of the Transport Act 1968 gives them all the powers they need in this respect.—(Lord Harvington.)

COUNTY OF SOUTH GLAMORGAN BILL [H.L.]
Reported from the Select Committee (on Recommitment) with Amendments; a Special Report made, and to be printed.
RAILWAY CLEARING SYSTEM SUPERANNUATION FUND BILL [H.L.]
Examiners Certificate that the further Standing Orders applicable have been complied with: Ordered to lie on the Table; Bill committed to the Committee on Unopposed Bills.
PREVENTION OF TERRORISM (TEMPORARY PROVISIONS) BILL
Returned from the Commons with the Amendments agreed to.
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