Sitting of 7 July 1977

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  LONDON TRANSPORT BILL
  Lords Amendments agreed to.

  MERSEYSIDE PASSENGER TRANSPORT BILL (By Order)
  Order for consideration, as amended, read.
  Bill to be considered upon Monday next at Seven o'clock.

  UNIVERSITY OF LONDON BILL [Lords] (By Order)
  Order for Second Reading read.
  To be read a Second time upon Tuesday next.

  BRITISH LINEN BANK ORDER CONFIRMA- TION BILL (By Order)
  Considered; to be read the Third time upon Tuesday next.
ORAL ANSWERS TO QUESTIONS
  NATIONAL FINANCE

    Land Fund
    Mr. Hordernasked the Chancellor of the Exchequer if he will set up, or reconstitute, a land fund, to be devoted to buying outstanding works of art, or buildings, for the nation and ensure that such a fund should have an independent board of trustees for its administration; and if he will make a statement.
    The Financial Secretary to the Treasury (Mr. Robert Sheldon): In view of the arrangements that already exist through the National Land Fund and other sources for the purchase of outstanding works of art and other property for the benefit of the nation, I do not consider that the establishment of a further fund is necessary. And even if such a fund were set up and controlled by a body of trustees, the basic problem would still remain of finding the money from within the resources available to the Government.
    Mr. Hordern: Whatever is the history of the National Land Fund, is it not abundantly clear, because of the muddle over Mentmore, that a strong case exists for setting up a separate fund to deal with the ravages caused by the capital transfer tax? Does the Financial Secretary agree that such a fund would be able to purchase works of art and land for the nation? Will he now reconsider this whole question, because of the severe loss to the nation that will otherwise occur?
    Mr. Sheldon: It is a question not of the money being available but the use of the money. The hon. Member will find that some of his hon. Friends would agree with the way in which the Mentmore case was handled.
    Mr. Bulmer: Is it not the case that our historic inheritance is second only to that of Italy and that inflation threatens it as never before? What work is being done in the Treasury to deal with the problems of maintaining our heritage until the end of the century? Will the Financial Secretary make its findings available to the House? Does he agree that the time has

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    come for a Royal Commission to go into the whole matter?
    Mr. Sheldon: The hon. Member talks about our artistic inheritance. I agree that it is a valuable part of that which we possess in this country. The hon. Member will be aware of the relief given under capital transfer tax and capital gains tax, and of the new clause that is being considered which gives relief to maintenance funds for historic houses. That will be widely welcomed.

    Public Bodies (Annual Reports)
    Mr. Hugh Fraserasked the Chancellor of the Exchequer whether he will now bring forward proposals to require every official body to institute an audit committee of non-executive offices, equivalent to the director level of a limited company, to supervise the preparation of the annual reports of official bodies and whom auditors, Members of Parliament and the general public may approach directly for information concerning the operation, accounting and reporting of official bodies.
    The Chief Secretary to the Treasury (Mr. Joel Barnett): No, Sir. It is difficult to see what further information in addition to what is already available would be provided by this kind of audit committee.
    Mr. Fraser: Is the Chief Secretary aware that I am astonished by his reactionary attitude? If there is to be any form of industrial democracy is it not essential that the public and those employed by these official bodies be given full information? Will the Chief Secretary consider this very seriously?
    Mr. Barnett: I am not sure why the right hon. Member is astonished that I take a reactionary attitude. Many of my hon. Friends take that as read, but they are as wrong as the hon. Member. I agree with him in the sense that of course we should have the maximum information. However, I do not believe that audit committees would help us in providing the kind of information that both he and I would like to see.
    Mr. Clemitson: Does my right hon. Friend agree that considerable concern has been engendered in recent years
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    about the auditing of the accounts of private companies? Will the Government consider setting up a public audit board, along the lines that I suggested in a Ten-Minute Bill some weeks ago, with power to audit the affairs of private companies?
    Mr. Barnett: As my hon. Friend and the House will know, in a previous existence I had some experience of this matter. There have been one or two cases of auditors in public companies that have given cause for concern but in the main I have no hesitation in saying that the professional firms of auditors do a first-class job in auditing public and private accounts.

    Import Levies (Wheat)
    Mr. Bodyasked the Chancellor of the Exchequer how much revenue has been derived from import levies on common wheat in the 12 months prior to the last convenient date.
    Mr. Robert Sheldon: For statistical and tariff purposes common wheat includes meslin, a mixture of wheat and rye, and figures are not available for common wheat separately. The net revenue derived from import levies on common wheat and meslin in the 12 months ending April 1977 was nearly £13 million.
    Mr. Body: Is the right hon. Gentleman aware that that is an enormous figure, which is really a tax upon food and represents no less than 39 per cent. on the price of imported wheat? How can he justify this to any constituent of his? Is he aware that the United States Department of Agriculture is now considering a policy of setting aside acres, as it is called, and thereby prohibiting American farmers, who can grow wheat more cheaply than anyone else, from growing that wheat, because of the system of levies and the way in which they are shutting out wheat from this country?
    Mr. Sheldon: The hon. Gentleman will know the obligations that we entered into. These levies are a consequence of our obligations. I understand the point that the hon. Gentleman has raised, and that he believes that food will be rather harder to obtain on the world market in future, perhaps, than it has been in the past—
    Mr. Body: Why set aside acres?
    Mr. Sheldon: —and that this may not be the best way to conduct our operations in future.

    Inflation
    Mr. David Mitchellasked the Chancellor of the Exchequer what he regards as the five most important causes of inflation over the last two years; and if he will indicate the estimated percentage of inflation which each has caused.
    Mr. Joel Burnett: It is impossible to give precise figures. But I estimate that two-fifths might be attributable to higher labour costs; one-fifth to higher world prices; and one-fifth to depreciation. Of the remaining fifth, about half is due to increased taxes and the rest to an assortment of minor factors, none of which predominates.
    Mr. Mitchell: Is the Minister aware that the figures that he has just given show a remarkable increase in the labour element of inflation during the last year compared with the answer he gave to this question 12 months ago? Which of these items does he expect to go down, and by how much, if inflation is to go into single figures by the end of the year, as promised?
    Mr. Barnett: One thing I can say today when the hon. Gentleman asks which of these elements I expect to go down is that if there were a Government of which he and his party were members —[HON. MEMBERS: "Answer."]—I think that I should tell the House this —any one of these items that caused this rate of inflation would be considerably worse.
    Mr. George Rodgers: Is my right hon. Friend seriously suggesting that a massive increase in profits, particularly by major food retailers, during the last 12 months has not had its impact on inflation?
    Mr. Barnett: Actually, I am saying that. I know that my hon. Friend may find it hard to believe, but in fact, over the last two years profits have had a negative effect on prices generally, so I am afraid that, as pleasant as it might be to find one simple answer to our problems of inflation, by way of excessive profits, that is not the case.
    Mr. Powell: Does the Chief Secretary recognise that when the temperature rises it is registered by the rise in a column of mercury, but the rise in temperature is not caused by the rise in the column of mercury?
    Mr. Barnett: I am not sure whether that is a philosophical argument or a practical one, but either way, if the right hon. Gentleman were to have his way and deal with this problem wholly through money supply I fear that there might be other consequences that would be equally damaging to our society.
    Mr. Pavitt: Although my right hon. Friend finds no difference of profits in terms of prices in generality, will he have a special look at the pharmaceutical industry, in view of the bumper profits made by Beecham, most of which are paid for by the taxpayer?
    Mr. Barnett: I am always happy to look at all kinds of things. I shall certainly be looking at pharmaceutical profits and prices. As much as I seem to be responsible for many things, that is not one of my direct responsibilities, but I shall see that it is brought to the attention of my appropriate colleague.
    Mr. David Howell: Will the right hon. Gentleman tell us about the Treasury's official inflation target now? Is it still single figures by the second quarter of next year, by the second half of next year, or not next year at all?
    Mr. Barnett: I am not sure whether the hon. Gentleman should have been smiling then. He seemed to be taking some pleasure from the thought that we might not achieve single-figure inflation. I hope that that is not his view. It is still our view that, given the right sort of policies, which we are pursuing, we can have single-figure inflation in the middle of next year.
    Mr. David Mitchell: On a point of order, Mr. Speaker. In view of the unsatisfactory non-answer to that Question, I beg to give notice that I shall seek an early opportunity to raise the matter on the Adjournment.
    Mr. Canavanasked the Chancellor of the Exchequer what is the current rate of inflation.
    Mr. Neubertasked the Chancellor of the Exchequer what is the latest annual rate of inflation.
    Mr. Watkinsonasked the Chancellor of the Exchequer whether he remains satisfied with progress towards reducing the rate of inflation.
    Mr. Joel Barnett: Over the 12 months to May, the retail price index rose by 17·1 per cent. By the fourth quarter of this year I expect the annual rate of inflation to be reduced to 12·13 per cent. But I shall not be satisfied until we have brought inflation down to the levels of our main international competitors.
    Mr. Canavan: Will the Government now take urgent measures to introduce a selective price freeze and reject any demands from the Liberals and others for a statutory incomes policy? Do not the decisions taken this week by the National Union of Mineworkers and the Transport and General Workers' Union show clearly that their members are fed up with having to make all the sacrifices, while exorbitant price increases are imposed by profiteers whom the Chancellor of the Exchequer once wanted to squeeze until the pips speak?
    Mr. Barnett: As my right hon. Friend made clear a moment ago, we are opposed to the idea of a statutory incomes policy. I agree with my hon. Friend that price increases were of great concern to those voting in the two recent trade union conferences. But there is also the question of real living standards, and it is interesting that even with rates of inflation rather higher than the present one there was not the same feeling as there is today. The main reason for that is that the cut has had to be in real living standards. That should not continue from now on. For the rest of this year that should remain stable, and from there on we should see increases in real living standards and falls in the rate of price inflation.
    Mr. Neubert: As the Chancellor of Exchequer has reaffimed his support for public expenditure limits this afternoon as part of his counter-inflation policy, why are there persistent reports of stopping the school meals increase, of freezing nationalised industry prices, and of re-introducing food subsidies? Do the
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    Government intend to do any of those things?
    Mr. Barnett: I really cannot comment on all the persistent reports in the Press about the matters that the hon. Gentleman has raised, and many others. I can only repeat that we shall stick to our public expenditure limits.
    Mr. Kinnock: Is my right hon. Friend aware that the decision to maintain cash limits in the public sector, against the background of the figures that he gave, is very worrying indeed, and is either a directive by the Government to subsidise the remainder of the economy through low wages or a formula for industrial warfare in the public sector in the coming year? Will my right hon. Friend reconsider the decision?
    Mr. Barnett: There is no question of the Government seeking industrial warfare in the public sector, or indeed in any other sector. I ask my hon. Friend to understand that the maintenance of cash limits is not worrying in the sense that he would have us believe. I believe that the maintenance of cash limits has done much for confidence in the financial system of this country, and therefore also for interest rates and the maintenance of jobs. That is why we intend to stick by it.
    Mr. Bugden: Will the Chief Secretary please answer the question that the Chancellor of the Exchequer did not answer about the sterling exchange rate? Will he tell the House whether it is the policy of the Government to hold down the rate? If it is the Government's policy, how long do they intend to persist in it?
    Mr. Barnett: The hon. Gentleman cannot have been listening. I think that my right hon. Friend the Chancellor of the Exchequer answered the question perfectly, and I could not add anything to it.
    Mr. Watt: Will the Minister acknowledge that one of the main reasons for the current rate of inflation continuing is that we import far too many manufactured goods and raw materials and far too much food, which our producers could supply, when we should have a positive policy of import substitution? Does he agree that that would not only help the balance of payments and the rate of inflation but would provide more jobs

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    for the many thousands who are out of work?
    Mr. Barnett: I agree with the hon. Gentleman in the sense that the answer to the problem is to improve our output and our productivity, and increase the amount of goods that we produce in substitution for imports. That is our policy.

    Chancellor of the Exchequer (Engagements)
    Mr. Greville Jannerasked the Chancellor of the Exchequer whether he will list his official engagements for 7th July.
    The Chancellor of the Exchequer (Mr. Denis Healey): I have several meetings with my ministerial colleagues during the course of the day. In the afternoon I am answering parliamentary Questions.
    Mr. Janner: When my right hon. Friend has a breathing space between answering Questions and meeting his colleagues, will he express to the trade union movement the appreciation of the House for its help in the reduction of inflation by two years of loyal adherence to pay restraint, and will he also indicate to the House what he considers to be the prospects for a future agreement, in view of the conferences of the miners and the transport workers?
    Mr. Healey: I never miss an opportunity of expressing the Government's gratitude to the trade union movement for the contribution, to which my hon. and learned Friend rightly points, that it has made to the conquest of inflation in the last two years. On the question of the prospects for the coming year, there are a number of Questions later on the Order Paper, which I shall be answering in the next few minutes.
    Mr. Peter Bottomley: Will the right hon. Gentleman find an opportunity today to tell the House and the country what level of pay increases during the next year is consistent with an inflation rate of less than 10 per cent. during the coming 12 months?
    Mr. Healey: I have already made that clear in answers to earlier Questions.
    Sir J. Langford-Holt: Can the right hon. Gentleman explain how altering
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    inflation from 8 ·4 per cent. to over 17 per cent. can be called a reduction, in any language?
    Mr. Healey: If the hon. Gentleman is asking a serious question, let me say that he will be well aware that the rate of inflation was halved between the beginning of the first year of phase policy and the beginning of the second year.

    Profit Sharing
    Mr. Buhnerasked the Chancellor of the Exchequer whether he will introduce measures to encourage the extension of profit sharing in industry.
    Mr. Joel Barnett: My right hon. Friend has no plans to do so at present.
    Mr. Buhner: Why?
    Mr. Barnett: We are still thinking about it.

    Widows' Pensions
    Mr. Hodgsonasked the Chancellor of the Exchequer what further representations he has received about the treatment of widows' pensions.
    Mr. Robert Sheldon: I have received a number of representations about the tax treatment of widows' pensions from hon. Members, widows' organisations and others.
    Mr. Hodgson: Is the Minister aware of the hardship that is caused by the tax treatment of working widows? Does he consider the present treatment to be fair or equitable? What will he do about it?
    Mr. Sheldon: The hon. Gentleman will know that these matters have been debated at considerable length in Finance Bill Committees and that reports of the proceedings are available in the Vote Office. These matters are gone into with very great care. A number of amendments have been moved. We have improved the widows' pension very considerably over the past three years. The hon. Gentleman might find some gratification in knowing that.
    Mr. Hooley: Does my right hon. Friend agree that an excellent way of dealing with this problem would be to raise the tax threshold, which would help not only widows but many other people on low incomes?
    Mr. Sheldon: I understand the point that my hon. Friend raises. Obviously one is always anxious to increase tax thresholds wherever possible, but that would have the consequence, as my hon. Friend will know, of helping everyone all the way up the income scale and giving most assistance to those on the higher incomes.
    Mr. Evelyn King: Has the right hon. Gentleman received any protest from rate-paying widows in Hampshire about the case of Mr. Johnson, who resigned at the age of 42 on a pension of £8,000 a year, drew a gratuity of £20,000, was then re-employed at £8,000 a year by the land authority of Wales and has, I understand, a right to a further pension? As the right hon. Gentleman represents the Department that is ultimately responsible for public finance, will he comment on that case?
    Mr. Sheldon: I am not sure what that has to do with the Question, but I look forward with great interest to receiving details of the case.

    Incomes Policy
    Mr. Ridleyasked the Chancellor of the Exchequer what he intends to be the standard rate of income tax for 1977–78.
    Mr. Biffenasked the Chancellor of the Exchequer when he next proposes to meet members of the TUC and CBI in order to discuss the Government's incomes policy.
    Mr. Adleyasked the Chancellor of the Exchequer if he will make a statement on his negotiations with the TUC on phase 3.
    Mr. Croninasked the Chancellor of the Exchequer if he will make a further statement on the progress of his negotiations with the TUC on the phase 3 incomes policy.
    Mr. Michael Lathamasked the Chancellor of the Exchequer whether he will now make a statement on his discussions with the TUC regarding a possible stage 3 of incomes policy.
    Mr. John Huntasked the Chancellor of the Exchequer if he will make a statement on the latest position regarding incomes policy for the coming year.
    Mr. Ioan Evansasked the Chancellor of the Exchequer if he will make a statement on the progress of his negotiations with the TUC on the phase 3 incomes policy.
    Mr. Healey: Our discussions on the pay arrangements for the period after 31st July are continuing. As soon as I am in a position to do so, I shall make a statement to the House. This will include an announcement about the basic rate of income tax for the current year.
    Mr. Ridley: With respect, Mr. Speaker, my Question was not about the pay arrangement. Does not the Chancellor think that it is disgraceful that three months after the start of the financial year he has not yet informed the country of the rate of income tax that he thinks we shall all be paying during the current financial year? Irrespective of the failure of his stage 3 negotiations, will he now tell the House what he believes the rate of income tax should be, because the House might decide otherwise, as it has on the personal allowances? What does he believe the rate of income tax should be?
    Mr. Healey: If disgrace is attached to not informing the country yet of the rate of income tax this year, the hon. Gentleman shares it. He has done his best in the Finance Bill Committee to change the intentions of the Government on a number of matters, and has succeeded in one or two instances, so I hope that we shall not have any more prattling from him about the morality of this problem.
    Mr. Biffen: As there is now evidence that phase 3 of the incomes policy is free collective bargaining, by whatever other name, will the right hon. Gentleman give an undertaking to the House that the Government will fully implement their proposed public expenditure economies and, furthermore, will desist from interfering in the pricing policies of the nationalised industries?
    Mr. Healey: The hon. Gentleman is aware that the Government have committed themselves to specific targets for public expenditure, for money aggregates, and for domestic credit expansion. They will stick to those targets, a factor not without importance in relation to any possible pay increases in the coming year. The hon. Gentleman is also aware that

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    we inherited a deficit of £1,500 million in the nationalised industry accounts because of price subsidies forced upon them by the last Government. We have completely wiped out that deficit. I hope that he will pay this Government some credit, since he shared in the responsibility for the activities of the last Government.
    Mr. Adley: Now that the big unions have put the seal of failure on the Government's economic policy, as Lord Ryder did last week by voting with his seat—with his feet—a Freudian slip, that —will the Chancellor nevertheless deny the scurrilous rumour on the tape this morning that the Government may be thinking of introducing an economic policy without the permission of the TUC and actually seeking to govern in the national interest rather than in a sectional interest?
    Mr. Healey: I think that the House would be much happier if the hon. Gentleman spent even more time than he does on his seat.
    Mr. Latham: Is not the whole concept of meaningful stage 3 now complete nonsense? If so, does the Chancellor still intend to go ahead with cutting income tax and reflating the economy?
    Mr. Healey: I do not think that the possibility of a meaningful agreement with the TUC on pay policy after the expiry of the present round is by any means to be ignored. I shall be discussing this problem next week with the members of the economic committee of the TUC, and I shall tell the House of my intentions on income tax when those discussions are concluded.
    Mr. Hunt: Does the right hon. Gentleman recall that only last month he was warning the Nottinghamshire miners against going back to the kind of wage explosion that we had two years ago, and what he called the "collective insanity" of that time? As he was himself in charge of the economy two years ago, was that not a quite remarkable political confession? Is not the main difference between then and now that whereas in 1975 the Labour Party had just incited the miners and others to go for the jackpot in wage claims, that free-for-all has caught up with the Labour Government and so they are now espous-
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    ing the kind of moderation and restraint that they consistently dismissed and derided during the period of the Conservative Government?
    Mr. Healey: The complexity and confusion of the hon. Gentleman's supplementary question is exceeded only by its feebleness. I stand by every word that I said in Nottingham to the miners about pay. It was repeated by Mr. Daly and Mr. Gormley at the NUM conference two days ago. I was shocked to find that when a decision was taken by another union to go back to unfettered free collective bargaining a day later it was immediately quoted and welcomed by the official spokesman of the Opposition Front Bench.
    Mr. Evans: As my right hon. Friend has said that the trade union movement has made a great contribution to bringing about changes in our economy, and as the economic indicators show a great improvement, will my right hon. Friend. in his consultations, ensure that the trade unions begin to reap the benefit of the contributions that they have made in recent years?
    Mr. Healey: I think that the trade unions are well aware of the benefits that they have gained over the last two years. That is why a majority of the members of the movement, whose unions have already declared their position on the policy for the next round, wish for an orderly return to free collective bargaining. It is well understood by most of the union membership that to go back to a free-for-all or a wage explosion would be more disastrous to the members of the trade union movement than to any other part of the population.
    Dr. Bray: As hon. Members will have to make decisions about how they vote on the Report stage of the Finance Bill, and in view of the developing economic situation, will my right hon. Friend consider issuing either a White Paper or a full statement of his view of the economic situation in plenty of time for us to consider it before Report?
    Mr. Healey: I propose to make a statement to the House about the matters germane to the Report stage of the Bill as soon as discussions with the trade union movement are completed, and in good time for a debate in this House.

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    The Government plan to produce a White Paper on their counter-inflation policy in the coming year, also in time for it to be debated during the course of the Report stage of the Finance Bill.
    Sir G. Howe: In view of the right hon. Gentleman's clear indication that the proposed cuts in income tax are still conditional on the achievement of a satisfactory agreement on pay, can he give at this stage some indication of what he now regards as a satisfactory agreement? In particular, can he give an assurance that he will not be tempted to buy an agreement that amounts to no more than a piece of paper by making dangerous concessions towards premature reflation? Will he now answer specifically the question put by my hon. Friend the Member for Oswestry (Mr. Biffen) and assure us that he will not go back on the public expenditure cuts previously announced or re-embark on subsidising nationalised industries' prices, but will stick to his letter to the IMF?
    Mr. Healey: I have already answered the last of the right hon. and learned Gentleman's questions. I do not know whether he was here at the time or whether he was listening. I said that the Government intend to stick to the ceilings that they had set for money supply, domestic credit expansion, the public sector borrowing requirement, and public expenditure during the coming year. On the question of the relationship between tax cuts and pay policy, I quote again what I said in my Budget Statement on 29th March. I said that I could not commit myself to a decision on the second group of tax concessions
    "until a satisfactory agreement on a. new pay policy has been reached…."—[Official Report, 29th March 1977; Vol. 929, c. 283.]
    I made it clear that that would require assurance of a continuing fall in the inflation rate.
    Mr. Atkinson: Does my right hon. Friend agree that the theme common to the conferences of the transport and engineering workers and miners has consistently been the threat of rising prices? If the whole argument about the future is about the restoration of confidence and credibility, should he not now arrange some discussions with the Secretary of State for Prices and Consumer Protection, taking a leaf from his book in
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    arguing for price controls as the only reasonable way to make progress in wage negotiations, so that trade unionists can freely bargain their wages against price ceilings readily agreed by the Government?
    Mr. Healey: No, Sir. I am in constant contact with my right hon. Friend the Secretary of State for Prices and Consumer Protection, and we never disagree about anything, as my hon. Friend the Member for Tottenham (Mr. Atkinson) will be glad to hear. I am aware that there is very great concern and that a great deal of suffering has been caused to many sections of the population by the rate of price inflation over the past 12 months. The House will also be aware that a major cause of price inflation was the depreciation of sterling, which resulted from excessive levels of inflation in the previous year and which at least one of my hon. Friends wishes to go a very great deal further. I do not think that he has much support in the trade union movement for that.
    The fact is that sterling has been stable over the past seven months at a level 16 cents above the value it reached in October last year, and that will be working through into the year-on-year retail price index in a couple of months' time.
    Mr. Pardoe: Has the Chancellor of the Exchequer read this week the Fabian pamphlet, written by Nicholas Bosanquet, which says that a return to free collective bargaining would be unthinkable for the present wage bargaining system? Does the Chancellor regard that view as the authentic voice of British social democracy, and does he agree with it?
    Mr. Healey: I know, like and admire Mr. Nicholas Bosanquet, but I do not think that he has any more claim than hundreds of my other friends, including many of my hon. Friends, to be the authentic voice of British social democracy.

    Bank of England
    Mr. MacGregorasked the Chancellor of the Exchequer when he next plans to meet the Governor of the Bank of England.
    Mr. Healey: I maintain close contact with the Governor of the Bank of England, meeting him on a regular basis

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    and also as and when circumstances require.
    Mr. MacGregor: Does the Chancellor of the Exchequer recall that the last published statement of the Bank of England was that with an expected rate of money expansion of 9 per cent. to 13 per cent. this year, the rise in wage costs will have to be significantly below this in order to allow for real growth? Will that be the Chancellor's view when he next meets the Governor of the Bank of England? Is it the Chancellor's intention that the Government's target of not more than 10 per cent wage costs, as stated by the Chief Secretary, will at least be applied by the Government in the sector over which it has responsibility and control, namely, the public sector?
    Mr. Healey: I read the article in the Bank of England "Bulletin" with admiration at the time, but I think that the hon. Gentleman is confusing a number of separate factors—an increase in earnings, an increase in wage settlements and an increase in wage costs, which is an increase in earnings from which the increase in productivity over the period has been deducted.
    Mr. Heffer: If my right hon. Friend should have discussions with the Governor of the Bank of England, will he avoid any commitment of any kind to legislation on the question of wage control? Is he aware that many of us believe that it is perfectly understandable that the Transport and General Workers' Union and other unions should have voted in the way they have, because of the lowering of standards of the workers over this last period? Will he therefore take these things into consideration as another view of democratic Socialism in this country?
    Mr. Healey: The Government have made it clear on very many occasions that they are totally opposed to statutory control over wages involving penal sanctions against working people. They have, of course, also supported wage policy over the last two years by various types of legislation acting through prices.
    Mr. Powell: As the Chancellor of the Exchequer has just told the House that the exchange rate of sterling has been one of the causes of the rate of inflation, will he tell the Governor of the Bank of England to desist from holding
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    down the sterling rate by borrowing and by increasing reserves?
    Mr. Healey: I frequently discuss this and other matters with Mr. Governor, but I think he finds that sterling is subject to pressures from both sides, rather as I am pressed on the matter of sterling values by some of my hon. Friends and by the right hon. Member for Down, South (Mr. Powell). But I think that the current policy that the Bank is following in relation to the value of the pound sterling is a very sensible one, and this view has been endorsed by the International Monetary Fund, among others.
    Mr. Ashley: On the question of wages control, although Conservative Members are delighted at the recent setbacks to the Government's income policy, is it not a fact that the good sense and moderation of trade unionists on the shop floor can still prevail during negotiations, despite recent votes? When my right hon. Friend says that trade unionists are aware of the benefits of phases 1 and 2, I am not sure that he is right. Have not the Government responsibility for telling all trade unionists of the benefits that have come to them from the policy of the past two years?
    Mr. Healey: I think that all who have the interests of Britain at heart share this responsibility, not only the Government. My hon. Friend will be aware that I have accepted and carried out this responsibility on very many occasions over the past three years.
    I think it is undoubtedly the case that common sense will prevail in the overwhelming range of wage negotiations and that the leadership of many unions very much supports common sense. Those in the House who have the interests of the country at heart should welcome the efforts that have been made by trade union leaders—even where they have been unsuccessful, as with Mr. Jack Jones and Mr. Joe Gormley—to put the facts of the situation honestly and squarely to their membership.
    Mr. Hordern: Will the Chancellor of the Exchequer give a clear assurance that the cash limits in the public sector, which allow an increase in wages of only 5 per cent., will be strictly maintained?
    Mr. Healey: Yes.
    Later—
    Mr. Adley: On a point of order, Mr. Speaker. On Question No. 11, the Chancellor of the Exchequer announced that there would be no statutory incomes policy, and the hon. Member for Cornwall, North (Mr. Pardoe), from a sedentary position, invited the right hon. Gentleman to "Get stuffed". Is that parliamentary language, Mr. Speaker?
    Mr. Speaker: Order. I am very pleased to say that I did not hear it.

    Balance of Payments
    Mr. Hooleyasked the Chancellor of the Exchequer what is his current estimate of the out-turn on the balance of payments current account for the year 1977.
    Mr. Robert Sheldon: The Financial Statement and Budget Report this year forecast that the current account would show a deficit of half a billion pounds in 1977. This forecast now appears likely to be too pessimistic.
    Mr. Hooley: Is my right hon. Friend aware that I welcome his statement that the forecast is too pessimistic? Does he agree that it is important to take advantage of the betterment of the balance of payments position to reduce interest rates still further and to push more money into industrial investment through the National Enterprise Board?
    Mr. Sheldon: I am grateful for what my hon. Friend says about the improved position of the balance of payments. I note his comments on interest rates. He will be aware of the considerable fall in interest rates that has taken place over the past few months. Let us hope that that will lead to the sort of investment that I think he foresees.
    Mr. Gould: Will my right hon. Friend say how much of the improvement will be accounted for by an increase in our share of world trade and manufactures?
    Mr. Sheldon: These matters are always hard to predict. There is no question but that there has been an improvement not only in our exports but in the terms of trade and in our invisible earnings. All these factors have contributed to the considerable improvement in the overall position of the balance of payments to
    1414
    which my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) referred.
    Mr. Peter Bottomley: Will the right hon. Gentleman confirm that during the past year there has been a great improvement in our trading position with the rest of the EEC?
    Mr. Sheldon: Certainly there has been an improvement in our exports to the EEC in comparison with last year's figures. This is an encouraging trend that we welcome and hope will continue.

    Tax Arrears (Remissions)
    Mr. Shersbyasked the Chancellor of the Exchequer whether he will review the present income limits for remission of arrears of tax which have arisen through official error.
    Mr. Robert Sheldon: Changes in the income limits which govern the practice set out in the White Paper of July 1971, Cmnd. 4729, were announced on 30th March 1977 during this year's Budget debates. The new higher limits, which operated from the date of the announcement, replaced those which were fixed at the time of the previous revision in 1974.
    Mr. Shersby: Is the right hon. Gentleman aware that those increases will be welcome not only to my constituents but to many hon. Members who have to write to the Inland Revenue in connection with official errors? Will he please do everything possible to ensure that the level of official errors by the Inland Revenue is reduced?
    Mr. Sheldon: I am glad to note the welcome that has been given by the hon. Gentleman for the revision, which takes into account the changes in values and the importance of the matters that he has raised. We are doing all that we can to reduce the level of official errors.

    European Community (Budget)
    Mr. William Hamiltonasked the Chancellor of the Exchequer what progress has been made in resolving the problem arising from the demand that the United Kingdom contribution to the EEC budget be substantially increased; and whether he will give an assurance that this will continue to be resisted.
    Mr. Joel Bamett: Her Majesty's Government have made quite clear to the Governments of the other member States of the Community that they cannot agree to increases in United Kingdom contributions to the Community budget in 1978 and 1979 as a result of introduction of the European unit of account. I hope that this position will soon be accepted by them.
    Mr. Hamilton: Does my right hon. Friend agree that virtually the whole House will support his robust reaction to this proposal? When does he expect the matter to be resolved?
    Mr. Barnett: There is a Budget Council meeting on 20th July that I shall be attending. If the matter is not settled before then, I hope to be able to persuade the other Ministers to accept the view that we take, which is also the view of the Commission.
    Mr. Wrigglesworth: Will my right hon. Friend confirm that the Government will generally be supporting increased expenditure on the Regional Fund and the Social Fund?
    Mr. Barnett: The review of the regional fund is still in progress. I cannot comment on its outcome.

    European Community (Tariffs)
    Sir J. Langford-Holtasked the Chancellor of the Exchequer what effect the final abolition of tariffs between the countries of the EEC on 1st June will have on the numbers of customs officials in Dover and Folkestone.
    Mr. Robert Sheldon: As a result of the abolition from 1st July of tariffs on infra-Community trade for all goods except horticultural products, it is estimated that 40 fewer Customs staff will be required on this work in the port of Dover and seven fewer in the port of Folkestone.

  HOME DEPARTMENT

    Immigrant Workers
    Mr. Stanbrookasked the Secretary of State for the Home Department if, in view of the high level of unemployment in Great Britain among workers who have nowhere else to go, he will propose
    1416
    a scheme to encourage the voluntary repatriation of immigrant workers on the lines of that adopted in France.
    The Minister of State, Home Office (Mr. Brynmor John): No, Sir.
    Mr. Stanbrook: Is the hon. Gentleman aware that there are thousands of native-born Britons who are unemployed in this country whereas thousands of immigrant workers from abroad, whose homes, families and loyalties lie elsewhere in the world, are filling the jobs of our people? Will he put the interests of Britons first?
    Mr. John: First, I totally reject the idea that it is immigrants who cause or aggravate unemployment. Secondly, there is a fundamental difference when those who come here regard Britain as their settled home. I reject totally the idea of divided loyalties among our minority communities.

    SECRETARY OF STATE FOR INDUSTRY (SPEECH)
    Ql. Mr. Blakerasked the Prime Minister if the public statement by the Secretary of State for Industry at the Union of Post Office Engineers' Conference on 19th June 1977 concerning the economy represents Government policy.
    The Prime Minister (Mr. James Callaghan): Yes.
    Mr. Blaker: Is the Prime Minister aware that his right hon. Friend was reported as saying that the Labour Government do not intend to hand over to the Tories the hard-won fruits of their policy? Does the right hon. Gentleman think that one of the fruits that his right hon. Friend had in mind was the current unemployment figure of 1,450,000? In the light of recent trade union decisions, is there any prospect of avoiding an increase in that figure?
    The Prime Minister: I always thought that my right hon. Friend was a man of good sense. The quotation has undoubtedly confirmed that view. As I have said on many occasions, unemployment is the one serious blot in the progress that the Government are making. In view of the fact that world trade is not increasing as fast as we had all planned and

    1417
    hoped for when we met as a group of international countries, I do not look for —[Interruption.] I shall shout a little louder. I do not look for as much support from that as I would have hoped. Therefore, it is even more imperative to overcome inflation so that we can start domestic expansion in due course.
    Mr. Radice: Does my right hon. Friend agree that without the social contract we could not have got through the past two years? Does he further agree that if free collective bargaining leads to a wages explosion it will undo all the sacrifices that trade unionists have made over the past two years and abort any economic recovery?
    The Prime Minister: There is no doubt that the social contract contributed a great deal to maintaining good industrial relations at a time when the British people were suffering an overall cut in their standard of life. It enabled us to preserve some social cohesion in those circumstances. I am not surprised—I do not think anybody else is—by the great tensions that have arisen as a result of the policy. What is important is that we should have moderate wage settlements during the next 12 months. I entirely agree with my hon. Friend that if there is an explosion it is clear, as I have frequently said, that a great deal of the hopes that we have for reducing inflation will be destroyed.
    Mrs. Thatcher: Is the Prime Minister aware that many of us think that there is rather more than one blot upon his economic record and that the fact is that the result of his whole incomes policy has now led, inevitably, we believe, to a low-output, low-wage, high-prices and high-tax economy? Does he not recognise that unless he changes that strategy this country will fall progressively further behind in its standard of living compared with those of our industrial competitors?
    The Prime Minister: What I think is true, as I have spelt out to the right hon. Lady on many occasions, is that unless we have an increase in productivity, and unless both management and unions work together to achieve that, the standard of life of this country will progressively fall behind. There is no difference between us on that. What I do not understand from the right hon. Lady—I still do not understand it after having read the speech
    1418
    that she made last Monday—is what alternative policies she has for producing the magic recipe that has so far escaped the country during the past 30 years.
    Mrs. Thatcher: Perhaps the Prime Minister will one day say to the people of Britain what I believe the people of Ashford and Stechford are wanting him to say, namely, that they believe that they can spend their money better than he can and that he should leave them with a bigger proportion of their own earnings in their own pockets. Is the right hon. Gentleman aware that until he has some sort of incentive policy we shall get what we have had under his prime minister-ship and that of his predecessor, namely, a flat reduction with no prospects of an increase?
    The Prime Minister: No, I do not interpret the attitude of the British people in that way at all. The real truth is that the British people want both lower taxes and higher services. They want both more money in their pockets and no waiting lists at the hospitals when there is an operation pending.
    Mrs. Kellett-Bowman: They want an election.
    The Prime Minister: The fact that people want all these things is a problem for all democratic Governments. Hence. I come back to what I have always said; we have got to get higher productivity out of manufacturing industry. That is our first requirement and our first essential. On whatever side of the House the Leader of the Opposition may sometimes find herself sitting, she will have to come back to this problem and try to solve it.

    TUC
    Mr. Bidwellasked the Prime Minister when he next expects to meet the TUC.
    The Prime Minister: I refer my hon. and gallant Friend to the reply which I gave to my hon. Friend the Member for Hemel Hempstead (Mr. Corbett) on 3rd February.
    Mr. Bidwell: Due to the hilarity of the House I did not quite hear what my right hon. Friend said. But in anticipation of what he might have said in reply to my Question, may I ask my right hon. Friend

    1419
    whether he agrees that the decision of my union, the Transport and General Workers' Union, yesterday puts the Labour movement in a new phase? Will my right hon. Friend, as well as the Chancellor of the Exchequer, be seeing the trade union leaders to discuss the situation? Does he agree that the trade union movement is far from being a wild, woolly or greedy movement but that it is seriously worried about the prices explosion and about the necessity of preserving its standard of living? My right hon. Friend has a lot going for him, but our movement's unity will be preserved on the basis of its Socialist understanding—
    Mr. Speaker: Order. The hon. Gentleman is taking the Question Time of other hon. Members. Mr. Bidwell, to finish.
    Mr. Bidwell: I would suggest to my right hon. Friend that not least of what is going for him is the incapacity of the Leader of the Opposition. I have hitherto raised a question with my right hon. Friend—
    Mr. Speaker: Order. The Prime Minister.
    The Prime Minister: I agree that the decisions that have been taken, which affect the future of any agreement between the trade unions and the Labour Party, mean that we are entering a new phase. The Government will assume their responsibilities in this regard, but responsibilities in co-operation with the trade union movement. We should not assume that because these decisions have been taken there is no prospect of co-operation or collaboration between us.
    Next week, the Chancellor of the Exchequer will be seeing some of the members of the TUC. The Cabinet will then consider the result of those discussions and we shall come forward to the House with our proposals, endeavouring as far as we can to carry with us all those who care about overcoming inflation and about ensuring that we get a steady expansion of our economy. From our conversations with members of the TUC I believe that it is possible to do that.
    Mr. David Steel: Does the Prime Minister agree with what Jack Jones said last night, namely, that the 12-month gap between pay rises under phase 2 was a
    1420
    promise made by the trade union movement to this Government? If so, does the right hon. Gentleman expect it to be kept?
    The Prime Minister: Yes. The 12-month gap was one of the early parts of the negotiations that have been going on. I am certain that the TUC will want to maintain that 12-month interval if it is at all possible. [Interruption.] The TUC is the servant of its members, in the end. This only goes to show the ambivalence of the Opposition, who are never quite sure whether the trade union leaders have too much power or too little. At some time they had better make up their mind.
    I am quite certain that the leaders of the TUC will endeavour to maintain this 12-month period. That would be of great help to us, because the last settlement will not be made for several months yet.
    Mr. Molloy: When my right hon. Friend meets the trade union leaders will he make it clear to them how absolutely opposed the Leader of the Opposition and many of her hon. Friends are to any form of price control? Some Conservatives are advocating a massive wage explosion and encouraging the trade unions to get involved in it. If that brings about any form of danger for the progress that this country is now making, they will then blame the trade union movement for it.
    The Prime Minister: I am sure that the Conservative Party would like to ride to power on the back of every dissatisfied element in the country. What I have noticed is the extraordinary and unholy alliance between the Morning Star and the right hon. Member for Leeds, North-East (Sir K. Joseph), who seems to be joining this Communist band-wagon, about which his leader complains so much.
    Mr. Donald Stewart: Why should the Prime Minister assume or expect the co-operation of the trade union movement, since he is aware that when the alleged social contract was cobbled together there was an implied remark that when wages were frozen prices would also be frozen? The wages part of that was carried out, but prices were allowed to escalate.
    The Prime Minister: No undertaking of that sort was ever given. What was said was that there would be selective

    1421
    control of prices and food subsidies, and that took place. But the trade union movement is anxious that there should be good sense and sobriety in this matter. I am not speaking of everyone in the trade union movement, but as a whole it is concerned about this because it is as deeply concerned as anyone about the consequences of a return to 1973–74, when there were wage claims and settlements of 30 per cent, and prices went up by about the same amount. The trade union movement can see the consequences of that as well as the next man.

    PRIME MINISTER (ENGAGEMENTS)
    Mr. McCrindleasked the Prime Minister if he will list his public engagements for 7th July.
    The Prime Minister: This morning I presided at a meeting of the Cabinet. In addition to my duties in this House, I shall be holding further meetings with ministerial colleagues and others.
    Mr. McCrindle: When reading the speeches of trade union leaders, did the Prime Minister notice the very interesting one by Mr. Joe Gormley, in which he said that if the Labour movement was ever afraid of a General Election he did not know what it was in the political business for? Is the Prime Minister afraid of a General Election now? If so, what is he in the political business for?
    The Prime Minister: On the whole, I am in the political business in order to ensure that the Labour movement gets a full opportunity of carrying out its principles and its programme. It is a five-year programme, and that is what I hope to do.
    Mr. Madden: Can my right hon. Friend get someone to read the speeches of the Leader of the Opposition in order to discover whether the official Opposition believe in a voluntary incomes policy, a statutory incomes policy, or no incomes policy at all?
    The Prime Minister: It is the view of the right hon. Member for Leeds, North-East (Sir K. Joseph) that there should be absolutely no incomes policy, but some
    1422
    of his hon. Friends seem to hold the view that there should be a statutory policy. We do not hold either view. [Interruption.] I am not discriminating. We hold neither view. The experience of the Opposition and our history since 1945 show that a statutory policy will not command consent and that it will only bring the law into disrepute. One can proceed in this country only on the basis of persuasion and acquiescence with regard to the policies that are put forward. It is a very great exercise in carrying people with us.
    Mr. Tebbit: When the Prime Minister is going through his diary of engagements, will he refer back to his diary for January of this year and look again at his New Year's message to the Labour movement, in which he said that the social contract between the Goverenment and the trade union movement was intact and sound? Is that still his view?
    The Prime Minister: No, Sir. It is not. I do not think that it is intact.
    Mr. Prentice: The Prime Minister has told us several times what the Cabinet rejects in terms of pay policy. Can he say whether the Cabinet this morning expressed determination to stand by its own view of the guidelines of phase 3, with or without trade union agreement? Can my right hon. Friend also say that the Government will stick to those limits rigidly in the public sector and stand by any private employer who tries to stick to the same limits in the private sector?
    The Prime Minister: I do not know whether my right hon. Friend was here when the Chancellor of the Exchequer was replying to Questions.
    Mr. Prentice: Yes.
    The Prime Minister: My right hon. Friend dealt with these matters perfectly adequately, and there is no need for me to add to what he said—[Interruption.] However, as the Opposition obviously like to hear me repeating what has been said already, I shall repeat it. My right hon. Friend the Chancellor of the Exchequer will be meeting trade union leaders next week. In the light of that, the Cabinet will bring forward to this House a paper which will set out our views on the way in which incomes should be dealt with during the next 12 months, and I hope

    1423
    that it will be debated in the House before we rise for the Summer Recess.
    Mr. Speaker: Mr. Fairbairn.
    Mr. Fairbairn—[Interruption]—
    Mr. Speaker: Order. Popularity is one thing, but whom I call is another.
    Mr. Fairbairn: When the Prime Minister addressed the nation in his philosophical and avuncular way at the weekend and told us that all his policies— [Hon. Members: "Reading"]—and told us that all his policies—[Hon. Members: "Reading"]—would help to loosen the steel band from the chests of the British people—[Hon. Members: "Reading "]—
    Mr. Speaker: Order. Right hon. and hon. Members are only provoking the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn). Will the hon. and learned Gentleman be kind enough to come to his supplementary question?
    Mr. Fairbairn: As an unprovocative person, I am obliged to you, Mr. Speaker, for your protection. The right hon. Gentleman said that his policies would help to loosen the steel band from the chests of the British people. Are we entitled to assume that that means that he intends to cut the Lib-Lab pact?
    The Prime Minister: I am not at all sure that the denouement was worthy of the build-up, but I realise that the hon. and learned Gentleman was in some difficulty. If he refers to my speech, assuming that he is allowed to later, he will see that my point was that it was the fact that the balance of payments will be moving into surplus over a period, thanks largely to North Sea oil, which would loosen one of the constraints. I went on to say—and I think that this cannot be challenged—that, with that constraint loosened, which has held us back for many years, if we can get on top of some of the other serious difficulties—for example, a reasonable control of incomes rises, an expansion of the economy, prices and the rest of it—this country will have an opportunity that it has not had for 30 years. I hope that we in the Labour movement will be able to take advantage of it.

STANDING COMMITTEES (PROCEDURE)
Mrs. Wise: On a point of order, Mr. Speaker. May I have your guidance on whether it is customary for closure motions to be accepted in the House either before a Minister has spoken or while a Minister is on his feet? If it is not customary to accept closures in the House in those circumstances, can you advise us why it is happening in Committee Room No. 9 upstairs?
Mr. Speaker: It is not customary— and it is not the done thing, either—to refer to Standing Committees until they have reported. But I can answer the hon. Lady on the general question. The acceptance of a closure motion is at the discretion of the Chair and the decision of the House afterwards.
Mr. Heffer: Further to that point of order, Mr. Speaker. You have just said that it is not customary to refer in the House to what happens in Standing Committees. I have been in this House for quite a long time now—many hon. Members probably think that I have been here far too long. But on numerous occasions hon. Members have raised issues on the Floor of the House because they have felt that the rules of procedure had not been properly carried out in Committee. This has happened on many occasions. Therefore, there seems to me to be a difference between your ruling, Mr. Speaker, and those of previous Speakers on this subject. I should like very much to clarify the position.
Mr. Speaker: There is not a difference in the ruling. There is a difference in the hon. Gentleman's memory. It is quite clear that until a Committee reports to the House it is not possible to discuss on the Floor of the House what is going on there. The other point is that it is quite clear that there is no appeal to the Speaker of the House about rulings made in a Standing Committee. The Chairman is responsible there.
Mrs. Renée Short: Further to that point of order, Mr. Speaker. In view of what you have said, can you tell us how the minority on any Committee in the House can claim the protection of the Chairman of the Committee?
Mr. Speaker: The hon. Member for Wolverhampton, North-East (Mrs. Short) might as well have asked me how minorities have a chance here. Whoever is in the Chair does his best. That is all that I can say.

BUSINESS OF THE HOUSE
Mrs. Thatcher: Will the Leader of the House be kind enough to state the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): Yes, Sir.
The business for next week will be as follows:
MONDAY 11TH JULY—Consideration of Private Members' motions until 7 o'clock. Afterwards, the Chairman of Ways and Means has named opposed Private Business for consideration. Motion on EEC Documents R/89/75, R/1643/75, R/2026/76, R/2027/76 and R/2203/76 on pesticides, plant protection and packaging and labelling.
TUESDAY 12TH JULY—Supply [27th Allotted Day]: there will be a debate on the prevention of crime.
Remaining stages of the Local Authorities Works (Scotland) Bill.
Second Reading of the Rent Bill [Lords] and of the Protection from Eviction Bill [Lords], which are consolidation measures.
WEDNESDAY 13TH JULY—Remaining stages of the Criminal Law Bill [Lords].
THURSDAY 14TH JULY—Progress on the Report stage of the Finance Bill.
FRIDAY 15TH JULY—Consideration of Private Members' Bills.
MONDAY 18TH JULY—Supply [28th Allotted Day]: subject for debate to be announced.
Mrs. Thatcher: The Lord President will recollect that the Chancellor announced in Question Time that there is likely to be a White Paper of considerable importance published early next week. Is it his intention to provide us with a day for debating economic matters
1426
before the House rises for the Summer Recess? It would seem that the Report stage of the Finance Bill is not an appropriate vehicle for a major debate.
Mr. Foot: I shall look at the right hon. Lady's suggestion. However, we thought that it would be perfectly possible and proper to discuss these matters in the Finance Bill debates. They will be strictly relevant to the matters under discussion in the Finance Bill.
Mrs. Thatcher: Will the Leader of the House reconsider that answer? Clearly there are a number of questions about public expenditure that have to be considered. Surely it would be better to have a full day's economic debate than to talk on specific amendments to the Finance Bill.
Mr. Foot: I shall look at the right hon. Lady's representations. If she is asking for the provision of an extra day, I must point out that that would create some difficulties. We thought that the matters comprised in the White Paper could be discussed adequately on the Report stage of the Finance Bill. However, I shall look at her representations.
Mr. Powell: In view of the rapid approach of the Summer Adjournment, would the Leader of the House ensure that a statement is made next week about the conference to be presided over by yourself, Mr. Speaker? Perhaps, subject to your wishes, that conference might begin work, as intended, before the Summer Recess.
Mr. Foot: I fully accept that. Without being tied to an actual date for a pronouncement, I can say that a statement should be made to the House. Progress is being made on the composition of the committee and I hope that an announcement will be made very soon.
Mr. Prentice: The Prime Minister promised a statement to the House following talks between the TUC and the Government. Will he promise us adequate time for a debate following that statement and before the recess?
Mr. Foot: That was covered by the reply I gave earlier to the Leader of the Opposition. There will be three days' debates on the Report stage of the Finance Bill, and those debates will cover

1427
a very wide range of subjects. I promised to look at the representations of the Leader of the Opposition without any commitment to an extra day. All the subjects my right hon. Friend has raised could be raised on the Report stage of the Finance Bill.
Mr. Donald Stewart: Could the Leader of the House tell us whether there are any prospects for a debate on the recent White Paper on transport before the Summer Recess?
Mr. Foot: I cannot promise a debate before the recess. However, I know the desire of many hon. Members for a further general debate on this matter.
Mr. Noble: In view of the rapid deterioration of employment prospects for textile workers in the North-West mainly because of imports and the withdrawal of the temporary employment subsidy from firms which have exhausted their entitlement to it, would my right hon. Friend promise us a debate on this subject before the end of the Session?
Mr. Foot: If we reach the second subject for debate on Private Members' motions on Monday, this topic would be relevant. Also there are other possibilities for raising the matter, such as the debate on the motion for the Summer Adjournment. I am afraid that I cannot promise a full debate on this matter.
Sir J. Eden: Can the Leader of the House assure us that there will be a debate on the EEC budget before the Ministerial Council of 20th July, bearing in mind that the report of the Scrutiny Committee will be available later next week?
Mr. Foot: I believe that we shall be able to make sure that a debate takes place before the debates in Brussels. I would like to check the dates, however, before making a final commitment.
Mr. Gwynfor Evans: In view of the fact that it is almost two years since the Government decided that, without prejudice to what happens in England, in Wales the fourth television channel would be a national channel, giving priority to the Welsh language, and in view of the fact that English television has done enormous damage to the Welsh language, particularly among young children in
1428
Wales, could we have an early statement on the implementation of this decision?
Mr. Foot: I cannot promise an early statement. The House is committed to a debate on Welsh affairs at some time and it would be perfectly proper to raise that matter then.
Mr. MacFarquhar: Could the Leader of the House say whether the CPRS Report on the Foreign Service will be presented before the recess? If so, is there a chance of a debate on it?
Mr. Foot: The report will be presented before the recess but I cannot guarantee a debate in the time before we rise.
Mr. Tebbit: Are we to understand that we are to have a White Paper on economic affairs but that the matters contained in it are to be debated on a Bill? Is this not a somewhat unusual practice? Also, is the right hon. Gentleman aware that details of the Bermuda Agreement on air traffic services between Britain and America have been widely published in the Press in the United States? Is it not time that we had a debate in this House, even in advance of the Government's own White Paper?
Mr. Foot: On the Bermuda Agreement, whatever may be published in the American or British Press, I cannot give a guarantee of a debate before the Summer Recess. However, I am sure that the hon. Member can use his ingenuity to raise the subject in the ways that are available to hon. Members. On his other point, it is perfectly normal procedure for a White Paper to be published and then taken into account in debates that are proceeding at the time on a Bill. Many matters in the White Paper will be strictly relevant to debates on the Report stage of the Finance Bill. Therefore, I believe that the House is perfectly able to comprehend a debate on the White Paper during debates on the Report stage.
Mr. Madden: Reverting to the textile industry, my right hon. Friend is well aware of the considerable problems in this respect and the number of jobs that are in jeopardy as a result of overseas textile imports. There have been important talks in Geneva on the Multi-Fibre Arrangement, so could he arrange for the Secretary of State for Trade to make a

1429
statement? It would be most appropriate if that statement could be made on Monday in order to coincide with the motion tabled by my hon. Friend the Member for Rossendale (Mr. Noble).
[That this House notes the growing volume of imports of textiles, footwear, electronic components and other products; expresses concern at the effect this increasing penetration is having on employment and investment in these industries; welcomes the negotiating stance of Her Majesty's Government on the Multi-Fibre Agreement and other measures to restrain excessive imports without which the situation would have further deteriorated; calls on Her Majesty's Government to introduce immediately additional selective import controls to defend these sensitive industries; further requests Her Majesty's Government to seek bilateral trading arrangements with overseas producers of sensitive products with a view to reducing the level of import penetration; and urges Her Majesty's Government to enter into negotiations with other signatories of GATT with a view to introducing into that Treaty a social clause which will ensure that employees in those developing countries with which Great Britain trades have the legal right to join free trade unions, have access to free collective bargaining and a developing social security system.]
Mr. Foot: I cannot promise a statement by the Secretary of State on Monday. I shall take account of what has been said and I shall consult him on the possibility of getting a general statement on the subject.
Mr. Geoffrey Finsberg: Will the Leader of the House look again at the question of the White Paper? The Chancellor has indicated that the White Paper cannot be issued until after the meeting with the TUC. As the first business on Thursday is the Finance Bill, will he give an assurance that the House will have at least 24 hours to read the White Paper and that we shall not find that it has been leaked to the Press at 2.30 p.m. and that the House will be expected to consider it an hour later?
Mr. Foot: That would not be satisfactory for the House. We propose that the White Paper should be published to enable the House to take account of
1430
its considerations before the conclusion of the debates on the Report stage of the Finance Bill.
Mr. Greville Janner: Will my right hon. Friend give an assurance that there will be a statement before the recess on the negotiations in Belgrade? Also could he indicate when the recess is likely to be?
Mr. Foot: I know that there is some curiosity about the second point. I do not want to announce a date until we are certain of it. I understand that there is a desire of hon. Members that the House should reach the end of its discussions some time before the end of the month.
I fully accept what my hon. and learned Friend says about Belgrade, but I am sure that he and other hon. Members will take account of the fact that if I agreed to every proposition for a debate and every call for a statement, instead of rising about the end of the month we would be still sitting until well into November. I do not think that that would be satisfactory.
Mr. Maxwell-Hyslop: When does the Leader of the House intend to introduce the European Assemblies Elections (No. 2) Bill? It is quite clear that the No. 1 Bill will not reach the statute book this Session.
Mr. Foot: I bow to the hon. Member's great knowledge of parliamentary procedure. I agree that it is conceivable that the No. 1 Bill will not reach the statute book this Session. However, I think that we had better see how we get on with the No. 1 Bill before we consider introducing No. 2.
Mr. Cledwyn Hughes: My right hon. Friend referred to the possibility of a debate on Welsh affairs, which will be welcomed. However, will he give an assurance that the debate will not be held on the last day before the House rises for the Summer Recess?
Mr. Foot: That is another of the problems that arise when many hon. Members—I do not refer specifically to my right hon. Friend the Member for Anglesey (Mr. Hughes)—press urgently for important debates and then suggest that they should not take place on the last day before the House adjourns for

1431
the recess. That truncates the possibility of further debates. However, I shall bear in mind my right hon. Friend's helpful remarks.
Mr. Raison: Is it not completely unsatisfactory that the occasion when the House is to debate the new financial White Paper should be wrapped up in the Report stage of the Finance Bill? Is it not clear that this is a Government device for avoiding a vote? The Government know that votes on Report will relate to different matters. Is it not clear that now that the Government and the Liberal Party are totally at variance on economic and incomes policies, we should have separate votes to see where we all stand?
Mr. Foot: The hon. Gentleman is putting forward an extraordinary proposition if he is suggesting that a vote on Report is a device to avoid a vote. Many votes take place on Report. There seems to be nothing wrong with the proposition that general subjects covered by a White Paper should coincide with many of the topics which inevitably arise on Report. We propose to hold the debates in the way we have suggested. However, I have suggested that we shall examine the representations made by the right hon. Lady the Leader of the Opposition. We shall also examine the timetable, because that aspect also has to be considered.
Mr. Hooley: Will my right hon. Friend tell the Opposition that it is a discourtesy to the House and an inconvenience to Back-Benchers that the Opposition have not yet announced a subject for discussion on their Supply Day? Will he ask them to make up their minds and let us know what will be the subject on Monday week?
Mr. Foot: To be fair to the Opposition, I must point out that other Oppositions in the past have waited until a late stage before announcing a subject for debate. Therefore, there is no question of our seeking to avoid a vote, but after the fiasco of last Monday I can understand the Opposition wanting to think very carefully about the next one.
Mr. Tim Renton: The Lord President will doubtless be aware that strong views were expressed by hon. Members on both sides of the House in yesterday's debate
1432
that direct elections should be on a first-past-the-post basis and that that should be regarded as a genuine option within the framework of the fact that such elections should be held in May-June of next year. Indeed, assurances were given by the Home Secretary that that would be the case. Therefore, in the circumstances, if the Bill receives a Second Reading tonight, will the right hon. Gentleman arrange for the method of election to the European Parliament to be debated before the House rises for the Summer Recess, so that if the House decides that the elections should be held on a first-past-the-post basis, the Boundary Commissioners can get on with their work?
Mr. Foot: All those are topics to be raised in the debate that is now proceeding. I shall not anticipate the vote that is to take place tonight.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. I propose to call a total of six hon. Members, three from each side, because of the long list of speakers in the next debate.
Mr. Alan Lee Williams: Will my right hon. Friend say when the Hansard for 18th July on the subject of the Helsinki accords will be available in the Vote Office?
Mr. Foot: I apologise if that day's copy of Hansard is still held up because of printing difficulties. [An HON. MEMBER: "What about 18th July?"] I am not so sure about what will happen on 18th July, but that is my knowledge of the present situation.
Mr. Alan Lee Williams: I am sorry. I meant 18th May.
Mr. Foot: I shall make inquiries to see whether matters can be speeded up.
Mr. Watt: Will the right hon. Gentleman say when we shall see a resurrected devolution Bill? Although he may be congratulating himself on manoeuvring the Liberals and Ulster Unionists into supporting that Bill, will he recognise that unless such legislation contains meaningful revenue-raising powers my party may no longer be able to support it?
Mr. Foot: I note that the hon. Gentleman's threats grow milder and milder each day.
Mr. loan Evans: When may we expect a statement on the future arrangements for broadcasting the proceedings of the House? Furthermore, is my right hon. Friend in a position to give the House the likely date when we shall rise for the Summer Recess?
Mr. Foot: I cannot give the answer about the date when the House will rise for the Summer Recess, although I have given some faint indication. I hope that we shall be able to complete proceedings by the end of the month. I hope that before that happens we shall have a debate on the broadcasting of our proceedings.
Mr. Hordern: Will the right hon. Gentleman recognise that there are already a substantial number of amendments and new clauses to the Finance Bill and that one of the clauses concerns the proposed reduction of income tax which was conditional on a pay agreement? Now that the Leader of the House says that a White Paper is to be brought forward to the House which will describe the total destruction of the Government's economic policy, is it not essential, bearing in mind the fact that the rules of order pertaining to Report stages of Finance Bills are so narrowly drawn, that there should be a separate debate on the Government's economic policies following the publication of the White Paper?
Mr. Foot: The hon. Gentleman has illustrated the reason why we propose to deal with the matter in the way I have suggested. Obviously the White Paper will deal with many of the subjects which in any case would have been discussed on Report, and they will be strictly relevant to those discussions. It is for that precise reason that we propose to deal with the matter as I suggested.
Mr. Hordern: On a point of order, Mr. Speaker. May I take it that on Report on the Finance Bill any reference to the White Paper will be wholly in order during that stage of the Bill?
Mr. Speaker: I never cast my bread on the waters to that extent. The hon. Gentleman must give me a chance to tell him the answer later.
Mr. Fry: Does the right hon. Gentleman agree that it is an indictment of the state of disunity in the Cabinet that we
1434
are now debating the European Assembly Elections Bill, which has been so long delayed and yet the right hon. Gentleman admits that the Bill cannot be finished this Session?
Mr. Foot: I am sure that the debate now proceeding is proof of the fact that the House would have insisted that we should discuss at considerable length a matter of such constitutional importance. The hon. Gentleman's intervention proves the opposite of his claim.
Mr. Edward Lyons: Will my right hon. Friend consider a debate before the recess on the Government's policy towards Japanese investment in the United Kingdom, particularly bearing in mind the proposal by Hitachi to set up a television factory in England? If not, will he give an undertaking that no decision will be taken on that proposition until after the House reassembles after the recess?
Mr. Foot: There is still time for my hon. and learned Friend and others interested in that subject—and I fully appreciate their concern—to make representations to the Ministers concerned. Indeed, I am sure that my hon. and learned Friend is engaged in doing so at present. In the light of such representations, we shall consider whether a statement should be made, although I would point out that hon. Members can discuss such matters in the debates that normally take place towards the end of a parliamentary Session.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: I shall call one more hon. Member. Mr. Paul Dean.
Mr. Paul Dean: In view of the fact that it would be intolerable and an abuse of the procedures of this House for hon. Members to be expected on the Report stage of the Finance Bill also to debate a major White Paper which has not yet been published, will the right hon. Gentleman examine the amendments which many of us have tabled to that Bill, and does he not recognise that it will be exceedingly difficult in three days adequately to debate the new White Paper?
Mr. Foot: The hon. Gentleman has not yet seen the White Paper, nor have I.

1435
Indeed, the White Paper is not yet written, and I do not intend to prejudge the matter. Although the hon. Gentleman suggests that our proposal would be intolerable and an abuse of the proceedings of the House, I wish to point out that that language was not used by the right hon. Lady the Leader of the Opposition. She made no such suggestion, but asked in a courteous manner whether we would reconsider the matter and provide another day. I replied, equally courteously, by saying that we would consider her representations, without making any commitment. I said that it would be possible to discuss references to the White Paper on Report precisely because the same types of topic are covered. I shall take account of the right hon. Lady's representations, but I repudiate any suggestion by the hon. Gentleman that there is an abuse of the procedures of the House.

STATUTORY INSTRUMENTS, &c.
Ordered,
That the draft North of Scotland Hydro-Electric Board (Compensation for Smelter Deficits) (No. 2) Order 1977 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Foot.]

ORDERS OF THE DAY

  EUROPEAN ASSEMBLY ELECTIONS BILL
  [SECOND DAY]
  Order read for resuming adjourned debate on Question [6th July], That the Bill be now read a Second time.
  Question again proposed.
  4.0 p.m.
  The Minister of State, Home Office (Mr. Brynmor John): The first day of this debate initiated a debate revolving around two main themes—the argument in principle and the detailed discussion of the Bill. Whatever one does on this issue one is likely to run into criticism. I hope that in dealing mainly with questions that were asked of the Government about the Bill during the course of yesterday's debate I shall not be thought by hon. Members to be undervaluing the arguments of principle that were then adduced. The Foreign Secretary and I will try to deal with most of the questions that were raised yesterday and I hope, therefore, that we shall not be criticised for not having included issues of principle that would involve me in too long a speech— for which I should be equally criticised.
  In many ways I find my position like the erstwhile position of my hon. Friend the Member for Luton, East (Mr. Clemit-son). Though an anti-Marketeer, I have not opposed direct elections. I do not believe that one has to go all the way to a federal Europe to believe in direct elections. In that I do not agree with a number of hon. Gentlemen or my hon. Friends. Future Members will be able to perform a worthwhile function with the powers of the Assembly as they are. Certainly the Government are putting forward this Bill upon the basis of the Assembly's powers being no greater than they are today. It was re-emphasised by my right hon. Friend yesterday that it would need unanimous consent by all members of the EEC before extra powers of the kind foreshadowed, or perhaps feared, in some quarters, could be granted, and that would require the consent of Parliament.
  I therefore part company from my hon. Friend the Member for Luton, East when

  1437
  he says that the only consistent supporter of direct elections is a federalist. It seems to me as illogical as saying that the only consistent drinker is an alcoholic. I propose to deal during the next few minutes with the questions about the Bill, and I hope that the mechanics, since they are important, will not be thought more suitable for Committee, because a number of important issues raised yesterday demand answer.
  First, there was considerable discussion in yesterday's debate about the way in which the House would come to a decision on the electoral system to be used for elections to the European Assembly. The right hon. Members for Knutsford (Mr. Davies) and Bridlington (Mr. Wood) and others discussed that subject. I believe that by the end of yesterday's debate the matter had been resolved to most people's satisfaction, but, at the risk of compounding confusion, I shall again underline the main elements of the proposed procedure.
  I re-emphasise that Clause 3(2) contains a procedural device that makes it possible for the Bill to contain two alternative electoral systems. In normal Bills there is one proposition, but if there were one proposition on one system in the Bill and it were defeated, the whole Bill would have to be withdrawn and a new one substituted. Those hon. Members who were complaining, at intervals of varying frequency, about the time constriction in such debates in view of next year's events should take that into account.
  By allowing alternative systems to be considered and debated in one Bill we are saving time by enabling substitution. Once a system has been chosen, we can remove the procedural device and remove from the Bill all the provisions that relate to the system not chosen.
  Dr. Colin Phipps: I appreciate the reasons why the Government have introduced two methods within the same Bill and I can see that it would expedite matters if we took one out, but are the Government prepared to begin now on the preparation of the boundaries that would be necessary if we had the first-past-the-post system? If those boundaries are not drawn, there
  1438
  is not much point in having two systems in the Bill.
  Mr. John: I beg my hon. Friend to have patience. I propose to deal with that. However, I shall deal with matters in the order in which the questions were asked rather than in the order in which interventions come up. My hon. Friend will know that this issue was dealt with pretty fully yesterday, but I propose to deal with it again merely for the sake of completeness and clarity.
  I was dealing with the way in which we can expect the debate to take place. We expect that the opponents of the regional list system will put down an amendment to Clause 3(1) to provide for their preferred electoral system and that the debate and vote on the electoral system will take place on such an amendment. That would enable—and this answers one of the points made by hon. Members—the comparative merits of the two systems to be weighed up in the course of the debate and to be voted on.
  In the unlikely event that no amendments were suggested to the electoral system provision, the vote would take place on the regional list system. If that were passed, the system would have been chosen and the Government would then put down amendments to remove the procedural device in Clause 3(2) and the associated Schedules 1 and 2. I hope that that gives an adequate and fairly clear picture to hon. Members of how the debate would proceed.
  During the course of the debate yesterday my hon. Friend the Member for Newham, South (Mr. Spearing) raised the spectre of a carry-over of the Bill into the next Session.
  Mr. John Davies: Would the Minister be kind enough to clarify this point? In replying to a question that I put yesterday, the Home Secretary said:
  "we have an amendment drawn up, which we shall assist people to put down."—[Official Report, 6th July 1977; Vol. 934, c. 1267].
  Am I to understand that the Government will not put down an amendment, but will jog the elbows of those who are prepared to do so?
  Mr. John: It is clear from their advocacy in the Bill of the regional list system that the Government would not

  1439
  put down an amendment against their preferred system. However, upon application in a pre-addressed, stamped envelope any hon. Member who wishes the assistance of the Government in putting down an amendment, for example, to deal with the simple majority system, can have the assistance of the Home Office.
  Mr. Paul Channon: Is the Minister aware that there will be a number of hon. Members on both sides who will be tabling such an amendment tonight which we believe will meet these points? I hope that many hon. Members from both sides will sign it. Can the Minister guarantee that the amendment will be debated at such a time and in such a way that if it were carried it would still be implemented in time for the elections to be held?
  Mr. John: I am delighted to know that drafting chores are not beyond the advocates of the simple majority system. However, I repeat that if they want assistance with the nature of the wording, we shall be prepared to help. I cannot possibly foreshadow matters that will depend upon the progress of the Bill, but there is a real choice available. Hon. Members will be able to weigh that real choice.
  I was diverted from dealing with the question raised yesterday by my hon. Friend the Member for Newham, South. That was the question about the carryover, and this probably bears a little upon the point made by the hon. Member for Southend, West (Mr. Channon). If the Bill is not carried to Royal Assent in this Session, it will be necessary to reintroduce it for Second Reading in the new Session, though I hope that our current debates will inform the subsequent progress of a new Bill.
  The right hon. and learned Member for Hexham (Mr. Rippon) suggested yesterday that one way out of the possible timing difficulties over Boundary Commission procedures would be to introduce a one-clause Bill in parallel with the present Bill. I do not believe that that would be a practical proposition. I do not believe that it would be a one-clause Bill as the right hon. and learned Gentleman suggests. If it were to enable the Commission to determine single-Member constituencies for the elections, that
  1440
  would imply a decision on the electoral method or would at least involve the Commission in considerable nugatory work and expense. It would also involve a final decision on the allocation of seats among Scotland, England, Wales and Northern Ireland as set out in Clause 2. The hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) gave notice that he did not accept those proposals.
  It would also be necessary to set out in such a Bill the detailed procedures for the Boundary Commission to follow and to provide for its expenses to be met. All that amounts to much more than a one-clause Bill. More important, it would require decisions on many of the most important issues on this subject. In the light of these considerations, I cannot believe that its progress would be more speedy than if we debated it with due time for consideration of all the clauses.
  Mrs. Winifred Ewing: Does the Minister agree that my hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. Reid) made clear on behalf of this Bench that we support the principle of the Bill and, while we want more than eight seats, we shall take the eight if they are offered until we have independence, when the question of parity with Denmark will arise?
  Mr. John: That is not what the hon. Member for Clackmannan and East Stirlingshire said. He said that in order to obtain 16 seats Scotland would have to be independent. I should be grateful if the hon. Lady would listen. Few hon. Members can listen and speak at the same time and she is not one of them. The hon. Gentleman made clear that he was going to move an amendment to provide for 16 seats for Scotland. There should be no dubiety about that. He indicated that there would be amendments and debates on the options in Clause 2.
  Dr. Phipps: I wish to return to the fundamental point. Some of my hon. Friends said that the matter that I raised earlier was sub judice—I am sorry, I mean ultra vires. But are we not in exactly the same position as we were on the devolution Bill? Many amendments were suggested to that Bill, but the Government were prepared to purchase two large buildings and start equipping them

  1441
  long before the House had decided whether it wanted devolved Assemblies. Why can we not begin the procedures that are necessary for holding direct elections?
  Mr. Deputy Speaker (Mr. Oscar Murton): Order. The hon. Gentleman may catch the eye of the Chair later. He should not make his speech now.
  Mr. Dennis Skinner: My hon Friend was going on ad nauseam.
  Mr. John: I was going to say that my hon. Friend's intervention was a reductio ad absurdum. I know that it can be described by one of those Latin tags. My hon. Friend should either have been present yesterday or have read the Hansard of yesterday's proceedings. The essential difference was pointed out by the hon. Member for Banbury (Mr. Marten). My right hon. Friend the Home Secretary said that there was a world of difference between the statutory form needed for the Boundary Commission and the administrative procedures involved in the devolution Bill.
  Hon. Members also spoke yesterday about the timing of Boundary Commission procedures, and I shall try to clarify the situation. For the regional list system no Boundary Commission procedures would be necessary. The proposed electoral regions are set out in the Bill.
  If the House chooses the simple majority system, it is proposed that the Boundary Commissions for Engand and Wales and Scotland should follow the procedures set out in Schedule 2. These are widely known as option B in the White Paper. For the initial division into single-Member constituencies the Commissions would be required to publish provisional recommendations and to receive representations on them.
  In evidence to the Select Committee on direct elections the Commissions said that such a procedure, with one round of representations but no local inquiries, would take a minimum of 18 weeks from the time of Royal Assent to the Bill. This calculation assumed that the Commissions had given preliminary consideration to the matter in advance of Royal Assent and that their provisional recommendations were published within two weeks of Royal Assent. The rest of the 18 weeks would
  1442
  be necessary to allow representations to be made and considered by the Commissions and for the Commissions to prepare and submit their final recommendations.
  It is clear that the initial report of the Commissions would be ready, if this option were chosen by hon. Members, within two weeks of Royal Assent. There fore, the initial shape of the boundary structure in Britain would be known within that time.
  Neither the Home Secretary nor I have sought to hide the fact that the regional list system, with no Boundary Commission procedures, can obviously be brought into operation more quickly than the simple majority system. This is a matter for the judgment of hon. Members. One hon. Member put the matter well when he contrasted the need to meet the proposed date with the need to get it right. This must weigh with hon. Members as they consider these matters.
  Mr. Tim Renton: Is the Minister not using the simple threat of saying that we have to decide in favour of the regional list system, because if we do not we shall not have an election under the first-past-the-post system by May or June next year? Does this not go back to the point made by the hon. Member for Dudley, West (Dr. Phipps)? Should not the necessary statutory procedures be started before the Summer Recess so that the Commissioners can get to work on a first-past-the-post system if that is what the House wants?
  Mr. John: My answers to the hon. Gentleman are "No" and "No". I am using no threat. I am trying to be helpful by indicating the Government's thoughts and clarifying many of the points that were raised yesterday. The hon. Gentleman is not right to read a threat into that or to imply blackmail. That is no part of my duty or my inclination.
  A number of hon. Members mentioned the one-off nature of the elections and the question of subsequent elections. My right hon. Friend the Home Secretary has explained that the Bill is directed primarily to making provision for the first elections to the European Assembly. The Treaty of Rome envisages that there will eventually be a uniform electoral system in use throughout the Community,

  1443
  and it will be for hon. Members to make their own judgment about whether the Nine EEC States will be able to agree such a uniform electoral system in time for the second round of elections.
  If not, the Bill does not limit the time when the particular method of election should expire. If no Community provision were made in the first five years, by the time the second election came along Parliament would have had ample opportunity, having considered the experience of the first round of elections and the method used, if necessary to substitute another preferred method at that stage. So it is a one-off election in that sense.
  Finally on this particular part of my clarification of the Bill, I come to the speeches of the hon. Member for Clackmannan and East Stirlingshire, and my hon. Friend the Member for Swansea, East (Mr. Anderson). They both discussed the allocation of seats to Wales and Scotland.
  The hon. Member for Clackmannan and East Stirlingshire said frankly that only an independent Scotland could expect 16 seats. I repeat what my right hon. Friend said yesterday this is a united kingdom and there is a United Kingdom allocation of 81 seats. More seats can be granted to one part of the country only at the expense of the allocation to other parts of the country. The Government have accepted the Select Committee's division of the seats among the component parts.
  Mr. George Reid: I hope that the Minister will accept what I said yesterday, that 16 seats would be possible only with independence. My party would put down an amendment as a mere marker for the future. I have argued that the main purpose of the SNP would be to budge up the representation from eight to 10 or 12. I cited much cross-parly support for that—in Brussels, in the Liberal Party and so on. Given Scotland's geographic position and resources, does not the Minister agree that there should be slightly greater weighting towards that country?
  Mr. John: There will be an opportunity to debate this matter, but I notice that the marker talked about yesterday has now become a mere marker. So the
  1444
  hon. Gentleman and his party are retreating steadily on the way forward.
  Consideration was given not only to mere proportions and populations but to the geographical difficulties. Although fractions can be tyrannical, the fact is that Scotland is being given eight seats when its proportion based on electorate is about seven and a half seats, and Wales is being given four seats when its due would be 4·07 seats.
  But what is not and has not been considered by other members who have asked for extra representation for Wales and Scotland is that England, which on the pure proportion of electorate to seats would be entitled to 67·4 seats, is being given 66 seats. It is losing about one and a half seats.
  I say frankly to my hon. Friend the Member for Swansea, East, whose nationality and, therefore, whose sympathies I share on this point, and to the hon. Member for Clackmannan and East Stirlingshire that, given a total of 81 seats, the proportions given to one part of the United Kingdom can be raised only at the expense of another part. I believe that the Select Committee and the Government have hit upon the right proportions, and they are the proportions that the Government commend to the House in the Bill and that the Government believe are right and proper in all the circumstances.
  Mr. Alexander Fletcher: Did it not occur to the Government when they signed the agreement with the other member States regarding allocation of seats throughout the Community that if they agreed that the Irish Republic should have 15 seats and, on this basis, Northern Ireland should have three, there would be every reason for a strong sense of injustice in Northern Ireland—leaving aside Wales and Scotland? It knows that with half the population of the South it has only one-fifth the representation in Europe.
  Mr. J. Enoch Powell: Will the Minister state, as he has for the other members of the Community, the proportionate number of seats on due proportion appropriate to Northern Ireland?
  Mr. John: I do not have the exact fraction written down, but it is rounded

  1445
  up approximately from two to three. I believe that it is just over two.
  But the hon. Member for Edinburgh, North (Mr. Fletcher) makes a cardinal error in talking about Northern Ireland of assuming that it is a hermetically sealed country whereas it is part of the United Kingdom and therefore has part of the total allocation of 81 seats. The matter has been proceeded with on that basis. Whatever the hon. Gentleman may say about the total allocation, the fact is that we have an allocation of seats that equals those of our major partners within the EEC, namely, France and West Germany.
  Finally, the question to be decided tonight is on all hands admitted to be important, and I hope and believe that we shall have a genuine and free expression of the feelings of hon. Members towards the principle of the Bill, because I believe that the importance of this Bill and its consequences to this country demand no less.
  I have backed this Bill and I commend it to the House. I do not believe that it is necessary to eschew direct elections because one is dissatisfied with the Common Market. Throughout my speeches on the Common Market in the Referendum Campaign I criticised one feature, and that was the bureaucratic nature of the Commission in Brussels. I believe that with this Bill and these provisions we have a chance of remedying that defect for the future.
  4.27 p.m.
  Mr. Geoffrey Rippon: The House will welcome the contribution to the debate by the Minister as an original anti-Marketeer who, as he says, now welcomes direct elections. He reiterated the point made by the Home Secretary yesterday that many anti-Marketeers made one of their main lines of criticism in the referendum the undemocratic nature of the Community institutions.
  We ought also in this debate to bear in mind, as the Prime Minister told the House last week, that there is no practical prospect of our leaving the Community. It is right, therefore, that we should now be directing our attention to building the sort of Community we want and making a success of our member-
  1446
  ship—something that many Ministers are not particulary concerned about.
  Direct elections will enable us to give a new dimension to the work of the Community and will afford an opportunity, which I would have thought everyone would want to seize, of enabling the public to be involved in the policies that we want to put forward in order to build an effective Europe.
  We should, therefore, be looking forward to the directly-elected European Parliament—or Assembly, if that term is preferred, because that is what it still technically is—to provide the front line of democratic control over the Council of Ministers and the Commission. The ultimate line is and will remain the national Parliaments which alone can give the Parliament additional powers. Direct elections, as the Minister made clear, will not change the nature of the European Parliament. They will merely give it an opportunity to work more effectively.
  Mr. Neil Marten: My right hon. and learned Friend the Member for Hexham (Mr. Rippon) said—I do not know whether he meant it—that the European Parliament, as he called it, would exercise control over the Council of Ministers. Is that really so? If so, how would it do it?
  Mr. Rippon: I said that it would be the front line of control, not the ultimate line. I said that it would be a front line because it would be calling the Council and the Commission publicly to account in the Assembly for their actions.
  Now and for the future, the primary responsibility of the European Parliament is to influence policy at its formative level. That it already does in many important ways. But it suffers from being part-time and from the fact that it is once removed from the electorate. A European Parliament which was strong and confident enough to make its weight felt would be able to fire the imagination and the interest of the electorate in a constructive way. That should be our prime purpose in securing direct elections at this time.
  Whatever doubts the Government may have had from time to time about the appropriate date for direct elections, it will be recalled that as long ago as 4th December 1975 the then Prime Minister,

  1447
  the right hon. Member for Huyton (Sir H. Wilson), reporting on the Summit Meeting in Rome on 1st and 2nd December, in one of those occasional flashes of clarity that he had, plainly said:
  "I made it clear that we accept in principle the commitment to direct elections in the Treaty of Rome. This issue was decided by the referendum".—[Official Report, 4th December 1975; Vol. 901, c. 1932.]
  Yesterday the Home Secretary reiterated that "the Government accept" Britain's membership and that "the Government accept" that it is now right that we should move towards direct elections. But what is meant by the Government in the context of the Bill and this debate?
  In September 1976 the Government freely, and in the exercise of their collective responsibility, entered into an international agreement about direct elections. It was this Government who agreed to 1978 as the date. Incidentally, that was at a time when the European Parliament was suggesting 1980.
  The House will appreciate that the conclusion of international treaties and agreements is the exercise of the Royal Prerogative in the conduct of foreign affairs. The Government make up their mind whether, as a Government, they assent to the international commitment into which they propose to enter. If they do, that is an exercise of the collective responsibility by which the Government in substance always commit themselves to use their best endeavours to secure whatever parliamentary approval may be necessary.
  My hon. Friend the Member for Richmond, Surrey (Sir A. Royle), in his very effective speech last night, referred with great relevance to the Lord President of the Council's reply on 26th May 1977 to the question of dissension in the Cabinet. The Lord President said:
  "It is, of course, true that occasional differences of opinion arise in Cabinet but it is no mystery that what Cabinets do is to argue about the different points of view, resolve them and communicate the result to the House."—[Official Report, 26th May 1977; Vol. 932, c. 1639.]
  In this instance, the moment when the Cabinet resolved those different points of view was when the Government entered into the international agreement of September 1976 and communicated it to the House. That was the time for members
  1448
  of the Cabinet to record their dissent. If, as the hon. Member for Fife, Central (Mr. Hamilton) said, they maintained their dissent, they should have resigned. In other days, as he said, that is what would have happened. If any member of the Cabinet votes against the Bill tonight, he is open to the charge that, by hiding his dissent in September 1976, he misled not only the House but those in other countries who entered into the agreement with the Government in good faith. This is just as important a constitutional issue as the Bill itself.
  For Ministers, especially Cabinet Ministers, to breach their collective responsibility by voting against a measure to which they freely committed themselves by international agreement is to call into question the good faith of this and any subsequent British Government. Those Ministers who go into the Lobby tonight against a measure that they themselves promised in the Queen's Speech, in accordance with their own accepted obligations under an international agreement, will be flouting a constitutional practice which is at the core of the way in which we order the relationship between the Executive and the legislative as well as between this country and others.
  The anti-Marketeers, whom those Ministers may join in the Lobby, sought a referendum to give the people of this country the right to decide whether we should be willing members of the Community. It will be recalled that the Secretary of State for Energy said that even Parliament must tremble before their verdict. In the event, the result was decisively in favour of our remaining in the Community. The right hon. Member for Huyton was right when he said that the issue of direct elections was decided in the referendum. Since then, however, certain right hon. and hon. Members have consistently tried to undermine the verdict of the people.
  I go about Europe a great deal. Therefore, I entirely agree with the view expressed by my hon. Friend the Member for Mid-Oxon (Mr. Hurd) last night that it is not possible to exaggerate the damage done to Britain's honour and reputation, and, indeed, to our interests, by the way in which certain Ministers come back to the House and smirk about how they have failed to carry out their objectives.
  Mr. Bruce Grocott: Will the right hon. and learned Gentleman explain why it is always the question of direct elections that is taken to be the test of one's integrity on this subject? For example, on the question of our obligations under the common fisheries policy and the common agricultural policy, why is it that he and others of his right hon. and hon. Friends can now pretend that they can ignore their formerly held positions in that respect and apparently still retain their full integrity?
  Mr. Rippon: It is not the only test, but it is the test before the House tonight. Indeed, the then Prime Minister, as long ago as December 1975, said that that was decided in the referendum. Therefore, everyone in Europe and all Governments with which this Government have dealt have relied on our good faith in the matter. Certain Ministers have involved not only their own Government but the whole of the House and the nation in the squalid performance of their duties in Brussels, which they evidently intend to repeat tonight.
  I think that by a large majority the House will tonight repudiate them and support the principle of direct elections, to which we are committed. But support for that principle, which is very important, does not in any way imply acquiescence in the badly drafted contents of the Bill.
  Mr. Nigel Spearing: Time and again the right hon. and learned Gentleman has said that the House is committed to the principle of direct elections. Does he agree that the two pages of the Government's popular document and the "Yes" document in the referendum did not refer to that principle? Does he agree that the decision on 20th September expressly provides for ratification by this House? Why does he still say that there is an obligation?
  Mr. Rippon: The Government freely committed themselves. Whatever individual Members may do the House as a whole will decide the issue—it is intolerable that Miinsters should represent Her Majesty's Government abroad and freely enter into international agreements and then for a long time hide not only from this House but from those other Governments their intention to do everything in their power, as distinct from using their
  1450
  best endeavours, to try to defeat the purpose of the agreements into which they had entered.
  I suggest that, having determined the wishes of the House on the principle of direct elections, the Government should give the House an early opportunity before the Summer Recess of having the promised free vote on the method of election. On 25th April the Opposition, pressed that this should be done. There is no reason for any further delay, unless the House decides to reject the advice of the all-party Select Committee which, as the Home Secretary said, has produced three reports. What are we to do about the Select Committee's reports? Its advice was that we should maintain our present election procedures. It is only if we decide to depart from the Select Committee's advice that we have to weigh all the advantages and disadvantages of the various forms of proportional representation.
  Yesterday the Home Secretary said that after the debate on 25th April he had come to the conclusion that we could choose the method of election only if we could see the Bill. We have seen the Bill. I believe that, without further delay, we can now choose in broad general terms which system we prefer.
  The Government have not told us why we should not have an early opportunity of a vote on the Select Committee's recommendation that
  "The first past the post system at present in use for Parliamentary elections should be used in the United Kingdom for the first round of elections for the European Assembly."
  Why cannot that principle be decided? It is no good to say that we can have a free vote and then, if it goes one way rather than another, for the Government to say that we, and not the Government, shall be to blame for any delay.
  Mr. John Mendelson: Since the right hon. and learned Gentleman made so much play of constitutional rectitude a few minutes ago on another matter, that of collective Cabinet responsibility, how can he now dare to advance the proposition that, merely because there is a Select Committee report on the subject, the House can ignore, when discussing the major constitutional change of the last 50 years, that the Bill has to be decided before hon. Members can decide the method of election? How can the

  1451
  right hon. and learned Gentleman maintain that with constitutional rectitude?
  Mr. Rippon: I accepted the Home Secretary's view that we could not have a vote immediately after 25th April because we could not see the Bill. But now we can see the Bill. We do not need a Bill in this extraordinary form in order to make up our minds which system we prefer.
  Are the Government still telling the House and our European partners that whatever choice is made there will be no difficulty in meeting the date of May-June 1978? Or has the Prime Minister already told our European partners at the London conference that it will not be the end of the world if the elections are not held until 1979? It ought to be clear what date we are now committed to with our partners in Europe.
  What the Minister of State has said about the Boundary Commission strengthens the case for taking a vote now. We thought that we might help the Government by saying that we should allow the Boundary Commission to start its work, but we are told that we cannot do so by simple resolution or by a Money Resolution. The hon. Gentleman sees difficulties in having a one-clause Bill. Let us make sure that no Select Committee or anyone else does any more abortive work. Let us decide on the method now.
  We should remember that even majorities have some rights. Let no one in this country or in Europe be in any doubt that if the Government wish to give effect to the wishes of the House they have the necessary power, means and support to do so. We must remember that our European partners are looking to the House tonight to demonstrate our good faith in international affairs. By a decisive vote tonight in favour of direct elections, we shall be demonstrating that we have a political as well as an economic commitment to Europe. We shall be playing our part in giving the Community a fresh sense of purpose and identity.
  I believe that there is support on both sides of the House for the principle of direct elections. We shall test that tonight. I echo the sentiments expressed by the hon. Member for Fife, Central, a fellow Member of the European Parliament. What is at issue tonight is, as the hon.
  1452
  Gentleman said, our good faith and the validity of our membership of the Community. We are seeing one more last-ditch attempt by the anti-Marketeers to undermine the verdict of the British people in the referendum.
  I am sure that the majority of hon. Members will vote enthusiastically for the Second Reading of the Bill tonight in order to honour our international commitment. I have also come to the conclusion that we do not like the form or content of the Bill, nor do we like the Government's inexcusable delay in presenting and promoting it. Above all, we do not like the way in which the Government have behaved and continue to behave.
  Mr. Deputy Speaker: I call the right hon. Member for Dartford (Mr. Irving).
  Mr. John Mendelson: On a point of order, Mr. Deputy Speaker. Yesterday at the opening of the debate the Front Bench spokesmen of the Government and the main Opposition party were unanimous in declaring that the Bill raised divisions not between the two sides of the House—this was confirmed this afternoon—but between hon. Members of all parties. I therefore wish to put on record my strongest possible protest at the fact that three hon. Members who are in favour of the Bill have been called to speak in succession today, just as yesterday five hon. Members in favour of the Bill were called to speak in succession. If we do not obtain satisfaction on this point we shall be forced to put down a motion, Mr. Deputy Speaker.
  Mr. Spearing: Further to that point of order, Mr. Deputy Speaker. I, too, was present yesterday. As my hon. Friend has pointed out, there were five speakers in favour of the Bill before I managed to catch your eye. As the sixth speaker in the debate, I was the first speaker against the Bill, and that was at about 5.50 p.m. I understand that one of the objectives of the Chair is to conduct debates in the best interests of the House so that both sides may be heard.
  Mr. Deputy Speaker: I am grateful to both hon. Members for drawing the attention of the Chair to this matter. The hon. Member for Penistone (Mr.

  1453
  Mendelson) raised a similar point yesterday, when I said:
  "A list has been drawn up by Mr. Speaker and there will be a balance, which will develop during the course of the debate, among right hon. and hon. Members who hold varying views. I can assure the hon. Gentleman that this will be the case."—[Official Report, 6th July 1977; Vol. 934, c. 1279.]
  In reply to the point of order raised by the hon. Member for Newham, South (Mr. Spearing), perhaps I might point out that in order to achieve that balance three hon. Members holding similar views to his own were called consecutively.
  The Chair has a difficult problem, because there are three alternatives. As I understand it, some hon. Members do not like the Bill at all, certain others would prefer one method of election, and other hon. Members would prefer a second method of election. The Chair is in a difficult position, but it will do its best to see that a balance is maintained during the course of the debate.
  Mr. Robin Maxwell-Hyslop: Further to that point of order, Mr. Deputy Speaker. Surely the question before the House is not which system of election there should be but simply whether the Bill should have a Second Reading. Therefore, surely there are only two categories of hon. Members—those who favour the proposition that the Bill should be given a Second Reading and those who favour the proposition that it should not. Whether hon. Members favour proportional representation or a first-past-the-post system is not a relevant consideration on Second Reading, as opposed to the importance of an "Aye" or "No" vote on the proposition that the Bill should have a Second Reading.
  Mr. John Mendelson: Further to that point of order, Mr. Deputy Speaker. It has been common ground for many years that it is the particular function of the Chair to make the debate. I say this in all seriousness. Debate can take place only if one point of view is followed by another. By calling in succession yesterday five speakers who favoured one point of view, and three later on, you did not live up to that function, Mr. Deputy Speaker. I submit that you should now call an hon. Member who opposes the motion.
  Mr. Skinner: I should like to add to that point of order, Mr. Deputy Speaker, and to make an additional one.
  In view of what you have just announced, Mr. Deputy Speaker, may I take it that the next speaker after my right hon. Friend the Member for Dart-ford (Mr. Irving) will not be the Leader of the Liberal Party, who has just left the Chamber, as Liberal Members usually do?
  The other point that I want to raise is, I think, of deep significance. There is a system operating in debates whereby hon. Members with interests in certain matters declare them. According to certain newspapers—in particular the Daily Telegraph today—at least 50 Tory Members of Parliament have their names down on the list to secure one of the £30,000 jobs in Europe. I believe it to be of supreme importance that every right hon. and hon. Member who rises to speak in this debate makes clear whether he or she has an interest. I am expecting you. Mr. Deputy Speaker, to apply that instruction, as is the case on other occasions when hon. Members have interests in other matters.
  Mr. Roderick MacFarquhar: Is it not the case, Mr. Deputy Speaker, that all those Labour Members, whether for or against the motion, who remained in the Chamber yesterday were called?
  Mr. John Mendelson: That has nothing to do with it.
  Mr. Deputy Speaker: What the hon. Member for Belper (Mr. MacFarquhar) says is correct.
  I think that the hon. Member for Bolsover (Mr. Skinner) is looking into the future. Hon. Members who have certain views will no doubt bear in mind what he said. I do not think that it is germane to this debate.
  I take the point made by the hon. Member for Penistone. He is an old and distinguished Member of the House in terms of service but I remind him that the Chair must also bear in mind that by tradition Privy Councillors have a certain right of priority within the limits of the time available and of the interests of all hon. Members. The Chair will, therefore, do its best. I hope that the House will allow the Chair to continue

  1455
  to do its best and to see that the balance is preserved.
  Mr. George Cunningham: It should be recorded that the House has never decided that precedence should be given in debate to Privy Councillors. It is true that a former Clerk of the House has recorded that tradition in a book, but it has never had the authority of the House. The House has no Standing Orders that give precedence to Privy Councillors. I hope that the practice will be eroded over the years.
  Mr. Deputy Speaker: It is a matter of custom, and if there is to be erosion it will have to be examined on another occasion.
  4.51 p.m.
  Mr. Sydney Irving: As a former occupant of the Chair, to say nothing of being a Privy Councillor, that is the last argument in which I wish to become involved. However I might redeem myself if I say that I have not applied to go to Europe, along with the entire membership of my party.
  The Bill has at last got on to the Floor of the House. It seems a long time since the Select Committee, over which I presided, was set up to consider urgently proposals for direct elections.
  I have not been quite as impatient as some hon. Members, because I have been conscious of the difficulties under which the Government have been labouring. I congratulate the Prime Minister and his colleagues on getting the Bill on to the Floor of the House with the Lib-Lab agreement and the Cabinet intact, although I regret the unwillingness of some Cabinet Ministers to accept the doctrine of collective responsibility.
  It is important that the elections should be held—first, because they are indicated by the treaty and, secondly, because of the obligation entered into by the Government. Failure in this respect would confirm to many on the Continent our unwillingness properly to commit ourselves to membership of the Community. It would not enhance the Government's reputation for their capacity and good faith to carry out their obligation if the Bill failed tonight.
  I do not believe that the proposals are a major step towards federalism in the
  1456
  sense that they involve any real shift of power. They are of a much more limited significance. However, they will provide an opportunity for the British people to involve themselves in European affairs. They could in time strengthen the European Parliament and make the Commission more accountable. These are sound democratic principles, which all hon. Members on the Government Benches should support.
  I turn to the first-past-the-post system. The Select Committee recommended an inquiry, and I regret that this is not to take place. However, it is clear that if it did take place there would be inadequate time to enable the elections to be held next year. I urge the Government to instruct the Boundary Commissions to proceed with the work immediately after the Second Reading of the Bill. Yesterday the Home Secretary said that that was impossible. The Minister confirmed that view today. There are no precedents for the Boundary Commissions being instructed before Royal Assent, because there has never been any need for haste.
  Some of the oral and written evidence given last year by the Boundary Commissions on this point is illuminating. On 15th July Sir Raymond Walton, the deputy chairman of the English Commission, in answer to questions 382 and 392, made it clear that he thought that they could begin work—although they would need to know the number of seats to be allocated and the principles on which the boundaries were to be determined.
  Presumably the Boundary Commissions would act on the assumption that what was in the Bill that was given a Second Reading would go through. No doubt they could adjust accordingly if amendments were made at a later stage. The same points are made briefly in paragraph 15 of the joint memorandum submitted on 13th July 1976 by all four Boundary Commissions.
  Mr. Jeremy Thorpe: The right hon. Gentleman dismissed as a minor matter the fact that the Boundary Commissions would assume that the number of seats would be the same as is contained in the Bill. Surely it is terribly important to know whether there will be 66, 65 or 64 seats for England and whether there will be more than 10 for Scotland.
  Mr. Irving: It is not a major matter and does not present an insuperable difficulty for the Boundary Commissions.
  There are no precedents for the Boundary Commissions being briefed in this way. But it is a common practice in nationalisation and other measures to set up shadow boards and make other appointments long before the measure receives Royal Assent. I urge the Government to consider that. I make this plea not because I am in favour—but it is reasonable for those who want to consider this method to be assured that it will be a practical proposition if that is the wish of the House.
  I started off in favour of the first-past-the-post system. I am now convinced that we should adopt PR for Europe. The simple majority system is relevant for Westminster, where we are electing a Government, but we are not doing that in Europe. We are electing a consultative Assembly. If we adopt the first-past-the-post system just to protect the Westminster system, and our own smaller parties get no representation, there will be a reaction even among Labour and Conservative voters, who will believe that that is not fair. Rather than pressure lessening for PR at Westminster, it would increase if the first-past-the-post system were adopted for Europe.
  I am glad that the Government have decided on a deposit of £500 and that the number of the sponsors, including proposer and seconder, should be 50. These were the first thoughts of the Select Committee. Its second thoughts put the deposit figure too high, at £1,000. The Committee also recommended that the sponsors should come from each constituency in the new system, which would have been difficult to operate. I regard the new figures as more satisfactory.
  I do not want to take too much time, since other hon. Members want to speak. I hope that the Bill receives a Second Reading by a large majority. However, there is another matter that we should not avoid. I hope that the Bill will make good progress.
  Mr. John Mendelson: Everyone is saying the same thing.
  Mr. Irving: It is what we believe.
  The Government should not shirk their responsibility. They should accept that
  1458
  they might have to consider a guillotine, although this depends on the support in the House. The Bill should not be held up by indefinite obstruction. That is not in the tradition of the House.
  Several Hon. Members Several Hon. Members rose—
  Mr. Deputy Speaker: I call the right hon. Member for Devon, North (Mr. Thorpe).
  Mr. Spearing: On a point of order, Mr. Deputy Speaker. A few moments ago I pointed out to you that yesterday we had five speakers on one side, followed by myself, one of my right hon. Friends and the hon. Member for Banbury (Mr. Marten), followed by my hon. Friend the Member for Southampton, Test (Mr. Gould). I think that, as the House knows, their views were well known and it was known that they would be speaking against the Bill. A little while ago, Mr. Deputy Speaker, you listened to some further points of order. You have also said that right hon. Members have a certain precedence. I believe that there are two right hon. Members on the Opposition side of the House wishing to catch your eye and I believe that one of them may well wish to oppose the Bill. I therefore suggest to you, Mr. Deputy Speaker, in line with the points that have been made by my hon. Friends, that if we are to have a debate in which points may be replied to, one against the other, some alternative arrangement of speakers is required.
  I should have hoped that the views of those seeking to catch your eye, list or no list—and I do not think that one existed—would be found appropriate to make a debate.
  Mr. William Molloy: Further to that point of order, Mr. Deputy Speaker. There is another dimension to this argument, which I respectfully ask you to consider. It has happened a number of times during my service in the House that both Front Benches have been in unison and the leaders of other political parties have joined both Front Benches in unison. This has meant that it has been a very difficult task for Back Benchers on both sides of the House to get their views over or to affect the opinion of the House. If that situation exists now, in which we have the Government Front Bench, the Opposition Front

  1459
  Bench and leaders of other parties in the House all united in one endeavour, and if they are then to follow one another in submitting their views, to the exclusion of those who do not take the same sort of view, the situation will be unfair, in my judgment, which I ask you to accept. It will exacerbate an already unfair situation.
  Mr. Deputy Speaker: I take note of what the hon. Member for Ealing, North (Mr. Molloy) has said.
  I assure the hon. Member for Newham, South (Mr. Spearing) that if he will bear with me he will find that what I said earlier will be carried out.
  Mr. John Mendelson: Further to that point of order, Mr. Deputy Speaker. My hon. Friends have just recalled that opinion in this House must be fairly represented in debate. I want to add an additional point, which is that opinion in the country is also divided on this issue. So far, on both days of this crucial debate, five speakers have been called representing only one view of opinion in this country. I suggest that we cannot please ourselves as to whether we allow opinion in the country to be fairly and properly reflected. I am prepared to move a progress motion or a motion to move Mr. Deputy Speaker out of the Chair, if you will allow debate on it, to test this major constitutional issue here and now.
  Mr. Dong Hoyle: Further to that point of order, Mr. Deputy Speaker. Once we are debating this matter and saying that we want a fair balance of opinion in the House, there is also the added difficulty that what is not being represented is the differences of opinion within the constituencies. It seems obvious to me that if the debate continues to take the form it is taking many people will feel that their point of view has not been aired in the House.
  Mr. Deputy Speaker: In regard to those points of order, I can only reiterate what I have said before. Every endeavour will be made to allow expression of the varying views of all hon. Members within the time available for the debate. With all due deference, perhaps I may point out that these points of order—which I have fully taken into account and have listened to very care-
  1460
  fully—have been taking up valuable time, and time is not limitless. I shall do my best to meet all hon. Members' views in this matter.
  Mr. John Mendelson: On a new point of order, Mr. Deputy Speaker. May I move that Mr. Speaker be recalled to the Chair so that hon. Members can make submissions to him, as has happened on other important occasions on which a dispute has arisen? I beg so to move.
  Mrs. Elaine Kellett-Bowman: The hon. Gentleman is wasting time.
  Mr. Deputy Speaker: The moving of such a motion is not in order. Mr. Thorpe.
  5.4 p.m.
  Mr. Jeremy Thorpe: I was in some doubt as to when I would rise to speak. I am grateful to you, Mr. Deputy Speaker, for calling me. I shall try to produce a new dimension, which will restore the balance in one way or another.
  I am delighted to follow the speech of the right hon. Member for Dartford (Mr. Irving), who was Chairman of the Select Committee and who gave great service as its Chairman. He has an important position in so far as he has changed his mind, as has the hon. Member for West Bromwich, West (Miss Boothroyd), on the form of electoral system which should be used. That is a fact that the right hon. and learned Member for Hexham (Mr. Rippon), who rightly attaches great importance to the Select Committee, will also take on board. [Interruption.] If the hon. Member for Penistone (Mr. Mendelson) wishes to intervene, I shall be happy to give way, but I cannot hear him from his sedentary position.
  I should like to come later to the right hon. Gentleman's point about the Boundary Commissioners starting work after Second Reading. I believe that there are very great difficulties in that. Even accepting that the right hon. Gentleman wants to get some procedure through, I can see great difficulties there, as I also find in the Minister of State's argument that it would be possible to have proposals put forward within two weeks of the Bill's receiving Royal Assent. I shall come to that matter shortly.

  1461
  I start by welcoming the fact that we have the Bill, late though it is. I should like to thank Conservative speakers who, one after the other—this has been shot through all their speeches—have expressed their deep appreciation to the Liberal Party for the part that it has played in bringing this about. I exclude, of course, the hon. Member for Banbury (Mr. Marten). However, as for all the other pro-Europeans, one always knew that they were magnanimous to their opponents, and it is always rather nice to have that confirmed in debate. If I do not mention each right hon. and hon. Member individually, I hope that they will accept my gratitude expressed collectively.
  I shall not argue whether or not we are entitled to vote for an Assembly by election, save to say this: what the referendum decided was that the people of this country agreed that they wished to remain within the European Economic Community.
  Mr. Hoyle: Two years ago.
  Mr. Thorpe: I do not mind whether it was two years or two minutes. It is a fact that there was a referendum held in this country—principally supported by the anti-Marketeers, who then got rather a shock when they found how out of touch they were with public opinion, which decided that this country wished to remain within the EEC. That meant that it wished to remain in the Community that existed by force of a treaty— the Treaty of Rome.
  Under Article 138 of the Treaty of Rome there was an Assembly, which was already in existence. The anti-Marketeers did not pretend that they did not know that it existed. In the second part of that Article there was provision for the elections. That provision was agreed upon by the Council of Ministers —not this House—in September 1976. It is that ministerial commitment that we are being asked to ratify in this House.
  There is, therefore, no obligation on any right hon. or hon. Member to vote in favour of it, but there is an obligation upon the Government of the day to honour the obligation into which they entered, and there is, in my view, for those who are supporters of the Common
  1462
  Market, a clear moral obligation to deliver the goods, and I believe that that is right.
  Mr. Maxwell-Hyslop: Would not the Government honour their obligation most fully if they introduced the Bill in the form in which it would be most likely to command a majority in the House, namely, with the first-past-the-post system?
  Mr. Thorpe: We shall get on to that matter shortly. I do not think that anyone is likely to be able to say what is most likely to be the view of the House until we have had a vote. Unlike the hon. Gentleman, I would not like to prejudge the view of the House in advance of it being expressed.
  One asks the question, why do we want an elected Assembly? The short answer is that it has an important job of work to do. [Interruption.] Perhaps the hon. Member for Nelson and Colne (Mr. Hoyle) will contain himself for a while. The great David Lloyd George said that one should never ask a question unless one knew at once the answer that one was going to give to it. On that matter one has only to look at the events of the last few weeks and the statement of the Council of Ministers and its views about the collective action which the Community would take on growth, inflation, and employment, and its position on the Middle East. I may happen to disagree with parts of the statement on the Middle East, but it was an important position for the Nine to take.
  I do not believe that any anti-Marketeer could seriously object to the heads of nine nations getting together as neighbours with very close economic links to discuss some of the major problems that face us as neighbours. Nor, I believe, can they honestly say that if there are to be ministerial meetings and meetings of civil servants for the Commission to carry out the decisions taken, it is wrong for the parliamentarians for the same area to get together to discuss amongst themselves those same problems, which is what the Assembly does.
  I cannot see why it should be suggested that Ministers and civil servants can meet but that there is something wrong in having elected Members meet. And if there are to be Members of the Assembly, it

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  is better to have them elected than nominated, particularly if one accepts the doctrine that the dual mandate will be the exception rather than the rule.
  I give another example of the sort of job the Assembly has to do. One of the most exciting developments in the Common Market is the signing of the Lomé Agreement, whereby the Nine have agreed to link their economies with 50 African, Caribbean and Pacific developing countries. This is enormously important and I want to see it extended. Therefore, I would also like to see a powerful committee of the European Assembly established to push Governments, the Commission and the Community forward. Many of these decisions will ultimately have to be taken in the individual Parliaments, but there is no reason why there should not be a collective view, expressed by parliamentarians of the Nine in the Assembly.
  I disagree with the Prime Minister about the target date of May and June next year. He has said that it does not really matter if we do not achieve it. That attitude can be summed up as "This time, next time, some time, never." I believe that if there is a massive majority tonight for Second Reading it should be interpreted as a decision by this House that it wants the elections in May and June next year.
  That means that we shall probably have to have some form of agreed timetable, and the readiness to have it will be the real test of the Government's good faith and that of Her Majesty's Opposition. I believe that in the next Session we must see what progress we are making and bring in some form of agreed timetable if there is a filibuster. It is possible that there will be a filibuster. The House always says that it never does such a thing, but it is possible. We might see the sort of thing that we saw on the devolution Bill. I did not vote for the guillotine motion on that Bill because I thought it a bad Bill. Just as the Conservative Government came to an agreed timetable on the European Communities Bill, which we discussed and agreed with them, so the same will have to be done, if necessary, with this Bill.
  Mr. Rippon: On the right hon. Gentleman's assumption that we all ought to try to expedite the passage of the Bill,
  1464
  will he give his assurance that when we have a free vote on the method of election the Liberals will happily abide by the results?
  Mr. Thorpe: Yes, of course. But we have not voted yet, and after the vote there will be no alternative. It is rather an academic question.
  I do not believe that the regional list system is the best available but it has certain advantages. It means that the number of votes is reflected in the seats, so that if a party holds three-fifths of the vote it gets three out of five seats. That is new. The system also gives some choice to the elector among the candidates within his party list. That again is new. It is also, in my view, a system which could, although not necessarily would, be ready in time. Although we may want to look at Schedule 3 and carry out certain amendments, the system is simple.
  Its disadvantages are that, although one counts the party totals, if a candidate for a party fails to get the necessary quota, or if he exceeds his quota, those who vote for him will have no way of expressing where they would wish their second preference to go. The elector would get that ability under the single transferable vote system, but not under the regional list system.
  The main defect will be that in Northera Ireland, where one cannot have cross-voting and cannot share second preferences with any other party, it will probably split the vote between the SDLP and the Alliance Party, to the benefit of those more extreme on the right or on the left. That is one reason, I suspect, why the Government in their White Paper said that if we were to have the first-past-the-post system for the United Kingdom, we would have to have proportional representation or STV for Northern Ireland.
  I wonder why they said that. I think that they accepted their own advice, in paragraph 14 of the White Paper, that the first-past-the-post system magnifies swings. That is something of which every Government approve when they are in power—a magnification of the swings— because they benefit, and of which every Opposition approve when they think that they are about to become the Government. But they both know full well

  1465
  that minorities are very often underrepresented, and that in the case of Northern Ireland it would probably be the Roman Catholic minority. Indeed, it would probably not be represented at all. Therefore, even with the regional list system, I should still like the single transferable vote in Northern Ireland, because it is vitally important that both religious communities and all shades of opinion there should be as accurately reflected as possible.
  Mr. Powell: Why?
  Mr. Thorpe: It has been the polarisation of the Unionist-dominated Protestant clique in the last 40 years which has caused the problems in Northern Ireland.
  Mr. Powell: Not in the Common Market.
  Mr. Thorpe: If the right hon. Gentleman does not believe that, he will not believe anything.
  Mr. Powell: The right hon. Gentleman knows nothing about it.
  Mr. Thorpe: What is the position of the Opposition on the question of proportional representation in Northern Ireland if we have the first-past-the-post system for the United Kingdom? Do they accept the Government's view? The right hon. Member for Penrith and The Border (Mr. Whitelaw) was a little ambivalent in the debate in April. He is the man who reintroduced proportional representation into Northern Ireland and he did not, in the debate, dissent from the wisdom of what he had done. He did not speak as the father, because it was fathered by others, but he spoke as the godfather. He was nevertheless very ambivalent as to whether he would support the system for the European elections. We did not have from him the basso profundo tone that we are wont to expect, but something more akin to the falsetto of his mistress's voice. I hope that we shall hear a little more about where the Conservative Party stands on the question of Northern Ireland and proportional representation.
  I cannot understand the enthusiasm of the Conservative Party for the first-past-the-post system for Europe. I would not be so ungenerous as to suggest that it feels
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  such a system to be the best way to get an inflated majority. Nothing like that would cross my mind. I would not suggest that the Conservatives would prefer it because it would take longer than anything else and would therefore ditch the elections, because they are good Europeans, even if it took some time to convert them.
  However, many Conservatives are prepared to look objectively at alternative schemes, although not, of course, the right hon. Lady, the Leader of the Opposition. We know her position. She is absolutely rigid. One cannot talk about election systems to her. It is like mentioning the name of Mr. Gladstone to Queen Victoria. Indeed, Conservative Members of Parliament and industrialists who have discussed the subject with her and have favoured a change have come away with very thick ears, as many hon. Members on this side of the House will be prepared privately to admit.
  One of the merits argued for the first-past-the-post system is that there would be a close relationship between the Member and his constituents. But there is no close proximity between one Member and 500,000 electors. Again, the problems that the Members of the European Assembly will face are regional. That is why it is better that the system should be on a regional basis. But let us consider the timetable that the Minister of State mentioned. Let us look at what the Boundary Commissioners said.
  The Boundary Commissioners said that their estimate of 18 weeks for preparation was on the basis that there would be no preliminary consideration before Royal Assent, that there would be no preparation of papers before it, and no ordering of papers for publication before it. But they said that within two weeks they could arrange publication and display of provisional recommendations, and that there would be four weeks for representations to be made. These could be examined by the secretariat in two weeks and considered by the Commission in a further two weeks. The drafting of the report would take two weeks, and the ordering of maps, printing and submission of the report would take six weeks. I think that the total of 18 weeks for all that work is a wildly optimistic view. They thought that a maximum of about seven weeks

  1467
  would be required for preliminary consideration and publication of papers after Royal Assent. I cannot see how the first-past-the-post system could possibly be completed in less than six months.
  The hon. Member for Mid-Oxon (Mr, Hurd), who spoke last night for the Conservative Opposition, said earlier this year that:
  "The Home Secretary had a rather sibylline passage on boundaries in his speech, reflecting an almost similarly obscure passage in the Green Paper, when he said that we might simplify the remit of the Boundary Commission or have other arrangements approved by Parliament. We should put down a marker, even in advance of the Select Committee. I do not wish to be discourteous or to recall uncomfortable memories, but we go for the Boundary Commission with whatever simplifications may be appropriate—not arrangements between the parties or in smoke-filled rooms. Such arrangements are not likely to command the respect which is essential in this crucial matter if the direct elections are to be a success."—[Official Report, 30th March 1976; Vol. 908, c.1222.]
  I believe that the hon. Member was for option B at the very least, and in my view option B would take six months at the very least.
  Mr. Douglas Hurd (Mid-Oxon): We have always said that we want the Boundary Cominission to play a proper rôle in determining boundaries if we have the first-past-the-post system. The difficulty now about timing is that the Liberal Party has forced the Government to include in the Bill a system which, on present evidence, the House is likely to reject. It would be a pity if, the Liberals having brought the baby to birth, it were to be strangled in Committee.
  Mr. Thorpe: The hon. Gentleman does scant justice to the Home Secretary, who in his speech yesterday made it quite plain that he is personally in favour of the system, and I do not know why the hon. Gentleman should question the Home Secretary's good faith. The right hon. Member for Dartford, who is Chairman of the Select Committee, has likewise been converted. There are many in his own Conservative Party who take this view, and he must not automatically assume that everyone is so wedded to the system in which, obviously, he passionately believes. Let us put it to the vote, and we shall see what happens.
  1468
  I believe, therefore, that the Boundary Commissioners would have very great difficulty in starting work until they knew the number of seats. We do not know whether those for Scotland and Wales would go up or stay as they are. One cannot work out the quota until that is known. We will change in five years to some form of proportional system, anyway, I know perfectly well, because no one in Europe has the first-past-the-post system, and would not be found dead with it. In Europe it is regarded as a crazy system, and part of our archaic system of politics. I cannot see why we should change twice. Why not change to a proportional system now and go most of the way towards what will be the system in five years' time?
  The only advantage of the first-past-the-post system is that the results would be so undemocratic and unrepresentative that they would, as the right hon. Member for Bridlington (Mr. Wood) said, discredit the system in this country even more. I must say that there are times when I should not mind seeing that happen.
  If we want to get the Bill through, the Leader of the Opposition will have to be far more flexible than she has been hitherto in looking at alternative electoral systems. We must see how we can get this legislation through quickly.
  I do not see why British citizens living abroad should not be able to vote. I believe that the change in the deposit figure is right. I do not think that £500 and 50 signatures is very much for a business man to enable him to send brochures free of charge through the post to several million people. We might have to increase the number of nominations.
  I take it that we are making the hon. Member for Banbury and the hon. Member for Newham South (Mr. Spearing), whose views I respect, unhappy, but we are trying to have a greater democratic influence in Europe, and for my part I hope that there will be an enormous majority for the Second Reading tonight.
  5.24 p.m.
  Mr. Eric S. Heffer: My hon. Friend the Member for Penistone (Mr. Mendelson), in the recent exchange of views, quite rightly said that not only opinion in this House but opinion in the country has to be taken

  1469
  into consideration in relation to the debate. The views that I shall put forward today are based upon the decision of the annual conference of the Labour Party.
  In January 1976 the National Executive Committee of the Labour Party urged the Labour Government not to commit the United Kingdom to elections for a European Parliament until the NEC and the party conference had had the opportunity to discuss the important implications involved. We then drew up a document in which the NEC put the arguments for and against direct elections. That document was placed before the annual conference of the Labour Party, and the majority of the National Executive Committee urged the conference not to support direct elections. That was carried by a two to one vote. I will quote from the document. It said:
  "The fundamental argument against direct elections stems from an opposition to further integration and possible political union within the European Community and a consequent belief that such integration poses a threat to national sovereignty. It therefore follows that the Labour Party should continue the campaign against direct elections as a manifestation and commitment to greater political union."
  That was the decision after a democratic discussion and debate at the party conference. I have not always accepted conference decisions—I opposed devolution —but I always made it clear that I was opposing my party conference decision, and I did not pretend anything else. As hon. Members know, I always said that I was arguing against a decision of my party conference. Some of my hon. Friends seem to have forgotten what my party conference decided, and the Government especially forgot. Within a matter of weeks the Government had accepted the position, and it became part of the last Queen's Speech.
  I draw the attention of the House to this because there is a vast body of opinion in the country, particularly in the Labour movement, which is opposed to the whole concept of direct elections. It is not a question whether it is to be a regional list or the first-past-the-post method. That body of opinion is opposed to the principle of direct elections, and I am opposed to the principle of direct elections. I make it absolutely clear that on this question I stand foursquare with
  1470
  the decision of my party conference. [Interruption.] Why? Because I think it was right.
  I went through the speeches—
  Mr. Tom Ellis: My hon. Friend said that he follows the decision of the party conference on the ground that it was right. What would he have done had he thought it was a wrong decision?
  Mr. Heffer: My hon. Friend knows me sufficiently well to know that if I thought it was wrong I would not necessarily follow the conference decision. I have done that before, as the Government have. But there is a distinction between the position of an individual and that of a political party, with a Cabinet which in fact is here because the party has put its members here, not as individuals but to represent the views of the party. It will be very bad for this country when political leaderships, irrespective of who those political leaderships are, totally ignore the desires, the wishes, the convictions and the views of the majority of their party. That must be understood.
  Mr. Skinner: Does my hon. Friend understand that what the leadership of the Government is about, as distinct from the party leadership, although the General Secretary has been making noises that, in my view, are not in line with the conference decision, is to get a decision tonight and to hoodwink the Labour Party Conference of 1978, persuading it to overturn a previous decision, although, according to the constitution, it should not be allowed to debate the matter because a decision has already been made, and then, if it can manage to do so, to get a few trade union leaders to support it with a few million votes? Following that, the object is to try to cajole or persuade some of us to support the Bill when it next comes before us—
  Mrs. Kellett-Bowman: Address the Chair.
  Mr. Skinner: That is the present scenario. My hon. Friend should direct his attention—
  Mr. Deputy Speaker: Order. I should be obliged if the hon. Member would address his remarks to the Chair.
  Mr. Skinner: On a point of order, Mr. Deputy Speaker. I take exception to the

  1471
  fact that when I, as distinct from others, turn my back upon the Chair I am called to account—
  Mr. Deputy Speaker: The hon. Member should not take exception. I can assure him that there is no view held by the present occupant of the Chair, of any other occupant, that affects him more than any other hon. Member. The Chair is fair and impartial always.
  Mr. Heffer: I am sure that my hon. Friend the Member for Bolsover (Mr. Skinner) has a great deal to commend the point of view that he puts forward. I am sure that some people have that manoeuvre at the back of their minds.
  Mr. Skinner: All this lot on the Government Front Bench.
  Mr. Heffer: I turn to what took place during the referendum campaign. This morning I spent a considerable time—it was not particularly pleasant—going through the speeches of the right hon. Member for Sidcup (Mr. Heath) when he was Leader of the Opposition and right up to the end of the campaign. I also went through the speeches of the previous Prime Minister, my right hon. Friend the Member for Huyton (Sir H. Wilson), and the speeches of Mr. Roy Jenkins, who is now the President of the Commission. We have been told that direct elections were understood. We have been told that if we voted "Yes" in the referendum we were voting for direct elections. I have looked through the speeches and I find that the right hon. Member for Sidcup probably made more speeches than anyone else in the House on why we should remain in the Common Market. He talked about the defence of Europe. He talked, incidentally, about mountains of butter. He talked about every conceivable subject, but he never talked about direct elections. Not once did he mention them.
  The only possible reference to direct elections—it is very oblique—was made by my right hon. Friend the Member for Huyton. I refer to his speech in Cardiff on Wednesday 4th June, the night before the voting.
  Mr. Skinner: He covered everything.
  Mr. Heffer: My hon. Friend is right. In fact, he covered everything except direct elections.
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  The only possible reference—it is the only one that I can find in all the rather lengthy speeches that occupy a huge box in the Library—is that when my right hon. Friend said that it was
  "best for Britain and Europe"—
  that is, best for Britain and Europe to be in the EEC—
  "because our renegotiations gave a powerful stimulus to the movement for greater political —that means, democratic—control of the Market's institutions".
  Before anyone rushes in to say that my right hon. Friend meant direct elections, let me make it clear that he meant nothing of the kind. In his other speeches, in the statement that he made in the House on renegotiation, and in the White Paper on renegotiation, he said that we had strengthened the position of the Council of Ministers and the Heads of Government by bringing them together and that in future they would be much stronger in relation to the Commission. He spoke about strengthening democracy, and the issue of direct elections was not involved. It was not mentioned in the White Paper, and the only reference is to be found in Command 6003. I am sorry to have to refer to the document but it is important that I do so. It states:
  "The Heads of Government of the Community countries at their meeting in December 1974 expressed themselves in favour of the introduction of direct elections to the European Assembly by universal suffrage. It was however made absolutely clear by the United Kingdom that 'Her Majesty's Government could not themselves take up a position on the proposal before the process of renegotiation had been completed, and the results of renegotiation submitted to the British people'."
  Did the Government take up a position after renegotiation had been completed? The truth is that they did not. Stage by stage, step by step and manoeuvre by manoeuvre, we find ourselves being put in a position in which we are told "That is not important; we are not discussing that." We were not discussing direct elections and now we are faced with them.
  We are told that our powers will remain precisely the same. We are told that 20 years will elapse before there will be any change. What will happen when the Bill is enacted? Instead of our powers being strengthened, this House will be reduced to a sort of county council. We shall then

  1473
  be told "You must have known that when you were discussing direct elections". That is the truth. That is what is happening. Stage by stage we are being manoeuvred into something that is contrary to what the British people wanted and contrary to what they accepted when they voted in the referendum.
  I have looked through the dreadful documents that were put in front of us during the referendum campaign. There were two in favour, one coming from the pro-Marketeer group, and the Government paper that was supposed to be neutral but which was in favour. Finally, there was the one that was against the proposal. I shall not bother the House by quoting from them, but there was not a word about direct elections. That issue did not enter into any of the arguments contained in the documents.
  Why did not the paper that was against the proposition include a reference to direct elections? Such reference was omitted because the Government's views in the White Paper were accepted. The statement of my right hon. Friend the Member for Huyton in the House was accepted—namely, that it was not an issue. It was accepted that it was something to which we were not tied and that it was not something that we should have to accept in future.
  Tonight we are asked to take a decision on principle. I urge the House to vote against the Bill. I urge my hon. Friends, who may be bamboozled by the concept that we are strengthening democracy—
  Mr. Skinner: It is the money actually.
  Mr. Hefier: My hon. Friend sometimes gets right to the heart of the problem. I do not believe that any hon. Member who believes in the concept is concerned with money.
  Mr. Skinner: That is the concern of some hon. Members on the Opposition Benches.
  Mr. Heffer: I honestly believe that there are some who believe direct elections to be right as a matter of principle. I wish to argue, if my hon. Friend will restrain himself, that as a matter of principle.—[Interruption.]
  Mr. Deputy Speaker: Order. I hope that the hon. Member for Liverpool, Walton (Mr. Heffer) will be able to continue his speech.
  Mr. Heffer: I hope that my hon. Friends will not be bamboozled by the argument that this measure will strengthen democracy. If we really wanted to strengthen democracy, if we really wanted to turn the Assembly into a Parliament, we should have to agree on the principle of a totally united Europe—[HON. MEMBERS: "Hear, hear."] Yes, hon. Members may boast about that. They had better tell the people about that. Stage by stage they have obtained what they wanted, but they have not dared to tell the people. One or two hon. Members have, of course, argued honestly about this, but that has not been the position of the majority of the pro-Marketeers who have taken us step by step along this road. I do not think that the British people want that sort of situation.
  Mr. George Cunningham Mr. George Cunningham rose—
  Mr. Heffer: I am sorry, I shall not give way because I am just concluding.
  My honest opinion is that if the British people, after these years of being in the Common Market, again had the opportunity of deciding whether they would be in or out and not led by the nose by three party leaders, or by the Press and the other media—which during the entire campaign made it very difficult for those in opposition to put their opposition— because of the unmitigated disaster that it has been, the British people would now come out.
  5.41 p.m.
  Mr. J. Enoch Powell: Many hon. Members who have spoken in this two-day debate have sought to draw a distinction between the decision of principle, which, it is claimed, will be the subject of tonight's vote, and the question of method, which, they argue, can be considered later in Committee. Indeed, the hon. Member for Liverpool, Walton (Mr. Heffer)—although I agree with almost everything else that he said—sought to draw the same distinction between the general aim of introducing direct elections and the particular method of election embodied in the Bill.
  I believe that this is a distinction without a difference, and that the House is

  1475
  already discovering that the essence of the question lies in the method of election. Indeed, it could hardly be otherwise, for if this is a Bill to establish direct elections, examination of how the elections which are to be direct are to be conducted must be at the heart of the matter and must decide our view as to whether it is desirable—nay, whether it is even practicable—for direct elections to be instituted at all.
  As these debates proceed from the Second Reading through the Committee stage—if there is to be any Committee stage in this Session—and as they proceed again after an interval of some months, we shall find that the very nature of the Community itself and the nature of this decision of principle are gradually illuminated as we investigate the alternative methods of election that have been proposed.
  It is not, in my view, that the House, by a cunning device of the draftsman, has been presented in the Bill with two alternative methods, one of which is right and the other of which is wrong. The House has been presented with two methods of which both upon examination prove to be unacceptable and to be travesties of parliamentary representation as anyone in this country can understand it.
  Those who object to the regional list system and intend to vote it out are, in my view, justified in doing so; but so are the Government justified in resisting the alternative proposal and the consequences of the first-past-the-post system.
  I examine the two alternatives in a little more detail. I do not think that any hon. Gentleman can seriously contemplate without grave aversion the notion of political parties drawing up lists for regions and those lists then being elected en bloc—allocated in slabs as it were— in proportion to the votes cast for various parties. There can, I suppose, be nothing more offensive to our whole idea of representation than the notion of voting for a party and not a person and for the person to be allocated by the party. It flies in the face of all the traditions which have been built up through the history of this House.
  Nor is it representative in the sense in which we are accustomed to regard representatives as responsible to those who elect them. There would be no means of relating that bloc of elected persons to
  1476
  any section of the electorate who elected them. Are we to be told that it is the one or two off the top of the Liberal list who are to be responsible to the Liberal electors and the three or four off the Labour list who are to be responsible to the Labour electors? Clearly not. But to whom then are the various Members to be held responsible? Will they, as was sarcastically asked of the 12 peers created under Queen Anne to pass the Treaty of Utrecht, answer through their foreman like a jury? After all, they are a bloc of Members representing a slab of the country. Presumably they will act in some way collectively.
  Mr. John Roper: I am not quite clear whether the right hon. Gentleman is putting up a straw man or describing what the Government propose. What the Government propose is quite different from what the right hon. Gentleman has suggested. Electors will vote for individuals and not for slabs of parties.
  Mr. Powell: Yes, but those who will be elected will not be elected as a result of those electoral votes attached to individuals. They will be elected as a result of a computation of all the votes cast for party candidates. There will therefore be no such nexus as is the very essence of this place, no nexus between the person elected and those who elected him, no ascertainable channel of responsibility.
  But then, if we turn to the alternative, the case is scarcely, if at all, better. Members are to be elected by constituencies of 500,000 approximately, give or take a few thousand, and the constituencies will be so large that the Government are not the only ones who have recognised that the reflection of political opinion in this country through first-past-the-post elections will be grossly distorted, will be a travesty of the actual pattern of electoral opinion, even as it stands at the particular moment. If any hon. Member doubts that, let him ask himself whether he would like to accept the result, for the Government of this country, of the expression of political opinion in elections conducted on the basis of constituencies of 500,000.
  Nor can there, even so, be any real link between the individual Euro-Member and those 500,000 electors. We are told that this is to be a consultative Assembly. But we know, through experience late at

  1477
  night, what are many of the subjects on which those Euro-Members, we are told, will be consulted. They are matters which come home just as intimately to men. women and children in this country and which affect as differentially different constituencies and different areas and interests in this country, as do the subjects which we debate and decide in this House. Painfully, therefore, would be felt the impossibility of relating the responsibility of the Euro-Member to this inconceivably vast individual constituency of 500,000 persons with, in many cases, nothing whatever in common amongst its electorate. This is very different from the constituencies which send hon. Members to this House and whose natures determine the nature of the Assembly which is gathered here.
  But what is to be the political composition of the 81 Members elected by the first-past-the-post system? There was a remarkable passage in the speech of the Home Secretary yesterday of which I am not sure even he himself recognised the full interest and importance. He said:
  "Without the use of a proportional representation electoral system … it might be that there would be such a wide divergence between the balance of power at Westminster and the party composition of the British delegation to the European Assembly that there would be a real danger of friction between the Government at Westminster and our representatives in Europe."—[Official Report, 6th July 1977; Vol. 934, c. 1256.]
  That is a profoundly interesting statement. Evidently, in the view of the Government, the representation ought to be a representation of the balance of power as it is expressed in this sovereign Parliament. Of course, it will not be, and it could not be. It lies in the nature of things—and not just in this system— that there will be perpetual difference, or only rare and accidental congruence from time to time, between the balance in the 81 elected persons and the balance in this House of Commons. I shall come back to that in a moment when I come to consider the implications of the proposal for what is mistaken for an extension of democracy.
  What the Home Secretary, however, did not observe was that it is not merely under the system of first-past-the-post that this intolerable contradiction between
  1478
  two expressions of political opinion in this country will arise. It also happens under a proportional system. As the European and the British elections will not take place at the same time, we shall inevitably, as a result of direct elections, have discordant expressions of what are supposed to be the political views of this country. Nor, under either system, will they be the views—it would be unrealistic to imagine such a thing—of the electorate about certain Euro-matters. They will be—the system in Clause 3(1) calls aloud for it—expressions of party opinion on internal British politics at a given moment.
  So we set up a representation totally devoid of the human, parliamentary characteristics of representation here, but guaranteed to be in discord with the sovereign representation of the views of the British people as it exists in this House.
  There is no escape for hon. Members from these difficulties by saying that this is a "one-off". In any event, it is not a "one-off". The Minister of State today put this right very clearly. There is nothing in this Bill—there may be amendments considered in Committee later which would make it so—which limits it to one election, after which it will cease to have effect. We understand that there will be elections, under the decision of September last year, every five years. So until a different system is introduced, whatever system goes into this Bill will continue for Euro-election after Euro-election.
  Let not those who think that they will satisfy their compunctions by voting out Clause 3(1)—my hon. Friends and I will be amongst those who will help to do that—suppose that thereby they will have salvaged and preserved the good old British parliamentary system for the Euro-elections of the future. These very hon. Members claim that they are supporting this Bill in accordance with the spirit of our membership of the European Economic Community, if not actually in verbal obedience to the Treaty of Rome. The right hon. Member for Devon, North (Mr. Thorpe) was correct to say that this Bill is not in pursuance of Section 1(3) of Article 138 of the Treaty of Rome. It is in pursuance of the Decision of Ministers taken on 20th September 1976—

  1479
  15 months, incidentally, after the referendum.
  Do they seriously imagine that the European Assembly, which they believe can endow their European Community with virtues which at present it lacks, will, in the process of time, be elected by the principle of first-past-the-post? Of course not. If it is to be elected on a uniform system, in accordance with the Treaty of Rome, that will be a Continental system.
  The serious error which lies behind so much of the talking and thinking on this subject is the idea that, simply by electing representatives, we achieve a kind of extension of the parliamentary democracy of this House. What we achieve in fact is a negation and a contradiction of democratic control over what is done in the name of the British people.
  Does anyone imagine that 81 persons elected by either of these grotesque methods to form part of an Assembly of 400 odd, possessed of such powers as they have already or may arrogate to themselves and having the oversight of all the matters which come before the Council of Ministers, will secure greater control for the British people than we can exercise in this House, through Ministers, over the decisions of the Common Market? It will have the opposite effect. It will cut out and short-circuit, by a necessary logic, the power of this House. It will mean that, on every subject which arises, we in this House will be told that this has been considered already, that it has been passed, that it has been approved, by that very Assembly which we in this House under this Bill have set up to provide control for the British people. We in this House will be asked "Who are you—you minnows who are merely elected to the British Parliament—to stand up now and say that you want to mull over these directives, policies and all the rest of it which come out from the EEC?"
  This is a step which it is a pure illusion to suppose democratises the EEC. It reduces even that element of parliamentary control and democracy which that institution already has.
  So, of course, this is a debate about British membership of the EEC. We cannot help that. There again, the right hon. Member for Devon, North was very helpful. It is not so much a debate about
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  what people thought they were voting on at the referendum two years ago; it is about the principle of the matter. It is about what the Community is and what our membership of it means.
  Towards the end of his speech, the Home Secretary said yesterday:
  "We are in Europe to stay and it is time that this House put its mind to elections for the European Assembly."—[Official Report, 6th July 1977; Vol. 934, c. 1261.]
  The right hon. Gentleman said:
  "We are in Europe to stay".
  With the greatest possible respect, neither the Home Secretary nor any other man can or dare say that. It is not what the Government said to the people when they were asked to vote at the referendum. Then, they said:
  "The British Parliament in Westminster retains the final right to repeal the Act which took us into the Market. …"—
  these are the Government's words, the words of their legal advisers, words written up before the face of Europe—
  "Thus our continued membership will depend"—
  even in the event of a "Yes" vote—
  "on the continuing assent of Parliament."
  It is the question of the "continuing assent of Parliament" which is being raised in every speech that will be made at every stage of this Bill; for this Bill, which compels us to explore the nature, the possibilities and the implications of a directly elected European Assembly, will reveal to more and more how incompatible that form of association with the European continent is with our institutions, our freedoms and all that we value most.
  It is not the Home Secretary who got this right, but the Foreign Secretary. He got it exactly right in his words of 15th June. I am sure that those words were very carefully chosen. He said:
  "It may well be that the British people and this Parliament, as they have every right constitutionally to do, may wish to reassess the question of British membership."—[Official Report, 15th June, 1977; Vol. 933, c. 386.]
  So they may, and nothing can prevent it. Nothing can deny them that right. No claim of morality, nothing said against us, can trench upon that right.
  Part of the process of reassessment begins with this Bill, as it reveals over the coming months to this House and

  1481
  to the electors who have created it what it means to be part of the EEC and that the nature of the EEC itself is incompatible with democratic control over the things that govern their lives.
  6.2 p.m.
  Dr. Colin Phipps: There is much in what the right hon. Member for Down, South (Mr. Powell) has just said in his analysis. I agree with much of it, and other supporters of the Common Market will also agree. There is a major difference, however. The things that the right hon. Gentleman fears are, in many cases, the same things as I hope for.
  I am unashamedly in favour of a united Europe. My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) was a little unfair to many of us who, over the years, have made it clear that our reason for being here and what we hope to see is a united Europe. My right hon. Friend the Member for Dart-ford (Mr. Irving) said earlier that it was known that I was in favour of a federal Europe of which the United Kingdom was a member. This has always been my hope, and I have never shirked from stating it. The same applies also to many hon. Members on both sides. To speak of a subtle and insidious process of lulling and gently sweeping the British public into Europe is to do less than justice to many hon. Members.
  Mr. Heifer: I have never denied that there are individual hon. Members on both sides who have made their position absolutely clear. I am making my comments on the basis of the literature and material that has been issued on this question.
  Dr. Phipps: I know that my hon. Friend takes that point of view. The debates in this House have made it quite clear where the Labour Government stand and where many individual Ministers and members of the Government stand.
  It has been suggested that the referendum is something that is not binding, and therefore should not be considered in this matter. I am perfectly prepared to take that point. I did not vote in this House for a referendum. I believed, and still believe, that it was for this House to take a decision on whether
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  we should enter Europe. I did not vote for a referendum and I made it quite clear that I would not be bound by the result. To me it is this House that makes a sovereign decision, and that is what will happen tonight.
  We do not have to discuss the referendum. This House is about to take another sovereign decision on direct elections. I do not pretend that that decision is anything to do with the result of the referendum. That result will not make me vote for direct elections this evening. I shall vote for them because I believe that it is the sovereign duty of the House to decide what it wants. I believe that membership of the EEC is vital to us, and the future of the EEC is vital to the future of the world. I see direct elections as a means of securing the united Europe that I seek. Therefore I shall vote for them and I hope that many other hon. Members will do the same.
  Those who vote against direct elections will do so because they are fundamentally opposed to the concept of a united Europe. That is perfectly acceptable, and in those circumstances it is perfectly acceptable for them to vote against direct elections in order to prevent us from moving in that direction. Having said that, I believe that if there is a vote showing an overwhelming majority in favour of direct elections there will be many hon. Members on both sides who will have to consider seriously the points raised by the right hon. Member for Down, South about the nature and form of the electoral process.
  Recently I have become a convert to proportional representation. I became a convert not for European elections but for elections to this House. I think that proportional representation to this House would, to some extent, decrease the power of the Executive in favour of the Back Bencher, and I think that this is a good thing.
  For Europe, the arguments for PR are overwhelming. It is not merely a question of fairness of representation of the country as a whole, but the purely practical considerations as well. If we had the first-past-the-post system which produced in the South-West not a single Liberal or Labour Member and in the North-East not a single Liberal or

  1483
  Conservative Member, or in the country as a whole not a single Liberal Member, would this be acceptable? Conservative Members who are thinking of opposing PR but who are anxious to see our continued membership of the EEC, as I am, must realise that if they opt for a system that produces an obvious imbalance in the representation of this country in Europe it will play directly into the hands of the anti-Europeans.
  Mr. Molloy: Of course there is a great deal to be said for proportional representation, but does not my hon. Friend agree that there are Europeans—many Italians, for example—who think that they have an almost perfect system of PR? Yet all they have got from it is the fact that they have not had a stable Government for 30 years.
  Dr. Phipps: I take my hon. Friend's point. I have heard all the arguments against proportional representation that are based on the results that it produces in the government of the various countries. But we could find examples of that under any system of dictatorships of the Left, Right or Centre—examples of all systems producing good and bad Governments. Many European countries have systems of PR and they are not noticeably worse governed than we are. In fact, I suspect, that some are better governed. It is not the system that produces good or bad Governments.
  If Conservatives insist on the first-past-the-post system this may produce a system of representation to the European Parliament that will defeat the very objectives that they hold dear, namely, our continued membership of that institution, and its success.
  Let me turn to the argument of those Labour Members who oppose PR. I am not among those who believe that a system of PR would necessarily result in the Labour Party doing badly. Indeed, I think that the Labour Party would do much better than many people believe. I do not hold the view that there would be only a 20 or 30 per cent. poll. I expect the British electorate to be as interested in European elections as they were in the referendum. I do not expect the Labour Party to do particularly badly, but it ill becomes many
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  of my hon. Friends who are in the forefront of attempts to widen democracy within the Labour Party—a matter with which I have great sympathy—to seek to deprive the British electorate of a greater extension of democracy in the election of their representatives to Europe.
  Mr. Hoyle: My hon. Friend mentioned a widening of democracy within the Labour Party. How does he equate this with the giving of greater power to the party political machine? Surely, that is a negation of democracy rather than a strengthening of it.
  Dr. Phipps: I do not understand the argument which my hon. Friend is advancing on this matter.
  Mr. Hoyle: I am suggesting that the regional list system will strengthen the party machinery because the electorate will not individually select the candidate but will vote for a list put forward by the political parties. Indeed, the candidate who tops the poll might not even be elected in the end.
  Dr. Phipps: I understood my hon. Friend to be suggesting the strengthening of the party political machine within the Labour Party by the process of extending democracy in the Labour Party. I am sorry if I misunderstood him.
  Let me turn to the system of election which we should use. I am very much in agreement with the right hon. Member for Down, South that the proposed proportional system has many defects. Among its major defects appears to be not only the enormous advantage possessed by a "Mr. Abrahamson" in the electoral list, because he would also appear at the beginning of it, but the fact that it opens up a primary system which I suspect would lead to members of individual parties fighting each other at an election rather than fighting members of an opposing political party.
  Let us suppose that in one area one Labour candidate under the PR system may be returned, although there may be seven Labour candidates on the list. The net effect may involve seven Labour candidates fighting each other rather than fighting Conservative or Liberal candidates. This appears to be a weakness in such a system. I would prefer the single transferable vote system, which

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  would allow a Labour voter to put candidates in order of preference—candidate No. 1 to candidate No. 7. In other words, he would instance those members of his own party whom he wished to represent him in Parliament.
  If we must retain the current system, I suspect that the only way we shall achieve some fairness is by following the Finnish system. I understand that that system involves an additional box which includes purely the name of the party. There are objections to such a course. I agree with the right hon. Member for Down, South that it is an unsuitable way of voting in a democracy to vote merely for a party.
  If we are to retain the system, we need to provide for the person who does not know any candidate's name. He may know nothing at all about the various candidates who are put before him, and he may put a tick against the first Labour man because he wishes to vote Labour. In other words, he will choose the most convenient and easiest course. If there were a box marked "Labour" he could tick that box and choose in that way. That would have the same result in respect of total votes cast for each party in establishing the proportion of seats. But we should not back a ridiculous situation in which the first candidate on the list is much more likely to be elected than is any other candidate. One could have a situation such as that outlined by my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham), in which a member who had not received a single vote of preference was elected. If we are to have a system that also needs to include a little box entitled "Labour" or "Conservative" or whatever it may be. I would prefer to move to some form of STV.
  There is one element in the PR system which has not been discussed by Ministers—namely, that there appears to be no limit to the number of candidates which can be put up by individual parties. If the vote is for an individual, I see no reason why even in a seven-seat region there could not be 77 or 700 candidates. If each were approved by the party concerned, I find it difficult to see how we, as legislators, could restrict political parties in the number of people they put up. I can see that parties will find great
  1486
  difficulty in deciding whether to reject the eighth man or woman if no restriction is placed on the numbers in the list. That eighth person would have a strong argument for saying "I believe that I can fight a campaign in this election sufficiently good to give me enough votes to enable me to be one of those elected." That would be a difficult argument to counter.
  Therefore, I see great difficulties in the proposed PR system which is being advanced by the Government. I would prefer the STV system, or possibly even the block list. But that is subject to the kind of patronage to which many of us on the Labour Benches are opposed since political parties would make a list in order of preference.
  My final point I mentioned a little earlier, when I intervened in the speech of the Minister, but he did not give a satisfactory answer. Although I prefer the PR system I accept that many people in the House continue to prefer a first-past-the-post system. I believe that we must be prepared for both eventualities if we are to hold the direct elections on the date when they are due to be held in other European countries. To say that we cannot do anything before Royal Assent is given to this legislation seems to me to fly in the face of the sovereignty of this House. Surely we can do what we like. If we wish to have a Boundary Commission to examine the matter we can let it do so. It is not beyond the wit of 635 adult men and women to decide that this is what is to be done.
  I commend most strongly to the Front Bench the suggestion that if, tonight, there is a major vote showing that it is the will of the House that we should have direct elections to the European Parliament, irrespective of which of those methods is chosen, we should devise machinery that will allow the Boundary Commission to begin its work, and to begin that work soon.
  6.18 p.m.
  Sir Derek Walker-Smith: I shall be referring later to some of the interesting points raised by the hon. Member for Dudley, West (Dr. Phipps), including the suggestion which he advanced in his concluding remarks.
  I wish to present my observations to the House on three matters relevant to the

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  Bill and indeed to this debate. They relate to the degree and nature of the commitment to direct elections, the effect of direct elections on the powers of Parliament and the mechanics of direct elections as reflected in and provided for in this Bill.
  I have already referred in this House on previous occasions to the first two matters, in particular in my speech in the debate on 29th March last year. Therefore, to some extent I shall be summarising, recapitulating, and amplifying in regard to those two matters.
  The EEC Treaty envisages progress to direct elections after a period of membership by designation and contemplates that in acceding to the Community all member States associate themselves with and accept that concept. It follows from this that every adherent to the Community accepts obligations to work to that end—that is to say, to the institution of an appropriate form of direct elections for the European Parliament.
  There is, of course, no commitment in law to bring it about at any specified time. However, there is a clear and continuing commitment to consider proposals until an acceptable form has been achieved, and procrastination would bring no diminution of that duty. That is the position in law under the treaty.
  More recently, a further element has been injected in respect of the time factor, because the Government have agreed a target date of 1978. That date, again, is not a commitment in law. It does not derive from the treaty, because that is silent as to time, nor does it bind this House; but it does involve the good faith of the Government and therefore of the nation in whose name the Government speak overseas. On our reputation for good faith depends our standing and position both in the Community and in the wider world outside.
  There is, therefore, a clear obligation on member States in law to accept the principle of direct elections and to work constructively towards the implementation of that principle. There is a further obligation, that is not expressed in law but which derives from good faith, and it is to do our best—which is the English translation of "use our best endeavours"—to achieve a satisfactory method by 1978. If, having done our best, we can-
  1488
  not meet that date, that is that. Lex non cogit ad impossibilia. However, we must do our best. We cannot do more than that; but we must not do less.
  I come now to the matter of powers. I recognise that there are real apprehensions that direct elections will mean an increase of power for the European Parliament with a corresponding decrease in power for the House and perhaps further erosion of national sovereignty. I respect those apprehensions, but I believe them to be groundless for the reasons that I gave in more detail in my speech to the House on 29th March 1976.
  Those apprehensions derive from a misunderstanding of the constitutional position and a failure to grasp the wholly different constitutional position that obtains in the parliamentary institutions of Britain and the Community. In Britain we follow the principle of the sovereignty of Parliament. Parliament is supreme and its jurisdiction is unfettered and unbounded. That principle was enshrined in the old saying:
  "Parliament can do anything except make a man a woman, or a woman a man."
  It is true that the marvels of modern surgery have rather eroded the striking nature of that example. However, the principle remains the same. It is the principle of the omnipotence of Parliament.
  Similar considerations do not apply in the Community. There is no principle in the Community of the sovereignty and the supremacy of Parliament, and the consequences of a fundamental change in the method of election and the expansion of membership must be viewed in the context of the constitutional position that actually obtains there—not on a notional superimposition of quite different British constitutional principles.
  In Britain the powers of Parliament are a matter for Parliament alone, but that is not the position in the Community. The Community, unlike Britain, operates under a written constitution. It is an institutionalised Community with three political institutions—the Council of Ministers, the Commission and Parliament—as well as a fourth, non-political institution, the European Court of Justice. Each institution has its powers defined by treaty and cannot exceed them or encroach upon the powers of the other

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  institutions. The powers of the Parliament are clearly defined in Article 137 of the Treaty which says that it
  "shall exercise the advisory and supervisory powers which are conferred upon it by this Treaty."
  The interpretation of those powers is a matter for the Court of Justice under Articles 164 and 173. It follows, therefore, that just because the European Parliament becomes directly elected in future it could not extend its powers at the expense of the House of Commons or other national Parliaments or, indeed, of the other institutions of the Community.
  The European Parliament cannot confer upon itself a law-making function that it does not have under the treaty, or transfer to itself the law-making function that the treaty conferred upon the Council of Ministers, who are answerable, and should be responsive, to their national Parliaments. The European Parliament is not a law-making body.
  However, it does not follow that because the European Parliament does not have power, it does not have influence. Although it is not a law-making body, it is a law-shaping body, and that is a function that it discharges by scrutiny and discussion—in the presence of representatives of the Commission—of the draft regulations and directives en route from the Commission to the Council of Ministers as the law-making body. That gives the European Parliament an influence on the formative stages of legislation which, unhappily, is lacking in this House. The European Parliament exercises that function within its existing powers which were conferred by the treaty. Direct elections will not add new powers. What they can and should do is to enable the European Parliament better to discharge those duties that it already has.
  There can be no addition to the powers of even a directly-elected European Parliament against the will of national Parliaments including, of course, this House. Any increase in the European Parliament's powers would mean an adjustment in the allocation of functions contained in the treaty. That would involve an amendment to the treaty which would bring into play the requirements of Article 236; that is, ratification of any amendments:
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  "by all the Member States in accordance with their respective constitutional requirements."
  I now wish to say something about the mechanics of direct elections. The form of the Bill is somewhat curious and it perhaps calls for prefatory comment. The Government wish to keep their options open—at any rate between the two main possibilities—and so there is in the Bill Clause 3(2) which refers to a possible resolution by the House
  "after the passing of this Act".
  It is, on the face of it, somewhat Gilbertian. It is envisaged that Parliament will laboriously give effect to a Bill including the regional list system, and then—after the concurrence of both Houses and Queen's consent—the House by a unicameral resolution would reverse the corporate decision of Parliament. That is how the Bill stands. It is a constitutionally odd and perhaps not wholly dignified position.
  The matter calls to mind the American Congressman who ended his speech, when he was seeking election, with the words:
  "and those, gentlemen, are my sincere and profoundly-held sentiments. But, of course, if you don't like them, I can easily change them."
  We are now told that the Government would look upon an amendment with acquiescence. The Home Secretary said twice yesterday that if Clause 3(1) were approved—presumably he meant in Committee—Clause 3(2) would fall. Of course, that is not the position. Clause 3(2), logically, need not fall, because the wording in 3(2) refers to a different period of time. It is prefaced by the words:
  "after the passing of this Act."
  As drafted, it provides a locus peni-tentiae for the future. Its deletion could come about only by an amendment— which is now hypothetical—by an unidentified sponsor and with an unpredictable result.
  It would have been better to hold discussions at the formative stage, on a Green Paper basis, and to seek then to arrive at a consensus, or at least to define the parameters within which decisions should be taken.
  If we give a Second Reading to the Bill it will be without commitment to either of the suggested procedures, although we shall be committed to the

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  principle of direct elections and the choice between two specified methods. Prima facie, there will be a presumption in favour of the regional list system which is specifically enacted in the Bill, but there are obviously merits and drawbacks in both systems and, in my view, a fairly close balance between them.
  The Assembly constituency, with its first-past-the-post system, has in its favour that it is a less radical departure from our traditional system and gives a greater degree of local or quasi-local election and representation. Of course, the personal rapport between a Member and the electorate, which is such a basic and valued part of the constituency pattern in this House with more than 600 Members, cannot fully or perhaps even satisfactorily be reproduced when Members are representing the far larger constituencies that will be required if there are only 81 Members.
  The regional list system would result in a fairer representation between parties, at least on a strictly mathematical basis, and probably a more balanced and appropriate mix of Members suited for the work of a Parliament that operates a system that is quite different from our method of work. However, that would be at the expense of local representation. The regions would be large and some composed of disparate elements. There would be less scope for local election and selection; and diminished direct contact between the elected Member and his electors could diminish interest in what might be regarded as a remote Assembly.
  We must also consider the time factor. This is not conclusive because there is no legal obligation to conclude by a specified date, but it is an important factor having regard to the commitment entered into by the Government on behalf of the nation and the moral obligation arising from that.
  The advantage here clearly lies with the regional list system because the electoral regions are already specified in the Bill in Clause 4 and Schedule 3 with the voting procedures set out in Schedule 4. There are no post-Act procedures required with that method. Once the Bill is on the statute book, only the logistical items in Schedule 4 would stand between us and readiness for direct elections.
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  With Assembly constituencies the picture is different. First, there will have to be a House of Commons resolution, and this cannot be brought in until the Bill is on the statute book. Then the Boundary Commission must submit its report to the Home Secretary with recommendations for the 79 Assembly constituencies in compliance with the requirements of Schedule 2(9). The Commission must then publish a Notice of Recommendations and take into consideration the representations that may be made within one month of the publication of the Notice. It is true that no local inquiries are needed on the 1949 and 1958 Acts model, but we do not know how long it will take the Commission to consider representations. The Home Secretary mentioned a minimum of 18 weeks. We do not know how many representations there will be, but there is certainly nothing in the history of the Boundary Commission to give them a reputation for precipitancy or intemperate haste in these matters.
  Finally, the Home Secretary will have to lay a report before Parliament with a draft Order in Council to give effect to it. Parliament in this context means not just the House of Commons but both Houses.
  If we had to go through all these stages, the target timetable could not reasonably be met, and the Boundary Commission is not in a position to start work without express statutory authority. An hon. Member said earlier that surely the House could do something about that, but all that we can do is to put an Act on the statute book through all the normal legislative processes. There is no doubt that the powers enjoyed by the Boundary Commissions and the scope of their authority as defined under the 1949 and 1958 Acts do not extend to these activities.
  There are merits and demerits in both systems. Neither is perfect, but nor is our present system in the House. Indeed, it is manifestly imperfect. Not only does it give rise to the mathematical imbalance of representation between parties complained of by advocates of proportional representation, in an argument that obviously has some intellectual force, at any rate from the point of view of abstract principle; but it results also—and this

  1493
  has nothing to do with theory or learned argument about proportional representation—in gross and indefensible inequities in the distribution of seats and a completely distorted and unfair pattern of representation of electors.
  Hon. Members who want evidence for these views need look no further than the Home Secretary's Answer to one of my Questions about a month ago in which he set out the 20 largest and 20 smallest constituency electorates. My constituency is not the largest, but I represent 93,627 electors—41.7 per cent. more than the electoral quota and many more electors than the three smallest constituencies put together—all of which, curiously enough, are represented by hon. Members opposite. The Leader of the House also represents only 36,864 electors—35·4 per cent. less than the electoral quota.
  Mr. Molloy: The right hon. and learned Gentleman is correct in what he is saying, but such situations have occurred in other Parliaments and have been corrected by the Boundary Commission. Notwithstanding the imperfections of our system, is it not infinitely preferable to having one Member trying to represent 500,000 constituents?
  Sir D. Walker-Smith: It is much better to have a smaller electorate than to have Members trying to represent 500,000 electors. I said earlier that this was a disadvantage inherent in both the suggested schemes. The hon. Gentleman claimed that past Boundary Commissions had cured disparities, but that is not so. The gross disparities have continued for year after year. The principal Act dates back to 1949, but, despite intermittent pressure since then, Governments have not seen fit to do anything about it.
  These being the inequalities and disparities of the distribution and representation in our present system, we cannot approach this problem on the basis that, because something is new or different from our present procedures, it is ipso facto unsatisfactory, since our present procedures are patently unsatisfactory themselves, at any rate in the distribution of seats.
  Whichever course we take will involve significant variations of our present
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  pattern and procedures, though the regional list system will obviously involve a wider variation and more radical change. We have to devise new methods for a new situation and for elections to a Parliament different in size, function and method of working from our own. Basically, I think that either of the two postulated systems, although not perfect, could work reasonably satisfactorily.
  I see, therefore, the choice of procedures as primarily a practical matter, a matter of giving effect to the principle of direct elections in a workable and democratic way. It is a matter in which the wishes of the electorate should be taken into account. But the Bill has been published for barely a fortnight, and there has been little time for Members to ascertain the views and the preferences of their constituents. I am sure that every hon. Member would wish to be more fully informed as to the wishes of constituents on a matter which concerns them so closely.
  I conclude, therefore, by saying that the choice of systems is primarily a practical matter which should therefore be considered in an atmosphere of cool and constructive analysis rather than passion or dialectic.
  The principle here is the principle of direct elections as such in an acceptable and convenient form, not in any one specific form. The rest is a matter of mechanics and method. The principle of direct elections, I would think, is rooted in the philosophy of representative institutions in a democratic society, in the requirement of a direct nexus between the electors and the elected. It is to that principle that a Second Reading of this Bill will give expression.
  6.42 p.m.
  Mr. John Prescott: Let me make clear at the outset that I speak purely for myself on this matter. I say that since I have the honour of being elected what is euphemistically known as the leader of the Labour delegation to the European Assembly, and that delegation reflects the divisions which exist throughout the Labour Party.
  The vital principle of the Bill involves the election of representatives to the Assembly of the European Community. The right hon. and learned Member for

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  Hexham (Mr. Rippon) made considerable play of the fact that the division of opinion within the Labour Party somehow reflected upon Britain's credibility abroad. But Britain's credibility is harmed as much in Europe by actions such as that of the right hon. and learned Gentleman, who came to the Assembly having accepted a negotiated fishing agreement and then began to renounce it in his first speech there. Clearly that sort of behaviour does no good to our credibility.
  Mrs. Kellett-Bowman: That is not a fair representation of what took place at the European Parliament. My right hon. and learned Friend gave a clear and factual history of the fishing agreement, as everyone who was present at the time agreed.
  Mr. Prescott: I shall leave hon. Members to read the record of that Assembly debate and to draw their own conclusions. If I am wrong there is time before the debate ends tonight for me to be corrected.
  There is a distinctive difference between an Assembly and a Parliament. Various hon. Members have spoken of the European Parliament when they mean a European Assembly. To me a Parliament is a legislative body, and by definition, as was pointed out by the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith), the body we are now concerned with is an Assembly. Parliamentarians have ascribed to that Assembly the title Parliament, and that is one of the dangerous illusions that may become accepted as a fact as we proceed towards direct elections. The hon. Member for Mid-Oxon (Mr. Hurd) argued that there was little legislative power available for the establishment of a Parliament and he asked therefore why people were afraid of this body bringing a federal Europe into being.
  I have always been opposed to the development of a federal Europe, and that opposition is shared not only by so-called anti-Marketeers. Therefore, to that extent, let me enlist the aid of my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) and what he said in 1971. Of course, times change and so do the speeches. My right hon. Friend said that when Europe went federal there would be an elected
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  Assembly for the whole of the EEC. I assume that that meant that a Parliament might be created with the establishment of a federal Europe. That is probably correct. I am not against elections to a Parliament, but they are distinctly different from elections to an Assembly.
  I speak today on the basis of two years' experience in the Assembly. That experience confirms for me that it is an Assembly in the full consultative sense of the word, and that it is not a Parliament. It has no powers beyond the powers of being able to reject the budget or dismiss the Commission. Conservative Members have put down a motion to censure the Commission, but a censure motion such as that is rather like the hydrogen bomb. Everyone is reluctant to use it. When it has been used no one has scored a direct hit. Censure motions have proved to be miserable failures, and therefore the argument that they are an effective sanctioning power is not supported by experience.
  On another occasion the right hon. Member for Down, South (Mr. Powell) suggested that these were the levers of power of the sort that led to the establishment of a Parliament, and that the next step was to establish authority. This is bound up with the moral authority which it is suggested direct elections will give to the Assembly.
  Any proposal to develop a federal Europe—and I stress that I am against that—has at its heart the essential prerequisite of economic and monetary union. This includes a common decision-making body, a central bank with a single currency, the free movement of capital and labour and the harmonisa-tion of taxes and so on. Those are the objectives that supporters of the European Federalists' Movement have set themselves.
  Clearly, those who believe that all that could be achieved by 1980 must have been living in cloud-cuckoo-land. Economic circumstances have changed considerably in the last few years, and events have moved against harmonisation and economic and monetary union. This was recognised by the late Tony Crosland when he addressed the Assembly upon Britain's assumption of the presidency of the Council of Ministers. He said that we

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  were beginning to witness economic divergence not convergence, the latter being essential for economic and monetary union. He said that divergence increased the disparities in the standards of living and economic performance of the various countries concerned.
  If one accepts, as I do, that our economic problems are not of a cyclical nature but are much more fundamental, and that they are equally evident in other countries with central economic and monetary systems, one is forced to accept also that those countries have been unable to deal with the central problems of unemployment and inflation.
  This explains why the Tindemans proposals for a half-way house—a two-tier Europe—have been rejected by the Council of Ministers and the Assembly. I thought that when I first went to the Assembly I would be arguing against a federal Europe. However, I discovered that everyone wanted to forget Tindemans because it highlighted the reality that, with some nations getting richer and others getting poorer, the half-way house concept created far more political problems than the European problems it was designed to solve. One could therefore argue that the collapse of the Tindemans proposals has seen also the collapse of the timetable for progress towards economic and monetary union for this decade. If one accepts that divergence, and not convergence, is taking place, clearly, as Mr. Crosland said, it may prove necessary for individual countries with similar problems to desynchronise some of their harmonisation.
  I hope that the House can understand why I deploy this economic argument. It is central to consideration of what the Assembly will control. A Parliament controls a nation's economic affairs. That is what we seek to do in this Parliament. If we are to expect a European institution to deal with problems at a European level, we must consider whether it has the necessary basic legislative powers before we endow it with the moral authority which it must have to control those events.
  In the debate in Luxembourg yesterday, in which I took part and made some of these comments, both Presidents Jenkins and Simonet reiterated their desire for direct elections so that Europe could deal
  1498
  with the problems that it faces. They believe that the election of Members will give moral authority and political support to the Assembly to deal with these economic problems and their grave political and social consequences.
  What are those immediate problems? There is the global problem of inflation and unemployment. But there are also industrial problems—shipbuilding, steel and textiles—with which Europe has to deal. We have too much capacity in these basic industries. Britain has tried to reduce its capacity in steel production. Europe wants to do it at a European level.
  Somewhat ironically, for someone who believed in the import restriction solution—we were called the supporters of siege economy during the referendum— it comes hard to discover that we have embarked upon European protectionism. I do not know what the difference is between European and national protectionism. The argument may be that with European protection it is more effective, but that was not the argument in the referendum. The argument was that import restrictions and protectionism were not acceptable solutions.
  Mr. Deputy Speaker (Sir Myer Galpern): Order. I am sure the hon. Gentleman appreciates that what he has been saying is not relevant to the matter under discussion.
  Mr. Prescott: You place me in difficulty, Mr. Deputy Speaker. However, I recognise what you say. Perhaps I may attempt to explain why these matters are relevant, as my colleagues agree, and I may even convince you.
  We are talking about the control of our own society. The European Commission believes that, by having directly elected Members, we shall be able to achieve that kind of control. It is important to realise why the Commission believes this and why it is a strong advocate of direct elections.
  We must recognise the realities of economic life. If we want to cut back capacity in industry, the only real authority for such action is the national Parliament. If the argument is that social contracts contribute to reducing inflation, only the national Parliament can implement that kind of political acceptance

  1499
  and control. Whatever may happen in 20 or 30 years, at the moment such action is beyond the political mechanism of control in the EEC.
  The reality of the Assembly, as defined in the Treaty, is as a consultative and advisory body. By electing Members to the Assembly, we shall feed the dangerous illusion that it is a Parliament. Indeed, it has already got that impression now. We must make up our minds about the role of the Assembly.
  From where does the Assembly get its power? It gets it from the treaty. The hon. Member for Mid-Oxon said that the extra powers for a Parliament would require a change in the treaty. Any changes in the treaty have to be agreed by the national Parliaments so that is a proper control.
  However, under Article 235 of the treaty, if the Council of Ministers agree on a particular industrial strategy—a classic example is the regional policy— it may extend its influence into an area not mentioned in the treaty. But it has by definition extended the treaty by the back door, because the Ministers have agreed to extend its influence in that area.
  I do not want to spell out how it should have been counteracted. I did that in an article in Labour Weekly. The power of decision-making needs to lie with national Parliaments. Therefore, if the Assembly does not have legislative power, it is likely to become a democratic facade for the Commission. The Commission will make proposals and the Assembly will merely be consulted.
  If the Commission wants to give power to the Assembly and to make it a Parliament, it could, without changing the treaty. It could share part of the legislative process with it under its consultative advice status. Instead of just listening to the voice of the Assembly, it could get it to share in the legislative process. By doing that, the Commission would, at a stroke, give the Assembly some share in its legislative power.
  The Commission will not do that. It wishes to keep power to itself. It wishes to increase its power. It wishes to use the Assembly as a powerful elected representative European voice against the power of the Council of Ministers in which national Parliaments are directly repre-
  1500
  sented. In that way it will seek to reduce the influence of national Parliaments in the European decision making process.
  Mr. Roper: My hon. Friend has referred to the legislative power of the Commission. Presumably he is going further than just those areas in which the Commission has power to decide. I assume that he is using the expression "legislative power of the Commission" as meaning its power to make proposals to the Council of Ministers rather than its power to carry them into effect.
  Mr. Prescott: That is a fair point. The Commission wants to increase its power. President Jenkins would like to be president. That is not my idea of the Commission. It should be more of a secretariat. I have expressed my views on that matter elsewhere.
  I turn now to the obligation to hold direct elections. The right hon. and learned Member for Hertfordshire, East has referred to the arguments from the Floor of the House on Article 83. The right hon. and learned Gentleman said that there was no time limit on the obligation. There is clearly an obligation, but it is an obligation for uniformity. I have heard arguments from both sides of the House. On balance, I accept that there is an obligation under the Treaty to hold direct elections at some time. It may be when Europe decides that it wants to be a federal Europe, if that is its choice, and to establish a Parliament. One could justify that as the obligation under the treaty. In that sense, there is an argument, but that is not the only point that I would take into account.
  Clearly views change from one party conference to another, but on this matter there is a party conference decision on which we must make up our minds. Which is against direct elections. In addition, there is the referendum result. My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) referred to the document produced by the Government which talked about other Governments, as well as the British Government, not wanting to weaken their Parliaments any more than we would want to weaken ours. In my judgment, to embark on the election of Members to the Assembly without adequate controls is one step towards weakening our own Parliament.

  1501
  But I take the view that we must have regard to political realities. There is the reality of the Lib-Lab deal and the vote tonight, which is reasonably predictable.
  I am a strong believer in strengthening national Parliaments. I have spelled out in different articles how that should be achieved. We should make it clear that we have not embarked on a federal Europe or extra powers for the Assembly, that the elections will not take place in 1978, that the House of Commons Select Committee be strengthened to subject Ministers in the Council of Ministers to parliamentary approval and veto and that there will be a limit on the financial resources to the EEC of no more than 1 per cent. of VAT.
  Those in the Labour Party who are opposed to direct elections to this Assembly will not be able to stop them. I have said, and I believe, that they are inevitable, but I appealed to members of the Cabinet to make controls a condition. Today we have a free vote. Hon. Members must make their own decisions. This is a fundamental constitutional matter and we have a free vote, but on an Assembly without adequate control over its development.
  I believe that we have embarked upon a matter over which we have no control and that it is a step in the direction of a federal Europe in which I do not believe. I shall therefore vote against the Bill tonight. However, being realistic, I regard it as inevitable that direct elections will take place. As my hon. Friend the Member for Bolsover (Mr. Skinner) said, and as I predicted in Labour Weekly, we have embarked upon a certain scenario. Lib-Lab deals, conference decisions in October and a second direct elections Bill will make direct elections inevitable. But one can hope that recognition of the need of controls will come before we have the second Bill in the next Session—which one will have to support, as the gesture politics of tonight will be over. The challenge for those who still oppose a federal Europe is to find an alternative strategy, on which I have made my contribution, in Britain's adjustment to its rôle in Europe.
  7.0 p.m.
  Mr. Malcolm Rifkind: Unlike the hon. Member for Kingston upon Hull, East (Mr. Prescott), I shall vote for the Second Reading, but I accept two of the fundamental propositions put forward by those who are hostile to the Bill.
  I accept that it is totally bogus to say that the referendum two years ago somehow gave a mandate for the principle or the reality of direct elections. The right hon. Member for Devon, North (Mr. Thorpe) and other hon. Members try to draw a link between the referendum and the Treaty of Rome, but that flies in the face of political reality. We should all accept that when they voted in the referendum the electorate were voting for or against our continuing membership of the Community, and very few of them were in any way expressing a view on the principle of direct elections. In any event, the merits of the arguments in favour of direct elections are sufficiently strong to ensure that we should not have to fall back on such a tenuous argument as the consequences of the referendum.
  The other aspect on which I agree with those who are hostile to the Bill is that what we are considering is in no way a mere technical change in the nature of the European Assembly. I do not believe that it is possible to argue that we are talking merely about whether the inconvenience presently suffered by by hon. Members of this House and Members of other national legislatures, shuttling between their national Parliaments and Strasbourg, would be remedied by the Bill. Nor can it be argued that we are talking simply in terms of making the European Assembly slightly more representative or slightly more able to supervise what the European Commission is doing.
  Whether we are for or against the Bill, we should at least acknowledge the fundamental importance of the change that it will involve. For the first time in the history of Western Europe we arc envisaging the establishment of a directly elected European Parliament—
  Mr. Maxwell-Hyslop: Assembly.
  Mr. Rifkind: —Assembly or Parliament, as my hon. Friend wishes—elected on the basis of universal suffrage, and with substantial powers and responsibilities for a large part of Western Europe. No one can argue that that is of minor importance, or that it was finally resolved in the referendum on the EEC two years ago.
  It is clear that once it is directly elected the Assembly will be qualitatively different from the present European Assembly. It will be very different from the Council of Europe, Western European Union, the United Nations or any other international organisation. We shall be talking about an Assembly with the direct mandate of the constituent countries, not simply an informal alliance of nation, States or national Governments.
  Nor do I believe that it is possible to argue that the establishment of a directly elected Parliament is not an important step towards the political union of Europe. I entirely accept that the mere establishment of such an Assembly will not create a federal system. It will not create European federation or European confederation. There will be no European Government. The Assembly will not have legislative powers. Its powers will be very restricted. Nevertheless, directly elected membership of a European Assembly brings us one step nearer a United States of Europe. That may be a good thing, as I believe, or it may be bad, but the fact that it will happen is something that no hon. Member can reasonably deny.
  Major consequences will flow from the decision taken by this House and other national Parliaments on this question. For example, with a European Assembly that is for the first time directly elected, the sum of the corporate identity thereby created will be far greater than its parts. The Members elected to it will only partially think of themselves as the representatives of the countries that send them there. They will increasingly think of themselves as European Members, with interests that are not necessarily identical to those of the Members of the national legislatures of the countries from which they come.
  Most important, a directly elected Assembly will for the first time involve the peoples of the Community in the whole concept of a united Europe. For
  1504
  the first time, the electorates of the respective countries making up the Community will have a direct ability and opportunity to influence the decisions taken in Europe, and they will be able to exercise that choice in a manner that bypasses national Governments and national Parliaments. Whether we like that or not, it is a major step towards a political union of Europe. That is something of which not only the House but the country should be aware when this decison is being taken.
  There is one major factor that we cannot know, irrespective of the decision taken on this Bill and irrespective of the decision taken on a directly elected Assembly. We cannot know the time scale in which a United States of Europe, or some greater form of politico-economic union, will come about. I have no objection to our moving towards a politically united Europe, but I do not believe that it is desirable or feasible to think in terms of such a unification of Western Europe coming about in the political lifetime of anyone now in the House, let alone in the next 10 or 20 years.
  When we are considering direct elections to a European Assembly we are at least establishing the sine qua non of a united Europe. It is a fundamental requirement if we are to move towards political union. But the pace at which the peoples of Western Europe move in that direction will be determined not simply by Governments or Parliaments but by the attitude of the populations of the various countries that make up the Community. Anyone who sought to hasten that movement faster than public opinion—I use that expression in its best sense—would tolerate, would destroy the European ideal and reverse the process.
  I do not believe that political union of Western Europe is inevitable, that it is a historical necessity. It could easily be reversed, but I believe that the establishment of a directly elected European Assembly is a necessary first move in that direction.
  I can understand and respect those who will vote against the Bill because they know what might ultimately happen if it were to go through. The House—and particularly people outwith the House who, unlike ourselves, do not regularly debate these matters—should be aware of what we might be embarking on, so

  1505
  that people may come to a rational, clear, knowledgeable decision when they make their views known.
  I briefly turn to the speech made yesterday by the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid), because it raises a matter of some importance. I was amused and entranced by some of the hon. Gentleman's observations when he began his speech. He said that the Scottish National Party would vote for the Second Reading because:
  "we try not to keep bad company, and those voting against the measure will be the 'ultras' of both sides—one group devoted to a return of imperial grandeur and the other devoted to a siege economy the like of which is unknown this side of Eastern Europe. We want no part of that."—[Official Report, 6th July 1977; Vol. 934. c. 1330.]
  The hon. Gentleman had conveniently forgotten that at the time of the referendum on our membership of the EEC perhaps not the hon. Gentleman but certainly his party allied itself entirely with both those extremes that he was so pleased to condemn yesterday.
  I was also interested and amused when, near the end of his speech, the hon. Gentleman remarked that
  "the referendum was the great constitutional divide in British politics. For England it marked the final and formal abdication of sovereignty. For Scotland it marked the reawakening of a possible independent rôle as a small north European country."—[Official Report, 6th July 1977; Vol. 934, c. 1336.]
  That observation might be correct, but anyone reading the speech would not realise that the SNP campaign for a "No" vote in the referendum was overwhelmingly rejected by the Scottish electorate.
  Mr. Reid: I hope that the hon. Gentleman will agree that we did so on the grounds of Scottish interests, which were not adequately served in the renegotiations. I think of fishing, where our view has been borne out, energy and so on. There is a legitimate case, surely, for Scotland's seeking independent membership of the EEC along the developing lines that the hon. Gentleman has indicated.
  Mr. Rifkind: The hon. Gentleman and his party were perfectly entitled to campaign as they did in the referendum. I was pointing out that as the Scottish public decisively rejected their views they should not suggest that the referendum
  1506
  result was a great victory for the nationalist cause and that it made the prospects of independence far more attractive for the people of Scotland. A party that prides itself on being the voice of the people of Scotland was decisively rejected by them on the one occasion that the people had an opportunity to express a view on that matter. The House and the country should be aware of that.
  I turn to the point that the hon. Member for Clackmannan and East Stirlingshire was carping about yesterday—the total representation to which Scotland should be entitled. The figure of eight seats for Scotland is exactly justified by the position of Scotland within the United Kingdom and it will not be against the interests of Scotland in the Assembly.
  The hon. Member referred to Luxembourg. He said that it would have six seats because in a discussion between the Luxembourg Prime Minister and a Commissioner the Prime Minister was asked how many seats he would like— four, five or six. He was told that he could have whichever he preferred. That little anecdote exactly and pleasantly shows how irrelevant it is whether Scotland has six or nine seats. Luxembourg was given the choice of number of seats because it would make no difference to the real power of Luxembourg within an Assembly of 400 members.
  Mrs. Winifred Ewing: Does the hon. Member accept that it is impossible for a small independent State to function as a member of the Community unless it has at least six seats? That was probably the reason why it was irrelevant whether Luxembourg had four or five seats. A State could not fulfil a meaningful r61e with less than six.
  Mr. Rifkind: For once, I agree with the hon. Lady. I am willing to accept that Scotland should have six. I would not mind if it had 10 or 12. There are more important things to do than to quibble about whether Scotland has 10 or 12 seats because it would make no difference to its influence in the Assembly.
  If we are faced with the choice of an independent Scotland with 16 Members or as part of the United Kingdom with a combined force of 81, I know what would produce results in the Assembly which would ensure the interests of the people

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  of Scotland. Most fellow Scots would agree with that.
  I turn to the electoral system. I make no apology for saying that I am a strong believer in the desirability of a regional list. I have three reasons for that belief. First, I believe that the European Assembly, unlike this House, will to a large extent not be dealing with the individual problems of constituents but that a great proportion of its time will be taken up on international, national or regional matters. A method of election that is based on regions is therefore sensible.
  Secondly, we cannot ignore that the regional list would at least create the extreme probability of being able to honour the Government's commitment to have direct elections during 1978. I am well aware that this commitment was not entered into by Parliament or by my party. A pledge was given in the name of the United Kingdom. It is a pledge that will rebound, fairly or unfairly, on the integrity of the United Kingdom if it is not honoured. The other countries will not blame the wicked Labour Government. They will say that once again Britain is dishonouring a commitment and failing to live up to a promise.
  If we envisage an electoral system that is unlikey to last beyond the first election, the regional list or some form of PR is preferable. If an election were held now on the first-past-the-post system it is probable that not one Liberal would be elected. It is also extremely likely that there would be a derisory number of Labour Members. Some of us will view that scenario with unmixed glee. There are attractions in an Assembly deprived of members of the Labour Party.
  If we were choosing a European Government, or if there was a European Government elected from the Assembly the Right-wing/Left-wing balance would be of significance. If the Assembly were to have legislative power views on a party basis would be a prime factor. But that does not apply. For the first few years the Assembly is to be a deliberative and persuasive body, not one that is fundamentally political.
  The consequences of the Assembly being overwhelmingly represented by one party would be harmful to the cause of Europe. If I were an anti-Marketeer I should be delighted at an electoral system
  1508
  that would deny Labour any representation in the Assembly. As Mr. Roy Jenkins said, we know that the number of unreconstructed anti-Europeans is more substantial in the Labour Party. There is a struggle within that party about whether Britain should remain in the Community at all. I wish to see the pro-Europeans within the Labour Party win that campaign. I wish the issue of membership to be resolved in both parties. I am conscious that if the Labour Party is deprived of a significant and reasonable body of members in the Assembly it will simultaneously be deprived of a strong pro-European representation at its conferences, councils and on other bodies.
  We are not electing a European Government or a legislative body. It is in the interests of all those who believe in the European ideal that both major parties and minor parties, have adequate representations.
  I shall certainly vote for the Bill. I shall not vote for it as a technical improvement or as a minor change in our constitution but in the knowledge that we arc embarking on a major constitutional innovation and that we are on a path that might lead to political union in Europe. That does not frighten me, but I do not want to see it within too short a time. It is a step that this House can take. It is an action of which it will not be ashamed, or which it will regret.
  7.18 p.m.
  Mr. William Molloy: I have listened to or read most of the speeches that have been made in this debate. It seems that we are getting dangerously near the position of being concerned simply with the election and selection of MEPs without looking at what they are going to race for. They might win one of the most dangerous booby prizes imaginable.
  We must ask, what are these elections for? What will people do when they get there? What authority will they have? Will it be too much or none at all? We should direct our minds to these things because they are part of a fundamental constitutional issue.
  I welcome the statement by the Minister of State welcoming genuine and free expression. That also means genuine

  1509
  and free opinion being recorded in the Lobby later.
  I was sorry that this contrasts so much with the attitude of the Conservative Party with its imposed three- line Whip. It is easier to impose a three-line Whip on the Tories than it is on democratic Socialists. It is like comparing the vivacity of the national optic of this side of the House with the dull stare of the Tory glass eye. People will take note of this. There is a more rebellious spirit on the Labour side compared with the obsequious and sycophantic attitude of the Opposition.
  Mr. William Whitelaw: Before the hon. Gentleman goes further—
  Mr. Molloy: I have a bit more to say. I have not finished with the right hon. Gentleman or his colleagues. However, I shall give way to the right hon. Gentleman a little later, as he is one of the very few Front Benchers who immediately gives way when at the Dispatch Box. I shall be glad of the privilege of giving way to him.
  On an issue of this importance to all our parties and all those whom we represent here, I firmly believe that every Member of the House of Commons ought to have the right to express his views. He will then be answerable not so much to a party caucus or the Cabinet but to the people he represents in the House.
  Mr. Whitelaw: The hon. Gentleman must not go too far along a road that has no substance at all. After all, I was Chief Whip of the Conservative Party for six years. What he was saying is founded on absolutely no fact whatsoever. Furthermore, he will find that some of my right hon. and hon. Friends will almost certainly be voting against the Bill tonight. Therefore, I do not know what the hon. Gentleman was talking about.
  Mr. Molloy: I know what I am talking about. What I have said will loosen some of the Tory chains and may induce more Opposition Members to vote against the Bill now that their party dares not punish them for it after what the right hon. Gentleman has said. I believe that I have made my contribution to democracy in one move.
  Mr. Ioan Evans: If, as the right hon. Member for Penrith and The
  1510
  Border (Mr. Whitelaw) said, a three-line Whip has no effect, why has the Conservative Party put a three-line Whip on this important constitutional issue?
  Mr. Molloy: No doubt we shall have some explanation of that remarkable attitude within the next hour or two.
  What I want to ask is this: what the House has not done is to ask why we are to have these elections, if the House so agrees, and what sort of organisation the prospective Members of the European Parliament will be going to, and for what purpose. This is fundamental. There are some who argue that they are glad that it is only an Assembly and will not have too much power. There are those who argue that it is pointless for MEPs to go there because they will have no more power. All that it appears they will have is great big fat salaries, much greater than those of any Members of this House for all the hard work that we do.
  I do not think that these are particularly good reasons for us to be concerned with these things. There are many that are opposed to it and many that are against. Some of us are content and other are not content.
  There is one particular point that I wish to put to the House. I hope that I shall have an answer from the Government tonight, because it is a fundamental point. I want to refer to Article 4 of the agreement signed in September 1976. I shall go over it slowly so that it can be noted and passed to the Foreign Secretary or whoever is to wind up the debate.
  We have been talking about the new MEPs being able to have relationships with other Governments and other countries and organisations in this country as well as their 500,000 constituents. How can that submission be maintained when it is now understood that MEPs shall not be bound by any instructions and shall not receive a binding mandate? What is much more important, however, is that if any one of them becomes a chairman of a committee or is a member of a committee—therefore, to be free, he must not be a member of a committee and certainly cannot be a chairman—the recommendation is that such future Members of the European Parliament, so-called, should not enter into direct contact as MEPs with governmental or other national authorities.

  1511
  I find this an extraordinarily serious situation. I should have thought that my right hon. and hon. Friends and Opposition Members would want to know precisely what is meant by that. Does it mean, for example, that an elected Member of the European Assembly could be committing some sort of offence if he were to have discussions with a Member of this House or a Minister here, or indeed, any British industrial organisation, the CBI, the TUC or any other organisation of that calibre that belongs to these islands? That point certainly needs to be cleared up.
  It seems to me that the power of the Commission will be maintained and that the Commission will be much more powerful than any of the political groups. Therefore, once again, we must look at that aspect.
  I have had some experience of the existing European Parliament. I ought to repeat what I have said in the House previously. The British delegation as a whole, Tory and Labour, have certainly fought very strenuously to bring democratic rights into the Assembly. They have succeeded on a few matters, but on the majority of things they have been bashing their heads against a brick wall, despite sterling endeavours.
  What will still happen—this has not yet been referred to in this House—is that all the political parties in Europe will contribute to their political organisations, as they do now. The officials of those organisations already have a remarkable amount of authority. That might be maintained. Therefore, we could have the situation as it exists now, I understand, in which, for example, the appointments of rapporteurs to any particular committee will be decided not by the MEPs but by the secretaries of the particular groupings to which they belong. It is not so much that this is anti-democratic but that it is very dangerous.
  MEPs will not be in a position to have any regard to the attitudes of this Parliament. What is more, they will not even be able to have access to the Council of Ministers. I find this a remarkable situation. I suppose that in the House of Commons, if we want to do so—we have done so on occasions—we are able to let various Ministers know the strong feelings on particular matters. No doubt that has had an effect. I shall not bore
  1512
  the House with the deails of when it has been effective. That is the unified voice of the House of Commons.
  However, if we try that in future, if the Bill goes through as it stands, Ministers will say "It is not a matter on which hon. Members of this House should approach me. It is a matter for the Member of the European Parliament." What I want to know is this: if the MEP approaches the Minister, will he fall foul of the agreement to which I have referred?
  Mr. Maxwell-Hyslop: Also, of course, under the regional list system, an hon. Member will not even know who his regional Member is, so he will not be in a position to go to his regional Member.
  Mr. Molloy: That is another addition to the argument, which makes it not so much an absurdity as a dangerous situation. I do not want to poke fun at it. I am frightened of it, and the House ought to take more cognisance of its effects. No national party manifesto will exist for the MEP to work to. He will be an expensive, non-political adornment to an imitation Parliament and, what is worse, he will be providing a front for the world's most powerful bureaucracy.
  As the Council of Ministers changes from one six-month period to the next, all that the Commission's massive number of bureaucrats have to do if they run into a little trouble is to talk the matter out for a couple of months until they get another lot in, so the real power will still be in their hands.
  That is the sort of thing to which I should have thought even those who believe in some form of European unity should address themselves, as should those who have been opposed to some elements of the EEC and the European Parliament. What has not been said a great deal during this debate is that it is very wrong of people to assume that just because some of us have grave apprenhensions about the European Parliament and were very worried about Britain joining the EEC, we are somehow or other anti-European.
  Unless we take great care, we might find ourselves in the dangerous situation, after the so-called direct elections, of great animosity rather than of cooperation, and it may not be possible for

  1513
  the national Governments to intervene to cool things down. Rather than such elections creating European understanding, there is the possibility of the reverse being the case.
  It will be argued that the supranational aspects of Community policy will move to greater harmonisation, integration of laws, diminution of national sovereignty and, ultimately, federalism. But if those fine ideals are not achieved, and there is a degree of sourness and misunderstanding, our Members of the European Assembly, expected to represent our nation, will discover that they cannot after all set about the achievement of these wonderful desiderata, and instead will find themselves part and parcel of some form of agreement which we in this House will not be able to undo because they will have failed to convince their European colleagues that such agreement would be harmful and deleterious. Therefore, we must try to find escape clauses, not merely for Great Britain but for the unity of Europe, so that no such dangerous situations can be created.
  It is not so much a question of direct elections as such as of what they are for. Do we believe that one person can maintain liaison with 500,000 people of this realm that he is supposed to represent, or with all the massive organisations which exist here and with which, despite the regulations, he must have some form of consultation? It is not on. We have moved loo rapidly and much too dangerously for an ideal which, though wonderful in itself, has blinded us to the grave dangers which exist if we accept it too lightly. There is great danger in creating a bogus Parliament to the detriment of this sovereign body, Britain's Parliament, because in no way would it enhance democracy in Europe.
  7.34 p.m.
  Mr. Hugh Fraser: I assure the hon. Member for Ealing, North (Mr. Molloy) that I shall vote against the three-line Whip of my party if it is introduced, although I remind him that it is a Whip for attendance here rather than for voting in a special way.
  Direct elections have been described by both Front Benches as a great leap forward in democracy. We heard the same
  1514
  thing in the early stages of the devolution Bill. Doubtless the Second Reading of this Bill will be carried by some majority, but the more one reads the Bill the more difficult it becomes. We shall have the same situation as we had with devolution. We are, indeed, running over the same ground. The right hon. Member for Down. South (Mr. Powell) rightly said that the whole trouble is that for the political system of the Common Market to be effective and democratic it must go federal. That is the unfortunate fact that neither Front Bench will face. Indeed, the only supporter who has faced that fact today has been my hon. Friend the Member for Edinburgh, Pentlands (Mr. Rifkind), with whom I totally disagree but who, in an honourable and honest speech, said that this would lead to a united federal Europe.
  As far as the good governance of Europe is concerned, I believe that the direct election, independent of national Parliaments, of Members to sit in the European Assembly will merely destroy the power of the national Ministers in the Council of Ministers, will heat up the power of the Commission and the bureaucrats and will next year, for example, cause the most appalling difficulties in the European mechanism. Next year, 40 million tons of American surplus wheat will come on to the market. What will happen to the common agricultural policy then? Let us think of the difficulties that will be faced by the Ministers in charge.
  Inevitably, also, the people who will be elected will be from extremist parties. The Scottish National Party, for example, thinks that it will sweep Scotland. What surprises and amazes me is the patriotism of the extreme Left in this country on this matter, because, on the face of it, they should really be voting for these elections, as their counterparts will be in Europe.
  The simple point, made many times in the debate, is the question of the democratic relationship of our people to their Members of Parliament both here and in Europe. It was well made by the hon. Member for Ealing, North and it has been well made by my right hon. Friend the Member for Chipping Barnet (Mr. Maudling). It comes down to the fact that, independently of whom is elected,

  1515
  there has to be a clear distinction between what the European Member and what the local Member represent, and the only way in which that can be done is by a federal constitution.
  I ask both Front Benches whether they are in favour of the movement towards a federal system. Until they have answered that question they are merely bluffing this House with a system which they must know, if they have any brains at all, is moving inevitably towards a federal Europe. I believe that that should be opposed by the House. It is a movement not just because people like Lord George Thomson have said that it will happen; nor is it a movement just because Mr. Tindemans has said that it will happen; it is not just because there is a respectable European background for it through people like the late Kudenhove Kalurgi and M. Schuman, who did and do believe in a United States of Europe. It is now institutional, and inevitably so, because there is only one way in which this thing can develop and that is in a federal way. If the two Front Benches want a federal Europe, let them say so. I shall vote against the Bill for that reason.
  My friends within the Conservative Party have pushed out propaganda saying that the Conservative Party will now in Europe make a great alliance with like-minded, middle-of-the-road, Right-wing parties. Let us look at the history of Europe. Europe has only ever been united by persons believing in discipline, in force—if need be, military force. We have talked about the Medal of Charlemagne for Europe. I am not sure whether he did unite Europe, but two people certainly succeeded. One was Napoleon Bonaparte and the other was Adolf Hitler. So doubtless there will be a Hitler Bursary and a Napoleon Award. Doubtless that would sharpen up some of the thinking on the Front Benches.
  I remind my friends in the Conservative Party also that when they talk of the great Right-wing parties of Europe united as a bulwark against Communism, against Bolshevism, against Socialism, whatever it might be, the parties which will win these elections will be the disciplined parties, not the old Conservative parties like the Dutch Christian Historical Union. The winners will be parties with total disregard for national interest, and I do
  1516
  not believe that there is such a Right-wing party today.
  But there are extreme Left-wing parties which will go straight across the board. The polls will be no higher than 20 per cent. or 30 per cent.—almost meaningless. I assure my right hon. and hon. Friends that the danger—and it will grow—is that here is a federal instrument made for the Left-wing parties to use, in precisely the way in which, during the 1930s, Hitler outmanoeuvred the Centre Party and the Stahlhelm in the Reichstag and was in power within three months.
  I advise my right hon. and hon. Friends who see this as part of a great Conservative crusade for Europe to read a book by Dr. Rauschning called "Die Revolution Des Nihilismus". I shall send them a few copies—in English, because I know what marvellous linguists they are.
  By passing the Bill this House will be embarking on a most dangerous road. It is a road which can only lead to federalism and all the dangers which that entails. The Conservative Party may well be embarking not on a road to achieve a Conservative Europe but on one which will give the extreme Left the option of taking over.
  7.42 p.m.
  Mr. John Roper: I was glad that the right hon. Member for Stafford and Stone (Mr. Fraser) addressed the final part of his remarks to his colleagues on the Conservative Benches. I am not, therefore, obliged to follow him for too long in commenting on his remarks.
  I should, however, tell him that it is not necessarily quite as easy as he thinks to achieve co-operation between Left-wing parties within Europe. As my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) and others who sit on the National Executive Committee of our own party know, our relations with the Confederation of Socialist Parties within the Community are certainly difficult to handle.
  The idea that there is a united Left axis in Europe at the moment is, unfortunately —I repeat, unfortunately—not true, any more than it is possible to persuade Christian Democrats that they ought to have anything to do with Conservatives. This certainly applies in the case of

  1517
  Christian Democrats from Italy and the Netherlands. I think that the German Christian Democrats are prepared to talk to the Conservatives in their country some of the time.
  When the right hon. Gentleman said that this was a step towards federalism, he was in one sense technically right. If one is going towards a federal Europe, this is a necessary step along the road. What it is not is a sufficient step. As has been made quite clear, further steps of a much more substantial nature will have to be taken, and they will require the consent of the House. I happen to hope that we shall move in that direction, as I have made clear over the years.
  When President Giscard d'Estaing returned to Paris last Thursday from the Summit meeting, he said quite clearly on the French radio that in his view the institutions of Europe would be fixed and frozen as they are now, and that he did not envisage any significant change in the foreseeable future.
  Although the German Chancellor talks on occasion about uniting Europe, when it comes to giving any further power to the Commission, he is as resistant to this as anyone in this House. He is extremely resistant to the movement towards greater powers for the supranational organs of the Community.
  I think that we shall have, for the foreseeable future, inter-governmental cooperation between nine member States. The most important development since Britain has been in the Community has been the development of the European Council, and the meeting together of the Heads of Government and Heads of State. This makes it quite clear that it is an inter-governmental organisation rather than a supranational one.
  I shall concentrate on one or two matters to which not much attention has been given so far in the debate. I have spoken in previous debates on many of the major themes and do not wish to repeat what I said then.
  My hon. Friend the Member for Bolsover (Mr. Skinner), in a number of interventions today, suggested that Members of this House should declare their interests in speaking in the debate. Presumably, by that he meant that they
  1518
  should declare whether they intend to stand for the European Assembly or to allow their names to go forward. Presumably, that in turn was because he has read reports in the Press, as many of us have, about the relatively high salaries which it is said are to be paid to the members of the European Assembly once it is directly elected.
  I deal with this before turning to some of the more substantial matters because in talking to my constituents I find more concern and interest in the sort of salary to be paid than in the more substantive issues which have been debated today.
  I have always believed that Members of this House should be paid properly. We shall have a chance later tonight to move a little way in that direction. But I certainly feel that a substantial discrepancy between the salaries paid in this House and those paid in the European Assembly would be extremely unfortunate. I was glad to note that it appears from the Press comment that this was also the view of the Heads of Government when they met in London last week. I hope, therefore, that it will be possible for the report from the European Parliament, which suggested salaries of £30,000 plus expenses, to be buried at a very early stage. I believe that it would be right for Members of the European Parliament to continue to be paid at the same sort of level as that of Members of their national Parliaments.
  Mr. Powell: This is a matter which the Assembly itself will decide, so how can we bury the question at this stage?
  Mr. Roper: I was suggesting that the European Parliament should bury the report. It might be a matter—this, I gather, was discussed at the meeting of Heads of Governments last week—which the Council of Ministers will itself have to agree. Just as the Assembly has to agree to the part of the budget which is the responsibility of the Council of Ministers, so has the Council to agree to the part of the budget which is the responsibility of the Assembly. I believe that there is some influence that national Governments, and therefore national Parliaments, can have in this matter. That is why I believe it is worth while pursuing it a little further this evening. I suggest that for the time being members

  1519
  of the European Parliament should continue to be paid at the levels at which they are paid—
  Mr. Deputy Speaker: I doubt very much whether the amount to be paid by way of salary to the people elected as a result of the passing of the Bill is a matter of concern to the House at this stage. It is a matter for the European Assembly when it has been properly constituted.
  Mr. Roper: I hear what you say, Mr. Deputy Speaker, and will bring my remarks on this aspect to a close very quickly. But it seems to me that it would be possible for this House to introduce a new clause or in some other way to give an instruction to Ministers, who will be taking part in the Council of Ministers, on what the salaries should be. As I have indicated, I believe that salaries should be kept to the levels of those paid in national Parliaments, plus expenses on a published basis, as compared with the rather unsatisfactory position at the moment, in which people have great difficulty in finding out what expenses are paid.
  This may appear to be an irrelevant or a niggling point, Mr. Deputy Speaker, but it is an aspect which is considered by many of our constituents to be of great importance. That is why I have referred to it.
  Concerning the method of election, I favour—and I hope that the House will favour—the regional list system, but I think that we have to be realistic about this matter. Certainly from my arithmetic it would appear at the moment extremely unlikely that the House will agree to a regional list system. I think that we should consider what we shall do if we turn to a situation in which we have 78 constituencies in Great Britain and another system in Northern Ireland. It has been suggested that we should use the normal process for Westminster parliamentary seats—namely, by asking the Boundary Commission to do its work. It has been suggested that that will take about four and a half months.
  Surely it is right to ask why we have used the mechanism of the Boundary Commission in Schedule 1 and Schedule 2. It is obviously appropriate to use it in deciding our own seats in the House of Commons, and it is appropriate that
  1520
  we should have an independent, impartial body that makes those decisions, but would it be inappropriate for us to revert to the position that existed in the nineteenth century when the House decided the boundaries of parliamentary seats?
  It is right that we should have an outside body to determine boundaries, but I am not convinced that the argument that applies to this House necessarily applies when we are devising boundaries for a quite different purpose—namely, for 81 constituencies that may not be represented by hon. Members of this House.
  I wonder whether the parallel lies closer with local government boundaries than with Westminster parliamentary boundaries. I think I am right in saying that we decided local government boundaries in the London Government Bill, and certainly we did so in the Local Government Bill 1972. We decided them in this House in a schedule. When we are determining the boundaries for the European Parliament we are making a decision that will not directly affect hon. Members who sit in this House but a different body. Why is it not appropriate for us to follow the same procedure that was followed in the Local Government Bill—namely to include in a schedule the 78 constituencies in Great Britain—Northern Ireland would not be covered by this—that would be created by grouping together the 623 constituencies in Great Britain? To take that course would require quite a small amendment to that first paragraph of Schedule 1 and then a new schedule laying out the European constituencies that we desire.
  As I have said, that would arise only if the House were to decide against the regional list system, which I prefer. Almost certainly it would take us rather longer in discussion in this House than by referring the issue to the Boundary Commission. However, it would save a great deal of time in comparison with the four and a half months or six and a half months that we have been told the Boundary Commission would take.
  The only option open to us if we decide against the regional list system and if we wish to meet the target date of the first half of 1978 and thereby not delay our European colleagues, is to follow the precedent, which I believe is a good one, of the Local Government Bill. That is

  1521
  the method of putting the constituencies into a schedule to the Bill. We would be able to agree them here without the necessity of reference to the Boundary Commission. I hope that the House will give consideration to that suggestion when these issues are discussed in Committee.
  My hon. Friend the Member for Walton spoke about taking into account the decision of the Labour Party Conference. Naturally I have thought about that. Despite what my hon. Friend said, I shall be supporting the Bill tonight. It is a minor but important step forward. Obviously we may reach further forward towards some form of confederalism in future. However, at this stage this is a necessary step along that road, although far from being a sufficient one.
  7.55 p.m.
  Mr. Robin Maxwell-Hyslop: At 10 o'clock tonight Mr. Speaker will hold up the Bill in his right hand and say: "The Question is 'that the Bill be now read a Second Time'." It will not be a theoretical question about whether one is or is not in favour of direct elections. Those who attend the House regularly will know that that issue was debated on 20th and 25th April.
  I am happy to say that my right hon. Friend the Leader of the Opposition gave the whole House her advice about what to do on Second Reading with a bad Bill. On 13th December 1976, when speaking on the Second Reading of the Scotland and Wales Bill she said:
  "The thing to do with a bad Bill is to say so fearlessly, as I have done, and vote against it, as I shall do."—[Official Report, 13th December 1976; Vol. 922, c. 1007.]
  That was the advice that she gave to the House. It was constitutionally excellent advice. It was practical and commendable advice and I intend to take it tonight.
  If we want to get direct elections as quickly as possible, I do not believe that there is much doubt that it will be necessary to have an enabling Bill and a Money Resolution to enable the Boundary Commissioners to get on with the work before we go into the Summer Recess. Of course, as the Home Secretary said, it would not be a one-clause Bill. It would have to be slightly longer than that. However, if we want direct elec-
  1522
  tions as quickly as possible—namely by the date aimed at next year—and I do so want, I believe that we shall need an enabling Bill and a Money Resolution on the statute book before we rise for the Summer Recess.
  Paradoxically, if we want to ensure that direct elections are delayed as long as possible, or that they do not happen, it may be that the best tactical advice would be to give the Bill a Second Reading. It is so constitutionally objectionable, so complex and so demanding of such time-consuming amendment that it is the most efficient instrument for delaying direct elections that it is possible to conceive.
  The device—that is what the Minister has called it—that he has put into the Bill is constitutionally unacceptable. I refer to the proposal that we should give a Second Reading to a Bill that is in a form that we do not want, that it should pass through its stages in the House, receive Royal Assent after going through another place and then be overturned by a vote in this place. So the Record copy of the Bill that resides in the Record Office in another place, and in the Public Record Office, being endorsed by the Clerk of the Parliaments as the form in which the Bill received Royal Assent—it is that which the courts accept as being the law of the land— would be unamended. Lo, the Government would then hold that it was not the law of the land because of the uni-cameral motion passed pursuant to Clause 3(2).
  However, the Government tell us that they want us to give a Second Reading to the Bill as it stands and that in some way they will suggest an amendment, which will not be a Government amendment but one that they hope someone will table. The Home Secretary said quite wrongly—he has said it several times—that the decison was taken on firm advice that that was the only way to get the two methods of election into one Bill. If he was given that advice, he should change his advisers. There are many other ways in which it might have been done, but I shall not consume the time of the House by reciting them tonight.
  The right hon. Gentleman then said:
  "Once a decision has been taken one way or the other, Clause 3(2) falls from the Bill …".

  1523
  —[Official Report, 6th July 1977; Vol. 934, c. 1267.]
  Obviously the right hon. Gentleman is confusing clauses with amendments. Subsequent amendments fall if an earlier amendment is passed with which they are incompatible. However, we are talking about a clause and it will have to be amended by a quite separate amendment, as it does not fall. Everything else that goes with the regional list system throughout the Bill—it permeates practically the whole of the Bill—will have to be taken out by individual amendments, with the almost endless debates that will accompany them.
  If, therefore, one wants to get direct elections on to the statute book, the steps to be taken are quite clear. There should be an enabling Bill with a Money Resolution immediately after. The House can then take a decision—it need not do it on the basis of this Bill at all—on whether it wants a first-past-the-post system or a regional list system. That can be put in the form of a motion before the House without any Bill whatever before the House. Once this has been done, an enabling Bill on that basis can go through. This existing Bill should then be withdrawn and thrown away with its endorsement—"presented by Mr. Secretary Ross"—as a curiosity of parliamentary history.
  What should then be introduced is a Bill which is only in the form that the House has decided by resolution. That will be infinitely quicker to pass through the normal processes of the House than dealing with a Bill which the House wishes to get rid of and which the Government have already said will have to be got rid of following the decision taken on Clause 3(1). That must be the touchstone of hon. Members voting tonight.
  If they want direct elections in the timespan which the Government gave a commitment to use their best endeavours to achieve, hon. Members should vote in the "No" Lobby tonight to deny this Bill a Second Reading. The Government can then put to the House in one day the question whether there should be direct elections on the basis of a regional list system or of single-Member constituencies —first-past-the-post. That decision having been taken, the Government would
  1524
  then know which Bill they want to introduce before the House.
  Many things are difficult to believe, but it is difficult to believe that this Government are so incompetent that they have not actually got a Bill in draft to bring in direct elections by a regional list system and another Bill in draft to bring in direct elections by single-Member constituencies—a first-past-the-post system. Whatever view one may take about the European Assembly, I cannot see any persuasive argument in favour of the proposition that it is better that individual electors should not know who their representative is in the European Assembly than that they should know who their representative is.
  Wherever we have the multi-Member seat the buck does not stop anywhere in particular. When the buck does not stop anywhere in particular, one has broken the golden thread of what is known as responsible representation. One cannot have responsible representation if those represented do not know who it is who is charged so uniquely with the responsibility of representing them.
  This must be the fundamental principle of parliamentary democracy, whether it be in this Chamber or in the European Assembly.
  Mr. Powell: Or Northern Ireland.
  Mr. Maxwell-Hyslop: Or, indeed, Northern Ireland—an option which is denied in this Bill to this House. That is not one of the options offered in the Bill. That could lead to yet another set of amendments.
  Except possibly for those who went totally to disrupt any elections to the European Assembly, I hope that the House will vote convincingly to deny this absurd Bill a Second Reading tonight.
  8.4 p.m.
  Mr. John Mendelson: I am particularly glad that some hon. Members who contributed to the latter stages of the debate, such as the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), and who spoke strongly in favour of the Bill, addressed themselves to the basic problem of principle involved. I welcome that particularly because I believe that the country has been given a completely false and misleading impression by the

  1525
  first three and a half hours of debate yesterday afternoon and today.
  All the speakers during that time were in support of the Bill and concentrated almost entirely upon the details of the mode of election. The provincial editions of newspapers go to bed, as they say in Fleet Street, just before six o'clock and carry only the speeches from right hon. and hon. Members who are firm supporters of the Bill. That is a travesty of real parliamentary opinion as every right hon. and hon. Member knows it to exist both in this House and in the country at large.
  The officers of the Common Market in Brussels recently commissioned a new survey of British opinion on our membership of the Common Market. It reported two days ago. As broadcast on the most reliable of our BBC services, the World Service, the survey shows that there is now just a majority against our membership—40 per cent., and a percentage just below that in favour. That is the change of opinion that has occurred amongst the British people since the referendum.
  In that situation it is a travesty of parliamentary debate for hon. Members who are for the Bill not to concentrate the majority of their time, particularly on Second Reading, on the principle, on trying to persuade the electorate that they, too, should support it. Similarly, if hon. Members are against the Bill they should try to persuade the electorate why they also should be against it. This is not a matter of shadow boxing or of academic constitutional interest. It was responsible for my intervening on several occasions—which I do not normally do —on a point of procedure concerning the conduct of the debate. It is of real political importance at present that the House of Commons should properly mirror opinion in the country on this vital matter.
  There are, for instance, several hon. Members on the Liberal Bench who have made their speeches and have then left the Chamber. They lecture us on both sides of the Chamber not only on what we ought to do but on how we ought to present our arguments, yet having been called and spoken they then disappear and take no further part in the proceedings of this House.
  1526
  It is often said on the Liberal Bench and in the Liberal Party throughout the country that Parliament is becoming more and more an assembly that is no longer regarded as a central political forum in this country. I do not go along with that. I believe that they are exaggerating, for reasons that I shall come to in a moment. But surely those who do believe that the decline is serious ought, first, to be present during our debates and, secondly, to be in favour of properly representing the opinion of people in the country when a debate takes place.
  I do not go along with them, because I believe that they are deliberately exaggerating the decline of our parliamentary institutions and deliberately misrepresenting the effect of our electoral system purely for shoddy party purposes.
  I wanted to challenge the former Leader of the Liberal Party, the right hon. Member for Devon, North (Mr. Thorpe) —I regret that he is not present—on the speech that he made during the two-day debate a few weeks ago, when we first discussed this matter. The right hon. Gentleman said in clear terms that he was much more interested in getting a system of PR than in getting a Bill passed for direct elections to the European Assembly. That is why I use the words "shoddy party political purposes". The right hon. Gentleman tried to wriggle out of it, but Hansard will show that he said it.
  The serious discussion of the mode of election will come later. Today is only a curtain-raiser for that. But at the outset of my remarks I want to concentrate on the substance of the Bill.
  It is clear that the Government, in introducing this Bill, have not got public opinion behind them. I do not make very much of the decision of the Labour Party conference. The Prime Minister could say that there are other hon. Members in this House who sometimes believe that it is the duty of Parliament to give a lead and not always just be the obedient servant of any motion that has been passed somewhere. But if the Government wish to do something that is urgently needed— say, on employment or on investment— and there is no Labour Party conference authority for it, surely the Government have the right to go ahead. However,

  1527
  when we are dealing with a major constitutional change, there can be no such justification.
  When my right hon. Friend the Home Secretary was opening the debate I asked him, as he claimed the authority of the Labour Party's election manifesto for the principle of the Bill, where he got the authority for a Cabinet recommendation to this House to introduce a system of proportional representation. He got it from nowhere. It is quite clear that it was cooked up recently for reasons that we have to examine very carefully.
  Having said that, I hasten to say that I do not single out my right hon. Friend the Home Secretary. He speaks for the Government on this matter, and it is one which goes far wider than just a departmental document.
  Mr. Eldon Griffiths: The hon. Gentleman asked where the authority came from, and I can tell him. It came from the absent right hon. and hon. Members. It came from the Liberal Party.
  Mr. Mendelson: That may be the hon. Gentleman's explanation; it is not mine. I do not believe that simplicity is always the essential element of truth. I believe that the true answer is a little more complex than that. No one in his senses will deny that the Liberal Party is presenting itself to the country as the master of the Chancellor of the Exchequer and the tribal chief of the Prime Minister. No one will deny that the Liberal Party presents my right hon. Friend as its own little poodle. The hon. Member for Bury St. Edmunds (Mr. Griffiths) may eat that, but I do not accept it. One Liberal Member who parades himself as his party's economic spokesman goes about the country saying that, in the light of trade union conference decisions this week, we need immediately a statutory wages policy. The hon. Member for Bury St. Edmunds will not see my right hon. Friend the Prime Minister rushing to accept the Liberal Party's proposal. Therefore, I do not accept his simple explanation. It is more complex than that, for a number of reasons, none of them legitimate, in my opinion.
  What I am about to say is no more favourable to my right hon. Friend the Prime Minister than is any suggestion
  1528
  coming from the Opposition. However, I believe that it is nearer the truth. For a combination of reasons, the Government have persuaded themselves that it would be a good idea to have a system of proportional representation in this piece of legislation. I believe that they have no right to do that without first having put that change before the electorate in a General Election. They have no right to do that without having tried to get all-party agreement for such a change before putting it into a Bill. That is what I consider to be the proper constitutional course for any Government. It does not matter whether we speak of a Labour Government or of a Conservative Government. We speak of a British Government, which must conduct themselves at all times in accordance with our constitution. They have no right to make such a change. For that reason, I am prepared to join in voting against the recommendation to introduce a system of proportional representation.
  I come back to the Liberal Party, and why its present stance has nothing to do with the Common Market. It should be exposed. At a recent discussion at the Liberal Assembly of Scotland, the Leader of the Liberal Party was criticised for not having demanded the introduction of a system of proportional representation in the United Kingdom as the price of continued support for this proposed legislation. His reply to the delegates of that Assembly was that they must not be silly and that they could not get everything at once. That is the true explanation of the attitude of the Liberal Party. Therefore, it is no good my right hon. Friend the Home Secretary saying in good faith that he does not intend to introduce such a system for elections in the United Kingdom. For the Liberal Party, it is a step towards the introduction of such a system into this country, and Conservative Members had better look out if they are in principle opposed to the system, because they have no business to vote for it in this piece of legislation.
  Right hon. and hon. Members may ask why I am so completely opposed to that system. In an intervention yesterday, during the speech of the Leader of the Liberal Party, I suggested that historians were agreed that, especially before the 1939 war, over a period of between 30 and 40 years systems of proportional

  1529
  representation in various European countries had always led to a multiplicity of political parties—as many as 28 in a number of cases—and that the result had been the downfall of democratic parliamentary systems and their replacement by dictatorships.
  That is the most serious of all the reasons why I am opposed to a change in our system.
  It has been argued that it is time for a change. The Liberal Party argues that. To my regret, though in a different context, Lord Hailsham, for whom normally I have a great deal of respect, argues it when he says that democracy in this country is going to the dogs. The two arguments have in common the fact that the Labour Party has been in office too often during the past 15 years. That is what they do not like about it. That is a legitimate reason for being unhappy, and I can understand it But it is no reason for changing our electoral system without considering the consequences.
  A system of proportional representation deliberately avoids clear responsibility for what has been done by any Government. I assure my right hon. Friend the Home Secretary that I should prefer to face electoral difficulties for the Labour Party if, in a General Election, there has to be a change of Government than to tamper with our system merely because we think that it might do us some good.
  But that is not even the position. It is essential that we should be clear-headed about this. I do not believe that it is predetermined what the outcome of any election will be. All that I know is that the Liberal Party hopes to climb to power through the destruction of our electoral system and that it is interested only in achieving that aim and purpose.
  On the substance of the Bill, a great many arguments are being advanced in various of the European Assemblies, of one of which I have recently been a Member. Each of them puts one aim before all the others. All of them say that at present the European Assembly is not capable of overruling the Council of Ministers.
  At present, as the House knows, the Council of Ministers is both the legislature and the executive of the Common Market organisation. I regard that as the
  1530
  only safeguard for the British people. At present, there is virtually only the common agricultural policy, with its great disadvantages for the British consumer. Because of that, what stands between our consumers and their being railroaded by decisions in the Common Market which are against our interests is the Council of Ministers and each individual Minister in his respective Council. Moreover, parliamentary sovereignty in this country can be defended only by the Council of Ministers. It cannot be defended in any other way.
  I turn to the speech yesterday of the right hon. Member for Knutsford (Mr. Davies). I am glad that he is present now. The right hon. Gentleman has an excellent record, not only in this House but among many of us who have known him over the years, for accuracy and for not deliberately trying to mislead his audience. Therefore, I cannot bring myself to think that he tried to mislead us yesterday. I can only put it down to a disagreement on facts that can be resolved in good faith. He said that Britain was now the only country in the EEC which had serious difficulties about the adoption in its Parliament of legislation on direct elections. That is profoundly incorrect— I choose my words carefully.
  I have an original document here. It is the Bill on direct elections that was passed by the French Assembly. I hate using French in this Chamber, but I am as near to doing so as I have ever been. This document is now an Act. In it the Prime Minister was forced to introduce—because of the parliamentary position—a section that is not in our legislation. I would like the Home Secretary to know that in Committee I and some of my like-minded colleagues will seek to introduce a new clause to the Bill which will have the same effect as this section in the French document.
  This section, which is now part of the law of France, makes special provisions in two paragraphs, and I paraphrase them. They say, in effect, that at any time in the future if the European Assembly, directly elected, were to introduce any measures directly or indirectly to add to its powers, expressly or by implication, that legislation and that addition to its powers immediately would be null and void as far as France was concerned.
  Mr. Powell: The hon. Member may be interested to know that he need not wait for his new clause, because on the Order Paper tomorrow he will find an amendment to the first line of the Bill in the names of my hon. Friends and myself exactly to that effect.
  Mr. Mendelson: As the French say, the game has not yet been played. We shall see who is first at Mr. Speaker's Table at one minute past 10 o'clock tonight. As I have said before, wisdom does not reside in any one particular group of hon. Members, and I welcome the news that the right hon. Gentleman has just given me.
  This provision means that the French have, by legislation, excluded any addition to the powers of a future European Assembly. There is no such provision in our Bill.
  Why have the French done this? The right hon. Member for Knutsford did not give us the true facts. We must ask ourselves why the Prime Minister of France introduced this particular additional article into the Bill. He did it because a count had been taken in the French Assembly on the day before the Bill was introduced—not on the day before the vote was taken, but before introduction. The President of the Republic called a special council of Ministers at which he took the Chair. At that meeting it was decided that in view of the decision of the Constitutional Council of France—the Council of State—and in the light of the absence of a majority in the French Parliament for direct elections, this provision must be put in. How on earth can the right hon. Gentleman justify his statement that there have been no parliamentary difficulties in any other country of the EEC over this legislation?
  Even after the French Prime Minister had introduced this provision into the Bill a majority in the French Parliament still said that they would vote against direct elections. Under their semi-authoritarian constitution the President then said that if there was no majority in Parliament to pass the legislation, the Bill would not be put to it. That is how democracy works on this business in the French Assembly.
  Mr. John Davies: The fact is that the Parliament in France could have challenged the Government, if it had been prepared to do so, on a motion of confidence. For that reason the Parliament did not challenge the Government and the draft statute was put forward. That is a fact—the hon. Gentleman has made the point that I was seeking to make yesterday. There is now no legislative impediment to France's election of Members of the European Parliament as it exists today.
  Mr. Mendelson: I leave it to the judgment of the House. If that is the same as saying that there have been no parliamentary difficulties in any other country but Britain, after the right hon. Gentleman has accepted my story, I shall rest content.
  There is still no majority in the French Parliament for this legislation. But they are still not using the rather shabby argument that this country would be in disgrace if it did not pass this legislation. The French are proud of their tradition that if they do not want to do a thing, they will not. That used to be our tradition in days gone by.
  Mr. Rippon: What the French Government are saying is that they have committed themselves to direct elections and that it is a treaty obligation. If Parliament had dissented from this view they would have made it an issue of confidence. The British Government should do the same.
  Mr. Mendelson: Happily, we do not have a constitution like the French. The reason why they have such a constitution is their experiences of the Third and Fourth Republics, in having 24 or more parties. We have not got that sort of constitution and the Government cannot do what the French Government do. The French President said that as there was no majority for the Bill, Parliament could overthrow him and put in a Communist-Socialist Government. The majority of Members of the French Parliament did not want to do that. If Opposition Members read that as support for direct elections, they are welcome to join together on this level.
  Mr. Marten: I suggest that the answer to all these arguments may well be that

  1533
  if the Gaullists or Chiracians get back, the first thing they will do is to repeal the Bill that was forced through against their will.
  Mr. Mendelson: That remains to be seen. The right hon. and learned Member for Hexham (Mr. Rippon), as official spokesman for the Conservative Party in this debate, has not put the true facts. The fact is that there is a majority against direct elections in the French Parliament even after certain provisions that are not in our legislation have been introduced. When some of my hon. Friends and I seek to table a new clause in Committee on this matter we shall see whether my right hon. Friends the Home Secretary and the Foreign Secretary will accept or reject them.
  I turn finally to the relationship between public opinion and the vote tonight—
  Mrs. Kellett-Bowman: The hon. Gentleman has taken 25 minutes.
  Mr. Mendelson: After that intervention, I intend to speak for 27 minutes— and it will be just enough to allow me to make my final point. The hon. Lady must also appreciate that I am probably the last speaker against the Bill, and that is an opportunity that must not be missed.
  Mr. Deputy Speaker: I have listened carefully to the hon. Member for Peni-stone (Mr. Mendelson), and I must tell him that in that forecast he is 100 per cent. wrong.
  Mr. Mendelson: I gladly accept the correction.
  Let me deal finally with the relationship between this piece of legislation and public opinion, which is perhaps the most important aspect of the whole subject.
  A number of hon. Members will support the Bill and a number will oppose it, and the debate will start in earnest when that has happened. Dangerous suggestions have been made in various parts of the House, which I fear may be repeated by the right hon. Member for Penrith and The Border (Mr. Whitelaw) in winding up for the Opposition. He will try to entice the Home Secretary into what I consider to be a wholly unconstitutional procedure, namely, asking the
  1534
  Boundary Commission to begin its work without knowing what will be in the legislation and what or might not be passed. I am glad that the Government have stoutly resisted any such suggestion and have given good reasons why that cannot be done.
  I warn the Government against any weakening on that score, because it would be regarded by many as a breach of the constitution. It is a serious decline in political honesty on the part of the Opposition for the right hon. and learned Member for Hexham to make the suggestions that he has. If he is in such a hurry, he will have to learn to wait until Parliament has decided—and that process will begin tonight.
  8.32 p.m.
  Mr. Eldon Griffiths: I shall try to be somewhat briefer than was the hon. Member for Penistone (Mr. Mendelson), because I know that other hon. Members wish to take part in the debate.
  Some extravagant statements have been made in the House in the last half-hour, and there are two with which I should like to deal. One was made by my right hon. Friend the Member for Stafford and Stone (Mr. Fraser). He suggested that those of us who favour the unity of Europe can be likened to Hitler or Napoleon. In my view, Hitler would have had far less chance to plunge Europe into war if in the 1930s there had been the same European Community as we have today.
  The second statement with which I should like to deal is the imputation by the hon. Member for Penistone that tonight the House should reflect the opinion of the country. I agree with the hon. Gentleman that far, but my view of the opinion of the country is somewhat different from his. However, I find such a claim astonishing, coming, as it does from the Labour Benches, when the Labour Government's policies have been repudiated by public opinion in the last year in every test of public opinion. We have only to recall the by-elections at Walsall, Workington and Ashfield, and we shall shortly have the result at Saffron Walden. Therefore, the hon. Gentleman was extravagant in his claim that he reflects public opinion, because he does not.

  1535
  I support the Bill, and I shall say briefly why. I have lived a great deal of my life overseas, and I believe that the weaknesses of Europe have arisen from the divisions within our Continent. I have seen this Continent, of which I am proud to be a member, incapable of influencing the pattern of events in Africa or the Middle East. I have seen this continent unable to take decisions on great issues of war and peace, which to a great extent are decided in Washington and Moscow. The time has come when Europe must recover its strength so that our influence in the world may once again be effective. I know no way in which that can be achieved by the European people, including the British, unless there is European unity.
  I support the Bill because I believe that the European Community, whatever view one takes of it, for or against, is one of the greatest and most imaginative political ideas of my generation. My generation is old enough to have come in at the end of the Second World War. I believe that Europe is an inspiration to very large numbers of people, and this point has been totally missed by many hon. Members in this debate.
  I believe that the European Community ideal is far from being fulfilled, and that to some extent it has lost its impetus and perhaps its direction. It has become bureaucratic in many areas, particularly in agriculture and energy, in which the Commission has done badly, but I do not believe that the criticisms which rightly can be levelled at the Community and the Commission are any reason to run away or to quit. They are reasons for seeking a new initiative and impetus—and that new impetus will come with direct elections to the European Parliament.
  Another reason is that I served for four years in the Council of Europe, as did the hon. Member for Liverpool, Walton (Mr. Heffer). No doubt he will agree that they were interesting years but that the Council of Europe is a European talk-shop and frustrating for one reason above all else—and that is that it lacks the authority that its Members require. The European Parliament will obtain the authority that is needed to validate the work of its Members only when it has the authority of direct elections.
  1536
  I want the European Parliament to have greater authority. It should have more authority over the budget and over those pan-European questions that are larger than those that can be dealt with by any single national Parliament. It is absurd to say that energy policies across the whole of Europe can be dealt with exclusively in national Parliaments. Some matters transcend frontiers and are pan-European and transnational. Only a European Parliament elected on a European basis could deal with those questions.
  I now come to the details of the Bill. I much prefer the first-past-the-post system and I shall strongly support that system throughout our debates. I confront—as I suspect many other hon. Members do—a number of dilemmas. Although I vastly prefer the first-past-the-post system, I should rather have any system than no Bill, and I may well have to face that dilemma. I also want to see direct elections in 1978, but, because of the delays, the choice that many of us may face may well be between a system that we dislike but elections in 1978, and a system that we prefer but elections in 1979. I hope that that choice will not come, but I believe that it will and I have not yet reached a conclusion on it.
  Mr. Heffer: What would happen if the dilemma occurred in the House that we had a Bill with no system?
  Mr. Griffiths: I suppose that that is possible, but no doubt the Government would draw their own conclusion. If there were no method of achieving the object of the Bill, it would, for all practical purposes, be dead.
  I was grateful to the Home Secretary that, following the lucid intervention of the former Foreign Secretary, the right hon. Member for Fulham (Mr. Stewart), he at long last made clear that which he had not made clear when the Opposition spokesman raised the matter. That was that an amendment will be brought before the House so that a clear decision can be taken on the first-past-the-post system before Clause 3 is disposed of. It is important that that amendment should be brought forward and decided before we come to the matter of the regional list.
  The vote on the first-past-the-post system should come first and that on the

  1537
  regional list second. That was what I understood the Home Secretary to have agreed following the intervention of the right hon. Member for Fulham. I should be grateful if the Minister replying to the debate tonight will confirm that that is the position.
  In the end, Europe will not be united by institutions or by constitutions but by the unity of people. The other day I met a young woman in Aachen. Her name was Lore Gewecke. I asked her where she was going for her holidays. She said "the beach". In her father's day the only beach that anyone living in North Germany could go to was that little portion of the north German shore which was all the beach that the Germans of the day knew. Today that young woman, like many others all over Europe, in saying that she is going to the beach, means that she will go to any place where the water laps up against the shores of the European Continent. It makes no difference whether it is in Spain, Germany, Holland or France. Such people think as Europeans. They travel down the highways of Europe thinking in European terms. If hon. Members opposite are incapable of doing that, they are merely displaying their lack of understanding. The new generation that is arising in Europe thinks European—even if hon. Members opposite do not.
  Throughout Europe, there is a new group emerging who might be described as the hyphenated generation. There are Euro-Germans, Euro-Frenchmen and some, though not so many, Euro-British people. I welcome the process. It is bringing together a new generation of people who will eventually create Europe, and it is for them and their future that I shall support direct elections to the European Assembly.
  8.42 p.m.
  Mr. Doug Hoyle: The hon. Member for Bury St. Edmunds (Mr. Griffiths) spoke not so much like someone devoted to Europe as like a European fanatic. His words reminded me of the vision of Europe that we were given before the referendum. We were told that everything would be fine as long as we stayed in the EEC; all our economic problems would be solved; we should be given a new impetus. It has
  1538
  not happened. The hon. Gentleman admitted that the EEC had become a bureaucratic institution, yet he insisted that we must continue to tighten our links with Europe. I am sure that his speech warmed the heart of many hon. Members, but many of us who are democrats—and my hon. Friend the Member for Penistone (Mr. Mendelson) made a powerful speech on this subject—believe that democracy starts at home and we see direct elections as a weakening of democracy.
  The new powerful force in the House —the Liberals—have not been here for most of the debate. Of course it is not here but in the rooms and corridors of this place that they have been exercising their power. I share the view that if proportional representation is introduced for European elections, there is no doubt that it will be used for Westminster elections before long. Although there are only 13 Liberal Members, they are becoming almost as powerful as the 12 Apostles led by Jesus Christ. They can do things that we in the Parliamentary Labour Party can never hope to get done.
  The Prime Minister has said that it would not be an unmitigated disaster if we did not get direct elections in 1978. I do not know why we are rushing into this when we have a Labour Party Conference decision that is overwhelmingly against direct elections. Why could we not have waited for this year's conference and introduced the Bill in the next Session? Perhaps the Government hoped that by getting a decision from the House they would be able to twist a few arms. They have not been very successful trying to do that over phase 3 of the pay policy and they may not be any more successful over direct elections. I know that many people will resist their overtures.
  How can it be termed democratic to have constituencies of 500,000 electors? How can the Members representing those constituencies be representative of the people? The danger in the Bill, as some hon. Members have admitted, is that it is a step towards a federal Europe. Of course it is. I have listened to arguments which have said "We do not need to worry about that because it will not have many powers. After all, it is only an Assembly." There have been those honest enough to admit that it is a

  1539
  necessary step in the direction of a federal Europe.
  First, we were tied to Europe by a thread. Now we have the ropes binding us, and the chains are coming on. So it will be more difficult for the British people to reverse the decision. Any sane person who looked at these decisions from outside would wonder what had happened to the British people in taking this kind of decision. He would wonder why the British people should be attempting to tie themselves more closely to a Community which had in no way served the purpose of that people.
  I recall the pamphlets at the time of the referendum, as do some other hon. Members. They were saying at that time that food was not much dearer because we were in the EEC. They said that investment would result from our entry into Europe. Instead of investment coming here, a lot of it has flowed from Britain to Europe. The investment in this country is stagnant. The pro-Marketeers said that it would be a great opportunity to solve our unemployment problems. Instead, unemployment is still rising.
  A lot has been said about the rôle of the British people. What is certain is that opposition to the idea of the Common Market is growing in this country. Only recently—I agree that it was in the North-West—Granada Television held a poll. That poll showed that, on being asked whether Britain had benefited from being in the Common Market, only 25 per cent. of those asked thought that we had benefited, against 72 per cent. who thought that we had not benefited in any respect.
  Mrs. Kellett-Bowman: Does not the hon. Member agree that there is a very strong feeling in the intermediate areas of the North-West that the Government are pocketing for their own purposes money which should be going to the region? There is a feeling that they are not implementing the doctrine of additionality which is intended by the Community to help parts such as the North-West, which could benefit substantially if the Government of the day did not cheat.
  Mr. Hoyle: I am pleased to see the hon. Lady back here and making her usual kind of intervention. But the total help that we are getting from Europe is
  1540
  peanuts. I think it amounts to about two miles of motorway. What we want is what the people of the North-West and the other regions want, and that is meaningful policies that are under our control and that we can direct.
  There is some doubt as to the attitude of the EEC towards REP at the moment. That needs a lot of clarification, but that will not solve the problems of the regions. In the hon. Lady's area in the North-West 72 per cent. of the people think we have not benefited. Only 42 per cent. thought that we should stay in, against 53 per cent. who thought we should come out.
  There is a lesson here for the Labour Government, because more people said that they were likely to vote for the Government if the Government took a positive line in opposition to the Common Market than if they did not. Of the Labour voters who were polled, 37 per cent. said that they were more likely to vote for the Government if the Government took a positive line that we should come out of Europe. The opinion of the North-West usually becomes the pattern for the whole country. In Grimsby the people have had enough of the Common Market fishery policies. They know the effects that those policies have had on that constituency.
  It does not matter, therefore, what we decide in this House. A growing number of people in Britain are saying not only that they do not want the ties with Europe to be strengthened but that they want to come out of Europe. They are looking for someone to take that lead. If we on the Labour Benches are not prepared to do it, they will look for other standard-bearers. That is why it is absolute nonsense to discuss ways and means of trying to get closer to the concept not only of Europe but of federal Europe. It will make it more difficult for us to take the kind of decisions that I know the hon. Member for Lancaster (Mrs. Kellett-Bowman) wants us to take in the North-West by pumping in more aid and certainly reducing unemployment. It will bring no comfort to my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) or to the unemployed on Merseyside if we go ahead with this absolutely stupid step that we are proposing to take tonight.

  1541
  I have already said that I am completely opposed to direct elections. We should not be considering whether direct elections should be held in 1978 or 1979. We should be considering scrapping the whole concept and looking at ways and means of again testing the opinion of the British people whether they still want to stay in the Common Market.
  8.52 p.m.
  Mr. D. E. Thomas: I oppose the Bill for two reasons. First, I do not take the view that repeating the European nation State model on a totally continental basis is a true extension of democracy. Inevitably, democracy is tied up with the problem of the scale of the institution. We have seen a decline— this is part of the whole devolution argument in the United Kingdom—in the quality of answerability as the scale of the unit increases. I do not see how it will be possible for a directly elected European Assembly to affect the lives of ordinary citizens in a way which will be beneficial to them, because of the distance between the representative and those whom he seeks to represent. I sec the development of the political structure inevitably following the basic economic structure of the Community. It will institutionalise the possibilities for large multinational companies and free market forces to operate more effectively on a trans-European basis. It is not an extension of real democracy.
  Beyond that, Plaid Cymru is particularly opposed to the treatment that Wales receives in the Bill. This point has also been advocated by the Labour Party in Wales, by the absentee Liberal Party and even by certain Conservatives. There should be an increase in the number of seats to be allocated to Wales.
  The Select Committee on Direct Elections to the European Assembly, in its first report, stated
  "that any formulation should be such as to make it possible for the United Kingdom's allocation of seats to be large enough to provide representation for its component parts not significantly out of proportion to those of the smaller Member States (with the proviso that Luxembourg should be treated as a special case)."
  The Select Committee, and the Bill reflecting the Government's thinking, does not achieve that objective. Wales is to
  1542
  have four seats, which means one seat for 520,000 electors. Luxembourg is to have one seat for 60,000 electors, but that is a special case. Ireland is to have one seat for 200,000 electors; Denmark, one seat for 313,000 electors; and Scotland, one seat for 638,000 electors.
  I stress that the allocation given to Wales is totally inadequate. Plaid Cymru. in line with its argument for full national status, will argue for national representation. We shall support amendments in Committee, for which I hope we can get cross-party support, to enable the representation for Wales to be rounded up. It would appear that representation for Scotland and Northern Ireland have been rounded up, whereas for Wales it has been rounded down.
  For both those reasons—because we do not believe that repeating the nation State model on the European scale represents an extension of real democracy to the peoples of Europe and because we consider the representation for Wales to be totally inadequate—we shall oppose Second Reading of the Bill tonight.
  8.55 p.m.
  Mr. Tom Ellis: I agree with my hon. Friend the Member for Penistone (Mr. Mendelson) that we should be discussing the fundamental issues and principles involved in the Bill. I was a little sorry that my hon. Friend spent the major part of his speech discussing the relative merits of the two electoral systems that it contains.
  I followed closely the argument of the right hon. Member for Down, South (Mr. Powell). Like my hon. Friend the Member for Dudley, West (Dr. Phipps), I agree with much of what the right hon. Gentleman said. The difference between the right hon. Gentleman and my hon. Friend is the same as the difference between the right hon. Gentleman and myself. In other words, the right hon. Gentleman resists, and might even be fearful of, the consequences which he says might occur as a result of direct elections to the European Parliament. I and my hon. Friend not only welcome those consequences but are anxious to channel them into the best direction for the well-being of the people of this country and Europe. I say, with the greatest respect to an eminent senior Member of the House, that I believe that I and

  1543
  my hon. Friend adopt an attitude of realism while the right hon. Gentleman adopts an attitude of romanticism. I shall try to justify that claim and that allegation by developing an argument in a moment on a specific example.
  I wish to make it clear that individual hon. Members have been quite open about what they wish to see in Europe. I have made my position clear. The complaint of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) was about the official documentation and literature.
  Of course there will be an increasing clash between this House and a directly-elected European Parliament. There is already a clash between the European Parliament, delegated, impotent and derided though it is, and this Parliament. Those of us who serve in both Parliaments see it clearly. The European Assembly is fighting to become a Parliament. It is on the attack, and however impotent and however weak it is, the attack has been launched, from however weak a base. However strong a bastion this House is believed to be, it is on the defensive. Hon. Members have clearly seen the clash coming, but I think that it will be for the good of the people of Europe.
  One of the basic reasons why I support the whole concept of European community is simply that I believe that the classical nineteenth-century European nation State is outmoded. I cannot put it any more bluntly or baldly. I could spend much time elaborating this argument, and I could refer to a book published only a fortnight ago by Tom Nairn. I do not want to sound presumptuous, but it is a brilliant historical analysis. The book is called "The Break-up of Britain" and opens with a chapter called "The Twilight of the British State". It is rather a harsh and abrasive book which will be a bitter pill for many people to swallow but it is important that we should study it and realise exactly what is happening and why.
  Mr. Heffer Mr. Heffer rose—
  Mr. Ellis: I cannot give way to my hon. Friend. I want to make a clear, coherent, logical argument—
  Mr. Heffer: My hon. Friend has got it wrong. He has misunderstood the book.
  Mr. Ellis: I merely make the point that the nineteenth-century nation State is so outmoded that something must be found to replace it. It seems to me that the only practicable proposition is to go along with this European venture. No one knows where it will take us. It will not necessarily be federalism. It may be something that we have not thought of yet. In politics one is obliged to travel, and I always feel that it is better to travel hopefully.
  I give one illustration of why it is important and why I disagree entirely with the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith), who seemed to think that it was simply a matter of institutions, of jiggling them about, and that nothing would change. He is profoundly wrong. The European Court is already in certain narrow sectors becoming a federal court within the existing institutions.
  Ralph Dahrendorf summed it up when he said:
  "The first community is dead. Long live the second community."
  In the first 18 years of the Community, when we all went along in the wake of the great American engine and prosperity was all over Europe, simple institutional measures were adequate. We were able to rely on a bureaucracy and everyone was happy. It came to an end on 15th August 1971 when the Nixon Administration went protectionist. Other things have happened since then. That is why now we must have a political Community.
  One case illustrates exactly what I mean. On Wednesday the Commissioner responsible for steel made a statement about the steel industry. We all know that the steel industry in this country and in Europe is in a serious position. I do not think that we all appreciate how desperately serious is the position. The Commissioner said that the Commission was to introduce a variety of proposals in an attempt to rescue the steel industry. He spelled out the various proposals, including many that are well known to hon. Members. He said that he was anxious to take along with him the trade unions, managers, owners and Governments so that the directives that the Commission planned to impose would be accepted. The Commissioner has considerable power under the Paris treaty over the iron and steel industry.

  1545
  I can visualise the time arriving when, for the good of the steel industry, the Commissioner becomes cruel to be kind and imposes directives that will prove to be difficult pills for Governments to swallow. The Commissioner could demand that a steel works must close. He would be working within his legal rights. He could make that demand and the Government concerned could say "Not on your Nellie". The Commissioner could then take the Government to court. The court could rule in the Commissioner's favour. The Government could then say again "Not on your Nellie". That would produce a political crisis and the Community would be in a make-or-break situation. That event could occur in respect of steel. It could also happen as a result of difficulties in other industries. The engineering, shipbuilding, airframes, aero-engines, computer and machine tools industries are in serious situations. We are trying to compete with the multinational sector.
  I give another example from regional policy. Paris is the most developed region in France. It occupies 2 per cent, of the area of that country, contains 19 per cent, of the population and takes 54 per cent, of economic capital investment. That is not because of the perverse, mal-administration of the Fench Government. It is because that Government can do nothing about it, any more than this Government can do anything about regional policy.
  I can give an example of what I mean. A large multinational company may say that it wishes to build in London. The Government says that it may not do that and offers grants as an incentive to build elsewhere. That company may then say that it will build in another country if it cannot build in London and it eventually establishes itself in London. It is the duty of all hon. Members to try to correct that situation where we as a nation and Government are impotent. In the European Parliament we are introducing a kind of parliamentary control and authority which will lead to a genuine European Parliament. We shall rue it if we fail to go ahead with that policy.
  9.5 p.m.
  Sir John Eden: Like the hon. Member for Wrexham
  1546
  (Mr. Ellis), I, too, want to turn back briefly to the speech of the right hon. Member for Down, South (Mr. Powell). He made his position abundantly clear. He is against the Bill because, as he spelled out for us during his remarks, he is against United Kingdom membership of the European Economic Community. In that, of course, he is joined by many other hon. Members in all parts of the House who have habitually spoken and voted against our being members of the Community.
  The fact is that they are seeking to continue the argument that they lost in the referendum in the hope that in time they may be able to reverse the decision then taken by the overwhelming majority of the people of this country.
  I am not afraid of the Assembly. I am not in any way frightened of the European Parliament. I am not afraid of its advisory or supervisory powers, nor am I afraid of any development of them that may arise. They will not do damage to this Parliament. They will not in any way affect the degree to which we in this Parliament control Ministers who take the ultimate decisions in the Council of Ministers. They will not prevent this House from continuing to examine and to scrutinise European directives and legislative proposals which come from the Commission. They will not, as the right hon. Member for Down, South claimed, cut down this Parliament. They will certainly not subvert scrutiny.
  The elected Assembly of the European Community may, hopefully, prevent some of the nonsenses and spare us from some of the trivia for which the Commission has from time to time been responsible, and we here may have to adapt some of our own policies in respect of legislative proposals emanating from the Commission in Brussels. That is probably something that we ought to be considering in any event.
  However, I am quite certain that as the Assembly develops or as its composition changes as the result of the passage of this Bill and the direct election of its Members, so we shall find that, far from subverting and undermining our authority in the national Parliament, it will effectively complement it.
  I want to turn briefly to the question of the method of election. I agree here

  1547
  very much—and only on this point— with my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop). He spoke most effectively about the representation and responsibility that goes with the first-past-the-post system. I agree very much with him that we should strive to preserve the golden thread of responsibility between electors and elected. I am sure that he was right to emphasise that point and I support him in what he said. I believe that the Government are wrong in putting forward as their favoured choice the regional list system in the Bill.
  The right hon. Member for Down, South did the House a great service by drawing its attention to the part of the Home Secretary's speech in which he referred to the possibility of differences of view between the Assembly in Europe and this Parliament and the Government of this country. The right hon. Member referred to that part, which I shall not repeat. However, in the same paragraph the Home Secretary said:
  "Furthermore, the credibility of the British delegation in the European Assembly might well be undermined by such a result."—[Official Report, 6th July 1977; Vol. 934, c. 1256.]
  But the fact is that it will not be a British delegation. We have a delegation now. The purpose of the Bill is to make it possible for delegates to become elected representatives of the people. They will not be delegates of the Government or even of this Parliament. They will be elected representatives of the people.
  If that reference by the Home Secretary is in any way indicative of the attitude he brings to bear to this subject, I hope that, as a result of the debate, he will think again and change his whole approach. What he should be seeking to ensure, as a result of the enactment of this or similar legislation, is that the voice of the people is taken more into account as a result of the direct part that they will have in sending representatives to the Parliament of Europe.
  If that happens, I believe that the European Parliament or Assembly will more truly become the focal point in the formulation and development of European opinion. No doubt it will further develop the practice of calling the Commission to account. Perhaps it will develop new practices, such as the establishment of specialist committees to examine Commis-
  1548
  sion proposals in greater depth before they go forward to the Council of Ministers. Whatever detailed form they may take, I have no doubt that new parliamentary procedures will develop. I have no doubt, either, that those Members of the Assembly elected from individual constituencies in the member States will ensure that they increasingly come to reflect the wishes of the people who will send them there. I am sure that they will exert a most beneficial influence on the Commission which will effectively complement the influence that we exert in this House on the Ministers who attend the Council of Ministers.
  I make the plea that we do not try to achieve overnight what it has taken other Governments and other Parliaments and other people already many years to approach. We must recognise that, with our membership of the Community, we shall have to experience a very long-drawn-out, continuing and evolutionary process of working with our neighbours in Europe. But the practice of working together, however difficult, offers the prospect of greater prosperity for all our people and a peaceful solution to some of the most pressing international problems. Even though the practice may be difficult, with that possibility and that prospect before us, the attempt is very worthwhile, and I have no doubt that by sending elected representatives from this country to the European Parliament we shall be assisting it considerably.
  9.14 p.m.
  Mr. Alan Lee Williams: Those of us who have argued the case for European integration have never denied that it would imply some loss of parliamentary sovereignty. I do not find that such a terrifying prospect that I need apologise to the House for it. The right hon. Member for Stafford and Stone (Mr. Fraser) evoked memories of Hitler, Marxism and Bolshevism in raising the spectre of federalism. He was over-icing the cake. This modest Bill gives effect only to some tentative steps towards democratisation of the European Community itself.
  For the purposes of the debate, I have been looking at various articles written by people who have been concerned in the last 15 years with integration. Herman Kahn, back in the 1960s, erected 88 possible European futures. The late Alastair

  1549
  Buchan erected six different possible European futures, It is interesting that not one of these possible futures included federalism. There is more to the argument than that, and I believe that the opponents of integration have concentrated on federalism because they feel that this is the way in which they can somehow or another frighten the British people into believing that their sovereignty, in the real sense, will be lost.
  I believe firmly that if the European Assembly can have an infusion of real authority, which a directly elected Assembly will give it, it will be possible for parliamentary democracy to be extended in Europe.
  Difficulties arise now over the unaccountable power that is undoubtedly held by bureaucrats, and everyone agrees that this is wrong. I would argue this case in respect of the Commission. Indeed, I would argue it in respect of the Council of Ministers, which is in no real sense accountable to this place. It is an illusion for hon. Members on either side to imagine that the Council of Ministers is really answerable to Parliament. Only in the most theoretical sense is that so. We know that in reality this is not the case.
  It seems to me, therefore, that this timid, modest Bill is a step in the right direction, so that we can democratise Europe and, above all, move forward to integration, and ultimately, I believe—I make no apology for this—towards a democratic federal Europe.
  9.13 p.m.
  Mr. Jim Spicer: Of necessity, this will be a very truncated speech. I follow very much along the line indicated by the right hon. Member for Down, South (Mr. Powell) in terms of the regional list. It is a miserable system, which none of us should look at.
  In the South-West we shall be given six Members for Cornwall, Devon, Somerset, Dorset, Avon, Gloucestershire and Wiltshire. I agree with the right hon. Gentleman that those six Members, once elected, will have no individual responsibility. They will be chasing each other round that region, irrespective of party, each of them trying to make the best of whatever publicity opportunities come
  1550
  his way. I certainly could not vote for such a system.
  Equally, I find myself in a difficulty concerning the first-past-the-post system. I cherish the link between the Member of Parliament and the constituency and would hold very strongly to it. At the same time, I can see that there would be considerable difficulties in trying to find universal agreement.
  In my evidence to the Select Committee I made it quite clear that there might come a time in this House when we would need to find a compromise. I am horrified that the Government have included in their Bill the very worst possible system—[Interruption.] — the regional list, which even their friends in the Liberal Party, through their leader tonight, have admitted is the worst possible system. The right hon. Gentleman indicated that he would much rather have another system.
  Mr. Thorpe: I did not.
  Mr. Spicer: What was said—
  Mr. Thorpe Mr. Thorpe rose—
  Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. Only one hon. Member may occupy the Floor at one time. [Interruption.] Order. Mr. Spicer.
  Mr. Spicer: With the greatest respect, the right hon. Member for Devon, North (Mr. Thorpe) ceased to be the Leader of the Liberal Party some months ago. The right hon. Gentleman—
  Mr. Thorpe: The hon. Gentleman mis-quoted what I said.
  Mr. Spicer: The right hon. Gentleman is not the Leader of the Liberal Party.
  Mr. Deputy Speaker: Perhaps the hon. Member for Dorset, West (Mr. Spicer) will address the Chair.
  Mr. Spicer: I apologise profusely, Mr. Deputy Speaker.
  This is a strange way to end a speech, but I do so by taking up the remarks of the hon. Member for Penistone (Mr. Mendelson). I fully endorse his remarks about the Liberal Party and the absence of Liberal Members from their Bench throughout most of the debate.
  9.21 p.m.
  Mr. William Whitelaw: I shall not start my speech by seeking to come between the right hon. Member for Devon, North (Mr. Thorpe) and my hon. Friend the Member for Dorset, West (Mr. Spicer), or by indulging in pacts of any sort. As my speech proceeds I do not think it will be found that there are many pacts about me. I shall develop what I have to say in my own way.
  Nothing that we have had in the debate and nothing much that has been said has changed my view that the history leading up to the introduction of the Bill portrays a pretty squalid saga of the Government's lack of decision, their prevarication, internal dissension and delay.
  As my hon. Friend the Member for Richmond, Surrey (Sir A. Royle) said yesterday, it is over 18 months since the Government started talking about introducing a Bill for direct elections to the European Assembly. There has been a Green Paper, a White Paper and various debates. On top of all that, a Select Committee was set up on 13th May 1976 under the chairmanship of the right hon. Member for Dartford (Mr. Irving). The Committee produced three reports full of detailed and clear recommendations. It proposed that a very early Bill should be introduced in the overspill of the 1976 Session and that the election should be held on the first-past-the-post system.
  The truth is that the Government paid little or no attention to the work of the Select Committee. Of course, they will say "We published the White Paper early in 1977." That is true, but the White Paper only raised again the issues that had been considered by the Select Committee and on which it based its recommendations. Throughout the April debate on the White Paper and yesterday the Home Secretary talked as if the Select Committee had never made detailed recommendations. By April he had progressed only to the position that he thought that much thought would be needed before legislation.
  As my right hon. and learned Friend the Member for Hexham (Mr. Rippon) said today, the House could have been asked last Session to debate and vote upon the Select Committee's recom-
  1552
  mendation for an election on the first-past-the-post system. If that had taken place, the Government would have known on which system to base their Bill. If the House supported the Select Committee's proposal, the Government could have drafted their Bill on the first-past-the-post system. If it had voted against it, the regional list system or some other proportional representation system would clearly have been the will of the House.
  Why did the Government not take that course last year? I realise that the Home Secretary was not then in his present position. However, we are entitled to an answer from him on behalf of the part of the Government that he and the Prime Minister represent. We know that the other part of the Government would say that such a course would have impeded its determination to frustrate the Bill altogether. In view of all the muddle and confusion about methods now. why is it too late to take that course today? Is that not the answer to my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop), who wants to see a decision taken on the system before the Bill is produced again, as presumably it will have to be, in the next Session of Parliament under this Government, if there is one?
  Why cannot the Government table a motion now to accept the report of the Select Committee? If that were done and if there is to be another Session of Parliament with this Government in power, the Bill could be introduced in accordance with the decision that the House took on that occasion. Surely we are entitled to a clear and specific answer from the Secretary of State for Foreign and Commonwealth Affairs on that point. I do not know what the answer is myself, but I hope that the right hon. Gentleman does. It seems such common sense that I cannot understand why the House does not proceed along those lines at once.
  The failure is all the more surprising because of the Prime Minister's clear undertaking in September 1976, along with our partners in the EEC, to use the Government's best endeavours to hold direct elections to the European assembly in May-June 1978. No doubt he meant it. No doubt he believed that at least he would have the support of his Cabinet colleagues. Certainly they would appear

  1553
  to encourage him in that belief for they agreed to the Queen's Speech. Or perhaps the Queen's Speech, too, was one of those occasions on which the Prime Minister decided that collective responsibility need not apply.
  But if so, he did not fulfil even his extraordinary new doctrine because he did not tell us. And so, perhaps, if there is another Queen's Speech, and if they are still locked in the embrace with the Government, the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) and his hon. Friends had better look around to see what the position on collective responsibility is in the Cabinet for the next Queen's Speech, if there is one.
  However, we are still entitled to presume that even in this Government the Cabinet do collectively support the Queen's Speech. Thus it would appear that the opponents of direct elections in the Cabinet hit upon a subtle trick to neutralise the Prime Minister's best endeavours which, I am quite certain, were absolutely genuine. "Ah", they said, "we cannot introduce a Bill on direct elections until the measure on devolution is through the Commons". What a remarkable assertion! After being concerned one way or another with the business of this House for about eight years, I have never heard of a more unjustifiable assertion. Indeed, it is a well-known principle of business management in this House—alas, all too seldom achieved by any Leader of the House— that the important Bills in the Government's programme for any Session should start before Christmas. So what on earth was this new idea?
  Much play is now being made of the phrase "best endeavours". But the account of the Government's legislative efforts surely cannot be construed by any reasonable person as living up to a modest standard of endeavour.
  Yesterday the Prime Minister decided to change ground. The delay he said, has been part of the process of getting people to understand the necessity for the legislation. Persuading is, of course, part of democracy. How right the Prime Minister is. But as my right hon. Friend for the Member for Mid-Oxon (Mr. Hurd) said last night, the Prime Minister spoke
  1554
  yesterday of persuasion as though he had spent his time stumping the country advocating direct elections. If he has, he must have been doing it by stealth or with strict instructions to his public relations machine to ensure that in no circumstances should one single word of his advocacy be produced to anyone at any time.
  I have a great regard for the Prime Minister's public relations expertise and, therefore, I believe that if he had wished his persuasion and his advocacy to reach a wider section of people in this country he would have achieved it. But, alas, we have heard nothing of it.
  Of course, I suppose his persuasion has been of a very much narrower order. It has, in fact, been in what I suppose can reasonably be described at any time as the "semi-secrecy" of his own Cabinet. He has been seeking to use his persuasion there but, alas, it does not seem that his persuasion, even in that narrow and comparatively small circle, has had a very outstanding successful or beneficial result. Rather, I fear that this has led him to a disastrously weak decision which I trust and believe will prove to be entirely uncharacteristic of him. Nevertheless, if his Government survive for long enough, I believe that he will live to regret the day when he introduced a very dangerous precedent.
  The Prime Minister's decision to abandon collective responsibility in his Cabinet will weaken his own authority, which, as he will realise, does not worry me unduly. But it will also weaken Britain's standing amongst our allies, especially amongst our partners in the EEC. I think that that should be a matter of great concern to us all.
  By no stretch of imagination can Cabinet Ministers voting against their own Government's Bill be interpreted as a Prime Minister using his best endeavours —[HON. MEMBERS: "Where are they?"] Therefore, much as I respect the right hon. Member for Dartford. I cannot agree with him when he congratulates the Prime Minister on having kept his Cabinet intact. It will not look exactly intact at 10 o'clock tonight.
  Before the Prime Minister moves from his avuncular mood into a threatening one, which I thought that he showed signs of doing yesterday, I trust that he will realise that his record and that of

  1555
  his Government leave him with no right to accuse anyone in any part of this House of preventing the Government from meeting the target date or preventing direct elections. He has forfeited that argument. I thought that he was coming to it yesterday. Before he does, let me assure him that there will be a blockbuster in the way, because I shall not let him get away with that one. The Government's own tactics and manoeuvring have already brought about the delay. To them must go the blame.
  But the way in which the Government have handled the introduction of the Bill and the obvious imperfections of the Bill itself must not be allowed to obscure the fact that a major and important issue is at stake. Britain is by treaty a member of the EEC and, quite exceptionally, our membership was endorsed overwhelmingly by a referendum of the British people. The Prime Minister, as he is constitutionally entitled, in Britain's name gave a commitment to our European partners on direct elections. Of course, that commitment was given subject to Parliament's approval. I accept that immediately. Of course, Parliament has the undoubted right to withhold that approval. But if Parliament were lightly or frequently to exercise that right, Britain's international standing and reliability would be gravely threatened and probably seriously undermined.
  That argument will not convince those who continue to be opposed to membership of the EEC and who refuse to accept the result of the referendum. They are perfectly entitled to do that. I am equally entitled to say that in my view they are going the best way about ensuring that Britain gets the worst of both worlds. However, that is their undoubted right if that is their determination.
  But it is surely a compelling argument to those who believe in our European position but who have doubts about the importance and value of direct elections. There are those of us who believe in our membership of the EEC and in direct elections but who are unhappy about the way in which the Government are proceeding on this Bill. For us, there can be no doubt that, if we want to see direct elections to a European Assembly, we must vote for a Bill the principle of which it is to provide them.
  1556
  I do not want to see direct elections as a means to furthering a federal Europe. Unlike my hon. Friend the Member for Edinburgh, Pentlands (Mr. Rifkind), I am against a federal Europe. My right hon. Friend the Member for Stafford and Stone (Mr. Fraser) tells me and others that if we are against a federal Europe but in favour of direct elections we are in a stupid position. I do not accept that. I cannot understand that argument. I have always been of the view that there is no reason why we should proceed to a federal Europe if the countries concerned do not wish to do so.
  I see no evidence at all that the leaders of any other EEC countries passionately wish to do so. Both President Giscard d'Estang and Chancellor Schmidt have made it quite clear that they do not wish to proceed on this course. If that is so, I cannot see why on earth we should be forced in that direction.
  I want direct elections because I believe that they will give greater democratic control of the Community. I do not believe that that can be provided under the present system of membership. Nomination as a system has broken down. I do not believe it can work, bearing in mind the strain on hon. Members who are trying to do a job here and a job in Europe. They cannot do both jobs and I do not think it right that they should be expected to do so. That is why I want to move towards direct elections.
  A directly-elected Assembly could be an aid to national Parliaments in dealing with Community bureaucracy. I am not impressed by any analogy between duties of Members of that Assembly and our duties. My right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith), with his considerable experience, convinced me of the total difference between the powers of this Parliament and the powers of the Community Assembly.
  I do not intend to repeat the arguments in favour of the first-past-the-post system which I made in the debate on the White Paper on 28th April. Neither system is perfect, and, in answer to the right hon. Member for Devon, North, I recognise all too well and too clearly the problems that will arise with Northern Ireland if we proceed with the first-past-the-post system. But as I said before my conclusion

  1557
  on Northern Ireland is that if, as essentially part of the United Kingdom, it is taking part in a United Kingdom election, it must do so on the same basis as the rest of the country. To do otherwise, despite all the difficulties involved—of which I am only too well aware—could easily raise unjustifiable fears about our determination in Northern Ireland. That would be totally unjustified and absolutely unfair, but it is a danger. I stand wholly by these words. To paraphrase the right hon. Member for Devon, North, they come from the full-throated belly of a large man and not from any other source at all.
  I think that the position in a strictly Northern Ireland election is different, but essentially these are matters that can be discussed—if the House gives the Bill a Second Reading—at Committee stage. Tonight we are dealing with the Second Reading and with the principle of a Bill to provide direct elections to the European Assembly. This is the fulfilment of an undertaking given by the Prime Minister on behalf of the people of this country.
  On that basis, and for those reasons, I ask my right hon. and hon. Friends to vote for the Second Reading tonight. By doing so in great strength we shall earn from our European partners a respect for consistency and reliability—a respect that this Government and that Labour Party have forfeited beyond recall, to the great detriment of true British interests.
  9.39 p.m.
  The Secretary of State for Foreign and Commonwealth Affairs (Dr. David Owen): The right hon. Member for Penrith and The Border (Mr. Whitelaw) has huffed and puffed but essentially he has supported the principle of a Bill for direct elections, which I also believe the House should support—
  Mr. Walter Clegg: Would it not be possible to command the presence in the House of the Leader of the House, who, in effect, voted for this Bill in terms of the debate on the Queen's Speech?
  Mr. Deputy Speaker: The hon. Member knows that that is not a point of order for me.
  Hon. Members: Where are the rest of the Cabinet?
  Dr. Owen: The mood of the House reminds me of the debate that took place in this House when on 28th October 1971 the issue of our membership of the EEC was decided by the House as a whole. Then, as tonight, many were exercising their judgment as individual Members of Parliament. The House is no worse for being in that mood when deciding whether to support an issue of principle. That is the issue that is before us tonight.
  The right hon. Member for Penrith and The Border made a great deal of the voting intentions of various Members of the House. [HON. MEMBERS: "Where are your Cabinet supporters? "] The right hon. Gentleman when Leader of the House in 1971 surprised everybody by a last-minute bid to achieve a free vote on the issue of principle at that time. Therefore, it does not behove him to give us great lectures now on the issue of a free vote.
  Mr. Whitelaw Mr. Whitelaw rose—
  Dr. Owen: I know what the right hon. Gentleman is about to say. [HON. MEMBERS: "Give way."] I shall give way in a moment. I do not want to mis-judge the right hon. Gentleman. He will say that on that occasion it was a free vote for Conservative Members of Parliament. But The Times wrote at that time:
  "The reason for the volte face is to be found in the reckoning by Whitelaw and Pym that the Government must gain more on the swings of a free vote than they will lose on the roundabouts."
  Mr. Whitelaw: I am sorry to interrupt the Foreign Secretary, because I know that there is not a great deal of time left for him to contribute to the debate, but he will remember that the whole of the Cabinet collectively voted on that occasion for Britain's entry into Europe—and that blows his argument out of the water sky high.
  Dr. Owen: The House was told, as the right hon. Gentleman knows perfectly well, that there was a free vote on that occasion. He also knows that the issue of principle was decided by many people on the Opposition Benches exercising their right—[HON. MEMBERS: "Where are all the Cabinet?"] Right hon. and hon. Members who have come into this debate without having heard any of the arguments might at least listen to the arguments on a serious issue. [HON. MEMBERS: "Where is Wedgie?"] Those same

  1559
  right hon. and hon. Members—[HON. MEMBERS: "There he is."]
  Mr. Deputy Speaker:Order. Dr. Owen.
  Dr. Owen: Not for the first time, and I suspect that it will not be the last time when this issue of Europe comes before the House, Members of Parliament will exercise their individual judgment. I do not apologise for that. I argued for a free vote on this issue in 1971 and I am content that this issue will be decided by the House as a whole.
  I shall tell our friends in Europe who are watching this debate that there ismore chance—[Interruption.] The opposition of the right hon. Member for Down, South (Mr. Powell) is well known, but the Government's commitment to use their best endeavours to put this legislation on the statute book in time to reach the May-June target is clear. It is known that the commitment to elections in May-June 1978 is political, arising from successive meetings of Heads of Government in Paris and Rome in December 1974 and December 1975. That timetable was reinforced in the agreement that was signed by my predecessor last September. Nevertheless, we have made clear to our partners in Europe the difficulties that could arise in the United Kingdom about meeting the deadline.
  As the Prime Minister pointed out yesterday, the Government have never underestimated the difficulties that face any constitutional Bill in the House. We have always recognised that adequate time is needed for full consultation and consideration of the important issues involved in this legislation. We do not apologise for the fact that there has been a Select Committee report and time to debate a White Paper, that considerable consideration has been given to the method of election, and that two alternative methods have been put before the House.
  We have made it clear that we shall recommend—and we have recommended —the regional list system. During the negotiations with our European partners last year we sought a derogation allowing for continued nomination should we not be ready to hold elections in May-June 1978. However, our partners preferred an agreement under which the first elections would be held simultaneously throughout the Community. They also agreed that
  1560
  the target date should be a matter of best endeavours rather than a legally binding commitment and that the election itself should be fixed when all the member States were ready.
  The Prime Minister intervened in the debate yesterday to say that it would not be the end of the world if it proved impossible to be ready by 1978. The right hon. and learned Member for Hexhan (Mr. Rippon) wished to have this explained. The Prime Minister made it clear and I made it clear that we shall use our best endeavours. Those who believe that the Government will not use their best endeavours make a great mistake. However, there are important issues that the right hon. and learned Gentleman should consider. He drove through the House legislation concerning the European Community at a time when many people felt that the House had inadequately debated all the important constitutional issues. It is difficult to drive through constitutional legislation when there are hon. Members of differing views on both sides of the House. We all know that this legislation will be examined with care, as it should be, and that it will be difficult to get it through and on to the statute book in order to meet the suggested May-June target date, but we shall try our best.
  The right hon. and learned Gentleman must recognise that this matter will be decided by the whole House. I hope it will be seen tonight that there is a clear and decisive majority in the House for the principle of direct elections. At a later date we shall have an opportunity to determine—and again hon. Members will exercise their individual judgment—the method of election. The right hon. and learned Gentleman, claimed that he has a long record of support for the cause of European unity. That is a cause to which I also subscribe but the right hon. and learned Gentleman will not serve that cause by ensuring a form of election to the European Parliament that will give a completely distorted result in the political system of this country. That is one of the serious issues that will be decided in Committee on the Bill. We shall decide whether we can get a fairer system. [HON. MEMBERS: "When?"] Some hon. Members on the Opposition Benches have constantly pressed us to allow the decision on the method to be taken in

  1561
  advance of the legislation. It has been significantly obvious on many occasions that the Government are quite right to insist that the Bill should be judged as a whole. One portion of the Bill cannot be abstracted; the Bill must be seen as a whole. For instance, Clause 2 determines the number of seats and the distribution of the 81 seats. There have been interventions in the debate from a number of hon. Members from Scotland and Wales and from the right hon. Member for Down, South about the distribution of the seats.
  This is an important issue, which will have to be decided in Committee. The House has never had a serious opportunity to discuss the concept of a regional list system and I make no apology for bringing this issue to the House, first in the White Paper and now in the Bill. I believe that there are positive merits in such a system that have not been fully examined. I believe that it will produce a fairer result in the Assembly elections when they take place, and that is important.
  The fact that it is a different system from the first-past-the-post system that we have for General Elections is a merit, because it will emphasise that the European Assembly is not this Parliament. My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) said that a lot of the descriptions of the Bill and the language used in the debate were based on a false premise that the European Assembly is a Parliament. It is not. When we elect a European Assemblyman, he will not be a Member forming a majority for a Government. The Assembly will be a consultative and advisory institution, with limited powers, particularly on financial measures.
  We shall be adding to the democratic control of the Commission and much of the bureaucracy in Brussels.
  The right hon. Member for Down, South and a number of my hon. Friends have claimed that by directly electing the European Assembly we should be weakening democratic control. That analysis would be correct if we were dismantling the controls in this House, but we are retaining and strengthening those controls.
  Mr. Hugh Dykes: Would the Foreign Secretary remove the
  1562
  lecturing tone from his voice and confirm that the implication of his remarks a few sentences ago is that there must be time to meet the target date for elections under a first-past-the-post system?
  Dr. Owen: I was foolish to give way to the hon. Gentleman. I was dealing with the serious point of democratic control. Anyone seriously interested in this subject, whether for or against the Bill, will be concerned about democratic control. We are not reducing the democratic control of the Council of Foreign Ministers, the Ministers going from this House to Brussels, or reducing the limited powers that we have over the Commission. We are attempting to add to these controls.
  In the European Assembly yesterday, Commissioner Gundelach was questioned by British Members about the North Sea herring ban. They were able to exercise the democratic control over the Commissioner that we in this House are unable to exercise. It has been claimed that this power is insufficient. I am not claiming that the powers of the Assembly are strong. What is being decided in the Bill is a modest advance in attempting to achieve some increase in the control of the bureaucracy in Europe. [Interruption.]
  Mr. Deputy Speaker: Order. We shall make no progress unless the Foreign Secretary is allowed to continue with his speech.
  Dr. Owen: The issue behind the Bill is important. Direct elections will be a modest but important addition to the strengthening and development of the EEC, but I do not pretend that the mere passage of the Bill or the mere introduction of direct elections will make a dramatic change in the development of Europe.
  I know that some of my hon. Friends are deeply concerned about the threat of federalism. They believe that because of the argument of legitimacy given to members of the European Assembly by direct elections, there will be an increase in the powers of the Assembly. There will be no increase in the powers of the European Assembly unless they are voted for in this House.
  My hon. Friend the Member for Peni-stone (Mr. Mendelson) referred to the decision of the French Parliament in

  1563
  relation to its ratification Bill, which is now law, which provides that any modification of the existing powers of the Assembly which have not been ratified and if necessary incorporated in a revision of the French constitution should have no effect on France, and the same shall apply to any act of the Assembly which without involving any explicit modifications of those powers would go beyond them in practice.
  The fact is that the French, who have a simple majority system for their national elections, though done in two stages, have introduced a form of proportional representation for the European Assembly. They have made certain that there will be no increases in the power of the European Assembly unless specific provision is made for that in the constitution. We have no written constitution. The only way in which we can extend the powers of the European Assembly will be when such a proposal comes before this House specifically, and it will be for this House to control the exercise of those powers—
  Mr. Alexander Fletcher Mr. Alexander Fletcher rose—
  Dr. Owen: I will not give way. I have deliberately kept my speech to 20 minutes in order to allow more Back-Benchers to participate in the debate.
  Some of my hon. and right hon. Friends are concerned that we shall be making a step towards federalism. I cannot make it clearer than I did in the speech when I was describing the White Paper, that this Government do not believe in a federalist Europe. This Government will not allow an extension of powers in a federalist direction for the European Community. We believe in playing a full part as members of the European Community. In this case we accept the obligation to use our best endeavours to introduce a system of direct elections which would apply across the Community as a whole. We will honour that obligation. We will use our best endeavours
  to meet the target date, but we cannot commit the House to constitutional reform. We can only attempt to get this legislation through.
  It may be that in the last few years this House has reached the stage where it cannot get constitutional legislation through without some form of timetable motion. I believe that that would be an undesirable event. Equally, however, we cannot have a situation in which the Government can never get a constitutional Bill through because of filibustering and an inability to reach constitutional reform.
  The House must strike a fair balance between giving enough time to consider seriously these important issues, but also to allow the possibility of constitutional reform to be enacted in a reasonable period of time. I trust that when the Bill comes before the House it will be treated in that way both by those who oppose it as well as those who are in favour.
  The Bill gives the House an opportunity to make an important decision on the method of election. I recommend it to the House in principle, in favour of direct elections, and I recommend that when the time comes we should have the regional list system as offering the fairest way of achieving representation in the European Assembly which will represent the views of this country as a whole.
  Mr. Alexander Fletcher Mr. Alexander Fletcher rose—
  The Parliamentary Secretary to the Treasury (Mr. Michael Cocks)The Parliamentary Secretary to the Treasury (Mr. Michael Cocks) rose in his place and claimed to move, That the Question be now put.
  Question, That the Question be now put, put and agreed to.
  Question put accordingly, That the Bill be now read a Second time: —
  The House divided:Ayes 394, Noes 147.

  Division No. 189]

  AYES

  10.01 p.m.

  Abse, Leo

  Bagier, Gordon A. T.

  Biggs-Davison, John

  Adley, Robert

  Bain, Mrs Margaret

  Bishop, Rt Hon Edward

  Alison, Michael

  Baker, Kenneth

  Blaker, Peter

  Amery, Rt Hon Julian

  Banks, Robert

  Blenkinsop, Arthur

  Anderson, Donald

  Barnett, Rt Hon Joel (Heywood)

  Boolhroyd, Miss Betty

  Archer, Rt Hon Peter

  Bates, All

  Boscawen, Hon Robert

  Armstrong, Ernest

  Beith, A. J.

  Bottomley, Rt Hon Arthur

  Arnold, Tom

  Bennett, Sir Frederic (Torbay)

  Bottomley, Peter

  Ashley, Jack

  Bennett, Dr Reginald (Fareham)

  Bowden, A. (Brighton, Kemptown)

  Atkins, Rt Hon H. (Spelthorne)

  Benyon, W.

  Boyden, James (Bisn Auck)

  Awdry, Daniel

  Berry, Hon Anthony

  Boyson, Dr Rhodes (Brent)

  Bradley, Tom

  Gilmour, Sir John (East Fife)

  Lawson, Nigel

  Braine, Sir Bernard

  Ginsburg, David

  Le Merchant, Spencer

  Bray, Dr Jeremy

  Glyn, Dr Alan

  Lester, Jim (Beeston)

  Brittan, Leon

  Godber, Rt Hon Joseph

  Lever, Rt Hon Harold

  Brocklebank-Fowler, C.

  Golding, John

  Lipton, Marcus

  Brooke, Peter

  Goodhart, Philip

  Lloyd, Ian

  Brolherton, Michael

  Goodhew, Victor

  Lomas, Kenneth

  Brown, Sir Edward (Bath)

  Goodlad, Alastair

  Loveridge, John

  Brown, Hugh D. (Provan)

  Gorst, John

  Luard, Evan

  Brown, Robert C. (Newcastle W)

  Gourlay, Harry

  Luce, Richard

  Brown, Ronald (Hackney S)

  Gower, Sir Raymond (Barry)

  Lyon, Alexander (York)

  Buchanan, Richard

  Grant, Anthony (Harrow C)

  Lyons, Edward (Bradford W)

  Buchanan-Smith, Alick

  Grant, John (Islington C)

  Mabon, Rt Hon Dr J Dickson

  Buck, Antony

  Gray, Hamish

  MacCormick, lain

  Bulmer, Esmond

  Grieve, Percy

  McCrindle Robert

  Burden, F. A.

  Griffiths, Eldon

  Macfarlane, Neil

  Butler, Adam (Bosworth)

  Grimond, Rt Hon J.

  MacFarquhar, Roderick

  Callaghan, Rt Hon J. (Cardiff SE)

  Grist, Ian

  MacGregor, John

  Campbell, Ian

  Grylls, Michael

  McGuire, Michael (Ince)

  Cant, R. B.

  Hall-Davis, A. G. F.

  MacKay, Andrew James

  Carter, Ray

  Hamilton, Michael (Salisbury)

  MacKenzie, Rt Hon Gregor

  Cartwright, John

  Hamilton, W. W. (Central Fife)

  Maclennan, Robert

  Chalker, Mrs Lynda

  Hampson, Dr Keith

  Macmillan, Rt Hon M. (Farnham)

  Channon, Paul

  Hannam, John

  McNair-Wilson, P. (New Forest)

  Churchill, W. S.

  Hardy, Peter

  Madel, David

  Clark, William (Croydon S)

  Harrison, Col Sir Harwood (tye)

  Magee, Bryan

  Clarke, Kenneth (Rushcliffe)

  Harvie Anderson, Rt Hon Miss

  Mallalieu, J. p. W.

  Clegg, Walter

  Hattersley, Rt Hon Roy

  Marks, Kenneth

  Cocks, Rt Hon Michael

  Havers, Rt Hon Sir Michael

  Marshall, Dr Edmund (Goole)

  Cohen, Stanley

  Hawkins, Paul

  Marshall, Michael (Arundel)

  Coleman, Donald

  Hayhoe, Barney

  Mason, Rt Hon Roy

  Cooke, Robert (Bristol W)

  Hayman, Mrs Helene

  Mates, Michael

  Corbett, Robin

  Healey, Rt Hon Denis

  Mather, Carol

  Cordle, John H.

  Heath, Rt Hon Edward

  Maude, Angus

  Corrie, John

  Henderson, Douglas

  Maudling. Rt Hon Reginald

  Costain, A. P.

  Heseltine, Michael

  Mawby, Ray

  Crawshaw, Richard

  Hicks, Robert

  Mayhew, Patrick

  Critchley, Julian

  Higgins, Terence L.

  Meyer, Sir Anthony

  Cronin, John

  Hodgson, Robin

  Miller, Hal (Bromsgrove)

  Crouch, David

  Holland, Philip

  Mills, Peter

  Crowder, F. P.

  Hooson, Emlyn

  Miscampbell, Norman

  Cunningham, Dr J. (Whiteh)

  Horam, John

  Mitchell, David (Basingstoke)

  Davies, Ifor (Gower)

  Hordern, Peter

  Montgomery, Fergus

  Davies, Rt Hon J. (Knutsford)

  Howe, Rt Hon Sir Geoffrey

  Moonman, Eric

  Dean, Paul (N Somerset)

  Howell, David (Guildford)

  Moore, John (Croydon C)

  de Freitas, Rt Hon Sir Geoffrey

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

  Morgan, Geraint

  Dell, Rt Hon Edmund

  Howell, Ralph (North Norfolk)

  Morgan-Giles, Rear-Admiral

  Dodsworth, Geoffrey

  Howells, Geraint (Cardigan)

  Morris, Rt Hon J. (Aberavon)

  Douglas-Hamilton, Lord James

  Hughes, Rt Hon C. (Anglesey)

  Morris, Michael (Northampton S)

  Douglas-Mann, Bruce

  Hunt, David (Wirral)

  Morrison, Charles (Devizes)

  Duffy, A. E. P.

  Hunt, John (Bromley)

  Morrison, Hon Peter (Chester)

  Dunn, James A.

  Hurd, Douglas

  Movie, Roland

  Dunnett, Jack

  Irving, Charles (Cheltenham)

  Mulley, Rt Hon Frederick

  Durant, Tony

  Irving, Rt Hon S. (Dartford)

  Neave, Airey

  Dykes, Hugh

  Jackson, Colin (Brighouse)

  Neubert, Michael

  Eden, Rt Hon Sir John

  James, David

  Newton, Tony

  Edwards, Nicholas (Pembroke)

  Janner, Grevllle

  Normanton, Tom

  Elliott, Sir William

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

  Nott, John

  Ellis, Tom (Wrexham)

  Jessel, Toby

  Oakes, Gordon

  Emery, Peter

  John, Brynmor

  Ogden, Eric

  English, Michael

  Johnson, James (Hull West)

  Onslow, Cranley

  Ennals, David

  Johnson, Walter (Derby S)

  Oppenheim, Mrs Sally

  Ewing, Mrs Winifred (Moray)

  Johnson Smith, G. (E Grinstead)

  Osborn, John

  Eyre, Reginald

  Jones, Alec (Rhondda)

  Owen, Rt Hon Dr David

  Falrbalrn, Nicholas

  Jones, Arthur (Daventry)

  Padley, Walter

  Fairgrieve, Russell

  Jones, Barry (East Flint)

  Page, John (Harrow West)

  Faulds, Andrew

  Jopling, Michael

  Page, Rt Hon R. Graham (Crosby)

  Fell, Anthony

  Joseph, Rt Hon Sir Keith

  page, Richard (Workington)

  Finsberg, Geoffrey

  Judd, Frank

  Palmer, Arthur

  Fisher, Sir Nigel

  Kaberry, Sir Donald

  Pardoe, John

  Fitt, Gerard (Belfast W)

  Kaufman, Gerald

  Parker, John

  Fletcher, Alex (Edinburgh, N)

  Kellett-Bowman, Mrr blaine

  Parkinson, Cecil

  Fletcher-Cooke, Charles

  Kershaw, Anthony

  Pattie, Geoffrey

  Fookes, Miss Janet

  Kilfedder, James

  Penhaligon, David

  Ford, Ben

  Kimball, Marcus

  Percival, Ian

  Forman, Nigel

  King, Evelyn (South Dorset)

  Perry, Ernest

  Fowler, Gerald (The Wrekin)

  King, Tom (Bridgwater)

  Peyton, Rt Hon John

  Fowler, Norman (Sutton C'f'd)

  Kitson, Sir Timothy

  Phipps, Dr Colin

  Fox, Marcus

  Knight, Mrs Jill

  Pink, R. Bonner

  Freud, Clement

  Knox, David

  Prentice, Rt Hon Reg

  Galbralth, Hon. T. G. D.

  Lamborn, Harry

  Price, William (Rugby)

  Gardiner, George (Reigate)

  Lamont, Norman

  Prior, Rt Hon James

  Gardner, Edward (S. Fylde)

  Langford-Holt, Sir John

  Pym, Rt Hon Francis

  George, Bruce

  Latham, Michael (Melton)

  Radice, Giles

  Gilmour, Rt Hon Sir Ian (Chesham)

  Lawrence, Ivan

  Raison, Timothy

  1566

  1567

  Ralhbone, Tim

  Sinclair, Sir George

  Varley, Rt Hon Eric G.

  Rawlinson, Rt Hon Sir Peter

  Skeel, T. H. H.

  Vaughan, Dr Gerard

  Rees, Rt Hon Merlyn (Leeds S)

  Small, William

  Wainwright, Richard (Colne V)

  Rees, Peter (Dover & Deal)

  Smith, Cyril (Rochdale)

  Wakeham, John

  Rees-Davies, W. R.

  Smith, Dudley (Warwick)

  Walder, David (Clitheroe)

  Reid, George

  Smith, John (N Lanarkshire)

  Walker, Rt Hon P. (Worcester)

  Renton, Rt Hon Sir D. (Hunts)

  Smith, Timothy John (Ashfield)

  Walker, Terry (Kingswood)

  Renton, Tim (Mid-Sussex)

  Speed, Keith

  Walker-Smith, Rt Hon Sir Derek

  Rhodes James, R.

  Spence, John

  Wall, Patrick

  Rhys Williams, Sir Brandon

  Spicer, Jim (W Dorset)

  Walters, Dennis

  Ridley, Hon Nicholas

  Spicer, Michael (S Worcester)

  Ward, Michael

  Ridsdale, Julian

  Sproat, lain

  Warren, Kenneth

  Rifkind, Malcolm

  Stainton, Keith

  Watkins, David

  Rippon, Rt Hon Geoffrey

  Stanbrook, Ivor

  Watt, Hamish

  Roberts, Michael (Cardiff NW)

  Stanley, John

  Weatherill, Bernard

  Roberts, Wyn (Conway)

  Steel, Rt Hon David

  Weitzman, David

  Rodgers, Sir John (Sevenoaks)

  Steen, Anthony (Wavertree)

  Wells, John

  Rodgers, Rt Hon William (Stockton)

  Stewart, Ian (Hitchin)

  Welsh, Andrew

  Roper, John

  Stewart, Rt Hon M. (Fulham)

  Whitehead, Phillip

  Rose, Paul B.

  Stott, Roger

  Whitelaw, Rt Hon William

  Ross, Stephen (Isle of Wight)

  Stradling Thomas, J.

  Wiggin, Jerry

  Rossi, Hugh (Hornsey)

  Strauss, Rt Hon G. R.

  Willey, Rt Hon Frederick

  Rost, Peter (SE Derbyshire)

  Summerskill, Hon Dr Shirley

  Williams, Rt Hon Alan (Swansea W)

  Royle, Sir Anthony

  Tapsell, Peter

  Williams, Alan Lee (Hornch'ch)

  Sainsbury, Tim

  Taylor, Teddy (Cathcart)

  Williams, Rt Hon Shirley (Hertford)

  St. John-Stevas, Norman

  Temple-Morris, Peter

  Williams, Sir Thomas (Warrington)

  Sandelson, Neville

  Thatcher, Rt Hon Margaret

  Wilson, Gordon (Dundee E)

  Scott, Nicholas

  Thomas, Jeffrey (Abertillery)

  Wilson, Rt Hon Sir Harold (Huyton)

  Scott-Hopkins, James

  Thomas, Mike (Newcastle E)

  Wood, Rt Hon Richard

  Shaw, Giles (Pudsey)

  Thompson, George

  Wrigglesworth, Ian

  Sheldon, Rt Hon Robert

  Thorpe, Rt Hon Jeremy (N Devon)

  Young, Sir G. (Ealing, Acton)

  Shelton, William (Streatham)

  Tinn, James

  Younger, Hon George

  Shepherd, Colin

  Tomlinson, John

  Shersby, Michael

  Tomney, Frank

  TELLERS FOR THE AYES:

  Silkin, Rt Hon S. C. (Dulwich)

  Townsend, Cyril D.

  Mr. Frank R. White and

  Silvester, Fred

  Trotter, Neville

  Mr. Ted Graham.

  Sims, Roger

  van Straubenzee, W. R.

  NOES

  Allaun, Frank

  Foot, Rt Hon Michael

  Mikardo, Ian

  Ashton, Joe

  Forrester, John

  Miller, Dr M. S. (E Kilbrlde)

  Atkins, Ronald (Preston N)

  Fraser, Rt Hon H. (Stafford & St)

  Miller, Mrs Millie (Ilford N)

  Atkinson, Norman

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

  Mitchell, Austin Vernon (Grimsby)

  Barnett, Guy (Greenwich)

  Freeson, Reginald

  Moate, Roger

  Bell, Ronald

  Fry, Peter

  Molloy, William

  Benn, Rt Hon Anthony (Wedgwood)

  Garrett, John (Norwich S)

  Molyneaux, James

  Bennett, Andrew (Stockport N)

  Garrett, W. E. (Wallsend)

  More, Jasper (Ludlow)

  Bidwell, Sydney

  Gilbert, Dr John

  Morris, Alfred (Wythenshawe)

  Biffen, John

  Grocott, Bruce

  Newens, Stanley

  Body, Richard

  Hamilton, James (Bothwell)

  Noble, Mike

  Booth, Rt Hon Albert

  Harrison, Rt Hon Walter

  O'Halloran, Michael

  Bradford, Rev Robert

  Hatton, Frank

  Orbach, Maurice

  Buchan, Norman

  Heffer, Eric S.

  Orme, Rt Hon Stanley

  Budgen, Nick

  Hooley, Frank

  Ovenden, John

  Butler, Mrs Joyce (Wood Green)

  Hoyle, Doug (Nelson)

  Park, George

  Callaghan, Jim (Middleton & P)

  Huckfield, Les

  Pavitt, Laurie

  Canavan, Dennis

  Hughes, Robert (Aberdeen N)

  Pendry, Tom

  Carmichael, Neil

  Hughes, Roy (Newport)

  Powell, Rt Hon J. Enoch

  Carson, John

  Hutchison, Michael Clark

  Prescott, John

  Carter-Jones, Lewis

  Jackson, Miss Margaret (Lincoln)

  Richardson, Miss Jo

  Castle, Rt Hon. Barbara

  Jeger, Mrs Lena

  Roberts, Gwilym (Cannock)

  Clark, Alan (Plymouth, Sutton)

  Jenkins, Hugh (Putney)

  Robinson, Geoffrey

  Clemitson, Ivor

  Kelley, Richard

  Roderick, Caerwyn

  Colquhoun, Ms Maureen

  Kilroy-Silk, Robert

  Rodgers, George (Chorley)

  Cook, Robin F. (Edin C)

  Kinnock, Neil

  Rooker, J. W.

  Cowans, Harry

  Lamble, David

  Ross, Rt Hon W. (Kilmarnock)

  Cox, Thomas (Tooting)

  Lamond, James

  Ross, William (Londonderry)

  Craigen, Jim (Marvhill)

  Latham, Arthur (Paddlngton)

  Sedgemore, Brian

  Crowther, Stan (Rotherham)

  Leadbitter, Ted

  Shaw, Arnold (llford South)

  Cryer, Bob

  Lee, John

  Shore, Rt Hon Peter

  Cunningham, G. (Islington S)

  Lestor, Miss Joan (Eton & Slough)

  Short, Mrs Renée (Wolv NE)

  Davidson, Arthur

  Litterick, Tom

  Silkin, Rt Hon John (Deptford)

  Davies, Bryan (Enfield N)

  Loyden, Eddie

  Sillars, James

  Davis, Clinton (Hackney C)

  McCartney, Hugh

  Silverman, Julius

  Deakins, Eric

  McCusker, H.

  Skinner, Dennis

  Dean, Joseph (Leeds West)

  McDonald, Dr Oonagh

  Snape, Peter

  Dormand, J. D.

  McElhone, Frank

  Spearing, Nigel

  Eadie, Alex

  McMillan, Tom (Glasgow C)

  Spriggs, Leslie

  Edge, Geoff

  McNamara, Kevin

  Stallard, A. W.

  Ellis, John (Brigg & Scun)

  Marshall, Jim (Leicester S)

  Stoddart, David

  Evans, Fred (Caerphilly)

  Marten, Neil

  Stokes, John

  Evans, loan (Aberdare)

  Maxwell-Hyslop, Robin

  Taylor, Mrs Ann (Bolton W)

  Ewing, Harry (Stirling)

  Maynard, Miss Joan

  Taylor, R. (Croydon NW)

  Flannery, Martin

  Meacher, Michael

  Thomas, Dafydd (Merioneth)

  Fletcher, Ted (Darlington)

  Mendelson, John

  Thomas, Ron (Bristol NW)

  1568

  1569

  Thorne, Stan (Preston South)

  Wilson, William (Coventry SE)

  Torney, Tom

  Winterton, Nicholas

  TELLERS FOR THE NOES:

  Walker, Harold (Doncaster)

  Wise, Mrs Audrey

  Mr. Max Madden and

  Watkinson, John

  Young, David (Bolton E)

  Mr. Bryan Gould.

  Wellbeloved, James

  Question accordingly agreed to.
  Bill read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Snape.]
  Committee tomorrow.

  BUSINESS OF THE HOUSE
  Ordered,
  That the Motion relating to Members' Office, Secretarial and Research Allowance and the Motion relating to Members' Salaries and Pensions may be proceeded with at this day's sitting, though opposed, until any hour.—[Mr. Snape.]

  EUROPEAN ASSEMBLY ELECTIONS [Money]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to make provision for and in connection with the election of representatives to the Assembly of the European Communities, it is expedient to authorise—

  (a) the payment out of the Consolidated Fund of the reasonable charges of returning officers in connection with Assembly elections;

  (b) any increase attributable to that Act in the sums payable under any other enactment out of that Fund or out of money provided by Parliament; and

  (c) the payment into the Consolidated Fund of any sums falling to be so paid by virtue of that Act.—[Mr. Robert Sheldon.]

  MEMBERS' ALLOWANCES, SALARIES AND PENSIONS
  10.20 p.m.
  Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Before calling the Lord President of the Council to move the next motion, I should inform the House that I understand he would wish to move it in a slightly different form by substituting, for the existing words of sub-paragraph (c), the words
  "on research undertaken in the proper performance of those duties".
  Mr. Speaker is satisfied that this does not extend the scope—[Interruption.]
  Mr. George Cunningham: On a point of order, Mr. Deputy Speaker. Could we wait a minute until the noise has subsided?
  Mr. Deputy Speaker: Order. Perhaps it would be wise if I were to start at the beginning again.
  Before calling the Lord President of the Council to move the next motion—
  Mr. Robin Maxwell-Hyslop: Which motion?
  Mr. Deputy Speaker: It is the motion which appears as Item No. 3.
  I understand that the Lord President would wish to move it in a slightly different form by substituting, for the existing words of sub-paragraph (c), the words
  "on research undertaken in the proper performance of those duties".
  Mr. Speaker is satisfied that this does not extend the scope of the original notice and that it is proper for the motion to be moved in the altered form.
  I think that it would be for the convenience of the House for there to be a single debate on Items 3, 4 and 5 on the Order Paper, together with the amendments to Item 4 in the names of the hon. Members for Nottingham, West (Mr. English) and Islington, South and Finsbury (Mr. Cunningham). After Item 3 is disposed of, I shall ask the Minister to move Item 4 formally, at which stage the amendments which have been selected can formally be moved by the hon. Members concerned.
  1572
  In this connection, hon. Members will observe that two of the selected amendments are in the name of the hon. Member for Nottingham, West. In normal circumstances, an hon. Member cannot move more than one amendment to a single motion because it involves speaking more than once. As hon. Members will know from page 391 of Erskine May", however, this rule is relaxed in the case of certain types of motion relating to procedure. Although this present motion does not fall exactly within the categories described, Mr. Speaker regards it as cognate to them and has, therefore, informed me that he is prepared to allow the hon. Member to move both of his amendments which have been selected, should he wish to do so. When Item 4 and the amendments have been disposed of, I shall then call the Minister to move Item 5 formally.
  10.24 p.m.
  Mr. Francis Pym: On a point of order, Mr. Deputy Speaker. That was a very long statement as a preamble to this debate. It began by your advice to the House, and it was the first news I had received, and, I suspect, that the House will have received, of the fact that the motion on the Order Paper is to be amended in some kind of manuscript form by the Government.
  We have had no notice of this amendment. It may be an amendment which may be perfectly in order and which does not alter fundamentally the sense of what is proposed. Nevertheless, without notice having been given to the House, I should have thought, as a matter of procedure, that right hon. and hon. Members would take a great deal of exception to it.
  If I may say so, Mr. Deputy Speaker, you subsequently went on to describe the nature of the debate and how everything might be discussed together, and how various matters might or might not be cognate to something else, in a way, if I may say so, that is most extraordinarily unusual.
  Whereas these motions and amendments are important matters and are directly relevant to Members of Parliament as such, nevertheless they are not of such a character or of such urgency that the House of Commons should be required immediately to proceed with them.

  1573
  We have had no explanation of any kind whatsoever. I certainly have not. I do not know whether the Government have made any endeavour to give any explanation to the official Opposition or to any other party or right hon. or hon. Member of the House. In the light of what you have said, Mr. Deputy Speaker, I am bound to say that I take the view that it would, therefore, be perfectly in order and correct in the circumstances, and of no disadvantage to anybody, not to proceed with these items.
  Let the motion be put down on another day—next week or the week after, it matters not which—in a form which is correct and accurate. If that procedure were acceped, Mr. Deputy Speaker, it would enable the House to consider the ruling that you have just given and the ruling that you have conveyed from Mr. Speaker. Some of us would like to see what that ruling is before we proceed. In making this request and suggestion, I do not think that it is unreasonable or is preventing Government business from getting ahead. It is perfectly possible for the Government to take this matter on another night and in another form when we have had time to consider what you have said.
  Several Hon. Members Several Hon. Members rose—
  Mr. Deputy Speaker: I think it is better to deal with one point of order at a time. The only manuscript amendment, if I may describe it as such, covers 10 words. If it will be of any help to the House, I will read the words again: in sub-paragraph (c), the words proposed are
  "on research undertaken in the proper performance of those duties".
  That is a matter which has been considered by Mr. Speaker, and Mr. Speaker has asked me to convey to the House that he is satisfied that there is no reason why that should not be proceeded with.
  Mr. Pym: I am sorry to intervene again, Mr. Deputy Speaker, but I feel that even if one word is added to what appears on the Order Paper there needs to be a very good explanation of why the House should proceed. Whereas in relation to some motions and situations it might be justified and the House might agree that in all the circumstances it would be necessary, right and appropriate
  1574
  to proceed, in the circumstances of this particular matter there is no need to proceed with it. You have said, Mr. Deputy Speaker, that the amendment covers 10 words, and you cannot deny, Sir, that there were other aspects to your proposals for the debate which were slightly complicated, to say the least, and right hon. and hon. Members might wish to consider them.
  Whereas I in no sense challenge what you have said, Mr. Deputy Speaker, or what Mr. Speaker has said to the House, nevertheless I think that when 10 words have to be altered without notice to anybody this is not a correct, proper or parliamentary manner in which to proceed. In view of the fact that the Government business will not be lost in any way, and that nobody will be disadvantaged by a postponement of a week, or whatever it might be, I respectfully suggest that that would be the right decision for the House to come to.
  Several Hon Members Several Hon Members rose—
  Mr. Deputy Speaker: Mr. Michael English.
  Mr. Michael English: The change, Mr. Deputy Speaker is of some importance in that the original motion said "employing a research assistant" and now it does not. There is a difference between recruiting a person for a fee and actually employing that person, and doing the work oneself.
  In so far as your ruling concerns myself, Mr. Deputy Speaker, I am grateful to Mr. Speaker for his ruling, because enough hon. Members support my amendments to enable them to move the amendments that stand in my name, although I could not have spoken more than once. I assure Mr. Speaker, and yourself, Mr. Deputy Speaker, and hon. Members that I had not intended to speak more than once. I should not have attempted to do so. I believe that Mr. Speaker's ruling is a simplifying one and saves greater complexities in procedure than would otherwise be necessary.
  The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): On a point of order, Mr. Deputy Speaker. I am grateful to you and to Mr. Speaker for the ruling

  1575
  that has been given on this matter and the manuscript amendment which we have submitted. I think that when the House has examined the manuscript amendment it will realise that it is a minor matter. [Interruption.] If hon. Members will listen to me, I repeat that those who examined it will discover that is is a minor matter.
  However, as the right hon. Member for Cambridgeshire (Mr. Pym) says that he thinks it is causing difficulty for hon. Members, and if, as he says, he would prefer that the matter should proceed on another occasion, I am prepared to concur with his wishes. I hope the House will understand that we shall have to seek time—no doubt at approximately this time of night—to get the matter through. It is the Government's intention that it should pass through the House. We believe that this is fair to all hon. Members. However, in view of the representations of the right hon. Gentleman and the apparent support of some hon. Members, I am prepared not to proceed with the matter now.
  Mr. Pym: It is only right and proper for me to respond at once to the right hon. Gentleman's statement. He has appreciated quickly and immediately what our feelings are and what the situation is. I think that he has taken entirely the correct decision. I make no comment about the extent or nature of the amendment, but in terms of House of Commons procedure the right hon. Gentleman has taken the correct course and I am grateful to him.
  Mr. Maxwell-Hyslop: On a point of order, Mr. Deputy Speaker. I have not before encountered a situation in which the Chair merely reads out how someone would like a motion on the Order Paper to appear instead of reading out the amendment in the form of leaving out whatever has to be left out and inserting whatever has to be inserted. Is not this an astonishing way of dealing with our proceedings?
  Mr. Deputy Speaker: If we had proceeded, the hon. Gentleman would have found that the matter had been made perfectly clear had it been moved in its amended form.
  Mr. Ronald Bell: Further to that point of order, Mr. Deputy
  1576
  Speaker. Is it really possible for a motion, of which notice must be given, to be moved in a different form? It is quite another matter if a manuscript amendment is moved as that would be amply covered by precedent. Surely it cannot be the case that an hon. Member gives notice of a motion only to say that he will move it in another form, with Mr. Speaker concurring in that.
  Mr. George Cunningham: In view of the objections which have been raised to the proposal that my right hon. Friend the Lord President has brought forward, I feel obliged to say, Mr. Deputy Speaker, that the responsibility for what hon. Members are objecting to probably rests with me rather than with my right hon. Friend. My right hon. Friend knows, but others do not, that the suggestion that the change of wording should take place by some means or other was mine. I rather assumed that it would by means of an amendment. I imagined that it would be an improvement in the language that was required, not a change of substance but a change that could have avoided misunderstanding about the meaning at some later stage. I did not envisage a substantive amendment. That being so, and given that a short time ago the House voted to proceed with the business after 10 o'clock although opposed, surely it is more sensible to proceed with it, given that the only people who have directed their minds to this change of wording know that it has no substantive content. At least, I ask hon. Members to acquit the Lord President on this occasion of any discourtesy to the House and to direct their criticism at me.
  Mr. Eric Ogden: Further to that point of order, Mr. Deputy Speaker. Will you clarify the position? I understand you suggested that we should consider Items 3, 4 and 5 and any amendments thereto together and vote on them separately. After that, there was an objection from the right hon. Member for Cambridgeshire (Mr. Pym) because 10 words in sub-paragraph (c) of Item 3 were changed without prior notice to him.
  I suggest that even if the right hon. Gentleman's objections are valid—in my opinion they are not—there would seem to be no reason why we should abandon Items 4 and 5 because of possible changes

  1577
  to Item 3. Even if the changes in Item 3 are not acceptable to the right hon. Gentleman or his hon. Friends, or even to some of my hon. Friends, I do not understand, when there are more hon. Members in the House than usual, why we should abandon the whole of the proceedings in order to support, complement or implement an understanding between the two Front Benches.
  This of all subjects is not a matter only for the two Front Benches. Although we may not be able to proceed with Item 3 because of a procedural change, I do not see why we cannot go ahead with Items 4 and 5 tonight.
  Mr. Foot: Further to that point of order, Mr. Deputy Speaker. I appreciate the way in which my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) has approached the matter, but I do not think that it would be for the convenience of the House to proceed with some of the motions and not with all of them. That would lead to difficulty. I assure my hon. Friend, that of course it is the intention of the Government to present these motions to the House at an early date. We have every intention of securing the support of the House for these proposals because they are of importance to Members of Parliament generally.
  As I have said, however, I have not moved any of these motions and I have indicated that I do not intend to move them. Even my hon. Friends in their most persuasive mood will not now persuade me to change that view. I suggest that the best course is for the House to meet to deal with them on another occasion.

  WHOOPING-COUGH VACCINE
  [Motion made, and Question proposed, That this House do now adjourn. —[Mr. Snape.]
  10.38 p.m.
  Miss Joan Lestor: My hon. Friend the Member for Ilford, North (Mrs. Miller) has asked to have a few minutes at the end of my speech to contribute towards this debate. I have agreed that she should do so.
  The purpose of bringing forward some of the dangers in relation to vaccination against whoopinglcough is geared to what was said in the House by my right hon. Friend the Secretary of State for Social Services when he was dealing with compensation for vaccine-damaged children.
  All of us in this House were pleased that the Government saw their way clear to compensating at least those children who had suffered brain damage as a result of vaccination, but I do not think that anyone will ever be able to establish the number of children who suffered such brain damage, simply because vaccination has been used in such a large number of areas and many children have suffered brain damage since 1957, some of it possibly caused by the vaccination and some of it arising from other causes. The whole area of compensation and identifying the cause of brain damage is a difficult one to establish, to say the least.
  The most important outcome of my right hon. Friend's deliberations occurred when he said that he had evaluated very thoroughly all the data which had come forward about whooping-cough vaccine and that he had not hesitation in urging parents to have their children vaccinated. He added that, if they did not, the likelihood was that we would have an epidemic of whooping-cough.
  I do not know the basis on which those statements could be made. I tabled a Question to my right hon. Friend soon after those statements inquiring about the number of reported cases of alleged vaccine-damaged children which had been sent to the committee set up for this purpose, and what were the results of the committee's examination of those cases. My right hon. Friend replied that a large number of cases had been sent in from various sources, that the committee's

  1579
  examination of them would take a considerable time, and that no conclusions were yet available.
  If that is true—and I do not doubt it—I fail to understand why my right hon. Friend could be so categorical in his assertion that the risk of brain damage resulting from vaccination was so slight that he had no hesitation in making the recommendation that he did.
  To go on from there, it is clear that the medical profession is itself divided about vaccination. Over many years, there have been schools of thought in the country, including naturepaths, homeopaths and others, with doubts about the wisdom of vaccination. But I am not talking about those people. I am talking about people in orthodox medicine who themselves are arguing, first, about the efficacy of whooping-cough vaccine and, secondly, about the dangers attributed to it.
  Therefore, I am in duty bound to ask my hon. Friend what attention has been paid to the assertions which have been made by Professor Gordon Stewart, from Glasgow, and Dr. John Wilson, of Great Ormond Street, who, between them, have sent details to the committee of more than 300 cases of alleged brain-damaged children as a result of the whooping-cough vaccine, none of which has yet been investigated. The same is true of the 180-odd cases which have been sent by the Committee of Brain-Damaged Children in connection with whooping-cough vaccine. What attention has been paid to the research which has been done, especially by the two gentlemen whom I have named, and what weight is given to it?
  It is surprising that the Department should publish its findings and be so categorical in its assurances to parents that it is safe to have their children vaccinated against whooping-cough and that we would have an epidemic if they did not, when much of the evidence which has been put forward as the basis for a great many claims for compensation has not been evaluated in any way that I can see.
  I am about the last person on earth to want to do anything not to protect children from the worst effects of any disease. But, whichever way one looks at the statistics available, it is clear that
  1580
  before a vaccine against whooping-cough was in common use cases of whooping-cough were declining in number all the time. I would have expected this. Improved standards of public health and sanitation have resulted in a higher standard of living for our society, and we advocate them strongly in order to safeguard people against disease. But I find it hard to establish what part vaccination has played in this process. There is no doubt that whooping-cough was on the decline before the vaccine was in constant use. The number of cases fell dramatically between 1930 and 1957.
  Moreover, according to the admittedly small amount of research done on this aspect, 70 per cent of people—mostly children and young adults—who have been found to be introducers of whooping-cough to others had been vaccinated against it. If this is true—and the evidence has been quoted by Professor Stewart and Dr. Wilson—I think that the DHSS has rather overstated its case, to put it mildly, in its claims for the usefulness of vaccine.
  Moreover, one thing stands out very clearly. I can find no recorded case of a child who has had whooping-cough suffering any brain damage. But there are many cases of children who have been vaccinated suffering from brain damage. Whether vaccination against whooping-cough is as effective as the DHSS and others argue is open to doubt.
  I am basing my argument not so much on that as on the large number of cases in which people working in this field have done their own research and sifted through the cases available to them and have put forward the results to the committee dealing with the efficacy of vaccination and immunisation. Without examination of those cases the DHSS has advocated that parents should get their children immunised against whooping-cough. Moreover, it has asserted that if they do not do so there is likely to be an epidemic. I am not aware of any evidence of this. There does not seem to be any great correlation between the rise and fall in vaccination and the incidence of whooping-cough. As I have pointed out, there was a steady decline in the disease before the vaccine was in general use. That is explained as much by improvements in health and living standards as by anything else.

  1581
  My final point is that there seems to be a great deal of doubt, on the evidence produced, that babies and toddlers are effectively vaccinated against whooping-cough, yet they are the most likely to get it. Evidence bears that out. The efficacy of vaccinating babies under six months and young children has been found not to be as great, even in orthodox medicine, as in other groups. The dangers to young babies are considerable, yet we still continue to vaccinate them.
  Is it wise for the Government, who at least have had the courage and wisdom to accept partial responsibility, because of their advocacy of vaccination for whooping-cough and to pay compensation to the parents of children where it is established that this is the cause of damage, to be so outspoken and without caution in their statements that the danger is minimal and the need for vaccination is as great as it is. Without examining the large number of cases brought to their attention, they have said that the number of children identified as having brain damage is small, and the risk is small.
  10.50 p.m.
  Mrs. Millie Miller: I support my hon. Friend in her submissions to the Minister, and I should like to expand the information she has given the House relating to the decline in the incidence of virulent diseases in the last century without the aid of complex vaccines and other forms of medication. The combined death rate, from 1860 to 1965, for scarlet fever, diphtheria and whooping-cough in children up to 15 shows that nearly 90 per cent. of the total decline in the death rate over that period had occurred before the introduction of immunisation and vaccine programmes.
  My hon. Friend has already said that improved health standards and better housing and stability of population has eased the situation. Certainly relief from poverty has done a great deal towards assisting the position, with the aid of the medical profession.
  Many are worried about the record of mishaps through the administration of so-called protective measures. Many cases resulting from the administration of whooping-cough vaccine have been reported in recent years. People are turn-
  1582
  ing away in their tens of thousands from orthodox medicine treatment, including many young mothers who are afraid to subject their children to vaccination and immunisation processes because of the danger of complications.
  I know, from personal experience in recent months, the effects on me as a result of the side effects of drugs administered to me by one of our main hospitals. Those side effects were devastating and I have suffered greatly from them. I have joined the ranks of those who want to warn the Minister of the dangers of advocating chemo-therapy in any form without a most searching investigation into the question whether it is as effective or as safe as he has maintained.
  The Government should take into account the growing views of the public in this direction. They should make available facilities for those who wish to choose different methods of achieving and maintaining health. To take a case reported in the Press recently, I wonder whether the Government are being fair to those who believe in the efficacy of acupuncture, an non-orthodox treatment, in not registering those who practise it. For the past five years the Acupuncture Association has pressed for registration, but it has not been successful in achieving it.
  There are other non-orthodox treatments that are also not yet accepted by the Government and that I believe should be available to people under the National Health Service. Therefore, those who have turned away from treatment for very good reasons, flowing from the side effects and damage of many of the modern technological medicines, should be as entitled to be treated by their chosen methods as are those who are able to pay for them. I plead with the Government to consider this matter and to take into consideration the worrying figures given by my hon. Friend.
  10.48 p.m.
  The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins): I am grateful to my hon, Friend the Member for Eton and Slough (Miss Lestor) for providing this further opportunity in the debate tonight to reassure Members on both sides of the House, the medical and nursing profession, and, above

  1583
  all, the public at large, about the weight of medical opinion in favour of vaccination against whooping-cough.
  My right hon Friend the Secretary of State, on 24th June, announced the publication of the Report of the Joint Committee on Vaccination and Immunisation on this subject and its issue to all doctors and nurses involved. The committee's review of the benefits and risks of vaccination was carried out at his specific request because he was deeply sympathetic to the concern that had been expressed. I think the House will agree that the committee has responded with admirable speed and thoroughness. It makes it clear that while it will continue to review the position with the utmost care, it unanimously recommends the continued use of whooping-cough vaccine. I trust that hon. Members will welcome this conclusion, based as it is on a very thorough examination of the wealth of data available to the committee.
  My right hon. Friend has expressed the fullest confidence in the committee, and I should like to reaffirm this—at the same time expressing the hope that we can now concentrate on the vital task of rebuilding public confidence in whooping-cough vaccination and the vaccination programme generally, and so increasing the level of uptake, which has fallen to dangerously low levels in the case of some vaccines.
  First, however, I should like to stress the weight of expertise within the joint committee itself. The committee was set up in 1962 by the Central and Scottish Health Services to
  "advise Health Ministers on all medical aspects of vaccination and immunisation".
  It continually reviews the use of existing vaccines and considers the possible application of new vaccines. For example, it introduced measles and rubella vaccination on a national scale in 1968 and 1970, respectively, and in 1971 it recommended that routine smallpox vaccination was no longer necessary. Its membership, which is drawn widely from the whole of the United Kingdom, includes medical and scientific experts from every branch of medicine concerned with immunisation—hospital medicine, including paediatrics; microbiology; epidemiology; immunology; community medicine; and general practice.
  Miss Joan Lestor: Will the Minister tell me why the committee recommended that vaccination against smallpox was no longer necessary?
  Mr. Deakins: With respect, I have little time left to answer the points made in the debate. I shall write to my hon. Friend with an explanation and if my hon. Friend the Member for Ilford, North (Mrs. Miller) is interested I shall write to her also.
  The committee is thus in the best possible position not only to study all the available data from this and other countries but to know from personal experience the relative benefits and risks of vaccination. The detailed discussion of the protective efficacy of whooping-cough vaccine, which is mentioned in Chapter II, is based on the numerous studies that have been carried out here and in America. It will leave doubts in few minds about the effectiveness of the vaccine. I recommend those interested to read that section of the report in particular.
  The report goes on to discuss, fully and fairly, the arguments put forward by opponents of whooping-cough vaccination, including those mentioned by my hon. Friend the Member for Eton and Slough. The committee acknowledges that a degree of risk is involved in any vaccination but it points out that interpretation of data in this field is extremely complex, and, in its view, in offering opinions opponents of the vaccine have not always taken into account all relevant factors and data. For instance, the association of alleged neurological damage with whooping-cough vaccine has been based on retrospective study of information, some dating back a number of years.
  It is agreed by most research experts that it is often difficult to collect and examine sufficient trustworthy data from past cases and to determine whether a disability was due to vaccination or to some other cause. It has to be borne in mind that convulsions leading to neurological damage occur spontaneously and that in a few cases such convulsions will occur at or about the time of vaccination. In other words, there is an ever-present danger of making an association where the damage is in fact coincidental. The joint committee considers that retrospective information of (his kind provides no basis for a

  1585
  decision to withdraw protection that is generally agreed to be effective from what is known still to be a dangerous disease in young children. But the committee emphasises it is not fully content with the adequacy of the information available and it has set up studies in order to supply more reliable data on this aspect. It will continue to review the position in the light of new evidence. Of course, I can assure my hon. Friends that should the committee report further to the Secretary of State, and should there be any alteration in existing policy, my right hon. Friend will take appropriate action.
  It has also been claimed that the decline in whooping-cough following the introduction of vaccination on a national scale in 1957 has been due to improved socioeconomic standards. However, examination of the decline in the incidence of whooping-cough over a longer period than has been carried out by those opposed to the vaccination—and I take note of the suggestions made by my hon. Friends— indicates that the fall in whooping-cough subsequent to the introduction of vaccination was marked.
  That in rare cases there can be an association of neurological complications with the administration of whooping-cough vaccine has been accepted for some years. Normally these are mild, but occasionally they can be severe. The booklet "Immunisation against Infectious Diseases", which was drawn up by the joint committee and published in 1972, draws attention to this and emphasises the need to exclude from vaccination any child with a history of, or a tendency to, neurological defects. It is the degree of risk of adverse reactions over which opinion is divided—though the bulk of medical opinion agrees with the joint committee. The booklet's advice has been repeated in the guidance recently issued by the Chief Medical Officer on contraindications to vaccination.
  Present evidence is however, inadequate to assess the incidence of these rare complications. Much more evidence will need to be obtained before it is possible to determine satisfactorily the relationship between vaccination and neurological damage. Two main studies, recommended by the joint committee and supported by the Department, are under way.
  1586
  First, the Department of Community Medicine of the Middlesex Hospital is undertaking a national survey of encephalopathy between the ages of six months and 3 years. This is to investigate all cases of serious neurological damage occurring from 1st July 1976 in children of the appropriate age range and is being supported by paediatricians in hospitals throughout the United Kingdom. In addition, the Public Health Laboratory Service is undertaking in the North West Thames Region, a survey of all adverse reactions to all childhood vaccinations. Doctors are being encouraged to report every reaction, however small.
  As for past cases of damage alleged to be due to vaccination, my hon. Friend will be aware that the Committee on Safety of Medicines is currently in the process of studying cases collected in recent years by the Association of Parents of Vaccine-damaged Children. At the same time, the Department is encouraging and supporting research aimed at improving whooping-cough vaccine and eliminating neurotoxic elements while retaining its protective efficacy.
  My remarks would not be complete without drawing attention to my right hon. Friend's announcement in the House on 14th June. In this, he indicated the Government's acceptance in principle that there should be a scheme of payments for the benefit of those who are seriously damaged as a result of vaccination recommended by a public health authority. This applies to existing as well as new cases. We were able to make this decision in the light of the conclusion reached by the Royal Commission on Civil Liability and Compensation and conveyed in correspondence with the Prime Minister. We felt that it would be right to make this clear commitment in the exceptional circumstances of vaccine damage and we hope that it will be of great relief to the parents concerned.
  As we do not yet know the details of the recommendations that the Royal Commission will be making, the detailed provisions of the scheme cannot yet be settled, but its report is expected later this year and we shall lose no time in considering its recommendations and working out a scheme. The setting up of the scheme and arrangements for the

  1587
  submission for financial assistance will be given publicity in due course.
  Meanwhile, we are doing all we can under the present law to ease the heavy burden of families in the rare cases where serious ill-effects result. A wide range of services and benefits is available under the National Health Service, personal social services, the social security system and the Family Fund, which was extended in 1974 to help families in which there is a severely handicapped child. We are doing our best to draw the attention of all parents who may be concerned on the assistance these provide.
  To conclude, I stress that the committee rejects the view that the balance of benefits and risks of immunisation can be decided in terms of the number of neurological complications resulting from the disease and from immunisation. All the burdens of illness, the complications and the deaths from whooping-cough have to be taken into account, and not just the children who may have had brain damage. The committee supports the continued use of pertussis vaccine and, while it does not recommend selective immunisation for particular social groups, it emphasises that protection is specially necessary for children in large families.
  My right hon. Friend and I hope that the report will provide the reassurance
  1588
  needed to restore confidence in the vaccination procedures currently recommended. The whole vaccination programme has suffered in recent years from the controversy surrounding whooping-cough vaccine. In the case of some vaccinations there has been a reduction to dangerously low levels, which could lead to serious outbreaks of infectious disease. We intend to do all we can to restore the level of uptake that will provide adequate protection to the children of this country. It is their due.
  My hon. Friend the Member for Ilfora, North raised a number of points connected with non-orthodox medicine. I shall consider what she said and remind her that there was a recent Adjournment debate on homoeopathic medicine. I recommend her to read it, if she has not done so already. In half an hour that debate exposed many of these issues.
  We have not yet had an Adjournment debate on acupuncture, but I have the feeling that one may be coming along in due course. I shall be writing to both my hon. Friends on the other matter that was raised earlier.
  Question put and agreed to.
  Adjourned accordingly at six minutes past Eleven o'clock.

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Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Worcester.

FISHERY PROTECTION VESSELS
Lord BOOTHBY: 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 view of the fishery limits that must now be imposed in order to ensure the survival of the fishing industry, they are satisfied that the Royal Navy has enough fishery protection vessels to enforce them; and, if not, whether more will be laid down.
Lord WINTERBOTTOM: My Lords, in anticipation of the extension of Britain's fishery limits, orders were placed two years ago for five new vessels of the "Island" Class. These are in addition to the nine vessels of the Coastal Division of the Royal Navy's Fishery Protection Squadron and the six fishery protection vessels of the Department of Agriculture and Fisheries for Scotland, and to the vital surveillance effort regularly provided by Royal Navy Sea Devon and Royal Air Force Nimrod aircraft.
Two vessels of the "Island" Class are already undertaking operational patrols as part of the Offshore Division of the Fishery Protection Squadron; the third will undertake its first patrol in a few weeks' time, and the last two will be in service by early next year. Meanwhile, frigates are being used to make good the gap. Her Majesty's Government have no grounds for doubting the adequacy of their planned fishery protection resources, but are of course keeping the matter under constant review.
Lord BOOTHBY: My Lords, while thanking the noble Lord for his interesting but not altogether satisfactory reply, may I ask whether it is a fact that last year the Dutch caught three times their quota of
452
herring off the West Coast of Scotland, and that recently Danish vessels have been fishing for herring in an area of the North Sea which is closed? Furthermore, do Her Majesty's Government realise that the British people as a whole will never tolerate the destruction of the fishing industry of this country, either by the European Economic Community or by anyone else?
Lord WINTERBOTTOM: My Lords, I am certain that the whole House will be in agreement with what the noble Lord has said in the last part of his supplementary question. May I say in reassurance that from 1st January to 4th July 1977 there have been 830 boardings of foreign fishing vessels and 98 boardings of British fishing vessels by fishery protection vessels of the Royal Navy and the Department of Agriculture and Fisheries for Scotland, resulting in 24 convictions for contraventions of fishing legislation within the extended fishery limits.
Baroness EMMET of AMBERLEY: My Lords, in view of the anticipated shortage of fish in the deep sea, may I ask the noble Lord whether he is satisfied that Her Majesty's Government are doing all they can to help fish farming in this country?
Lord WINTERBOTTOM: My Lords, that is another matter.
Lord SHINWELL: My Lords, may I ask my noble friend whether the Government have ever considered converting some of the redundant deep-sea trawlers—which have considerable speed—in order to supplement the Royal Navy?
Lord WINTERBOTTOM: Yes, my Lords, this has been considered but was turned down as not being the best solution. My noble friend must not forget that behind the Fishery Protection Squadron is the Royal Navy, with its frigates, and the surveillance flights by Nimrods, which in one hour can cover between 500 and 5,000 square miles of sea.
Lord PEDDIE: My Lords, may I ask a question which I asked previously but to which I did not receive an adequate reply? In view of the increasing threats

453
to the British fishing industry, are the Government satisfied with the present machinery for continuing adequate discussions with the fishing industry and fishing interests on the protection of the British fishing industry?
Lord WINTERBOTTOM: My Lords, periodic discussions take place between the Royal Navy and the fishing industry to make certain that the facilities available for the protection of our fishing interests are always there to be called upon.
Lord GLENKINGLAS: My Lords, will the noble Lord bear in mind—and I am entirely in accord with his desire to do what I know all of us want—that, if we are to extend our fishing limit to 200 miles (which is, at the moment, a thought) then the present situation, even with Nimrods, is totally and absolutely unsatisfactory? Perhaps, within our capabilities, it always has been. I have spent many hours on Scottish fishery protection vessels and have listened to the fishermen talking to each other about exactly where we were and when to get out. I am certain that the same thing happens with naval vessels. Will he bear in mind that the larger we make our fishing limits—and I am not objecting to doing so—the more essential it is to provide the resources to patrol them, otherwise the effect will not be achieved?
Lord WINTERBOTTOM: My Lords, as I have explained more than once, the facilities available are very large—including not only those of the protection squadron but those of the whole Royal Navy and the RAF with its very great surveillance capacity.
Lord BALFOUR of INCHRYE: My Lords, on this subject of North Sea fishery protection, can the noble Lord say whether the examination within the Ministry of Defence of the possibility of aiding fish patrol work with lighter-than-air craft—which has been successful in the past—has been concluded; and, if so, what is the result of the study?
Lord WINTERBOTTOM: My Lords, I know that the noble Lord is interested in this matter. Studies have taken place, but the present thinking is that the capacity of lighter-than-air craft to remain
454
on station in the sort of gale conditions that can occur in the North Sea precludes them from being an essential element of our protection services.
Lord SEGAL: My Lords, is my noble friend aware that the Dutch have an excellent habit of eating strips of salted herring at street corners? Would he advise his right honourable friend to take additional steps to promote our export trade in that direction?

COST OF LIVING AND EEC MEMBERSHIP
3.13 p.m.
Lord O'HAGAN: 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 how the cost of living in the United Kingdom has been affected by membership of the EEC.
Lord ORAM: My Lords, this is a matter on which precise estimates are impossible. The one thing of which we can be confident is that any effect has been slight, and certainly well below the forecasts published by Governments of both Parties before we joined the Community.
Lord O'HAGAN: My Lords, has the noble Lord studied the speech made by Mr. Roy Hattersley on 18th June in which he stated that the effect in percentage terms over the past year was under 1 per cent? Do the Government as a whole agree with their Secretary of State on this matter? Will the noble Lord make inquiries as to whether it will be possible to issue these statistics on a regular basis and so prevent me from having to occupy your Lordships' time by asking for the information?
Lord ORAM: My Lords, indeed the Government as a whole agree with my right honourable friend the Secretary of State for Prices and Consumer Protection. He made a more precise Statement in another place on 20th June. He pointed out that the annual rate of inflation in this country is running at about 17·5 per cent.,

455
and of this about 0·5 per cent. is due to the Common Agricultural Policy. I will follow up the second point which the noble Lord made about the publication of statistics of the kind which he seeks.
Lord CARRINGTON: My Lords, would the noble Lord make sure that his Answer is circulated to all members of the Cabinet?
Lord BYERS: My Lords, may I ask the noble Lord whether he really means that the Government as a whole accept this, or that a majority of the Government accept it?
Lord ORAM: My Lords, I have been giving facts, and my right honourable and honourable friends are well aware of the facts.
Lord BYERS: My Lords, I asked whether it was the majority of the Cabinet and the Government or the Government as a whole. This is a fact that the House ought to know.
Lord ORAM: My Lords, I am sure that all that I have said this afternoon is well accepted by the members of the Cabinet.
Lord DAVIES of LEEK: My Lords, if he accepts the request of the noble Lord the Leader of the Opposition to circulate the Cabinet with categorical statements, will my noble friend include in that process a statement which I extracted from the New Statesman and New Society today which told the British public in an advertisement before the referendum that they would be £7 a week better off by joining the Common Market? I am still waiting for my £7.
Lord FLETCHER: My Lords, would it be right to interpret the Minister's statement as saying that there is no evidence that the cost of living in the United Kingdom has been adversely affected by our membership of the EEC?
Lord ORAM: My Lords, what I said was that the cost of living has been very much less affected than the estimates that were made at the time that we joined. The estimates that were made by successive Governments were of the
456
order of 15 to 20 per cent. As I have indicated, it is very much less; 0·5 per cent., in relation to the Common Agricultural Policy.
Lord SHINWELL: My Lords, is my noble friend aware that every time this Question has been asked we have had the same answer; namely, that the increase in the cost of living in this country attributable to the EEC is minimal? May I ask him this question. In view of the fact—and it is an inescapable fact well known to us all—that the cost of living in the other countries associated with the EEC is very much higher than in this country, is that due to membership of the EEC?
Lord ORAM: My Lords, there are many factors affecting increases in the cost of living other than membership by ourselves or other countries of the Community. The price of commodities which come from outside the Community, coffee, I tea and items of that kind, have increased very greatly in price. Labour costs have also increased. The oil crisis and many major factors of this kind have caused the increase in the cost of living, both on the Continent and here. These factors do not arise out of the arrangements between the Member nations of the Community.

BRITISH FILM INSTITUTE: GRANT AID
3.18 p.m.
Lord NUGENT of GUILDFORD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what annual grant the Department of Education and Science makes to the British Film Institute, what proportion of their annual expenditure this amounts to, and what conditions, if any, are attached to it.
The MINISTER of STATE, DEPARTMENT of EDUCATION and SCIENCE (Lord Donaldson of Kingsbridge): My Lords, the British Film Institute's grant-in-aid for 1976–1977 was £2·514 million which amounts to 70 per cent. of its

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expenditure for the year. Of that sum £100,000 was earmarked for the Housing the Cinema Fund; otherwise, the Institute has discretion to spend the grant within the objectives laid down in its constitution.
Lord NUGENT of GUILDFORD: My Lords, I thank the noble Lord for his Answer which confirms that the Institute is a Government sponsored body and is Government financed. Is he aware that the British Film Institute, which enjoys a high reputation, has this month slipped somewhat in putting on at the National Film Theatre a programme of films of homosexuality and lesbianism, some of them quite explicit? Is he aware that this is objectionable to the majority of our people on two grounds?—first, that the public look to Ministers to uphold the decencies of life, whereas the promotion of these perverted activities is quite the reverse; secondly, that, as the whole community are forced to finance this activity, we find it doubly objectionable, adding insult to injury, when we have to pay for it. Would he please ask the Institute whether it would return to its normal high standards and abjure activities of this kind?
Lord DONALDSON of KINGS-BRIDGE: My Lords, I am aware of this programme. I am also of the view that the British Film Institute is particularly well qualified to take its own view of whether or not the programme falls within the objects as laid down in its memorandum of association—
Lord NUGENT of GUILDFORD: Oh dear!
Lord DONALDSON of KINGS-BRIDGE: Perhaps I might further add that we should be denying the facts if we did not also accept that the subject to which the noble Lord has referred has attracted the attention of many distinguished film-makers and that the programme list which I have seen includes many distinguished films. My own views on the way in which the programme has been handled are immaterial. If I may adapt the words, I think, of Voltaire:
"Even were I to disagree with everything which the Institute have published, I would defend their right to do what they have done".
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, was not Voltaire referring to freedom of speech and not to the use of public funds?
Viscount HANWORTH: My Lords, may I ask whether the Minister is aware that this is not a completely private club, because members are allowed to take three guests? Therefore, it is not on all fours with, for example, a club in Soho. Is he also aware that there is a big question as to whether at least one of those films which are being shown is not illegal, for several reasons? When there is that doubt, does lie not think that, in view of the bad taste in exhibiting these films, it is justifiable for a Minister to interfere?
Lord DONALDSON of KINGS-BRIDGE: My Lords, this is a serious study of the characteristic treatment of the subject and it is accompanied by three seminars. The films that illustrate it include such accepted classics as Mädchen in Uniform; Rope by Alfred Hitchcock; Reflections in a Golden Eye adapted from Carson McCullers' novel; and the 1971 British film, Sunday, Bloody Sunday. Noble Lords will appreciate that these are not pornographic films for the prurient eye but entertainments or social commentaries that incorporate a homosexual element. It seems to me a proper subject for serious study. It is open to members only, although I agree they can take guests, and it is not open to the public.
The Earl of HALSBURY: My Lords, is the Minister aware that one of the films involved—The Bigger Splash—illustrates what I must put into Latin, as "Intromissio penis per anum? Does he think that is an edifying use of public facilities?
Lord DONALDSON of KINGS-BRIDGE: My Lords, in the first place it is not a public facility and, in the second place, the drawing of a line here is extremely difficult. I think the House is not being fair to the large number of people who are seriously interested in this subject and to the fact that a number of studies are worth examining psychologically and sociologically. I really do not feel inclined to intervene as a censor when, if I intervened as a censor in any other aspect, I should get into very serious trouble—and rightly—from you all.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, will not the noble Lord realise that, if a body like the Film Institute wants to be subsidised by the public, it really is doing itself an injury by offending public taste to the extent described by the noble Earl on the Cross-Benches? If it wants to exercise freedom, does the noble Lord not agree that it must not abuse it?
Lord DONALDSON of KINGS-BRIDGE: My Lords, of course I agree with that. No doubt the British Film Institute will read our exchange, which may affect its future behaviour, but I have absolutely no intention of acting as a censor here and I think the House would not wish me to do so.
Several noble Lords: Oh!
Baroness WARD of NORTH TYNESIDE: My Lords, may I ask the noble Lord whether he realises that most Members here disagree entirely with his answer?
Several noble Lords: Oh!
Baroness WARD of NORTH TYNESIDE: Would he not consider that a matter of this kind, which arouses much realistic and proper controversy, could be put, for once, to a referendum?
Lord AVEBURY: My Lords, is the noble Lord aware—
Baroness WARD of NORTH TYNESIDE: My Lords, may I have an answer, please?
Lord DONALDSON of KINGS-BRIDGE: My Lords, unfortunately, somebody sneezed at the major part of the noble Baroness's question and so I was a little confused. Perhaps she would be kind enough to repeat it.
Baroness WARD of NORTH TYNESIDE: My Lords, perhaps the noble Lord will be kind enough to write to me and put it in Hansard.
Lord DONALDSON of KINGS-BRIDGE: My Lords, with pleasure.
Lord AVEBURY: My Lords, is the noble Lord aware that many of us would
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strongly repudiate the inference that a majority of your Lordships' House is in favour of censorship, as implied by the noble Baroness, and that, whatever our views may be about these particular films, we would wholeheartedly agree with the attitude expressed by the Minister that he is not a censor and that it would be utterly wrong for him to set himself up in that capacity? Is he aware that we warmly applaud the stand that he has taken this afternoon?
Lord DONALDSON of KINGS-BRIDGE: My Lords, I am most grateful.
Lord PEDDIE: My Lords, would my noble friend not agree with my personal opinion that the majority of the critics who have voiced their opinion today have never seen the films issued by the British Film Institute?
Lord DONALDSON of KINGS-BRIDGE: My Lords, I would agree with that, but I would also respect the right of a noble Lord to criticise on principle and not only as a result of having I seen these films.
The Earl of LAUDERDALE: My Lords, could the noble Lord tell us what are the objectives of the British Film Institute to which he referred earlier? Would he be kind enough to explain how those allow or disallow the exhibition of material which, at any rate in the eyes of some, is corrupting?
Lord DONALDSON of KINGS-BRIDGE: My Lords, the British Film Institute is an independent company limited by guarantee, incorporated under the Companies Act and registered as a charity. Its objects are laid down in its memorandum of association, paragraph 3 of which provides that:
"the Institute is established to encourage the development of the art of the film; to promote its use as a record of contemporary life and manners; to foster study and appreciation of it from these points of view; to foster the study and appreciation of films for television and television programmes generally; to encourage the best use of television".
The Earl of HALSBURY: My Lords, does that amount to saying that the policy of Her Majesty's Government is to tread the narrow line between right and wrong, inclining neither to the one nor to the other?
Lord DONALDSON of KINGS-BRIDGE: My Lords, I think that is an inaccurate description of the path I am trying to tread. I am trying to tread the path of non-interference, from a post which ought not to interfere.
Lord ALPORT: My Lords, may I ask the noble Lord whether he does not think it would be better if your Lordships' House spent less of its time discussing matters concerned with sex?

RENT BILL [H.L.]
Read 3a; an Amendment (privilege) made; and passed, and sent to the Commons.
PROTECTION FROM EVICTION BILL [H.L.]
Read 3a, and passed, and sent to the Commons.

MINIBUS BILL
3.30 p.m.
Baroness YOUNG: My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3a.—(Baroness Young.)
Lord DE CLIFFORD: My Lords, while welcoming the Bill, I should like, if I may, to say a few words before it is read a third time. I had intended to put down certain Amendments at Committee stage, but I did not feel that it was worth wasting your Lordships' time to put them down when it is quite apparent that this Bill is already partially in operation. I gathered this from the White Paper on transport policy, which the noble Baroness, Lady Stedman, commended to us the other day, and which I read. But I should like to make one or two points on what I regard as weaknesses in the Bill, and to express the hope that in operating it the Minister will help various people.
I think that this Bill will not help the people it is required to assist. It certainly will not help pensioners in rural districts. I do not believe that it is appreciated that
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it takes quite a collection of people to be able to buy a minibus, as I understand that each one costs nearly £3,000. That rather rules out any collection of pensioners in a small village who would like to apply for a permit. It therefore puts back on to the welfare societies and the churches, who are the only people able to provide the funds, the obligation to assist pensioners in rural districts under this Minibus Bill, if they can see their way to do that from within their own organisations. I trust that, when the positions becomes more widely known, some encouragement will be given to the various societies for this to be done.
Furthermore, when the Minister is issuing permits and giving directions or guidance to the Traffic Commissioners, will he please tell them not to base their thoughts on whether there will be wide interference with some bus service, or other public transport? Will he please ask them to look at this matter from an angle from which they do not normally look, which is the benefit of the community? I suggest that it would be very nice if somebody could very politely spell out to the Traffic Commissioners the meaning of "the benefit of the community", so that they can take it from there. With those words, I welcome this Bill. I hope that it does all that it is supposed to do, and I wish it well on behalf of everybody.
3.33 p.m.
Baroness YOUNG: My Lords, the answer to my noble friend Lord de Clifford, who has raised three points, is as follows. The Minibus Bill was never intended to be a substitute for public transport in rural areas. I wish that it could be, but it cannot be. Therefore, I regret to tell him that, had he decided to put down Amendments on that point, I should have had to resist them. As I hope I explained at Second Reading, the Bill can be of enormous benefit to voluntary organisations (which are defined in the Bill), religious organisations and others. If there is an old age pensioners' club that has a minibus, the difference that the Bill will make is that that club can use the minibus and make a charge to cover costs, without needing to have a driver with a public service vehicle licence, and without coming under the Road Traffic Acts. This will be of great

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help to them, and it will make it possible for them to continue using a minibus without breaking the law. In that way, it will help pensioners. It cannot possibly provide a bus service for elderly people in country districts. Much as one would like it, I regret to say that that is outside the terms of the Bill and, therefore, could not possibly be included.
That brings me to my noble friend's third point, which was the definition of "the benefit of the community". This has been put in, along with the groups to which the Bill applies that have been identified in Clause 1, to indicate voluntary organisations not covered by the other definitions. It could, for instance, be a group that was interested in conservation and which took out a minibus to look at some archaeological site or something like that.
I think that the Traffic Commissioners, in issuing their permits, will have to bear in mind the purposes of the Bill. I have no reason for supposing that they will not interpret them correctly, because the Bill is one which has all-Party support. I am sure that, when the regulations are drawn and a circular is issued on the interpretation of the Bill, the Commissioners will be left in no doubt as to the groups of people to whom the Bill ought to apply. Therefore, the Commissioners will be perfectly willing to give the permits, provided, of course, that a vehicle is a safe one, the driver is suitably qualified and the organisation falls within the definitions in Clause 1. I hope that that answers the questions that have been raised.
Lord SHINWELL: My Lords, I do not intend to intervene on the merits or demerits of this Bill. We have now before us the Third Reading of a Bill and what I want to ask is this: why is it that in another place—not that we should always follow the procedure of another place—when a Bill reaches the Third Reading, after having gone through First Reading, Second Reading, Committee stage and Report stage, it is finalised? That is the end of the story. No Amendments can be moved and no speeches can be made. Why should we waste time having to listen to speeches which have been heard over and over again during the various stages of a Bill? Could we
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not save some time by accepting the Third Reading and passing of a Bill as the final stage?
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, my noble friend was looking in my direction, but I fear that it does not fall to me to answer the question, because of the strange alchemy of your Lordships' House.
Baroness YOUNG: My Lords, with the leave of the House, I think the answer to the noble Lord, Lord Shinwell, is that it is possible in this House to move Amendments on Third Reading. As my noble friend said, he did not put down Amendments at Committee stage, and he therefore wished to raise some points which I hope I have answered.
Lord SHINWELL: My Lords, if I may pursue the matter for a moment, it seems to me to be all wrong. Surely this could be referred to the Committee on Procedure. This happens over and over again. We come to Third Reading and Members of the House, who have probably taken no part in the Committee or Report stages, make speeches. I cannot see why that should be permitted.
The LORD PRIVY SEAL (Lord Peart): My Lords, I would only say to the noble Lord, Lord Shinwell, who has long experience of the other House, that even there Third Reading is very useful for finalising attitudes. But if the noble Lord feels strongly about it, this matter could be referred to the Committee on Procedure to be looked at.
On Question, Bill read 3a, and passed.

SEXUAL OFFENCES (SCOTLAND) BILL [H.L.]
Lord BOOTHBY: My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3a.—(Lord Boothby.)
Lord LEATHERLAND: My Lords, in view of our rather excited exchanges at Question Time a few minutes ago, are we going to see a film about this Bill?
On Question, Bill read 3a, and passed, and sent to the Commons.

NEW TOWNS BILL
3.39 p.m.
Baroness STEDMAN: My Lords, I beg to move that this Bill be now read a second time. As the House knows, I have something of a special interest in the new towns in that, until I took on my present appointment, I was a member of the board of the Peterborough Development Corporation and had the privilege of being closely involved with its work.
The purpose of this Bill is to increase the limit which is set from time to time in Acts of this kind on the amount of money which may be borrowed by new town development corporations and the Commission for New Towns. The current limit of £2,250 million was set in May last year by the New Towns (Limit on Borrowing) Order 1976 following the last piece of legislation of this kind, the New Towns Act 1975. That limit encompasses the total of all outstanding debt by new towns since they were first established by the farsighted legislation of 1946. The existing limit is expected to be reached by September or October of this year and this Bill accordingly provides for further borrowing to be made available by raising the limit to £2,750 million, with provision for it to be raised by a further £500 million by an order to be made by my right honourable friend the Secretary of State. Any such order will require Parliamentary approval by way of an Affirmative Resolution in another place.
When this Bill was debated in another place the Opposition repeatedly claimed that no explanation had been given for the large sums of money which new towns were being authorised by the Bill to borrow. That claim was coupled with the suggestion that the need for the Bill could be largely avoided if private investment funds were brought into the new towns, either by financing joint developments or by selling existing new town assets to finance further development. Even though these criticisms of this Bill were misguided, as my honourable friend the Parliamentary Under-Secretary clearly demonstrated, they were twice pressed to a Division, despite the very serious consequences which would have followed had the Opposition been successful in denying the new towns these funds.
In view of what has gone before, I take
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this opportunity to answer yet again the criticisms of this Bill in another place—and perhaps forestall some which might otherwise be made here—by explaining in some detail why this money is needed and why the Government believe there is not at the present time any alternative to this Bill for providing it.
In one sense the purposes to which this money will be put are obvious. It will be used for the provision of houses, factories and shops, for roads and sewers and for the many amenities and facilities necessary to turn the towns into living and working communities. Three-quarters of the money in this Bill is required for capital investment in the physical fabric of our new towns. The expenditure was foreshadowed in the Government's expenditure plans which were published in the recent White Paper, Cmnd. 6721. These plans provide for about £300 million of new investment annually during the next three years. This figure requires further explanation. Perhaps some of the earlier confusion stems from the fact that the White Paper identifies only housing investment of £143 million in 1978–79 and £175 million in 1979–80 as separate items. The figure for new investment in all the other things I have mentioned is not separately identified but is aggregated with similar expenditure by local authorities. But allowance must he made for investment in these other aspects of new town development, since it all counts against the borrowing limit.
Moreover, these expenditure figures are set in the 1976 PESC survey prices and the new towns borrowing limit is not. No matter how helpful it would be for new towns to continue to pay for their activities at the prices which obtained in November 1975 they will, like all of us, have to continue to pay cash. The figures which are derived from the White Paper have, therefore, to be adjusted to take account of the expected increase in costs, particularly in construction costs. These changes are very difficult to predict but our best estimate at present is, as I said earlier, that new town investment will on average be about £300 million in cash terms for the next three years.
On top of this new investment must be added borrowing of about £100 million each year, again in cash terms, to meet revenue deficits which arise principally in

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the second and third generation towns which at this early stage of their development are not able to meet their debt charges from their rent income.
Thus I think that it will be clear how we have arrived at our estimate, that the proposed increase in the borrowing limit will last for some two and a half years—expiring during the second half of the financial year 1979–80—on the basis of the programme of expenditure which has already been announced. But it is difficult to be precise about how long the money will last, since much depends on future movements in interest rates and costs and on how quickly programmes can be implemented.
I should like to turn now to the suggestion that the need for this Bill could be largely avoided by seeking other sources of finance in the private investment market. One untapped source of funds, it is claimed, lies in projects of joint development financed by institutional funds on what we have come to call lease and lease-back arrangements. But there is nothing new about this suggestion, nor have the Government any objection to it. Indeed, it is already happening. Between 1969, when a previous Labour Government first gave approval for investment of this kind and established the Advisory Panel on Institutional Finance in New Towns, and May 1977, some 27 separate schemes for lease and lease-back arrangements were entered into in the new towns, involving sums of £55·2 million. I am delighted to tell the House that the Peterborough Development Corporation have just agreed lease and lease-back arrangements with Norwich Union Insurance who will advance £24 million towards the cost of a new shopping centre there. These are obviously useful additions to the funds available to our new towns, but it must be admitted that it does not seem likely that the contributions from these sources could be quickly expanded so that they substantially reduce the amount of borrowing that will be necessary during the lifetime of this Bill.
A more difficult aspect of the question of bringing institutional funds to the new towns arises in considering whether existing new town assets should be "rolled over" to finance further develop-
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ments. My honourable friend the Parliamentary Under-Secretary, when he spoke during the Third Reading debate in another place, explained what would be involved in order to be able to adopt such a policy in an effective and businesslike manner. I should like, with the forbearance of the House, to repeat what my honourable friend said:
"It is absolutely vital that the complexity of the background to the creation of the assets since the new town programme began is fully understood. The structure of the holdings in terms of the leasehold interests which attach to them, the rates of return and the existence or otherwise of the opportunities of review of rentals have to be taken into account. A fundamental analysis of these interests would have to be undertaken so that a realistic assessment could be made not only of the likely market value of those assets which might be selected for disposal but also to form some assessment of the financial loss which might be incurred by premature disposal, and at the heart of the exercise is the identification of the precise kind of interest which might be disposed of, for there is little doubt that outright disposal of freeholds which are, for instance, subject to long leaseholds at low annual rentals without review clauses—which was certainly the acceptable thing in the early days of the new towns—could be an irresponsible short-term activity".—[Official Report, Commons; 20/6/77; col. 1024.]
Thus on practical rather than ideological grounds, to determine the merits of such a policy will require a great deal of time and consideration. Managing a marketing exercise of the size and sophistication involved would likewise require much skilful preparation.
My right honourable friend the Secretary of State has agreed to consider the issues involved and he is now doing so. But it is clear that a programme of disposals on a scale sufficient to affect substantially the need for further borrowing in new towns during the two to two and a half year life of this Bill could not be undertaken in a way which was consistent with the proper management of public assets. I hope I have explained the need for this Bill and the way in which it relates to previously announced spending programmes. I hope, too, that I have been able to satisfy your Lordships that while our minds are certainly not closed to the use of other sources of funds for the new towns, those proposed do not offer an alternative to this Bill.
My Lords, I apologise for speaking at some length on the need for this Bill in the light of the points made in another place and I shall therefore be sparing in

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my general remarks on the virtues of the new towns and the value they offer, in social and ultimately in financial terms, for the substantial public investment in them. I think it is unnecessary in any event to dwell on this. There is general agreement here, in the country at large and internationally that our new towns have been outstandingly successful. That success has stemmed partly from the imaginative Act of 1946 and partly from the effort and dedication of the new town staff in using the money which has been provided over the years, not only to build houses and factories but to translate that hare provision into real communities providing improved living conditions and security for those who live and work there.
It is no reflection on the success of the new towns that my right honourable friend has recently proposed lower population targets for the third generation towns. Those revised targets have stemmed primarily from the very substantial reduction in the forecasts of population growth in the country as a whole. Lower population growth in the towns will, of course, eventually be reflected in the size of the continuing investment programme, and some savings which will allow some £10 million next year and £20 million the year after will be redeployed for other uses and are already in prospect. But since it is intended substantially to maintain the momentum of development in the third generation towns, it is not expected that larger savings will accrue until these towns begin to approach their revised population targets. Those savings will therefore be meat for discussion during a future new towns Money Bill. In the meantime, this Bill is necessary to allow the new towns to proceed with their still much needed work. There is, in the short term at least, no feasible alternative to this Bill and I have no hesitation in commending it to your Lordships. It is of course a Money Bill, but that does not inhibit discussion on it in your Lordships' House. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a,—(Baroness Stedman.)
3.53 p.m.
Baroness YOUNG: My Lords, I should like to thank the noble Baroness, Lady
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Stedman, for introducing this Bill to us this afternoon. I do not always find myself in agreement with her, but, as she knows, I very much admire her knowledge of new towns and the way she has put out her case. I think that, from her point of view, she has made a very good case indeed for this Bill. It is of course a very important matter. It presents us with an opportunity to discuss new towns as a whole and new town policies and I think it is disappointing that so few have taken this opportunity to take part in the debate today.
I was particularly glad to hear her explanation as to how long this large sum of money is expected to last. This question was raised on several occasions in another place, and it is helpful to know that it is expected to last for approximately two and a half to three years. Then, presumably, we shall have a similar debate all over again. I do not intend to repeat the arguments which have already been set out fully in another place, but I should like to raise three main points. As the noble Baroness has said, the effect of this Bill is to allow new towns to borrow £1,000 million to last, as we now know, for the next two and a half years. It is of course an enormous sum of money, and, although it has all been set out in the Government expenditure White Papers, nevertheless anyone in local government always looks with a certain degree of scepticism nowadays when very large sums of money are going to be given to one part of local government.
After all, we know, and I can quite understand, why the Government have thought it necessary to give so much money to the inner cities. But anyone in local government knows that every time the Government give something to the inner cities they actually take away money that they were going to give to the shire counties, and that in fact there is not an increased amount of money for local government as a whole but it is a reshuffling of the pack between different parts of it. In this particular case it would be helpful to know whether by giving—or more accurately by allowing the new town corporations to borrow—this large sum of money, other sections of local government, notably the counties, the districts and the inner city areas, will be deprived of any money that they would otherwise

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have had. This is a very important point, which I know greatly concerns local authorities.
The second point I should like to make is one that the noble Baroness herself raised about the demographic projections. I do not think that anyone who takes an interest in environmental, educational or social service matters can have failed to read the report by the Central Policy Review Staff on population and the social services, and to try to understand the very important matters which it has set out.
What we do know from it is that the population projections over the last few years have all had to be revised down and the fall in the birthrate is startling, as also is the increase in the number of old people in the population, and in particular the enormous increase in the numbers of those over the age of 75. I think this cannot have other than a major bearing on new town policy, and rather than talking just about the houses I think it is worth considering the complexities of managing this large number of houses that have already been built in new towns and no doubt others that are to be built with the money that we are talking about this afternoon.
What is revealed from this review on population is that, although we have a situation in which there are at the moment more households than houses, and although we have a situation in the country as a whole in which the birthrate is falling, the growth of headship of families or the numbers of households of single persons is very much on the increase. Young people are moving away from their families and setting up home on their own; widows and widowers and elderly relatives, instead of living with their families are living alone and consequently there has been a tremendous growth in the number of single person households. Anyone who has looked at new towns, visited them or studied them will know that there is very little single person accommodation in them and I wonder whether spending yet more money on the development of houses is the right course of action, or whether we ought not to be thinking of a policy of converting a great many of the three-bedroomed houses into flats suitable for single people so that we are actually making a much more effective use of the housing stock.
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What occurred was a large build-up of young couples in new towns, and, as that rate is not going to continue, socially it would be far better to devise ways of encouraging older people to go into new towns. I myself feel that we make a great mistake in all our policies by not looking at the family as a whole, encouraging the family to stay together and to help one another. One of the defects of housing policy which has been brought home to me time and again, whether by one parent families, by the elderly, or by couples waiting to get houses, is that often, for example, by moving out into new towns they uproot themselves from all their relatives and they are cut off. Therefore, I consider that in new town expenditure it is necessary to see how the type of housing is being developed, and whether it is housing of the kind that keeps families together—particularly elderly relatives—so that in a real sense we have a community, and not a vast town with almost everybody in one age group.
I should like to return to the point about buying new town houses. I appreciate that this is ground over which we have trodden many times before, and I do not intend to elaborate this afternoon all the arguments for encouraging people to buy a new town house, nor, as I should like to see, for new town corporations selling their houses to their tenants whenever they would like to have them. However, the noble Baroness, Lady Stedman, spoke about the problems of financing new towns, and indeed that is what the Bill is all about. It seems to me that you create a much better community or town, call it what you will, if people own their own property or, at least, if a large proportion of people own their own property, and if businesses can buy the freeholds in the town.
If I took down her words correctly, the noble Baroness spoke about two methods of financing, one of which was the special scheme of leasing and lease back. She quoted the fact that there were 27 such schemes, and I entirely agree that they are extremely valuable. However, many small businesses want the right to buy a freehold in the middle of a town. I suspect that it was the combination of small businesses and houses that made the cities what they were. The fact that these have all been broken up and disbanded is

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one of the reasons why we have the present problems of the inner city. Therefore, I believe that the new towns would become better places if there were more people who owned their houses and more businesses privately owned on land that they owned themselves, because all those people would have identified with the place by actually putting their own money into the place where they lived.
The third matter to which I wish to draw attention is the relationship of new town policy with inner cities. It was not so long ago that your Lordships' House had an extremely interesting and important debate on the problems of inner cities. Indeed, the Government have issued a great many very interesting publications on the problems of inner cities, the studies that have been done and the amount of money that is required to revive the centres of towns. The figures indicating the depopulation of the cities of Liverpool, Manchester and London are well known and need no further repetition. Anyone who visits those places cannot help but be struck by the acres of empty and derelict land and the vandalism that is everywhere in the huge open ugly spaces. Therefore, we need to be very careful that we have the balance right in encouraging another £1,000 million of expenditure in new towns.
New towns have their contribution to make but, in developing the new we do not want to break up and ruin the old. There is a moral for us when looking at the empty old inner cities and the new centres in the new towns. It is essential as a matter of public policy that we get the balance right. As the noble Baroness Lady Stedman, has said, this is a Money Bill. It is not one to which we shall return in Committee or other stages. I am not someone who will condemn the new town policy. In my view some very interesting ideas have been tried out in them. However, they have not achieved quite the measure of success that we should have wished in many cases, because it is very difficult to create a new town and the community that lives in it. If one studies the history of towns one sees that they are places that grew organically. People wanted to go to live in them not because they were obliged to do so but because they were places where there were jobs. It is extremely difficult to create artificially something which has grown in other parts of the country naturally.
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Therefore, when we are short of money and in difficult economic circumstances, we must be careful that the money we put into new towns will not be taken away from other places that need it very badly. We ought to allow new towns a period to develop and grow naturally rather than force extra expansion upon them.
4.5 p.m.
Lord RAGLAN: My Lords, the noble Baroness, Lady Young, referred to a most important factor as regards the development of new towns. The yardstick previously favoured the building of three-bedroomed houses, but now new towns are being encouraged to build far more single-person dwellings. The single, biggest factor to stagger or surprise our policies on planning in the past 10 or 15 years has been the reduction of the occupation rate of houses which has dropped from about 4·1 per house to 2·9 per house. This has meant that a quarter more people are looking for houses than otherwise would have been the case, and this is one of the main reasons we continue to be short of housing.
I have been chairman of a new town for seven years and therefore I am interested in the purpose of the Bill. Our new town is awaiting the decision of the Secretary of State as to whether to go ahead with a small expansion. Therefore, if all goes well, I suppose that some of the money concerned in the Bill may come our way. We must wait and see, and waiting is a difficult business for all concerned.
Having declared what might be described as my interest, I wish to draw your Lordships' attention to certain matters relating to the management of new towns which I consider pertinent to raise during the passage of the Bill. In the long-term management of their affairs, new towns have enjoyed one great advantage and suffered from one disadvantage. The advantage is that, although new towns are a nationalised industry, they have not encountered the ambivalence of attitude which has made the effective and efficient running of our other nationalised industries so difficult. They were pioneered by a deeply imaginative feat of private enterprise, but the legatees of these pioneers were happy that under the 1947

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Act the Government had espoused their cause. There was no ideological clash, there was no history of bitterness and there were no undertones or overtones of confiscation.
Therefore, successive Governments have continued to back new towns and put money into them. Although the towns went through a period when they received a great deal of criticism, and much of that criticism may have derived from the fact that the relations between them and the local authorities were sometimes strained, it is now widely accepted all over the world that they have been extremely successful. Recently they passed a severe examination, and it has been shown that they are not in competition with the inner cities but have been responsible for providing a planned environment for about 10 per cent. of those who have voluntarily chosen to leave our city centres. All this is good and goes some way to explain why the new towns are run by well-adjusted characters who believe in what they are doing and are pleased and proud to do it.
The disadvantage, from which I believe they suffer, stems from their being under direct Parliamentary control, or rather under the relevant Minister via the Department of the Environment. Apart from some inevitable ups and downs, the liaison between the Department of the Environment's New Towns Department and the new towns themselves, is a good and constructive one. However, as a result of coming directly under a Minister, we feel the passing of every and any breeze which is stirred up during the airing of policy views, whether by the Government or by the Opposition. We are exposed to the personal opinions of each Minister who is put in charge of us.
Some of the towns are now over 25 years old. They represent by their nature a very long-term investment, demanding, one would think, a long-term policy of a kind. There can be in that long term many changes of Government. However, in the shortest term it takes, as has been recognised in the recent housing Green Paper, an average of four years from beginning to acquire the land until the time when the houses begin to be occupied.
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Yet in those four years there can be two changes of Government and/or three changes of Minister in charge. I submit that no commercial undertaking would sensibly be subjected to or be liable to so many changes in top management and changes of policy or threats of changes in policy. Furthermore, to add to the difficulties, each fresh Minister comes into the job with ideas and prejudices—he would not be human if he did not—but, when faced with actuality, he almost certainly has a change of mind, he modifies his views. Therefore, every change of Minister is likely to bring two changes of policy directly affecting new towns.
If one puts this kind of uncertainty alongside the need to which everyone is exposed, that is, to cater for the tap inevitably being turned on and off due to changes in the economic climate, it seems to me that a better way should be found of running the new towns programme. I suggest that perhaps this could be done by putting them under a State holding company of a kind, and a possible framework to build this on exists in the shape of the New Towns Commission. I have not thought through all the difficulties which might accompany such an operation. I am just looking for a way in which the policy direction on new towns could be taken somewhat further away from the influences which inevitably flow from having them under direct Ministerial control. I must add that nothing that I have said is intended to reflect in any way at all upon the intelligence or competence of any individual. It is just that I strongly believe that this aspect of our system of government is detrimental to the good running of the new towns. May I also add that I speak for no other person or organisation, and that the opinions are my own.
My Lords, I thought it might be helpful if I made a very short comment about the assets of new towns. I have seen it suggested that they should be valued, and, speaking for my own town, I do not think it would be a difficult operation to do some sort of valuation, although it would take some time. The historical costs are documented and the present day value of property can be guessed at, although it would be very hard indeed to apportion the general development expenses. But may I put in a word of caution. Running a new town is not a

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strictly commercial operation. Sacrifices in potential returns have to be made in the interests of improving community life. For instance, we had to yield the rent from a store in order to obtain a cinema which we knew would not be viable on its own. Incidentally, I believe that the Coal Board Pension Fund were involved somewhere in that deal, and that was long before the Norwich Union got involved in Peterborough.
We are not in the least a monolithically Government owned concern, and it is a myth that new towns are wholly Government owned; but we do retain the freehold if we can. My advice to anyone who consulted me—I am offering the service free this afternoon, of course—would be that retention of the freehold is a very important tool, both of planning and of management; and in the case of our town centre, which must be treated as a whole, it is an essential tool. However strong planning powers appear to be, possession is still nine-tenths of the law. In the interests of managing the assets of new towns on behalf of the community, I think upon examination it will be seen how necessary it is for the corporations to retain the freehold, if possible. We have sold freeholds on a matter of judgment, but, unless I was shown a very good reason indeed why I should sell, I would not do so as a matter of policy.
My Lords, I greatly welcome the informed debate which has been taking place in the last few months on policy towards new towns. Particularly I welcome the increasing reference which has been made to the desirability of using bodies of their structure to help in the renovation of old city areas. I believe that much good could come of that, but at the moment that is another matter.
4.17 p.m.
Lord SHINWELL: My Lords, it is very difficult to enter into competition with experts on this subject, and certainly I would not attempt to emulate the expertise to which we have just listened. But if I had my way, and could ensure a respectable vote in your Lordships' House, I would throw a spanner into the works, with what courage I possess, to ensure that not a single penny further should be spent on the new towns without a reappraisal of what has happened since
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1946, including looking at the vast sums of money that have been spent, and in particular whether we have gained the advantage which is justified from that expenditure and endeavour. Nothing that I say can detract from my congratulations to my noble friend who presented the case with such clarity, but I am bound to say that, in this thin House, with these wide open spaces, to be discussing the expenditure of hundreds of millions of pounds in the next few years, including vast borrowing facilities from whatever source can be found, is just a little too much.
I recall as a member of the Cabinet in 1946, when this concept was initiated, that there was considerable enthusiasm when the venture was exposed for the first time. The intention then was to escape from the squalor, sometimes the filth, and almost one could describe it as the inhumanity of existence in various parts of the country; I can recall in particular the county of Durham. However, we decided to embark on this alleged solution of the problem, only to create a vast number of others, because in creating the new towns we simultaneously created a number of ghost towns in the surrounding neigh-bourhoods. In fact if we had expended all the endeavour, all the industry, all the intelligence, and in particular all the finance that has gone into the new towns since 1946, in order to rehabilitate the old towns, we should have made a far better job of it.
I am not complaining about the advantage of a new town as compared with a derelict area which is blotched with slums and the like. Many of the new towns are admirable—probably every one of them can be regarded as admirable. I have not seen them all, but I have seen some. However, I would remind Members of your Lordships' House of the original idea, which was not merely to build houses, although that was essential and a prerequisite of the advent of industry because people had to have accommodation. The original idea was to promote industry in those areas and it was thought and argued very eloquently and intelligently by the experts from all sides of industry that new industries would be encouraged to go to the new towns.
That is far from being the case. Of course, many new industries have gone to the new towns and have then found

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themselves to be in a bankrupt condition. Many have discovered that it was possible to survive only with aid from the Government. Every kind of Government since 1946 has had to come to their aid. If that aid had been provided for some of the towns I have in mind—the villages and townships in the county of Durham, in the North-West and elsewhere—we should not now he faced with the derelict conditions that are to be found in those areas. At the time, it was not foreseen, particularly in the mining areas, that the mining industry would suffer pit closures on a vast scale and that hundreds of pits would close down in areas where the new towns were to be built—that is, not in the townships themselves but in areas contiguous to those townships.
I wonder whether the time has not arrived when the Government should embark on an independent examination. I do not mean the setting up of a Royal Commission. I do not like Royal Commissions; they never really do any good. They talk a lot and come to conclusions only to find that there have been more errors of judgment at the end of the day than at the beginning. There should be an examination of the problem by an unbiassed, independent board. That board should not comprise—and I say this with great respect—those who are members of the boards of new towns, who are naturally enthusiastic about their associations.
I mean no disrespect to my noble friend Lord Raglan, but I have had experience of being canvassed over and over again to see whether it was possible to use my influence—not that I ever had any at any time—in order to ensure the appointment of certain people either as chairman of a new board or corporation as it was called, or as members of a committee; or to exert pressure on a member of a committee of one of these corporations to the effect that it was now time to make room for someone else. I am not suggesting that any Member of your Lordships' House would be in that situation, but that sort of thing has happened One becomes a member of a committee or a board and immediately becomes enthusiastic and fascinated by its transactions and hopes for the best; naturally, one says the best one can on
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behalf of the project. It is now time to put an end to all that.
Lord RAGLAN: My Lords, perhaps I may offer my noble friend a seat on my board!
Lord SHINWELL: My Lords, I cannot recall ever having been offered a seat on any board. If I may say so, this matter is somewhat irrelevant, although I never object to interruptions, having been accustomed to them all my life. I can simply say that no Government have ever asked me to be a member of any board. I have never been a member of a board where there was anything gainful. I certainly mean nothing offensive when I say that there are at least 40 or 50 Members of your Lordships' House who have Government appointments. I have gone through the list. Some of them even have two salaries and many have part-time jobs with the appropriate salaries. During my whole existence in political life in this country I have never once been offered an appointment of that kind. I cannot say whether I should have accepted it, had I been offered one. However, that has nothing to do with the subject under discussion.
I suggest that there should be some examination of this problem—for it is a problem—before we spend too much money. I do not like the idea of investment and obtaining money from sources outside the Government. My noble friend Lord Raglan suggested that one of the problems facing the new towns is that they are under Ministerial control. I believe that the trouble lies in the fact that they are not under Ministerial control; they are a form of private enterprise and do pretty much as they like. I cannot understand why they cannot be transferred to the local authority in the area, as was the idea many years ago. Local authorities are elected bodies and there is no reason why we should not inject democracy into the new towns. At present, there is none.
The mere fact that my noble friend Lord Raglan is chairman of a board does not mean that he acts in a democratic fashion. As far as I know he never consults electors in the area about what the board should do. Of course not. It is a kind of private enterprise. It is accepted. A person is appointed as chairman and it is beside the point to ask whether he is an expert. He

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may be a politician, a would-be politician, a journalist, a retired businessman or a retired member of the Forces. Usually he is the latter and I do not object to such people getting a job at the end of their period of service in the Forces.
But what are the results? They carry on in the same old-fashioned way—in a form of private enterprise. No! The whole thing should be transferred to the local authorities, and the sooner the better. If I had the chance and if I could find anyone to support me, I would vote against any further finance being provided for these bodies. To begin with, it was an excellent and wonderful idea, an admirable concept. We expected much of it. On the whole, we have gained very little from it. We have not had the industries that we expected. A great many problems have been thrown into the situation. It is about time that we reversed the position and asked for a reappraisal of the whole situation, at any rate before spending vast sums of money.
4.30 p.m.
Lord LEATHERLAND: My Lords, I wholeheartedly agree with so many of the views of my noble friend Lord Shinwell that I hesitate to stand up and say that I disagree with practically everything that he has said about new towns. Probably he knows more about them than I do. He says that he was a Member of the Cabinet which inaugurated the new town system. I was not a member of that Cabinet—but that is probably the country's loss, and I will not pursue the point.
My noble friend has mentioned the difficulty which industry finds when it sets up its factories in new towns. He perhaps has been speaking of Durham where they have had Peterlee, which has not been among the most successful of the new towns, I will agree; but in my county of Essex we have two new towns and our experience there with regard to industry is diametrically opposed to that which my noble friend suggests.
We have two new towns, Harlow and Basildon. Harlow, I had nothing to do with its establishment. Basildon, I had very much to do with its establishment; I was one of its progenitors. I was the finance committee chairman of the local council in whose area my late noble friend Lord Silkin proposed to put a new town. We discussed whether the
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new town would be a financial advantage to the local authority. We analysed all the figures and found that the existing rated value of every hereditament in the district was £10 a year; so if you imposed a rate of 10s. in the pound, that brought you in the sum of £5.
We sat down and considered the matter. We said, "Well, if Mr. Silkin"—as he then was—"puts the new town in the middle of the four townships which constitute our urban district area then, as the years go by, this town will grow and grow and take in these four little townships where there are many unmade roads, where there is no street lighting, where there is no water supply in many cases, and certainly no sewerage supply". Then I said, "We will, with Government money, get a whole face cleaning operation put into operation in this part of Essex", and so it has worked out.
My noble friend suggested that the factories had great difficulty in running themselves successfully in these new towns. In Basildon, with the formation of which, as I said, I had very much to do, I had Mr. Silkin down at my country house night after night, and we went round the whole district urging upon the people the many advantages the new town would bring. It was necessary to do that because many of them, living in their ugly, insanitary little shacks around the fields, did not want to move. They have altered their minds since then.
The question of factories is one that has been a huge success in these two Essex New Towns. My noble friend suggested that it was desirable to have new industries. Well, at Basildon, we have a huge factory by Marconi; we have another one by the Ilford Film Company; we have another one, Yardleys the perfumiers, who I suppose can be regarded as a useful kind of institution, and we have a huge dairy factory that has established itself and has turned out hundreds of thousands of cartons of yoghurt every day. Those are new industries involved in the production of new products.
As for the degree to which these industries prosper, we set aside in Basildon a particular area for what we called nursery factories, where the little businessman could go, have a little factory of his own which he would rent from us, and then we would watch and see him develop it.

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Time after time the little businessmen who set up their businesses and got them going in these nursery factories have come to us and said, "Please let us have a bigger factory. We have increased our turnover tenfold during the last two or three years".
I know something about Basildon not only because I played, I say it modestly, such an active part in its foundation, but because later on in years the then Minister asked me to join its board, and for four years I sat on its board. Of course I was immediately removed when the Labour Government were defeated and a Conservative Government came into Office. That is one of the little passages in my life about which I am very sorry indeed. We were doing something constructive.
What is more—we have not heard a great deal about this in the debate today—these new towns have brought a great sum in human happiness to many thousands of people. I have mentioned the people who were living in little, insanitary shacks around the fields between the four little townships in our Essex area. Many of those people have now been accommodated in fine homes. They are very happy. Their children are going to first class new schools, and their husbands are able to cycle, or walk, to the factory where they want to work, instead of having to spend £2 or £3 and many hours a week travelling up to London, sometimes in the very early hours of the morning.
The noble Baroness, Lady Young, said something about these new towns growing up naturally. They are growing up naturally because people are acting naturally. People are having babies. These babies then become young people of 16 and 20, and, again acting naturally, the second generation gets married and they, in turn, again act naturally and have babies. So you get applications sometimes for new houses from those second and third generations, and we are able to accommodate them in the new towns. Therefore, the family is being kept together instead of being disintegrated, as the noble Baroness mentioned. There are disintegrations, I quite agree, when grandma stays in Stepney and the younger members of the family go out into the country.
One of the criticisms that was made of new towns in the early days was that
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there was no community spirit; people had emigrated to the new towns from this place and that place and the other place, and they did not know each other. But I know that in Basildon—and it is the same in Harlow—there are scores and scores of social societies which have grown up: music societies; operatic societies; billiard clubs; bowling clubs; local Labour parties, and all kinds of other worthy institutions, and there is a community spirit growing up in these places.
The noble Baroness rather hinted at the suggestion that these towns were becoming rather one class communities. She did not use the words directly, but she suggested that there should be more opportunity for people to purchase their houses. I agree with that. But in Basildon we foresaw this and set out what we called a middle class area—although we did not use such an old fashioned term as that. This was an area of superior houses which would be occupied by managers of the local factories and people of that ilk—not, I may say, by county councillors.
There is one thing that must be said about the financial aspect of this matter. The noble Baroness suggested, and my noble friend suggested, that it might be better to build and rebuild on some of the vacant plots in our rather deserted big cities. Well, if the new town corporation had to buy up land in those places the prices would be enormous and it would be absolutely impossible to build houses that could be let at anything like a reasonable rent. Another aspect of the financial question I must mention before I sit down, although I have been standing much longer than I expected to. In the early days of these new towns, when the county council had to provide clinics, schools, all kinds of other institutions, fire brigades and police forces, we found that the rateable revenue which we received from the new towns was less than what these facilities were costing. But now that the towns have grown up to a reasonable size the rateable revenue received is showing a surplus over the expenditure that the county council had had to incur. I suppose complaints can be made, and faults can be found about new towns; but to my mind, in terms of human happiness, in terms of human convenience, the establishment of the

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new towns has been one of the finest things that we have seen in this generation, and so I commend the Bill.
4.40 p.m.
The Lord Bishop of BIRMINGHAM: My Lords, I hesitate to rise to speak in this debate, not having put my name to the list of speakers, but as I once worked as a young parson in a parish in a new town, and later, on moving to Lancashire, had a fair amount to do, on the periphery, so to speak, with the development of the new town of Skelmersdale, I feel impelled to utter a word, first in support of what has been said about the problems of maintaining full employment and indeed of engendering sufficient employment in new towns. This is clearly a problem which has not yet been resolved and which poses very great difficulties. However, I am sure it is a matter of which Her Majesty's Government will never lose sight; it must be very disappointing indeed for people who move with their family to a new town, with all the hopes of job opportunity, only to find that those hopes are not realised.
There is a point which may seem trivial to some noble Lords but which, from my point of view, is not be be so regarded. It is the reference by the noble Lord, Lord Raglan, to the importance of retaining the freehold in new towns, especially in new town centres. I can admit the force of this but I hope it will not be exclusive, not least so far as the Churches are concerned, and I mean not only the Established Church and the other historic Churches of a Christian tradition in this land, but of other faiths which are taking their place in the pattern of the community and which, because they have at least a national background to them, can be regarded to be making a permanent contribution to the future religious structure of the country. To deny the freehold where Churches such as I have described wish to build themselves into the situation would, I believe, be a considerable impediment and I hope that no hard and fast line will be taken in that regard.
I welcome the fact that in supporting the provision of a very large amount of additional money for the new towns, we can know that this will in present
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circumstances help to forward the reclamation of the inner city areas in the old towns. I speak as Bishop of Birmingham and with particular regard to the report about the Small Heath area, one of a number in that city, and of course there are many others which could be cited. The sooner we see evidence of progress on that front the happier we shall be in the older cities and towns in this country, as I hope there will be continuing happiness on the part of those who are directly concerned with the progress of new towns in the other areas.
4.42 p.m.
Baroness STEDMAN: My Lords, this debate has ranged much wider, with many more participants, than we originally anticipated, but I am delighted at the interest that has been shown in it. I wish also to thank the noble Baroness, Lady Young., for her rather guarded welcome to the Bill and for her acceptance of the need for the new towns to have this facility to continue with their borrowing and with their work. Lady Young expressed concern over whether, in allowing new towns to borrow this large amount of money, it would mean that other sections of local government would be deprived of money which they thought they were going to get. I have seen no statements or papers of any kind implying that any other local government service will lose out because we are voting this afternoon in support of a Bill to enable the new towns to continue with their borrowing.
Indeed, the Government, through the new towns, are giving help to others, particularly the shire counties, where, as the noble Baroness will know, I have been concerned, both before becoming a Member of the Front Bench and since, about the effect of new towns within shirecounties and the effect of the cost of services in providing the facilities for the people coming in, in advance of getting any return in rateable value from them. I am sure the noble Baroness knows that there are now provisions whereby, if the rate burden in the shire counties proves to be too much because of the inclusion of a new town within their boundaries, the new town development corporations have power to help out the shire counties. Indeed, from the figures I have with me I see that the amounts that are being handed over—

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the contribution towards the burden—vary from £70,000 plus to over £1 million in some cases, to enable them to meet their obligations to the newcomers. We are, therefore, trying to let the new towns' money also be available to help with the local authority services that are needed for those people who go into the new towns.
The noble Baroness also referred to the sale of new town housing. I recall the debate we had when there was a suggestion of the handing over of the housing in the first generation of new towns and the question of the sale of new town housing arose, and it was my privilege in that debate to give the criteria by which the then Minister for Planning would consider applications from the new towns for permission to sell their new housing. In fact, we announced last May that we were considering the resumption of the sale of new town houses and that applications to do so were being considered from individual towns where the waiting list was less than three months for the main category of people housed in that town and where the new town development corporation had had the necessary consultation with the local authorities in the area. So far, nine of the corporations in England and five of the Scottish new towns have all been given permission to sell their houses and the sales are going ahead; and in addition the Commission for New Towns has made an application in respect of four of their towns. Thus, I hope Lady Young will be satisfied that, so far as the new towns are concerned at any rate, the Government's object of allowing people to own their own homes, as well as to provide the necessary rented accommodation, is being achieved.
The freehold question is of course a knotty one. It is a matter on which we must accept that on both sides of the House we shall not get absolute agreement. There are certain problems. There are the problems of timing and of management, to which my noble friend Lord Raglan referred. And I know that some of the new town corporations have sold freeholds in very special cases. I am sure that if there were very special cases the Department would still be willing to consider applications from the new town corporations.
Lord Raglan referred to the fact that we need more houses because we now have smaller households. This is something
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we have been finding in the new town in my own district. We find we require nothing like the number of school places that we thought would be needed seven or eight years ago when the new town houses were beginning to be occupied, because smaller families are moving in and smaller families are growing up in the town.
Lord Raglan also referred to the disadvantages of being under a Department of the Environment Minister and to the constant changes of Governments and Ministers, which meant that they had many more problems to deal with than perhaps an ordinary business organisation would have in regard to top management. I could suggest that the moral might be not to change the Government and, if one has a good Minister, not to change the Minister, but perhaps that is looking rather too far ahead.
He also made the extremely interesting suggestion—he admitted that he had not thought it through, and I am sure it is not something he would expect me to take on board without consideration—of some sort of State holding company to control the new towns, which he thought might perhaps be better and which would take them completely out of the local government field. I can see dangers there as well; we would have Ministers saying in Parliament, "This is not the responsibility of the Government but the responsibility of the board", and we should then run into trouble with noble Lords in this House if, as they thought, we evaded questions in that way.
I confess that my noble friend Lord Shinwell rather shook me. I remember, though he probably will not, that some 25 years ago, as a young housewife active in the Labour Party, I marched with my noble friend, in his constituency of Easington, behind his miners' banner in one of their famous miners' marches. I spoke on the same platform with him and was proud to do so. I also stayed with friends in one of the mining villages and they took me to see Peterlee, which was just starting. I must say that, as a young housewife, I would have preferred to live and bring up a family in the houses that were being offered in Peterlee than in the very close back-to back houses in the mining district, although I would accept that perhaps Peterlee did not have the same warm community spirit that one finds in the mining villages.

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The noble Lord asked whether we could have some reappraisal of new towns. That, my Lords, is what we have had. We have had a reappraisal of new towns in connection with inner cities. We have given new targets to the second and third generation new towns in order to make more money available to do just the kind of refurbishing which noble Lords have been asking us to do in our inner cities, to try to make them a much better place in which to live than they have become over the past 20 years.
But there are still many people who will look to the new towns for their homes and for their jobs, and who are just as enthusiastic today as were their original counterparts in 1946. They have a chance of a home, they have a chance of a job. They have all the amenities that go with a new district. They can have these things at rents which they can afford to pay, or at prices at which they can afford to buy their houses. In addition to that, we are now able to give money to the inner cities to help refurbish them.
All new town development boards are under very close scrutiny from their locals. They are not working as a thing apart. Many of the second and third generation new towns have, as of right, representatives of their local authorities on their hoards. From my own knowledge of new towns around my own area, and of the one with which I was involved, I know that there is very close liaison at all levels covering all kinds of amenities that are provided in the old town and the new. There is liaison between the existing authorities and the new town corporation, and it is at member and at officer level. They are certainly under very close scrutiny from the local people.
We hope that we will have more investment of the kind we have talked about, from the pension funds, from Norwich Union and institutions like them, who will help us; but this is not something on which we can depend completely to meet all our demands. Therefore, we must have this Bill to give the new town corporations the opportunity of borrowing the money if they cannot get it from other sources.
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The noble Lord, Lord Leatherland, confirmed my view of the new towns' abilities to attract industry and to provide the homes and the necessary amenities for families, as well as the very great human happiness that they can bring about. I think it was the noble Lord, Lord Shinwell, who spoke of new towns being a thing apart in the early days and not having the same kind of community spirit as older towns. I do not know what other new towns do, but in my own new town our existing city council, our district council, has been under tremendous pressure to do things for the older part of the city. The older residents point to the new residents and tell their city councillors of the kind of amenities and facilities which the new residents have, and to which they think they also are entitled.
The coming of a new town corporation, grafted on, as mine is, to an existing city, has been a tremendous advantage in terms of amenities for people in the older city where, before the advent of the new town, we had no community centres. Now almost every one of the wards in our city has a community centre because it is the practice of the development corporation to provide these facilities within each neighbourhood and each area as it builds it. Therefore the development corporation has also stimulated local demand for these things.
The right reverend Prelate the Bishop of Birmingham, referred to his doubts about the freehold situation as it applies to the Churches. This is a matter which we would have to look at before we could give a blanket assurance that freeholds would always be available for people who wanted to extend their church activities. Again I apologise for drawing on my own experience, but I should like to say that we have a rather super, one-off project within the new town of Peterborough, the Cresset, to which the Churches and all the voluntary organisations have contributed. The Churches are to use the buildings of the Cresset for their services, and the youth clubs and the old people will also use the premises. Surely this is one way in which the ratepayers and the development corporation can help the Church to get established within new areas.
My Lords, I think that, by and large,

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the Members of this House have accepted the need for the Bill, have accepted that our new town corporations are doing a good job, and that they are doing the job which we gave them to do. I am delighted that this Bill is being given a Second Reading, so enabling them to carry on doing that job.
On Question, Bill read 2a; Committee negatived.

LOCAL AUTHORITIES (RESTORATION OF WORKS POWERS) BILL
4.55 P.m.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk): My Lords, I beg to move that this Bill be now read a second time. This is a very short and simple Bill. It does no more than restore to 25 authorities powers which had been available to them up to the end of March this year. Under the general legislation, the direct labour organisation of a local authority is able to carry out both new construction and maintenance work for its parent authority. It may also undertake maintenance work for other local authorities and a wide range of public bodies. But a direct labour organisation does not have power to undertake new construction work for another local authority.
One of the effects of the local government reorganisation was to pose problems for a number of direct labour organisations since the scope for their employment was seriously affected when functions were transferred between the different types of authority. In particular, this meant that the direct labour organisations of the county boroughs, which were taken over by the new district councils, were no longer able to carry out new construction work on highways and education as those functions were transferred to the county councils.
Temporarily, this situation was dealt with by orders under the Local Government Act 1972. These orders enabled the direct labour organisations of 25 specified district councils to enter into agreements, up to 31st March 1977, to carry out new construction work for
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another local authority within the former county borough or borough area concerned. I should make it quite clear that each of these is wholly within the area of the particular district council, and there is absolutely no case of a direct labour organisation being permitted by the orders to do work outside the administrative area of its authority.
It obviously makes sense to continue these arrangements. For example, where a county council wishes to erect a school in the district council's area, the DLO of the district council may well have built a school for the former county borough council before local government reorganisation, and therefore have the experience and capacity to undertake the work. In these circumstances, it would surely be right for the county council to continue to have the opportunity to engage the DLO of the district council, if it wished to do so. To act otherwise could well be wasteful of resources.
Since the order powers expired at the end of March, the 25 district councils have not been able to enter into fresh agreements—although they have been able to carry on with work already started —and unless the Bill is enacted speedily there could be unnecessary redundancies in these organisations. The one substantive clause in this Bill does not extend the frontiers of direct labour; it simply makes the temporary orders permanent. Direct labour organisations account for only 8 per cent. of all construction output, and employ about 173,000 people. Most of their work consists of repairs and maintenance.
The Government's policy is to encourage efficient direct labour organisations. In this context the Government would have implemented in essence the recommendations in the report of June 1975 by the Chartered Institute of Public Finance and Accountancy. Separate accounts of DLO activities would then have been required. Charges would not have been limited to actual costs as at present, but could be based on original tenders, so that the extent of profits and losses would be known. All appropriate overheads would have had to be taken into account, including a return on capital employed. A local authority would have been under a duty to avoid making

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a loss, and powers would have been taken to close down activities where an organisation failed consistently to meet the financial objective.
This Bill today is concerned simply with 25 authorities, and even then with only a small part of the DLO activities of those authorities. It does not deal with new construction and maintenance work which a DLO may carry out for its own authority, nor with maintenance work which may be undertaken for a wide range of public bodies, including other local authorities; that is, client authorities.
To apply a new accounting system for the work covered by this Bill would mean that these 25 authorities would have to operate two different accounting systems, which would be both confusing and inefficient. It would therefore be unacceptable to include accounting provisions in this narrow, limited Bill, since it needs a far more comprehensive measure of the kind the Government originally intended to introduce. But, even without new accounting provisions, I roust stress that the client authority will itself be concerned to ensure that its work is undertaken as effectively and economically as possible. The safeguarding of the ratepayers' interests will he of particular concern to the authority in deciding the arrangements by which it gets its work done.
The Government will continue their work on improving procedures for direct labour organisations so that these can be embraced by subsequent legislation. Meanwhile, a Departmental Working Party has been concentrating on detailed arrangements on accounting, charging and tendering for new construction work in the light of the recommendations of the Chartered Institute of Public Finance and Accountancy. Its report on this is expected during the summer. The Working Party will then turn its attention to maintenance work, on which a further report by the same body is expected in the autumn. My right honourable friend the Minister for Housing and Construction has already undertaken to issue a consultation document when he has received the reports of the Working Party. My Lords, what we are concerned with today, therefore, I repeat, is a simple but necessary measure which deals with problems stemming from local government
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reorganisation, and I strongly recommend it to the House. I beg to move.
Moved, That the Bill be now read 2a.—(Baroness Birk.)
5.2 p.m.
Baroness YOUNG: My Lords, I should like to thank the noble Baroness, Lady Birk, for introducing this Bill to us this afternoon, and for her explanation. She says, quite rightly, that it is a short Bill, but, nevertheless, it is not quite as simple as I think she would lead the House to believe. As she has said, the Bill puts in statutory form the former orders allowing 25 district councils to carry out works for their county councils and neighbouring district councils in specified areas. These powers lapsed on the 31st March, and the Bill puts the orders in statutory form. This means, in fact, that the orders are permanent, as they are part of a statute; and, of course, as we know, there is a Scottish Bill to follow which takes the legislation into Scotland in a way in which it has not been taken before. So I think it would be wrong to suggest that there is no extension of powers, either in this Bill or, indeed, in the one that accompanies it.
However, what I think is disturbing to us on this side of the House is that, both on Second Reading and certainly on Third Reading, the Government Minister, the right hohourable Mr. Freeson, indicated that in fact a more comprehensive measure should follow; and if I heard the noble Baroness correctly, I think she repeated this statement. At any rate, on the 27th June, at column 132 of the Official Report of the proceedings in another place, Mr. Freeson said:
"As I indicated on Second Reading, I hope that before too long we shall be able to introduce the comprehensive measure that we had originally intended".
So I think there is no doubt at all that this is simply a forerunner, or holding measure, to something of the nature of the Bill originally intended by the Government.
I was therefore surprised to hear that the Government believed that we should have no objections to this, and that it would have a straightforward passage through this House. I think I should make it clear right at the outset that we are in principle opposed to direct labour departments in local authorities, and we are

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certainly opposed to any extension of this form of direct labour because it is, in effect, the nationalisation of the building industry by the back door. It is, I believe, very difficult to make out a case for direct labour building departments as such. I think it is perfectly possible for a local authority to have some direct labour for certain jobs which it would be extremely difficult to get done in any other way than by a local authority. The kind of jobs I am referring to are the gritting of roads in the winter time, and the rather unusual but difficult jobs that have to be done at particular times. But to have building works departments which are in direct competition with private industry seems to us absurd.
It is particularly absurd at a time when local authorities are under such acute financial pressures and when they already have enormous responsibilities which they must undertake. District councils, after all, have very considerable environmental responsibilities, frequently recreational responsibilities, responsibilities for museums and libraries, and so on. To undertake work which could be done by private enterprise seems an absurd way to spend public money.
Furthermore, at this particular time it is a very depressing state of affairs. There are now 204,000 unemployed in the building industry in this country, and I believe this constitutes one-fifth of the total unemployed in this country. It is true that there has been a very slight drop in the figures from February. This is almost inevitable, of course, as figures for construction work always alter in the summer time. Nevertheless, the figures indicate that the unemployment in the building industry is more than just a seasonal matter, and is therefore a very serious matter indeed for the country as a whole. At the same time, over the last two years there have been 2,500 company failures in the building industry, brought about by the general recession. I do not believe anyone can take any pride, either in the unemployment figures or in the business failures. They both indicate the sorry state to which this country has been reduced. What I think underlines them is that it is only by the support of private firms, of private enterprise, that wealth is created in this country to support the very services which local authorities must
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and, indeed, do run. To take away from them by setting up in competition, often in unfair competition, is not a sensible thing for the country to do and is not something which ought in any way to be encouraged because, of course, in almost every case it is a most wasteful exercise.
Many examples have been given of waste by direct building departments, but perhaps I might just say that the fact that there is absolutely no incentive for a direct labour department to be efficient, as of course it cannot go bankrupt, is one of the major difficulties which they are up against. If one considers the fact that last year, for example, the Government-supported National Building Agency produced a report showing that the Camden Borough Council may have lost up to £1 million because of the work done by its direct labour department, this, I think, is a deplorable and shocking event—and this particular example can be repeated time after time in the country. A report in the Evening News only two days ago indicated that, in Wandsworth, repairs to one house have cost the council thousands of more pounds than was necessary, and questions are obviously being asked in that council as to what is going on.
The reason why all this arises, of course, is that there is no suitable accountability for direct works departments. I was very interested to hear what the noble Baroness said on this point. I was interested that there should be a Working Party on accountability, and interested to know that this working party is expected to report later on this year. Nevertheless, I find quite unconvincing the argument that, when the Chartered Institute of Public Finance and Accountancy have published a report in which they make a number of recommendations on accounting procedures, so that it can be shown publicly to the council and to ratepayers whether direct work departments are producing as efficient and as economical a service as private enterprise firms can, when we have all these recommendations before us and when the Government believe them to be right in principle and would like to incorporate them into a larger Bill, they feel unable to incorporate them in this small Bill. Surely it is better to make a start in a small way, even if they cannot be included in something larger, than not to make a start at all, when it is in

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the interests of the local authorities themselves that their accounting procedures should be seen to be publicly appropriate and it is very much in the interests of the ratepayers that they should know that they are getting value for money.
Finally, my Lords, I think there is evidence to show that not all the 25 authorities covered by this Bill are at present making use of their powers, and that some of them would like to have their names taken off the list. This, again, is a matter to which we shall refer in Committee, and I do not intend to go into it further at this stage of the afternoon. Nevertheless, we on this side of the House feel there is no point at all in giving these powers to authorities which neither make use of them nor wish to make use of them.
The noble Baroness said that this was a short Bill; and many of the matters that I have referred to this afternoon will undoubtedly be raised again at the Committee stage. There is no use blinking at the fact that this is simply a forerunner to a larger Bill. In fact because of widespread concern by the building industry up and down the country that the Government, following their statement in the gracious Speech, intended to introduce a larger Bill which would have had the effect of nationalising the building industry, this Bill is the only thing that the Government were able to get through.
It is one that we are opposed to in principle. We believe it is the kind of Bill that encourages inefficiency and wastes public money at a time when the Government, and particularly local government, are short of money. It encourages Departments that are not publicly accountable. Now that the noble Baroness has said that the Government are not at this stage going to include the CIPFA recommendations, I think that this is all the more unfortunate. It is a Bill that we regard as completely unnecessary, and I am sorry that the Government have seen fit to bring it in.
5.11 p.m.
Lord O'HAGAN: My Lords, we are debating a strange little Bill with a strange Long Title: Local Authorities (Restoration of Works Powers) Bill. It sounds like something major and important and when
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we look inside we find that there is almost nothing there. But I would submit to your Lordships that it is important because behind the few, small clauses of the Bill are some major assumptions which have a wider significance.
The first question I should like to ask the noble Baroness, Lady Birk, is this. It follows from something that my noble friend Lady Young has said. Do we need this Bill at all? The noble Baroness read quickly from her brief the case for this legislation; but is it really necessary? And is it necessary to make it permanent? Do we need the whole apparatus of legislation going through both Houses of Parliament if all that is needed is the mere extension of some lapsed powers in a Bill? Can the Government assure the House that this is not a matter that could be done in some other way? Is legislation the answer for something that the noble Baroness said is really an attempt to correct an administrative oversight?
There are other wider questions which this Bill raises. Most of them have already been brought to your Lordships' attention by my noble friend Lady Young, but I should like to underline one or two. Those of us who study this subject know that the Minister for Housing and Reconstruction is a disappointed man. He wanted—and, from all reports still wants—a much wider, more fundamental, more radical Bill than the one now before the House. He was hoping to establish a permanent, far-reaching system for direct labour departments in local authorities to work outside the boundaries of those authorities. He and the Government went further. They intended to widen the scope of the work which direct labour departments are entitled to undertake. Where does this Bill fit into that scheme? Is this merely the forerunner of what the Government originally intended to do and had to withdraw at the last minute? I should like to ask the noble Baroness whether the original intentions of the Government remain the same. Have they withdrawn from them or will that previous Bill be reintroduced when the Parliamentary situation permits?—as it was put in another place. When the situation becomes easier for the Government, will they dust off that old Bill, take it out of the pigeonhole and attempt to ram it through both

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Houses? It seems that the Government are pursuing this Bill merely because they have to give a hint and a promise to their supporters of what they will do when they have the full chance to do so.
This is not a minor or narrow partisan matter; it is something of significance for any of us interested in local government. Local government has many tasks which it is called upon by central Government to do. To carry out those tasks we pay as ratepayers or as taxpayers through the rate support grant. It is very important that Parliament should impose upon local government only the tasks for which local government is qualified; therefore, if direct labour departments are to be extended in their scope and powers at some future time by this Government, we will pay if things go wrong; and we want to know how far the Government's intentions as originally expressed still stand.
There is another matter on which I should like to ask the noble Baroness for more information. It seems to me that what she was saying was self-contradictory. On the one hand, she laid great emphasis on the Government's enthusiasm for proper financial accountability and control of direct labour departments. She mentioned—and my noble friend Lady Young referred to this, also—that a Working Party had been set up and was, I believe, to report later in the summer. Yet both in the other place and here today the Government are saying, "If you had allowed us to go along with our original Bill, our wider Bill, we had a whole range of new techniques for controlling the expenditure of direct labour departments all ready to put on the Statute Book. We were going to make direct labour departments more accountable."
I want to ask the noble Baroness this: if those new procedures were ready to be introduced into a Bill, why are they not in this Bill? If they are ready, why is there a Working Party? It seems to me that the Government are having it both ways at the moment. I understand that the Chartered Institute of Public Finance and Accountancy issued its report in 1975. There has been ample time to study these matters. If the Government have studied them and were going to introduce these proposals into the original Bill, why cannot that be put before the House now?
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There is another matter that I must bring up in this House. I hope that I am not going to awaken the noble Lord, Lord Banks, from a quiet slumber; but what about the Liberal Party? Do they not care about the future of direct labour departments? What is their attitude in this matter? There is no Liberal spokesman down to speak. We want to know where they will stand in this matter. We must presume that silence means consent and that, in contrast to the other place, the Liberal Party in this House is in favour of this Bill and that, although Liberal spokesmen claim the credit for some of the things that happened to the original Bill, in this House they say nothing and care less.
I am in favour of short speeches, especially on short Bills and I will sit down very quickly indeed; but there are many detailed questions to which we must return in Committee because this small Bill has some larger matters concealed within it. Any noble Lord who looks into the question of direct labour organisations can find hosts of detrimental stories. I have a file of them but I will not weary your Lordships with all that I have learned and read. I want to know this from the Government. There are 25 local authorities mentioned in this Bill. I understand that only seven of them make regular use of their powers. What is the point of this Bill if it is for under one-third of the small number of local authorities for which it is designed? Is it really necessary? Or is it not a waste of Parliamentary time and merely a token flag waving to conceal the fact that the Government have had to withdraw the more fundamental measure to which they are still fully committed?
5.19 p.m.
Baroness BIRK: My Lords, the noble Baroness, Lady Young, did not feel able to agree with me that this was a short Bill and quite a simple one. I am always optimistic and I had hoped that everybody would see it the way I saw it. I appreciate that there is a fundamental difference of opinion about whether or not there should be direct labour organisations. That is one basic point. There has been constant doctrinaire opposition to this. There is no use my pretending that there is not a great gulf in this whole

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area. The Government have never claimed—and I certainly would not—that direct labour organisations are always perfect or that there is no room for improvement in their operations. On the other hand, I do not think that the noble Baroness or anybody else could argue that every private building operation is perfect, does not make bad errors or always conducts its business properly. There are occasions where the DLO has been used because the private building contractor has gone bankrupt. It is true that the district auditor's report is often quoted to point out failings in DLOs. The district auditors have also pointed out from time to time that there are savings which DLOs achieve, but these and also the occasions when DLOs have to take over jobs because firms have gone into liquidation, do not receive the same publicity.
There are many direct labour organisations throughout the country which provide an effective and efficient service for the authorities and also the ratepayers. Where work can be undertaken more economically and effectively by a DLO, because of continuity and local knowledge—and much of the work is on maintenance—it is in the ratepayers' interest that it should do so. The noble Baroness was not correct about Scotland. This Bill applies only to England and Wales and no temporary orders were made for Scotland. The Scottish measure simply seeks to regularise the activities of certain authorities which had been working for the predecessor authorities without the necessary powers to do so. That was just righting the situation.
If I may take up the basic points which cover some of the noble Baroness's comments as well, the noble Lord, Lord O'Hagan, asked about the need for the Bill. I repeat that it is required because the Local Government Act 1972, which reorganised local government, failed to deal with the situation of DLOs. The problems were dealt with initially by transitional orders under that Act, but our legal advice now is that the Act is not wide enough to enable the continuation of the powers to be achieved by further orders. If it had been possible to do so, we would certainly have not gone through the time-consuming work of introducing this Bill—and the noble Baroness and the noble Lord, Lord O'Hagan referred to that.
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Of the 25 authorities covered by the orders, 12 have used the powers. In these instances, the total value of work undertaken was nearly £3½million in 1975–76 and over £3½ million in 1976–77. While the use of the powers has been limited, their continuation is important for a number of the authorities. If they were not continued there would be significant redundancies. The noble Baroness is wrong regarding unemployment. I have gone into this matter because I considered the same questions. If one is unemployed, whether one is put out of work because there is no DLO for a local council, or because one worked for a private builder, the effect of unemployment is exactly the same on the individual. It is not right to say that to undertake work which could be done by private enterprise is absurd.
That brings us back to the tremendous gulf between us on that basis and which I do not think can be bridged. What is important for me to try to make clear once again is the difference between this small measure, which is trying to correct the present situation because the orders cannot be continued, and the far more comprehensive measure which the Government had in mind. It is true, as my right honourable friend has said in another place, that that measure in some form or other is still part of Government policy. Noble Lords opposite may dislike this intensely, but that is the situation and we can go on arguing about it till Doomsday. This is a difference in approach and view.
The important point which I tried to explain in moving the Second Reading is why the financial and other accounting provisions cannot he attached to this Bill. The reason is that this Bill applies only to the 25 authorities which were affected by the change in boundaries; and if these provisions were applied to them, they would be in a position of having two sets of accounting to do. It would apply only so far as these functions are concerned. Therefore not only would there be clumsiness but confusion, and an unbearable burden would be put on the local authorities.
Baroness YOUNG: My Lords, I am extremely sorry to interrupt the noble Baroness while she is in the middle of her argument, but is not the point that it would be perfectly possible for a local authority to introduce the CIPFA recom-

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mendations for those parts covered by this Bill, and in the other parts of its direct works department not covered by this Bill? There is nothing to prevent it doing that. Until the CIPFA recommendations are implemented—and this is important—we shall never know whether any direct works department has ever been more efficient than private enterprise because the basis for its accounting is different.
Baroness BIRK: My Lords, where a local authority can introduce any of the proposals, recommendations or advice, where it does not need legislation, there is nothing to stop it working on that basis. What cannot be done is to introduce into this narrow and restricted Bill a whole concept of a different form of financing, accounting and charging, which would require legislation. This legislation is being delayed in order to deal with the whole subject of DLOs. When that happens, the Secretary of State will have the added sanctions which will cover the points which the noble Baroness made regarding when the work of a DLO is not satisfactory. It will also mean that the terms of competition with private contractors are still more clearly laid down and more severely structured.
What seems to be forgotten is that this is not compulsory. No authority or county council has to go to the district council in order to avoid doing its own work; it only does so—and this Bill gives it power to do so—where it is obviously economically and financially beneficial so to do. The authority can still use outside contractors and many do. If authorities—and there are some— do not wish to make use of these powers, then they do not have to do so. It would have introduced hybridity into the Bill if any authorities out of the 25 had been omitted from this legislation.
This legislation keeps a status quo which was there before the 1972 Act and which has been continued by order. I would have thought noble Lords opposite would welcome this, grab it with two hands and say: "Thank goodness! it has not gone so far as we feared anything like this would go". What is going to happen in the future we shall have to leave for legislation. The fact that a Working
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Party is looking into this in great depth to try to get a better balance is a matter for congratulating the Government rather than "bashing" them. But whatever is said about it, and whatever Amendments the noble Baroness and her friends move in Committee, it would not alter the purpose of the Bill, as I have explained it; nor can they turn it into a larger, more sinister animal—which in fact it is not.
Lord O'HAGAN: My Lords, I shall not detain the noble Baroness, but should like simply to put the question which I put to her before; that is, if there were new and improved proposals for accounting procedures in direct labour organisations ready for the original Bill, where are they now? I know that the Long Title of this Bill may be restrictive —we have heard about that—but where are these proposals now? Were they not, in fact, ready in the first place?
Baroness BIRK: My Lords, the proposals would have been contained in the legislation which in fact was not proceeded with and was not published because of the Parliamentary situation in another place. That is the situation, as the noble Lord knows very well; it would have taken a very much more comprehensive look at the whole subject. This, as I keep repeating, is just to bring into line the 25 authorities, because the orders have now lapsed. If we do not do this, there will be redundancies and nothing will have been gained. But, nevertheless, it is not a compulsory measure. The comprehensive Bill, about which the noble Lord, is speaking would have set down the main principles of accounting and also the statutory framework for the detailed controls. The reason why the Working Party is still considering this is that they are still advising on the detailed arrangements. They have already advised on the broad arrangements, but this needs another Bill. I think that the comments addressed by the noble Lord to the Liberal Benches were probably better addressed to them than they would have been to me. I think he is probably right about that.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

NORTHERN IRELAND ACT 1974 (INTERIM PERIOD EXTENSION) ORDER 1977
5.31 p.m.
The MINISTER of STATE, NORTHERN IRELAND OFFICE (Lord Melchett): My Lords. I beg to move that the Northern Ireland Act 1974 (Interim Period Extension Order) 1977 be approved. In speaking to this order, I should like also to refer to the Northern Ireland (Various Emergency Provisions) (Continuance) Order 1977, which I will be moving immediately after this one. These two orders are closely linked and I hope that it will be for the convenience of the House if we discuss them together, and I then plan to move the second order formally.
The first order deals with direct rule. Under the Northern Ireland Act 1974, the arrangements for direct rule are renewable for a maximum of one year at a time, and the present legislation expires this month. In the present circumstances in Northern Ireland, the Government believe that there is no alternative to direct rule, and I am therefore seeking the approval of the House today to an order which will extend the statutory basis for direct rule for a further year from 16th July. The second order is concerned with security matters.
Although there has been some welcome improvement in recent months, the emergency in Northern Ireland continues and it is therefore necessary to renew for a further six months, from 24th July, the various emergency provisions under the Northern Ireland (Emergency Provisions) Act 1973, the Northern Ireland (Emergency Provisions) (Amendment) Act 1975 and the Northern Ireland (Young Persons) Act 1974.
I think I should emphasise that direct rule is not the Government's preferred form of government for Northern Ireland. Our aim remains the establishment of a form of devolved legislative government which will command widespread acceptance among all the people of Northern Ireland; but until this can be achieved there is no alternative to direct rule. I think it would be fair to say that direct rule is providing stability; this is helpful, hut stability is no substitute for a final constitutional settlement.
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During the period of direct rule, Government policy in Northern Ireland has three main facets. They are these: ending the violence; searching for a durable and acceptable constitutional solution; and improving the economy of Northern Ireland. Each of these aims has a degree of dependence upon the others. Recognising the need for movement on all three fronts, my right honourable friend the Secretary of State for Northern Ireland has in recent weeks taken steps to intensify security operations, to encourage Northern Ireland's political leaders to consider whether constitutional progress can be made and to stimulate the economy.
I believe that there has been some welcome progress on the security front, and this view is certainly justified by the available statistics. The Government are far from complacent and I know that all figures must be used with care, but two points stand out. First, the charging and conviction rate is up. Secondly, the level of violence is down. Comparing the first six months of this year with the corresponding period last year, shooting incidents are down from nearly 900 to just over 650, bomb explosions from almost 400 to 228, the weight of explosives used by terrorists from nine tons to less than two, and deaths from 174 to 79. Injuries have been cut by half. Although the overall trend of violence is unquestionably downwards, this is not to say that the Security Forces or the Government are in any way satisfied with the position. But we are confident that our general strategy is the right one.
I must emphasise, as my right honourable friend did in another place last Thursday, that we do not believe blanket measures will help in the present situation. The reintroduction of detention, or indiscriminate search and destroy operations, would produce few practical dividends to offset the alienation of the many innocent people who would experience the inevitable arbitrary and unfair consequences of such policies. Instead of introducing such draconian measures, we will continue to improve our present security policy. My right honourable friend repeated the main points of that policy of intensification in his speech during the renewal debate in another place last week, and I do not intend to repeat all of them today.

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I turn now to the need to continue direct rule, and to political and constitutional matters. The Government are anxious that there should be no misunderstanding about our constitutional objective in Northern Ireland. This remains the restoration of a devolved legislative Government. The essential criterion for the successful establishment of such a Government is that it should be widely acceptable in Northern Ireland—that is, acceptable to both parts of the community.
At the end of May this year—after the failure of the stoppage called by the United Ulster Action Council and after the district council elections—my right honourable friend held separate meetings with representatives of the official Unionist Party, the Social Democratic and Labour Party, the Alliance Party and the Democratic Unionist Party to discuss both security and constitutional matters. My right honourable friend told all the political Parties he met that, for his part, he was prepared to consider an interim arrangement which would involve the devolution of real power and responsibility, provided that it was an arrangement which would command widespread support from both parts of the community. Some Parties expressed an interest in continuing the discussion by looking at the possibility of creating some form of administration in Northern Ireland which would fall short of full legislative devolution. The exploration of the possibility of some interim arrangement is continuing, but is still at a very early stage.
To turn briefly to the economy, there is no doubt that economic progress is a vital factor in securing stability in Northern Ireland. The Government's economic policy is directed towards alleviating short-term difficulties, broadening Northern Ireland's industrial base and regenerating many of its existing undertakings for the longer term. We hope shortly to have the benefit of a new Economic Council to help us with this task. It is essential that Northern Ireland should be able to attract new investment in growth industries, and the Government regard it as an important part of their job to attract potential investors to Northern Ireland. Whatever we achieve on the industrial front, Northern Ireland, like the rest of the United Kingdom, faces the
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particular problem of very high levels of unemployment among young people.
I am particularly pleased, therefore, that we have been able to announce, in the Youth Opportunities Programme, a major new initiative which will increase by 2,000 to over 6,000 the number of training, job experience and employment places, and which will include a major expansion of further education and special courses for young people available for the Department of Education. The aim will be to offer a range of opportunities to those young people who are not able to get a job by conventional means within a few months of leaving school.
The Government believe that in Northern Ireland the last few months have been a time of slow but steady progress in a number of different ways. I repeat that we are certainly not complacent, and we do not believe we know all the answers. But we do believe that our policies are on the right lines and that they deserve support. We are making sustained and determined efforts to end the violence, to promote understanding among Northern Ireland's political leaders and to stimulate the economy. These three strands of our policy have a common theme and purpose. Our determination is to provide for Northern Ireland a stable future in which its people can live in peace. Direct rule is not our preferred position, but so long as it is necessary the Government will not shirk their responsibility to provide Northern Ireland with impartial, responsible and responsive government. In order to discharge that task, we need the legislation which I am asking your Lordships to renew today. My Lords, I beg to move.
Moved, That the draft Northern Ireland Act 1974 (Interim Period Extension) Order 1977, laid before the House on 24th May, be approved.—(Lord Melchett.)
5.42 p.m.
Viscount LONG: My Lords, I am sure that we are all most grateful to the noble Lord, Lord Melchett, for the way in which he has introduced these two orders, and for giving us so much information both about the economy in Northern Ireland and about security. I feel that it is better if I first say a few brief words on the security angle, because this is what we have all been watching very carefully. There are still certain of these

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frightful IRA gunmen, who are still shooting with their very fine weapons. Only yesterday two more policemen were shot, and the week before last two young soldiers, a padre and an officer were shot while returning from duty. Therefore, we on these Benches support all that the Government are doing to make sure that the security forces are given the best weapons, and to give encouragement from Westminster, in order to counteract the evils of the IRA, as well as to protect those people who always appear to be caught in the crossfire.
What worried some of us recently was the comment of the RUC on the comparison between its weapons and the high velocity rifles of the IRA. So I would ask the noble Lord whether the RUC have now been supplied with new rifles to counteract the IRA, as well as with the vehicles which they need to enable them to manoeuvre in a hurry, and under protection, around the danger spots. Unless we equip the security forces properly, they will be in difficulty before they even begin to move out of their barracks. So, as I said, we support all that the Government are doing to stop the IRA, and those who mistakenly believe that it is right to try to break down the country.
We also welcome the noble Lord's statement on the economy, and the way in which he and his right honourable friend Mr. Roy Mason are trying their hardest to keep the economy stable. The noble Lord mentioned that the Government want to draw investment into Northern Ireland in order to provide jobs and keep down unemployment, especially among young people. This we welcome, as we do the statement that education has a part to play in getting young people doing a proper job of work, rather than being on the streets, unemployed, and probably falling into the hands of the IRA or those who want them to behave in an indecent way with rifles and bombs.
Having said that, I should like to ask one question about the morale of the security forces in the province of Northern Ireland. Despite all the shootings that are going on, and the losses that they have had, is the morale of the RUC still good and is recruitment satisfactory? As I said, we welcome what the noble Lord has said on these orders, and we look
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forward to the day when they do not have to be introduced every six months or every year, but can be dispensed with entirely. But until the gunmen have been defeated, I am afraid that we must continue to accept these orders.
Lord HAILSHAM of SAINT MARY LEBONE: My Lords, may I say a word before the noble Lord replies, which I do not think my noble friend could have said for reasons which will be obvious. The noble Lord who has introduced these measures and who is one of the youngest Members of this House, in the full service of this House, is facing personally an uphill, difficult and intensely complex task. Some of us may be critical of the Secretary of State or the policies pursued, but I wish—and I am sure I speak for the older Members of this House—our young representative in Northern Ireland very great good fortune in the difficult responsibilities he has undertaken so early in his life. We admire the constructive and courageous way in which he is facing them.
5.47 p.m.
Lord MELCHETT: My Lords, I am deeply grateful to the noble and learned Lord for what he had to say. I take it as a tribute not only to myself but to my colleagues who are working in Northern Ireland with me, and I will make sure that the tribute is passed on to them. I am very grateful to him. The noble Viscount, Lord Long, asked me some important questions about the position of the security forces, and particularly of the RUC in Northern Ireland. I would say, first, that the noble Viscount is quite right in saying that the RUC have been placed under considerable extra pressure and danger in recent months, and I hope that I can convince the noble Viscount and your Lordships that both the Government and the RUC have responded very well to this increased pressure.
On the equipment front, two problems have arisen, to which attention has been addressed, so far as equipment for the RUC is concerned. The first concerns the acquisition of the M.I carbine by the RUC: and that stemmed, also, from the natural concern which the noble Viscount has expressed that the RUC should have the right weapons for the job they have to do in Northern Ireland. The recom-

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mendation in favour of the M.1 carbine came from the Chief Constable. The Chief Constable has available to him the resources of the force's research and planning branch, and the Police Authority technical officers, to advise on the range of weapons available and those best suited to the needs of the RUC. There were, unfortunately, some defects in the first consignment of M.1 carbines that were received by the RUC, but these have been resolved in consultation with the American manufacturer. A proportion of that first consignment is now in operational use and the balance is being used for training, Delivery of the main consignment of the new weapons is expected shortly.
The other problem concerns the reports of delays in the supply of armour-plated vehicles for the RUC, which again the noble Viscount mentioned. Most of the components are, of course, obtained through normal commercial channels and some difficulties have occurred. But these were tackled and overcome, and these new vehicles are now coming into service. So I hope the noble Viscount will feel that, on the two points he raised about equipment, action has been taken, and that, while problems were met, they have now been overcome.
The noble Viscount also asked me about the morale of the RUC. I can assure him, both from the advice that I have received and from my personal knowledge and contact with RUC officers, that their morale is excellent. The recent successes achieved by the RUC speak for themselves. This has undoubtedly done an enormous amount to improve the morale of the force.
When I opened the debate on the order I mentioned the very considerable increase in the number of arrests and convictions that has taken place in the last six months. This has been coupled with a decrease in the level of violence. I believe that this says a great deal for the spirit and success of the RUC. Its strength continues to increase and now stands at 5,423, compared with 5,055 12 months ago. In the first six months of this year there were 1,360 applications to join the force, which in itself is an indication of the morale and standing of the police in Northern Ireland. Already 278 recruits have been accepted.
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Our aim is to improve upon last year's record figure of 581 recruits. Similarly, and also very important, the strength of the full-time RUC reserve now stands at 943, compared with 729 on 20th June 1976; so there has also been a substantial increase in the full-time reserve.
May I conclude by thanking the noble Viscount very much for the welcome he has given to these orders, though coupled with a qualification which I certainly endorse: that we all look forward to the time when it will not be necessary to bring these orders before your Lordships' House at regular intervals.
On Question, Motion agreed to.

NORTHERN IRELAND (VARIOUS EMERGENCY PROVISIONS) (CONTINUANCE) ORDER 1977
5.52 p.m.
Lord MELCHETT: My Lords, I beg to move the draft Northern Ireland (Various Emergency Provisions) (Continuance) Order 1977.
Moved, That the draft Northern Ireland (Various Emergency Provisions) (Continuance) Order 1977, laid before the House on 24th May, be approved.—(Lord Melchett.)
On Question, Motion agreed to.

UNFAIR CONTRACT TERMS BILL
5.53 p.m.
Lord JACQUES: My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3a.—(Lord Jacques.)
On Question, Bill read 3a, with the Amendments.
Lord JACQUES Lord JACQUES moved Amendment No. 1:
After Clause 10, insert the following new clause:
Evasion by means of secondary contract
A person is not bound by any contract term prejudicing or taking away rights of his

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which arise under, or in connection with the performance of, another contract, so far as those rights extend to the enforcement of another's liability which this Part of this Act prevents that other from excluding or restricting.
The noble Lord said: My Lords, Clauses 2 and 3 of the Bill assume that a clause excluding or restricting the liability of the supplier of goods or services under a contract will be contained in a contract between the supplier and the customer, but this is not necessarily so. It may be contained in a contract between the customer and a person who was not a party to the original contract. I gave a detailed example during the Report stage on Monday. The purpose of the Amendment is to prevent evasion of the controls contained in the Bill by means of such a secondary contract.
I withdrew this Amendment during the Report stage on Monday in order to reconsider it in the light of the observations made by the noble and learned Lord, Lord Hailsham of Saint Marylebone, who doubted the need for the Amendment and criticised both its placing and its drafting. To deal first with the necessity for the Amendment, I should like to point out that the possibility of three-cornered contractual situations engineered by companies acting in collaboration came directly from the Law Commission. I submit that their advice on these matters ought not to he lightly disregarded. As to the placing of the Amendment, when I moved it on Monday it was to be found at the end of what is now Clause 13. Accepting the criticism of the noble and learned Lord and following the Scottish example, now I move it as a new clause after Clause 10, under the cross heading "Other provisions about contracts" rather than under the cross heading "Explanatory provisions".
Finally, I come to the wording of the Amendment. I have to report with regret that, after the most careful examination of the wording, we are unable to improve it. This is a difficult subject matter. We believe that the wording as it is now will stand up to analysis. It is, of course, not possible to achieve the desired purpose in the way it is achieved by the Scottish draftsman in his equivalent new clause, That method would be wrong for Part I, which is drafted throughout in terms different from those in Part II. I beg to move.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, I am grateful to the noble Lord, Lord Jacques, for having considered the criticisms which I felt bound to make at the first attempt and for giving effect to some of them. I still think that this is an over-elaboration. The mania of modern legislation to try to predict every form of evasion and to stop the hole in advance is cluttering up the Statute Book with an absolute mass of gobbledegook, and I believe this to be an example of it. Also, despite what the noble Lord has said, I vastly prefer the relatively lucid language of the Scottish equivalent to the extremely obscure language of this new clause. Having said that, I do not wish to hold up the business of the House, and I am grateful to the noble Lord for having improved the position, even to a modest extent.
On Question, Amendment agreed to.
Clause 15 [Scope of Part II]:
The SOLICITOR-GENERAL for SCOTLAND (Lord McCluskey)The SOLICITOR-GENERAL for SCOTLAND (Lord McCluskey) moved Amendment No. 2:
Page 8, line 3, leave out ("and").
The noble and learned Lord said: My Lords, may I speak to Amendments Nos. 2 and 3 at the same time. The real purpose of these Amendments is to avoid doubt—to make it clear, in other words, that the validity of any discharge or indemnity granted in settlement of any claim is not affected by any of the provisions in Part II of the Bill. Part II of the Bill contains several provisions which render void or of no effect a term of contract which purports to exclude or restrict liability for breach of duty or breach of contract. One finds an example in Clause 16(1) and, indeed, in other clauses.
It is not, of course, intended that controls should apply to any contractual provision which discharges any claim a person may have in respect of any liability which some other person may have incurred in the past. I understand that the problem which we visualise and have sought to cover by this avoidance of doubt provision does not arise in England. In England, the view is taken that what is termed in English law accord and

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satisfaction does not include or restrict any liability arising in future and that it merely operates to discharge a preexisting liability. I beg to move Amendment No. 2.
The Earl of SELKIRK: My Lords, I made an oblique reference to this point in my remarks during the Committee stage of the Bill, although I did not put the question directly to the noble and learned Lord. I believe this to be a sensible Amendment.
On Question, Amendment agreed to.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 3:
Page 8, line 4, at end insert ("and does not affect the validity of any discharge or indemnity given by a person in consideration of the receipt by him of compensation in settlement of any claim which he has.")
The noble and learned Lord said: My Lords, I beg to move Amendment No. 3.
On Question, Amendment agreed to.
Lord DRUMALBYN Lord DRUMALBYN moved Amendment No. 4:
Page 8, line 28, at end insert ("or the rights or obligations of its corporations or members or relates to the formation, constitution or dissolution of any unit trust scheme (as defined by section 26(1) of the Prevention of Fraud (Investments) Act 1958) or the rights or obligations of its trustee or managers or beneficiaries;")
The noble Lord said: My Lords, this Amendment relates to those who offer the opportunity to participate in investment in a particular way—that is, through unit trusts. I suppose that I should declare a modest interest. Like many others, I am a unit holder, with investments in two or three unit trusts. What the Bill provides in relation to these unit trusts is not clear, at least to some lawyers, particularly in relation to Scotland. I am not a lawyer and certainly the position is not clear to me.
It is important that in a matter of this kind the effect of the law should be the same in Scotland as in other parts of the country. The way in which the law is expressed in the Scottish part of the Bill—Part II—is necessarily different because of
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the difference between Scottish and English legal procedures and institutions. However, the outcome should be the same. That is what I think the EEC call "harmonisation". It is unfortunate that the point was not put to the Scottish Law Commission and there is doubt as to what the Bill intends. Clause 15(1) says that Part 11 applies only to contracts and subsection (2) says that Clauses 16 to 19 apply to any contract only to the extent that the contract fulfils one of five conditions, one of which is that it relates to services of whatever kind.
Subsection (3) goes on to exclude any contract, again to the extent that it is a contract of insurance or that it relates to the formation, constitution or dissolution of any body corporate or unincorporated association or partnership. As to the second paragragh, it appears that a unit trust scheme is not a body corporate or an unincorporated association or a partnership. Yet a unit trust provides opportunities for investment in much the same way as does a company. Indeed, under Section 17(1) of the Prevention of Frauds Investments Act, a unit trust scheme can be brought into operation only if it is sanctioned by the Department of Trade—if it is not the Department of Prices and Consumer Protection, because I am not quite clear how the Board of Trade empire was divided up between several separate departments—and its provisions are closely examined by a Government Department before authorisation is given. In those circumstances, one would have thought that the exclusion of unit trusts to the extent that they relate to the formation, constitution or dissolution of the trust should a fortiori extend to unit trusts as well as to companies, since no such authorisation is required in the case of companies.
The purpose of the Amendment is to ensure that a unit trust scheme shall enjoy the same exclusion as a company, corporated or unincorporated, or a partnership. It may be that, because of its nature and the authorisation that is needed, a unit trust scheme does not need such an exclusion. If so, I hope the noble and learned Lord the Solicitor-General for Scotland will tell us so, so far as Scotland is concerned. For that matter, perhaps he can tell us if the same applies to England.
It hardly seems conceivable that any unit trust scheme would be authorised if it included any provision restricting liability for breach of duty that the Department considered unreasonable. Nevertheless, unless this is explicitly stated in the Bill, beneficiaries under the trust—that is, investors—might challenge the reasonableness of any provision in the courts, and I suppose the courts might reach a different conclusion from that reached by the Department. I think this is undesirable, and for that reason I propose this Amendment, which would add further words to the exclusions in favour of unit trust schemes and the rights or obligations of these corporators or members. The reference to the rights or obligations of its corporators or members is taken from Schedule 1, paragraph 1(d)(ii) which provides exclusions from Clauses 2 to 4 of the Bill relating to England and Wales. I submit that the same provision should apply to Scotland, but I find no comparable words in Part II. I beg to move.
6.4 p.m.
Lord McCLUSKEY: My Lords, I am indebted to the noble Lord, Lord Drumalbyn, for giving me notice yesterday evening of his intention to move this Amendment. As he suggested, it really comes along rather late in the day, and I agree entirely with what he said; that is, that it is a great pity that this matter was not put, in the terms in which he has put it, to the Law Commissions. As the noble Lord has explained, this Amendment seeks two objectives: first, to add to the matters which are exempted from the Bill by Clause 15(3)(a)(i) the words,
"…or the rights or obligations of its corporators or members",
and of course as the noble Lord has explained these words are taken from the corresponding English part of the Bill. Secondly, the Amendment seeks to insert special exemption for contracts, so far as relating to the formation, and so on, of a unit trust or the rights or obligations of its trustees, managers or beneficaries.
If I may take the two points in that order, first the appropriate paragraph to which he has made reference in Schedule I makes a specific reference to:
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"…the rights and obligations of corporators or members".
We have considered this phrase very carefully in relation to Scotland and I have to advise the noble Lord that we have concluded that we cannot see that its inclusion in the Scottish part of the Bill in Clause 15 would make any significant improvement. Indeed, I fear it would cause some confusion because there would certainly be difficulty in Scotland in construing the term, "corporators", which I cannot confess to ever having encountered in my brief career in the law. It is not a word which is a term of art in Scots law, and for that reason I should be reluctant to allow it to come into this clause in this part of the Bill. It would seem to me to add confusion. In any event the words which he wishes to add seem to be covered already by the words in Clause 15(3)(a)(ii):
"… formation, constitution or dissolution of any body corporate or unincorporated association or partnership".
For these reasons I am not happy with, and would ask your Lordships not to accept, the first part of the Amendment. With regard to the second part, I would suggest that the noble Lord has chosen the wrong vehicle to move the Amendment, because he is proposing to amend the policy of the Bill in regard to unit trusts. If he wanted to do that, he should surely also have moved an Amendment to Schedule 1 as well as to Clause 15. It is our judgment that if he does not do so, and if this Amendment were to be carried, the law in Scotland would then in the result be different from that in England and Wales.
The question of the application of the Bill to unit trusts has been carefully considered in detail, both by the Department in England—the Department of Prices and Consumer Protection—and by the Scottish Office advisers concerned with the same matter. The view of both Departments is that, in so far as there are any provisions in a unit trust scheme which are contractual in character—and of course there may be provisions which are not contractual in character—and provide for services being rendered by the managers and the trustees, or by the trustees alone, no reason has been presented why they should not be subject to the controls imposed in the Bill. In

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so far as those provisions in a unit trust scheme are not contractual but fiduciary in nature, they would not of course be caught by Part II at all, because as Clause 15(1) makes clear, Part II, as the noble Lord has pointed out, applies only to contracts.
The provision in relation to companies was included because of the recommendation of the Law Commission. I would certainly he inclined to accept what the noble Lord has suggested or has implied; that is, that it is hardly likely that a unit trust scheme which has got past the Department—in fact it is the Department of Trade which is responsible —could then be attacked in the court as being unreasonable in some particular. So it may be that, in fact, this is very much a shadow of a fear rather than a real fear.
For that reason, also, I would ask the noble Lord not to press this Amendment. But I should like to make it clear that, in so far as the unit trust scheme contains contractual provisions relating to services, the policy of the Bill, both in England and Wales and in Scotland, is to cover the appropriate term of the contract. In case the noble Lord should think there is some difference between England and Scotland, I would remind him that if he looks at Schedule 1 in relation to England, and in particular at paragraph 1(e), the wording of that does not exclude a unit trust scheme. The wording there is:
"… any contract so far as it relates to the creation or transfer of securities or of"—
and perhaps, "of" is the important word—
"any right or interest in securities".
I suggest that the policy, as the Bill stands, is applied equally to England and Scotland and the effect of the Amendment would be to change the policy for Scotland. I therefore ask the noble Lord, Lord Drumalbyn, not to press this Amendment.
Lord DRUMALBYN: My Lords, I am grateful to the noble and learned Lord, Lord McCluskey. I apologise for giving him such short notice of this matter. However, perhaps an apology is also owed to me. The noble and learned Lord has explained the position with great
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clarity. I appreciate that, had I had the time and foresight, I would have amended the Schedule as well to make certain that there was no difference between the law of England and the law of Scotland, or its substance in relation to the Bill. The noble and learned Lord has satisfied me of the reasons for the policy decision to exclude unit trusts from the purview of the exclusions, and for that reason I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord DRUMALBYN Lord DRUMALBYN moved Amendment No. 5:
Page 8, line 28, at end insert—
"(iii)relates to the creation or transfer of securities or of any right or interest in securities;".
The noble Lord said: My Lords, this is an Amendment to which the noble and learned Lord the Solicitor-General has already referred obliquely. It is certainly shorter than the previous Amendment, and its meaning appears, on the face of it, to be clear. Therefore, I shall be brief. Schedule 1, as the noble and learned Lord has said, relates wholly to England and Wales, and includes a provision in paragraph 1 where it says:
"Sections 2 to 4 of this Act do not extend to—
(e) any contract so far as it relates to the creation or transfer of securities or of any right or interest in securities".
I cannot find any comparable provision in Part II of the Bill which applies only to Scotland.
Therefore, my first question must be: is the same result achieved in Part II in different words? If so where, and if not why not? My second question is: what is meant by "securities"? I cannot find a definition in the Bill, but from what the noble and learned Lord has already said it would seem to me that perhaps "securities" does cover the units of unit trust, and perhaps he will confirm this.
Although unit trusts differ from companies in that they do not engage in the provision of goods or services other than the services of their expertise and investment, a unit holder is investing in much the same way as the holder of securities in a company, except that they are spreading their risk over a number of securities

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chosen by the managers. For the purposes of the Bill there seems no reason why unit trust units should not be treated as securities. After all, I am advised that for tax purposes an authorised unit trust scheme falls to be treated by the Inland Revenue as if it were a company and the units were shares. In this case, of course, we are talking solely about a contract so far as it relates to the creation or transfer of securities or of any right or interest in the securities—"so far" and no further. To that extent it seems to me that the same general provision should apply to Scotland as to England and Wales. I hope that the word "securities" covers units in unit trusts as well as shares, whether fixed interest or otherwise, in companies.
Lord McCLUSKEY: My Lords, the reason why the noble Lord, Lord Drumalbyn, cannot find the equivalent provision in the Scottish part is that, as he knows, it is not there. I assure him that the same result is achieved. The reason it has to appear in Schedule 1 relating to the English part but is not required to appear in relation to the Scottish part. is that the whole drafting scheme of the Scottish part is different from the drafting scheme of the English part. In effect, the English part of the Bill applies to contracts unless they are taken out under Schedule 1. In the Scottish part of the Bill, Clauses 16 to 19 apply only to those contracts which are specified. Therefore, unless a contract is specified in Clause 15(2) one does not need to exclude it unless possibly for the avoidance of doubt, as one has in one or two cases. Therefore, if one now looks at Clause 15(2) one simply does not find that a contract of this kind is included. For that reason we did not go to the trouble of excluding it. That is the explanation.
As regards the other matter, there is, in fact, no definition of "securities" in the Bill. No definition is needed and I advise the noble Lord that my advice is that it certainly includes units or covers units under a unit trust. I am advised that the only statutory definition of securities which is available does not cover a wide enough area of all securities. However, my advice is that "securities" here does cover unit trusts.
Lord DRUMALBYN: My Lords, I am much obliged to the noble and learned Lord, Lord McCluskey. It is clear from what he has said that it would be unnecessary, and possibly undesirable, to put these words into the Bill, and therefore I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
6.17 p.m.
Lord McCLUSKEY Lord McCLUSKEY moved Amendment No. 6:
After Clause 23, insert the following new clause:
Evasion by means of secondary contract
Any term of any contract shall be void which purports to exclude or restrict, or has the effect of excluding or restricting—

(a) the exercise, by a party to any other contract of any right or remedy which arises in respect of that other contract in consequence of breach of duty, or of obligation, liability for which could not by virtue of the provisions of this Part of this Act be excluded or restricted by a term of that other contract;

(b)the application of the provisions of this Part of this Act in respect of that or any other contract.

The noble and learned Lord said: My Lords, this is the Scottish provision designed to have the same effect as the one introduced into the Bill in the first Amendment spoken to this afternoon by my noble friend Lord Jacques. The noble and learned Lord, Lord Hailsham of Saint Marylebone, complimented the Scottish draftsman on the previous occasion for the succinctness and lucidity of the drafting. Unfortunately, my noble friend Lord Jacques gave an example of a particular case which had not occurred to the draftsman and the Departments and he has caused a good deal of extra work since he introduced that example during the Report stage on Monday. The end result is that we have had to change the wording which was praised by the noble and learned Lord, Lord Hailsham of Saint Marylebone, on Monday night.
My Lords, again there is a difference in the drafting style and approach to the Bill in this regard. Part I of the Bill is expressed in personal terms and imposes controls upon the extent to which a person can exclude or restrict his liability for negligence and the like. However, when one turns to the Scottish Part it is not

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drafted in personal terms. Its provisions are addressed not to persons but in respect of contract terms. For example, it provides that a contract term which purports to do a certain thing shall be void or of no effect in certain circumstances. Therefore we could not adopt the English wording, and so the wording is different. The wording in the new clause achieves for Scotland what my noble friend Lord Jacques has spoken of as regards England. Paragraph (b) is designed to cover the particular example that he gave during the Report stage debate. I beg to move.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, again all I have to say about this is that I am sorry that the noble Lord, Lord Jacques, has obscured the felicity of language of the original draft of the Scottish draftsman. This again is a meaningless piece of gobbledegook designed to guard against an imaginary danger which will never come about and which, if it did come about, would either be wholly unreal or the courts could deal with it effectively without the aid of the complicated draftsmanship of this miserable Amendment. Having said that, I shall not hold up the business of the House.
On Question, Amendment agreed to.
Clause 27 [Choice of law clauses]:
Lord JACQUES Lord JACQUES moved Amendment No. 7:
Page 15, line 19, after ("7") insert ("10").
The noble Lord said: My Lords, this is a consequential Amendment on an Amendment which was accepted by the House at the Report stage. I beg to move.
On Question, Amendment agreed to.
Lord JACQUES: My Lords, I beg to move that this Bill do now pass. I ask the House to bear with me for just two minutes so that I might do what I very much want to do; that is, to express thanks for the help I have been given from all sides. First of all, I would especially thank my noble and learned friend the Lord Chancellor and his staff for the considerable
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assistance which they have given me. Without that assistance I doubt whether I could have piloted this Bill through the House. I would also thank my noble and learned friend Lord McCluskey and his staff for the help they have given me in handling the Scottish side. May I also thank my right honourable friend the Secretary of State for Prices and Consumer Protection and his staff for the assistance and briefing I have had on this Bill.
I thank noble Lords on all sides who have tried to improve the Bill, particularly the noble and learned Lord, Lord Hailsham and the noble Lord, Lord Lyell, from the Opposition Benches, and Lord Airedale from the Liberal Benches; nor do I forget the considerable help that we had from the noble and learned Law Lords on the Cross-Benches. They were of considerable help on the intricate, and in one case contentious. part of the Bill. I am grateful to all concerned. I am sure that my honourable friend Mr. Michael Ward, the MP for Peterborough who sponsored this Bill in the Commons, will feel that this House has dealt with his Bill in a very constructive way. I wish him every good fortune in the final stages of the Bill.
Moved, That the Bill do now pass.—(Lord Jacques.)
6.22 p.m.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, I thank the noble Lord, Lord Jacques, for the kind things he has said about us on this side, and particularly about my noble friend Lord Lyell, who on our behalf has really shouldered an extraordinarily difficult and detailed task, with which I do not think I could have coped had I had to face it alone. If I may be allowed to say so, it is only another example of the way in which hereditary Peers are able to discharge important functions. They are young men of professional qualifications; they give their services for nothing. I do not think I could have coped with this technical little Bill if I had not been assisted by someone of that character. I am sure my noble friend will be glad to know what the noble Lord, Lord Jacques, has said.
I should also like to offer my congratulations to Lord Jacques. He has shouldered

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an immensely difficult task with extreme skill. We on this side miss him from the Government Bench; we know his extreme kindness and patience and conscientiousness in dealing with our various complains, whether querulous or reasonable, and these we have experienced again in the way in which he has dealt with us on this occasion. I think he has performed a very important task in getting the Bill through this House, with the assistance of the Government, as he rightly said. I do not think one ought to pass legislation of this kind unless it is approved by the Government of the day; it is far too complex and one is bound to make mistakes. But he had the assistance of the Government, and I think he has performed a very important task. The weight of opinion behind this Bill and the demand for it was really overwhelming. The words of the noble and learned Lord, Lord Morris of Borth-y-Gest and the noble and learned Lord, Lord Denning, will be fresh in your Lordships' minds. The two Law Commissions have backed it. The various consumer organisations have backed it, and I suppose the various particular interests whose views we felt it necessary to ventilate at various stages have not really knocked much of a dent in it.
I retain, I am sorry to say, my own scepticism about introducing reasonableness into the law of contract as a legal test, or rather extending it, because it is already there. I appear to be alone in this respect, or almost alone. I have done my best, as the noble Lord, Lord Jacques, very kindly said, to take a constructive and not destructive part in these debates. I am grateful for the small additions and amendments that, with the assistance of the Government and Lord Jacques, we were able to carry through. I hope in this respect I am not Athanasius contra mundum, but I feel that, sitting where I do with the background that I have, I ought to hold a sort of watching brief for the general theory of law in the legislation we pass. If I do not express quite the same enthusiasm for the Bill that the noble and learned Lords on the Cross-Benches expressed, I can only end by saying that I hope I am wrong. At any rate, the great mass of public opinion is with the noble Lord, Lord Jacques, and
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against me. I congratulate him on his success. It would have been wholly wrong had he not been allowed to carry through his worthy endeavours to fruition, because that is what the public wants.
6.24 p.m.
The LORD CHANCELLOR: My Lords, may I on behalf of the Government express my gratitude to Lord Jacques, the sponsor of the Bill in this House, for the cheerful, competent and masterful way in which he has led us through this highly technical Bill. The noble Lord, Lord Lyell, was not present to hear the well deserved tribute paid to him by the noble and learned Lord, Lord Hailsham, in a gracious speech for which we are all grateful. He suffered the long days and nights, the heat and battle, of the Patents Bill with a similar fortitude worthy indeed of his military background, and we are grateful to him.
The agreeable thing about the progress of this Bill is that sometimes it has enjoyed criticism, but always constructive criticism, from noble Lords of all Parties and of none. I think that perhaps we should expressly indicate our debt of gratitude to the Law Commission and the Scottish Law Commission, who laid the foundation for the Bill and continued their interest during the passage of the Bill. For our part also, we would like to thank those one does not often expressly refer to who have been guiding us with their expertise through the Bill.
I believe that the Bill represents a major step forward in the development of the law of contract and it is good that it has been given a general welcome in your Lordships' House. The experience has yet again shown the value of this House in improving legislation as it goes through the House.
On Question, Bill passed, and returned to the Commons.

LONDON TRANSPORT BILL
Returned from the Commons with the Amendments agreed to.
  SELF-EMPLOYED PERSONS: EEC SOCIAL SECURITY REGULATIONS
  SELF-EMPLOYED PERSONS: EEC SOCIAL SECURITY REGULATIONS
  MINING SUBSIDENCE COMPENSATION
  MINING SUBSIDENCE COMPENSATION