Sitting of 19 July 1977

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

  CITY OF LONDON (VARIOUS POWERS) BILL
  [Lords]
  Read the Third time and passed, with amendments.

  NORTH WEST WATER AUTHORITY BILL
  [Lords]
  Order for consideration, as amended, read.
  To be considered upon Thursday.

  BRITISH RAILWAYS ORDER CONFIRMATION BILL
  Considered; to be read the Third time.
ORAL ANSWERS TO QUESTIONS
  SOCIAL SERVICES

    Disabled Persons (Vehicles)
    Mr. MacKayasked the Secretary of State for Social Services how many extra people would now be in possession of invalid tricycles if previous policies had been maintained.
    The Under-Secretary of State for Health and Social Security (Mr. Alfred Morris): No precise estimate can be made. The hon. Gentleman may, however, like to to know that under our new policy over 48,000 severely disabled people are now receiving outdoor mobility help for the first time ever.
    Mr. MacKay: Is the Minister satisfied that many people who have become disabled since last July, when trikes were no
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    longer given out to disabled people, are severely restricted and need assistance?
    Mr. Morris: I shall be delighted to look into any particular case that the hon. Gentleman may wish to refer to me. Other hon. Members have taken advantage of a previous offer. The Question assumes that there was no element of choice in the previous scheme, whereas in fact more and more people were choosing a private car allowance instead of a trike under the old scheme. Between January and June 1976, when there was a choice between the trike and the mobility allowance, about 96 per cent. of disabled people chose the mobility allowance.
    Mr. Crawshaw: I appreciate the help that is being given, but is my hon. Friend aware that there are many people who have been able to spend a lifetime at work because from the word "go" they have had the ability to get to work and back? Is there not a disincentive under the present system to people starting work while disabled because of their inability to get to work and back? Could not this be taken into consideration?
    Mr. Morris: I fully appreciate the point that my hon. Friend is making. Our phasing-out programme is very gradual. We are particularly mindful of the claims of people who will need extra help to get to and from work. We have been in close contact with the Royal Association for Disability and Rehabilitation about a scheme which may provide for the leasing of vehicles. All that my hon. Friend has said today will be taken fully into account.
    Mr. Hal Miller: Can the Minister tell us what progress is being made towards developing a new and more suitable vehicle than the tricycle and whether there is any hope that those at present with tricycles can look forward to receiving a replacement vehicle either by leasing or by some other means?
    Mr. Morris: There are a number of prototypes and I have seen several of them recently. The GKN Sankey prototype is fairly well known. We have given a strong commitment to people in the existing scheme. My right hon. Friend the Secretary of State has given what he calls a "cast-iron assurance" to disabled drivers in the old vehicle scheme. The

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    hon. Gentleman can be well assured that we are fully mindful of the problems of people who will still need specialised vehicles when we can no longer replace their tricycles.
    Mr. Park: Regarding employment, is it not a fact that my right hon. Friend the Secretary of State for Employment has said that no person would be denied the opportunity of seeking and retaining employment and that he would deal with the matter? Is it not true that an evaluation of the GKN prototype vehicle is being carried out and that there are now discount schemes with the major motor manufacturers?
    Mr. Morris: On the final point, I recently gave a reply to my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley), listing all the available concessions. My hon. Friend is correct in the point that he makes about the GKN Sankey prototype. In regard to the Employment Service Agency scheme, we are in close contact with my right hon. and hon. Friends at the Department of Employment. The very worst inheritance that I had when I became a Minister was the arrangement under category 3 of the old scheme whereby if a disabled person lost his job he also lost his vehicle. I take pride in the fact that this Government have ended that system.
    Mrs. Chalker: We accept that a lot has been done. Does the Minister accept, however, that there is still great concern about those leaving school or who have become newly disabled and cannot go to work? Will he institute a special inquiry among the schools for the handicapped and the training centres for the newly disabled to make sure that no one is prevented from working by the lack of a vehicle?
    Mr. Morris: I share the concern of those who have anxieties about further improving the mobility of the disabled. Getting out of hardware is not an easy task. There were many criticisms of the invalid tricycle. We must not be put in a position where we cannot do right for fear of doing wrong. I am mindful of the point made by the hon. Member for Wallasey (Mrs. Chalker). I assure her that we shall do everything possible further to improve the mobility of disabled people, not least disabled young people.

    Pharmacists
    Mr. Hodgsonasked the Secretary of State for Social Services what further consulations he has had with pharmacists about their new contract.
    Mr. Madelasked the Secretary of State for Social Services what further consultation he has had with pharmacists about their new contract.
    The Secretary of State for Social Services (Mr. David Ennals): I am meeting representatives of the Pharmaceutical Services Negotiating Committee again on 25th July to continue our discussions about NHS remuneration.
    Mr. Hodgson: Will the Secretary of State explain why he is proposing to make retrospective cuts of £11 million in the revenue receivable by chemists from the NHS? Is not this another example of the Government penalising efficiency and a matter which will ultimately redound against the interests of all consumers?
    Mr. Ennals: There is no question of retrospective cuts. The stock-holding inquiry held in 1975, the validity of which was not challenged by the Pharmaceutical Services Negotiating Committee, showed that pharmacists' working capital had fallen from its previously assumed level. The PSNC agreed that the new figure, whether it be higher or lower, should operate from the date of the inquiry.
    Mr. Ogden: My right hon. Friend knows of my special interest in the Pharmaceutical Society. I am grateful, as are most responsible chemists, for the special interest that he takes in problems facing pharmacists. Is he aware that the new President of the Pharmaceutical Society, Mrs. Estelle Leigh, is a Liverpool pharmacist? Will it be possible for my right hon. Friend to arrange to meet her and her colleagues during the Summer Recess to discuss not only negotiation, which is not the real duty of the society, but outstanding problems in this regard?
    Mr. Ennals: I have already met Mrs. Leigh, for whom I have great respect. I assure my hon. Friend that if she and her colleagues from the Pharmaceutical Society want to have a discussion with me on any relevant issues I shall be delighted to see them.
    Mr. Costain: Does the Secretary of State appreciate the problems in villages caused by chemists shops shutting down? Will he pay special regard to this problem, which is causing great anxiety to the elderly who have to travel many miles to the nearest chemist's shop?
    Mr. Ennals: I am always concerned when this happens. There is a steady reduction year by year in the number of pharmacies, but most of them are not in villages. Some closures in urban areas are due to changes in population patterns as a result of slum clearance and so on.
    The negotiating committee and I have a common concern to do more to help the small pharmacy. As the hon. Gentleman recognized, the small pharmacy is in the greatest danger. We are discussing how to give greater protection to the small pharmacy.
    Dr. M. S. Miller: In view of the difficulties encountered by the pharmaceutical profession—there has been reference to the numbers of pharmacies closing year by year—and since this situation has nothing to do with the intrinsic nature of the National Health Service, will my right hon. Friend try to encourage local authorities to institute pharmacies within health centres?
    Mr. Ennals: There are pharmacies within a number of health centres. It is far better that that should be the case than that there should in a sense be competition to get a pharmacy very close to a health centre. I am not prepared to give a direction on this matter by any means, but I should always approve of a recommendation that there should be a pharmacy within a health centre, particularly a big one providing services for a larger population.
    Mr. Patrick Jenkin: Is the Secretary of State aware that there is widespread anxiety about the likely effect of the announcement that he has made about the pharmacists' contract, as evidenced by the fact that there is an all-party motion on the Order Paper signed by 212 hon. Members from both sides of the House? Does he agree that there is something inherently undesirable about a contract which appears to penalise efficiency in that the more efficiently the
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    pharmacists use their capital, the more income they appear to lose? Is the examination taking account of the need to try to build in some kind of incentive payments for pharmacists that will help to keep pharmacies within the community instead of accelerating their closure?
    Mr. Ennals: I do not agree with the right hon. Gentleman's diagnosis. I am prepared to look at any new proposals, though none has yet come forward, on a totally new restructuring of the system of remuneration. The only announcement that I made today was that I was going to meet the negotiating committee on 25th July. I do not want to anticipate anything that happens then. I am considering carefully the representations that have been made to me by the pharmaceutical companies.

    Health Sere ice Facilities (Bromley)
    Mr. Goodhartasked the Secretary of State for Social Services what plans there are to reduce Health Service facilities for those living in the Bromley Health Authority Area.
    The Minister of State, Department of Heath and Social Security (Mr. Roland Moyle): There are no firm plans to reduce facilities. The Bromley Area Health Authority is examining the feasibility of rationalising maternity and children's services in order to free resources, mainly to improve community and psychiatric services.
    Mr. Goodhart: I appreciate that there is a surplus of maternity beds in the area. Will the Minister bear in mind that the suggestion that the Beckenham Maternity Hospital might be closed would bear particularly hard on the residents of Penge and Anerley who have less private transport than most residents in the area and that public transport facilities for getting to other hospitals are grossly inadequate?
    Mr. Moyle: If the community health council makes those points, I am sure that the Bromley Area Health Authority will listen to them. If there is still a dispute about the future of the hospital, ultimately the decision will come before my right hon. Friend or myself and at that stage I should be prepared to see the community health council. At this

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    stage I should not want to comment on the merits of the scheme.
    Dr. Vaughan: We appreciate the problems that the Minister is creating in the Bromley area. Will he tell us what advice he has given to the Bromley Area Health Authority for dealing with cases such as that of Mrs. Ward?
    Mr. Moyle: I should like notice of Mrs. Ward's case. I am not creating any problems in the Bromley area. I have had no contact with the Bromley Area Health Authority. I do not see how I can be accused of creating problems in that area.

    Supplementary Benefits System (Review)
    Mr. Neubertasked the Secretary of State for Social Services when he expects the Supplementary Benefits Commission to have completed its review of the supplementary benefits system.
    The Minister for Social Security (Mr. Stanley Orme): I cannot yet say when the team of officials which my right hon. Friend established to carry out this review in close consultation with the Commission will complete its work. But we hope to receive early next year its first recommendations for discussion of possible options for the future, which we have undertaken to publish.
    Mr. Neubert: Why must we wait until 1979 for the full implementation of the child benefit scheme? Why does not the Minister take the opportunity to complete the change next April?
    Mr. Orme: That question has nothing to do with the Question on the Order Paper.
    Mr. Boscawen: Does the Minister recall those confident days when the Labour Party used to condemn any extension of means-tested benefits? How will he end means-tested benefits? What does he have to say about the fact that there are 1 million more people on means-tested benefit today than there were four years ago?
    Mr. Orme: Our attitude to means-tested benefits has not changed. The development of the child benefit scheme is an indication of the phasing out of means-tested benefits.
    Mrs. Chalker: What response has the Minister felt able to give to Professor Donnison, who has committed himself to believing that the best way of getting rid of many of the problems of means-tested benefits is to phase in a full tax credit scheme?
    Mr. Orme: Professor Donnison, as Chairman of the Supplementary Benefits Commission, rightly has a great deal of freedom to express his and the Commission's views, and obviously the Government will listen to what he has to say.

    Child Benefit Scheme
    Mr. Andrew F. Bennettasked the Secretary of State for Social Services if he will receive a delegation from Stockport Gingerbread Group to discuss the child benefit scheme.
    Mr. Orme: My right hon. Friend has twice received a delegation, which included Gingerbread, at national level, and its views have been taken fully into consideration. As my hon. Friend will know, we have now announced a substantial improvement in the rates of child benefit, including doubling the premium for one-parent families now getting 50p.
    Mr. Bennett: May I assure my right hon. Friend that the Stockport group is extremely pleased about the announcement that was made last week? However, there is still some concern because it is so sad that the announcement always comes so early compared with the actual uprating. Can my right hon. Friend tell us how soon the whole thing will be put on a computer so that the uprating can be done more quickly and so that there can be variations according to the age of the child?
    Mr. Orme: On the last point, I am sure that my hon. Friend and the House would want to examine in some detail whether we wish to have different rates, because that could possible be regressive. As for computerisation, we are taking steps in that direction but it will possibly be some time in the 1980s before this is completed.
    Mr. Peter Bottomley: Will the Minister explain his reply to my hon. Friend the Member for Romford (Mr. Neubert) in which he said that the supplementary benefits review and Professor Donnison's

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    speech had nothing to do with the child benefit scheme, although the right hon. Gentleman has spoken of using the scheme as a means of getting people off mean-tested benefits? Why have the Government decided not to bring in the full child benefit scheme by April of next year?
    Mr. Orme: We have discussed this in the House many times and we now have an agreement for phasing in the child benefit scheme which has been widely accepted. I should have thought that the substantial increase that is proposed for next year—which will cost more than £300 million in public expenditure—was a sign of the Government's good intentions.

    Vaccine-Damaged Children (Compensation Claims)
    Mr. Adleyasked the Secretary of State for Social Services when he expects to be able to advise parents of vaccine-damaged children how they are to submit claims for compensation; and if he will announce some guidelines at an early date.
    Mr. Ennals: As I made clear in my statement to the House on 14th June, the detailed provisions of the scheme of payments for vaccine damage cannot be determined until we have received the report of the Royal Commission on Civil Liability and Compensation for Personal Injury. As soon as the report is received. we shall examine its recommendations in detail so that a scheme of payments can be decided without delay. The provisions of the scheme and arrangements for the submission of claims will then be publicised. In the meantime, advance work is in hand by my Department on possible arrangements.
    Mr. Adley: I thank the right hon. Gentleman for that reply. Would he agree that it would be tragic if, in the case of some parents, hope were to turn to disappointment and even bitterness because they had thought that they would qualify for compensation on behalf of their children and subsequently found that they did not? Will the right hon. Gentleman consider establishing immediately some form of preliminary inquiry, even one as basic as for the purpose of establishing that a child received a vaccination at a given time from a certain doctor and subsequently suffered symp-
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    toms similar to brain damage? Would not that avoid some of the potential misery that might occur?
    Mr. Ennals: To start setting up some form of inquiry in advance of an agreed system would lead to precisely what the hon. Gentleman is concerned about—that is, hope turning to bitterness. We must accept that there will be people—and this applies in other situations—who may apply for benefit without the adjudication necessarily being that they are entitled to it. The assumption that every brain-damaged child is brain damaged as a result of vaccination is not accurate. One of the most difficult aspects of the matter is the determination of a method by which it can be seen whether the damage was due to vaccination. It would be unwise to start anything other than preliminary work in advance.
    Mr. Ashley: Is my right hon. Friend aware that most hon. Members recognise his anxiety to help in the matter and the genuine difficulties that he faces? However, will he consider recommending to the independent medical assessment board that in cases where there is a margin of doubt the board should be generous and give the benefit of the doubt to the children concerned, as happens in other countries?
    Mr. Ennals: Such considerations must be taken into account when the Commission's recommendations have been received and we have established a system. It would be unwise for me to comment now.
    Miss John Lestor: Will my right hon. Friend say whether the Commission and its recommendations will deal with the point about whether payment of compensation, or even application for compensation, will undermine the rights of parents to sue manufacturers if at a later stage they decide to do so?
    Mr. Ennals: I revealed to the House the broad principles upon which the Royal Commission would be working in connection with vaccine damage. I did not, and should not, reveal to the House any other aspects of the consideration of the Commission. We shall have to await the report of the Commission, when I shall be better able to answer such questions.
    Dr. Vaughan: Is there any evidence yet of an increased uptake in vaccination generally as a result of all the discussions that have taken place recently and the pleas that have been made to the community not to be put off vaccination?
    Mr. Ennals: I cannot give any statistics, but the review of the joint committee was well received by the medical profession which found it helpful and reassuring. That has gone a long way towards re-establishing confidence within the medical profession. I expect that even without further efforts it will lead to an increased take-up. However, no statistics are yet available. I shall follow this up carefully.

    National Health Service Reorganisation
    Mr. Clemitsonasked the Secretary of State for Social Services if he is satisfied with the results of the reorganisation of the National Health Service.
    Mr. Ennals: This Government's views on the 1974 reorganisation of the NHS are well known. When the Labour Government came into office three weeks before the date set for reorganisation of the Health Service, one of their first decisions was that it was not practicable in the time available to delay the reorganisation or to attempt to change immediately those features which it opposed.
    We continue to have serious reservation about the structure of the NHS and we have asked the Royal Commission to look at this. Pending consideration of its report, it would in my view do serious harm to the Service to effect an early across-the-board reorganisation.
    Mr. Clemitson: I am glad to hear that answer, because it is now generally accepted that the reorganisation has hardly been an unqualified success. Has not one of the results of it been that a higher proportion of resources has been spent on administration and consequently, a lower proportion on the patients? Is it not about time that we learned from our mistakes?
    Hon. Members: Their mistakes.
    Mr. Ennals: It is true that if we are to learn we must learn from the mistakes
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    of others and also the mistakes of McKinsey, which gave advice to my predecessor. The Opposition already seem to have learned their lesson and to have recognised that the reorganisation is far from being a success. I agree with much of what my hon. Friend has said about administration and the fact that it has caused us who have responsibility for the NHS to do a great deal of work in slimming the administration without changing the structure. We are now going through a process of reducing management costs to make more funds available for patient care.
    Mr. Fry: Whatever the merits or demerits of the original reorganisation, is there not now real concern, particularly in the Northampton area, about the way that the reorganisation is working in respect of the allocation of funds from the Oxford Region? Is the right hon. Gentleman prepared to meet a deputation of hon. Members representing Northamptonshire constituencies to discuss this unfairness before swingeing and damaging cuts must be made?
    Mr. Ennals: Some months ago I received a deputation of hon. Members to discuss the situation in Northamptonshire, just as my colleagues and I have received deputations from people in many parts of the country. When we come to making the allocations for next year, we shall take all these things into consideration. I want to say to the whole House that the policy upon which the Government have embarked—of a redistribution of resources to ensure that traditionally deprived regions will get a higher rate of growth—is a policy that we shall stick to in the interests of social justice.
    Mr. Pavitt: In view of the fact that the Government will be unable to make basic changes before 1982–83, in these slimming operations will the Government consider making immediate arrangements to get rid of one tier of the NHS—namely, the area health authority tier? Will the Government make the necessary arrangements for the redistribution of funds and people during the next two years so as to bring organisation down to a district level instead of there being an area authority?
    Mr. Ennals: That would be a revolutionary change and would anticipate whatever the Royal Commission might decide.

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    Some would say that if one tier were to be removed it should not be that one. I have made it clear to the health authorities that where they believe that it is in the interests of the management of the service, provided that there has been effective consultation with the local authorities and staff, I am willing to look at any changes that would create more single-district areas and change the balance. However, an across-the-board change such as my hon. Friend has suggested would undermine the work of the Commission.
    Mr. Patrick Jenkin: Does the right hon. Gentleman recognise that we would go a long way to endorse the plea which has just been made by his hon. Friend the Member for Brent, South (Mr. Pavitt)—where, perhaps, the slogan ought to be "Prepare to shed thy tiers"? Does not the Secretary of State remember that no fewer than four Secretaries of State in the Labour Government last year signed a report which committed the Government to saying that the reorganised National Health Service
    "provides an improved administrative framework within which it is now possible to look at priorities more comprehensively and to plan the allocation"—
    Mr. Russell Kerr: Who wrote that?
    Mr. Patrick Jenkin: It is signed by the right hon. Members for Blackburn (Mrs. Castle) and Kilmarnock (Mr. Ross), the Secretary of State for Wales——
    Mr. Speaker: Order. We are getting untidy. This is a time for seeking information rather than for making arguments.
    Mr. Patrick Jenkin: Will not the right hon. Gentleman give credit where it is due?
    Mr. Ennals: I did not sign the report.
    Mr. Patrick Jenkin: Your predecessor did.
    Mr. Ennals: I did not. Nevertheless, there have been aspects of the reorganisation which have produced some improvements in administration, partly because they have brought together the community and the hospital services. That was an important step forward which would have been in any proposals, whether they were made from the Labour or the Tory side. I am glad to hear that the right hon. Gentleman has
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    been reviewing the situation and is shedding "tears", be they crocodile or whatever else. I welcome the fact that he is now crying over the mess the Conservatives made.
    Mr. Beith: If we are to have to make the best of a bad job, at least for the time being, is it not important that the right hon. Gentleman does all he can to try to get management decisions affecting local institutions taken at a more local level rather than have so many people running around in cars telling others in institutions to which they have never been before what to do?
    Mr. Ennals: The hon. Gentleman is absolutely right. We have to operate at the moment as best we can within the structure we have. That is the way in which I am approaching this. That means that we need much more effective joint planning as between local authorities and health authorities. This move has received a tremendous stimulus by the £21 million which is available this year for joint spending by social service authorities and health authorities. This is bringing them together in a practical way that is immensely improving the quality of community service.

    Kidney Transplants
    Mr. Dalyellasked the Secretary of State for Social Services if he will give the latest convenient figures for the shortage of kidneys for transplant.
    The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins): On 30th June 1977 there were 1,164 patients in the United Kingdom on the waiting list for transplantation. After increasing for many years, the waiting list now shows signs of levelling out.
    Mr. Dalyell: Does my hon. Friend have any sympathy with the proposals for contracting out of the scheme?
    Mr. Deakins: We are not convinced that the proposals for contracting out or opting out would achieve as much as advocates of the scheme suggest. Nor, in spite of some recent evidence, are we satisfied that it would be acceptable to the public at large or welcomed by the profession. Certainly, before there were to be any proposals for a radical change in the law put to Parliament there would

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    need to be widespread consultation with professional and other bodies.
    Mr. Pavitt: Is my hon. Friend monitoring the effect of the issue to learner drivers of a voluntary ticket enabling them to donate their kidneys? Will he ensure that there is close co-ordination with the Department of Transport to see that this fine scheme does not run into the sands?
    Mr. Deakins: The kidney donor scheme is a good one and cards continue to be available in hospitals and doctors' waiting rooms. We are always seeking new ways of improving the distribution of these cards. In addition to being issued with first provisional driving licences, they will shortly be available in all social security offices.

    Overseas Doctors
    Mr. Bidwellasked the Secretary of State for Social Services what new action he proposes to take concerning the registration of overseas doctors.
    Mr. Ennals: The arrangements for the registration of doctors with overseas qualifications were among the matters covered by the Merrison Committee on the regulation of the medical profession.
    As my hon. Friend will now have seen from my answer to my hon. Friend the Member for Ilford, South (Mr. Shaw) yesterday, the Government accept in principle the committee's proposals for altering the legislation governing those arrangements.
    Mr. Bidwell: I am grateful to my right hon. Friend for that information. Does he not agree that older doctors of Asian origin who qualified at the time of British administration overseas have been rather unfairly treated? If that is recognised, will he get a move on and alter the situation?
    Mr. Ennals: Most overseas doctors in this country, who have made an extremely important contribution to the National Health Service, would, I am sure, share my view that proper standards must be maintained for doctors wishing to work in this country. We have become excessively dependent upon doctors from overseas, which is fair neither to them nor to the Health Service. I agree that some EEC directives put some of these doctors at a
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    disadvantage. The Overseas Doctors Association has made representations to me and we are considering whether this is an issue which we can pursue formally with our Community colleagues.

    Finer Report Recommendations
    Mrs. Haymanasked the Secretary of State for Social Services how many of the recommendations of the Finer Committee have been implemented by his Department since the publication of its report in July 1974.
    Mr. Deakins: Nineteeen in full and one in part.
    Mrs. Hayman: Is my hon. Friend aware that that is not a very good record, considering that there were 230 recommendations? Can he tell the House what the thinking of his Department is at the moment, particularly about long-term financial support for one-parent families? Is he aware that, welcome though the El supplement to child benefit is, it is not a long-term solution to the poverty of one-parent families? What thought is being given to a new scheme, a possible extension of the widowed mother's allowance?
    Mr. Deakins: Many of the recommendations in the report related to the details concerning major concepts. In rejecting the idea of a guaranteed maintenance allowance, 54 recommendations—64 to 117—were rejected. All these related to one specific issue. Many of the other recommendations concern local authorities and social services. The speed with which they can be implemented depends on the availability of resources. A number of the remaining recommendations are for other Government Departments and some have been implemented. Help for one-parent families has to be considered in the context of financial help generally for poor people and families. We shall have to wait and see what resources will become available.
    Mr. Peter Bottomley: Can the hon. Gentleman try to find out whether he can get other Government Departments and his own to implement those proposals which require neither legislation nor extra finance?
    Mr. Deakins: In my Department we have implemented the recommendations

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    which do not require legislation. There are one or two more which we are still considering. There were fewer recommendations concerning other Departments, and a number of these recommendations have been implemented. A number of the major ones, concerning family courts and so on, have not been implemented and, I believe, are not likely to be implemented. They would require legislation.

    Mental Health Services
    Mr. Ogdenasked the Secretary of State for Social Services what was the total annual National Health Service revenue expenditure on services for the mentally ill for the North-Western Regional Health Authority for the years 1967 to 1977.
    Mr. Moyle: Expenditure in 1975–76 was about £25 million, of which about £11 million was incurred in the single-specialty hospitals for the mentally ill. Similar information for 1976–77 is not yet available. Information in this form is not available for earlier years but I would refer my hon. Friend to the answer given by my right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) on 25th May 1976 to my hon. Friend, which, however, relates exclusively to the single-specialty hospitals.
    Mr. Ogden: In general terms, does my hon. Friend consider that there is a fair allocation for the mental health services in the North-West as compared with other parts of the Health Service in the North-West and as between the North-West as an area and other areas? Will he continue to use his influence in the North-West and other areas to ensure that there is consultation at all levels before any possible changes in the Health Services take place? May we have consultation before final decisions rather than after final decisions have been taken?
    Mr. Moyle: Prior consultation before decision-making is built into the system of the reorganised Health Service and I hope that it will work. Mental health and mental illness are two of the highest priorities in future planning of the health services because they have been subject to so much neglect in the past throughout the country and particularly in the North-West. The North-West has had
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    the highest allocation of funds of any region in the Health Service for the current year. Therefore, I would expect slightly larger amounts of money to be available for the mental illness services in the North-West than has been the case.
    Mrs. Chalker: Now that more mental health patients are leaving hospital for care in the community, what action are the hon. Gentleman and his Department prepared to take to ensure that funds are transferred from the health services into the community so that patients do not fail, as at present, immediately they are left on their own in the community?
    Mr. Moyle: It will be some time before we can provide the social service provision for the receipt of the mentally ill outside hospitals that we should like to see. We have set up a scheme of joint financing whereby this year £21 million is available from health funds for the social service departments of local authorities for provision for mental handicap and mental illness, among other categories. In the North-West this allocation is £1·85 million.
    Mr. Ronald Atkins: Is my hon. Friend aware that insufficient expenditure on this Cinderella of services has led to most deplorable under-staffing in the mental hospitals that serve my area? In addition, the services outside the hospitals are woefully neglected in Preston. Does my hon. Friend agree that it is false economy for money not to be spent on these services?
    Mr. Moyle: As I have said, the nation as a whole, through the National Health Service, has neglected the specialties of mental illness over the years. Obviously it will take some considerable time to catch up. There is a new hospital coming on stream at Preston. I hope that it will make a contribution towards alleviating the situation. Bids can be made for joint finance money for the social services.
    Mr. Ashleyasked the Secretary of State for Social Services if he will make a statement on the services for mentally sick in the constituency of the hon. Member for Stoke-on-Trent, South and the region generally.
    Mr. Moyle: Services for the mentally ill in my hon. Friend's constituency and

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    the West Midlands generally are based largely on old hospitals serving wide catchment areas, with patchy community services. They are typical of the situation in most of the country, and reshaping them to the pattern envisaged in our White Paper "Better Services for the Mentally Ill" is a major priority.
    Mr. Ashley: Is my hon. Friend aware that there is a great deal of concern in my region and throughout the country about the neglect of mental illness and the after-care service of which he has spoken? Will he supplement his present efforts by issuing as soon as possible a major consultative document and, if necessary, a White Paper on the Government's future policy?
    Mr. Moyle: As a result of consultations on priorities for the Health Service, we are preparing a definitive paper that will set out the definitive priorities for the Health Service for the future. As for my hon. Friend's constituency, it is hoped to provide a new day hospital in Stoke in the next few years. On the social services side, a home for psycho-geriatric patients is planned under joint finance arrangements and there are plans for a new psychiatric after-care hostel in Hanley.
    Mr. Moonman: Does my hon. Friend recognise that the all-party Mental Health Committee daily receives letters of anxiety from many people who are concerned about the lack of facilities and the lack of opportunity for local authorities to provide day centres? Will he consider the possibility of improving the whole of the service by means of a new Mental Health Act? Would such a measure be likely to be delayed?
    Mr. Moyle: My hon. Friend can be reassured that we have been reviewing the Mental Health Act 1959. My right hon. Friend will shortly be issuing a statement about the results of the review. I can assure my hon. Friend that there is no delay. I appreciate that he must be receiving many letters and expressions of concern about services for the mentally ill. We are trying to make up in a few years for a situation which has been created over the past 30 years or more.
    Mr. Patrick Jenkin: I return to the question put by my hon. Friend the Member for Wallasey (Mrs. Chalker). Is
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    it not the case that, although many mental hospitals now have only one-half or one-third of the number of patients they had 10 or 15 years ago, there does not appear to have been any comparable transfer of resources from the health authorities to the local authorities, which are now faced with the consequences of trying to look after the patients in the community? Does the hon. Gentleman accept that the joint financing arrangements, which are fairly limited, are not an adequate way of dealing with these issues? What we need is a more effective transfer of resources to recognise the number of patients now in the community.
    Mr. Moyle: The last thing that I would argue is that joint financing arrangements are the sole answer to the problem of which the right hon. Gentleman is talking. However, I do not accept his figures in respect of mental hospitals. Throughout the country the situation varies from hospital to hospital. It should be said—here I disagree with the right hon. Gentleman—that there has been a substantial development of local authority social service provision throughout the country, especially since the Seebohm Report of the late 1960s. That should be taken into account as well.

  PRIME MINISTER (ENGAGEMENTS)
  Mr. Corbettasked the Prime Minister if he will list his official engagements for 19th July.
  The Prime Minister (Mr. James Callaghan): This morning I had a telephone conversation with Chancellor Schmidt of Germany, in the course of which he was good enough to give me an account of his recent discussions with President Carter. I am also holding meetings with ministerial colleagues and others, in addition to my duties in this House.
  Mr. Corbett: As we are nearing the end of Animal Welfare Year—[Interruption.] I am amazed that hon. Members find this funny.
  Mr. Speaker: Order. What they find funny is that this is a question of which there is no notice.
  Mr. Corbett: As we are nearing the end of Animal Welfare Year, will my

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  right hon. Friend today give special consideration to the economic and welfare case for the ending of the export of live animals for slaughter? Will he find time today to discuss with my right hon. Friend the Minister of Agriculture, Fisheries and Food a review of the trade since it was resumed in 1975 and respond to growing public concern over the continuation of this vile trade?
  The Prime Minister: I am aware that the transport of animals, whether internally or externally, causes stress even if the animals are properly fed and watered en route. Therefore, the most stringent regulations need to be applied. I understand that a directive has been agreed, or is about to be agreed, by the Council of Ministers that will regulate the conditions under which animals are transported in this way. I hope that my hon. Friend will keep up his pressure to ensure that the regulations are properly observed.
  Mr. Amery: Will the Prime Minister find time today to make it clear that we do not intend to sabotage an internal settlement in Rhodesia between Mr. Smith and national groups that might work with him? Will he repudiate the repeated Press smears that the Government are prepared to endorse only a settlement that includes the pro-Soviet Patriotic Front and its Marxists backers?
  The Prime Minister: If I am to avoid uttering smears in answers, it might be as well to avoid uttering them in putting the questions. To characterise the Patriotic Front in that way when it is a body which clearly represents a large group of African opinion is not likely to enhance a settlement. As for the future, it has always been the policy of Her Majesty's Government that it is not our task to pick and choose the African leaders who will lead that country in due course. It is our task to ensure, in so far as we have the influence, that one man, one vote will prevail unless and until Mr. Smith operates that policy. Whether he holds a General Election will be seen to be largely irrelevant in those circumstances.

  AUSTRALIA
  Mr. Martenasked the Prime Minister whether he has any plans to visit Australia.
  The Prime Minister: I have at present no plans to do so.
  Mr. Marten: When the Prime Minister next meets Mr. Fraser, will he discuss with him his speech at the Mansion House on 2nd June in which he said that Australia was able to produce almost every product that is eaten in Britain at a lower cost than the EEC? When are we to break out of this Fortress Europe and start sensibly buying cheaper food outside the Common Market, where there is an abundant supply?
  The Prime Minister: Let us be clear that we do not regard the common agricultural policy as best fitted to the needs of this country. However, the hon. Gentleman should acknowledge that the cry that large amounts of cheap wheat or other commodities are to be found in Australia is not true. I have just inquired about the figures. For example, the cost—[Interruption.] The information came along to me only a minute ago. I thought that I might be asked about it. The price of EEC wheat is more expensive than Australian wheat. The Australian price is £80 a ton and the EEC price is £86 a ton. Do not let anyone pretend to the British housewife that all her problems would be solved on that sort of difference.
  Mr. Powell: How does the Prime Minister account for the fact that most hon. Members appear to find it difficult or are unwilling to take advantage of the arrangements that he and you, Mr. Speaker, recently made in order to secure more substantive Questions on the Order Paper addressed to the Prime Minister?
  The Prime Minister: Last night I made an analysis of the 36 Questions that had been put down to me. Three are substantive, 13 asked me to state my engagements, eight asked me to put in the Library a speech which I have put there already, six asked me about my next meeting with the TUC and six asked about meetings with the CBI. The idea that good Questions drive out bad ones does not seem to hold much water.
  Mr. Jay: As the Government accepted and the House approved a motion on 16th March calling for easier imports of food, is it not time that this applied to Australian beef, mutton and cheese, which is certainly available but is excluded by EEC protection?
  The Prime Minister: We secured the maintenance of a system of beef premiums for the whole of the 1977–78 marketing year and we shall continue, in conjunction with Australia and other countries, including the United States, to get sensible reforms in the common agricultural policy. That does not mean, however, that we should overturn the whole of its principles. If we did, we would find ourselves up against an impossible block. When one looks at the progress which has been made in the price-fixing this year, from which I shall quote only one point—the increase of 31 per cent., which has been the lowest since we joined the EEC—it is useful to acknowledge that a great deal of progress is being made in wearing down the situation.

  PRIME MINISTER (ENGAGEMENTS)
  Mr. Molloyasked the Prime Minister if he will list his official engagements for 19th July.
  The Prime Minister: I refer my hon. Friend to the reply which I gave earlier today to my hon. Friend the Member for Hemel Hempstead (Mr. Corbett).
  Mr. Molloy: When the Prime Minister meets his ministerial colleagues this afternoon, will he discuss with them the fact that the prices of materials purchased by industry fell by 1 per cent. in May and by ½ per cent. in June? Does he agree that this is indicative of a reduction in the rate of inflation and that it should encourage sensible wage bargaining in the future?
  The Prime Minister: That is the sort of question that it is a delight to answer. My hon. Friend is correct in every respect. There is no doubt that the price of imported commodities is going down, and this is bound to have an effect that will work through in the general price index. I hope that this will encourage those who are about to embark on wage
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  claims and show them that they will be operating in the next 12 months against a price index that will not be increasing as fast as on the last occasion when we had free collective bargaining.
  Mr. Pardoe: Will the Prime Minister believe me when I say that I want to ask him genuinely about his engagements today? Could he be more forthcoming about his conversation with Chancellor Schmidt on the telephone this morning? Did the Chancellor tell him of his discussions with the American President about Germany's intention to emulate the example of the United States in meeting the growth targets that were recently set out at the Heads of Government conference?
  The Prime Minister: No, we did not discuss this aspect this morning. The telephone call was quite expensive.
  Mr. Mike Thomas: Reverse the charges.
  The Prime Minister: Without going into details, we discussed the relationship between the United States and the Soviet Union on matters of détente and the Belgrade Conference. We also discussed the President's attitude to human rights. I have made a preliminary engagement to meet the German Chancellor during the recess—after August—and no doubt these matters will he raised then.
  Mr. Skinnerasked the Prime Minister if he will list his official engagements for 19th July.
  The Prime Minister: I refer my hon. Friend to the reply which I gave earlier today to my hon. Friend the Member for Hemel Hempstead (Mr. Corbett).
  Mr. Skinner: Is the Prime Minister aware that the reason why we put down stereotyped Questions is that we are in danger of having them taken off on future occasions if they are not acceptable to the Prime Minister? [HON. MEMBERS: "No.") Yes, it applies both ways, at the Table Office or with the Prime Minister. He has made an agreement, but Questions can still be taken off. In view of the fact that I have a Question down that is about to be answered, will the Prime Minister trot along this afternoon, or at some other time, to the Guild of Master Craftsmen? If he does, he will find that the Leader

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  of the Opposition is the Guild's patron—I do not know whether she is a saint—and the Guild's latest letter, under her name, says that genuine craftsmen should set themselves apart from the unskilled because they are "incompetent, unscrupulous and indifferent". Does the Prime Minister agree that this is the George Ward philosophy, and should he not ask the Leader of the Opposition to withdraw it?
  The Prime Minister: I have looked very carefully at all the substantive Questions put down and I have accepted 90 per cent. or more of them, even when some of them seemed to me to fall on the wrong side of the borderline. I have done this in an attempt to make the new system work.
  On my hon. Friend's particular question, this is more a matter for the Leader of the Opposition to comment on than for me.
  Mr. Churchill: Will the Prime Minister find time today to reconsider his abject surrender on the Drax B power station? Will he confirm that every job saved on Tyneside will be a job less in Manchester, and in particular at Trafford Park, and that it is the height of irresponsibility for the Government to spend £30 per family in order to appease Mr. Arthur Scargill and the Secretary of State for Energy? Will he give the House an explanation for his action?
  The Prime Minister: This matter was discussed at length after Questions yesterday. [HON. MEMBERS: "The hon. Member was not here."] If he was not here, I can understand why he has to persuade his constituents that he is here now. It is not as simple a matter as the hon. Minister thinks. Indeed, it is a difficult issue. Obviously, I would have preferred that the restructuring could be agreed, but short of nationalisation—and I am not sure whether the hon. Member would support that—there is no way of compelling the restructuring of the industry in this way. This is particularly so as the two chief protagonists—I refrain from commenting on either of them—are quite unwilling to get together on any basis to provide a solution. In these circum-
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  stances, the Government had to take a position on the matter. Although it will cost more, it leaves the way open—and both sides have given an assurance on this—for the necessary restructuring that must take place in due course if a good, decent industry with proper export potential is to be maintained.

  HATFIELD
  Mrs. Haymanasked the Prime Minister if he will pay an official visit to Hatfield.
  The Prime Minister: I have at present no plans to do so.
  Mrs. Hayman: Will the Prime Minister reconsider that answer so that he can hear for himself from the workers on the project all the arguments in favour of a full-scale funding of the HS146? With the real possibility of Rolls-Royce engines, this could be the perfect project for new launching for British Aerospace. When do the Government expect to receive the recommendation from the board of British Aerospace and to make a decision?
  The Prime Minister: I know that there are great anxieties at Hatfield about the project, and one of the important factors in deciding whether to re-launch the HS146 is the employment aspect. Ministers are reviewing these matters and the decision will be made and announced as soon as possible.
  Mr. Forman: When the Prime Minister finally travels to Hatfield, will he use the time in his ministerial car to re-read the speech he made at Aberystwyth on 7th July and consider whether he was wise to promise this country the prospect of booming 1980s when his Government have not even begun to grapple with the real problems of today—inflation running at a rate of nearly 18 per cent. and unemployment of 1½ million?
  Mr. Speaker: Order. That is really an example—[Interruption.] some of those hon. Members who are cheering do it too—of an hon. Member jumping from the Question on the Order Paper. That is not in the interests of the House at the end of the day.

QUESTIONS TO MINISTERS
Mr. R. C Mitchell: On a point of order——
Mr. Flannery: On a point of order, Mr. Speaker. I carried out what was required of us in asking a substantive Question of the Prime Minister—Question No. Q7—but it is not very encouraging when the non-substantive Questions take precedence over a straight Question. That is a point that I hope you will at some time consider on behalf of the House.
Mr. Speaker: There is a machine which turns the numbers around and it is a matter of luck whose Question comes out first. However, I shall look into the matter again. Mr. Mitchell.
Mr. R. C. Mitchell: My point of order was exactly the same as that of my hon. Friend, Mr. Speaker.
Mr. Shersby: Further to the point of order. When considering this matter, Mr. Speaker, would you be kind enough to investigate the possibility whether Prime Minister's Questions could be extended to 30 minutes? Ever since I have been a Member of the House I have found 15 minutes far too short a period for hon. Members to question the Prime Minister.
Mr. Speaker: That is not, of course, a matter for me, but the Select Committee has looked at the matter and I have no doubt that the Leader of the House has heard what has been said.

MR. SPEAKER'S CONFERENCE (NORTHERN IRELAND)
Mr. Speaker: The House will recall that on 30th June the right hon. Gentleman the Secretary of State for Northern Ireland referred to the issue of Northern Ireland's representation at Westminster and said that agreement had been reached with the party leaders for this matter to be referred to a Speaker's Conference. The Prime Minister has now formally invited me to preside over such a conference and I have agreed to do so. The terms of reference of the Conference will be as follows:
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"To consider and make recommendations on the number of parliamentary constituencies that there should be in Northern Ireland."
The following right hon. and hon. Members have been good enough to indicate their willingness to serve on the Conference: the right hon. Member for Anglesey (Mr. Hughes), the hon. Members for Antrim, South (Mr. Molyneaux), Beckenham (Mr. Goodhart), Belfast, West (Mr. Fitt), Birmingham, Edgbaston (Mrs. Knight), Blackpool, North (Mr. Miscampbell), Brent, South (Mr. Pavitt), Bristol, North-East (Mr. Palmer) Chester-le-Street (Mr. Radice) and Croydon, South (Mr. Clark), the right hon. Member for Dartford (Mr. Irving), the hon. Members for Dearne Valley (Mr. Wainwright) and Devon, West (Mr. Mills), the right hon. Member for Down, South (Mr. Powell), the hon. Members for Eastbourne (Mr. Gow) and Esher (Mr. Mather), the right hon. Member for Fulham (Mr. Stewart), the hon. Members for Glasgow, Garscadden (Mr. Small), Gloucestershire, West (Mr. Watkinson), Goole (Dr. Marshall) and Hemsworth (Mr. Woodall), the right hon. and learned Member for Huntingdonshire (Sir D. Renton), the hon. Members for the Isle of Ely (Mr. Freud), Leeds, South-East (Mr. Cohen), Newbury (Mr. McNair-Wilson), and Rother Valley (Mr. Hardy), the right hon. Member for Stafford and Stone (Mr. Fraser) and the hon. Members for Wokingham (Mr. van Straubenzee) and Woolwich, East (Mr. Cartwright).
I am asking the Conference to hold its first meeting on Wednesday 27th July. The joint secretaries attending the Conference will be Mr. J. H. Willcox, a principal clerk in the Department of the Clerk of the House, to whom all communications regarding the Conference should be addressed, and Mr. D. Chesterton, Northern Ireland Office. It will, of course, be open to hon. Members, party organisations and other bodies concerned to submit representations to the Conference on matters falling within the terms of reference. Such representations should be addressed to the Joint Secretaries of the Speaker's Conference on Electoral Law, the Department of the Clerk of the House, House of Commons.

MR. SPEAKER'S RULING (CRITICISM OF JUDGES)
Mr. Speaker: Yesterday points of order were raised about references to the conduct of judges and I think that it might be helpful to the House if I restated the practice of the House in this matter.
It is one of our oldest rules, mentioned in May's "Parliamentary Practice" on page 428, that the conduct of certain persons, including the judges, cannot he criticised save in a substantive motion. This rule has been strongly enforced by my predecessors for 200 years. Since it is my duty to see that the rules of the House are observed, I must enforce this rule as well. If the House, or certain Members of the House, do not like the rule, they must get it changed. I cannot change it.
Yet the rule is not so restrictive as some hon. Members may think. It is not necessary to have a substantive motion before the House to allow Members to argue that a judge has made a mistake, that he was wrong, and the reasons for those contentions can be given within certain limits, provided that moderate language is used.
On the other hand:
"Reflections on the judge's character or motives cannot be made except on a motion. No charge of a personal nature can be raised except on a motion. Any suggestion that a judge should be dismissed can be made only on a motion."—[Official Report, 4th December 1973; Vol. 865, c. 1092.]
That statement of our rules was given by my predecessor on 4th December 1973, and I have given similar rulings myself which seem to have been generally accepted by the House.
I acknowledge that there is considerable feeling about the recent judgment, but that cannot alter the practice of the House. It should be possible for hon. Members to voice their opinions while still keeping within the limits of what is permissible in the light of this explanation. What is permissible must always be a matter of judgment and only the Speaker can exercise that judgment. He will do it to the best of his ability and as impartially as possible. Much must depend upon the context in which an observation on a judge is made. I can
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only say that, in my view, to refer to a judge's summing up as "disgraceful", as was done yesterday, must fall on the wrong side of the line.
However, I have had the advantage of discussing the speech which the hon. Member for Stoke-on-Trent, South (Mr. Ashley) will make today in introducing his Ten-Minute Bill and I am satisfied that, on the basis of what he has told me he proposes to say, he will be in order.
Mr. John Mendelson: On a point of order, Mr. Speaker. The statement which you have just made will not, of course, as a statement, he contradicted by any right hon. or hon. Member who knows that you have merely repeated current practice. However, with regard to the interpretation, I think that you will agree that it all depends on how restrictive the attitude of the Chair is when the subject is being broached. In spite of the loud cheer from one hon. Member opposite when you made your statement, I submit to you and to the House that what happened yesterday and might happen on other occasions is the result of strong feeling in the country, which is always of the greatest importance to any interpretation and application of procedure in this House, and of the treatment of an hon. Member who issues a judgment about a particular case and a judge by praising him and his humanity, as contrasted to the equal right, in the opinion of some hon. Members, if that is allowed, to make a critical character judgment of the same judge. You have said that that would be out of order, so it should also be out of order to try to influence opinion by praising the humanity of a judge whose decision is regarded as anything but humane by so many people in the country at large.
Mr. Molloy: Further to the point of order, Mr. Speaker. I am sure that the House is grateful for the attention which you have given to this difficult question and for your enlightenment this afternoon. What perturbs many of us is that in the past it seems to have been in order to make laudatory and even sycophantic statements about judges without any criticism from the Chair but that we are not allowed to question the wisdom and sometimes the interpretation of a judge—as in the recent case, where the soldier

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could not, under Queen's Regulations, be sent back to his regiment on the recommendations of the judges, who were therefore in a way recommending the breaking of the law. I hope that the leniency which you, Mr. Speaker, have indicated might be shown if our language is moderate will allow us to express not only our own views but the grave and bitter feelings of many people outside the House.
Mr. Lipton: Further to that point of order, Mr. Speaker. May I make it clear that when I used the word "disgraceful" yesterday I was talking of the judgment and not of the judges. I have therefore been allowed to put on the Order Paper the three notices of motion in the proper form requesting that an humble address be addressed to Her Majesty for the removal of these judges.
Mr. Hugh Fraser: Further to that point of order, Mr. Speaker. You have touched on a delicate question. It strikes me that the judges should be criticised by the House only on a very serious matter and when that criticism reflects the feelings throughout the country that the judgment is wrong. I humbly suggest that it is wrong to criticise judges except when a judgment does not meet the general opinion in the country and is therefore against the making of the common law, because that is a general reflection of morality in the country.
I am somewhat alarmed by your suggestion, Mr. Speaker, that judges should be easily criticised by the House. That is wrong. They should be criticised only on very grave matters when many people believe that a judgment is incorrect and false.
Mr. Skinner: Further to that point of order, Mr. Speaker. You have set yourself a pretty awesome task in trying to define what is moderate and what is immoderate. Those very words are subject to many interpretations. Is the definition to be based on how long somebody speaks about judges and whether he raises his voice? Have you, Mr. Speaker, a list of words that must not be used? Unless you have, I cannot for the life of me see how you can conduct the operation successfully. Can you tell us more precisely how far we may go in this matter?
Mr. Speaker: May I seek to reply at this stage? If hon. Members wait until tomorrow and read what I have said in Hansard, they will find that it is a matter of cold, common sense.
In passing, may I say—and I do not wish to stir up further points of order—that when kind words are used about hon. Members in the House nobody objects, although they might be a little embarrassed if those kind words come from the wrong side of the House. However, if someone makes a personal attack on an hon. Member in the House, an appeal is immediately made to the Chair. In all the time that I have been in the House, I have never known anyone appeal against a kind word about him. Obviously. I want to guard the rule which has been guarded by my predecessors for 200 years. I also seek to serve the House.
Mr. Bidwell: Further to that point of order and your last remarks, Mr. Speaker. Do you not agree that it behoves any hon. Member who wishes to raise the name of another hon. Member, about something that has been alleged to have been written, to give notice of that intention since it must have been premeditated? Is that not the proper and honourable practice to pursue?
Mr. Speaker: We all know the general practice of parliamentary courtesy to each other.

ELECTRICITY SUPPLY INDUSTRY
The Secretary of State for Energy (Mr. Anthony Wedgwood Benn): With permission, I propose to make a statement about the structure of the electricity supply industry in England and Wales. The structure of the industry in Scotland will not be affected by my proposals.
I have given very careful consideration to this subject in the light of the findings of the Plowden Committee, which reported last year. I pay tribute to the work of that Committee. Since that time I have had extensive consultations with both management and unions in the industry.
Hon. Members will recall that the Plowden Committee found that the main weakness of the industry was a lack of strategic control and direction, and that

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the Electricity Council, whose role is mainly advisory, was not equipped to give the industry the strong leadership that it requires. The Committee accordingly recommended that the industry should he unified under a single statutory body which could take over the responsibilities of the Council and the existing boards.
The electricity supply industry does, of course, make very heavy demands on national resources and has to make far-reaching decisions on technical and financial issues of immense complexity. I fully accept that the industry needs a structure which promotes more effective policy-making and decision-taking. There is also a need for a legislative framework which provides greater flexibility for the industry to adapt its internal organisation in response to changing circumstances.
At the same time, however, I regard it as essential to provide adequate safeguards against the dangers of excessive centralisation. The Plowden Committee was right to point to these dangers, but it would not be enough, in my view, simply to place the industry under a general duty to devolve maximum authority to operating units as the Committee recommends.
I accordingly intend to bring forward in due course legislation that will abolish the Electricity Council and boards as at present constituted and create a new central body, which will have responsibility for the industry as a whole. The new central body will have powers and duties similar to those of other nationalised industry boards, including a requirement to prepare corporate plans, and will be responsible for the industry's financial, commercial, engineering, research and development and industrial relations policy. The Bill itself will not, however, go on to prescribe the industry's internal organisation. It will instead include provisions enabling this to be prescribed from time to time by the Secretary of State, after consultation with the new central body, in subordinate legislation which would, of course, be subject to specific parliamentary procedure. These proposals for primary legislation enjoy the support of the management and unions concerned.
My intention would be, after further consultations with the industry, to bring an order into operation on vesting day to set up a board for generation and boards
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for local distribution whose members I would appoint after consultation with the industry. These boards would operate in the same areas as at present and would have delegated to them broadly those functions now exercised by the present boards, although the capital and revenue budgets and tariff proposals of each board would be subject to approval by the new central body as part of an overall industry plan.
Although a stronger centre is required to deal with the major strategic decisions facing the industry, I believe that it is equally important to find a solution that also preserves vigorous and effective local boards enjoying statutory authority under the initial order.
The proposed legislation will also place the new central body under a duty to promote industrial democracy, and will make provision for safeguarding the interests of the consumers. My right hon. Friend the Secretary of State for Prices and Consumer Protection will be making a statement later today in a Written Answer about his plans for an electricity consumers' council.
I hope that these proposals will commend themselves to the House and bring to an end the present uncertainties in the industry. The changes proposed will, I believe, meet the need for greater coherence in policy and planning in the industry. I hope that the industry will co-operate in introducing in advance of legislation some of the more desirable changes in the working relationship between the existing boards and the centre. This whole approach—essentially an evolutionary one—will avoid a major upheaval in the industry. My proposals will also help to ensure that the industry remains fully responsive to the needs of consumers, in particular by retaining a recognisable and real identity at the local level.
Mr. Tom King: Is the Secretary of State aware that we welcome this statement on the Plowden Report, if only because it has at last been made? The report was submitted in January 1976 and it is important for the industry to know what the plans for the future are.
Is he also aware that we have the gravest doubts about the solution that he is adopting? We believe that there is

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a case for either an efficient unified structure or for competitive area power boards. Is the Secretary of State aware that the solution that he has adopted, which retains for him the power of patronage of over 100 jobs at area level, may be damaging to the industry? Will the right hon. Gentleman confirm that his latter proposals do not in fact have the support of the management or unions in the industry? We shall, of course, await the Bill when these matters can be discussed at rather greater length.
Mr. Benn: I am grateful for the hon. Gentleman's general points, though they were somewhat qualified by later comment. It has taken time to discuss this matter, because it is a very important issue. It has been under public discussion since my right hon. Friend the Secretary of State for Northern Ireland was, I think, Minister for Power, in about 1968–69 and it has gone through various stages. The primary legislation will provide an opportunity for successive Governments, with the consent of Parliament, to come forward with the proposals that they think best in subordinate legislation.
The hon. Gentleman asked me about the views of the management and the unions on this proposed Statutory Instrument. I thought it wrong to go into detail, candidly, with the unions and management on the provisions of a Statutory Instrument until I had been able to make a statement to the House about the primary legislation. The discussions that I have had so far have been of a very restricted character on the primary legislation, but it would clearly be my intention to publish a draft Statutory Instrument, which would be before the House so that it could discuss the the primary legislation in the light of what was in my mind. That legislation could be amended later, and there would be very wide discussions on these issues.
Mr. Cledwyn Hughes: Is my right hon. Friend aware that I must reserve my welcome until I know precisely what he has in mind for Wales? Is he also aware that his statement was excessively vague? He said that he was against excessive centralisation. Is he aware that I entirely agree with him about that matter and that it would be in line with the spirit of the
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Government's policies on devolution if he were able to assure the House that the proposed decentralisation should give an appropriate body with statutory authority for Wales in this matter? It is clear that Scotland is excluded from these provisions. Why is Wales not similarly treated? I think that it would be in line with the Government's general policy if it were.
Mr. Benn: My right hon. Friend will know, of course, that the South of Scotland Electricity Board and the North of Scotland Hydro-Electricity Board have been enjoying totally independent status from the general England and Wales structure. In looking at the Plowden recommendations I had in mind, of course, considerations such as those my right hon. Friend mentions, and so, indeed, did Lord Plowden and his colleagues. All that I can say to my right hon. Friend is that the Bill, as brought forward in due course—the primary legislation—will give a very great degree of flexibility for the organisation of the industry within this new framework.
Without wishing to encourage any particular view as to how the matter might be handled let me say that at least the House will not be in the position of being unable to change the structure of the industry save by a massive Bill with hundreds of clauses every 20 years or so. The whole arrangement will be capable of adjustment in accordance with the needs as they emerge.
Mr. Grimond: Is the right hon. Gentleman aware that while there is a very strong case for the decentralisation of area boards, it is not clear that by taking the power to appoint these boards he will necessarily increase their local accountability? He may be merely increasing his patronage and possibly frustrating the main recommendation of the Plowden Committee.
I welcome the statement that the needs of the consumers and workers will be taken into account, and I trust that this will be fully implemented in the coming legislation.
Mr. Benn: I take the point about patronage. I think that the House knows my view—that there is much too much ministerial patronage. [HON. MEMBERS: "Oh."]. I think that that view is very well known. The question is whether

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one secures what is intended by transferring that patronage to others who are not even accountable to the House. The argument was whether it would be right, having appointed a CEB, to give all ministerial patronage, with which at any rate there is a degree of accountability, to an appointed board, so having subordinate patronage on a very large scale. That was one of the issues that led me to the view that the status quo might be preserved in this respect, at any rate in the first Statutory Instrument.
However, if in the course of the debate the House can assist in finding a better way than the present way—which I do not personally like; I am speaking for myself—in which powers of patronage are exercised on this scale, subject to what my colleagues may say, I would certainly listen most intently. What I do not want is to have one massive industry with no really effective way of establishing its relationship with local communities, which in my opinion most hon. Members find valuable, through their regional supply boards.
Mr. Peter Walker: Will the right hon. Gentleman's requirements on employee participation be of a general or a specific nature? Is it his intention to use part of his patronage to see that a specific proportion of existing employees are put on the board?
Mr. Benn: I am grateful to the right hon. Gentleman for giving me a chance to clear up that matter. It is not intended that the primary legislation, when published, would be the instrument by which the board would respond to what are generally called the Bullock proposals. However, it would seem sensible, as in the case of the Aircraft and Shipbuilding Industries Act, where we have a new authority being set up, to charge that authority with a general responsibility. Beyond that it would be handled by a statement by my right hon. Friend the Secretary of State for Trade covering a much wider range.
Mr. Palmer: I congratulate my right hon. Friend on reaching a decision on this very complex matter. However, has he not been a little less than frank in the second part of his statement about the attitude of the trade unions? The trade unions are, in fact, extremely hostile.
1390
They have told him that on a number of occasions. On this proposal to divide the command structure they take the view that there must be either a unified structure or a genuinely autonomous structure. One cannot mix the two. Will my right hon. Friend bear in mind that if he pursues this, he will have to pursue it in the face of much trade union hostility?
Mr. Benn: I think that my hon. Friend is rather less than fair to me. All that I have said in my statement is that the proposals for primary legislation enjoy the support of the management and the unions, and so they do. What I have said is that the further consultations that will take place will be around a draft Statutory Instrument. How my hon. Friend can forecast bitter opposition to words that have not been drafted escapes me.
The fact is that I am anxious to reach an understanding that preserves the accountability of local boards to local communities and at the same time to do it in such a way as does not impair the efficiency and central direction of the industry. To say the least, my hon. Friend is very pessimistic if he thinks that these twin objectives would not be reasonably met.
Mr. Skeet: Will the right hon. Gentleman be frank with the House? Does he intend to reserve for himself in the Bill power to make specific directions? If he proposes to do this, as he reserved the right under the Petroleum and Submarine Pipe-lines Act or the BNOC, will this not be excessive centralisation and excessive control?
Mr. Benn: The hon Gentleman heard me in the debate the other day saying that there were two issues with which I was particularly concerned. One of them was a specific directive and the other was whether civil servants should be members of the board. The hon. Gentleman will notice that there was nothing in the statement about that, because the Ministers looking at this matter under the provisions of the NEDC recommendation feel that any change that might be made should be made across the board and should not be made in legislation affecting one particular industry that happens to have to come before the House.
The hon. Gentleman knows my view on this matter. It is that there is an

1391
advantage in modernising the Morrison provisions. In trying to build upon the undoubted success that has come from the limited experiments in having civil servants on the board, as with BNOC and the Atomic Energy Authority—[Interruption.] I hope that the hon. Gentleman will do me the credit of agreeing that I have not made reference to that today and I am not basing my statement on it because this is a matter that has to be looked at by the Government across the whole board.
Several Hon. Members Several Hon. Members rose——
Mr. Speaker: Order. I propose to call those hon. Members who were on their feet just now.
Mr. Wrigley: Further to the very valid points made by the right hon. Member for Anglesey (Mr. Hughes) and the Secretary of State's own comments on the need for greater democratic accountability, is the right hon. Gentleman aware that there is strong feeling in Wales that there should be a more coherent organisation in the electricity industry, particularly on the distribution side, but also in the weaving in of distribution and production? In view of the Government's proposals for a Welsh Assembly to have greater democratic control over bodies such as that for the water industry and other nominated bodies, will the right hon. Gentleman give an assurance that he has not shut the door on the possibility of the same accountability in Wales for electricity?
Mr. Benn: I appreciate what the hon. Gentleman has said and what my right hon. Friend the Member for Anglesey (Mr. Hughes) said. In the energy industries there are a number of countervailing pressures that any Secretary of State has to bear in mind. One is that which the hon. Gentleman mentions. Just as strong among Bristol consumers is the desirability of maintaining the identity of the South-West Electricity Board. It is not a cultural identity and it does not begin when one crosses the Channel.
The other matter to be taken into account is that in the fuel industries there is a very powerful demand for an integrated national energy policy. It is to find a way of achieving an integrated energy policy that makes the maximum
1392
use of the nation's resources for the benefit of the nation, combined with proper, efficient management in the industry and local accountability, that I am legislating in this way, with a primary Act and then subordinate legislation to try to reflect what at different times may seem a different balance between these different arguments.
Mr. Hatton: What effect will my right hon. Friend's statement have on the regional structure of the CEGB? Does he envisage that there will be any further regional amalgamations and consequential loss of job opportunities?
Mr. Benn: That is a matter for the electricity industry itself. None of the discussions has borne upon that matter. But I am aware that any changes in organisation inevitably raise anxieties about employment, and the trade unions are very well equipped and ready to take up such matters. But they would not flow specifically or directly from the short, primary legislation Bill that I said today will come forward in due course.
Mr. Rost: Does the right hon. Gentleman accept the important recommendations contained in paragraphs 422 and 424 on energy conservation, criticising the industry for its waste of fuel and low thermal efficiency, and recommending the removal of the statutory restraints and obstacles at present preventing a more extensive application of combined heat and power? If so, how can he reconcile that with the development of Drax B, which is to have a thermal efficiency of only 35 per cent. without the application of the reject heat?
Mr. Benn: I think that the hon. Gentleman is confusing two points, one of which is in the Plowden recommendations. Plowden was looking at a whole range of issues, some of which would require legislative changes and some of which were more general. As the hon. Gentleman knows very well, since the Plowden Committee reported we have had the report on combined heat and power and a number of statements about energy conservation. I do not carry each paragraph of Plowden in my mind, but I know those to which the hon. Gentleman refers. I shall not be dealing with paragraphs 424 and 425 in the primary legislation that I hope to bring forward in due course.
Mr. Loyden: In view of my right hon. Friend's keen interest in the democratisation of our institutions, what steps will he take to introduce the long-overdue democratisation of the publicly owned industries? To what extent will democracy be established in the regions so that the people in them have a part in decision-making in the electricity industry, particularly on the distribution side? This has been the subject of argument in the regions as part of the devolution debate in the English context.
Mr. Benn: My hon. Friend has correctly identified one of the reasons why I was not prepared to go along with Plowden and wind up all the regional boards and put all the power in the centre, simply hoping that the centre would devolve some of the management power downwards. Democratisation falls into two kinds. One is accountability to the local community that is served, accountability that I hope will be preserved. The other is the extent to which industrial democracy can develop. This largely depends on the initiatives taken by the unions, initiatives that I have made absolutely clear I would encourage. It is not possible for blueprints on this to be drawn up in a Minister's office, but I should like to see an advance made in that direction.
Mr. Forman: Does the right hon. Gentleman accept the point made by my hon. Friend the Member for Derbyshire, South-East (Mr. Rost)—that the Plowden Report made strong recommendations for relaxing the statutory provisions governing the electricity generating boards? Does he also accept that it would be appropriate, in the secondary legislation if not in the primary legislation, to relax these controls so as to make it easier to have matters such as combined heat and power schemes on a viable basis?
Mr. Benn: I shall examine that matter. It would be open to the House in amending the primary statutes to give power by the subordinate legislation to amend any other primary legislation that might be a barrier to that. But it is a point of detail. I am not saying that it is not extremely important, but it is a point of detail that does not bear directly on what I said today, which is that we shall pro-
1394
vide a central structure for the industry, subject to parliamentary approval.

HOSPITAL SERVICES (BIRMINGHAM)
Mr. Litterick: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the current developments in the dispute between members of the National Union of Public Employees employed in the hospital service in Birmingham and the hospital service management."
The core of the matter is the management's refusal to implement the recommendation of an industrial tribunal that an unfairly dismissed employee should be reinstated. Industrial sanctions have already been selectively imposed, and my information is that further sanctions are planned to embrace the entire hospital service of the whole area. I do not think that I need labour the implications. It seems clear to me that if there is not some form of external intervention in the very near future all the hospital services of the City of Birmingham will be endangered by what seems on the face of it to be an intransigent attitude by the management.
Mr. Deputy Speaker (Mr. Oscar Murton): The hon. Member for Birmingham, Selly Oak (Mr. Litterick) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the current developments in the dispute between members of the National Union of Public Employees employed in the hospital service in Birmingham and the hospital service management."
As the House knows, under Standing Order No. 9 I am directed to take account of the several factors set out in the Order, but to give no reason for my decision.
I have given careful consideration to the representations that the hon. Gentleman has made, but I have to rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

BUSINESS OF THE HOUSE (SUPPLY)
Ordered,
That this day in the case of the Question which under the provisions of paragraph 11 of Standing Order No. 18 (Business of Supply) Mr. Speaker is directed to put forthwith at Ten o'clock, he shall put such Question forthwith as soon as the House has entered upon the Business of Supply.—[Mr. Ashton.]

BUSINESS OF THE HOUSE
Ordered,
That, at this day's sitting, Standing Order No. 3 shall apply to the Motion relating to the Criminal Damage (Compensation) (Northern Ireland) Order 1977 with the substitution of half-past Twelve o'clock or two and a half hours after it has been entered upon, whichever is the later, for the provisions in paragraph (b) of the Standing Order.—[Mr. Ashton.]

STATUTORY INSTRUMENTS &c.
Mr. Deputy Speaker (Mr. Oscar Murton): With the leave of the House I shall put the Question on all five motions together.
Ordered,
That the draft Cinematograph Films (Collection of Levy) (Amendment No. 5) Regulations 1977 be refered to a Standing Committee on Statutory Instruments, &c.
That the draft Civil Aviation (Air Travel Organisers' Licensing) (Reserve Fund) (Amendment) Regulations 1977 be referred to a Standing Committee on Statutory Instruments, &c.
That the Films (Exemption from Quota) Order 1977 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Child Benefit and Social Security (Fixing and Adjustment of Rates) Amendments (No. 2) Regulations 1977 be referred to a Standing Committee of Statutory Instruments, &c.
That the Family Income Supplements (Computation) (No. 2) Regulations 1977 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Ashton.]

RAPE
4.9 p.m.
Mr. Jack Ashley: I beg to move,
That leave be given to bring in a Bill to amend the law relating to rape and sexual assault; and for connected purposes.
The purpose of the Bill is to give the prosecution the right of appeal on sentences in cases of rape and other sexual offences. At present we have a one-way system. A sentence can be reconsidered on appeal only when the defendant requests it. The prosecution cannot make such a request, yet excessive leniency is as damaging as excessive severity. The one affects society and the other affects the individual, and they should both have the right of appeal. This right should apply to the whole of our law, but my Bill is confined to rape and other sexual offences because rape is a singular crime requiring particular attention, and because of the attitude of some of the judiciary.
Public support for the judges is vital and we must ensure an independent judiciary, particularly one that is free from parliamentary control. But the worst enemies of an independent judiciary include some of its own members. Some of their pronouncements and sentences have provoked a storm of protest from all sections of the community. The judiciary has left itself open to a charge of discrimination against women which leads to injustice in cases of rape. It is that which brings the law into disrepute and which raises serious questions about judicial attitudes towards rape and other sexual offences.
I do not propose to criticise any particular judge, but the House must evaluate for itself how the law is operating. I state, without comment, that it has been said by a court,
"It is well known that women in particular, and small boys, are liable to be untruthful and invent stories".
Again, I state without comment that a man guilty of raping two women at knife-point was set free, so recently was a guardsman guilty of a violent sexual assault. It was the Court of Appeal which made that latter judgment mainly because it thought that a prison sentence would damage the man's career. But men throw away their careers with their

1397
humanity when they embark on crimes of sexual violence. The court said that the man
"allowed his enthusiasm for sex to overcome his normal good behaviour"
and he was allowed to go free. But the men involved in the great train robbery allowed their enthusiasm for money to overcome their normal good behaviour and were sent to gaol for 30 years. The discrepancy in those sentences is eloquent testimony that a change in the law is urgently called for, not least because the Court of Appeal influences the sentencing policy of all courts.
Figures given by the Lord Chancellor reveal that in 1975 of 328 men found guilty, only 47—that is 14 per cent.—received more than five years' imprisonment; four men received less than six months; and over a quarter, 87–26 per cent.—were not imprisoned at all—and that for the grave and violent crime of rape. The Lord Chancellor then made the straight-faced comment:
"The courts do not shrink from imposing heavy sentences."
The problems are not simply those of a few well-known cases, nor of the attitudes of a few judges. The problem lies in the whole sentencing policy for rape and sexual offences and the attitudes which have permeated every level of the judiciary. It is that kind of discrimination which disfigures British justice in cases of rape; and it is based on historical, cultural and psychological factors which express masculine codes in our society. Consequently, the law is used as an instrument for perpetuating outmoded values, whereas it should be used to reflect the new role of women, to codify changed opinions about them, and to operate as an instrument of change—as it has begun to do in legislation such as the Equal Opportunities Act.
The need to give the prosecution the right of appeal has been debated for decades and is at present under review by the Criminal Law Revision Committee. But this is an issue on which the House should express its own view. The Donovan Committee rejected this idea. It said that it was logical, but a complete departure from our tradition. That was an incredibly flimsy basis for denying a review where miscarriages of justice are suspected.
1398
It has been argued that there are few cases where excessive leniency is shown in British courts. This may or may not be so generally, but the figures I have quoted show that it is commonplace in cases of rape. But, in any event, numbers are irrelevant to the principle involved. Judges, because they are human, must make mistakes. Respect for judges does not entail acceptance of the bogus doctrine of judicial infallibility.
The provision for an individual to appeal is important, but it is not less important a provision for society as a whole because the consequences to women, and therefore to society, are too grave to permit judicial errors or excessive leniency to go unchallenged. The right of appeal of the prosecution is already firmly established in other countries including France, West Germany and Holland. Apparently we are not to have it because of hallowed tradition. But we should not allow archaic practices or outmoded values to interfere with the administration of justice. Rapists, or men guilty of vicious sexual assault, should not be allowed to take sanctuary in the hide-out of tradition. They should be treated with justice—no more and no less. And when justice is not done or is not seen to be done, society should have the same right of appeal as the criminal.
4.18 p.m.
Mr. Nicholas Fairbairn: I beg to oppose the Bill.
I pay tribute to the sincerity of the hon. Member for Stoke-on-Trent, South (Mr. Ashley), who introduced it, and I merely wish to say that he operates from a variety of misconceptions.
I declare both interests and lack of them. I operate under a different system of law and this Bill would not affect me. I have the good fortune to operate under a system of law that has not been plagued by the absurdity of the Sexual Offences (Amendment) Act, which demonstrates the impossibility of putting common sense and reason into statute.
I operate also as somebody who has appeared in hundreds of cases involving sexual assault. Therefore, I hope that I may be able to speak with some authority on the subject. Lest it be suggested that any man or any lawyer has some prejudice against women, may I declare

1399
another interest. Nobody is fonder of women than I am.
I approach the subject from that basis, and I think that it is a fantasy that is in the hon. Gentleman's mind that there is some outdated hostility to women. A phrase he used seemed to demonstrate all the frightful archaic attitudes to women and of chauvinism that have ever existed. He spoke of a male enthusiasm for sex—as though women hated it, did not want it, wanted to take no part in it, but were compelled to do so in marriage.
Mr. Tom Litterick: They do not want to be raped.
Mr. Fairbairn: Indeed they do not. However, rape differs from all other offences in the calendar of crime in that it involves actis criminis that is normal to people and is sought after by people, men and women. People do not normally steal, lie or indulge in corruption or fraud, but they do normally seek after sex as a matter which they wish, and so it is a very different crime.
Like the crime of culpable homicide in the Scots calendar and manslaughter in the English calendar, rape can cover a wide range of cases. Rape cases range from, at one end of the scale, the case of Valerie Storey whose consent and co-operation was obtained at gunpoint. In this case, the assault was enlarged by a sexual content of the worst kind and merited condign punishment. If Hanratty deserved to be hanged, it was more for the second offence. At the other end of the scale, I have known frequent cases of women charging with rape men with whom they live.
Why does a woman say that she has been raped? There may be many reasons. She may have been raped, she may be feeling contrition at having gone further than she intended, she may be a young girl who gets home late and finds her mother waiting to ask where she has been or a wife whose husband wants to know what she has been doing. Once the word rape has escaped from the lips of the woman, for whatever reason, it is an admission that, whatever else she did, she had intercourse and she cannot go back on it.
1400
From my experience in hundreds of cases, I know that when the word rape has been mentioned, far from treating the inquiry in a chauvinistic fashion, policemen take steps far in excess of their normal diligence to investigate the truth and to ensure that if a woman has been raped, the charge can be substantiated. In my experience, the Bench leans over backwards to protect the women or children in the witness box and it is almost impossible to cross-examine them as one would cross-examine a male.
The hon. Member for Blyth (Mr. Ryman) prosecuted in a rape case in this country last week in which there was an all-female jury. In contradistinction to what the hon. Member for Stoke-on-Trent, South said, when I have defended cases in which my client was seeking to establish that a woman or a child was not telling the truth, I have always tried to get women on the jury. It is not a matter of male chauvinism, but women know that women do not always tell the truth. Men prefer to think that they always do. The same is true with children. That is why I have always preferred women on a jury because they know that they are not dealing with a species that is so saintly as to be inevitably perfect.
It is important that the channel along which the law in England has been travelling should stop. In Scotland we have the benefit of the common law. It is interesting to note that of all the offences in the calendar of crime, rape and sexual offences are the only offences that have been consistently falling over the past 10 years, and they are the only crimes that excite hon. Members opposite to ask for greater sentences.
It is important to remember that in any case of rape there are so many variants and differences that to criticise a judge or judgment that is selected for some reason is a very dangerous proposition. There is no right for the Crown to appeal against a sentence in any crime—for a very good and proper reason. When a person has been brought to trial, found guilty of an offence and sentenced, that is the process of the law. The process should not be continued beyond that.
It was because there was an appeal that the hon. Member for Stoke-on-Trent,

1401
South has a complaint. There was an appeal by the defence in the case to which he referred. If there had been no appeal, the hon. Gentleman would have had no complaint. When a person is found guilty of an offence and sentenced, that is the extent to which the law should go unless he cares to challenge it—and that should be the case with rape, parking or any other offence.
The emotion involved in the sexual content of rape should not be allowed to disturb principles. Hon. Members would do well to remember that rape involves an activity that is normal. Hon. Members should remember the words of Ovid—and I translate them into English for those who do not know Latin:
"Whether they say yes or no, they all like to be asked. And, saying she would never consent, she consented."
It is part of the business of men and women that they hunt and are hunted and say "Yes" and "No" and mean the opposite. If it is misinterpreted, let a jury decide whether it was reasonable to
misinterpret it. Let us not change the law because a sentence in a case appears to an outsider to have been inappropriate. In any event, it was a sentence that was made inappropriate by the lunacy of the Committee on the Criminal Law Bill and the Criminal Justice Act that preceded it.
Let us take the emotion out of this subject. We have no difficulty in Scotland. We have the common law, we can apply it, we understand it. If it is a bad assault, there will be a heavy sentence. If a man takes a girl out and she consents and afterwards retracts or feels contrition, there will be a small sentence, if any. As an outsider to the law of England, I beg the House not to pass the Bill.
Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business):—
The House divided: Ayes 52, Noes 114.

Division No. 201]

AYES

[4.28 p.m.

Allaun, Frank

Ennals, David

Perry, Ernest

Ashton, Joe

Evans, Fred (Caerpillly)

Reid, George

Bain, Mia Margaret

Evans, Gwynfor (Carmarthen)

Sillars, James

Boothroyd, Miss Betty

Farr, John

Smith, Cyril (Rochdale)

Brown, Ronald (Hackney S)

Fletcher, Ted (Darlington)

Stallard, A. W.

Buchanan, Richard

Foot, Rt Hon Michael

Stott, Roger

Callaghan, Jim (Middleton & P)

Hatton, Frank

Taylor, Teddy (Cathcart)

Canavan, Dennis

Janner, Greville

Wainwrlght, Edwin (Dearne V)

Carter-Jones, Lewis

Lipton, Marcus

Wainwright, Richard (Colne V)

Castle, Rt Hon Barbara

Loyden, Eddie

Weetch, Ken

Coleman, Donald

MacFarquhar, Roderick

Welsh, Andrew

Conlan, Bernard

Mikardo, Ian

Wigley, Dafydd

Cowans, Harry

Miller, Dr M. S. (E Kiibride)

Wilson, Gordon (Dundee E)

Crawford, Douglas

Morris, Alfred (Wytnenshawe)

Woodall, Alec

Crowmer, Stan (Rotherham)

Morris, Charles R. (Openshaw)

Dempsey, James

Ovenden, John

TELLERS FOR THE AYES:

Dormand, J. D.

Palmer, Arthur

Mr. William Molloy and

Dufly, A. E. P.

Pavitt, Laurie

Mr. Robin Corbelt.

Edwards, Robert (Wolv SE)

Pendry, Tom

NOES

Atkinson, Norman

Douglas-Hamilton, Lord James

Jessel, Toby

Baker, Kenneth

Dunwoody, Mrs Gwyneth

John, Brynmor

Banks, Robert

Dykes, Hugh

Jopling, Michael

Bates, Alf

Edge, Geoff

Kaberry, Sir Donald

Bean, R. E.

Ellis, John (Brigg & Scun)

Kerr, Russell

Bell, Ronald

Ewing, Mrs Winifred (Moray)

Kinnock, Neil

Bennett, Andrew (Stockport N)

Faulds, Andrew

Lamond. James

Bennett, Sir Frederic (Torbay)

Fernyhough, Rt Hon E.

Lamont, Norman

Boscawen, Hon Robert

Finsberg, Geoffrey

Latham, Arthur (Paddington)

Brittan, Leon

Fletcher, Alex (Edinburgh N)

Lester, Jim (Beeston)

Brooke, Peter

Fry, Peter

Litterick, Tom

Buchan, Norman

Goodhart, Philip

Lyon, Alexander (York)

Burden, F. A.

Gray, Hamish

MacFarquhar, Roderick

Butler, Adam (Bosworth)

Grieve, Percy

MacGregor, John

Carlisle, Mark

Grimond, Rt Hon J.

Marshall, Jim (Leicester S)

Cartwright, John

Grist, Ian

Maynard, Miss Joan

Clarke, Kenneth (Rushcllfe)

Grocott, Bruce

Miller, Hal (Bromsgrove)

Clemitson, Ivor

Hamilton, Michael (Salisbury)

Miscampbell, Norman

Cocks, Rt Hon Michael

Hardy, Peter

Mitchell, Austin Vernon (Grlmsby)

Cook, Robin F. (Edin C)

Hayman, Mrs Helene

Mitchell, R. C. (Soton, ltchen)

Corrie, John

Heffer, Eric S.

Monro, Hector

Costain, A. P.

Hunt, David (Wirral)

Morrison, Hon Peter (Chester)

Crawshaw, Richard

Hunter, Adam

Mudd, David

Crouch, David

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

Murray, Rt Hon Ronald King

Newens, Stanley

Roper, John

Thomas, Rt Hon P. (Hendon S)

O'Halloran, Michael

Ross, Stephen (Isle of Wight)

Thorne, Stan (Preston South)

Onslow, Cranley

Royle, Sir Anthony

Thorpe, Rt Hon Jeremy (N Devon)

Osborn, John

Ryman, John

Walker, Rt Hon P. (Worcester)

Pardoe, John

Sandelson, Neville

Walker, Terry (Kingswood)

Parry, Robert

Selby, Harry

Walker-Smith, Rt Hon Sir Derek

Penhaligon, David

Shaw, Arnold (Ilford South)

Ward, Michael

Price, C. (Lewlsham W)

Shersby, Michael

Watkinson, John

Price, David (Eastleigh)

Silvester, Fred

White, Frank R. (Bury)

Rathbone, Tim

Skinner, Dennis

Whltelaw, Rt Hon William

Renton, Rt Hon Sir D. (Hunts)

Smith, Dudley (Warwick)

Young, Sir G. (Ealing, Acton)

Renton, Tim (Mid-Sussex)

Snaps, Peter

Richardson, Miss Jo

Steen, Anthony (Wavertree)

TELLERS FOR THE NOES:

Ridley, Hon Nicholas

Stoddart, David

Mr. Nicholas Fairbairn and

Rlfkkid, Malcolm

Taylor, Mrs Ann (Bollon W)

Mr. John Lee.

Rooker, J. W.

Question accordingly negatived.

ORDERS OF THE DAY
  SUPPLY
  [29th ALLOTTED DAY]—considered
  SUPPLY

    DEFENCE AND CIVIL ESTIMATES, 1977–78 (OUTSTANDING VOTES)
    Mr. DEPUTY SPEAKER (Mr. OSCAR MURTON)Mr. DEPUTY SPEAKER (Mr. OSCAR MURTON) proceeded, pursuant to Order this day, to put forwith the Question,
    That the total amount of the Votes outstanding in respect of the year 1977–78 be granted out of the Consolidated Fund for the purposes defined in those Votes.
    Question,
    That a sum, not exceeding £22,730,155,000, be granted to Her Majesty out of the Consolidated Fund to complete or defray the charges for Defence and Civil Services for the year ending on 31st March 1978, as set out in House of Commons Papers 174, 231, 441 and 422,
    put and agreed to.
    Bill ordered to be brought in upon the foregoing resolution by the Chairman of Ways and Means, the Chancellor of the Exchequer, Mr. Joel Barnett, Mr. Robert Sheldon and Mr. Denzil Davies.

    CONSOLIDATED FUND (APPROPRIATION)
    Mr. Robert Sheldon accordingly presented a Bill to apply a sum out of the Consolidated Fund to the service of the year ending on 31st March 1978, to appropriate the supplies granted in this Session of Parliament, and to repeal certain Consolidated Fund and Appropriation Acts: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 172.]

  PROBLEMS OF LARGE TOWNS AND CITIES
  Motion made, and Question proposed, That this House do now adjourn.—[Mrs. Ann Taylor.]
  4.40 p.m.
  Mr. Reginald Eyre: Against the background of our present national economic difficulties, it is especially appropriate that the House should have this opportunity to discuss the problems of large towns and cities. More than 35 million of our people live in relatively densely populated urban areas having important connections with industry and commerce. Unhappily, it has to be acknowledged that a large proportion of these people feel in recent years that there has been a deterioration in the quality of life.
  So the problems of urban life generally are of great practical importance, and I think that we would particularly wish to have in mind the towns and cities within the great metropolitan areas in the Midlands, the North-West, Yorkshire, Tyne and Wear, as well as London and Glasgow. Also, a considerable number of large towns and cities outside the metropolitan counties—too many to name but I will mention Bristol, Cardiff, Leicester, Nottingham, Reading, Preston and Portsmouth as examples—experience similar problems.
  The shared features of too many of our older towns include worn-out hospitals, schools and similar public buildings in need of modernisation or replacement, and large numbers of dilapidated houses and run-down districts. The fact that these blemishes still exist is a reflection on the poor performance of our national economy. It is now becoming common ground that only success in the creation of additional wealth will provide the resources necessary to deal long-term with widespread urban decay.
  We also have to keep in mind that, particularly in the older industrial areas, unemployment has more than doubled since what the Chancellor of the Exchequer has described as the catastrophic year of 1975, and the lack of jobs for young people has emerged as a severe problem which will cause us anxiety for years ahead. There is an

  1407
  additional feature which is deeply disturbing—the exceptional rise in crime, especially violent crime, and vandalism, which has taken place in so many of these large towns and cities, reflecting the wider spread of instability and social problems and causing considerable apprehension to the aged and to those who feel themselves vulnerable.
  Within these wider areas of urban problems, there are inner areas of many of our older towns and major cities where the features of decay—bad housing, high and rising unemployment, crime and elements of social disorder can be seen in particularly intense form. The Government's White Paper on the inner cities, as expected, concentrates mainly upon these areas and aspects. On the analysis of the causes and intensification of these inner area problems there is much agreement, and I will not take up time by repeating them all, but I want to emphasise that while slum clearance was essential, the almost indiscriminate use of the bulldozer to break up existing communities living in sound older houses capable of modernisation was grievously wrong.
  This was particularly so when people were transferred in huge numbers to vast, ill-designed housing estates, including far too many tower blocks of flats which are not suitable as homes for families with young children. We must see to it that these mistakes are never repeated. Again, as the steep fall in job opportunities is a major factor in most of the other symptoms of decline in the industrial towns and cities, the bulldozing out of existence of so many small non-conforming businesses in the inner areas was extraordinarily insensitive and short-sighted, especially when so few efforts were made to resite these businesses and to safeguard the jobs that they provided.
  Looking at the White Paper as a whole, and having noted carefully the change in emphasises and policies which the Government have adopted in recent months—in education, transport, housing and the problems we are discussing—I congratulate the Prime Minister, the Secretary of State for the Environment and their colleagues on their diligent study and partial adoption of the "The Right Approach", the Conservative policy document published last October. But I want to say to
  1408
  them that we on these Benches and in the council chambers throughout the country who, as Conservatives, believe in these principles will apply them more energetically and effectively than any Labour Administration could. Indeed, with many Socialists it is very much a case of asking the leopard to change his spots.
  The Government's prescription in the White Paper for strengthening the economies of the inner areas puts great emphasis on preserving the firms and businesses which at present exist and on giving them an opportunity to expand. It also calls for new businesses to be started by firms and individuals and for private capital investment to be stimulated so that extra jobs can be created. These are the very policies we have advocated for the strengthening of the national economy, and we welcome and support them.
  Mr. Eric S. Heffer: The hon. Gentleman referred to "The Right Approach", from which, he said, the Government have borrowed. I do not want to be immodest, but point out to him that I have been advocating these steps for the last two years in the House. Perhaps the Conservatives have borrowed the ideas from me.
  Mr. Eyre: I would like to give the hon. Gentleman credit for the way in which he has advocated liberal and sensible policies with regard to small businesses and the contribution that they can make. But "The Right Approach" goes wider, and some of its terms have been incorporated in the other policies of the Government.
  We want these policies to be applied to manufacturing and service businesses as well as to small craft industries, all of which have the potential for the employment of young people and those displaced by present difficulties. In the Conservative pamphlet "Hope for our towns and cities" and in the pamphlet published recently by London Conservative Members, the Secretary of State will find a number of practical suggestions along these lines to which I hope the Government will give serious consideration.
  Of course, there will have to be changed attitudes on the part of the local authorities to attract and assist entrepreneurs and business-starters by making

  1409
  available suitable cheap premises or sites for small businesses and the self-employed. There will have to be changes in the attitude on the part of local authorities in speeding up the planning processes to allow mixed development of housing and business activity in inner areas, subject to reasonable environmental safeguards.
  But the Government must also change their attitude to removing the barriers which have prevented small and medium-sized firms from making profits, expanding, and creating jobs. The Government must understand that excessive taxation lessens the will of people to work and damages the spirit of those likely to establish the successful businesses that we need. The Government must appreciate, too, the importance of incentives to those exercising skill or undertaking responsibility.
  I find it difficult to explain convincingly to a school leaver in Birmingham that he should undertake an apprenticeship and acquire extra skill if he is not to be rewarded in an egalitarian society. Everything possible must be done to help people in these areas to improve their skills. Government training centres and retraining schemes should be more flexible and—this is very important—their activities related more realistically to local job prospects, to the chances that actually exist. That is particularly so in the small business sector.
  We must remember that education in schools provides the basis of later training for life, and that is one of the reasons why the maintenance of good standards in all our schools is of crucial importance to the future of the children in these areas. In the same way, too, the vital part that industry plays in our national life should be emphasised so that its status and attractions are better understood by young people. I ask the Government to look again at their regional policy for areas of high unemployment in Birmingham, the West Midlands and London.
  The White Paper makes clear that IDC applications coming forward from such regions will still be kept behind those from the assisted areas, though they will now be placed in front of those from new towns. At a time when few developments of this kind are likely to be forthcoming, this hardly seems to be a fair
  1410
  priority in view of the new high rate of persistent unemployment in these areas. The Government should consider creating within those towns and cities limited areas with status equal to that of assisted areas for IDC purposes. I believe that my hon. Friend the Member for Hampstead (Mr. Finsberg) will mention office development problems.
  Although we accept that the basic purpose of the White Paper is to tackle urban decay, I should like to indicate to the Secretary of State the Opposition's certain differences of principle and emphasis about his White Paper. It is not enough to look only at the dramatic problems of the inner areas, serious as they are. The fact is that large-scale clearance of the inner areas has brought about a substantial transference of people to the outer parts of the large towns and cities, mainly in the form of vast council housing estates, which often lack adequate recreational and community facilities. In this way some problems have been transferred wholesale to the outer and middle areas. This has happened on a substantial scale in Liverpool, Leeds, London, Manchester, Newcastle-upon-Tyne and Birmingham, to mention only a few of the cities affected.
  Additionally, urban decay spreads not only from the inner areas but from existing areas of older neglected housing in middle and outer city areas, and they can adversely affect standards in the surrounding districts. Unless this process is arrested by remedial action, future widespread deterioration will be expensive, or even impossible, to correct.
  So in these and other important respects we think that efforts to prevent a wider spread of decay and falling standards are necessary. We emphasise that the problems of towns and cities must be seen as a whole, because the capacity of councillors and local government officers and those engaged in social and educational services is stretched across the city as a whole. So paragraph 81 of the White Paper, which suggests switching resources from other parts of the cities to the inner areas, can be seen as an attack on those living in the middle and outer parts, nearly all of which have their problems, too. I believe that the Government have failed adequately to take account of these factors.
  Mr. Alexander W. Lyon: The argument on this subject is about the allocation of resources. There are no infinite resources but only finite resources. In those circumstances one has to make choices. The choice is between the urban areas and the rural areas and, within the urban areas, between those that are worse off and those that are better off. The hon. Gentleman has just given a recipe for spreading the jam all over the place so that it is so thin that it does not do any good at all.
  Mr. Eyre: If the hon. Gentleman will bear with me, I think that he will find that I shall try to answer that. As all these ratepayers and taxpayers living in the middle and outer wards of cities share the cost of dealing with serious problems in the inner areas, it is vital that these citizens feel that fair account is taken of their problems.
  Another issue that I wish to raise on the White Paper relates to the criteria adopted for the choice of areas to be offered partnership arrangements. Here I want to make it clear that we understand and accept that there must be a strict limit on Government expenditure and that priorities are required. In any event, because of our economic plight, the additional amounts that the Government are able to make available for inner areas are not significant against the background of immense needs in all the industrial towns and cities. The Chancellor's recent adjustments of construction expenditure only restore a fraction of the sums previously cut by the Government.
  We understand these limitations, but any sensible reading of the criteria makes it plain that great areas of the Black Country—Dudley, Sandwell and Walsall in particular—are ignored. Anyone who knows these districts knows that they have their problems of an inner area nature as defined by the Government.
  The same situation applies in many Lancashire and Yorkshire industrial districts and cities as well as Leicester. The White Paper contains a number of rather vague future sweeteners which I have no doubt the Minister will recite. But in my judgment they obscure the fact that the right realistic priorities have not been established as required by the realities of the economic situation and the needs of older towns.
  1412
  I suggest that firmer priorities should be established mainly by way of housing policies. Otherwise, the hope of improving their situation will be diminished in the greater number of older towns and cities outside the scope of the Government's inner area policy.
  So, first, we should recognise that the cost of building new council estates on the periphery of towns is becoming unbearable because of the cost of subsidies provided by the ratepayers and taxpayers and the existing council tenants who have to contribute through rent in the pooling systems. Secondly, the Government should acknowledge that they have partly done this, that the 1974 Rent Act has lessened the supply of privately rented accommodation available in those towns and cities. But the Government should go further than their present proposals and should also adopt the Conservative policy on short-holding tenure for limited-term letting, which undoubtedly would add to the stock of tenancies available in the areas of greatest need.
  Mr. Frank Allaun: Will the hon. Gentleman give a straight answer to a straight question? If the Conservatives were to become the Government, would they restore the council house building programme? Unless the hon. Gentleman is prepared to give a firm "Yes", he is condemning millions of families both in the inner areas, one of which I represent, and the outer areas to homelessness because they cannot afford to buy their own homes.
  Mr. Eyre: I understand why the hon. Gentleman always speaks passionately on housing matters, but I assure him that he is out of touch with the changing situation. I am seeking to detail the priorities that I believe should be allocated in the present situation. New council house building at the peripheries of the cities should be reduced.
  Mr. Frank Allaun: What about the overall programme?
  Mr. Eyre: The answer is "No". Almost every month Ministers make announcements about cutting the Government's programme. The hon. Gentleman is badly out of touch.
  Thirdly, the Government should welcome the unlocking of extra resources

  1413
  by the sale of council houses, since that would help to provide funds for building to meet special needs, such as those of the disabled and the elderly, thus releasing for the accommodation of families more housing at present under-occupied.
  Fourthly, on the question of resources, the Government should move urgently to sell to the present occupiers or, subject to the tenancies of those occupiers, to pension funds or similar investors commercial and industrial assets consisting of premises in the new towns. These funds would usefully assist in dealing with the inner area problems. We were pleased some weeks ago to hear the Secretary of State agree to look into this aspect, and we hope that he will report progress this afternoon.
  Mr. Stephen Ross: Does the hon. Gentleman agree that before selling off the stock of council houses local authorities, particularly the Conservative ones, should look at the possibilities of selling on long leaseholds flats in tower blocks, the less desirable properties? That would make a very good priority.
  Mr. Eyre: The hon. Gentleman has made a practical suggestion in that the sale of flats on a leasehold basis could well be of value. That is included within our policy proposals.
  Mr. Frank Allaun: May I take up this important question? Who does the hon. Member think will buy an 18th-storey flat? Is it not obvious that the Conservative policy of selling off council houses means that the nice properties will go but that the duds will be left and that therefore families living on the 18th floor will never be able to transfer to houses with a little bit of garden in which their children can have some privacy and can play?
  Mr. Eyre: Although flats are unsuitable accommodation for families with children, some people like them, and 18th floor flats, for example, change hands in London and other cities quite rapidly.—[Interruption.]
  Mr. Deputy Speaker (Mr. Oscar Murton): Order. I am sorry to interrupt the hon. Member, but there are too many private conversations in progress. If interventions are to be made, they should be made in the normal manner.
  Mr. Eyre: Fifthly, the Government should divert housing resources thus released, as well as funds which have been earmarked for extending municipalisation of tenanted properties, to the improvement and modernisation of older houses to the extent that the age and condition of the houses warrant. In this way people over a wider area of housing decay would feel that some more effective priority was being established to halt the process of deterioration.
  I cannot do less than commend the Government's recent partial conversion in their Green Paper on housing in urging the Minister to help first-time purchasers to buy their homes rather than to encourage them to become heavily subsidised tenants in the public sector. This is an important priority to restore the balance to housing in the large towns and cities, though, of course, we should have preferred full-hearted conversion to the scheme we have advocated to assist wherever possible young people and other first-time purchasers. We urge local authorities to make land available to builders at reasonable cost so that low-priced, small, new-starter homes can be made available through competitive tender to young couples and others wishing to take on home ownership.
  Here I express concern that the Government have not yet brought forward details of how they are to solve the problem of releasing great areas of land in our towns and cities which is owned by local authorities and State bodies. The Green Paper on housing does not mention this subject, yet it is of great practical concern that local authorities should use their land in the inner areas for housing purposes of the kind I have just described. In so many cases, however, local authorities are in great difficulties because the land is over-valued on their books and they cannot sell it at a realistic price. This same problem faces local authorities when they try to make cheaper sites available to small businesses and other enterprises for the job-creating process that we all want to encourage.
  I therefore urge upon the Secretary of State that this problem of writing down land values to enable local authorities and State undertakings to sell off land at reasonable prices needs urgent consideration. I hope that we shall hear

  1415
  from the Secretary of State on this subject today.
  In the light of the Chancellor's confirmation that strict cash limits will apply to local authority expenditure, it is clear that councils will be under great strain to maintain their existing services. As a Birmingham Member, I have to put it to the Government that it is quite wrong that immigration into this country at around 60,000 people a year should continue to bring extra population into the run-down inner areas of the relatively small number of towns and cities that form the main immigrant reception areas.
  It cannot be in the long-term interest of those communities nor of the community as a whole to continue to add more and more people through immigration to these areas at a time when housing, education and welfare services are strained to their limits, when unemployment is at a record post-war level and is particularly bad among the minority communities and when social problems in these areas have worsened. By continuing with present immigration policies the Government are in danger of creating larger and larger problem areas which will make it immeasurably more difficult to remedy the problems. Many of the people in these ethnic communities recognise that fact. It is essential that the Government introduce immediately a strict quota system for entry, which would mean a much lower number of people entering the country each year than is now the case.
  Mr. Alexander W. Lyon: Will the hon. Member tell me of any ethnic community he has come across that refuses to allow a man to live with his wife, bearing in mind that wives and dependants make up the bulk of present immigration? The hon. Member always talks as though a vast number of workers is coming into the country, when those coming in are wives and dependants.
  Mr. Eyre: The hon. Gentleman will understand that I am emphasising—and he mentioned that resources were finite—that under cash limits local authorities will have the greatest difficulty maintaining decent standards in the large towns and cities, particularly in the crowded reception areas. Given that limitation, to continue to bring in numbers of people
  1416
  who are disadvantaged in some way—perhaps the wives do not speak English and the children will need schooling—in the absence of the necessary resources to do the job properly, is assuming a false sense of obligation. To do that is to seek to multiply the problems in the inner areas.
  Mr. Stanley Newens: Would the hon. Member apply to the same restrictions and objections to white people coming into this country from, say Western Europe? If he is suggesting that the restrictions should apply only to coloured people from the Third world, he is advocating a system of greater racial discrimination.
  Mr. Eyre: I make it clear that the Birmingham people, for whom I speak, do not want an increase in the population where that would be to the detriment of conditions there. That is a perfectly reasonable view, and that view applies to any people from wherever they may come. If they came in large numbers and settled in the run-down inner areas, increasing the problems there, there would be a resistance against such an increase.
  Mr. Alexander W. Lyon: The hon. Gentleman goes from the absurd to the more absurd. Does he not realise that in every single area of immigration settlement the population is less now than before coloured immigration began? Leicester is a first-class example.
  Mr. Eyre: I ask the hon. Gentleman to go into those areas and to see the problems that exist and the responsibilities that are put upon local authorities. He is over-simplifying the situation. A lot of people who are very responsible are greatly concerned about the problems that I have described.
  Mr. Anthony Steen: Is my hon. Friend aware that in the Indian sub-continent only 29 out of every 100 people seeking entry into Britain are dependants of families settled here, but that 71 are people in other categories? That pattern is reproduced all over the sub-continent. The vast majority of people seeking admission to Britain are not wives and dependants.
  Mr. Eyre: I have noted the point that my hon. Friend has made. If I may continue, for the sake of long-term peace and

  1417
  good will it is equally essential that we care about the problems of the settled immigrants so that they give of their best and are able to make a contribution to society. The crucial need will be to avoid alienation on a large scale, for otherwise there is a danger of young immigrants with special needs, if ignored, turning against society.
  I have already referred to the large municipal housing estates built up in the urban areas. Despite all the efforts of councillors and officials, they probably represent the least acceptable bureaucratic system in this country. Anyone who holds an advice bureau on those estates knows of the queues of tenants who attend to complain about lack or inadequacy of repairs, unsuitability of accommodation, difficulties of transfer and more increasingly in recent years, of the damaging effect upon working households of disruptive behaviour on the part of serious problem families. Control of these estates is too much by officialdom and not enough by individuals.
  By way of a council tenants' charter we shall give tenants a better and more direct say in the administration of their estates and the management of their homes, including internal and external decoration and an end to such irksome and unnecessary restrictions as taking in lodgers and keeping pets, subject to reasonable safeguards. The aim will be to increase the diginity and status of tenants by giving them more say in matters affecting their daily lives. In return for acceptance of increased responsibility for maintenance and decorations there should be longer letting periods so that council tenants are given a greater feeling of belonging and security.
  The Council Tenants' Charter Bill, which was introduced from these Benches to effect these purposes, was narrowly defeated by the Government earlier this year, although the Under-Secretary of State responsible for housing kindly indicated that a Bill along these lines would be introduced by the Government. I want to make it clear that we shall hold the Government to that assurance and we should like the Secretary of State to confirm that the Bill that he will introduce will include a right of enfranchisement for the tenants so that they have the right to purchase the house or flat that they occupy on attractive terms.
  1418
  That would indeed be a great measure of land-holding reform for this country.
  In any event, the Conservative Party is determined to see this happen and in this way we shall bring home ownership within the reach of many thousands of families each year. We consider that there is great social significance in this reform, because home ownership plays a vital part in the build-up of family assets that we want to bring about. Home ownership creates greater mobility during times of job shortage and increases the personal freedom of people to choose where and what kind of home they live in during their working careers and upon retirement.
  I have referred to the great anxiety caused by high crime rates, hooliganism and vandalism. People in the crowded urban areas want the police force increased in numbers to combat these damaging activities. We shall be prepared to raise police pay so that men and women of suitable calibre are recruited and retained in the service. Similarly, the huge increase in juvenile crime causes great anxiety and there is a strong call for power to be returned to magistrates to deal with hardened young offenders. A review of the 1969 Children and Young Persons Act is an urgent priority.
  In the pamphlet "Hope for our Towns and Cities" there is reference to the difficulty that many families and individuals have in finding a comfortable sense of identity in large towns and cities which have grown so big that they tend to submerge the importance of the individual. People find it difficult to relate their own problems to the national and local services which we often administered through remote office blocks. I believe that it is necessary to consider ways of bringing back a proper sense of neighbourhood or village feeling by dividing up vast housing estates along natural boundaries. I think that a similar division would help in the inner cities in coping with many of the problems there.
  By this neighbourhood system we should seek to relate housing and social services more closely to the needs of families and individuals. In housing allocations much more account should be taken of families who wish to come closer

  1419
  together—the mother to support her daughter with small children and, later, that daughter to help with her mother when she becomes infirm or aged. It is amazing how in many cases the system is not flexible enough to take proper account of these things now.
  Given the restraints on public expenditure, I do not believe that professional welfare services can cope with all the demands in the towns and cities. Indeed, many local authorities no longer have resources to carry out in full the requirements of Acts provided for those in need. I believe that through the neighbourhood principle we can more effectively encourage voluntary effort in caring for that group in society that needs help.
  One of the basic faults in the developing tendency of the post-war years is that there has been too much dependence upon the State to provide. But the fact is that the State cannot now satisfy those demands and cannot answer all those needs. It is essential that we change our attitudes, because we need a healthier emphasis on self-help and self-reliance if we are to maintain the standards of care that are needed. Our aim should be to see that the community is caring more for itself, particularly in the many task involving basic human skills.
  In an established neighbourhood people can be encouraged to take more effective interest in improving their environmental surroundings, and anti-social behaviour would be discouraged. This would help to counter vandalism because of the support in the neighbourhood. People would be more willing to report incidents to the police. One finds instances where, through intimidation, people on the vast housing estates are reluctant to report.
  Administrative relations with local officials could also be improved through the neighbourhood system. To reduce the feelings of helplessness that develop when so much of life is dominated by large-scale bureaucratic systems we need seriously to consider some counterbalance by creating smaller units within our large towns and cities. There is no better way of providing a sense of community than through providing a purpose in our society that might well attract active support from young people, who
  1420
  too often nowadays cannot identify those areas where they can give practical help. We must look at all proposals aimed at increasing stability within our society. Family interests play a great part in this.
  It has been said that civilisation has a thin crust. Recent events in New York show that perhaps that crust is thinnest in densely populated cities. We are certainly now at that point where a great deal of good sense is required in dealing with our problems and in shaping our policies so that the people living in those large towns and cities feel that in a practical way we are moving to cope with those problems. They must have a genuine feeling that we are beginning to improve our society and to deal with our problems by producing a more confident and better balance and a healthier sense of community in those areas.
  5.20 p.m.
  The Secretary of State for the Environment (Mr. Peter Shore): I listened to the speech of the hon. Member for Birmingham, Hall Green (Mr. Eyre) with great interest and, thanks to the publication a week or so ago of his pamphlet "Hope for our towns and cities". I have been able to consider his views in greater depth than is perhaps normally available to a Government speaker in a Supply Day debate. However, I want to make one or two comments about the content of the hon. Gentleman's speech because I do not think that he has fully taken account of all that we have been doing and are proposing to do.
  I begin straight away with what he said about London and Birmingham and his question whether there were not additional ways of assisting industry in these two great cities. I shall say something more about that later. However, in making his claim, the hon. Gentleman overlooked the fact that we are proposing to strengthen the powers of local authorities in the inner city areas of both London and Birmingham to do more to help industry in those areas than they have been able to do for a long time, and he has overlooked our proposal to take the gag out of London's mouth and to allow London to speak for itself in terms of the advantages which are there in this capital city—a right which London has been denied for nearly 50 years.

  1421
  The second matter which I do not think the hon. Gentleman understood properly arose when he said that there were many areas outside the defined partnership areas where much could be done if we gave them more assistance in housing. What does the hon. Gentleman think we were about when we declared housing stress areas last year and safeguarded the new house-building programmes in all those areas, including all the major urban areas, and maintained it despite all the difficulties in public expenditure?
  Thirdly, I will not follow the hon. Gentleman very far on immigration, but either he was announcing some new Opposition policy relating to the control of immigrants' dependants or he was not saying anything worth listening to. If he applies his doctrine equally to people coming from Common Market countries, which he appeared to think equally might upset the balance in Birmingham, he will be in grave trouble with the Commission and the Treaty of Rome. I warn him that there is a free market in labour and that he had better watch out for that.
  During the course of making his final argument, the hon. Gentleman fudged and ducked a major challenge put to him by my hon. Friend the Member for York (Mr. Lyon). It is a difficulty. We have to choose. We have to discriminate. There is not enough to spread round to all our towns and cities at present. Even if there were very much more, I believe that we would be driven to try to establish priorities. We would have to try to establish the areas of greatest need. We have to do it with as much information as is available to us but with an element of judgment in it as well. We try our best to get it right, and I believe that at least the areas which we have selected need the additional assistance that we have given.
  Having said that, I was encouraged to discover from his contribution and his pamphlet how far the hon. Member for Hall Green and his colleagues have moved on the problems of the inner cities since this Government announced a new and positive initiative last September. It is quite a contrast between what happened during the last period of Conservative rule and the position today. Between 1970 and 1974, the problems of our inner cities were intensified. No initiative was taken other than the setting up of three
  1422
  major studies which took four years to complete. There was no new inner area programme. There was no new approach. There was no new analysis. We had just a continued and unchecked policy of exodus from our major cities. I am not impressed by the Conservative Party's past. Therefore, I welcome this new approach, and I hope that it is sustained and genuine.
  If I have any complaint about the pamphlet produced by the hon. Member for Hall Green, it is that although he may have got the analysis of the problem broadly right, it is absurd to suggest in it that somehow the problem is due to what he calls
  "years of Labour domination in these areas"
  He suggests that it is that which has contributed to the continuing deterioration of these areas. But that will not do.
  In so far as, in part, the problems faced by inner areas have arisen because of decisions by government, whether at national level or at local council level, they have arisen not out of any party prescription but from much more powerful and pervasive forces. The first has been a positive and genuine concern to deal swiftly with the vast number of slums—the legacy of nineteenth century private enterprise, of neglect in the 1930s and of bombs in the 1940s—which were in an irretrievable condition and which could only be bulldozed. Although I am on the record many times as saying that I want to pension off the bulldozer, let us not go back over the past and rebuke ourselves unnecessarily for taking actions that we had to take because of the conditions which existed in our inner cities in the earlier post-war years.
  Mr. Kenneth Baker: The Secretary of State must not attempt to wriggle out of the accusation made by my hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre) that large parts of our inner cities still remain derelict and undeveloped as a result of the inactivity of Socialist councils. The right hon. Gentleman's own constituency is the classive example, taking in, as it does, Tower Hamlets, Stepney, Poplar and Bethnal Green. It is a disgrace that hundreds of acres are still empty, having been empty for the better part of 10 years. Who has been in power during that time? It has been the Socialists. The

  1423
  Socialist local authority has done nothing, and it has quarrelled with the Socialist GLC. The blame lies there and not with the previous Conservative Government.
  Mr. Shore: I am not prepared to engage with the hon. Gentleman in argument about that. That is absurd. I know the problems in my area, and I have seen the progress which has been made. The existing problems are very serious. But, going back to 1964, Tower Hamlets had the worst housing problem in London, if not in the whole country. We had tenements of the most appalling kind. They were old and rotting. We had the biggest waiting list in Central London. We have made substantial progress. But that does not mean that I am content with what has been done. I want to make many more proposals.
  Mr. Steen: Will the right hon. Gentleman give way?
  Mr. Shore: No. I shall not give way any more. I feel that I shall not get through my speech if I do. In the light of the intervention by the hon. Member for St. Marylebone (Mr. Baker), which was trivial and political, I prefer not to give way for some time now.
  My point is that some of these problems could be dealt with only by demolition. They were an inheritance from the past. All parties recognise that, although in the 1950s and 1960s we argued about the pace of change. Of course we now all regret some of the consequences, not so much of the decisions to demolish, most of which would have to be made today if we were starting afresh, as of the decisions on what to put in their place. There were too many tower blocks and barrack block estates, often without communal facilities.
  Although there may have been mistakes, we have to recognise that these decisions were often made by political leaders of both parties who were not aware of the social consequences of the building designs partly because they had not been tried before and partly because they were often under great pressure, not least from Central Government, to build quickly and at a minimum cost.
  The second powerful and pervasive force was the conventional wisdom which had gone unchallenged in three postwar
  1424
  decades that the cities had to be given more room to breathe by positive policies of dispersal of population and industry. As with many fashionable policies which take hold and develop their own momentum, it had its point. Our cities needed more room to breathe. They were overcrowded, and no one in the House would suggest that it would be other than insane to attempt, for example to pack back into my own borough of Tower Hamlets the 500,000 or so people living there in the early 1930s. But what my constituents regret—and, I would guess, those of any hon. Member for any inner area of any major city in the land—is that dispersal has gone too far and too fast, and that insufficient attention was paid to the communities and to the industry and employment that was to remain in the inner areas.
  Since I became Secretary of State for the Environment, therefore, my major concern has been to produce a sea-change in both attitudes and policy towards the inner city. In terms of changing attitudes I believe that we are now succeeding. It is remarkable but also gratifying to see how far things have moved since last year. This change of attitude has been essential, for no paper policy will work unless it is backed by political will and conviction on the part of those who have to carry it out and on the part of the intended beneficiaries of the policy, too.
  I would now like to inform the House of the progress which has been made since my statement on 6th April when I announced that partnerships would be offered to the local authorities of certain major cities so that central and local government can jointly tackle the problems of their inner areas. These cities were Liverpool, Manchester and Salford, Birmingham, and, within London, Lambeth and Docklands. I said then that I was ready to consider whether other authorities should be offered similar arrangements.
  I repeat what I have previously said—there can be very few other authorities. Some 20 authorities have approached me, and my colleagues in the Department and I are actively considering these requests. We have already spoken with a number of the authorities about their own problems, and have arranged to see several more. I hope to announce my decision

  1425
  on further partnerships within the next few weeks.
  The purpose of selecting a few areas for special attention was to recognise the scale and intensity of their problems and to make sure that limited resources were not spread too thin. This is the only way we can achieve a concentration of effort which will make a serious impression on the problems. The concept of partnership is in no sense an adverse reflection on the ability of the local authorities concerned, but a recognition—which all these authorities share—that central Government, too, has a direct contribution to make if these inner areas are to be rejuvenated as quickly as we all would wish.
  Mr. Heffer: Will my right hon. Friend indicate whether he feels that the concept of partnership is sufficient to allow quick decisions to be taken? Has he ruled out completely the concept of some sort of agency—I do not mean on the same basis as the new towns—which could make quicker decisions and on which the Government and local authorities would be represented? The essence of the problem is that we need quick decisions and quick action.
  Mr. Shore: I certainly do not myself intend to propose agencies. That would be the wrong approach. If any partnership authority was to say—perhaps for certain limited purposes—that it wanted and would welcome an agency working with it to carry out some part of its redevelopment, I should not wish to stand in the way. I hope that that is the assurance that my hon. Friend seeks.
  Formally, the partnership is between the local authorities and central Government. But I hope that the concept of partnership will be a pervasive one and will underline the way in which these authorities carry out their programme, and that it will enlist the involvement and enthusiasms of those vitally concerned with the creation and sustenance of employment—that is to say, the industrialists, trade unionists, voluntary bodies, and the community generally.
  So far as the partnerships which I have already announced are concerned, I have had meetings with the leaders of the local authorities in Liverpool, Manchester and Salford, and London Docklands and will be meeting the leaders of Birmingham
  1426
  and Lambeth within the next few days. These meetings are focused on both the machinery for the partnerships and the nature of the programmes which they will launch. As an indication of the importance which we place on these partnerships, I have arranged that a Minister should chair each of the partnership committees. It is to this committee that the inner area teams will work.
  It is my intention formally to launch the partnerships in the early autumn, and at that time I hope to indicate the order of magnitude of the urban programme that will be available for those areas for the three years from 1979–80 onwards. I announced in my statement on 6th April that the overall sum for 1979–80 would be £125 million. Of course, the programme which the partnerships will prepare will be concerned with all aspects of expenditure in the inner areas and not simply with the extra urban programme money being made available to them. I am glad to tell the House that all the discussions I have held with the authorities indicate that the White Paper and our proposals are getting a genuine and helpful response on an all-party basis.
  Mr. Steen: Can the Secretary of State explain the partnership arrangements in more detail? Are the local authorities to give some money as well? The term "partnership" presupposes that there is giving on both sides, but at the moment one gathers that only the Government are giving.
  Mr. Shore: It is important that some of the major local authorities should reallocate resources as far as they can—I know that that is not easy for them to do—so that they have greater input into the areas that need it most within their city boundaries. That is their contribution. The same will apply to the county councils, which will also be involved. For our part, the Government will match this by using the main programmes. In addition, there will be an increased urban grant, as I have described.
  Mr. Timothy Raison: One point on which I believe people are genuinely not clear on the partnership arrangement is whether the partnerships will have any executive role or whether they will be purely consultative. After deciding something with the Minister as chairman, will the partnerships tell or

  1427
  merely ask the local authority to do such and such a thing? Similarly, will they tell or ask the public or Government agency in that area to do such and such a thing? What is envisaged as the executive function?
  Mr. Shore: The executive function of the partnerships will be carried out either by central Government agencies or local government agencies. The important thing is to bring them together in a clearly identified programme to which they are all agreed, to establish priorities and then to get on with it. That is the way in which we believe that they should proceed.
  The financial year 1979–80 has been set as the launch year for the main partnership programmes. This will give the partnerships the necessary time to draw up sensible programmes for their areas. I have been conscious throughout the development of our inner city policy that simply spending more money in an indiscriminate way would not be a guarantee for the necessary change. It is how we spend the money, as much as how much money is available, that will determine the success of these programmes.
  We are not overlooking immediate needs. In his Budget statement in March my right hon. Friend the Chancellor of the Exchequer announced that £100 million would be available for inner city construction projects for this year and 1978–79, of which £83 million was for England.
  I have allocated £57 million of this amount to the partnership authorities—£11 million each to Liverpool, Manchester-Salford, and Birmingham; £17 million to Docklands, £5 million to Lambeth, and £2 million to the ILEA for Docklands and Lambeth together.
  In the programmes which we shall be approving in detail a strong emphasis is being placed on industrial regeneration and environment improvement. I have approved the first batch of proposals from Docklands. Approvals will be going to the Liverpool and Manchester authorities in the next few days.
  Mr. Geoffrey Finsberg: The Secretary of State spoke about the £17 million allocation to Docklands in the construction package. Am I right in
  1428
  thinking that this refers not to a grant but merely to the authority to borrow the capital finance which must still be raised and the loan charges met by the local authorities?
  Mr. Shore: It refers to the total amount of additional expenditure. We grant-aid expenditure. If it is housing it is 66 per cent. and if it is under the urban aid programme it is 75 per cent. The Government will make our contribution and the local authorities will be making the smaller part of the contribution themselves. Let there be no misunderstanding on that point.
  I want here to say a separate word about London. Because of the scale of the problems and the timetable London is somewhat different from areas elsewhere in the country.
  First, Docklands. The important thing is to get the show on the road and to make progress as rapidly as possible. It was for that reason that I approved the Docklands Strategy last July, within three weeks of it being placed before me, and gave Docklands a high priority in the allocation of construction moneys for this year and next.
  I should like to place on record my appreciation of the work done under the leadership of Mr. Percy Bell to draw up and agree the Docklands Strategy, and at the same time to welcome its new chairman, Sir Hugh Wilson, to this most important and challenging task. Docklands involves five boroughs and the GLC, as well as a number of statutory and other undertakings.
  The only alternative to these bodies working together as a partnership is for there to be some agency imposed on top of them. That is unacceptable, because it would not be able to take account of the needs of residents in the way in which the local authorities can. But partnership there has to be in Docklands, and that means willingness by all concerned, whatever their political persuasion, to abandon sloganising and to get on with the job.
  So far as transport is concerned, which is a key and difficult element in the Dock-lands Strategy, I have today written to the Leader of the GLC and to the chairman of the Docklands Joint Committee to invite them to meet my right hon. Friend the Secretary of State for Transport and me to discuss the whole transport strategy for Docklands.

  1429
  Secondly, London housing. The Greater London Council is a strategic housing authority, with all the duties which that implies. The decision of the GLC to stop all new building in outer boroughs has given me concern, because it does not seem to me to have been based upon any serious analysis of housing requirements and needs in this great metropolis but more upon a simple and doctrinaire desire to cut back on council building. London still has a major need for rented housing, and a cessation of building in outer London will cause distress to thousands in housing need in this city and will make mobility of families more difficult than ever. This problem will only be made worse by an indiscriminate policy of selling council houses.
  What will ensure mobility is the acceptance by the GLC of its strategic housing role and its willingness, and that of the London boroughs, to agree a common allocation system so that tenants are not trapped in one borough or another. The need for a common allocation system becomes even more pressing if large parts of the GLC stock are transferred to the boroughs. I ask the Opposition to say what their view is. Do they believe that mobility among council tenants should be enhanced? Do they agree that a common allocation system, or an inter-borough nomination scheme, has to be the way forward?
  So far, I have spoken mainly of the partnership authorities, because it is they which have the most obvious and large-scale difficulties in their inner areas.
  Mr. Ronald Brown: I am following what my right hon. Friend is saying with great interest. Does he agree that any strategy for moving people from the inner to the outer areas depends on the cooperation of Tory-controlled boroughs which, over the years, have wilfully refused to allow any interchange between inner and outer London areas? We need an answer to that problem from the Opposition.
  Mr. Shore: The London housing problem can be solved only if all the boroughs, particularly the outer boroughs which have substantially more space for building houses, help the inner boroughs. It does not mean that there is no space for
  1430
  development in inner London. But the idea that, for example, Lambeth's problems can be dealt with within that borough's frontiers is quite wrong, as the recent study demonstrated. Therefore, we must find a way for outer London boroughs to play their part in helping to solve London's housing problem.
  But the inner urban problem goes wider than the partnership areas, as I have seen in the many visits which I have made in the past year. To meet this wider need, a crucial element in our new approach is a shift in the direction of our main programmes—housing, education, social services, health and so on towards these urban areas. In housing, all the major cities of the country have been made stress areas and have had their new building programmes protected. The priority that we accord to these areas is also reflected in the allocations under Section 105 for rehabilitation and those for acquisition and municipalisation.
  As part of the £100 million package of measures to assist the construction industry announced on Friday, and in view of increases in costs since the grant limits were set, I have decided to make substantial increases in the maximum expense limits for house renovation grants. For discretionary improvement grants the new limit will be £5,000—an increase of 56 per cent. on the existing figure of £3,200. For intermediate, repair and special grants the new limits will be £2,700, £1,500 and £1,200 respectively, representing increases of between 70 per cent. and 87 per cent. on present limts.
  I have also decided that, in the light of emerging results from the 1976 House Condition Survey and representations made by local authorities, there should also be an increase in the rateable value limits for discretionary improvement grants. The limit in London will therefore be increased from £300 to £400, and outside London from £175 to £225. The necessary order will be laid before the House shortly.
  To meet the increased expenditure, I am making an allocation of £30 million from the £100 million construction package to local authorities for the current financial year for grants and loans for renovation work. I am also making available immediately a further £10 million

  1431
  for local authorities' own improvement expenditure. Taken together with the additional provision announced by my right hon. Friend on 2nd May, this brings the total provision for this programme for the current financial year—that is, in Section 105—to more than £400 million at outturn prices. This amount is greater in real terms than the estimated expenditure by local authorities last year on Section 105 work. There is also a further allocation to come for renovation of housing out of the inner cities construction package which I have already described.
  Mr. Geoffrey Finsberg: The Secretary of State referred to the necessary order being laid before the House soon. From what date does he expect the new limits to operate? Perhaps his right hon. Friend could give the answer to that question in winding-up the debate.
  Mr. Shore: Yes. I suspect that the answer will be "just as soon as practicable".
  In the December public expenditure cuts it was necessary for us to reduce Housing Corporation expenditure by £57 million in 1977–78 and to make a consequential reduction in 1978–79. The figure of £57 million has been much bandied about. I should like the House to pay particular attention to the next passage.
  I authorised the Corporation straight away to negotiate private loans to mitigate the effect of these reductions in public expenditure, and £35 million has already been secured in this way. As a result, the Housing Corporation's programme of new approvals for 1977–78 is running at a level only 15 per cent. below the originally planned level, and most of the main priorities, such as rehabilitation work in the inner cities, have been preserved. In addition, an extra £5 million of expenditure for the current year was made available to the Housing Corporation in May to fund house improvement work. That was part of a package designed to help the construction industry at that time. I now propose to make a further £8 million available to the Corporation from the £100 million package announced by the Chancellor on Friday.
  With the rate support grant, which is again extremely important in the whole
  1432
  context of the finance of our urban areas, we have continued the policy established by the right hon. and learned Member for Hexham (Mr. Rippon), when he was Secretary of State, of helping inner areas and others with pressing needs through the needs element of the grant. It is in their attitude to the distribution of the rate support grant that we shall be able to test the real support that the Opposition are giving to our new policy for inner city areas.
  Mr. Steen: It has been said that my right hon. and learned Friend's policy did not do anything.
  Mr. Shore: The right hon. and learned Gentleman announced the policy in January 1974, so it did not have very long to achieve anything! No doubt he would have been virtuous in implementing it if he had had the chance, but time was against him.
  Last December we were faced with the spectacle of the hon. Member for Henley (Mr. Heseltine) agreeing that inner areas needed more resources but objecting to both the distribution of rate support grant and the total size—on the ground that it was too high—of the support that we were giving to local authorities. I merely ask the Opposition to reflect on the views of the right hon. Member for Worcester (Mr. Walker) who, in commenting on my inner cities statement on 6th April 1977, expressed disappointment
  "among those who started the shift in the rate support grant that much of the shift has not gone to the benefit of inner city areas but has been spread among cities as a whole".—[Official Report, 6th April 1977; Vol. 929, c. 1232.]
  If we were to concentrate the needs element on the inner areas as the right hon. Gentleman wishes and away from cities as a whole it would be the outer areas of London, Birmingham, Greater Manchester—where the Opposition are more heavily represented than my party—which would lose out. I wait with interest the advice which hon. Members opposite may give me.
  Furthermore, in recognition of the needs of the non-partnership areas I have arranged for £16 million of the £83 million "construction money" to be made available to 38 metropolitan and non-metropolitan districts. In addition, I

  1433
  intend a range of authorities with severe inner area problems—whether they are partnership areas or not—to benefit appreciably from the enlarged urban programme when it comes into effect in 1979.
  In all the speeches that I have made on the inner area problem, and in the White Paper, I have emphasised above all the crucial importance of maintaining and improving the employment base of these areas. It is the decline of employment opportunities that has been even more rapid, and even more worrying, than the decline in population itself. We expect that a good deal of the special money that we are allocating to inner areas will be spent on improving the industrial and employment infrastructure and building advance factories.
  But there are two other initiatives which we have taken which should greatly assist industry in these areas. The first is to secure a change in planning policy towards new and existing industry. In the circular 71/77 which I sent out last week I asked local authorities to take stock of their dealings with industry, to give first priority to all applications for industrial development, and to consider a more flexible line in development control and planning.
  The concept of the "non-conforming user" was designed to prevent the intrusion of industrial premises into residential areas. However, this policy, too, may have gone too far and then become, in some areas, an end in itself. Of course, pollution and noise from industrial premises can be intolerable for nearby residents—and where it is, it obviously has to be controlled in one way or another. There is no argument about that. I believe firmly that inner city dwellers would much rather have a workshop at the end of their street—even at the cost of a little intrusion—than a site which is empty and derelict and pervades the whole area with gloom.
  The second initiative we propose is to enhance local authority. powers to assist industry. As we said in the White Paper, local authorities with serious urban problems will, if legislation is agreed, be given powers to provide 90 per cent. loans for the erection and improvement of buildings; powers to provide 90 per cent. loans for land pur-
  1434
  chase; powers to declare industrial improvement areas, and powers to give grants to assist with rents, and loans for site preparation. We envisage that the first three powers I mentioned will be available to all local authorities with serious urban problems.
  Mr. Eddie Loyden: Would it be permissible for local authorities to enter into arrangements with community industries? As my right hon. Friend will know, there is an establishment in Merseyside, the Liverpool Enterprise Development Unit, that has made approaches to various Departments, and it would be a part of meaningful co-operation on the part of the local authority and the Government to give an opportunity to this unit to present its arguments and the case for the development of community industry.
  Mr. Shore: As I said earlier, I want to see the local authorities have the power to help industry, and that will include all kinds of industries which, in the judgment of the local authority, are capable of sustaining viable enterprises in their areas.
  The effect of these proposals will be that the areas with the worst problems will be able to offer somewhat greater inducements to industry than are available to their regions as a whole. We have no interest in disturbing the basic structure of intra-regional industrial policy. We are not trying to do that. This approach, and the Government's approach to the new towns, illustrates the way in which we are shifting inter-regional policy in favour of the hard-pressed inner areas.
  Dr. Jeremy Bray: On the matter of grants, I entirely accept what the Secretary of State has said about not interfering with the main structure of regional policy. However, will grants be paid from the budgets of the Government or local government?
  Mr. Shore: The local authorities will be authorised to pay these grants and the grants will be paid from the resources of local government to local industry.
  London and Birmingham are different from the other major inner city areas in that they are outside the assisted regions for industrial development. Without disturbing the overall balance of regional policy, I have been anxious to secure a greater emphasis for the inner areas of

  1435
  these two great cities and for that reason there has been a relaxation of industrial development certificate policy in respect of them. Inner London and inner Birmingham will now get a higher priority in terms of the issue of IOCs than the new towns within their regions. As the House will know, we have made changes in office development policy recently which will be of help to inner London.
  Mr. Eyre: The point that the right hon. Gentleman has just made was partly taken into account in my speech. If we consider the matter in practical terms we can see that this does not amount to any practical priorities for such areas as Birmingham and London, which have extremely high unemployment rates now, because even if the proposed development does come out of the regions, there will still be a priority for the development to be carried on in other assisted regions. In practice, that will mean that we shall not be giving help to these cities in respect of the industrial development certificates. We should carefully consider the matter of special development certificate status.
  Mr. Shore: If the Birmingham and West Midlands region is anything like London and the South-East, the great amount of industry that has been lost from the cities has gone into their region. That is the point. Some of the industry has gone to the assisted areas, but only a small part of it. Apart from mobile industry which should still go out to the regions—given the nature of the problems in Merseyside and the North—the next priority should be the inner city areas. That is an important point because that is quite different from what has happened in the past.
  In presenting this progress report to the House I am very much aware that this is only a beginning. To halt the trend of decline in our major urban areas will require a sustained effort for a decade and more. I claim that we have made a new start. With the right policies, the necessary measure of all-party support at both national and local levels, and a will to succeed, I believe that we can make our cities healthy economically and places where people will increasingly wish to work and live.
  5.58 p.m.
  Mr. Ian Grist: The Secretary of State has called for all-party support for his policies. He will find it to some degree, because the problems of our major cities involve us all and are something that most of us understand. After all, they are problems that affect the majority of citizens in our country. Most of our people live in the large towns.
  Although we are aware of the problems and often of the probable sources of them, many of the answers that we put forward rely on a certain amount of money being available. The availability of that money will depend on the recovery of our economy and that must happen before our answers can be put into operation.
  One thing of which we can be sure is that in general, at any rate, we do not need any fresh legislation. For that we should be thankful. Positive discrimination in favour of the inner parts of cities has been carried on to a greater or lesser degree for some time, for instance in the supplements paid to teachers working in the stress areas of our major cities.
  While the inner areas certainly have grievous problems connected with their being old areas—with industry leaving and unemployment rising—it is a mistake to think that these problems belong only to such areas. For instance, in my own city of Cardiff, unemployment in the post-war estates in the constituencies of Mr. Speaker and the Prime Minister is higher than, or at the same level as, that in the old docks area of the city, approximating to about 12 per cent. to 13 per cent. of the male population. The fringe estates, to which my hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre) referred in his speech, are the large new estates, sited on the outskirts of the city or, in the case of Glasgow, outside the city.
  The example of Glasgow illustrates how naïve was the belief that poor housing lay at the root of the malaise in urban life. We are now aware that the community as a living factor is more important than, or just as important as, the standard of housing. Everyone is now sold on the idea, at last, of improving and repairing the existing housing stock. I welcome the Secretary of State's

  1437
  announcement today about the increase in the rateable limits and so on for housing improvement aid. That was long overdue and is, I suspect, more or less in line with indexation.
  In many cities such as Cardiff we have a problem because so much of the housing went up at one time. Within the last quarter of the last century nearly all the housing in the city centre was built to take advantage of the growth in the coal trade. We therefore have a simultaneously ageing housing stock. This puts a particular strain on the system, on private owners and councils.
  The assistance for improvement and repair will be expensive. Nevertheless, it is expense which will be far greater in the future if it is not committed now. The houses will fall into decay and become slums if we do not spend money on them now. At the same time the assistance which is being given in the central areas, and what might be called the middle areas of our major cities, should go in part to the small traders. I am thinking of people such as shoe repairers and watch repairers, the ordinary little shops which used to abound and which are now extremely difficult to find in the centre of a city. Rates and taxes have put them out of business.
  On the new estates, special efforts should be made to see that a range of services is conveniently available. There are two large estates in my constituency which suffer from a lack of convenient services. There are few chemists and, since these estates are often made up of decanted elderly people and families with young children, there is an above-average call for prescriptions in the evenings and at weekends. Unless such services are available people become involved in the high cost of using public transport to reach a city centre which may be seven or eight miles away. Without such services it is difficult, on new estates, to stimulate a sense of community.
  These huge new estates are, almost by defininition super-anonymous areas. I know from the estates in my constituency that people come not only from all over the city of Cardiff but from other areas of the country. They may be civil servants drafted to Cardiff in the dispersal programmes. They may be workers at Guest Keen and Nettlefolds. These people
  1438
  are on the estates and they have no community feeling. The presence of shops and similar facilities is important in helping to establish that sense of community. I would like to see it made a rule that, when planning permission is granted for these estates, a community centre and possibly a youth centre should also be built, timed to come into operation as the estate progresses.
  It is well known that these facilities often come as much as eight years after the bulk of the estate has been completed. By that time it is frequently too late to inculcate the sense of community which the people so desperately need. What many of these areas lack is somewhere for people to congregate. This is something which the older inner areas do not lack. The small rural towns and villages have their own pubs which have rooms that can be hired out. There are parish halls and drill halls where the Townswomen's Guild, the Brownies and the Scouts can meet.
  On most new estates the pubs are not built in the early years because they rely on having a large public to which to sell. Many other amenities are also lacking. There is a breakdown in community life on these new estates. In many ways they are suffering from the problems of the older inner areas. My constituency in Cardiff takes in some of the older parts, all the way through the wealthier middle areas, out to the huge estates.
  In the heart of the city one of the most depressing problems is the lack of somewhere for youngsters—very young children—to play. The streets today are very different from what they were in the time of the children's parents or grandparents. I look with great sadness on one area of my constituency where I fought hard for the building of a play area. Two houses were found to be knocked down. Another two neighbouring houses in the area were derelict. The owners were prepared to sell to the council which was prepared to take over the four sites and build a play area. Unfortunately, the local people petitioned against the play area because they feared the presence of vandals and youths on motor cycles in the evenings. Because of that problem the small children in that part of my constituency lost a play space. That in itself speaks volumes for what is going on in some of the more derelict parts of Britain.

  1439
  There is some difference in party thinking although most of the factors can be agreed upon and talked about between ourselves. However, there is one particular difference between the two major parties. It is almost invariable and inevitable that Socialists tend to look to the State to increase its contribution to solve our problems. They often do so with justice. I think of the social services and the probation departments. Conservatives see a very much larger role for voluntary aid. In many instances this presupposes a willingness on the part of local authorities, especially the social service departments, to encourage voluntary workers and voluntary bodies and to work with them.
  I believe that we are fortunate in my county and city. One organisation that is well known to Mr. Speaker is the Cardiff Council for the Elderly. It is a voluntary body that is given encouragement, support and help by the social ser- vices. Among a number of other services for the old people of Cardiff is the pro- vision of street wardens. The wardens give up their time to look after the old people in the streets in which they live. Their terraced houses bear a large notice on the window declaring that they house the street warden for the elderly. I should like to see more local authorities giving encouragement and support to such organisations, giving them premises and trying to create links with day centres and similar organisations.
  That is a means by which old people may be visited on a daily basis. They may be looked after and visited regularly so that we do not hear of the sad cases of old people dying and not being found for a week or two.
  Mr. Simon Mahon: I find myself in agreement with most of what the hon. Gentleman has said, but surely he is not serious when he says that Socialists and those on the Government benches are not as interested in voluntary organisations as Conservatives. I point out respectfully that most of us made our reputation in voluntary service before entering public life.
  Mr. Grist: The hon. Gentleman's role in that area is well known. I accept that many Socialists in their own activities
  1440
  and their own life work hard and support voluntary movements. However, it is undoubted that there is a feeling among Socialists and those who support Socialist policies that much of the work of voluntary organisations should be the responsibility of the State, and that therefore we should wait upon the State's aid and assistance. That goes without saying.
  Groups of the sort that I have mentioned can go a long way to overcome the loneliness and anonymity of our large towns but of course we shall always need the official services. For example, we need many more policemen, preferably locally based. I refer to the policemen on the beat, policemen who are known to the local communities as part of those communities. They offer reassurance to the community and protection against the vandal and the thug. However, they require the support of the public if they are to do their job.
  A little over a year ago I attended a young person's jazz festival in my constituency. It was an open-air festival that ran all day. I and a local councillor turned up, to be told that from the large estate on which the competition was taking place a group of youths had emerged and attacked one of the competing bands. It was a band that came from a village outside Cardiff. Some of the youngsters had to go to hospital for first-aid treatment.
  A local person said to me about the thugs involved "They should not be allowed to get away with it. If they do, they will think that they will always be able to do so." I followed up the matter. The police pursued the case and they identified to their satisfaction those who had been involved. However, the parents of the children who had been attacked would not prefer charges. The thugs were allowed to get away with it. I do not know why the parents would not prefer charges. It could not be intimidation as they did not live anywhere near the estate in question. I can only think that they did not want to get involved. That is a well-known phrase.
  People must be encouraged to become involved in their community. It is in their interests that they should do so as it is in ours. Youngsters should be taught at home and in school to cherish their country, their town and their street,

  1441
  to recognise that litter is anti-social and that turning a blind eye to vandalism Of crime is anti-social and against their own long-term interests.
  We want to encourage people to take responsibility for their own houses, be they owner occupiers or council tenants. We want them to look after sports amenities—for example, pitches and goal posts—and the youth clubs in their locality. If people believe that there is always an authority that is ready to take responsibility, they will not in many cases—indeed, in too many cases—be bothered to take an interest, but ask them to look after their own amenities and we shall get a different response. If we are to achieve anything, we must restore what used to be called civic pride. I am afraid that that is something that has fallen rather behindhand and sometimes seems almost to be equated with football hooliganism. Certainly there will have to be long-term education. It will not be easy to bring back a sense of pride in localities and local amenities.
  Mr. Stephen Ross: Does the hon. Gentleman agree that one way to get it back is to encourage in the smaller towns and inner urban areas some responsible community establishment such as successor town councils so that a sense of pride is returned to the towns which the council serves?
  Mr. Grist: Frankly, no. I do not know how the hon. Gentleman, who represents one island that has a clear identity, talks of this, but I think that the nearest large town to him is either Southampton or Portsmouth. I am sure that those who live in those cities feel just as great a sense of pride in them as they ever did.
  Mr. Stephen Ross: There are Newport and Ryde.
  Mr. Grist: Certainly people can feel pride in their village as well as in a large town. The large housing estates in my constituency were outside the limits of the old Cardiff City. The reorganisation brought them within the district that is now called the City of Cardiff. That was one of the results and one of the purposes of the reorganisation, for which I personally make no apology. Indeed, I have always supported it. Unless we restore a form of pride and unless we give people
  1442
  a sense of responsibility, we shall not restore morale in our cities. Unless we can restore a sense of pride and involvement in the cities we shall have lost not merely the support and morale of most of the citizens in this country but I believe quite seriously that our whole society must of necessity be doomed.
  6.20 p.m.
  Mr. Simon Mahon: I congratulate the hon. Member for Cardiff, North (Mr. Grist) on his careful analysis of some of the difficulties facing our towns and cities. He would carry most of the House with him in his remarks about the troubles and tribulations affecting so many people in so many parts of our island. I hope that his own Front Bench and ours, will take careful note of his speech and do all they can to ease these very grave burdens which affect so many people.
  The hon. Member for St. Marylebone (Mr. Baker) was rather pessimistic. He could not have taken much notice of the Secretary of State when he said that we should stop sloganising. I am 100 per cent. with my right hon. Friend, because since the war there has been far too much party politics in many of the situations that we have been trying to cure. When the hon. Member for St. Marylebone says that Socialism has not been a success in curing these problems he is guilty of party politics.
  I have been in the House a long time and in local government a very long time. Just after the war, in which my constituency was bombed as badly as or worse than any other part of the country, I was given the invidious task of trying to bring some order back to that town. The medical officer for health at that time sent for me and told me the size of my task. He told me that I had to deal with the highest infant mortality rates, the highest maternal mortality rates, the highest birth rate, the highest early death rate and the highest incidence of tuberculosis. The Labour Party in my area, alongside the Conservative Party from time to time, made a great contribution to bringing down these deadly figures to below the national average.
  I think that the young hon. Member who occupies that important seat so close to this House should not be so pessimistic about the activities of public men in the Labour Party or any other party.

  1443
  We berate ourselves too much. This has become a habit nationally, and the standing of politicians is not what it should be at present. The hon. Member does us no justice.
  Mr. Baker: I am flattered that the hon. Member for Bootle (Mr. Mahon) has referred to my comments, but I have not yet made a speech, and I hope that he will stay in the House long enough to hear what I intend to say in developing my arguments. I shall take full cognisance of all the hon. Member's comments.
  Mr. Mahon: I was here to hear the hon. Member's intervention, and I took note of it.
  I want to take to task the hon. Members for Birmingham, Hall Green (Mr. Eyre) and Cardiff, North. When was it that the Labour Party did not believe in the paramount importance of the individual? When was it that we in the Labour Party said that the State should come before the family? It was these very things—the lack of dignity for the individual and particularly the lack of dignity for the working-class family—that brought us all into the political movement in the first place. Of course we believe that the Labour Party is the right party, but I personally believe, above anything else, that the individual comes first because the State cannot re-create itself and the individual can. Therefore he or she is more important than anything else. The family is an indicator of how well a nation is doing, not the economic statistics. Today we are discussing how to bring greater dignity to our cities—not just as bricks and concrete, but as individuals and families, particularly in deprived areas.
  The Secretary of State, with his great knowledge of Merseyside, spoke of Liverpool, and I am sure that he means to include in that the most important area represented by the hon. Member for Bootle. I should like an assurance that the benefits, which are so welcome, will be equally shared by the most important part of the port of Merseyside which happens to be in my constituency.
  Today we get a lot of people, particularly in the Press, who constantly say that the demands of ordinary people are excessive. The outstanding case at the moment is that of the miners. It is said
  1444
  that they expect too much. That is a matter of adjudication and judgment, but in my quite long and considerable career I have always thought that the demands of ordinary people were extremely modest. Alongside these modest claims, we must consider the sacrifices that ordinary people make: they are tremendous, both in peace and war.
  What do the people really want? The Government should listen more to the people, and the people will tell them what they want. Even though Parliament must lead, if it listened more to the ordinary people it would lead in the right direction.
  My constituents do not come to me to make outrageous demands. I have a surgery in my own home every Friday and I live in my constituency, and I have never known people to come with outrageous claims. They come because they are concerned about their jobs and their homes and about trying to keep the dignity of a modest family in good order. They are concerned about security in work, and about getting an adequate pension. These are the things on which both the Labour and Conservative Parties should be concentrating. Far too often Parliament and the Government tend to tell people what is good for them, when people know what they need.
  It has been said before, but I shall say again, that the first thing we want in large cities is good government—good local government. I happen to love local government for its achievements. It has done a great deal of good. In health services, social services, education, housing and many other spheres so much has been accomplished. Of course, it has not always succeeded, but I believe that the biggest mistake that this House has made—certainly in my constituency—was in reorganising local government in the way it did three or four years ago.
  The Secretary of State talked of the need for one part of London to accept people from another party in order to ease housing problems. My local authority is not Labour controlled; it is represented overwhelmingly by the Conservatives. The present situation is that not one of my constituents in Bootle or Liverpool has been allowed to occupy houses in Birkdale or Southport. This has been going on for four years. Does

  1445
  any hon. Member lend himself to that? Are my constituents inferior people? Hitler did not think so: we were the most bombed town in the country.
  We were told that the creation of bigger units would lead to improvements, but that has not been the case. The sooner that these things are altered, by my right hon. Friend or someone else, the better and more just our society will be. I am grieved that my area is part of this new authority, paying the same rates, yet not receiving all the benefits. I therefore support the Prime Minister's appeal for a change in local government organisation.
  My right hon. Friend's statements will bring increasing benefits to industry. Unemployment is a social scourge. It is no good offering people houses or anything else unless they have work. That is the only way for families to advance to dignity. If sickness prevents people from working they should be maintained as if they were working, not at a lower level. I am not talking about those who overload the social services but about the genuine sick and those who were wounded in their country's cause—95 per cent. of those concerned.
  As a young man I gave 90 acres of precious land in an overcrowded town which was crying out for houses, the old county borough of Bootle, to English Electric, one of the finest firms in the country, which is now GEC. The idea was to bring in heavy industry, which we needed to train our boys. The only alternative was making it into an extension to the nearby golf course. Just imagine, in Sunbury or somewhere like that, giving up 90 acres of what could be a first-class golf course. The project was a success, the factory was built, 150 key workers were given houses. We did everything that the Secretary of State has talked about today.
  If he is to succeed, more control will be needed. In our case, Sir Arnold Weinstock, who is now on the other side in the Drax B controversy, for good or ill, closed down that factory and left us with 90 derelict acres. That land is now in the hands of the Walton Property Company, whose biggest exercise was selling Aintree racecourse. Hardly a soul is now working on that precious land. We need to be awfully careful what we do with public money and land, and most of all with people's lives.
  1446
  A ray of light might have been seen today in the suggestion that local authorities should initiate the attraction of industry. The number of men working on the Liverpool dockside today is only a tiny fraction of what it was 25 or 30 years ago. The South Docks have silted up and there is a major social and planning problem. At the north end of the docks we have built the Seaforth container berth for £45 million, catering for the finest ships from all over the world. That looks likely to be a success. Alongside is the Gladstone Graving Dock almost the biggest graving dock in this country. A large dry dock like that today would cost millions of pounds, yet that dock is a container wet dock. It is never dry, and no repairs are done there. If any one of the magnificent ships which use the container berth needs repairing, it has to go outside Liverpool.
  I have done every job in the ship repairing industry, from scaler boy to managing director of my own company, which I gave up when I entered the House. Dozens of internationally famous companies—Harland and Wolff, for instance—were situated at Liverpool. We made at least as many engineers as the Clyde. On my side of the river today there is one company. Men are being laid off, or paid for doing nothing, and no attempt is being made to resuscitate the port. As a maritime nation, we cannot afford to let that graving dock lie idle. Its purpose has already been overtaken by new developments, but I ask the Government to see whether it could still be viable.
  Our port is not only dying but being allowed to die. Liverpool, when this country was in dire straits, was the only port open to the gateway of the Western Approaches. As Service men, we were given many promises which have not been kept. We should consider the promises of the past as much as the problems and desires of the present. We never know when we might need a major port again. When we need Liverpool, Liverpool may not be fit to do the job.
  Among the hardest things that I am asked to do in my surgery is getting a sick old lady into a dignified hospital as a geriatric case or arranging a holiday for the parents of a sick or spastic child. Those are the things that we should be dealing with.

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  I must end by criticising contemporary society. I have spent much time in industry settling strikes. I do not like them. I have sometimes been blamed for strikes—the national seamen's strike in 1960 for instance. I say to the trade union movement, of which I have been a member for 15 years, to the country and the House, that strikes are the last thing that the country can afford. They are a luxury that we can do without. Some strikes are unavoidable and some are deliberate. There is no doubt about that. It needs to be said clearly that a strike is like an act of war. That should be made known in every trade union branch, every industrial office and in the CBI and TUC headquarters. Like every other act of war against society it might be just, but an act of war should be the last resort. It should never be the first, as it is so often. My hon. Friends could say how often they have said "Don't", but people have still gone on strike, doing irreparable harm to themselves and to society.
  In Liverpool we have learnt the hard way. We are trying, and the situation is improving. I recommend to other parts of the country the hard road that we have had to follow. I began by speaking of dignity. Dignity comes only through work. Strikes are the last thing that should be allowed to affect the dignity of mankind.
  6.43 p.m.
  Mr. Stephen Ross: Everyone will agree with the final remarks of the hon. Member for Bootle (Mr. Mahon). I also agree with him about local government reorganisation. It has taken from the towns, although perhaps not from the cities, their sense of identity and civic pride. Herefordshire lost its pride and suffered from amalgamation with Worcestershire.
  During the Jubilee celebrations people remarked on how notable it was that the villages played a leading part because of their identity with parish councils. In the bigger towns there were street parties, but other than that there was little activity to mark the Jubilee. We must do something to re-establish town councils so that they have some power.
  It is sad that since the war we have made a hash of the redevelopment of
  1448
  inner urban areas. But we have not done everything wrong. There are many success stories to be told. I recall the right hon. Member for Leeds, North—East (Sir K. Joseph), in another incarnation, going to Cambridge in the 1960s when he was a Minister. He talked about urban renewal. In those days we were talking about renewing shopping centres and building office blocks. We did not get to grips with housing schemes or industry.
  So many opportunities have been missed, particularly for public transport. Portsmouth is a typical example. Immediately after the war some good schemes were devised to provide a fast link between the centre of Portsmouth and the outlying areas. However, those schemes were allowed to go. Today it is almost impossible to think that they could be revived.
  We need a joint partnership scheme between local authorities and experienced development companies that have the financial backing of the institutions. I agree with the Secretary of State's idea of partnership between national and local government, but that is only the beginning. Someone has to provide the finance and the development has to take place. We must get the institutions involved in housing. We can do that if we make progress in bringing down interest rates. The money is available if we can only encourage people to invest it in such development.
  I hope to visit dockland with some other hon. Members on Thursday. I hope that when redeveloping such areas we shall take extra care over the architectural designs. I hope that we shall go for something simple which has been proved to work and for buildings which will not fall down. We do not want any more flat roofs or massive blocks which have proved so disastrous. One can recall the pride that the people of Belfast had in the Divis flats. They thought that they had achieved something, but the development proved to be disastrous.
  Local authorities must take on the role of land assemblers and planning controllers. I say to the Conservative Party that I believe that the Community Land Act has a role to play. We should not be too concerned about local authorities owning land in city centres. That is common in Western Germany and Canada. In Edmonton, for instance, the local

  1449
  authority owns almost all the inner urban land.
  I agree with the hon. Member for Birmingham, Hall Green (Mr. Eyre) that the sooner local authorities release land that they are hanging on to and do not need, the better. Perhaps some way could be found to wipe off the cost of releasing such land. That would be a step forward. Some of the prices paid and the interest rates involved are horrifying. They mean that land cannot be put to proper use.
  Particularly in provincial towns local authorities tend to stand aside and allow buildings of character and historic interest to deteriorate to such an extent that they cannot be restored, except at great expense. I should like to see more activity and more grants perhaps to charitable housing associations—so that something could be done about restoring such buildings, even at a loss. We have lost too many such buildings, particularly in county towns. I should like to see an outright ban on further demolition without the Secretary of State's consent.
  In some London boroughs we have seen appalling examples of properties being knocked down, even though they have 10 to 20 years' life left in them. They are often demolished because eight or 15 years ago a local authority decided that certain buildings should be scheduled for demolition. Those local authorities are not prepared to change their ideas. A typical example occurred in Lambeth recently.
  I was delighted with the greater availability of improvement grants announced today. I hope that they will not be delayed any longer. We want to get improvements going again. They will help particularly areas with a high immigration settlement.
  Coupled with new developments and renovation must go the provision of adequate recreational and cultural facilities. I should like to say how much I agree with the paragraph 23 of the document relating to policy for the inner cities about the use of school buildings, which recommends the fuller involvement of schools and colleges in the life of the community and the fuller use of their buildings and facilities out of hours by local people. I only wish that the Government could persuade local authorities to implement that.
  1450
  Perhaps I am in an area in which it does not seem to work out. Often people complain to me that the cost of hiring the buildings is excessive, or that the caretaker will not work at the weekends or wants double pay, or something extra.
  It reaches the point at which it is almost not worth while for local associations—dancing clubs, for instance—to try to arrange to make use of school buildings. That is a palpable nonsense. A tremendous amount of money goes into school halls and they ought to be part of the facilities available to the area in which they are situated. I hope that that will be made abundantly clear when we redevelop large areas such as the docklands.
  Mr. Clement Freud: Does my hon. Friend agree that it may well be time for the Secretary of State to make clear whether education authorities should try to make money out of providing facilities for the local community or whether they should be of service to the local community? I am sorry to say that I have neither a large town nor a large city in my constituency, although I have a very small city. At present an enormously high fee is charged by the local education authority for the use of premises for recreational purposes, such as £2·30 an hour for cricket, and if only the Government could make it clear——
  Mr. Deputy Speaker (Sir Myer Galpern): Order. The hon. Member for Isle of Ely (Mr. Freud) has only just come into the Chamber, as we all know. He has not heard the debate. An intervention ought not to be used as a substitute for a speech. I hope that he will now finish his intervention.
  Mr. Freud: I am grateful to you, Mr. Deputy Speaker. I have finished it. I should not have been able to speak if I had not just come into the Chamber.
  Mr. Deputy Speaker: Yes, I know, I am glad to compliment the hon. Member on his honesty, but the duty of the Chair is to try to ensure that those who have sat here patiently throughout the debate are given an opportunity to speak and do not have to resort to an artful dodge.
  Mr. Ross: I happen to agree with my hon. Friend. I believe that some

  1451
  local authorities make charges that palpably dissuade people from making use of their buildings when those people should be encouraged to do so. That has happened with play groups recently and in other spheres.
  I conclude by congratulating the London housing associations on the exhibition that they put on last week. I went to see it. I was delighted to learn that they are deeply involved in the renovation—perhaps "rehabilitation" is a better word—of the old Covent Garden area. That seems to be a move that is very much in the right direction. There are buildings there that would have been pulled down at one time and communities that would have been destroyed. They are now trying to bring them back.
  I came away from that exhibition thinking that we are making progress in the area of management and in people doing much more for themselves in the way of renovation. Some of the houses that have been renovated by these associations were a joy to look at. Therefore, I think that we have made more progress in recent years than I had previously thought possible. I am delighted to know that extra money will be going to housing associations. The future appears not so bleak as at one time I thought.
  6.55 p.m.
  Mr. Frank Hatton: I very much welcome the partnerships that the Minister has offered to the inner city areas. I particularly welcome the fact that these are to be based on local authorities.
  In spite of the criticism of my right hon. Friend the Secretary of State that has come from some Opposition Members, I welcome the positive attitude that he has shown to the problems of the inner city areas. He displayed this to the full in his important speech at Manchester Town Hall some months ago, and I was very pleased that that speech was made in my city. It was a recognition that quite serious mistakes have been made in redevelopment. I think that all of us must admit that, in spite of much rejuvenation in our large cities, serious mistakes have been made in redevelopment. We do ourselves no good at all by not admitting that.
  1452
  I welcome very much the statement in paragraph 34 of the White Paper to the effect that local people will be involved in the regeneration of the inner city areas. That will be an end in its own right.
  I think that many of our present problems have come from an acceptance that the professional planners know best. From my own experience in local government I know how difficult it is for the lay member of a planning committee to persuade the professional advisers that what they are putting before the committee is wrong. Many of us have had to live with this, and we now see the enormous financial consequences of some of our inner city developments such as high-rise buildings and, as the Minister has said, barrack-like blocks.
  Mr. Steen: Does the hon. Gentleman agree that his Government should ban the building of vast council estates, because all the evidence seems to be that people are miserable in them?
  Mr. Hatton: I do not accept for a moment that all inhabitants of large council estates are miserable. Indeed, I could take the hon. Member to many council estates in my city and in other parts of the country where people are living very happy lives indeed.
  This is not a problem only where Socialist local authorities—so-called—have developed high-rise buildings. In my city both major parties must accept their full share of the blame for this problem. Manchester was one of the last cities in this country to accept the idea of high-rise development. It was forced upon the city very largely by propaganda in the news papers and from Ministers and other people who ought to have known better. Evidence exists now in no uncertain terms that those who have been rehoused in large-scale buildings, especially in the upper storeys, want only one thing for themselves and their children—a house with a garden in which their children can play and be happy.
  I was talking about the problems that exist because we have accepted that the professional planners know best. One of the things that we were persuaded to do in the rejuvenation and rebuilding of our cities was to sweep away many of the small business premises. We now know the terrible cost of this in terms of

  1453
  lack of employment opportunities. We have seen large industrial estates become estates of decline. I instance one in the Greater Manchester area—the Trafford Park industrial estate.
  A statement was made yesterday about the restructuring of the electricity industry, particularly in regard to turbine generation. The effect on my constituents and on citizens of the Manchester area can easily be understood. The workers in the General Electric Company are in a state of despondency and dismay as a result of the statement. My hon. Friend the Member for Bootle (Mr. Mahon) has referred to similar problems in Liverpool. Now, by virtue of the loss of another industrial base, these problems have come to Manchester.
  I welcome in the White Paper the powers that local authorities are to be given in order to establish new business interests and new industrial interests in the big cities. Over the years of their development many of our large cities have lost their skilled population. Manchester is a very good example to quote in this respect, because about 100,000 people have left the city. Indeed, largely because of persuasion by professional planners, many people were positively encouraged to go. Now we see the consequences of this policy for the inner city areas where large numbers of the remaining work force are either unskilled or semi-skilled. In Manchester 35 per cent. of the remaining work force are unskilled and semi-skilled.
  The loss of the skilled population during the period of migration has far outstripped the loss of unskilled workers. As the Secretary of State has rightly said, we can now recognise that in our redevelopment we proceeded too far and too fast. I very much welcome the opportunities that the White Paper will give us to think again about many of the inner city problems. I congratulate the Secretary of State on his enthusiasm and wish his proposals well.
  7.3 p.m.
  Mr. Anthony Grant: In listening to the hon. Member for Manchester, Moss Side (Mr. Hatton), it sounded to me as if some of the problems experienced in that great city are not wholly dissimilar to those which we know only too well in London, high-rise build-
  1454
  ings, industry, and so on. I may touch on some of those matters in my remarks.
  I congratulate my hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre) on introducing a most important and serious problem in what, I thought, were extremely serious, responsible and thoughtful terms. He has done an enormous amount of work on the subject and is deeply concerned about it.
  I rather regret that the Secretary of State chose to respond to my hon. Friend in what I thought, to begin with at any rate, were flippant and rather offensive terms. I thought that in that sense he fell below the level of the debate. As to the substance of his speech, he gabbled through his brief so quickly that I had some difficulty in following all the points. If I have to raise certain questions as a result of this I hope that the Minister for Housing and Construction, in winding up, will deal with them.
  I understand the reason for the partnership schemes, which make broad sense. I gather that in these schemes there is to be a major contribution from Government and that the local authorities are to play their part by contributing something to the partnership. That makes sense, but it did not seem to me to be very clear how it is to be done. As I understand it, the local authorities are to do it by reallocating their own resources in some way. I am a little perplexed about this. I am not certain how local authorities, heavily over-pressed, and with their ratepayers struggling very considerably, are to reallocate their resources. I suppose that the main source for reallocation would be education. Is something to be taken off that? One could not, I imagine, get much contribution to partnership by cutting down on sewerage or parks. I hope that the Minister for Housing and Construction will spell out more clearly how these local authorities, which have had quite a big burden put on them, will be able to play their part in the partnership.
  I thought that the speech of the Secretary of State dealt with the problem in a somewhat superficial way. I regard it as a much more fundamental problem. I am glad that my hon. Friend the Member for Birmingham, Hall Green referred

  1455
  to last week's events in New York. I think it must have come as a very great shock to many people that in this technological age, in the richest country in the world, and in the largest city, there could be such an apparent total breakdown of social life and so much disorder over a single technological failure. We delude ourselves if we imagine that it could not possibly happen in London. The circumstances here are quite different, but it is absolutely right, as my hon. Friend said, to remember that the crust of civilisation is really very thin indeed.
  For that reason, although it is not directly connected with the debate, I regret the way in which Government and local government have neglected the need for special emergency services, Civil Defence and things of that nature. But that is simply an aside.
  What was clear from the events last week in New York is that in a great city the first people to suffer, and to get involved in some disorder and the breakdown of civilisation, are those who are the least fortunate—in many cases the coloured people and the poor. It is not, therefore, a problem which can be solved merely by jiggling about with money, rates and so on. We have to get to the root cause of the problem in our great cities.
  Perhaps it will be for historians to analyse the decline in morale in our great cities, but, as far as I can see, there are three fundamental points which go to the root of the problem, and which are directly in the political arena. They are, of course, housing, education and, above all, employment. In one way or another reference has been made to all of them. The solutions, if I may say so, do not only involve money. They are much more fundamental than that.
  There can be no doubt that bad housing and homelessness are a major source of social disorder. I believe that the Government—indeed, Governments over a very long period—have tended to tackle the whole problem of housing in cities in entirely the wrong way. I believe that the great trembling structure of Rent Act legislation, which has been with us now since 1919, but which culminated in 1974 in one of the worst Rent Acts, has effectively totally destroyed what used
  1456
  to be a part of housing in this country. I refer, of course, to privately rented accommodation, which is desired by people who wish to rent accommodation, and is also helpful to and desired by landlords who wish to lease. It is not just a matter of the big landlords. I believe that this rent legislation has caused a very great deal of our housing problems over the period.
  It is also an illusion to imagine that Rent Acts put a stop to unscrupulous practices. It is a delusion to suppose that it is not possible for people to find their way round the Rent Acts. I commend to the Minister an article in The Economist this week. It demonstrated how it is possible, perfectly lawfully, to evade the rigours of the Rent Act. The method is available to people of skill and ingenuity, but not to the very large number of humble landlords and humble tenants who wish to let and to rent.
  There is a great demand for this type of accommodation, particularly among young married couples and among single persons in our cities. I think it was the Secretary of State who talked a great deal about mobility of labour. This is important, but the lack of rented accommodation and the whole concept of these great council estates has put labour into a state of total rigor mortis. People who would like to move to a better job in another city cannot get accommodation. If they want council accommodation they must go to the end of a long queue. The result is that if they are already in council housing they will not leave it for all the tea in China. That means that they do not move after all. I think that the anti-landlord hostility of the Labour Party has contributed as much as anything else to the troubles of our inner cities. I hope that that fact will be taken on board in the Green Paper.
  I agree that these ghastly high-rise monstrosities have probably caused more social unhappiness and perhaps depression than almost anything else, but the concept was well meaning. I remember that, when we were worried about the housing situation, we were told that we must preserve the green belt and, therefore, expand upwards. It made sense to me at the time and to other simpleminded people on local authorities, and

  1457
  to Governments of both parties. We were all hopelessly wrong.
  The other lesson that we should learn is that people, particularly the elderly, do not want to be uprooted and put into gleaming palaces or high-rise flats. More than anything else, they want to stay in their familiar environment where they and their families grew up. Therefore, our first priority should be to give them help to repair, renovate and rehabilitate the familiar houses in which they raised their families.
  I understood the right hon. Gentleman to say that he would allocate greater resources to repairs and improvements. That is helpful as far at is goes and is a move in the right direction. We look forward to the relevant order emerging quickly, but the trend must go much further. We could do a great deal more if we stopped the lunatic policy of building great estates on the periphery. It is unnecessary and undesirable.
  If only we could sell council houses to the tenants. I know that it is not the policy of my party, but I am attracted by the view of my right hon. Friend the Member for Worcester (Mr. Walker) and am almost tempted to give these houses away. However, I do not carry all my colleagues with me on that. At the moment, therefore, we have to concentrate resources on rehabilitation and renovation. That could be done with a great increase in happiness to a very large number of people.
  There is only cursory reference in the White Paper to education. The problem is not just one of money. We are engaged in a great education debate. The problems of education are, perhaps, most severe, in one sense, in our inner cities. Educationists, educational theorists and teachers to some extent have a considerable amount to answer for in the problems of modern youth in our great cities. I know that parents are primarily responsible for their children and that the breakdown of family life has contributed to the problems, but educationists cannot look on the results of the past decade with any pride. During that period, education experts have taught children that they should question authority and our existing institutions and challenge everything they hear.
  The net result has been that the poor children find themselves in a state of
  1458
  appalling confusion. They do not know what to put in the place of the structures they have been taught to tear down. They have not been taught the most vital quality of all—the ability to make decisions and stick by them. The result has been cynicism, aimlessness, apathy and a general decline among the less fortunate and less talented children, particularly in some of our inner city areas. All this goes far beyond the question of money. It is a question of an attitude of mind.
  One of the most fundamental problems is that of employment. Unemployment is a degradation of the human spirit, and for young people a valid excuse for them to turn their backs on a society which apparently offers them no hope. The situation in our cities as a whole is scandalous. Only last week I was told by the Government that in June 1973 there were 112 unemployed school leavers in the Greater London area and that in June 1977 the figure was 6,162. Unemployment as a whole has trebled in the Greater London area since 1973. It is an appalling and disgraceful situation of which the Government should be totally ashamed. I know that the situation is even worse in other parts of the country—indeed, in parts of the London area itself. The White Paper does not show any sign that the Government are coming to grips with this fundamental problem. There is merely a general tinkering and patchwork approach, through job creation schemes, the lending of money by local authorities to firms, the building of advanced factories—a little here, a little there, putting another plug in the leaky ship.
  What is wanted is a radically different approach to the economic affairs of the country. That is the only way in which the appalling curse of unemployment, which is so damaging in its effects, particularly on young people, can he overcome. The Government must create in our inner cities the right climate for industry and commerce to develop. If the Government can provide such a climate, in which firms can operate profitably and with hope for the future, the jobs will flow.
  If industry flourishes, the jobs follow. The Government should not merely tinker with the problem. They need to remove much of the legislative burden that they have imposed on industry, and

  1459
  certainly much of the tax burden. They must also remove, particularly from the smaller firms, the burden of administrative bumph, such as the multi-rate value added tax. Indeed, nearly all of the programme in which the Government have indulged over the last four years needs to be discarded if we are to create a better climate for industry and commerce.
  The White Paper makes a cursory reference to small firms. It merely says, in paragraph 27, that local authorities are being asked to help through sympathetic planning policies and by making available suitable cheap premises or sites. That is not good enough. I estimate that between 5 million and 6 million people—more than in the public sector are employed by small firms. If each of these small firms were able to take on one extra person because of hope for the future, much of the unemployment would disappear.
  Small firms have been treated disastrously, with ever-increasing burdens thrust upon them. In the first quarter of this year 1,372 bankruptcies were declared, most of them of small firms. Yet our inner cities need small firms for employment. One is not likely to get a great strip mill or a car assembly plant in the centre of London, for example. In the inner cities most employment has to be provided by diverse small and profitable industries. They do not want or need subsidies. They merely want to be allowed to get on with the job and retain their earnings.
  This White Paper does not go far enough on the question of industrial development certificates. I welcome the fact that the Minister has relaxed to some extent, but if firms really take on board the fact that there is some easing of IDC control they will look at the White Paper and think that it might be worth while making an application. They will then go to see the Department of Industry. In the old days they might have seen a chap called Grant, but if they press hard enough they will see the Minister. Every effort will then be made to see that they go to the assisted areas to Merseyside or Glasgow or Newcastle. If it is a very large firm that is involved, it should do so, but if it is only a small or medium sized firm, it will not do this, but will turn away
  1460
  and give up the project. It is no good saying that it will have more priority than if it went to Milton Keynes, but that it really ought to go to Newcastle or Stafford, or somewhere else instead. This will put it off. Therefore, the Minister has got to go much further than he has.
  Turning to the subject of ODPs, what do we need office development permits for? If we did not have them, that would save a great deal of administrative burden. Civil servants would have nothing to do. But I do not think I mind that. But cities do need offices. Commerce is a natural source of employment. The service industries will be much more readily available and anxious to go to the cities than are factories and industries of some sort. Therefore, the ODP policy, although I know that the Minister has eased it a little, has been dealt with much too half-heartedly. I would advise him to scrap it utterly. That would give an enormous boost to service industries.
  In so far as the White Paper is a somewhat belated response to a great deal of nagging of the Minister by both sides of the House for a long time—he has, quite rightly, been nagged—and in so far as it copies that which was in "The Right Approach", and in the admirable, thoughtful pamphlet introduced by my hon. Friend the Member for Birmingham, Hall Green it is a step in the right direction, but it is inadequate to deal with what is a masisve growing cancer in our midst. It is too narrow; it is too insular; it fails to get to grips with the outer urban areas; and it fails to get to grips with the fundamental problems.
  What we need is an entirely new approach. In the words of my hon. Friend in his pamphlet, we need a new hope for people in our towns and cities, and, above all, a new Government.
  7.24 p.m.
  Mr. John Forrester: The hon. Member for Harrow, Central (Mr. Grant) has reminded us that there are nationwide problems common to all areas—areas that may of us thought had no problems. He speaks from great experience as a Minister. I am sorry that when he was a Minister he did not direct all that industry to Staffordshire, as he might have suggested in one of his

  1461
  asides a moment or two ago. [An hon. Member: "They all went to Newcastle."] They all went to Newcastle. I shall not complain.
  I am interested in the Opposition argument that we are short of rented accommodation but we must still sell off the largest stock of rented accommodation that we have. I should be more convinced if the Opposition said "We shall advocate the sale of all rented accommodation, private and municipally owned, at discount rates." I might support that view.
  When the Government issued the White Paper on inner urban areas they gave the impression that only the metropolitan districts of London needed extra financial assistance. This is far from the truth, as we have heard many times this afternoon. My right hon. Friend the Secretary of State did not intend to give that impression. Financial resources are limited, but the White Paper caused tremendous concern in the urban areas which were not mentioned and in the shire counties. I am not certain, despite the concessions from my right hon. Friend, whether their fears have been allayed or magnified.
  The aim of part of this debate is to bring to the Secretary of State the feelings of the rest of the country and the problems there and for some of us to make constituency points along the way. A number of large cities within shire county boundaries, such as Stoke, Nottingham and Leicester, are struggling with the decay and dereliction of bygone years.
  There is a natural concentration of that dereliction and decay in the urban areas, but in Stoke, which has six town centres, the problems are spread around in a bigger way than in some of the other large conurbations. We are grateful for Government assistance in the reclamation of derelict land. This is one of the areas in which we are encouraging grass to grow under our feet. But with 1,400 acres of it already reclaimed—this is about half of our total legacy—we are conscious all the time that new dereliction is being created. This is a problem not only in Stoke but in other large towns and cities and urban areas.
  The Government promoted a few years ago an excellent special environmental assistance scheme. We spent a lot of money on that. But I wonder
  1462
  whether the Department is yet in a position to advise on and to sponsor and encourage a scheme for industrial improvement areas, which would clearly, if successful, go a long way to improving the environment of our old industrial cities.
  We have heard the jargon from planners. It is now called environmental, social and physical deprivation, and the poverty trap. If that means bad housing, depressing neighbourhoods, old schools, outside lavatories, no bathrooms, gardens and no community facilities, if it means a high concentration of immigrants in certain parts of a city, or if it means population loss because of conditions of inner areas or because industries are moving out of the cities, Stoke-on-Trent has such areas, too. One-third of our housing stock, which is 30,000 houses, was built before 1914. We hope to clear 2,000 slums between 1976 and 1980. Four thousand people are on the waiting list. The figure would be considerably larger if we included people seeking substandard accommodation who thought that there was a chance of getting council housing.
  If special assistance is available for inner urban areas on all the criteria, Stoke would qualify. We in Stoke-on-Trent have informed the Government that we would co-operate in any partnership arrangements for regeneration.
  If "partnership" means that the councils will find their own money, there does not seem to be much point in partnerships. So one must assume that in the partnerships to come there will be some money from central Government: otherwise it would be a waste of everybody's time.
  One can understand the thinking that suggests that we ought to concentrate our available resources in just a few areas. But that is no consolation to people living in other areas with the same problems. If resources are allocated for inner area purposes, the Department has a responsibility to see that they are spent in that way. There is evidence that the money via the rate support grant which has gone to London and the metropolitan districts—we acknowledge that they have serious urban problems—has been spent on the area as a whole and not on specific areas.

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  I prefer direct funds to go to specific projects or specific areas of stress throughout the country. In that way we would at least be able to see and measure the effect of the spending of the money. It should not just be thrown into the area with the instruction "Spend it", with the area being left to get on with it as in the past. Areas cannot be singled out for treatment at the expense of other areas, and it is wrong to penalise those areas that have made the effort in the past by helping areas that have been less diligent.
  The White Paper says that the rate support grant is a major source of Government finance to local authorities. In assessing the rate support grant account must be taken of the problems of the areas in the shire counties. The rate support grant was biased in favour of London and the metropolitan districts. This created great fears in the shire counties that if the programme was to be pushed forward, there would be even less money for them under the rate support grant in future. That is a daunting prospect for their treasurers.
  There are problems in the new shire counties since they have taken into large urban conurbations. Those problems may be concealed. For example, if the Department asks Staffordshire how many pre-1914 houses there are in the area the answer may conceal the fact that a very high percentage of those houses are in Stoke-on-Trent. If it asks what is the pupil-teacher ratio in the county as a whole it may not be apparent from the answer that the south of the county is better off than the north. This matter, therefore, is more complicated than it used to be.
  We can no longer think in terms of the shire counties being rich and the other areas being poor. The new shire counties are no longer the lush green pastures of yesteryear. Rate support grant has to be sophisticated enough to compensate for the changes made during local government re-organisation. Each area has its own problem. In Stoke-on-Trent it concerns house purchase. The local authority was granted £177,000 for that purpose and to that sum it has added £60,000. The whole of that sum has been committed for house purchase already in this financial year. In three months the building societies have committed them-
  1464
  selves to spend only £15,000, although they are entitled to spend £391,000 under the scheme.
  We have no quarrel with the building societies. They have their rule books and they stick to them. But they are reluctant to lend money on houses that may be subject to mining subsidence. It is difficult to find a house in Stoke that is not subject to it, or at least in some danger from it. The building societies do not like lending money on terraced houses without forecourts, or on houses where road improvement schemes might come along, even though that prospect is now receding well into the future.
  They are also reluctant to lend money on houses in areas of or adjacent to commercial properties. In an old inner urban area that is a difficult criteria for us to overcome. I wish to take this up in detail with my right hon. Friend the Secretary of State, but for the moment I simply urge him to ensure that the Government's policy is flexible enough to take account of local variations.
  If we are to succeed in our task of regenerating the inner urban areas and of stopping the population drift, I accept that public money alone will not be sufficient in the foreseeable future. We must attract private capital to help us. If we are to attract industry or commerce, we must be able to provide the right conditions. The land must be available at acceptable prices. The White Paper recognises that we need to attract industry. We cannot say, however, that we want the factories and the machinery to create jobs but that we do not want the lorries and motor cars. I wonder whether some of the people who write the circulars in Whitehall encouraging restrictions on vehicles realise that few cities have any underground system and that people depend upon four-wheeled vehicles to get about.
  Some of the Whitehall circulars are read in the nooks and crannies of town halls where they are regarded almost as the second Book of Genesis. It is only later that they are found to be full of original sin. The local planners by then have added their little variations to the original sin and have compounded sin upon sin. The mind boggles at the outcome. We are left with one of the problems mentioned by my hon. Friend the Member for Manchester, Moss Side

  1465
  (Mr. Hatton) whereby doctors bury their mistakes, but planners seem to move on and leave someone else to clear up their mess.
  If we are serious about a returning to thriving inner city areas we must not be hidebound by attractive-sounding theories which may be reversed in a few years' time anyway. We need fewer theories and more common sense.
  The subject of IDCs is important for the inner urban areas. The Government's policy on this matter must be under constant review if industry is to be attracted. Now that we are in the Common Market, multinational companies are no longer susceptible to the kind of pressures exerted hitherto to send them in this or that direction. They do not need to fall for that line of persuasion any more. On a number of occasions we have called the bluff of firms that have gone off to the green pastures of the Continent to set up in the Common Market there factories that might have been set up here.
  If local authorities are to be encouraged to attract industry and if they are succesful in attracting firms from this country or from abroad to take a look at their areas, it is up to the Government to take care not to drive those firms away. In saying that I have in mind, of course, the pressures that the Government might be under from areas of high unemployment.
  Irrespective of the facts of the case as set out in The Guardian last week in the articles about local government reorganisation, I wholeheartedly support the return to the major cities of those powers necessary to the social life of the community. I oppose regional councils as another tier of local government, but I support the concept of smaller all-purpose authorities with a very limited range of powers at regional level.
  The present system has not worked badly in Staffordshire, but there will be growing pressure for a return to the major urban areas of those services. Equally, there will be a counter-pressure to keep the present system of local government longer so that it may have a chance to work—at least, that will be the story. I believe that the sooner we make the changes the better.
  7.39 p.m.
  Mr. Kenneth Baker: Having heard the hon. Member for Stoke-
  1466
  on Trent, North (Mr. Forrester) I feel sure that the problems that he was outlining and that affect Stoke have a commonality with the problems that other hon. Members have outlined and that afflict other cities such as Cardiff, Birmingham and London.
  In the stage of economic development through which the Western world is passing there is no doubt that the cities and larger towns generally are in decline. That is not the case with all countries. Some cities in the developing world are expanding at a fantastically faster rate than ours and are facing problems that make the problems of our inner cities look minuscule.
  The decline of the larger city happened first in America. I used to believe that there was a time lag of four or five years between economic developments in America and similar economic developments in the United Kingdom and Europe. The symptoms of the decline and decay of cities could be measured and observed in America five or six years ago. The symptoms we have been describing tonight may now be seen over here and are common to many cities in America. The declining population, the movement away from the centre, the growth of ghettos—usually associated with one ethnic group of one colour or several colours—increasing hooliganism, increasing violence, the desire of young couples with children to move out to find a place with a garden where their children can play, are all typical of most of the cities whose representatives have spoken in the debate this evening.
  The hon. Member for Bootle (Mr. Mahon) was kind enough to refer to me although he did not hear my speech. He spoke in a rather sad way about soldiers returning after the war and having a vision of what life would be like and the great disappointment of what it is like today. I could not help recalling the famous verse from the scriptures that "without vision people perish". Paradoxically, the reverse is true! Without people, the vision perishes.
  In many parts of our inner cities there is a sort of desert, whether in the dockside of Liverpool or in the East End of London. Vigorous and thriving areas of even 20 years ago are now literally empty in the East End of London. I would

  1467
  introduce a polemical note for a moment, because the Secretary of State introduced a polemical note when he said that when we were in office we hardly did anything. The right hon. Gentleman contradicted himself when he said that my right hon. and learned Friend the Member for Hexham (Mr. Rippon) did do something—a sort of dying throe.
  The Secretary of State has represented an inner-city seat since 1964. I fought as a candidate in Tower Hamlets before he did. I fought the neighbouring seat of Poplar. The right hon. Gentleman will recall that he was adopted during the campaign when the sitting candidate, Stoker Edwards, died. The right hon. Gentleman was very lucky to get that seat. I think that he would have settled anywhere—in Stechford, in Walsall or anywhere else—but he happened to latch on to Stepney because the candidate died.
  The right hon. Gentleman knows what is wrong with the inner cities. Since becoming a Member of Parliament for Tower Hamlets he has seen hundreds of acres become empty and derelict. But what action has the right hon. Gentleman taken over the last 13 years during which he has represented Stepney and Poplar?
  In fact, in the middle of the 1960s some of us tried to revive parts of the East End with housing associations. I tried to establish one in Popular. All the best sites were owned by the then Poplar Borough Council. When we approached the council and asked for two or three acres to build a community development, it said "No. This is industrial land and we shall develop it." In many cases that did not happen, because the philosophy—this is where Socialist thinking is to blame—is that there can be only one developer—the local authority. Yet, because funds were tight in one way or another, there was no developer as a result.
  That is the sort of attitude that we have to change. In some areas one is beginning to see some change. Another area where some change is needed is in our attitude to comprehensive development. Fifteen months ago the Secretary of State said that he was pensioning off the bulldozer. That is a graphic phrase. But does he know that the bull-
  1468
  dozers that he pensioned off 15 months ago were only last week tearing down 600 houses across the river in Lambeth? Those 600 Victorian houses in Thorne Road, Lambeth, could have been rehabilitated. But they were pulled down and a half a dozen small businesses have disappeared. The Secretary of State should not make statements about pensioning off the bulldozer and then do nothing about it. He should have used his powers with regard to that development.
  I make only one point tonight about the decline in our towns and cities. If we do not arrest the economic decline of our cities and towns, there is no hope of our dealing with their social, family and housing problems. It is essential to grasp that fact, because until we revive the economic activity of our towns and cities, we shall not be able to deal with their social problems.
  Speaking as a Londoner, I would establish as my first priority the arrest of the decline in the economic activity of London, particularly inner London. How does one set about that? As my hon. Friend the Member for Harrow, Central (Mr. Grant) said, we should destroy or throw away all the paraphernalia of ODPs and IDCs. There is no point in having IDCs in an area such as London. They are a sort of façade so that the Secretary of State can say to his friends in the regions "We still have a regional policy of a short, because we have IDCs". But the Secretary of State tells London Members "Actually, do not worry. We shall give you an IDC order when any firm applies." That is a very deceitful stance.
  On the one hand, the Secretary of State says to his friends outside London that the Government still want to help the assisted areas; at the same time he says that local authorities in certain parts of London are allowed to attract firms. I am not against that. But it requires a greater degree of frankness by the Secretary of State, when introducing that sort of policy, to admit that it is a major reform of his regional policy. One cannot ride both horses and be honest about it. I suggest that all this paraphernalia of control should be done away with.
  Secondly, I welcome what the Secretary of State has done to change the attitudes in the town hall with regard to

  1469
  non-conforming users. When a small garage or small workshop is moved away from a residential or semi-residential area, it is not relocated. I believe that there should be a much greater freedom in the attitude of non-conforming users, particularly many small businesses which have started as a home workshop in a garage. I hope that this attitude changes.
  The next thing is to provide premises at a rent that businesses can afford. I am not suggesting any special subsidies or asking Westminster City Council, the GLC, or any borough council in London to subsidise rents for firms. But what has happened in certain parts of London is that provision for low-rented accommodation has been established. The finest example is the Clerkenwell workshop scheme where two people, with no State money, took over an old Victorian warehouse two years ago and split it up in a rough and ready way—no fancy entrance hall and no heating—into units of a few hundred square feet which they rented for £2·50 a square foot.
  More than 40 firms have taken those premises. They are mostly small businesses which all the macro-economists in the world would never have thought would go on. But they have survived and are now employing about 200 or 300 people. Many of these small companies are not arty, crafty companies that were somehow set up in an arty, crafty way. They are providing goods and services for which there is a need in the market.
  What we must do in our regions, docklands and constituencies generally is to bring life back into all these derelict buildings. They are there. They can be converted. The right hon. Gentleman must know many of them. Why is not it happening? Why is it not happening in his constituency, in Greenwich and in Deptford? He is the Minister. He can do something about it.
  I hope, therefore, that what the Clerkenwell workshop scheme is doing will be repeated in many places throughout London. Our cities and towns grew not by massive companies moving into them and establishing huge factories but by a lot of small business men establishing businesses in them and slowly expanding. The inner city has to grow again.
  So my main argument is that if we are to deal with the social problems of
  1470
  our cities and towns we have to start by revitalising their economic life. If we do not start there and if we do not start encouraging the small business, which is what it comes to, we have no chance.
  I raise one small point about housing in London. It has not been mentioned so far, but it should be mentioned. One of the most depressing correlations of statistics is to see the graph of the ageing populations of our cities compared with the extent of council ownership. They are directly correlated. If one looks at the tables of statistics, one can see that where there is a higher proportion of council ownership, one can bet that the area will have a much higher age average than another area. This is certainly true of London.
  Despite all the problems, London is still one of the most pleasant and civilised cities in which to live. It has some of the finest theatres and open spaces. Its buildings are cleaner than they ever were. The Thames is cleaner than it has been for decades. None the less, it has an inner core of plain seediness which is not a very pleasant environment in which to bring up a young family.
  One of the great attractions of London is that its acts as a magnet to young people. Many young people come here to live and work for two or three years, and some stay longer. In the past they have been able to do that because of the existence in London of a pool of accommodation. That pool has largely dried up. I will not cast blame on the Government. It is too easy to do that as a result of the 1974 Act. But we have to devise housing schemes and housing association schemes to encourage young people to come back and to share flats collectively. I should like to see council tenants being allowed to take in young people as lodgers.
  Unless we make it more attractive for young people to come to London, to stay for a few years and then to move on, one of the special exciting ingredients that still make London a marvellous place to live in will be missing.
  7.53 p.m.
  Mr. Alexander W. Lyon: The problems of our inner cities are many

  1471
  and complex. The analysis of their problems has reached volumes which are beyond anyone's endurance to read. But the solutions have evaded most of the learned writers on the subject, and it behoves us in this debate to approach the problems with a good deal of caution. There has been a lot of simplistic talk about what would reverse the trends in the inner cities. There is no guarantee that, if we put together a package of all the suggestions made in this debate, there would be a marked change in the deterioration of our cities. I apply that caution to any suggestions which I make.
  There are two factors about which I could take issue with some of the critics. I do not believe that the problems are not capable of some resolution given an adequate amount of resources put into the inner cities. Anyone who has seen an area of deprivation which has been taken over by middle-class incomers and "gentrified" knows that a certain amount of resources will create a considerable change to the good in the environment. The real issue is whether there is any agency—Government, local authority or private—capable of putting into the inner cities that degree of resources which goes into some areas of our cities which have been "gentrified". The application of resources is at least part of the answer to the problems of the inner cities.
  The other matter on which I join issue with the critics is the suggestion that it is not possible to improve smallish areas unless improvements are made in the economic structure of the region or of the country. To quote the thinking of the CDPs, it is impossible to work in small area terms, we cannot rely entirely on a small area policy, and there is no way of avoiding the difficulties of macroeconomics and the implications which they have for every part of the country, especially those which are the most deprived.
  I accept that thesis. However, I believe that within the macro-economic structure of the country it is possible to divert resources to give a greater degree of help to those areas which are in the greatest need at any given moment, and that it cannot be wrong to do that merely because we think that we should also have a complete analysis of the problems of the country as a whole. It is not
  1472
  enough to say that we cannot help a small area until we have done something quite revolutionary for the whole country. For that reason, the policy behind the inner city White Paper is right. We ought to be seeking ways of reallocating resources.
  Although the hon. Member for Birmingham, Hall Green (Mr. Eyre) was congratulated by his hon. Friend the Member for Harrow, Central (Mr. Grant), I did not find a great deal of help from his speech. He answered my intervention by saying that he would come to the central issue of the reallocation of resources, but he never got there. Unless he does get there, he has no policy.
  It is no good saying that we should do something about our inner cities by improving small businesses and helping with schools and housing, then that we should do something about the outer areas where a wilderness has been created in modern council flats, and finally that we should do something about the middle areas because they happen to be Conservative-held seats and we must not leave them out, must we?
  We must. If we talk about the reallocation of resources, we are talking about taking from one deserving case and giving to another. The right hon. Member for Worcester (Mr. Walker) at least had the honesty to concede that that was essential to any policy for the inner cities when he said that he was prepared to give up resources from Worcester in order that they might go into Birmingham. The hon. Member for Hall Green has to give up something from Hall Green in order that it may go into Handsworth. There are areas of such deprivation that the only way that we shall get resources within a restricted budget is by taking from some and giving to others.
  Contrary to the philosophies which have been animating the discussion from the Opposition Benches for most of this debate, that is what I call Socialism. It is what Nye Bevan called Socialism. I always understood that Socialism was the language of priorities and that the real argument for an inner city policy was the absolute ethos of Socialist doctrine.
  When I went into the Home Office, therefore, I was delighted to think that

  1473
  we in the Home Office were charged with the duty of providing for the first time in our history an inner city policy or urban deprivation policy. I looked forward to it with eager anticipation. It never came. It is too painful to explain why that was so, and it might cause me more trouble than the trouble that got me the sack. [HON. MEMBERS: "Tell us."] All I shall say is that three years were lost, not because there were not people in Government who desperately wanted to do something about it, but because there was departmental resistance to the necessary will to do something about it. There was a centre in the urban deprivation unit which had a fairly expert analysis of the problems involved in reallocating resources and what should be done about it. I fear that in the transition to the Department of the Environment—which I wholly welcome—something of considerable importance was lost.
  What must be decided is how to allocate resources from one area to another and who will receive them. The White Paper has made a rather broad attempt to deal with this central problem by saying that we cannot give help all over the place because the jam will be spread too thin, so we shall select the cities that will get the extra jam, and we shall do so on the basis that larger numbers of people in those cities live in deprived conditions. We are taking five major urban areas as the first major partners in the partnership agreements.
  Two arguments arise as a result. The first is that those areas are not necessarily the most deprived in the country. If hon. Members look at the list of most deprived areas drawn up by Sally Holterman in her paper for the Department of the Environment, they will find that Bradford is listed as the third most deprived city by reference to the indicators of deprivation used in that paper. Yet Bradford is not included in the five partnership committees. Manchester is included, although Manchester was a good deal further down the list of most deprived areas. It has been included because it is bigger, and it is possible to say that the money will perhaps go to more people. However, in terms of need, Bradford should have been preferred to Manchester. Why was it not preferred? It was because this analysis of which cities should feature
  1474
  in the partnership agreements was not done by any scientific test of what were the most deprived areas.
  The second part of the problem—and this is the point I was making to the hon. Member for Birmingham, Hall Green—is that if Birmingham is to be included, which it clearly must be as one of the areas with considerable sectors of deprivation, does that mean that the whole of Birmingham is to be included? If a grant under the urban aid programme is to be given to Birmingham City Council, will it be used to help a playgroup in Edgbaston or will it go to Handsworth or some of the other major areas of deprivation in the centre of the city? How will that choice be made? Who will make it?
  I note that the partnership committees will be chaired by the Minister. Will he be able to say to the Conservative City Council You must not give money to constituents of the hon. Member for Hall Green because they are Tory voters anyway. You must give it to the Labour voters in Handsworth."?
  That consideration should not be in anyone's mind. But the practical politics of the situation is that that consideration will be in their minds. If a Labour Minister says that the council should not give money to Handsworth, All Saints or Ladywood just before a by-election, he will not get much help from the other members of the partnership committee. It cannot be done on that basis and must not be started on that basis. It must be done on the scientific basis of where there is greatest need in Birmingham, because the money is too thin to be spread throughout Birmingham. It must go to the areas of greatest need, and that need must be assessed by some kind of objective standards. It cannot be done merely on the basis of political partisanship.
  There was a device which was being manufactured in the urban deprivation unit in the Home Office which sought to overcome this. It was not the CDP, which Opposition Members love to attack on the basis that it is the CCP. The CCP is different from the CDP. These initials are confusing. They were always confusing to me. The CDP is a lot of young men put into areas to urge the inhabitants to attack their councils to get something done. They have drawn down on themselves the wrath of God and of

  1475
  many Conservative councillors because they did too good a job in stirring up inhabitants to claim their rights. They have my backing, even though most of them are Trotskyists, Marxists and Maoists. What they did was tremendous in raising people's expectations in those areas. Thank goodness that they did.
  They are completely different from the CCP, which is a planning technique that says that the local authority will look at an area and decide where the greatest need is in that area. These needs should be assessed according to standardised tests, and they should indicate a sort of national balance of the worst areas and a local balance within the area of the local authorities concerned in those areas.
  The local authority should have a plan for dealing with the particular needs of that area, a running plan that is adjusted as the years go by, according to the shifting needs and the satisfaction of those needs. This ongoing plan should be one in which the local authority states to the Government "There are our needs, we have these resources available from our budget to tackle these needs, but the resources are inadequate for the total task and we shall need more resources to help us".
  The Government should have the task of allocating from their own resources the extra resources that should be ploughed into particular local authority areas. Clearly we have the constraints of public expenditure restrictions and constraints on our total growth. We shall never have enough resources to give everything to every local authority. Sane kind of choice has to be made by a Government Department. The objective was a partnership at local level, but also in central Government between Government Departments about how the central programmes were to be reallocated so that more money went into areas of greatest need, and, at the local level, within the local authority budget, more money should go into areas of greatest need.
  I think that the CCP idea has a great deal to recommend it. I do not mind whether we call it something else or a partnership agreement, but the agreement must have a degree of scientific objective assessment of the priorities that have to be followed. We come near to it in paragraph 81, which is the most important
  1476
  part of the whole document. Unless we build upon that, we shall never be able to say whether, for example, the Manningham ward in Bradford is to be preferred to the Handsworth ward in Birmingham, or whether the Handsworth ward is to be preferred to a ward in Lambeth. Unless we have that kind of assessment, the money will be spread far too thinly.
  We have some experience from the urban programme under Section 11 of the 1966 Act of how money allocated for a particular purpose in a particular area is used by local authorities at times of pressure for other main-line programmes which are more politically popular but for which they do not have the resources at that time. That undercuts the whole purpose of the urban programme and of Section 11
  The second point that I wish to raise is that I regret that, in assembling this inner city policy on the basis of the White Paper proposals, too little attention has been paid to the particular problems of the black minority. Suggestions have been made about the black minority today. We had a dissertation on immigration control, but I do not want to go into that.
  Both major parties—no major party has yet adjured it—have long accepted that two major commitments must be honoured. They have not yet been honoured, but they can be honoured quickly if my policy is followed. It will still have to be followed, whichever party is in power. The Opposition say that it would be followed slowly. That means that immigration on this scale will go on much longer. That is the only difference between the two views. No party has yet said that it will give up the commitment to the East African Asians or to the wives and families still in India, Pakistan and Bangladesh. Until the Opposition say that, they cannot say that they will reduce the total number of immigrants coming into this country.
  Accepting that, there will still be substantial groups of people in this country with difficulties greater than the indigenous whites who are also deprived. It is not because they are black, but because they come from different cultures. If they live in bad housing, they are no different in that respect from whites living in bad housing. If black children

  1477
  go to schools with bad school buildings and inadequate resources, they are no different in that respect from the white children who go to those schools. If they have bad transportation difficulties, they share them with the whites.
  All those problems can be dealt with by an inner city policy similar to that in the White Paper. But blacks have additional difficulties not because they are black but because they are new to this country. Those difficulties come from the conflicts of culture that they experience when they come here. I am in no sense casting any reflections upon the cultural heritage that they bring with them from Asia or the West Indies. I am suggesting that anyone who comes from a different culture into a new culture faces problems. The most obvious problem is languauge. Such people have to learn a different language. That is an initial problem for them.
  In addition, there are problems for most of the immigrants who have come to this country from the new Commonwealth during the last 20 years, because most of them had a different standard of living from that experienced by even the poorest in this country. The adjustment that has to be made in that respect also causes difficulties.
  For West Indians there is a particular difficulty. Their culture, dominated by the experience of slavery that their forefathers endured, means that for most of them the normal nucleal family unit is not the pattern as it is in English society and the extended family unit is not the pattern as it is in the Asian community. West Indian children do not have the back-up that comes from close family links to sustain them during periods of difficulty and adjustment in our society during their adolescence. West Indian teenage criminality occurs in only about 4 per cent. of the West Indian teenage population. Nevertheless, it is a serious problem in some inner city areas. That problem arises largely from the lack of family back-up in the West Indian family structure.
  The Asians have a tight, strong, family, religious and cultural back-up that helps to give confidence to their children. But the fact that it is so strong and tightly knit causes strain when Asian children come into conflict with different standards
  1478
  and attitudes in our society. Adolescent children—particularly girls—suffer strains that are difficult for them to manage and cause acute difficulty on an increasing scale in the Asian family structure.
  Many of these problems—I could go on for quite a long time—are not problems that the white deprived child or adult in our society needs to experience. There are white single-parent families who need child minders in deprived areas in inner cities, but nothing on the scale or quality of need required by West Indian families. That problem adds to the burden of local authorities in terms of social services, education and housing facilities. It is different from the kind of problem that they face in relation to deprived white people in their areas. Therefore, we need something in addition to the comprehensive inner city policy outlined in the White Paper.
  I want a black dimension in that inner city policy. Unless we have it, we shall not cure the problems of the blacks in inner city areas in this generation. If we do not cure the problem now, we shall find that, as happened in Liverpool, blacks who are deprived in this generation will pass on that deprivation to their successors. After two or three generations it will be not newness from which they suffer, because they will not be new here, but poverty, and that poverty will become identified with colour in the way that it has in the United States. It is crucial that, having a different black problem from that in the United States, we should solve it in this generation.
  We should be tackling the problem now. If we cannot tackle the problem by building a black dimension into the comprehensive community programme technique, we must have a black programme as such. I am told by those who are wise in the world of politics that that is anathema to the white electorate, which would not accept a black programme. I am told that one would lose votes if one were to say that to the white electorate.
  If a white mother who sends her child to a school in which there are 75 per cent. West Indians or Asians feels strongly that, because there have not been adequate resources put into the school in terms of teachers and teachers' helps, her child is not getting a proper education, she will welcome more resources being put into

  1479
  that school to balance the needs in order that her child has an adequate chance.
  It is the same wherever we look. If black people have difficulties of adjustment when they come to this country because of their different cultural backgrounds and levels of achievement in economic terms, those problems have to be overcome if we are not to have the kind of difficulty that many Opposition Members tend to prophesy. Those problems can be overcome by the allocation of adequate resources.
  If we cannot tackle those problems in the comprehensive programme outlined in the White Paper, we must have a black programme. In fact, we have a black programme in Section 11 of the 1966 Act, which is all that is left to the Home Office of its urban deprivation polcies. If Section 11 were adapted to cover not just the 2 per cent. school count and those who have been here for less than 10 years but all blacks having the problems of newness, we could build out of Section 11 a comprehensive black programme that would deal with all these problems. Unless that is done we shall not solve the problem of the inner cities in anything like the way that has been suggested, because the major component of our inner cities now is the black population.
  On average blacks represent 30 per cent. of the population in the most deprived areas, according to the census indicators, and that is over the top 15 per cent. of the most deprived areas. If one examines the areas that are most in need one finds that outside Glasgow—and Glasgow is always picked on by the Department to make the case that why we cannot have a black programme—they are those in which the percentage of blacks is considerably greater than 30 per cent., and in the worst areas it is more than 50 per cent.
  If the trends in these areas are to be reversed, that must be done not only by the kind of policies that are in the White Paper but by additional help for the new needs of the new immigrants. The problems must be solved in this generation or else they will become endemic in our society.
  Mr. Deputy Speaker: The Front Bench speeches are due to begin at 9 p.m. and
  1480
  there are six hon. Members who have been sitting patiently in the Chamber waiting to speak. All of them can be accommodated, and it would help to solve the problem—leaving aside the problems of the large cities—if hon. Members would take roughly six minutes apiece. A lot can be said in six minutes.
  8.21 p.m.
  Mr. Anthony Steen: Most hon. Members this afternoon have devoted a great deal of time to a diagnosis and analysis of conditions in our cities and their problems. That is the pattern of most debates on urban problems, although since the present Government have been in office our debates have tended to concentrate more on the inner city areas while the country and outer city areas have been correspondingly neglected.
  In such a debate we tend to hear a recital of the problems rather than real attempts to tackle them, although the hon. Member for York (Mr. Lyon) gave us an insight into different ways of looking at the solutions. However, when solutions are put forward, there is an underlying assumption that nothing major can happen unless the cities are given a facelift. Since that would require vast sums of money, it must be ruled out.
  The Minister's proposals this afternoon following the same path and gave us little cause for hope. Most speakers, understandably, confined themselves to speaking about what is possible, namely, minor reorganisation and change here and there. One senses that some despair has crept into them and into most local authorities—that there is nothing that anyone can do to help and that there is not much that anyone can do even without the help of the local authorities. I am convinced that that is an unnecessarily defeatist approach.
  We should not be focusing on the skyline and seeing only buildings. We should be far more concerned with the people living in them. A significant feature of the debate this afternoon was that the Minister said precious little about people. The right hon. Gentleman confined himself to technicalities and high finance. He talked with great vagueness about partnership with local authorities, but it was difficult to decipher what he meant and what it would mean for people living in the cities.

  1481
  Since the war successive Governments have tended to focus on buildings as a solution to city problems, in terms of pulling down old and putting up new buildings. They were oblivious of the damage that they were doing and the dereliction that would result from the local shop and row of houses being pulled down, because with that went all the relationships that people had built up over generations. Until the late sixties the cry was "Pull down the slums". Planners said that cities could not fire on all cylinders until everybody was housed in decent accommodation.
  Yet in all but a few odd places the bulldozers have now been gone for 10 years and the cities are not happier. It is not the inner city slums and economic problems that make people in most industrial areas go around with long faces. It was not until the late sixties that the light dawned on the politicians and they realised that it was not just the back-to-backs that they had pulled down but they had severed whole communities and family links. Only then did they begin to question the mass transfer of people from inner to outer areas, to large council estates, and to think about the disastrous policy of breaking up families and friends and scattering them over a wide area.
  It was this awakening that prompted the Government in the late 1960s to introduce a series of special measures, each aimed at trying to identify the nature of the problem and the way to help rebuild communities. The most imaginative programme was the urban aid programme, which sought to get resources to the grass roots. Unfortunately, local authorities in the latter period of that programme used much of the money as a form of rate support grant through the back door.
  Not enough money has gone down to the grass roots, to the community. I hope that the Minister will see that the next phase of the urban aid programme has a specific loading to favour voluntary and community work, with a minimum percentage to be given by the local authority to the community direct.
  As part of the urban aid programme there was a community development project in which 12 teams of professional workers went to major areas of urban deprivation on so-called "action research". There are mixed views as to the value of this scheme, but one of the
  1482
  things which the Minister should do is to publish the results of the research. The projects have been going for their full length and perhaps the Minister can say why this scheme, which has cost over £5 million and which sought to tell us the answers to community deprivation, has still not published any findings and why some of the projects have had to publish the reports themselves because the Government were not prepared to expose the findings. Perhaps we may have an explanation why the Government wish to keep the results of these projects a secret.
  Besides such projects there was also a whole range of other projects—the comprehensive community programme, the total approach, the older town studies, the inner area studies, housing action areas, educational priority areas, urban deprivation units. These schemes were accompanied by a mass of social jargon—inner city deprivation, urban deprivation, the cycle of deprivation, the quality of life. These sought to focus on the problems of cities and to show what was needed. The curious thing is that nothing clear has emerged from all of these studies. except more studies.
  "Policy for the Inner Cities" is yet another document suggesting another course of action. Already it would seem that the Government are unlikely to be able to fulfil the obligations they have set out in their programme. It seems that all the Government can do is to set up successive studies rather than get down to the root of the problems in the cities.
  The White Paper goes down the same well-trodden path. It concerns itself with the visual and the materialistic, with the fabric of the city, with the look of the place. The £100 million which the Government are now able to give will go on construction work. What will happen to the city? All that will happen is that there will be a slight change in one street, a new building here and there. There seems to be little point in building a new shopping mall if the people using it cover it with litter and deface the brickwork with graffiti.
  There will be little change coming out of the White Paper. No one will see very much difference when going into our great cities and towns. What is strangling the community is the attitude

  1483
  not of the local authorities or of the Government so much as of the people living there. Unless they can be given new hope, a new involvement, a commitment to a future, our towns will inevtiably go the same way as those in the United States: they will become more violent, more decadent, more dirty and more bankrupt.
  My impression is that, following these Government experiments, it was just beginning to dawn on the civil servants that there needed to be a shift away from the emphasis on reorganisation of administration and management, from buildings and equipment, into the direction of recognising the importance of the individual and the need for helping a community. Any prospects of new attitudes were dashed by the onward march of unemployment, now seen as the new town wrecker.
  The officials now proclaim that without jobs the cities can never get it right. Just as in 1968 the Government responded with a range of high-sounding community schemes, so the Government have again launched off on a number of schemes that have not much relevance to unemployment in the long term and merely divert the problem by reducing the unemployment statistics.
  The job creation programme, the temporary employment subsidy, the job release scheme, the work experience scheme, community industry—one after another they roll off the conveyor belt. They obscure the problems underlying the difficulties in our cities. Let hon. Members not mistake me. I am not saying that jobs and new houses are not important. What make a city flourish is the people living there. If they have bad relations with one another, if they have no community, if they are split apart, if their friends and families are dotted all over the town, the problems of the cities will continue.
  These are some of the problems that need to be tackled first and foremost. If vandalism is rife and mugging is widespread, these are manifestations of a deep-seated problem, the sickness signs of our society. They are the signs that urban areas are throwing out their distress signals and that they are not being heeded by Government.
  1484
  The pattern in most of our large towns and cities is of a declining inner city area, a more prosperous middle city with houses in private ownership, with council houses and large council estates based on the periphery. It is on the periphery that the majority live. It costs more to get to their jobs and means that they spend a longer time getting from home to work. It means that they are away from their families for a longer time. Transport is expensive and often unreliable. It is difficult for them to visit friends and to meet their families. It is not surprising that those living in such vast council estates feel rootless. They often feel that they have no identity, whereas in the inner city they felt that their houses were their homes. They feel that they have no security in their new houses.
  The impact and significance of the vast soulless council estates is not being fully realised. It has not been realised what they have done to the individual who lives in them. He finds himself no longer part of a living neighbourhood. No longer does he have a meaning or purpose in relation to his neighbourhood.
  As The Sunday Times highlighted last weekend, the most serious problem of all is loneliness. Most of our major physical diseases stem from the feeling of not having any contribution to make and a feeling that no one cares. Human beings need to feel wanted and cared for. My experience in Task Force among the elderly well illustrates that that is a major problem in our towns and cities. However, having recognised many years ago from endless research documents that that is one of the major problems, it is amazing that the Government should introduce a job release scheme that means that people are invited to retire earlier and, therefore, to become lonelier sooner, rather than feeling that they have a contribution to make to the community in which they are living. It is not only the city planners who fail to realise the importance of the individual when they pull down the slums. The Government, with their short-term unemployment programmes, are undermining the fabric of our society.
  My belief, therefore, is that the decline of our cities starts at the point that the family unit disintegrates. The policies of

  1485
  Governments and city councils, rather than making the family unit stronger, tend to prise open what was a closely knit unit where people were interdependent and where the grandparents, uncles and aunts played a part in family development.
  The break-up of whole communities and neighbourhoods in the great slum clearance programmes is having a cumulative effect on successive generations. It is the sins of the fathers being visited upon the children. Instead of the community looking after itself, instead of the family and the extended family looking after each other, instead of mothers being able to look after their own children, an increasing number of mothers are compelled to seek work and to rely on impersonal child minder schemes of one sort or another. In spite of the Government putting their emphasis on financing play schemes and adventure playgrounds, they are now increasingly concerned with bringing in a new core of professionals to look after children rather than encouraging mothers to look after their own. It is not surprising that more children find it difficult to have meaningful and permanent relationships when they are brought up in an ever-changing and ever-shifting society.
  Good transport provisions, good shops and good houses are all important, but if the family unit is weak no amount of good planning will compensate for it. We need to re-establish the neighbourhood and to reduce the size of the units at local level. We must give incentives for the family to help and care for one another. We must help those who have space to look after aged relatives and not allow them to drift into institutional care. We must consider employing the young mother to clean for an elderly next-door neighbour and pay her rather than insisting that she goes to work at a factory miles away. We must ensure that housing allocations are based on new criteria so that members of the same family live near each other.
  My approach to the towns and cities is concerned with changes of attitude, with the need to reinforce community responsibility and to give the community and the neighbourhood real power. It is only in this way that the individual will start to re-emerge and people will
  1486
  think in terms of community care rather than depending on an ever-beneficent Welfare State.
  The solution to the problem of towns and cities is within the cities themselves. We must give people living there the hope and opportunity. The battle is for the individual as opposed to the big bureaucracies in which significance is lost and a person assumes merely a numerical identity.
  The only way to halt the decline in the social malaise is to provide people with a sense of purpose and to devolve on to the neighbourhood real responsibility. The example of New York showed us that when the lights go out people do not care any more. If this is the underlying feeling in Britain, there is no hope for our cities. We must learn the lessons that the Americans have learned already, before it is too late.
  8.36 p.m.
  Mr. Eddie Loyden: I do not wish to follow the line taken by the hon. Member for Liverpool, Wavertree (Mr. Steen). I wish to speak from experience of the inner cities—something that is apparently lacking among hon. Members opposite. I was born in an inner city and have lived the best part of my life in one, and from what has been said today I find that Conservatives know very little of the problems of inner cities.
  The problems of these areas have been with us for a very long time. It has been a question of getting Governments of both complexions to recognise that these problems exist. Anyone who suggests that 1977 is the year in which inner city problems have emerged should have lived in the shadow of Tate and Lyle, or in the Scotland Road or Vauxhall Road areas of Liverpool. I fail to understand the points of view put forward by Conservatives.
  In the 1920s and 1930s the city of Liverpool was a thriving port and commercial centre, but it still had the highest incidence of slums in Western Europe and one of the highest unemployment rates in the United Kingdom. In that sense there is nothing new in talking about inner city problems. Certain changes have taken place which have accelerated the problems in many ways or changed them into something different.

  1487
  It is no use hon. Members opposite arguing about the mistakes of the planners in the post-war period. Local authorities had to face the problem of re-housing thousands of families from the slums in the city centres. These pressures compelled them to take action which they and the people they moved regretted later. But the pressures to resolve the massive problems of housing and slums led these authorities to believe that the answer lay in moving people out of city centres. We may well argue that this was not the right thing to do and that they should have taken a different line in order to bring about the necessary changes, but there were great pressures on them because of the prevailing terrible housing conditions.
  Those factors and others have brought our present problems. In addition, Liverpool has, and always has had, more than twice the national average level of unemployment. There has been a decline in the native industries and these were based primarily, if not exclusively, on the docks and the ancillary industries That decline has been going on for decades and no attempt has been made to compensate for the loss of industry and commerce derived from the handling of cargoes in Liverpool.
  Many of us believe that if the inner city problems are to be dealt with positively it will require State intervention in a positive and direct manner. That is why I welcome the inner city report. Although it will not solve the enormous problems, it is at least a recognition by the Government that special attention and positive discrimination are needed. Everyone appreciates the contribution of voluntary organisations, but there is no alternative to the deployment of massive resources.
  We need more than cosmetics, more than brighter streets. We must improve the total life of the people. High unemployment, bad schools and bad housing go hand in hand with slum conditions. We should not be content with varnishing the exteriors. The problem is endemic. We can see how little Tory Members understand in their remarks about wicked Labour councils like Tower Hamlets and the responsibility of the wicked Secretary of State.
  1488
  That is nonsense. The problem has existed in Liverpool since long before the Secretary of State took up his office and Labour controlled the council. After 50 years of uninterrupted Tory rule, in the 1930s and 1940s Liverpool had the worst slums and the highest unemployment in the United Kingdom.
  This problem cannot be tackled only by local authorities and voluntary organisations. In line with Liverpool Council's paper on the inner city problems, we want the Government to realise the extent of the difficulties. A work force of 40,000 to 50,000 on the Mersey docks has declined to 7,000. Warehousing, commerce and transport have all declined. A stretch of three-and-a-half miles of Southend Dock has been closed, with a disastrous effect on the economy of that part of the city. The economic life of the city has declined steadily and it will not be cured by Boy Scouts.
  We have argued for greater interventionist policies, through the NEB for instance, in the hope that the Government would attract industries to areas such as Merseyside to compensate for those which have declined and to provide new jobs. Then the situation might have improved.
  As industries have declined, people have sought work elsewhere. The postwar planners were largely responsible for this movement and I agree that without people a city is dead. An inner city programme should immediately consider repopulating the city—not in tower blocks but in new town houses. There is no reason why this could not happen. In Aigburth, Woolten and Allerton and other places in the constituency of the hon. Member for Liverpool, Wavertree (Mr. Steen) there is good housing and a pleasant environment. Nothing makes it impossible for the Scotland Road, Netherfield Road and the dock land areas to be habitable and pleasant, but they have been disregarded. Working-class people and immigrants have settled in these areas. I talk of Irish immigrants rather than coloured immigrants. These areas have been left in poverty and penury. No attempt has been made to make them better. Local authorities have spent little on such areas. I should like to see available resources used for positive discrimination in favour of areas that have been deprived for so long.

  1489
  This is the beginning of what I hope will be a continuing process, not only to identify the problems in areas such as mine, but to see that our cities are populated once more. The population of Liverpool has declined by about 250,000 in the last 15 to 20 years. Such decline destroys the life of a city. Unless the problem is tackled, we shall finish up with a city of people who are over 65 years of age or who are unskilled workers.
  The inner city policy will not be the answer to all the problems, but it will be a beginning. I hope that the Government will take a long and searching look at their responsibility for ensuring that our major cities do not die.
  This is not a problem peculiar to this country. New York experiences similar problems and they exist in all major cities in the world. Unless a major rescue operation is carried out, the problem of our major cities will become worse and we shall have urban deserts.
  8.48 p.m.
  Mr. Fred Silvester: I am sorry that not more hon. Members have been able to speak. I shall be brief. The main criticism levelled at local authorities and planners is justified. But we do ourselves no credit if we say that it is all in the past and forget about it. The planning problem is moving into other areas.
  The same problems are arising in the social services. In Manchester we still have letting problems. People are not allowed to take up a letting in an area, even when they were born there, because of the slum transfer policy. The policy takes no account of the fact that people live in the area and have community ties with it.
  The major feature that arises out of the debate is that one can divide it into a number of separate subjects such as housing and education. But by doing that one fails to see the totality of the problem. Inner city problems are so interrelated that one is faced with a gigantic whole. If one tackles housing, one creates education problems. If one tackles education, housing problems are caused. It is difficult to find a solution by dealing with the problems through separate policies.
  The hon. Member for York (Mr. Lyon) may say that I am simplifying the matter. Perhaps he will forgive me because of the
  1490
  time that is available. It is important not to isolate the problems but to find some overall solution and to apply it across the whole range of policies, whichever we happen to be discussing at a particular time.
  I do not know what that solution is, but I should like to suggest that the essence of this problem lies in the principle of self-generation. Although people are very depressed about international comparisons, there are differences between cities around the world, and some cities do better than others. One of the reasons for this—it is true also of regional policy—is that, in the end, what matters for the wealth and attractiveness of a place is the ability of those who live in it themselves to generate the will to make it better.
  To some extent this is a matter of resources, but it is also a matter of other things. I should like to mention one or two of those matters, because they relate to political decision.
  First, there is the whole question of the momentum, euthusiasm and sense of self-interest necessary for generating the kind of employment that we require in inner cities. My hon. Friend the Member for St. Marylebone (Mr. Baker) cited the situation in Camberwell when a warehouse was taken over and subsequently relet to 40 businesses. Such enterprises are many, and the nature of a city is that it develops in that kind of way.
  To make a simple statement in half a minute is difficult. However, it seems to me that one of the most difficult things arising out of the White Paper—the partnerships, ministerial committees and local government—is that one is still talking about planned activities, and one of the most important features of cities is that they rise in an incoherent and frequently unpredictable way.
  The element that local authorities have most difficulty in facing is that of risk. It is not the risk of the person who is doing the undertaking but the risk of reaction that this or that will fail or that a particular enterprise will cause a nuisance. The whole problem of risk, of allowing individuals and individual companies to do something that they had not conceived and that is not in the plan, is a most important element in the regeneration of cities.

  1491
  My second point is that the whole matter of the lack of attractiveness of areas is self-perpetuating. I warmly congratulate the Minister on the new improvement grant regulations. I think that they will be a considerable help. One of the features of the whole improvement grant business illustrates the problems of inner city regeneration. The hon. Member for York was talking about the problem of "gentrification". What he omitted to say was that it was not merely that the money was spent on the houses, but that as the people in them changed, many social problems moved out of those houses as well, so the comparison is not exact.
  As I have said, the problems are intertwined. One can spend money on houses, but if one is in an area in which vandalism is rife and in which the police foot patrols have gone, one finds that these matters are interrelated and that it is difficult to separate them. The conclusion that one has to arrive at is that with each of these changes one must try to devise a system that will bring the situation closer to the point at which individuals can see that there is opportunity for themselves to develop their own interests.
  It is very difficult to summarise, but there seem to me to be three main priorities. First, it is very important that the place should become more physically attractive. I have made that point and I have referred to housing improvement. Secondly, it is most important for there to be a sense of order and safety. That cannot be over-emphasised. It is not simply a question of having more foot patrol policemen and less vandalism and people being able to go safely at night. It is also a question, for example, of considering the educational policy of inner cities and the fact that it is very important that people who are being trained in schools that are dealing with seriously deprived children should be able to do the basics very well.
  A great deal of experimental work, which it has been very difficult to do, has been concentrated in these areas and has produced some very bad effects. The net effect is that people who started in a bad condition have had their condition worsened, because education has been too difficult to apply. We have to try to apply higher standards and to provide
  1492
  more order and greater safety in these areas.
  There is obviously a great need for resources and for State aid. I wish the partnerships well, although I think they will have considerable trouble. We tend to create structures and we have the most enormous difficulty in getting the money to go down the channel. I beg the Minister not to create another situation in which we have more bodies overseeing more bodies. The end point of the exercise is that whatever pound notes we have available should go to somebody who is actually doing something on the ground rather than to somebody who is supervising somebody else who is doing something on the ground.
  8.56 p.m.
  Mr. Hal Miller: I hope that the Minister was listening to my hon. Friend the Member for Manchester, Withington (Mr. Silvester) and will accept from him and from the hon. Member for York (Mr. Lyon), that the problem of the inner cities is not solely within the compass of his Department and that what he has taken over from the Home Office is something very much more complex than the Secretary of State led us to imagine this afternoon in his response to the speech of my hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre).
  There was very little recognition in the Secretary of State's speech that the problem of the cities had anything to do with people. All he treated us to was a long catalogue of extra expenditure on bricks and various forms of the construction programme. The Secretary of State must recognise that a change of attitude is required and that we are concerned here with all aspects of life in cities.
  The only aspect with which I have time to deal is that of employment. My hon. Friend the Member for Hall Green has pointed out in his excellent pamphlet that
  "urban decay is a complex social and economic blight which hits parts of towns and cities for many reasons, but at the heart of the problem is a decline in job opportunities, and particularly jobs in manufacturing industry."
  We should recall at this stage that jobs in manufacturing industry have fallen by about 600,000 in the past three years. We can perhaps consider the job market under the heading of opportunity, training and

  1493
  incentive. It is not just a question of bringing in new opportunities by grants, by advance factories, by rent subsidies and all the other things, because they are in fact draining industry from other areas such as the West Midlands, leading to a decline in industry and an ageing industry structure. What happens is that the new industries go to another part of the country and the West Midlands is left with declining industry just as the North-East has been left with shipbuilding and the North-West with the textile industry. We need, therefore, to re-examine very carefully the basis of regional industrial policy.
  The industries in the inner city areas have been very largely bulldozed away. Where they have not been bulldozed physically, they have been bulldozed by taxation and by other forms of Government legislation. But, despite that, there are opportunities available.
  In the June survey of the Birmingham Chamber of Commerce and Industry, of those members responding—20 per cent.—who had increased their labour force recently 97 per cent. found it very difficult to get any skilled labour at all and 41 per cent. found it very difficult to get unskilled labour. The relative figures for the whole of the West Midlands conurbation were 77 per cent. and 32 per cent. This is in an area where adult male unemployment is running at 9 per cent., so it is not just a question of there being no opportunities, for there are. It is attitudes that we have to tackle.
  Last week I gave a lift to a young gentleman from Liverpool who told me that he had had to go south to seek work. He said that his friends stayed behind living on the "box" and were satisfied to live on the "box". He could not understand their mentality. Nothing would shift them. This is a major problem. We have to change this attitude and get back to the idea and custom of working, as the hon. Member for Bootle (Mr. Mahon) said in a thoughtful speech earlier in the debate. There is an opportunity for work, but it is much better if one is trained.
  The Government's training programmes have fallen to complete disarray, with a division of responsibilities between the Department of Education and Science and the Department of Employment that has effectively sabotaged the prospects of
  1494
  getting skilled training to our school leavers. Something must be done about it. Whether the Department of the Environment is in a better position than the Home Office to secure improvement is something that we shall examine carefully. It is an important matter.
  Finally, there is the question of incentive. People are confused by the divisions of Government policy, by the extent of burreaucracy and by the vast amount of taxation on earnings so that there is little incentive to take work in many occupations. They cannot see the drift of Government policy. What hope is there of changing their attitude under such a regime? The Employment Protection Act is another example—supposedly to protect jobs, it has actually led to a loss of them. In my constituency, a small workshop employing six people has been forced to close because of the provisions of the Act, thus adding to the unemployment.
  The Government must clarify their purposes and aims, provide incentives and training, and change people's attitudes so that they can take advantage of the opportunities still available.
  9.2 p.m.
  Mr. Geoffrey Finsberg: My hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre) set the tone of the debate when he spoke of the need to create wealth and said that it was the key to any solution. He is right. Without resources, it is impossible to try to alleviate many of the problems of our big cities.
  Both my hon. Friend and the Secretary of State referred to office development permits. Many of us on both sides of the House believe that the time has passed when such permits can do positive good. Indeed, they may be doing positive harm. I am not sure that the changes in the functions of the Location of Offices Bureau go far enough, because the Bureau is still permitted to encourage jobs to move out of central London, and I do not believe that that can be right.
  I want to deal in some detail with what the Secretary of State said. He claimed that he had been responsible for a set change in our inner city policies. I do not wish to deny him appropriate credit for spearheading some fresh ideas. They were very welcome, and anyone trying to

  1495
  bring common sense out of the inner city mess that both sides agree exists deserves credit. I gladly pay tribute to the right hon. Gentleman.
  I welcome the new improvement grant limits and the increase in the rateable value limits. We were pressing for this as long ago as 1974, when the Housing Act was going through the House. But even at that time everyone admitted that the figures were not right. I agree that what we have seen of the new proposals amounts to indexation. I hope that the Minister in reply will tell us the date when it is expected that the increases will come into effect.
  I welcome the meetings on transport for dockland announced by the right hon. Gentleman so that the problems can be looked at as one whole, in the light both of the London rail study and of the many other studies being done in that area. The right hon. Gentleman made much of the construction package, but it is right to put on record now that the Government have already disallowed 40 per cent. of the package submitted by the Docklands Joint Committee. The local authorities were not particularly happy about that. The Government's decision does not indicate very much confidence in what the local authorities and the joint committee put up—after all, the local authorities were all at the time Labour-controlled.
  The hon. Member for Hackney, South and Shoreditch (Mr. Brown) floated one of the hoary old canards that he brings up from time to time—that the outer London boroughs had not played their part. That is a false statement. It is well documented that in many cases nominations offered by outer London boroughs to inner London boroughs and the GLC were not fully taken up. Those facts are on record and cannot be gainsaid.
  The Secretary of State then tried to deny that many of the problems that my hon. Friend the Member for Hall Green spoke about in the inner cities were the legacy of long years of Labour rule. These are facts, and one cannot get away from them. But he was unhappy when he was challenged on it. He must not expect to have his assertions accepted without analysis. One could go on to say that in nine out of the last 13 years there has been a Labour Government. But before he came in, I paid tribute to the sea
  1496
  change. So I would acquit him of dilatoriness because he has not been long in his job.
  He then threw two questions to the Opposition. He asked whether we sup- ported the idea of the Greater London Council to concentrate its new building only on inner London. My answer is very simple. It is "Yes". That policy is based upon an election programme, an election manifesto backed by the voters of London. I could imagine the cries from Labour Members if we broke those promises at this stage. The policy was very nearly endorsed by the voters of the Secretary of State's constituency.
  The Secretary of State then asked about the mobility of council tenants. I believe that the mobility of council tenants can be enhanced only in two ways. The first is by a relaxation in rent control along the lines of my hon. Friend's suggestion of shortholds. The second is by allowing council tenants of flats or houses to own their properties so that they will have an asset if they want to move to another part of the country. This seems to be right, and should not be discouraged.
  The hon. Member for Salford, East (Mr. Allaun) expressed amazement that people might want to obtain the lease on an 18th-floor flat. Many people would like the opportunity of buying a long lease on a flat in a high block. But the hon. Member for Salford, East said that people would never be able to live in houses with gardens and enjoy the quiet with their children. They would certainly not be able to do so under the policies that the hon. Member supports. Why should council tenants be the only people not permitted to buy their own homes and pass them on to their children? One can never get this point home to the Labour Party. Yet the Labour Party knows full well that right across the country they lost votes on this issue at municipal elections this year and last year.
  My hon. Friend the Member for Cardiff, North (Mr. Grist) raised the important point of small shops being driven out and of the need for more chemists' shops. I hope that the negotiations on the costs of pharmacists will soon be successfully concluded. If not we shall all be landed with even more problems in our constituencies.

  1497
  My hon. Friend the Member for Cardiff, North said that all who have spent time in local government recognise that when one is planning a large council estate there is massive pressure from the officers for the completion of the housing units first. Yet in many cases problems have arisen because the housing estate when occupied is not balanced. It may not have a community centre. More balance is needed. I hope that the Secretary of State will try to persuade local authorities to look further at this.
  My hon. Friend made a vital point about citizenship carrying duties and responsibilities and not just rights. I wish that more people would remember that. That was the keynote of the speech of the hon. Member for Bootle (Mr. Mahon), who put his finger on the major point. We in this House all too often denigrate ourselves, as if the media did not already do a major hatchet job. We do not very often hear of the misdemeanours of journalists and reporters, nor of newspaper editors. It would be nice to see some of those people exposed in the national Press, but that does not happen.
  The hon. Member for Bootle then asked when the Labour Party had put the interest of the State before that of the individual. He never would, but the new breed of Socialist intellectual does. That is why Britain is turning away from the Labour Party. The new breed no longer reflects the fine old-fashioned virtues displayed by the hon. Member for Bootle. I am sorry that more of the hon. Gentleman's Left-wing colleagues were not present to hear his common sense remarks on the nonsense and stupidity of strikes.
  The hon. Member for Isle of Wight (Mr. Ross) spoke of the need to get institutions to take an active part in housing. I agree. However, they will come in only if there is long-term security for their investment. I noted the hon. Member's continued support for the Community Land Act which was a major piece of Socialism, and that shows why he endorses the Lib-Lab pact.
  My hon. Friend the Member for Harrow, Central (Mr. Grant) did the House a great service in stressing that the problems of the cities could not be solved by money alone but that attitudes had a major part to play. He said that
  1498
  office development permits should be scrapped.
  The hon. Member for Stoke-on-Trent, North (Mr. Forrester) questioned the partnership arrangements. He said that the limitations were no consolation to other areas which had similar problems. Knowing a little about Stoke, I can understand his feelings. There are parts of Stoke that have major problems. I hope that some of them will be sympathetically examined by the Secretary of State.
  My hon. Friend the Member for St. Marylebone (Mr. Baker) spoke of the thriving and vigorous areas of London and the other cities which were faced with decline. He spoke of the hundreds of acres that are dead in Stepney and of similar areas that are dead in Lambeth. Until those areas are built upon, it is a bit much to say that the outer London boroughs should contribute even more when their own nomination offers have not yet been fully taken up. Without a revival of the economic life of the cities there is no hope of solving many of our social problems.
  I do not know about Clerkenwell workshop scheme, but it sounds a first-class idea. I should like to see it and I hope that it will be emulated not only in other parts of London but in the rest of the country. The solutions to problems in inner Birmingham, where there used to be hundreds of small workshops in the jewellery quarter which were replaced by the flatted factories, have not given the satisfaction that the planners had expected.
  The hon. Member for York (Mr. Lyon) said that Socialism was the language of priorities and that the middle and outer areas should give up resources to the inner areas. He seems to have forgotten that one cannot make the poor rich by making the rich poor. In his dogmatic assertions on immigration he forgot to remind the House that the last Labour Party Conference wanted to repeal all immigration laws. That would mean unrestricted entry. We on the Conservative side are utterly opposed to that, and that needs to be put on the record.
  Mr. Alexander W. Lyon: If it needs to be put on the record, let us put it on the record correctly. The motion did not say what the hon. Member claims. I

  1499
  supported the motion, but I do not support the abolition of all immigration controls. If the hon. Member reads the motion carefully he will see that it accords with my view. If he reads the speeches made in the support of the motion he will see that everyone made the same point.
  Mr. Finsberg: The motion called for the abolition of particular Acts. The contents of the speeches are not relevant. Only the motion is relevant. All impartial observers at the time made it clear that the Labour Party had followed the Liberal Party in calling for the abolition of immigration restrictions. I am content to rest on that point.
  Mr. Alexander W. Lyon: The mere fact that nonsense is repeated does not make it anything but nonsense. Nobody who supported that motion ever supported it in terms of abolishing all immigration control. They said that the 1971 Act should be repealed. But no one indicated that it should not be replaced by another Act involving a measure of immigration control. They simply said that the 1971 Act should go.
  Mr. Finsberg: I am content to rest on the fact that at its last conference the Labour Party called for the abolition of all immigration controls. The wording of the motion referred to the abolition of the 1971 Act. If one were to read the turgid speeches made on the motion or the 21-minute speech by the hon. Member for York one might find that different things were said. However, the wording of the motion is clear and I am content to base my argument on that wording.
  My hon. Friend the Member for Liverpool, Wavertree (Mr. Steen) gave us a realistic approach. He reminded us that cities are people and urged us not to be despondent. That is extremely important. All too often politicians on both sides of the divide forget about individuals. If nothing else, this debate has brought out the fact that people are what make up the cities.
  All I can say about the speech of the hon. Member for Liverpool, Garston (Mr. Loyden) is that he failed to comprehend the feelings that lay behind the debate. I firmly assert that voluntary bodies can do more per pound of expenditure than
  1500
  any local authority. Over and over again I would back them to the hilt.
  My hon. Friend the Member for Manchester, Withington (Mr. Silvester) highlighted the problem of transfers and the folly of allowing planning policies designed years ago to affect individuals' lives so that people are treated as mere numbers on housing lists. I make that criticism of local authorities of all political colours.
  At the moment the Minister is drawing up a document on transfers. I believe that one of the most important things which should be put right is the system of transfers. It causes more headaches among council tenants than virtually anything else. I hope that the Minister's document will throw some light on this subject.
  My hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) spoke about the need for training and incentives if we are to get over the problem of unemployment.
  This has proved a valuable debate. Mostly it has been free of political rancour. It shows the value of using a Supply Day to debate these wider issues rather than set pieces when the Press are saying "The Government may win by just two votes". Such a Supply Day produces a full Chamber and all too often the same old clichés are thrown from side to side. However, while this sort of Supply Day has a much smaller attendance, those hon. Members present have been interested and have made substantial contributions to the debate.
  There are perhaps three specific topics to mention—housing, employment and transport. I first quote from the latest report of the Housing Corporation. But before I do, I pay a warm tribute to Lord Goodman, who has now retired as chairman of the Housing Corporation. He is the sort of man who usually exists only in books. He is a man who apparently works 22 hours a day. Whatever he does, he does well. The country owes him a deep debt of gratitude. He is one of the finest types of public servant who come forward and chair the most difficult committees. I would pay my warm tribute to the work that he has done.
  The Housing Corporation is now chaired by another old friend of mine

  1501
  across the political divide, Lou Sherman. This year's annual report of the Corporation states:
  "It is heartening to note the energy and dedication with which associations have risen to the challenge of assisting those trapped in the rising tide of urban decay and housing squalor. By now over 33,000 homes are being or have been improved and the Corporation intends to support a further 14,000 to be rehabilitated in this year alone in the major cities and towns of Britain.
  Associations are now the major agents of urban renewal in many of the worst inner city areas. Their small scale and local base impart an essential degree of flexibility which enables them successfully to cope with the dual tasks of improving physical housing conditions with minimum disruption to the resident whilst at the same time preserving the character and stability of the community."
  That is the most important sentence—
  "the character and stability of the community".
  Firms are driven out of major cities and we lose jobs. There are many reasons. One of them is clearly the shrinking rate base, which is a cause of great concern. I give one example of figures for central London, but I am certain that they could be repeated for most major cities. In April 1972 the rates per square foot in central London were £1·91. In April 1977, they were £8·78. The open market rent per square foot was £13 in April 1972. In April 1977, it was£13·50. The percentage of rates to rent in April 1972 was 14·7. In April 1977, it was 65.
  It is not surprising that firms, large and small, wonder whether it is worth staying. If they have responded to the blandishments of the LOB and gone out, their move has taken away jobs from our constituencies, and we shall not be thanked for that. Yet this is one of the major reasons—the shrinking rate base and the vast increase that we see in rates. I hope that something can be done about this in the Government's White Paper and and in the response, when it comes, from the local authorities.
  I support the increased effort by the Housing Corporation and by housing associations. I support the experiment which the GLC is making in its homesteading scheme to bring into use many of the derelict and semi-derelict houses which local authorities own up and down the country, get them into use, offer them to people, let them put them in order and
  1502
  then let them buy the homes into which they have put their effort. I support the experiment fully, and I suggest that it can be done in many other places.
  Unemployment is the third topic about which there is a great deal of worry—about youth unemployment especially. I recall that, when we debated youth unemployment, Liberal Members sat on their posteriors and did not even bother to vote. Tonight, they have flitted in and out of the Chamber, but they have not contributed very much.
  Male resident unemployment rates in inner London have been higher than in the rest of the United Kingdom consistently since October 1975. This is a worrying state of affairs and, again, if we do not regenerate the inner cities, we shall find more and more people leaving inner London and central London and it will become more and more of a decaying desert. I cannot believe that that is right.
  Over the past two years, we have seen published a valuable series of discussion pamphlets. The latest is the one by my hon. Friend the Member for Hall Green, "Hope for our towns and cities". There was the pamphlet by my hon. Friend the Member for St. Marylebone, "Maybe it's because we're Londoners". We have had also the excellent Department of the Environment inner area studies, the latest of which has come out today on employment in Liverpool. I commend them. They were commissioned by my right hon. Friend the Member for Worcester (Mr. Walker). They have come to fruition, and they are invaluable.
  One paragraph in the document dealing with Liverpool summarises the position:
  "The total approach at the local level must in the end be a compromise between the possibly conflicting aims of central control and local autonomy, to be arrived at through a process of negotiation between the interested parties."
  That is perhaps a summing up of the partnership system about which the Secretary of State spoke. The paragraph goes on:
  "It may well vary in different cities. But in the end, achieving a total approach will depend not on the institutional arrangements nor even on the level of resources allotted to inner areas. The motivating forces will lie in the strength of political commitment to the aims of inner area policy and the degree to which administrative practices are capable of being

  1503
  adapted to the requirements of a total approach."
  I am bound to say that I am not yet convinced that in all our major cities that will be done. Many of them will be frightened and daunted by the task. I hope that I am wrong, but I should like to have more confidence, especially in some of the elected representatives on both sides who may find the task much greater than they envisaged when they stood for election.
  As I said, the debate has been constructive, basically free from political nonsense. We are all trying to avoid our inner cities finally decaying and becoming all too like the hearts of New York and Washington. We had those object lessons long before last week's blackout. Anyone who has wandered round Washington and New York and looked behind their lovely facades knows what exists It is the same as that which exists behind the facades of Rome and Naples, or any other major city. We want to avoid this happening in a permanent way to our major cities.
  In the end, it is the citizens of our large towns and cities who will look to us, the politicians, their elected representatives, to show the way. I think that they will follow a constructive and courageous lead. But they want to feel that we understand. I hope that some of them have been listening to the debate or will read it in Hansard, and I hope that they will feel that some effort has been made to understand their problems. But do we know the feelings of the battered publican or the bus driver who is roughed up on a Friday night in the Kilburn High Road, whether on the Brent or the Camden side, or the overworked and overstretched police force, or old people who are terrified to walk out at night or in many cases—as we know from canvassing—are terrified to open their chained front doors in tower blocks or elsewhere?
  Do we know the feelings of those who have been on housing waiting lists and see rehabilitation and redevelopment schemes held up by irresponsible squatters who do not realise that by sitting tight they may be delaying the housing opportunities of many thousands of people? Squatters cause major extra costs because of the vandalism that they do and the
  1504
  filth and squalor that so many of them leave behind them. This cuts right across party politics.
  Do we know the feelings of people who come to our surgeries and ask us what we are doing to stop the squatters jumping the housing queues when they have been waiting for ten years or more? Do we know the feelings of the unemployed for whom the three-day week is now no longer a political gibe but a target that in many cases seems unattainable? Do we know the feelings of those who are trying to use vandalised telephones in an emergency?
  Many hon. Members have spoken about the loss of interest that leads to vandalism and to a worsening situation for the whole community, but I think that it is much more real than that. How often do we walk into a block of flats in our own constituency and literally have to wade through pools of urine in the passenger lifts in council flats? Many people will not co-operate. As my hon. Friend the Member for Cardiff, North said, when a culprit is found people will not go into the juvenile court to say "Yes, he was the one who did it." That is where the obligation of the citizen comes in.
  I appeal to people to realise that they themselves should begin to make an effort to put their own conditions right. Do we know the feelings of those on our waiting lists who feel that they are not getting a fair crack of the whip because people are being rehoused ahead of them who have come from outside their towns and cities?
  I am conscious that much of the debate has been long on problems and short on answers. It has been a repetition of many debates that we have had. What is clear is that continued failure to solve this problem swiftly will give an added impetus to the National Front and the Communist Party, who are the twin enemies of democracy. They will say to people "The old parties of the establishment have let you down. Try us—we are the bright new hope for the future." People will not realise that behind the glossy facade lie the jackboot of Naziism or the slave labour camps of Communism. There is no difference between them. We run the risk of disillusioned people turning to them.
  We have to ensure, finally, that our civil servants and local officials refine the

  1505
  problems into a series of options based on what we have said, and it is then the responsibility of the elected representatives of the town hall, county hall and Parliament. We cannot shrug off that responsibility. We must not fail, because the price of failure is far too terrible to contemplate.
  9.30 p.m.
  The Minister for Housing and Construction (Mr. Reginald Freeson): Before turning to the main theme of my remarks I should like to pick up two or three specific observations that have been made in the debate. I think that only one of them may raise political hackles. I shall then proceed to discuss the general subjects that have been the subject of the debate.
  The hon. Member for Hampstead (Mr. Finsberg) asked my right hon. Friend at the beginning of the debate when we should be introducing the changes in the limits for private sector improvement grants. The answer is that we intend to lay the order making the increases before the House rises for the Summer Recess. The increases will come into effect 21 days after the date on which the order is laid. I have no specific date for its being laid. There are still internal consultations within the Government to sort out. However, that is our intention.
  I gather that during my short absence from the Chamber the hon. Member for Liverpool, Wavertree (Mr. Steen) asked why reports on action projects carried out by the community development teams had not been published. I understand that many reports have been published. For the record—the hon. Gentleman is not in his place—I should point out that this is a matter essentially for my right hon. Friend the Home Secretary under whose Department the CDPs were sponsored.
  I turn now to some of the points that were made about London housing in order, as it were, to discuss and express a view on the situation and then to proceed with the generality of my theme. I do not want to get too involved in this matter. Both my right hon. Friend and the hon. Member for Hampstead discussed this matter at some length and there were interventions expressing concern about certain aspects of the present and prospective situation. Therefore, I feel that I
  1506
  must deal with it to some extent. I shall home in on one particular aspect—the programme—but not on other matters, such as the transfer of estates.
  As I understand it, the immediate effects of the Greater London Council's decision to stop new building in outer London, which was announced recently and which I gather has been endorsed by the hon. Member for Hampstead, will be to reduce its programme this year by nearly half, from 5,500 dwellings to be started to about 3,000. That means that the total local authority programme of about 20,000 dwellings in London will be reduced by between 10 per cent. and 15 per cent. during the year.
  In my view, to impose such a sudden reduction seems to disregard the housing needs of Londoners as a whole and, indeed, the state of the construction industry. A sudden, massive cancellation of programmed work such as this is bound to result in waste. I am not trying to make a party point. It is inevitable that, as the Minister responsible, I cannot be indifferent to the waste of precious resources in housing at a time when we are under constraint generally. If the GLC insists on withdrawing from this part of what I should describe as its strategic role, I trust that as a matter of urgency it will ensure that its housing sites in outer boroughs are not left idle but are made available immediately to borough councils and housing associations that are willing and able to build housing quickly. I invite any public sector agency, whether in inner or outer London, wishing to take over such sites from the strategic authority to fill the gap that is being left to approach my Department for the necessary public expenditure provision.
  In considering the allocation of resources for future years under the housing investment programme arrangements that we have recently announced, we shall be seeking to ensure that, taking all the London authorities together, there is a proper balance between the inner and outer areas. I believe that to be essential whatever views there may be from time to time about changing emphases in one direction or another.
  There is one last point on which 1 should touch now in case I do not have time to deal with it later. A number of hon. Members expressed anxiety about

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  our intentions regarding non-partnership authorities, which will inevitably be on a limited list basis. I am turning now to the main theme of the debate. We have indicated our intentions in fairly broad terms in the White Paper. The programme of partnerships that we shall announce later in the year, after the present round of extensive consultations with a whole range of local authorities has been completed, should, as the Secretary of State said earlier, be seen as a major start in a campaign and policy in this area. We shall develop this and seek to apply the lessons and experience that we shall gain from the partnership areas to other areas with problems that may, as hon. Members have said, be just as intense as those in the selected partnership areas, although not on as large a scale as in the areas that we are seeking to identify as a basis for selection. This should not be seen as a once-and-for-all exercise. It should not be thought that after the list has been published no further efforts will be made for other authorities.
  I now turn to the main theme of the debate. Although the debate has been wide-ranging, a central theme has been the Government's intentions as outlined in the White Paper, "Policy for the inner cities", and in other publications. A pamphlet has been produced by the Opposition and other papers have been published in this connection as well as the studies that have been referred to.
  This has been a quiet debate and, in many respects, all the better for that. It has had a small attendance. I believe, as the hon. Member for Hampstead has clearly indicated, that, second only to Britain's economic revival, urban renewal in the sense that we have been discussing it today is our biggest and most important challenge. The matter therefore warrants more concern and attention than it has yet received.
  Long before I entered the House I pressed this as a central issue of politics. I am glad to see that during my term as an hon. Member and a member of the Government the day has arrived at long last—and it is long overdue—when urban renewal has become widely defined and has come to the centre of politics. It is no longer on the periphery. If nothing else, that is a major step forward.
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  We must keep the matter there and I hope that the media will do so as well.
  There is a long, hard haul ahead, but we must think positively. There are many things going for us as well as many problems to be resolved. There is no doubt that the hearts of our cities are threatened with economic and physical decay and loss of community, in a moral as well as a physical sense.
  During the past decade there has been a variety of initiatives on housing and special need. There were the housing priority areas during the latter days of the last Labour Government. Now there are housing stress areas. There is the urban aid programme. There are general improvement areas and housing action areas, and there have been the inner area studies and other research on connected projects by central and local Government and other institutions. The time is long overdue for us to draw these efforts together. Central and local Government must organise more effectively to deal with the problems of decay and obsolescence.
  Large parts of our cities are in a mess and we must act more directly, consistently and comprehensively to make them worth living in. Otherwise the problems will be as bad in 10 years' time as they are today. New methods are needed to tackle priority areas in a comprehensive and continuing programme of action on housing, education, employment, environment, community services and planning. It will need close co-ordination and integration of national and local government policies and executive action.
  It is difficult for people outside local or national Government to realise how hard it is to achieve administrative cohesion between one department and another. That should have been attempted in 1972 and earlier when the inner area studies were started, and that must still be achieved today.
  The local government and Government framework for the Liverpool, Lambeth and Small Heath pilot area studies, for which I have been responsible since 1974, should have been interdepartmental from the start and should have provided for study, analysis and implementation of developing comprehensive programmes broadly along the lines of the CCP. This

  1509
  is no criticism of the inner area study reports, but a questioning of the setting within which the consultants had to work. Certainly deeper understanding of the problems of inner urban areas was needed, and the study reports have given us that.
  By the late 1960s or the early 1970s it was surely already clear that the chief practical obstacles to advance in these areas was compartmental and fragmented Government and local government policies, programmes and budgets. But we did not need research to tell us that. For example, some of us concluded over a decade ago that the methods of developing new and expanded towns—I do not mean the organisations—needed to be adapted and applied to the problem of urban renewal. That has been the theme of many representations, papers, pamphlets and reports over many years now. This kind of approach might in time need big legislative, organisational and financial changes in Government at all levels, but we should not await these.
  That is what the Cabinet Committee on Urban Policies, which the Prime Minister set up last autumn, was all about. It comprised Ministers from every relevant Department under the chairmanship of my right hon. Friend. For the very first time Government—and I mean Government at ministerial level—looked at inner urban problems as a whole. The committee's immediate task was not to prepare some long-term grand design but to seek practical ways in which to act now: the more major reforms can come later. This interdepartmental approach was itself a major and, I hope, decisive step forward. At least, as I have said, urban renewal has come from the periphery to the centre of politics.
  The studies I have referred to have played their part in this change. As chairman of all the three steering committees for several years, I encouraged them to go far beyond their original departmental brief, to probe links between policy areas which they investigated, to consider the machinery of local and national Government and particularly to probe that area which has been spoken of by practically everyone who has taken part in the debate—the economic background to our inner urban problems.
  Society as a whole may only lately have come to perceive the scale of urban prob-
  1510
  lems, but it has been there in one form or another for generations. In the postwar years, for example, city dwellers in the inner areas faced appalling problems of bad housing, ill-health and environmental pollution—an inheritance from decades and generations past. The general situation in these areas has worsened in recent years relative to the suburban areas in many ways that have now come to light. Much has been done in the past 30 years that we should not denigrate to tackle overcrowding, slum clearance and pollution. Much has been done in rehousing and in planned developments.
  Hundreds of thousands of people have been able to move into new homes and better environments and the worst problems of congestion have been overcome in most of our larger cities. There have been important achievements and there have also been mistakes. It is important that we learn from them. The policies that have encouraged the dispersal of population have also had their impact on the biggest single problem now faced by inner city areas—the decline in the employment base—which has been referred to so often today.
  The industrial structure of the whole economy has been changing and, as traditional industries have declined, structural difficulties have emerged, especially in the assisted areas. Many small towns have been affected by changes in the coal, steel or textile industry. The problems of high unemployment and job loss are greatest in the inner parts of our biggest conurbations where the contraction of old industries has often been exacerbated by a drastic run-down in service industries such as the docks and the railways. The problem has also been exacerbated by the movement of firms to outer areas, causing the death of many small firms. This has been due to the kind of redevelopment and planning policies mentioned in the debate.
  In some instances this sort of redevelop. ment—much of it unavoidable in clearing the bad conditions of the past—has inadvertently hastened the decline of industry and commerce in the areas concerned. The way in which re-development has been carried out, involving high densities, inadequate choice of tenure and the disruption of communities, has encouraged some to move outward at a

  1511
  far greater rate and in much larger numbers than was foreseen.
  The hon. Member for Harrow, Central (Mr. Grant) spoke about high-rise flats, and his comments were endorsed by other hon. Members. I agree entirely with what has been said about high-rise buildings. We can be pleased that in the past three years to four years the percentage of high rise developments coming into local authority programmes has fallen from 22 per cent. to 2 per cent. That is a major achievement.
  There is now pressure against even medium-rise flats. I have been involved personally in doing my best to that end. We want houses that can be built at reasonable densities and that will provide much better conditions than in the past. No one has to exhort us any longer not to build high-rise flats. They are no longer being built for families. That building has been stopped.
  The bulk of the migration to which these matters relate has been spontaneous. It has not been the result of public policy. It has brought benefits to industries and many young families, who have been able to move out of crowded centres. It is the old, the poor and the less skilled who have been left behind to face the problems of the inner areas. Many others live among them who lead normal productive lives. I am one of them. I have stayed in the London area and it is my concern to ensure that it is an area worth living in for my children when their time comes, as well as for the poor.
  In some instances new immigrants have arrived. As immigrants have always done, they have gone to the inner parts of the large cities. Too many of them have been caught in the cycle of few jobs, low pay and poor housing. However, there are positive aspects, as has been made clear in the inner area study at Small Heath. There are positive aspects to immigration, whether it is internal or from abroad, in such areas as Small Heath. Immigration produces positive results as well as problems and exaggerated reactions.
  It is not a new phenomenon. There has been immigration in past generations to the East End of London. It has happened over hundreds of years in many
  1512
  parts of the country. Let us not accentuate the negative. There is plenty on the positive side.
  Nevertheless, immigrants have become involved in the inner city areas at a time of sharpening decline. As they are immigrants they have produced a greater than normal number of young people of child-bearing age with young families. This has happened at the very time when job opportunities have been declining even more rapidly in the inner city areas than elsewhere. That was not the position in generations past for other forms of immigration. It is in areas of the large cities that we find the most complex and concentrated problems of urban life.
  The inner area studies have clearly shown the formidable combination of fewer jobs, decaying houses, a grubby environment and inadequate social services. In some areas there is increasing alienation from government. That is not a surprising result, although I believe that it runs much deeper in society than merely a question of government-social relationships.
  Collective deprivation affects not only the substantial minorities of deprived individuals but all the inhabitants of the inner areas of our larger cities. Even those leading productive and even affluent ordinary lives—they are the majority in these areas—are affected by the physical environment, but, more importantly, they are affected by the social environment in which their children are growing up.
  Many of us are rightly concerned about the increasing crime and vandalism that has been referred to at length, and rightly so. As has been rightly said, the increasing crime and violence, potential or real, in the inner city areas and elsewhere is a form of deprivation. Many old people are too frightened to go out at night, even if their fears are seen to be exaggerated when we examine the objective facts. However, their fears are real enough.
  Many studies have been written and will be written about the causes of vandalism and violence, but those are not matters to be debated today. Perhaps they are suitable issues for another separate debate. At this stage I should like to do something about the social environment, the job prospects and the

  1513
  expectations for young people. If we can find ways of improving these and ending the feelings of alienation, the crime rates will go down and there will be less vandalism and violence, particularly if we can do this by small methods within the big. We must learn to govern society by the means of "small within the big". There is a general theme here which applies to local government, industry and social relationships.
  There has been a view expressed that we should not bother with the inner cities and that we should allow a hygienic rundown. It has been suggested that this could be brought about by having a controlled rather than a haphazard rundown. The Government do not accept that. We cannot do so, because we have a social responsibility to millions of people who live in these areas. We cannot ignore their plight, even for selfish reasons. If we do ignore them there will be an increase in social tension, and escalating crime and violence, with the resulting deterioration spreading throughout and beyond the cities.
  The priority that we intend to give to the inner cities does not mean that we are abandoning other aspects of our policy. Some cities which need help most urgently are in assisted areas. New employment sent to those areas must have the right conditions for growth. But we must continue to recognise the regions' priorities.
  We have accepted the need to relax the constraints on industrial development in London. That does not mean that we are going back on our regional policy. It simply means that London itself is a region and parts of London face difficult problems of unemployment. It demonstrates our intention to be more discriminating in our approach and to fine tune our policies to the needs of people in local areas. In this way we should get a better return from our scarce resources.
  Mr. Grist: Would the Minister give us a little guidance? He keeps talking about inner areas but in many cities there are serious problems associated with large estates which have been built near the fringes decanting people from the old centres. These are showing all the hallmarks of the problems of the inner cities—unemployment and vandal-
  1514
  ism. If aid is available, will the Minister ensure that the civil servants do not categorise these areas because they are not in the inner areas?
  Mr. Freeson: It is not a civil servant who is standing at this Box; it is I. I accept what the hon. Member says. Earlier I said that I would not have time to deal with general urban policy in detail, but this is not out of our mind. We are concentrating on partnership schemes as our main theme at present. I accept entirely what the hon. Member has said about these estates and there is evidence of a more subtle kind that some of these problems have been emerging in the United States in suburbia as well. That could happen here also among owner-occupiers in the suburbs. We recognise this and we shall not exclude it from our policy considerations.
  A number of hon. Members asked whether local government would be able to find the resources itself. The tone in which this was said implied a challenge that this was wrong. It is not wrong It is a question of local government and national Government, because 60 per cent, of local government spending is directed by Exchequer grants anyway. Capital programmes initiated by local authorities are approved by central Government under the various capital loan procedures. So we are speaking of national and local authorities here. A total of £12,000 million to £13,000 million a year is spent in local government today. About £5,500 millions of that is spent in large urban areas and it is within that scope—and it is pretty considerable—that there is a local potential to redirect policies and objectives. This is an essential element, as has been shown in the work which has been done, particularly in Liverpool.
  My hon. Friend the Member for York (Mr. Lyon) referred to work done in regard to CPPs. In the Liverpool study it was called area resource analysis. I call it simply profile budgeting. The methods are being studied to see where the money is being spent as distinct from where we think it is being spent and on that basis we seek to adjust it to where we want it applied.
  The potential is there. Huge resources are already going in. The fine use of resources will be achieved by means of Government provision or local authority

  1515
  provision, but generally through the partnership arrangements.
  I do not have time to go into great detail about the form of the partnership arrangements and it might not be appropriate when we are in the middle of consulting the local authorities that we shall invite to participate. The results will be seen later this year, but the broad idea is that there will be a partnership committee consisting of representatives of local authorities, Government Departments and agencies. The precise form is being discussed.
  There will be a steering group, the policy body, under which there will be a partnership team comprising officials of the local authorities concerned with an input from appropriate Government Departments. Where that is not always required there will be a relationship with some official interdepartmental arrangement, which we shall seek to devolve. It will be based not with us in the centre but in our regional offices.
  There is more detail than that, even at this stage, but I cannot go into it now. In any case, we have yet to finalise the arrangements. They will be practical. We are not trying to create a grand design. Those concerned will learn as they proceed. Their programmes, on the basis of the best possible analysis, will be reshaped and changed as they learn. There will be many pressures from many interests, but the idea is to get the interested parties—those with the executive responsibility, who influence policy and who have the data available—coming together in machinery rather than operating just by means of letters and the telephone. They will work together to formulate joint policies.
  Mr. Eyre: Will the Minister assure the House that in those administrative
  1516
  arrangements the urgent question of high land values, which is of tremendous consequence in dealing with these problems, will not be neglected?
  Mr. Freeson: There are many contradictory views here, but I would take it further and say that the whole question of land management in urban areas needs to be considered. However, if we are to start anywhere, it is most important to start in the inner areas. I will not name names, but there are some inner areas—which we hope will become part of the partnership group—where the problems are greater than elsewhere.
  However, whether this is a question of values as such or of general management of which they are a part, we are certainly taking it on board in the Department—I am personally—but it will also be for the partnership machinery and the steering groups to take it on board in connection with their programmes. Already a good deal of work is beginning to be done by the local authorities likely to become partnership authorities.
  I think that results will be produced. Some interesting experiments are taking place in Liverpool in regard to housing, advance factories and small factory schemes like the community workshop scheme in Islington. In a similar scheme in my area, which is not a partnership area, the council bought a factory to make it available to half a dozen small artists and craftsmen who are producing products for sale. There are all sorts of projects and programmes, both in the community field and in the voluntary field and——
  It being Ten o'clock, the motion for the Adjournment of the House lapsed. without Question put.

  NORTHERN IRELAND (COMPENSATION FOR CRIMINAL DAMAGE)
  10.0 p.m.
  The Minister of State, Northern Ireland Office (Mr. J. D. Concannon): I beg to move,
  That the draft Criminal Damage (Compensation) (Northern Ireland) Order 1977, which was laid before this House on 13th July, be approved.
  This order will replace, and amend, the provisions of the Criminal Injuries to Property (Compensation) Act (Northern Ireland) 1971. It will affect claims for damage to property caused on or after 1st April 1978. Claims for damage caused before that date will continue to be dealt with under the 1971 Act.
  The 1971 Act, which itself replaced earlier legislation, has been in force since 1973. Under it and earlier legislation, from 1968–69 to the end of the last financial year, about 116,000 claims had been received, of which 100,000 had been settled. About £200 million has been paid out, including interim payments on claims still in hand.
  In view of the number of claims which had been received and were continuing to come in, of the amount of compensation payable, and of representations which had been made and problems which had arisen, the Secretary of State in November 1975 appointed a Committee under the chairmanship of Sir James Waddell to review the principles and operation of the 1971 Act. The Committee included representatives of the legal, insurance, valuation and loss adjusting professions. Its report was published at the same time as this proposed draft order and its general and particular recommendations underlie the draft order. Hon. Members will have been impressed by the Committee's thoughtful approach. It is right that on the Secretary of State's behalf I should thank Sir James Waddell and the members of the Committee for the time and care that they gave to their work.
  The 1971 Act provides compensation—except for certain agricultural property—only for property damaged by unlawful assemblies of three or more persons or by proscribed organisations; and—except
  1518
  in rather limited circumstances of looting—only for property actually damaged, not stolen.
  The picture, therefore, is of an attempt to make good substantially, but not necessarily completely, damage caused to property by civil unrest and terrorism. It does not, however, involve damage or loss caused by ordinary crime or vandalism. There is no wholly equivalent legislation in Great. Britain and the criteria for special compensation in Northern Ireland relate specifically to those risks to property which experience has shown to be peculiar to Northern Ireland.
  We have also kept in mind that damage to property should not and cannot be regarded as only a private injury. The loss of a building is a loss to the community. A shop is an asset not just to its owner but to its customers. Our experience of the kind and scale of terrorism suffered since 1969 suggests a need to ensure, more specifically than in the 1971 Act, that compensation does not go to the undeserving.
  The proposal for the draft order was debated in the Northern Ireland Committee of this House. The Secretary of State has amended it significantly in the light of that discussion and of representations made by hon. Members—not least those made by the hon. Member for Antrim, South (Mr. Molyneaux) and the right hon. Member for Down, South (Mr. Powell) and by their colleagues and organisations in Northern Ireland. I shall draw attention particularly today to the major changes. Other minor changes have been made to improve the drafting at a number of points, often again at the suggestion of hon. Members.
  Article I provides that the order generally will come into force on 1st April 1978. This will allow those affected by its wide-ranging changes to adjust to their impact. Article 13, however, which makes clear the power to deduct certain debts from compensation, will come into effect immediately. Nearly £1 million a year is recovered in this way against public debts, which now stand at a total of nearly £22 million in Northern Ireland.
  Article 2 defines certain terms used in the order. The term "Chief Constable" now includes an Assistant as well as a

  1519
  Deputy Chief Constable in order to facilitate the issue of certificates. The term "unlawful association" has been redefined to include not only proscribed organisations but any organisation engaged in terrorism, which is itself defined in terms reflecting the Northern Ireland (Emergency Provisions) Act as
  "the use of violence for political ends"
  including
  "any use of violence for the purpose of putting the public or any section of the public in fear".
  This is an important extension of the scope of compensation.
  I am afraid that my voice is failing, and——
  Mr. John Ellis: Have a drink.
  Mr. Concannon: It must be the very bad weather that I have been suffering this afternoon in the glens of Antrim. We had wretched weather there today.
  The Chief Constable will be able to issue a certificate that damage was caused within the terms of the wider definition of an unlawful association. We intend in this way to cope with any proliferation of terrorist organisations—sometimes quite short-lived—which cannot be associated with any proscribed body.
  Article 3 provides that the 1971 Act will continue to apply to damage or loss caused by an Act committed before 1st April 1978.
  Article 4 has been added since the proposal for the draft order was debated. It re-enacts fully the provisions of the 1971 Act giving compensation for damage caused maliciously or wantonly to agricultural property, even though three or more persons were not involved or any unlawful association. I explained fully to the Northern Ireland Committee why I consider that this provision is less necessary in present circumstances and less appropriate to present-day terrorism, than it once was. I think that if we were starting on a new compensation Bill tonight, we would not even think of putting it in.
  It remains the Government's view and intention that this provision should eventually be repealed. However, we have accepted the very strong argument put up by hon. Members and organisations in Northern Ireland that it should not be
  1520
  repealed without due notice at the present stage of the terrorist campaign. I think it is only fair that one should give due notice of this when an industry, such as that in Northern Ireland, has been used to this special treatment in these terms. I ask those concerned to take heed of the remarks I have just made and to note that we are giving just this kind of notice this time around.
  Article 5 follows the 1971 Act in providing compensation for damage caused by three or more persons unlawfully, riotously or tumultuously assembled or by an unlawful association—now, of course, more widely defined.
  Article 6 follows the 1971 Act in providing compensation for looting. Such compensation is payable if three or more persons have been tumultuously and riotously assembled and have caused damage to a building or to property within its curtilage, and if during the riot property is unlawfully removed from the building. This is the only provision in the Act or in the order for compensation for loss of, as distinct from damage to, property. This is in keeping with the general purpose of the draft order, as of the Act, which is to provide compensation for damage, not loss.
  Article 7 retains the requirement that a notice of intention to claim must be served within 10 days of damage. But it allows the Secretary of State—or the court, on appeal—to extend this time, if a request is made within six months; and it greatly simplifies the form of notice, so that the applicant will in future have to state only the time and place of the damage and will not have to indicate the extent of his loss at that stage. We require the earliest possible notice of claims if proper investigations are to be carried out and speculations or even fraud detected.
  Mr. Clement Freud: On this point, I understand that the Minister of State would like instant notice of claims. Will he say how quickly the compensation is likely to be paid? I know that this worries the traders of Northern Ireland very much.
  Mr. Concannon: We have a monitoring system in Northern Ireland, and in many cases we get notice by the hour. We can then get our assessors and other people out as quickly as we possibly can. In other cases it is a matter of waiting for

  1521
  the claims to come in. Many negotiations have to take place on damage to property, and a number of matters have to be dealt with in this connection. Assessors have to be brought in. Many of the problems are not in my office at any particular time. Many of the pay and compensation problems depend on other people. This has been debated in all the committees and elsewhere. It is one of the reasons why we have tried to streamline the actions which have to take place.
  Article 8 requires the submission of a formal application within four months of the preliminary notice, though the Secretary of State or the court may extend this period to 12 months. It allows the Secretary of State to require further information from the applicant and makes clear that if an applicant fails to supply that information, the Secretary of State can determine his claim on the basis of the information he has received. Our records show that in many cases the applicant has simply not supplied all the details—in some cases any of the details—necessary if a full assessment of damage is to be made, and it is quite wrong that those claims should be allowed to drag on, even for years, and block funds which could usefully be applied elsewhere. The 1971 Act allows compensation to be reduced if the applicant has failed to take reasonable precautions to avoid loss.
  Article 9 places the onus on the applicant to show that his precautions were in fact reasonable, subject of course to the interpretation of the courts. The article also provides that compensation may be withheld or reduced if the applicant did not comply, for example, with regulations for the storage of inflammable materials—a kind of negligence which greatly assists the fire bomber; or contributed to his loss by provocative or negligent behaviour; of if the property was being used for any unlawful purpose. We have included the particular and commonest examples of the unlicensed drinking house and the untaxed motor car, but I stress that the provision to reduce or refuse compensation for such cause is not absolute and is applicable only if the circumstances are relevant. The article has been redrafted at the request of hon. Members, to make this point clearer.
  We have added to Article 10 a clear provision that compensation is not pay-
  1522
  able to anyone who is or has been a member of a terrorist organisation—an unlawful association—or who is or has been engaged in acts of terrorism: except, as is provided in Article 12, where the Secretary of State judges in his own discretion that a payment would be in the public interest.
  I cannot accept that those responsible for creating a climate of terrorism and destruction in Northern Ireland should benefit, where they themselves are caught up in the terror they have created, from laws intended to protect the innocent.
  Paragraphs (6) and (7) provide that no compensation is payable for a loss of £100 or less, and that any compensation payable will be reduced by £100. Hon. Members will notice that the amount has been reduced from the figure of £150 in the original proposal. This again is due to the representations of hon. Members in this House and by many organisations and various people in Northern Ireland.
  The principle of a deductible "excess" was recommended by Sir James Waddell's Committee. It is a principle well known and widely accepted in the insurance world, where the policy holder may be required to accept the first so many pounds of any loss. Bearing in mind the change in the value of money since 1956, when the present minimum was introduced, the safeguards against hardship contained both in this article and in other schemes of assistance such as the Emergency Repair Scheme and the Supple. mentary Benefits Scheme, and the widening of compensation to cover all kinds of terrorist damage, I believe that this new figure is reasonable in all the circumstances.
  Finally, paragraph (8) of this article follows the draft Criminal Injuries Order in allowing the Secretary of State, subject to appeal, to withhold payment of compensation until an applicant has given the police all reasonable help which could lead to the arrest of the person who caused the damage.
  Article 11 is a most important addition to the provisions of the 1971 Act, and again follows a recommendation of Sir James Waddell's Committee. As I have said, that article is known in my Department as the "Roxboro'-hotel article" or as "Powell's article". As hon. Members from Northern Ireland will note, it takes care of one of the more

  1523
  infamous cases that we have had in Northern Ireland.
  It provides that where compensation for damage to a building is based on the cost of reinstatement or some other criterion greater than the diminution in market value—mere financial loss—the applicant may be required to carry out the rebuilding, or the acquisition of alternative premises, on the basis upon which the compensation was assessed.
  The Secretary of State may impose appropriate conditions on the payment of compensation and may withhold payment beyond the market value level until, for example, rebuilding has been carried out. An applicant, however, will be able to appeal to the courts against any or all of the three elements of such a determination, the total assessment of compensation, the market value element, and the conditions imposed.
  The article also provides that where damage to a building is compensatable under this order, a landlord may not sue his tenant under the terms of a repairing lease for more than the diminution in the market value of the property. This will allow market value to be the basis of compensation if other considerations point in that direction. The absence of such a provision in the past, even if it has not exactly created an abuse, has certainly given a privilege to certain property owners.
  Article 12 allows the Secretary of State to make interim payments of compensation, which could be of benefit to the applicant in long and difficult cases. This makes statutory what is in fact the practice at present. Article 13 makes clear the Secretary of State's power to deduct from compensation debts due to Government Departments and public authorities.
  Article 14 follows Section 7 of the 1971 Act. Article 15 follows the 1971 Act in giving an applicant a right of appeal to the county court against the Secretary of State's determination of compensation. Those few claims which do in practice go to appeal provide standards and criteria by which the rest can be judged and assessed.
  Articles 16 and 17 allow the Secretary of State to recover compensation from anyone convicted of causing damage in respect of which compensation has been
  1524
  paid, or from an applicant who has himself received reparation from such an offender at common law, or who has failed to make a full and true disclosure of all facts relevant to his own claim.
  Article 18 provides simplified procedures for proving convictions and the conduct on which a conviction has been based.
  Article 19 provides penalties for obtaining compensation fraudulently. The remaining articles are straightforward.
  In commending the order to the House, I should like to thank those right hon. and hon. Members serving on the Northern Ireland Committee who have assisted me over the last year with this compensation order.
  10.18 p.m.
  Mr. John Biggs-Davison: I do not know what the Under-Secretary of State has been getting up to in the glens of Antrim, but he must have contracted something rather nasty, and we sympathise with him because he has been addressing the House under some disadvantage. We hope that he will be better soon.
  The hon. Gentleman referred more than once to the representations that have been made on the subject matter of this order by hon. Members and by organisations and individuals outside. Whatever one may say about the recently-established Northern Ireland Committee, it has taken a very useful part in improving the Government's first proposals for legislation to replace the Criminal Injuries to Property (Compensation) Act (Northern Ireland) 1971. The Committee generally welcomed the draft order in its discussion on 27th June. My hon. Friend the Member for Petersfield (Mr. Mates) spoke for the official Opposition, and he among others gave particular approval to Article 10—now Article 11 in the draft before us—designed to prevent compensation from feeding terrorism.
  There was that disturbing article in The Sunday Telegraph alleging that about £5 million of compensation money had found its way into the pockets of paramilitary organisations, and this was possible because there was no requirement under the 1971 Act—the Stormont Act—to apply compensation money for damaged property to the rebuilding or repair of that property. But Article 11

  1525
  now enables the Secretary of State to withhold all parts of the compensation until rebuilding has been carried out, and that is most welcome and desirable.
  Apart from the hon. Member for Belfast, West (Mr. Fitt), there was general support in the Committee for Article 12—Article 13 of the present order—giving the Secretary of State power to withhold payments from those who are in debt to public authorities. This seems reasonable.
  However, the debate in the Northern Ireland Committee on 22nd June was not without some contentious points. I shall refer to three of them. The first point concerned agricultural property. Under all previous legislation compensation was payable for malicious damage done to agricultural property even if three or more persons or an unlawful association were not involved. The order proposed to remove this exception. Rural and urban property were placed on exactly the same footing as regards compensation. All the Northern Ireland Members who spoke in the debate, whether Unionist or SDLP, objected to the change. There was a particularly eloquent contribution by the hon. Member for Londonderry (Mr. Ross). The right hon. Member for Down, South (Mr. Powell) pointed out—this was also said at Stormont in the House of Commons of Northern Ireland in 1971—that damage could be committed to agricultural property very easily in the absence of witnesses to prove whether it had been committed by one person or more.
  We are glad that the Government have given way on this point and returned in the new draft to the status quo ante. So owners of agricultural property will continue to be compensated for malicious damage, however caused. That is provided for in Article 4.
  The order proposes to raise the minimum claim for which compensation can be paid from £20 to £150 and to deduct £150 from all future payments. That is in Article 5. The Minister said that this was a substantial change. He defended it in the debate which was held in the Northern Ireland Committee. He said:
  "the mere change in the value of money since 1956 … when the £20 minimum was introduced, would require a substantial increase now."
  He has referred again to this point in his remarks to the House tonight.
  1526
  Everyone who spoke in the debate in the Northern Ireland Committee attacked the new minimum figure as being much too high and called for the implementation of the relevant section of the Waddell Report proposing a minimum figure of £50. I echo the tribute which the Minister paid to Sir James Waddell and his colleagues for their work.
  The right hon. Member for Down, South used some strong words. He said:
  "we regard the trebling of that figure as exhorbitant and unjustified".—[Official Report, Northern Ireland Committee, 22nd June 1977; c. 6 and 15.]
  Other Members present said that the new arrangements would cause hardship to the elderly, to those who lived in small houses and to some shopkeepers. Under the 1971 Act about one-third of all claims were for sums of less than £150. In Article 6 of the order we have a sort of compromise. The minimum amount comes down from £150 to £100, which is some improvement.
  I turn next to the conditions on which compensation can be reduced or withheld. The Minister referred to the question of shabeens—premises used for unlicensed drinking—and to untaxed vehicles. In the Northern Ireland Committee my hon. Friend the Member for Petersfield asked why the net could not be cast wider so as to exclude from compensation damage to property where other illegal activities—he mentioned gambling—were carried on. The new relevant articles 9(1)(c) and 10(1)(a) and (b) do not meet the point which my hon. Friend made.
  However, I should like to welcome one improvement. It is that in Article 10(3) laying down that no compensation shall be paid to anyone who is or has been a member of an unlawful association or has been responsible for acts of terrorism. I think that the murmured "Hear, hears" in the House when the Minister of State referred to that aspect make the point for me. The change is indeed to be commended.
  I come now to the question of contract bombing. During the debate in the Northern Ireland Committee, the hon. Member for Belfast, North (Mr. Carson) spoke of
  "cases of business men who have paid terrorist organisations to bomb new, unprofitable enterprises so that they can claim compensation."—[Official Report, Northern Ireland Committee, 22nd June 1977; c. 27.]

  1527
  The Belfast Telegraph of 23rd June lent some substance to these allegations with an article based on information which, according to the writer, had been supplied by the Ulster Defence Association. The UDA denied that it had been involved in contract bombing but asserted that other loyalist paramilitary groups
  "may have acted in consort with some firms for financial gain".
  The President of the Belfast Chamber of Trade associated himself with that view, but added that fraud was not widespread. I wonder whether the Fraud Squad of the RUC has made any investigation into these allegations and, if so, with what result.
  The hon. Member for Belfast, North also raised in the Northern Ireland Committee the matter of travelling shops, as did the right hon. Member for Down, South. They desired to widen Article 5 to provide for compensation to be paid for loss of the stock in trade of travelling shops. However, the Minister of State was unable to meet this request. He referred to the debate in the Stormont Parliament on the Northern Ireland Act 1971. He indicated that the point had been well answered there.
  I have been searching the Stormont scriptures and I have not found any answer in those debates. Perhaps the Minister of State will say a word about that, because travelling shops render a service of importance in scattered communities. If at a time of trouble and terrorism mobile shopkeepers are to be deprived of compensation when they lose their whole means of livelihood, they will certainly be discouraged. I hope that the Minister of State will be able to say something about that.
  10.28 p.m.
  Mr. J. Enoch Powell: With the passage of this order tonight the House completes the reform of the code of compensation for criminal damage and criminal injury which for a long time all sides have considered to be necessary. There have been two main grounds in respect of both sides of the code which have caused that feeling. The first was the knowledge that there was undoubtedly scandalous misuse of the funds paid out in compensation, both as regards the circumstances in which the sums were paid and, in some cases, the persons to
  1528
  whom those sums were paid. On the other hand, there has been a feeling that there is unnecessary delay in the satisfaction of claims for compensation, while, as the Minister of State pointed out, much of the delay, unbeknown often to the applicants, lies with their professional advisers and not in the Department.
  It can be claimed that, like its twin, this order substantially meets these two criteria. I pay tribute to the readiness of the Minister of State and his advisers to take account of the points, small as well as larger, which have been brought to his attention both informally and formally in the Northern Ireland Committee. I think that, again, our procedure for providing a kind of simulacrum of proper parliamentary legislation has borne evident fruit in the order before us.
  It would be churlish not to record some of the minor matters which have been dealt with in the order, compared with its earlier form, before going on to deal with two or three major issues which—in some cases more, in others less satisfactorily—have been dealt with in the interim.
  I shall briefly mention minor respects in which, in the view of myself and my hon. Friends, improvement has been brought about. First, in Article 5 there has undoubtedly been an improvement in the drafting and in the clarification of the meaning. That is much more so in Article 9, which the Minister mentioned, where the previous Article 9 (3) was highly unsatisfactory and gave rise to anxieties that it could be used in an unreasonable and punitive fashion. The references to "unlawful purpose", "unlawful use" and failure to tax a motor vehicle are now in the proper place in that article and are firmly brought first, under the discretion of the Secretary of State and, secondly, thereby under the ultimate jurisdiction of the courts on appeal.
  There has been an improvement in the drafting of Article 11(4) and a major improvement in Article 17 where paragraph (4) in effect vests in the court a discretion which previously was an arbitrary discretion of the Secretary of State. I am sure that it is quite right that where compensation is to be clawed back, it should be done in the first place—I am sure that my right hon. Friend the Member for Belfast, East (Mr. Craig) will

  1529
  agree—through the court procedure and not through the ipse dixit of the Secretary of State.
  There are two minor points which perhaps the Minister will be able to clarify when he replies. The first relates to Article 15 where the contents of Article 14(4) of the proposals for the draft appear to have been omitted altogether. There may be very good reasons for this. Perhaps the Minister in his concluding speech will be able to say whether I am right in thinking that the contents of old Article 14(4) have disappeared and why it was felt that they could be dispensed with.
  Finally, with regard to these minor points, I refer to Article 17(6). There is a point here to delight the heart of any paleographer and textual critic because there are two manuscripts before the House. There is the printed version which we might call Manuscript A, where a later scribe has deleted the word "excuse" and interlineated the word "cause". If, on the other hand, we turn to what I might call Manuscript B we find that a gap was left and the word "cause" has been written in.
  I therefore call upon the Minister of State, since we are engaged in the solemn matter of making law—he may recall an earlier occasion when great inconvenience was caused to Parliament as a whole by uncertainty as the wording of Acts which were passed by this House—to indicate what will be the authoritative text and whether it is to be "reasonable excuse" or "reasonable cause".
  Some of these matters may seem to you, Mr. Speaker, to fall irreverently into the category of nits. Nevertheless, I think it right that orders such as this, which in any other part of the United Kingdom would be the fruit of legislation with consideration clause by clause and subsection by subsection in Committee and on Report in two Houses, should be scrutinised by hon. Members as best we can, and therefore I make no apology.
  I come, then, to the major matters, the first of which, of course, is to welcome Article 11, which my constituents and I are proud should be associated with a particularly scandalous operation under the existing compensation code that we may have had some part in putting right. I trust that the wording of Article 11 will in fact supersede those difficulties
  1530
  of existing law and case law which have led to these results.
  That leaves me with the two major matters which we raised in Committee. Of course, we are glad that Article 4 has been brought back from the existing legislation into this new order. But we warn the Minister that it is a mere Treasury formula to talk about putting the House or Northern Ireland upon notice that this is only a temporary concession. Let those who talk, in the context of Northern Ireland, about temporary concessions beware what they do. After all, this article is concerned with agrarian terrorism and with the special characteristics of agrarian terrorism. We all hope devoutly that agrarian terrorism and all other forms of terrorism will be eliminated speedily from what should be a happy Province of the United Kingdom.
  But he would be a bold man who found any comfort in the history either of the last few years or of the last few centuries for the assumption that we shall speedily see the end of agrarian terrorism, and, as long as there is agrarian terrorism, Article 4 will be justified as a matter of common sense and fairness. So the Minister can have his pleasure with putting the House upon warning, and the rest of it. The fact is that Article 4 is thoroughly justified, and there will have to be some radical change in human nature before Article 4 ceases to be justified.
  I come finally to the matter of the £150 as it used to be and the £100 as it now is, which is not a minmum, as someone accidentally said, but an exclusion figure. My right hon. Friends and I remain of the opinion that this is the wrong approach, and we draw comfort from the fact that in another context—that of the other half of the compensation code—we succeeded in persuading the Government to change their exclusion to de minimis. Of course, we accept the necessity for a de minimis. Indeed, in so far as it contributes to the speedy dispatch of due compensation, we would regard a de minimis—a figure below which claims cannot be——
  Mr. Gerard Fitt: I did not know that I agreed to that.
  Mr. Powell: I am happy to hear that the hon. Member for Belfast, West (Mr. Fitt) thinks of himself as included in my expression "my right hon. and hon.

  1531
  Friends". He is welcome to come in. But if he occasionally finds the umbrella all too embracing, he must not complain.
  Nevertheless, it is understood that, in all these matters, minimal claims can choke the mechanism without any corresponding justificaion, and my hon. Friends and I would make no objection to an appropriate figure. I fear that inflation will presently make £100 the equivalent of £50 in the existing code. At the moment, it is about £80. But it will not be too long before it is £100, social contract or no social contract. However, I do not wish to trespass on tomorrow's debate.
  Although we would accept some such figure, we cannot accept that it should be an exclusion and not a minimum. We do not see that it is right for an admitted claim of £120 to be knocked down to £20 or of £200 to be knocked down to £100. That is not speeding the process. It will take just as long to deal with a claim for £200 knocked down to £100 as if the £200 were paid.
  The Minister of State argued the parallel of the insurance policy that has a minimum figure of £15 or whatever it may be. But there is an important difference here. We are dealing with the victims of actions committed against them in which, especially under the terms of the order, they have no possible part or fault. I am not suggesting that that cannot be true in many cases of those who suffer motor damage, for example. But there is certain prudence and logic in enjoining upon those who take out policies a degree of care and restraint in putting forward claims too often for damage inflicted upon their property. But, I repeat, that is not the case here. We are dealing with citizens whose property has been damaged to the extent of £150, £200, £250 or £300 where no possible fault of theirs, no possible pre-vision on their part, can be imagined.
  It is a totally false analogy to quote insurance policies for saying that these claims should be knocked down by £100. So, tit for tat I give notice—that was the Minister's phrase—that we cannot declare ourselves to be satisfied, although there is a minor improvement in the reduction of the £150 to £100, with the logic of the Waddell Report on the
  1532
  matter or with the logic of an exclusion which goes all the way up the scale and thereby bears more hardly upon little people who have suffered what for them may be substantial damage. On that matter, on behalf of my hon. Friends, I must register enduring dissatisfaction or partially removed dissatisfaction.
  Mr. Fitt: So the right hon. Gentleman will be voting against the Government tomorrow?
  Mr. Powell: The hon. Member for Belfast, West (Mr. Fitt) must recognise that there is proportion in all things. In order to secure major claims of justice for those whom we represent, it is proper for us to proceed, if necessary, to extremities in this House. It is proper for us to do as our predecessors in this place have done and to take the opportunity of any subject that comes up to enforce our will in matters that vitally concern our constituents.
  But, reason and moderation in all things, we have here an order which is 95 per cent. in accordance with our wishes. The order was 80 per cent. only in accordance with our wishes when we last saw it, but substantial improvements have been made. Therefore, it would indeed be churlish to part with this last element in the reform of the compensation code without acknowledging the sincere efforts that the Minister of State personally and his advisers have put into it and congratulating them, albeit with one qualification, upon the outcome of their labours.
  10.45 p.m.
  Mr. William Craig: My right hon. Friend the Member for Down, South (Mr. Powell) has more than adequately covered the order and I do not want to be unduly repetitive. Suffice it to say that whether my right hon. Friend spoke for the hon. Member for Belfast, West (Mr. Fitt), he spoke for me in this instance. I should like to underline two points that he emphasised.
  I agree wholeheartedly that any question of a claw-back must, in the first instance, be settled in a court of law. I also agree with my right hon. Friend's point about the unsuitability of the insurance concept of an excess amount in such a situation as confronts us here. I find it strange that a Government who claim to represent the workers of this nation

  1533
  and the less-well-off should be responsible for a piece of legislation that will penalise those people out of all proportion. The Minister has overlooked the fact that such damage is often not insurable and that old people, the retired and others find that in these days £150 is an extremely large sum to have to pay out for something for which they were not responsible and which has inevitably caused them more than pecuniary loss. Of course, we all understand the need for a de minimis approach and the need to phrase the law in such a way as to limit abuses. The principle adopted here is most unfair, however.
  There is a general matter that I want to put to the Minister. I wholeheartedly agree that the Department should have the right to attach conditions to the use of compensation funds for the reinstatement of premises. I hope also that the Minister, when he weighs up the problems, will not forget that often—particularly with commercial properties—the loss is not just to the owner but to the whole community, and that it is in the interests of the community as well as those of the individual that the property should be replaced as quickly as possible. I know that gossip and rumour-mongering is not the best basis for any argument, but on a number of occasions I have come across suggestions that the Department has indicated that, in its opinion, it would be better not to replace certain properties. Whether that is true, I am not in a position to say, but if it is true, that is something that I should deplore. The Department does not have any right to give such guidance. That must be left to the owner of the property. He should assess the risk in which he places himself. It is often a matter for his commercial judgment.
  I should like the Minister to give an assurance—if he can—that he will not lay down conditions forbiding the reinstatement of any property, unless a matter of exceptional security interest is involved. We would make that one exception.
  I have no wish for reinstatement to be made retrospective, but the Minister and the House have enough influence over public bodies to ensure that they set an example.
  The British Broadcasting Corporation in Northern Ireland is sadly remiss in this respect. The people of Fermanagh and
  1534
  parts of Tyrone have been largely deprived of colour television and have poor radio facilities because of the terrorist action that blew up the television mast on the Brougher Mountain. That was two or three years ago, if not longer. No effort has been made to restore that facility, and a large rural area has been deprived of what, in these days, is regarded as almost an essential service. If the Minister is not prepared to make representations I hope that the BBC will take note of the fact that the law expects, from now on, that properties will be reinstated out of funds from the public purse.
  I join my right hon. Friend the Member for Down, South in remarking upon the limited legislative opportunities that we have and saying how pleased we are that the Government have paid some attention to the points of view put forward. I look forward to the day when we shall have even greater opportunities for making representations because I would have liked, even in this improved order, to table one or two amendments.
  10.51 p.m.
  Mr. Wm. Ross: It is a pleasure to be able to say, for once, that we welcome that which is before us. I give a broad welcome to the reinclusion of Article 4 which deals with compensation for damage to agricultural property. There are one or two small points about which I would like to ask the Minister. I hope that he will be in a position to deal with them. Article 4 (b) (iv) speaks of
  "any corn, hay, straw, flax, wool, potatoes or other agricultural produce, feeding stuffs, fertilizisers or insecticides".
  There is no mention of what is an important feature of farming today, namely weed killers. It would appear that this part of the order has been lifted from the original Act and no effect has been made to up-date it in the light of changes which have taken place in farming. Can anything be done about this in any future order?
  I give a guarded welcome to Article 6, which has been so well covered by my right hon. Friend the Member for Down, South (Mr. Powell). I am happy to see that the figure has been reduced to £100, All of the iniquities to which my right hon. Friend referred mean that the provisions are no more welcome than they were originally. I hope that an opportunity

  1535
  will be taken before next April to amend this order. There is no reason which I can see why that should not be done.
  I would like the Minister to try to be a little more forthcoming about what is meant by the term reasonable precautions." I am not happy about it and I do not believe that my right hon. and hon. Friends are either. We are still not clear precisely what is meant by this and what is expected of persons who suffer, be they shopkeepers, owners of property or whatever.
  10.53 p.m.
  Mr. Robert J. Bradford: I return briefly to the grey area involving damage and theft. It appears that this problem of defining what is damage and what is theft is still with us. I would like to draw the Minister's attention to this matter by referring to a specific incident which occurred within my constituency. I accept that there are some products which can rarely be damaged, even if they are taken off the premises. One thinks of such goods as tinned products and cartons of cigarettes. But there are other items which suffer damage in the act of being removed. I refer to an incident involving the removal of £5,000 worth of clothing from a store in Bradbury Place, Belfast. The very act of taking the garments from the static hangers and dumping them into lorries and the boots of cars meant that when they were recovered at a much later date they could not be sold as new items. They were decidedly damaged.
  The owner of the shop took every precaution. He informed the police station that was a few yards away that he was due to open the very next day. He told the police that he had no burglar alarm, but they promised to give him all sorts of security. He returned on the day of opening and found that half his stock was missing.
  This bizarre incident becomes the more interesting when we discover that the Chief Constable provided a certificate that proved that the garments were taken and the Royal Ulster Constabulary established that one of the reservists was in league with those who were responsible for the theft. All the criteria in the order and the previous order were satisfied. The theft was committed by an unlawful or-
  1536
  ganisation, or an organisation deemed to come under the terms of the Act. The sum involved was £5,000. However, the owner did not receive compensation because the articles were adjudged to have been stolen rather than damaged.
  I hope that I shall have the opportunity to give the Minister a short brief behind the chair. I am sure that he will find it interesting. I hope that he will return to the grey area of damage and theft. In the case of my constituent there is undoubtedly a case for revision of the claim. I shall be grateful for the Minister's comments after receiving the brief.
  10.57 p.m.
  Mr. McCusker: I was unable to attend the sitting of the Northern Ireland Committee when it first debated the proposals in the draft order, but on reading the report I was encouraged by the Minister's comments, as I am sure was the business community in Northern Ireland. He repeated those comments tonight—that the loss of a building is a loss to the community, a shop being an asset to the customers as well as to the owner.
  If anyone doubts that, he needs not to go to Belfast or Londonderry; all he needs to do is walk up Market Street, Lurgan, along Market Street, Armagh, or go to the blitzed village of Newton Hamilton. If he does so, he will realise the effect on a community when attacks are made on selective important targets such as shops. He will realise the effect of their removal from the community. If the order does anything to enable business people to get back into business quickly and speedily, it is to be welcomed.
  I draw the Minister's attention to a pet subject of mine that is contained in Article 9. This is an issue that was taken up by my hon. Friend the Member for Antrim, South (Mr. Molyneaux). It is the paragraph dealing with the assessment of compensation. It states:
  "In determining whether any compensation should be paid in respect of any loss … the Secretary of State shall have regard to".
  It lists a number of items, the first being
  "any failure on the part of the applicant to take all reasonable precautions to reduce or avoid the loss".
  Another three requirements are listed. I completely agree with the other three, but the one that I have quoted can be

  1537
  interpreted in ways that could make life extremely difficult for business men trying to get adequate compensation.
  The incident referred to by my hon. Friend the Member for Belfast, South, (Mr. Bradford) highlights that difficulty. A business man in Lurgan operating in the Church Place area suffered bomb damage. His shop was 50 yards from the police station, which was destroyed by a bomb three years ago. The shop door was about 10 paces away from the spot where a chief constable and a chief inspector were shot dead in the past 12 months, and 50 yards from the place where a UDR man was shot dead within the past year.
  When the global sum of his compensation was agreed he was informed that because he had not taken reasonable precautions, a reduction would be made in the amount of his compensation. That was a very small shop. He employed only four people. One of these employees had a duty to watch out and to detect whether a terrorist attack was likely to be made. There is no way in which that person could have apprehended the terrorist, and the area is such that the police cannot keep a presence there any longer. No person employed in a full-time security capacity could have prevented the bombing, yet the Secretary of State has adjudged that this man did not take all resonable precautions.
  All the Minister said in the debate in Committee, and here again to night, was that it will be for the courts to decided, on appeal, what is reasonable. That constituent of mine wants to settle. He does not want to go to court. The global sum agreed between the parties is a reasonable settlement. The dispute is over whether he took reasonable precautions. Most people would agree that there was very little he could do. He had a searching device to ensure that any incendiary devices would be found, and, as I have explained, there was no way in which he could have prevented what eventually took place.
  The Minister should advise business people in that situation the likely interpretation of "all reasonable precautions". Is it when a business man complies with the advice given by the RUC? Will the police go to business people and tell them what they can do? Does he advise firms which employ security men
  1538
  to tackle the gunmen or people carrying bombs? It is adequate for security men just to be there to tell the customers and staff to get out to avoid personal injury? What advice can the Minister give, other that saying that a business man in this situation can go to court? It is unfortunate that the wording should be in such general terms, because many people will be put in a difficult situation.
  11.3 p.m.
  Mr. Gerard Fitt: I do not intend to detain the House too long. Reference was made by the right hon. Member for Down, South (Mr. Powell) to the fact that this legislation, allied with its twin on criminal injuries, is of major importance to many people in Northern Ireland.
  I am beginning to have a slight suspicion about the Government's actions in their presentation of these draft orders. In the presentation of the draft order on criminal injuries there was a good deal of unanimity—in fact no divergence of opinion at all—in Committee, and the same thing happened in the presentation of the draft order on criminal damages. Objections taken to certain provisions of those orders were so justified and the injustices in the original drafts were so blatant that it was obvious, looking at the matter in retrospect, that the Government would have to change and amend the original orders.
  Is there not some little game being played here? Are the Government deliberately including such unjust provisions in this order so that Northern Ireland Members will get the credit for having made representations in Committee? The Government then take note of the representations so that Northern Ireland Members, particularly on Opposition Benches, can say to their constituents, "What a great job we are doing in Committee. We are persuading the Government almost every day to change their minds. We are great representatives. When the election comes, will you vote for us?"
  Mr. Powell: I can assure the hon. Gentleman that if he were to make a careful study of Great Britain legislation, he would be relieved of his suspicions about Northern Ireland legislation.
  Mr. Fitt: I have been looking at Great Britain legislation and I am certain that

  1539
  representations by scores of my hon. Friends on many issues have not been given the rapt attention which appears to have been given in Committee to the representations of hon. Members opposite. The game may be, "We shall give you credit for changing some legislation."
  The original provisions were so blatantly unjust that no Government could have hoped to carry them. Everyone is pleased now, except about the provision concerning £100 or £150. I completely agree on that. It is less than honest if that is the tactic, but it is not admitted, "We will help you, but will you please help us? When there is a vote of confidence, you must abstain or just leave for Belfast."
  I want this Government to remain in office as long as the Prime Minister thinks necessary—but at least I am honest. But if those who follow a philosophy bitterly opposed to that of the Government are playing games with the object of keeping the Government in office, that is less than honest.
  What are the "reasonable precautions" which have to be taken? The Minister cannot give a satisfactory answer. The courts will have to decide. The Minister has seemed to take satisfaction from the fact that 95 per cent. of cases are settled in the office, and that it is only a few thick and nasty people who are not prepared to see reason who take their cases to the courts in the first place. But he added that it is the cases which go to the courts which set the criteria for the 95 per cent. which do not.
  What would have happened if that 5 per cent. had not been so thick, if they had decided to settle with the officials and not go to court? What would have been the criteria when none was being laid down in court decisions, The Minister should be grateful to those who had recourse to the law. They helped to lay down the criteria, and they deserve some credit.
  No provision has been made in the case of armed robbery which I have brought to the Minister's attention. Property can be furniture or clothes or anything else which is being sold commercially. But money can also be regarded as property. A man who is accompanied by a revolver—whether or not he is
  1540
  accompanied by two colleagues—can go into a shop and say, "Hands up." What precautions should a bootmaker or a proprietor of a public house take? Should he put cash in the till? Should he put it in the chute or should he hide it somewhere else? He cannot put it into a safe. Pandemonium would break out if he put his money into a safe on a Saturday afternoon. He would still have to open the safe if someone pointed a gun at his head or at the head of one of his staff.
  I know many people who have suffered great losses because they were robbed at gun point. But that is hard to prove. Unless criteria are set, many people will try to take advantage of the situation. It is hard to prove whether there has been an armed robbery or how much money has been taken. Such claims should not be ignored. The loss to those who have been robbed is as great as that to those who lose by other means. Their cases should not be thrown to the wind. I hope that the Minister will say that he will give such cases more sympathy than he has in the past.
  11.12 p.m.
  Mr. James Molyneaux: I can understand the confusion in the mind of the hon. Member for Belfast, West (Mr. Fitt) because when we debated these matters in the Northern Ireland Committee he advised hon. Members not to take themselves too seriously and not to bother to make suggestions for improvements because the Government would pay no attention to them.
  The hon. Member for Belfast, West ended his pontification tonight by asking the Minister to be sympathetic. But in Committee he said:
  "I do not think that we shall see any sympathy extended by the Minister."—[Official Report, Northern Ireland Committee, 22nd June 1977; c. 29.]
  The hon. Member is muddled. He cannot have it both ways. He believes that certain things are going on in the House. I can tell him categorically that they are. They are going on five days a week. If he wants to get in on the act he has only to attend the House five days a week as we do and he can join us haggling and bargaining with Ministers on behalf of the people of Northern Ireland.
  The order is another example of the improvements that have been worked out

  1541
  between ourselves and the Government, no matter how much it may grieve the hon. Member for Belfast, West. There was a time not long ago when measures would be slapped on the Table with a take-it-or-leave-it attitude, depending on the Department and the Minister involved. Then the elected representatives of Northern Ireland had not the slightest influence on the thinking behind the provisions. Nor did they have the opportunity of altering a dot or comma of the document concerned.
  I pay tribute to the present Government. In the last year they have moved a long way from that situation. In Committee we paid tribute to the Minister and expressed our appreciation of his efforts to meet our wishes about disputed issues, and to meet the wishes of the people we represent, wishes which have been transmitted in many cases through us and in other cases, somewhat reluctantly and belatedly, to the Minister by the organisations concerned.
  Perhaps I may get in a commercial on this point. It would be a great help to us if organisations and interests affected by legislation in Northern Ireland would stop belly-aching and get down to the dreary work of preparing submissions to send to the Minister or their elected representatives, and not make post-dated complaints when it is all over. We are becoming tired of that operation.
  As regards this order, we welcome the Minister's acceptance of the need for the reinstatement of the proposal in the 1971 Act which made special provision for agriculture. I support the Minister's present view, particularly as the Wadell Report did not advocate any change in the position on agriculture. It would not be prudent to go into the various possibilities that may have ensued had the order stood as it was originally drafted, but I am certain that the Minister and the Government have avoided falling into a very dangerous trap.
  Like my right hon. Friend the Member for Down, South (Mr. Powell), I would strongly advise the Minister not to be tempted by thoughts such as, "We shall let them off this time. This will be a temporary concession, and some fine day we may be able to dispense with it." There is a special reason why this provision ought to be retained on a permanent basis, and it would do no service
  1542
  to the agricultural industry or the people of Northern Ireland generally if one were to spell it out openly and publicly in any great detail.
  With regard to the other vexed issue of the exclusion clause, we welcome the Minister's second thoughts but we still think that the figure of £100 is too high. It is all very well for the Minister to say that that figure will eliminate very small claims and thereby speed up the processing of other claims, but I hope that the Government will recognise and accept what has been said to them in this debate and in the Northern Ireland Committee—that this exclusion will hit very badly many people who have limited resources. I hope that the Government will at least be prepared to review the position after a reasonable time has elapsed.
  I conclude by expressing the hope, which I am sure is shared by all parties in the House, that the need for the major part of this legislation, excluding what I have said about agriculture, will be removed in the not-too-distant future.
  11.18 p.m.
  Mr. Concannon: What we have proved tonight is the wisdom that there was in the change in the way in which we deal with Northern Ireland orders.
  I am a little surprised by the attitude of my hon. Friend the Member for Belfast, West (Mr. Fitt). If we were dealing with this order under the old method, I should have brought it to the House, not as a draft order, slapped it on the Box, defended every dot and comma, and then hoped that my hon. Friends would have been whipped in on a two-line Whip to vote it through. I had sought out the Northern Ireland Committee debates in order to point out the references made to my right hon. Friend the Secretary of State, but as that has already been done I had better leave well alone.
  I know how our proceedings are well read in Northern Ireland. I am sure that I have never—I do not think that I would do so—called anyone who went to court over a claim "thick". I hope that my hon. Friend will not attribute that remark to me. I do not call anyone "thick" for proceeding with his rights to go to court if he feels in any way aggrieved.
  The hon. Member for Epping Forest (Mr. Biggs-Davison) mentioned contract

  1543
  bombing. Any possible suspicion of contract bombing is reported to the RUC for investigation, and any evidence that is available should be given to the police.
  I do not think it would be helpful to discuss current police investigations at this stage. Hon Members and others who write to tell me that I should be paying out more rapidly should understand that we sometimes have to look a little more deeply into some cases than others.
  The hon. Member for Epping Forest mentioned the travelling shops and said that he could not find any reference to them in the 1971 debates. I was classing the travelling shops with the jewellery, the money and the other property in the context of looting. I think there was a manuscript amendment moved in 1971 by the hon. Member for Antrim, North (Rev. Ian Paisley) on this subject. It was fully debated within Stormont.
  The problem that we should soon find very evident in Northern Ireland terms is that every car which was put into a street to set up a barrier would suddenly become a first-class vehicle with a first-class engine, whatever its condition when put into the barricade. There is always difficulty in proving these cases, and the whole system could easily become exposed to abuse, so that hon. Members would soon be writing to tell me about the abuses taking place. It is very difficult to prove or disprove the presence of articles said to have been left in cars at the time they were blown up. We have paid out £200 million of public money in compensation, and there is no deviation from the principle that we pay when it is proved that we should pay.
  For the benefit of the right hon. Member for Down, South (Mr. Powell), I point out that the word in Article 17(6) should be "cause", and I apologise to the House for the misprint. I was under the impression that the House wanted to get on with this as speedily as possible, and I had to take all possible measures to short-cut the printing system. We thought that the old Article 14(4) might be necessary in 1971, but now the Crown Proceedings Act will apply to proceedings under the order, and we did not think it was necessary now to have that article.
  The special provisions for agricultural damage are not needed to cover terrorist
  1544
  damage in rural areas, which would be covered by Article 5 but covers private malice and wanton damage for which special compensation is hardly justified. But I have taken note of the points raised, and I hope that the outcome of tonight's order will prove satisfactory. I was wanting to know what the feeling was and why special arrangements should be made. I was told in no uncertain manner, and I have reacted to that information.
  Mr. Powell: The Minister of State should please not think that Article 4 as it now stands is restricted to what he calls acts of private malice. Of course, it will inevitably include, and cannot be prevented from including, acts of private malice, but it will also—this is the purpose of it—include acts as defined elsewhere in the order, but in circumstances where the conditions cannot be proved, given agrarian circumstances. I hope that the right hon. Gentleman will accept that amendment.
  Mr. Concannon: I will accept that. I think that in Committee I also advised that not only in the rural areas is there the problem of being able to prove claims. There are similar problems in the main cities of Belfast, Londonderry and elsewhere.
  In considering the Question whether reasonable precautions were taken, we have to treat each case individually. What would be reasonable in one case would be unreasonable in another. The 1971 Act allows compensation to be reduced if the applicant has failed to take reasonable precautions against loss. But, of course, appeal to the courts is always available in this respect as well.
  The right hon. Member for Belfast, East (Mr. Craig) spoke of rumours about people being disposed not to rebuild, or not to rebuild quickly, and restore their property. The Department does not, of course, advise or compel people not to restore property, but compensation may not be payable at law for reinstatement if it is clearly uneconomic to do so. For example, we have told people in some cases that the compensation could not be expected to meet the full cost of rebuilding.
  The important point still lying between us—I am sorry that we cannot meet it—concerns the principle of the deductible

  1545
  excess. We are sticking to the Waddell Committee's recommendation in this respect. I have referred to the safeguards against some of the hazards contained both in this order and in other schemes of assistance—for example the emergency repairs scheme and the supplementary benefits scheme. I note that members of the Northern Ireland Committee are still against the view taken by the Waddell Committee in this regard, but I still believe that it is reasonable in all the circumstances.
  Question put and agreed to.
  Resolved,
  That the draft Criminal Damage (Compensation) (Northern Ireland) Order 1977, which was laid before this House on 13th July, be approved.

  NORTHERN IRELAND (INSOLVENCY PAYMENTS)
  11.27 p.m.
  The Minister of State, Northern Ireland Office (Mr. J. D. Concannon): I beg to move,
  That the draft Preferential Payments in Insolvency (Northern Ireland) Order 1977, which was laid before this House on 5th July, be approved.
  The purpose of this order is to increase the financial protection available to employees who are caught up in the bankruptcy or liquidation of their employer, and thereby to give them the same financial protection provided for employees in Great Britain by the Insolvency Act 1976.
  The existing provisions of the Northern Ireland Companies Acts and the Bankruptcy Acts provide a degree of preference for the claims of the workers of insolvent employers, but this preference is subject to a financial limit of £200 in the case of any one employee. This order increases that limit in both the Bankruptcy and Companies Acts to £800 and gives the Department of Commerce power further to vary the limit, subject to affirmative resolution. The order will, therefore, provide much more realistic protection to workers in Northern Ireland whose employers become insolvent.
  The Insolvency Act 1976 contains similar provisions for Great Britain and also made several other amendments to the laws of bankruptcy and company liquidation which are not covered by the present order. It is hoped to include these provi-
  1546
  sions in more extensive legislation on company and bankruptcy law within the next year. In the meantime, I thought it desirable to introduce this short order to extend to Northern Ireland employees as soon as possible the improved cover now available in Great Britain.
  Hon. Members will, I feel sure, accept the importance of providing this further protection to workers unfortunate enough to be caught up in the insolvency of their employer.
  11.29 p.m.
  Mr. Norman Miscampbell: While welcoming the order, we do so recognising that it is but a small step in what would appear at first sight to be a rather dry legal field, but there are two points which certainly can be emphasised. I understand that the Northern Ireland Department of Commerce is considering this whole matter. We hope that the fruits of its deliberations will be before us in the near future.
  Here, however, we are dealing with piecemeal legislation. We should beware of that because it has caused trouble in the past and it will do so again in the future. It is a great pity that we have to deal in this order with a small section of an area which requires radical revision and which is known to require it. I can only hope that by dealing with it in this way we do not make matters more difficult.
  If one specific area of payment is increased by four times, that throws preferential payments in the other sectors out of balance. I hope that the Minister will give a clear assurance—perhaps we have had it already—that this matter will be brought before the House in a comprehensive way in the near future.
  My second point concerns the considerable increase that has had to be made—from £200 to £800—to bring matters into line with our English legislation. I welcome that Article 3(2) gives the Government the power to make a change by order if inflation unfortunately continues, as it seems that it will, so that we do not have to make such radical changes in the future.
  We recognise the human problem for those who lose their jobs either through redundancy or because their firms go bankrupt, and that those people have a special moral right to the moneys they

  1547
  have earned. In view of that, and in the hope that very soon we shall see a more comprehensive draft order, we welcome this measure.
  11.33 p.m.
  Mr. J. Enoch Powell: Like other hon. Members who have had before them cases of constituents suffering unfairly as a result of the bankruptcy of their firms, I would find it quite impossible to object to this order. However, I associate myself with the hon. and learned Member for Blackpool, North (Mr. Miscampbell) in the proposition that we should not be doing this sort of thing peck by peck.
  We have now settled to the general proposition that wherever there is not a distinct cause to the contrary we wish to see the law in Northern Ireland brought into uniformity with that in the rest of the United Kingdom. Certainly the law of insolvency and bankruptcy is one of the areas in which this is perhaps more necessary than others.
  The Minister of State will confirm that the bankruptcy laws of Northern Ireland are in a number of respects severer and more unconscionable than the present state of the law in Great Britain. I hope that the legislation that he foreshadows for next year will be genuinely comprehensive and will produce, in effect, a United Kingdom code on the subject of bankruptcy and insolvency.
  Some of us would be tempted to niggle and to say that if a year or two ago we had had the declaration of policy we now have—that wherever possible new legislation will be introduced for the United Kingdom as a whole—we might have been saved this order. The ingenuity of the draftsmen, which the Minister of State well knows how to strain, would not have been unequal to covering Northern Ireland with the rest of the United Kingdom.
  One ironical point arises from handling the matter in this way. I expect that you will have noticed, Mr. Deputy Speaker, that Article 3(2) contains a reference to the power of the Minister in future to adjust sums—no doubt due to the further progress of inflation—by order, subject to affirmative resolution. Knowing that you were dealing with Northern Ireland matters you would have been wiser than
  1548
  to believe what you read, Mr. Deputy Speaker. The orders will not be subject to affirmative resolution. That is on the assumption that the 1973 constitution, which is not in force, is in force and that this is not an Act produced by this Parliament under the 1974 Act but is an Act produced by a non-existent Assembly under legislation which is not in force. In those circumstances, indeed it would be subject to affirmative resolution.
  But there is a serious point here. If this were dealt with by a United Kingdom Act, it would be the United Kingdom Minister who would have to come to this House for an affirmative resolution, to get an increase which of course would apply simultaneously to the whole of the United Kingdom.
  However, I have belaboured that sufficiently. I make only one extra observation, in making which I trust that I may have your indulgence, Mr. Deputy Speaker. I feel that the time is coming, if it has not already come, when we are not only entitled to say that the harmonisation of the law of Northern Ireland with that of Great Britain should proceed comprehensively subject by subject and case by case but that it is time that we got a conspectus of the law of Northern Ireland as a whole so that some general picture can be formed of the size of the task which lies before us and the major and minor elements which compose the whole. On an occasion more appropriate perhaps than this, my hon. Friends and I will wish to press upon the Government the desirability of setting up a high-powered legal committee to cover the whole of the field and to show where exactly the remaining differences are which in due course will by common consent have to be cleared up.
  11.36 p.m.
  Mr. Concannon: The right hon. Member for Down, South (Mr. Powell) and the hon and learned Member for Blackpool, North (Mr. Miscampbell) are right: great consultation is proceeding in my Department. We hope to bring the consultation to a conclusion next year.
  As the right hon. Gentleman said, some of his constituents were caught up in this matter some time ago. I felt it only right to ensure that the work force in Northern Ireland was covered to the same extent as the work force was covered in the United Kingdom.

  1549
  I believe that the task to which the right hon. Gentleman referred in the latter part of his remarks would be a major piece of work if we were ever to embark upon it.
  Question put and agreed to.
  Resolved,
  That the draft Preferential Payments in Insolvency (Northern Ireland) Order 1977, which was laid before this House on 5th July, be approved.

  NORTHERN IRELAND (LEGAL AID)
  11.38 p.m.
  The Minister of State, Northern Ireland Office (Mr. J. D. Concannon): I beg to move,
  That the draft Legal Aid, Advice and Assistance Order 1977, which was laid before this House on 5th July, be approved.
  The main purpose of the order is to introduce the £25 or "green form" legal advice and assistance scheme into Northern Ireland. The green form scheme was introduced in Great Britain in 1973 and has proved successful in making legal advice and assistance available to persons of limited means. I am sure hon. Members will welcome the order, which will bring the legal advice scheme in Northern Ireland broadly into line with that provided under the Legal Aid Act 1974 for England and Wales.
  11.39 p.m.
  Mr. Norman Miscampbell: The order exemplifies the slowness with which legislation in Northern Ireland is brought into line with that for England and Wales. As early as 1971 it was first thought desirable to make legal aid legislation in Northern Ireland compatible with that in England and Wales. This matter featured in the last Queen's Speech at Stormont before that Assembly collapsed. The Act for England and Wales was passed five years ago, and this order seeks to bring the Northern Ireland situation into line with that existing under that Act for England and Wales.
  We welcome the fact that the £25 limit is now to be made available in Northern Ireland. The Minister himself used the phrase "broadly in line with the English situation". There are clearer distinctions
  1550
  between what happens in our own courts and what is happening in Northern Ireland. Not least, perhaps most importantly—the other matters are perhaps more technical—is that a very much higher degree of legal aid is granted in the courts in Northern Ireland. As many as 90 per cent. of applicants receive legal aid in Northern Ireland whereas the figure for England and Wales—it is a matter of controversy between counties—is between 40 per cent. and 60 per cent.
  Equally important is the fact that in Northern Ireland no attempt is made to assess the means of the applicant. However, I notice that under Article 6 attempts are being made to ensure that persons who make application for legal aid and provide the courts with information which is manifestly wrong can be pursued thereafter and recovery can be made. In England and Wales this is done as a primary matter. An applicant's means are considered before he is given a legal aid certificate.
  That brings me to the last point which I wish to query with the Minister. It has been the practice in the northern courts that when solicitors are on the premises or in the precincts of a court—this applies to both civil and criminal legal aid—a magistrate is able to ask them whether they will represent the person appearing who is before them. I understand that this is a great advantage in that it ensures that the case is adequately presented and perhaps, to put it mildly, a bit of sense is knocked into the person appearing before the court because he gets the advantage of advice there and then.
  Under the new Section 7A(4)(c) a court has to be satisfied that
  "an application for legal aid in respect of the proceedings has not been made previously and been refused."
  Will the Minister comment on this alteration? Do the Minister and his Department feel that where an application has previously been made and refused and this has not been disclosed to the court, this is an abuse which should be ended?
  With those few words, I can only say that the order, as the Minister said, brings the law on legal aid in Northern Ireland broadly into line with that which exists here. In so doing we welcome it.
  11.44 p.m.
  Mr. James Molyneaux: I am sure that the hon. and learned Member for Blackpool, North (Mr. Miscampbell) did not intend the House to accept the literal meaning of the word "collapse" when he said that Stormont had collapsed. It is much more accurate to say, as my hon. Friend the Member for Antrim, North (Rev. Ian Paisley) once said, that it did not jump but was pushed. It was certainly removed by an Act of this House.
  I do not think that the hon. and learned Member for Blackpool, North was very much happier than I was on that occasion. The hon. Member for Epping Forest (Mr. Biggs-Davison) was even less happy with the situation. I would not accuse the Government Front Bench of doing more than passively permitting the action to be taken. I do not think that the Front Bench was wildly enthusiastic.
  Mr. Miscampbell: Perhaps I should have said that support was removed from it.
  Mr. Molyneaux: With fatal consequences, and those consequences are with us tonight. That is really the reason why we are engaged in this type of operation at this late hour. It is also the reason why the process which has been foreshadowed in the previous two short debates—namely, that of reviewing the law and bringing it into line with Great Britain—will have to be embarked upon sooner or later, and, in our view, the sooner the better.
  Although I do not claim to have much knowledge of legal matters and I always strive to keep as far distant from the legal profession as possible, since I find the friendship of lawyers somewhat expensive from time to time, I feel that this draft order is taking us in the right direction. We have all encountered examples in our constituency work of cases where the benefits conferred by the order would have helped greatly in providing resolution of the difficulties of many of our constituents. I hope that the order will make possible the resolution of a great many problems which hitherto have confounded all of us who have tried to give advice from the point of view of laymen.
  Now that we are set, on this day of all days, on a course at long last to bring Northern Ireland in all respects into line
  1552
  with the rest of the United Kingdom, we give our support to the order, which, in its own limited way, at least takes a step in that direction.
  11.47 p.m.
  Mr. Concannon: I thank the hon. Member for Antrim, South (Mr. Molyneaux) for his remarks.
  I think that I have two matters to answer, both of them raised by the hon. and learned Member for Blackpool, North (Mr. Miscampbell). First, he asked why it had taken so long to introduce this scheme into Northern Ireland. I think that he virtually answered his own question by saying that this was a measure which the Assembly was deeply involved in when it was dissolved, kicked or pushed—hon. Members sitting in different parts of the House describe it in various ways. It was decided to proceed by Order in Council, and the opportunity was taken to update certain other aspects of the legal aid scheme. To do that, we had to have consultations with bodies such as the Law Society in Northern Ireland, and this caused some further delay.
  The hon. and learned Gentleman was right in thinking that I said that the order brought the position in Northern Ireland broadly into line with that provided in the Legal Aid Act 1974 for England and Wales. There is one aspect in the order which differs from the original £25 scheme, and the hon. Gentleman hit the nail on the head. Section 7A (4) enables a court in certain circumstances to authorise a solicitor to assist a person who is party to proceedings. Experience of the operation of the corresponding provision in Great Britain has shown that on some occasions this facility has been misused by solicitors to represent a client in proceedings where an application for legal aid had been made and had been refused. Subsection (4) (c) of Section 7A will, it is hoped, prevent such abuse. A similar change is to be made in Great Britain.
  Mr. Miscampbell: Can the hon. Gentleman indicate the legislation by which such a change is to be made? I looked hopefully in the legislation which is before the House at the moment but I was not able immediately to identify it.
  Mr. Concannon: This is one of those cases where we are leapfrogging ahead. When we were discussing these matters

  1553
  with bodies in Northern Ireland, we also discussed it with the appropriate bodies in England and Wales, and we were advised that it would be better to take this line now, otherwise we would have to catch up again in the near future. This is a case of our leapfrogging and, if and when it comes, the law in Great Britain will, for a change, have to catch up with the law in Northern Ireland instead of vice versa.
  Question put and agreed to.
  Resolved,
  That the draft Legal Aid, Advice and Assistance Order 1977, which was laid before this House on 5th July, be approved.

  HOPS MARKETING SCHEME
  11.50 p.m.
  The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. E. S. Bishop): I beg to move,
  That the draft Amendments of the Hops Marketing Scheme 1932, as amended, which were laid before this House on 30th June, be approved.
  The Hops Marketing Scheme has operated since 1932 and has been amended on several occasions. The Hops Marketing Board considered that further amendment of the scheme was required to secure the supply of specific hop varieties of the quality standards wanted by United Kingdom brewers and to enable them to be supplied on forward contracts for up to two or three years ahead.
  The proposed amendments were designed to introduce provision for each variety of hops consigned to the Board to be allocated to a separate varietal pool and for a system of priorities in payment to growers within pools so that they would be encouraged to produce hops to be sold on forward contract. The scheme's quota provisions would continue to operate, but in a somewhat more complicated fashion than before. Amendments were also proposed to provide for transition from the present arrangements. In addition, the Board also sought power to acquire hop baling presses and to sell them to registered producers should the need arise. Finally, the amendments delete a reference in the scheme to the Permanent Joint Hops Committee, which no longer exists.
  1554
  The Agricultural Marketing Act requires that, in normal circumstances, a marketing scheme may be amended only on the initiative of the board concerned, and the board must first notify all registered producers of the proposed amendments. The Board circulated the proposed amendments to growers in November 1975. A poll of producers has to be held on whether or not the amendments should be submitted to the Minister if growers with an aggregate hop area of 1,000 hectares so request. In this case, no poll was requested and the amendments were submitted to my right hon. Friend's predecessor in January 1976.
  Lord Peart, the then Minister, duly gave notice that he had received the proposed amendments, and three growers subsequently made formal objections. In accordance with the Act, the Minister directed that a public inquiry be held into the objections, and he appointed Mr. A. O. R. Vick, barrister at law, to conduct it. Mr. Vick heard evidence from 11th to 22nd October 1976 and reported to my right hon. Friend the present Minister in December 1976, and the report was published in January 1977.
  The Board subsequently indicated its intention to make certain administrative arrangements, not requiring amendment of the scheme and explained their effect to growers at a series of special district meetings. I understand that the arrangements are satisfactory to the objectors and to other growers and that their effect would be to allow growers to offer hops up to the limit recommended in the report. After considering the amendments and the report, and in the light of the arrangements to be adopted by the Board, my right hon. Friend proposed to the Board some modifications of the amendments. These modifications were of a largely technical nature, allowing the amended scheme to operate with effect from the 1977 crop and providing for the Board to maximise payment to growers in certain circumstances where the amendments, as originally drafted, would have led to a lower return on their hops. The Board assented to these modifications.
  As there has been a public inquiry and as my right hon. Friend is satisfied that these amendments will conduce to the more efficient operation of the scheme, he has laid these amendments as modified

  1555
  in draft before each House of Parliament for approval. I therefore seek the approval of the House for them.
  11.54 p.m.
  Mr. Michael Joplin: I find myself in the strange situation of not knowing whether to declare an interest. However, I declare an interest as a farmer, but not as one who has grown or is ever likely to grow hops.
  The Opposition welcome the proposals. We regard them as a forward step in the marketing of hops—a product which has for many years been marketed through one of our statutory marketing boards in which we have faith and confidence and which we hope will be allowed to continue within the rules of the European Economic Community.
  This proposal to improve the marketing of hops comes hotfoot on the heels of the legislation which the Government proposed last year—and which we did not oppose—in the form of the Agriculture (Miscellaneous Provisions) Act 1976. The Minister will remember that we all became great experts on the sex life of hops and we agreed to allow certain designated areas to be set up for the production of seedless hops. The Government said that the purpose of such areas was to enable our hop growers to participate more in the export trade, which particularly likes unsexed hops. However, I should not care to go too deeply into the merits of sexed or unsexed hops tonight. As the scheme is partly concerned with helping the export trade, it will not be out of order to ask the Minister to tell us what has happened as a result of that Act of last year. Are some of the zones being set up? Can the right hon. Gentleman give us a progress report on these developments?
  The Hops Marketing Board has intimated to me that it regards it as of great importance to have these amendments accepted as they will enable the Board to increase its prospects of developing an export market as well as at least maintaining our share of the home market. We should remember that, now we are within the EEC, it will be much easier for producers of hops in the rest of the Community to move into our market area.
  1556
  I am particularly pleased to see the way in which forward contracting arrangements have been entered into by the Board for this year's crop—that is, 1977. The Board has sold 75 per cent. of the estimated average production on indexed contracts and more than 10 per cent. of the estimated average production on fixed-price contracts. That is for this year's crop. However, the Board says that for next year's crop it has already sold 74 per cent. of the estimated average production and that orders from the brewing industry are already starting to come in for 1979. This is something that we should acknowledge as an excellent result and an example of the way in which these marketing proposals can be made to work.
  I should like to ask the Minister a question relating to quotas and these proposals. What will happen if there is a bad season and the estimated average production fails to be reached by a fairly considerable margin? Will there be severe penalties?
  The Minister said that the proposals come to us in this form following the public inquiry which was carried out in October of last year. I hope he will confirm that the three producers who objected are now happy. Will he confirm that the scheme will allow growers to offer up to 100 per cent. of their basic quota under the forward contract scheme?
  Since the Government have followed the recommendation of the inspector relating to the views of the three producers, what of the views of the other 164 producers of hops in the country? Are we likely to find that the scheme, as amended and agreed by the Board, will meet with objections from those growers? They might be unhappy with the proposals as they have now been produced. We ought to know to what extent the bulk of the producers have been consulted now that the Board has altered its proposals.
  I do not wish to be critical of the Board, which has the confidence of the whole House. Over the past few months we have heard many expressions of confidence in the marketing bodies for milk, potatoes and hops. The view has been forcibly expressed that these statutory bodies ought to be allowed to

  1557
  continue to do their job. I was particularly glad to see how, in some respects, the Hops Marketing Board came out of the inquiry very well. At one stage the inspector tells us that there was a good deal of criticism about the Board's activities on the export side of the business.
  In paragraph 40 of the inspector's report, he says:
  "I therefore reject the criticisms of the Board as regards the export side of the case made by the objectors although I am confident that the Board and indeed the growers realise how essential it is for the industry to become export orientated in the changed marketing conditions."
  The Board comes out of the inquriy rather well.
  In paragraph 61 of the report we are told that the objectors were critical of the Board's costs. I imagine that that was a reference to administrative costs. On page 22 of the report, the inspector says of that criticism:
  "I heard very little evidence from the objectors as to the criticism of the Board's costs being too high, indeed, Mr. Bellamy in his closing submission, without formally abandoning the point, did not wish to pursue it."
  That, again, is a feather in the cap of the Board. I was glad to see, in paragraph 32, the inspector saying of the chairman of the Board:
  "Mr. Scott, who carried the brunt of the attack'"—
  that is, by the objectors—
  "was an impressive witness, having a profound knowledge of the industry as well as of the Board's policy in recent years."
  The House continues to have confidence in the way that the Board does its work. If we are to have a continuation of this scheme, it is important that the EEC regulations allow this type of operation to continue. I hope that the Minister will tell us something about the future of the Board under these new arrangements within the rules of the Community, I hope he will confirm that these proposals are in no way likely to cause the Community to tell the Board that its activities are outside the Community rules. Rather, I hope that the Board will be able to continue with its valuable work.
  Although the inquiry was a victory for the three objectors who opposed the Board's proposals, the Board has shown itself to be sufficiently adaptable to change its proposals in the light of the inspec-
  1558
  tor's report and recommendations. We should give credit to the Board for being sufficiently flexible to change the proposals in the light of the evidence. I hope that these powers will considerably improve the marketing of hops. I hope that they will allow us through the varietal pools to expand our export trade and strengthen our grip on the home market. We welcome these proposals.
  12.5 a.m.
  Mr. Michael Hamilton: I thank the Minister of State for bringing forward the amendments. In so doing I must declare that I am a member of the Hops Marketing Board, and I have been so since before I came into the House. The Minister pointed out that the Board is now 45 years old and, therefore, in the prime of life. It was the first of the marketing boards to be set up. It has abolished surpluses and brought stability to the industry, stability that is so sadly lacking today on the mainland of Europe where over-production is rife.
  The hops industry is very small. We have heard that there are fewer than 500 growers. However, it would be a mistake to imagine that the marketing of hops is a simple, unsophisticated business. I suggest that the 10 pages of amendments that we are considering are highly complex even for the hop grower and well nigh unintelligible to the ordinary layman.
  In essence, membership of the European Community has necessitated new trading arrangements between the Hops Marketing Board and its customer the Brewers Society. It has rightly been said that these proposals facilitated the making of long-term contracts. As my hon. Friend the Member for Westmorland (Mr. Jopling) pointed out, they will improve the export potential of the Board. Moreover, they will encourage the growing of varieties that are wanted and will discourage production of those that are least in demand. All in all, the amendments to the scheme are important and it is to the credit of the Minister that they have been brought forward despite the usual July pressures on parliamentary time.
  Important though these amendments are, they are not, as some might imagine, directly relevant to the continuance of the Hops Marketing Board within the Eurpean Community. That hurdle still lies

  1559
  ahead, although I am glad that my hon. Friend referred to it.
  I am deeply conscious of the plight of small growers, especially in Germany, who are incapable of organising their own market. I am conscious, too, of the straits in which the English hop industry found itself between the wars before the Board was established. It was then an industry crippled with over-production and bankruptcies. If hop growers wanted their marketing boards wound up, the Minister would do it for them tomorrow, but that is not their wish. I am very happy to reassure my hon. Friend, if he needs reassurance, that that is so.
  When the crunch comes, and when the constitution of the marketing boards is on the European agenda, I beg the Minister to have in mind the benefits which have accrued in this country from the present system.
  12.11 a.m.
  Mr. Bishop: I am pleased that the amendments to the scheme have been welcomed by the hon. Members for Westmorland (Mr. Jopling) and Salisbury (Mr. Hamilton). I am sorry that I had to go into some of the technicalities of the consideration of the objections, but it was necessary in order to assure the House that the procedures had been properly followed.
  The hon. Member for Westmorland asked me what would happen about quotas in a poor harvest. That is a matter for the Board. The amendments allow for special arrangements if there are exceptional circumstances.
  The hon. Member commented on the Agriculture (Miscellaneous Provisions) Act and the debates we had last year, particularly in Committee, on the sex of hops. The Act allows the Minister to designate an area in which the growth of seedless hops could be enforced. The hon. Member will know of the need to keep the sexes apart. We have not had a request from growers for an area to be designated in 1977, although it is likely that such an area will be designated in the coming year. Hampshire already grows seedless hops on a voluntary basis and has not felt the need for enforcement.
  I believe that the Board has fully consulted. The objectors have indicated that the proposed amendments are acceptable
  1560
  to them, and the difficulties they feared—those of the old system working alongside the new system when the quotas were determined—have been removed. Their objections are no longer relevant. One of the objectors, Mr. F. Wilesmith, has now joined the Board, which prompts me to comment that "If you can't beat 'em, join 'em". The position now is that all the procedures have been followed and the objectors accept the situation.
  I turn now to the position since the accession of this country to the EEC. Until accession the United Kingdom market was self-contained, with a restrictive import regime and close liaison between the Hops Marketing Board and the brewers regulating the supply and demand. However, the freer marketing regime and the increased demand for lager-type beers, for which mainly Continental seedless hops are used, has created new pressures on the hops industry. Although acreage has fallen, there has been substantial replanting with new varieties and production has not fallen commensurately, as has been the case with many other products. Increasing yields have also produced surpluses, and these pressures have led directly to the proposed revision of the scheme.
  The hon. Member for Salisbury raised the question of the future of the Hops Marketing Board. I remind him that agreement was recently reached in the Council of Ministers on an amendment to the hops regime aimed at stabilising the EEC market and reducing the imbalance between supply and demand. United Kingdom growers will continue to benefit from income aid that will be paid through the Hops Marketing Board until the end of 1980. Before the end of 1980 we shall need to discuss with the Board its constitution after that date. The aim will be to ensure the continued effectiveness of our hop marketing arrangements within the EEC context. The current amendments may well set a pattern of marketing which will continue past 1980.
  Our objective remains to maintain such functions of the boards as are considered essential to orderly marketing of the products concerned. In this case we are concerned about hops.
  The present scheme has served the growers well over 40 years, but it limits incentives to adapt production to changes in demand. These amendments will

  1561
  encourage growers to produce hops which can be sold on forward contract, thus providing a firm base for the development of the industry. I, too, pay tribute to the co-operation of all those concerned in this matter, including the Hops Marketing Board and my officials. The amendments involved are technical, but I am sure that the Board and my officials understand them. We are confident that when they are working they will help the Board to do the job it has been given and which it has discharged so well over the last 40 years. I commend the amendments to the House.
  Question put and agreed to.
  Resolved.
  That the draft Amendments of the Hops Marketing Scheme 1932, as amended, which were laid before this House on 30th June, be approved.

  PETITION

    Disabled Persons (Mobility)
    12.16 a.m.
    Mr. Michael Jopling: I seek to present a petition on behalf of my constituents as part of the National Mobility Petition. The petition bears 5,424 names, gathered from all parts of the constituency. It reflects a great deal of credit on Miss Jean Simpson and her team, of Kendal, who have achieved this result.
    The petition states:
    To the Honouurable the Commons of the United Kingdom of Great Britain and Ireland in Parliament assembled. Whereby the statement of the Secretary of State for the Social Services on 23rd July 1976 on mobility policy for the disabled causes your humble petitioners great concern in that it removes the assurance of continued independent mobility from those severely disabled persons now driving invalid tricycles, and condemns many new applicants for mobility assistance to be housebound as a result of the inadequate levels of the mobility allowance. Your humble petitioners pray that your honourable House call upon the Secretary of State for the Social Services to promote policies and propose such necessary legislation as will:

    (a) Immediately guarantee the rights of continued independent mobility to current invalid tricycle drivers when the supply of tricycles is exhausted, in order to allay their great anxiety for the future.

    (b) Restore immediately the option of a suitably adapted car or an invalid tricycle to new applicants for mobility assistance, under the powers granted to the Secretary
    1562
    of State for the Social Services by Section 33 of the Health Services and Public Health Act 1968.

    (c) Actively promote projects to decision and produce specialised vehicles which will enable an increasing number of severely disabled people to enjoy independent mobility.

    (d) Yourselves enact the legislation.

    Further, your humble petitioners pray that your honourable House take all necessary steps to promote a total policy on mobility which would ensure that a choice is available to the severely disabled between a mobility allowance set at a level which will enable the purchase and maintenance of appliances that they need, the use of a specialised vehicle or the issue of a suitably adapted car; which policy should be implemented with all possible urgency.
    And your petitioners, as in duty bound, will ever pray, etc.
    To lie upon the Table.

  MR. H. C. THORNE
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Bates.]
  12.19 a. m.
  Sir Anthony Royle: First, I apologise to the Under-Secretary for dragging him here at this inclement hour. Having done a similar job once myself, I have some sympathy with him.
  I want to raise a classic case—the need for this House to achieve justice for an individual, one of my constituents. Many Ministers, including myself, have considered this case over the years, but it has now come to a conclusion and there are certain major issues connected with it which I felt I should raise tonight. It has been the duty of this House over the centuries to achieve justice for individuals. It is only through his Member of Parliament that a constituent can bring to this forum of the people such a case. I hope that the Minister, who with his colleagues has already put right some mistakes, will be able to put right this major mistake—namely, the right of my constituent to compensation.
  Time and again over the last century this type of case has come before the House, particularly in the closing years of the Victorian era. My constituent was born in the closing years of the Victorian era. He is aged 87. He came to the House this afternoon, a spry and

  1563
  sprightly man despite all the agonies of mind that he has gone through.
  After the First World War, Mr. Thorne set up business in the Federated Malay States, which were at that time part of the British Empire. He had a practice which in those days, 1921–22, was worth £9,000 a year. That was in the days when the pound was worth a pound. He had a bright future ahead of him.
  Due to a civil debt which involved bankruptcy, Mr. Thorne was in error charged with a criminal offence. He was taken to court and sent to gaol. He was charged wrongly and sentenced to 12 months' imprisonment in 1923. The British administration was responsible. It was made responsible under a treaty of 1895.
  As a result of being sentenced to that year in gaol, Mr. Thorne was removed from the local Bar and was unable to practice as a barrister. He was also struck off as a solicitor in the United Kingdom. He has suffered from this tragedy all his life.
  Through the intervention of Mr. Ernest Bevin in 1939, Mr. Thorne achieved a clerk's job as a temporary civil servant. He retired from that job in 1956. He lives in great hardship in my constituency. He owns a rambling, large Victorian house which he cannot afford to keep up. His situation can be described only as tragic.
  What has happened since Mr. Thorne retired? He has, of course, fought to clear his name. He finally achieved success when, in 1963, the Sultan of Perak, as the successor to the colonial Government, granted a Royal pardon and all the records of his conviction were expunged. The records of his fingerprints were returned to him. So far as Malaysia is concerned, Mr. Thorne is innocent and should never have been convicted of a crime which he did not commit.
  Ministers here have followed the ruling of Malaysia. On 21st February this year, Mr. Thorne received a letter from the Lord Chancellor's Department dated 21st February 1977. It read:
  "The pardon entirely removes any stain on your character. You are to be treated for all purposes as if your conviction had never taken
  1564
  place. This has as much force in England as anywhere else."
  That was confirmed the next day in a letter to me from a Minister in the Foreign and Commonwealth Office, Lord Goronwy-Roberts, who has taken a great and sympathetic interest. He said:
  "I am happy to say that the Foreign and Commonwealth Office have secured agreement to an ex-gratia payment of £3,000 being made to Mr. Thorne in view of the hardship he has suffered following his wrongful imprisonment in Malaya in 1922."
  There is, therefore, no dispute between the law in this country and the law in Malaya. Mr. Thorne is innocent.
  I now turn to the payment that has been awarded to him. It is not just a question of the ex gratia amount of £3,000. Interest in the case has been widespread. A dedicated campaign has been conducted on Mr. Thome's behalf by a young journalist, Hugh Kirby of the Richmond Herald. He has pressed the case upon anybody who would listen and work on Mr. Thorne's behalf.
  I shall not this evening quote at any great length a recent editorial in the Richmond Herald, but I think it is worth commenting on the sort of feeling that is felt by public opinion about the way in which this old gentleman has been treated. Part of the editorial in the Richmond Herald of Thursday 14th July states:
  "Awarded £3,000 by the Foreign Office as an expression of sympathy for a corrupt and damning mistake by British colonial officials which sent him to prison for a year in 1922 and has ruined his life ever since, Mr. Thorne refuses to use a penny of it. And despite the poverty which surrounds 88-year-old Hugh Thorne and his wife Pamela in their dilapidated Lonsdale Road home, this newspaper applauds his decision as that of a proud and courageous man. As a £9,000-a-year solicitor in 1922 at the height of the rubber boom, Mr. Thorne had more than 40 years of business life to look forward to. And yet the faceless bureaucrats of Whitehall have the nerve to offer him a paltry £3,000 'as an expression of sympathy'. That sympathy has to be stretched over 55 years when Hugh Thorne, struck off the roll for a crime he never committed, scraped for a living."
  That is the feeling of many people who live in my constituency and of people in a wider area around it who know of this case.
  As I have said, there is no dispute now over the question of Mr. Thorne's pardon or his innocence. That is accepted by everyone. The only point at issue between the Government and myself is

  1565
  the question of compensation and how much it should be.
  I regret that a Treasury Minister will not be answering the debate, because I recognise the efforts that Ministers in the Foreign and Commonwealth Office and officials behind them have made to try to get justice for this man. It is now a question of the Treasury deciding how much money it is prepared to pay out in compensation for Mr. Thorne.
  I hope that tonight the Under-Secretary will not quote the April 1969 court case, because the Government have in the past quoted part of a judgment which is in error. The passages which have been quoted are in fact an observation and in error. This position does not accept the ruling of Malaysian law and challenges the validity of setting aside a conviction by a court in that country. It ignores a pardon which was granted after investigation and after an inquiry, and the British court in question in 1969 and early 1970 had no jurisdiction to comment on the nature of the pardon, but only on whether the writ before it could stand. There was, in fact, no evidence before the court in 1969 and 1970 relating to a pardon or the effect on Malay law, or, indeed, the Malay pardon's in English law. The Government have admitted that the imprisonment was wrongful. That constitutes an admission of fault.
  Therefore, what I ask tonight is that the Minister looks again at the whole matter relating to compensation. I know that the Under-Secretary will agree with me that this is a tragic case. I see no reason at all why similar rules and regulations should not be followed in Mr. Thorne's case as are followed in the normal course of events by the Home Office in a domestic case.
  For instance, the Home Office paid £17,500 to Mr. Virag and large sums in many other cases between 1972 and 1977. Only today I have had sent to me an official explanatory note, produced and typed by the Home Office, on the method that it uses to provide
  "ex gratia payments to persons wrongfully convicted or charged and the procedure for assessing the amount of payment".
  This procedure lays down, in paragraph 2, that
  "Subject to Treasury approval, the amount of the payment to be made is at the discretion of the Home Secretary, but it is his practice
  1566
  before deciding this to seek the advice of an independent assessor experienced in the assessment of damages. An interim payment may be made in the meantime."
  There are another six paragraphs of that instruction. It includes the fact that a person who has been wronged can be represented by a solicitor and that they can meet and discuss and go into detail on how much payment should be made and also on what it should be based. It seems to me to be right—I am sure that the Minister will look into this—that this procedure, which has not yet been followed in regard to Mr. Thorne, should be followed in his case.
  I hope that the Minister tonight will be able to give some feeling of hope to this man in the evening of his life. He is a man aged 87, living in great poverty, who has been deeply wronged and who has suffered for 55 years. It happened to him five years before I was born. It seems to me that in this House tonight we might perhaps do something to put this right.
  12.32 a.m.
  The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Evan Luard): This is an unhappy story, and I am grateful to the hon. Member for Richmond, Surrey (Sir A. Royle) for having put the case to the House and to me so cogently and with obviously such heartfelt sincerity. It is not often that we have to deal here with constituency cases where the relevant events occurred 55 years ago, but the hon. Gentleman's constituent was a relatively young man at the time when these unfortunate events occurred, and he is obviously also a very persistent person. As the hon. Gentleman has described, over very many years Mr. Thorne has fought this case. It has been raised in many different ways with different Governments and, now relatively advanced in years, he is continuing to present his case.
  The basic facts of the matter are not in dispute, and the essential facts have been given by the hon. Gentleman in his speech. We accept that Mr. Thorne's whole life has been affected by his imprisonment in 1922 as a result of a conviction in the Malayan courts, as described by the hon. Gentleman, and that that conviction was subsequently quashed. I think we can only admire Mr. Thorne's tenacity in seeking complete vindication in the way that he has.

  1567
  Partly as a result of this persistence, Mr Thorne, with the assistance of the late and distinguished Member of this House James Griffiths, was successful in 1963 in securing a Royal pardon from the Sultan of Perak. I understand that, in connection with the pardon, the Government and judicial authorities in Malaysia took action to quash the conviction, to ensure that all records of the proceedings were destroyed, to ensure that the records of conviction were destroyed, deleted and expunged, that Mr. Thorne's name was removed from the register of criminals by the Registrar, Central Criminal Registry, and that his fingerprints were returned to him for disposal. Mr. Thorne's name was cleared of any criminal stain, and he was thereafter quite properly restored to the solicitors' roll from which his name had been struck.
  In 1969 Mr. Thorne sued the Attorney-General of the United Kingdom for false imprisonment in Perak and malicious prosecution. He claimed, in effect, that the Crown in respect of the United Kingdom was responsible for certain actions which were taken by officials in Perak. This statement of claim was struck out by the master and subsequently on appeal by the judge in chambers, as disclosing no reasonable cause of action.
  A further appeal by Mr. Thorne came before the Court of Appeal in 1970. Having agreed to let him amend his action to refer to the Foreign and Commonwealth Office instead of the Attorney-General, that court dismissed his appeal with costs and refused leave to appeal to the House of Lords. The Court of Appeal in no way questioned the fact or validity of the pardon but held that it did not give Mr. Thorne a right to sue for damages. The court noted Mr. Thorne's claim, which it did not accept, that the prosecutor in the courts of Malaya had been a person for whom the Crown of England was responsible, but it concluded that there was no possible ground for any action against the Crown or any officers of the Crown in the matter. I believe that a subsequent attempt by Mr. Thorne to have an appeal heard by the House of Lords was also unsuccessful. It is not for me to enter into argument about these various judgments on Mr. Thorne's statement of claim, but I mention them only to
  1568
  demonstrate the unanimity of the highest courts in the land on the matter.
  Since 1964, Mr. Thorne has sought to obtain financial compensation from Her Majesty's Government in the United Kingdom for the injustice done to him. But I think that the facts that I have already given show that those events were not the responsibility of Her Majesty's Government in the United Kingdom. Governments of both parties in this country have consistently maintained that no legal responsibility rested on Her Majesty's Government.
  I cannot do better than read out a passage in a letter from my noble Friend Lord Shepherd, dated 1968, quoting an earlier statement by Lord Landsdown:
  "The legal position is that any claim for compensation which Mr. Thorne may consider has arisen by reason of his conviction in 1922 in Perak could never have been brought against the United Kingdom Government but, if at all, only against the appropriate Government in Malaya. Such a claim now would be one for consideration by the Government of Malaysia by reason of the transfer of rights, liabilities and obligations of the Federation of Malaya under the provisions of the constitution set out in an annex to the Federation of Malaya Independence Order in Council 1957."
  I recall that the hon. Gentleman, when he occupied the position I hold as Under-Secretary of State, told James Griffiths that, as Mr. Thorne's claim for compensation was in Her Majesty's Government's view a matter for the Malaysian authorities, it would not be appropriate for Her Majesty's Government to make an ex gratia payment. He also expressed the view that, as the courts had ruled that Mr. Thorne had no sound claim against Her Majesty's Government in the United Kingdom, there could be no question of the Government's offering him compensation.
  I do not recall that fact to score a point against the hon. Member. I know him to be a fair-minded person. I refer to his statement in order to show that fair-minded people in both parties and Ministers in both Governments have reached the same conclusion—that this matter is not within the responsibility of Her Majesty's Government.
  Despite that conclusion, in 1976, in response to requests from Mr. Thorne to look again at the matter, and in the absence of any admission of legal liability, the present Government took the decision, as an exceptional measure and

  1569
  as evidence of our sincere sympathy for Mr. Thorne, to make him an ex gratia payment of £3,000. It was made clear at the time that this did not involve any admission of liability on the part of Her Majesty's Government.
  My noble Friend the Minister of State wrote to the hon. Gentleman at that time making clear that the payment could not in any way be regarded as compensation but that it was a recognition by the Government of their concern and sympathy for Mr. Thorne in the unhappy course of events that had occurred to him. It was in no way a recognition of liability. I do not think that that decision concerning liability is likely to be changed.
  But I am very anxious that Mr. Thorne should not feel that the arguments put on his behalf by the hon. Gentleman and those he himself has put will not receive
  1570
  the fullest and most careful examination. The hon. Gentleman has raised in particular certain points concerning the principles governing compensation and the basis on which it is granted. I should like to examine those arguments in greater detail, and in the circumstances I am prepared to ask that the case be looked at yet again and that all the facts raised by the hon. Gentleman tonight and any further facts that he or Mr. Thorne likes to raise with us be considered. I cannot, of course, give any indication tonight as to the likely outcome, but I could give an assurance that we are prepared to look at this unhappy case once again with the greatest of concern and sympathy.
  Question put and agreed to.
  Adjourned accordingly at twenty-one minutes to One o'clock.

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  7511 Torpedo
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Preamble
The House met at half past two of the clock:
The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Leicester.

LORD CARVER
Field Marshal Sir Richard Michael Power Carver, GCB, CBE, DSO, MC, having been created Baron Carver, of Shackleford in the County of Surrey, for life—was, in his robes, introduced between the Lord Harding of Petherton and the Lord Elworthy.

PICKETING LAW
2.46 p.m.
Lord ORR-EWING: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what lessons they have learned and what they plan as a result of the picketing of Grunwick.
Lord WALLACE of COSLANY: My Lords, as my right honourable friend the Secretary of State for Employment stated in another place on 12th July, he intends to consult the parties principally concerned to see whether improvements to the law on picketing can be proposed.
Lord ORR-EWING: My Lords, does it not bring the law into some disrepute when 18,000 miners try peacefully to persuade 260 workers in a single firm? Does it make sense to have to divert 4,000 policemen from other vital duties in order to keep some measure of order? Will the Government consider most seriously and urgently whether the law on peaceful persuasion can be clarified and peaceful persuasion made peaceful, so that employers, employees, local residents, local firms and, above all, the police are not exploited by a vicious minority dedicated to creating strife and violence?
Lord WALLACE of COSLANY: My Lords, may I first state to the House that there has been no trouble since 11th July. Picketing has been peaceful. There have been no arrests. The noble Lord referred to a large number of miners. Certainly it is a tradition among trade unionists, when there is a difficult issue in which their comrades in another union are involved, if necessary to rally and support their comrades in arms. The trouble has arisen from outside elements—of Right and Left, may I state—who have provoked trouble and brought the police, whose conduct throughout has been magnificent, into a difficult situation.
Lord MURRAY of GRAVESEND: My Lords, when the Government are looking at the position of picketing, will they also look at the organisations, such as the misnamed National Association for Freedom, which have apparently also come in from outside to stir up trouble?
Lord WALLACE of COSLANY: My Lords, when I talked about the extremes of Right and Left, that was one of the organisations I had in mind. I am not going to classify them as of Right or Left. It is a matter for noble Lords to do so.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, the question of picketing and the law relating to it obviously requires a debate at some stage and I do not want to enter into the wider issues, but there are two questions that I should like to ask the noble Lord. Is it not the case that, so far from needing clarifying, the law of picketing needs to be observed and kept since the main lines of it are perfectly plain? Does not the noble Lord think that perhaps the phrase "comrades in arms", which he used, is unfortunate? Should they not be peaceful companions supporting a peaceful cause?
Lord WALLACE of COSLANY: My Lords, perhaps my reference to "comrades in arms" had the military connotation which the noble and learned Lord assumed; but that phrase is also used generally in the context of people helping one another, and it was in that context that I used it. Certainly I, and I know the whole House, would not condone any attempt at violent persuasion in any shape or form; it is not the tradition of this country, anyway.

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There is a certain amount of difficulty in sorting this problem out. The law remains, it is true; the Conservative Party when in office introduced legislation in this connection, as did a previous Labour Government. My right honourable friend wants to have very prolonged and detailed consultations with all sorts of bodies; the TUC, CBI, the organisation concerned, ACAS, and above all the police representative bodies, of which there are not just one but several. He wants to consult with the Police Federation, the Chief Constables Association and many other organisations and their relevant equivalents in Scotland. There therefore arises from this situation some need for consultation. In due course the House must be advised, and in due course this Chamber will have to debate the conclusions of those discussions.
Lord WIGODER: My Lords, may I ask the Minister to agree that the principal lesson to be learned is that, where there is an exceptional dispute which has arisen as the result of exceptional provocation on both sides, it would be quite wrong to rush into an amendment of the law without very cool and careful consideration?
Lord WALLACE of COSLANY: I entirely agree, my Lords. And, of course, it is true that certain proceedings are taking place at the moment and the decisions reached may have some very important bearing on various discussions that are to take place. I entirely agree that we should not rush this and make some sort of sensational gesture. We have had enough sensational gestures. We want to see orderly and peaceful picketing and proper, normal industrial relations.
Lord PAGET of NORTHAMPTON: My Lords, would the Minister agree that picketing in its origin was an aspect of freedom giving the weak the right to be heard in face of the strong, but when the situation becomes reversed then picketing, as in this instance, can become an instrument of terror and, as such, raises the grave anxieties we have heard expressed?
Lord WALLACE of COSLANY: My Lords, in reply to my noble friend, I
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would not be so sure that originally the case was of the weak against the strong. Later on, possibly, strength grew on one side rather against the other. We must await the decisions of the two courts that are sitting.
Lord INGLEWOOD: My Lords, when the noble Lord spoke of comrades in arms, did he include the Socialist Workers' Party, who claim to have played a very prominent role during this strike latterly, planned what they call a "week of action", and are believed to be ready to start again in the middle of next month?
Lord WALLACE of COSLANY: My Lords, I condemned extremists on both sides. When I referred to comrades in arms I was referring to genuine trade unionists, men of great repute and integrity, and a movement to which I am proud to belong.
Lord CLIFFORD of CHUDLEIGH: My Lords, may I ask the noble Lord to explain—perhaps his noble friend might also do so—what was the insinuation that the National Association for Freedom was supposed to have done wrong? So far as one can see, all it was doing was helping to deliver the mail to Grunwick—
Noble Lords: Really!
Lord CLIFFORD of CHUDLEIGH: — which, under the Post Office Act, was illegally being withheld.
Lord WALLACE of COSLANY: That is a matter of opinion, my Lords. Many of us have the opinion that it might have been provocative action but, as I say, it is a matter of opinion. What we are concerned with here is that, in a dispute of this kind, it should be trade unionists working legitimately for their rights, and any interference from outside bodies for political or other reasons should be banned and not allowed to provoke further trouble.
The Earl of LAUDERDALE: My Lords, is the Minister saying that citizens of this country are not allowed to support an industrialist who is being harassed?
Lord WALLACE of COSLANY: My Lords, I think that industrialists as well as workers have their trade unions.
Lord CARR of HADLEY: My Lords, may I ask the noble Lord two questions, one specific and one general? Specifically, would the Government seriously consider approaching the TUC to see whether it is possible to develop a code of practice about picketing? I am sure my noble and learned friend Lord Hailsham of Saint Marylebone is right when he says that the law here is quite clear, but that it is clarity about how it should be practised and observed which is lacking. Will the noble Lord bear in mind the good effect of what was an informal code of practice in the miners' strike of 1973–74? There was an informal code of practice which had very beneficial results. My general question is to ask the Government whether they will consider on this and all occasions giving a strong public lead, not underestimating the moral authority which Ministers have, in making clear to everybody concerned the difference between picketing and demonstrations? In this country both are legitimate activities, but there is a difference between them and it ought to be made clear.
Lord WALLACE of COSLANY: My Lords, I certainly accept the noble Lord's last suggestion and I assure him that it will be passed on to my right honourable friend, who is as anxious about this matter as we all are. Regarding a code of practice, I certainly agree that orderly procedures voluntarily adopted by those involved in disputes could do much to help ensure that picketing is peaceful. The idea of a code of practice on the subject will of course be one of the possibilities that will be considered, and I thank the noble Lord for his remarks.
The LORD PRIVY SEAL (Lord Peart): I suggest that we have had a very fair discussion on this Question, my Lords. Perhaps we might move on to the next Question.

LAW OF THE SEA CONFERENCE
2.57 p.m.
Lord BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what conclusions were reached at the Law of the Sea Conference.
Lord PEART: My Lords, during this session, which concluded on 15th July, detailed informal discussions were held on the main subjects on which agreement was still outstanding. On the issue of the régime for the exploitation of the deep seabed, there was little sign of a narrowing of the gulf between the developing countries and the industrialised countries.
It had been hoped that in the course of the session, the president of the conference would issue a new informal composite negotiating text. This text would be intended to replace the present negotiating text as the basis for negotiation at the next session. Unfortunately, it could not be got ready before the end of the session and is now expected towards the end of this week. I shall arrange for copies to be placed in the Library when it becomes available.
Lord BROCKWAY: My Lords, I thank my noble friend the Leader of the House for that Answer. Is it not the case that the text which is to be prepared is not a text of agreement but a text classifying disagreements about which compromises may be reached? Is this not a very disappointing result of a conference which has gone on for nearly four years and which still indicates that the nations are competing against each other to control the minerals under the sea?
Lord PEART: My Lords, I hope my noble friend will wait until he has seen what is in the Library. I understand his comments. This is of course a very difficult matter and many problems exist here which involve not only fisheries and mineral development; but I hope that out of it will come something which will be creative in the best sense, and will be helpful.
Lord BROCKWAY: My Lords, does not the crucial question concern who is to exploit the millions of minerals which are in the rocks under the oceans and—as last weekend's conference of the Society of Chemical Industries showed—even present in seawaters? Who is to have these? Should these not be for the benefit of all the nations of the world rather than for the one nation which exploits them?
Lord PEART: My Lords, that is precisely the purpose of the conference. I am not in any way responsible for the delay here. The conference has adjourned, and it will meet again in Geneva in March next year. The British Government should not be blamed. All I am saying is that this is the way that we should try to get a good régime, and I hope we shall.
Baroness GAITSKELL: My Lords, does the noble Lord the Leader of the House agree, first, that in considering the delay here we must take into account the fact that a complex and difficult problem is involved, and, secondly, that we would fool ourselves if we were to think that this is a problem which we can solve quickly? It may take years to solve. If we minimise the problem, we should simply be on the wrong track.
Lord PEART: My Lords, I agree with my noble friend.
Lord CAMPBELL of CROY: My Lords, bearing in mind that the first three weeks of this session was by agreement devoted entirely to the question of an international authority for deep-sea mining of minerals well beyond the shores of the countries concerned, and that the noble Lord has said that no progress has been made on that, and since all the other matters on which there is some progress and agreement, such as navigation and control of pollution, depend upon a settlement of this question, will the Government now consult urgently the United States and other Governments? Will they see whether a way can be found of going ahead with the other subjects of the conference, while at the same time not holding up the mining of these minerals, which will never be available for anyone if the present delay continues?
Lord PEART: My Lords, I do not dissent from that, but I hope that noble Lords will wait to see what the document says when they have an opportunity to read it.
Lord KENNET: My Lords, will my noble friend, as co-ordinator of maritime policy in the British Government, consider visiting the conference next time it meets?
Lord PEART: Yes, my Lords, if I am asked; I do not dislike Geneva.
Lord RITCHIE-CALDER: My Lords, although we realise that this is a very complex subject, does my noble friend agree that time is not on our side, and from now on Governments will be taking the kind of unilateral action which we have seen in the case of the 200-mile limit, and which would apply equally to the minerals under the sea?
Lord PEART: My Lords, I accept the warnings of my noble friend, but I would ask noble Lords to look at the text of the document in the Library.

BRITISH SHIPBUILDING: VESTED FIRMS
3.2 p.m.
Lord ORR-EWING: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government when the first payments will be made to the subsidiary firms vested in British Shipbuilding on 1st July 1977.
Lord WINTERBOTTOM: My Lords, compensation was paid in full on 1st July 1977 in respect of all the shares in Robb Caledon Shipbuilders Limited, and of the preference shares of John G. Kincaid Limited. The first payments in respect of the other companies are expected to be payments on account. The timing, and the size, of these payments will depend on the progress of negotiations in respect of each company. The Government hope that some will be made before the end of this year.
Lord ORR-EWING: My Lords, does the Minister recognise that only one company was wholly-owned, and that therefore the settlement affected only one company? The great majority were subsidiaries of bigger groups, and it is those firms which badly need some payment in order to restructure themselves so that they can invest in new machinery for the future and thus help to create new jobs. Have the Government, therefore, a sense of urgency in proceeding with this settlement, so that some payment on account can be made at an early date?
Lord WINTERBOTTOM: Yes, my Lords; the point made by the noble Lord is quite correct. Obviously, these companies want compensation as soon as possible. I seem to remember that during the debates both here and in another place the phrase "early and substantial" was used in relation to payments on account. We are entering a period of negotiation. Both the Government and the stockholders are being represented by expert advisers and, at the end of the day, arbitration may settle conflict between the two negotiating parties. In view of the fact that these are commercial negotiations, matters can, unfortunately, be delayed, but it is the hope of the Government that an early and substantial payment on account will be made.

PARLIAMENTARY QUESTIONS: MINISTERIAL RESPONSIBILITY
3.4 p.m.
Lord KENNET: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask the Leader of the House which Minister should reply to Questions in this House on the machinery of Government; and whether it was in order for a Written Answer to such a Question to be made on 27th June (col. 995) by a departmental spokesman.
Lord PEART: My Lords, most Questions on the Order Paper are addressed to Her Majesty's Government, and the Minister replying does so on behalf of the Government. The Written Answer on 27th June was not in any way out of order.
Lord KENNET: My Lords, while accepting of course that the Written Answer was not out of order, if my noble friend the Leader of the House says so, is the situation, in his opinion, fully satisfactory when the following Question is addressed to the Government:
"Since the Department of Energy has recently yielded control over nuclear pollution to the Department of the Environment, is there not now a case that it should likewise yield control over marine pollution to the Department of the Environment?"
that the Answer to that Question should come from the Department of Energy—
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that is, the Department whose functions were called in question by the Question for Written Answer—and not from, for instance, the Leader of the House as the Minister for the Civil Service?
Lord PEART: One can argue about this, my Lords, but this is the rule, and I think it is a good rule.

EMPLOYMENT PROTECTION BILL [H.L.]
3.6 p.m.
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, that the House do now resolve itself into Committee.—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clauses 1 to 159 agreed to.
Clause 160 [Citation, commencement and extent]:
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 1:
Page 127, line 38, before ("Act") insert ("(Consolidation)").
The noble and learned Lord said: With the leave of the Committee, I will speak at the same time to this Amendment and to Amendments Nos. 2 to 48. They are all drafting Amendment; relating to the Title of the Bill. The first Amendment changes the Title of the Bill from Employment Protection Bill to Employment Protection (Consolidation) Bill, and the remaining Amendments make the consequential changes in Schedule 16. I beg to move.
Lord TREFGARNE: It falls to me, it seems, to ask the noble and learned Lord whether it is in order for Amendments to be taken on this scale in what is, in fact, a consolidation Bill. Of course we are aware that consolidation Bills are not normally amended at all, but today we find that a large number of Amendments are to be moved on behalf of the Government. Can the noble and learned Lord

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explain why this should be, and whether it is a departure from the usual procedure?
The LORD CHANCELLOR: I do not think that it is a departure for mere drafting Amendments to be moved to consolidation Bills. There was only one change involved here; namely, the change in the Title from Employment Protection Bill to Employment Protection (Consolidation) Bill, and an illusion of magnitude has been added to that simple change by the multiplicity of occasions on which reference is made to the Bill in the Schedule. I hope that the Committee will not be unduly shocked by this state of affairs.
On Question, Amendment agreed to.
Clause 160, as amended, agreed to.
Schedules 1 to 15 agreed to.
Schedule 16 [Consequential amendments]:
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendments Nos. 2 to 48 en bloc:
Page 174, line 37, after ("Protection") insert ("(Consolidation)")
Page 174, line 41, after ("Protection") insert ("(Consolidation)")
Page 175, line 20, after ("Protection") insert ("(Consolidation)")
Page 175, line 34, after ("Protection") insert ("(Consolidation)")
Page 175, line 40, after ("Protection") insert ("(Consolidation)")
Page 176, line 16, after ("Protection") insert ("(Consolidation)")
Page 176, line 22, after ("Protection") insert ("(Consolidation)")
Page 176, line 26, after ("Protection") insert ("(Consolidation)")
Page 176, line 29, after ("Protection") insert ("(Consolidation)")
Page 176, line 32, after ("Protection") insert ("(Consolidation)")
Page 176, line 35, after ("Protection") insert ("(Consolidation)")
Page 176, line 40, after ("Protection") insert ("(Consolidation)")
Page 176, line 44, after ("Protection") insert ("(Consolidation)")
Page 177, line 6, after ("Protection") insert ("(Consolidation)")
Page 177, line 22, after ("Protection") insert ("(Consolidation)")
Page 177, line 29, after ("Protection") insert ("(Consolidation)")
Page 178, line 3, after ("Protection") insert ("(Consolidation)")
Page 178, line 10, after ("Protection") insert ("(Consolidation)")
Page 178, line 28, after ("Protection") insert ("(Consolidation)")
Page 178, line 32, after ("Protection") insert ("(Consolidation)")
Page 178, line 41, after ("Protection") insert ("(Consolidation)")
Page 179, line 5, after ("Protection") insert ("(Consolidation)")
Page 179, line 14, after ("Protection") insert ("(Consolidation)")
Page 179, line 22, after ("Protection") insert ("(Consolidation)")
Page 179, line 30, after ("Protection") insert ("(Consolidation)")
Page 179, line 34, after ("Protection") insert ("(Consolidation)")
Page 179, line 38, after ("Protection") insert ("(Consolidation)")
Page 179, line 46, after ("Protection") insert ("(Consolidation)")
Page 180, line 13, before ("Act") insert ("(Consolidation)")
Page 180, line 16, after ("Protection") insert ("Consolidation)")
Page 180, line 21, after ("Protection") insert ("(Consolidation)")
Page 180, line 24, after ("Protection") insert ("(Consolidation)")
Page 180, line 34, after ("Protection") insert ("(Consolidation)")
Page 180, line 38, after ("Protection") insert ("(Consolidation)")
Page 180, line 49, after ("Protection") insert ("(Consolidation)")
Page 181, line 3, after ("Protection") insert ("(Consolidation)")
Page 181, line 10, after ("Protection") insert ("(Consolidation)")
Page 181, line 15, after ("Protection") insert ("(Consolidation)")
Page 181, line 18, after ("Protection") insert ("(Consolidation)")
Page 181, line 24, after ("Protection") insert ("(Consolidation)")
Page 181, line 29, after ("Protection") insert ("(Consolidation)")
Page 181, line 33, after ("Protection") insert ("(Consolidation)")
Page 181, line 36, after ("Protection") insert ("(Consolidation)")
Page 181, line 41, after ("Protection") insert ("(Consolidation)")
Page 182, line 4, after ("Protection") insert ("(Consolidation)")
Page 182, line 8, leave out from ("for") to end of line 9 and insert (""Act 1975" there shall be substituted (""(Consolidation) Act 1977"")
Page 182, line 12, after ("Protection") insert ("(Consolidation)").
On Question, Amendments agreed to.
Schedule 16, as amended, agreed to.
Schedule 17 [Repeals]:
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 49:
Page 185, line 34, column 3, leave out ("27(10)").
The noble and learned Lord said: This, again, is a drafting Amendment. I beg to move.
On Question, Amendment agreed to.
Schedule 17, as amended, agreed to.
The LORD CHAIRMAN of COMMITTEES (Lord Aberdare): The Question is, That this be the Title of the Bill?
Lord LEATHERLAND: Should we not insert the word "Consolidation" in the Title, inasmuch as we have had 40 or 50 Amendments inserting it in other parts of the Bill?
The LORD CHANCELLOR: I think that is accomplished by the first Amendment that I moved. Perhaps I moved it at excessive speed.
Title, as amended, agreed to.
House resumed: Bill reported with the Amendments.
Then, Standing Order No. 43 having been suspended (pursuant to Resolution of 13th July), Report received, Bill read 3a, and passed, and sent to the Commons.

TORTS (INTERFERENCE WITH GOODS) BILL [H.L.]
3.13 p.m.
The LORD CHANCELLOR: My Lords, I beg to move that the Commons Amendments be now considered.
Moved accordingly, and, on Question, Motion agreed to.

COMMONS AMENDMENTS
[References are to Bill [77] as first printed for the Commons]
1 Clause 3, page 2, line 35, at end insert—
'(6A) Where under subsection (1) or subsection (2) of section 6 an allowance is to be made in respect of an improvement of the goods, and an order is made under subsection (2)(a) or (b), the court may assess the allowance to be made in respect of the improvement, and by the order require, as a condition for delivery of the goods, that allowance to be made by the claimant.'
2 Clause 8, page 5, leave out line 39 and insert 'all or any part of the interest claimed by the plaintiff, or in right of which he sues'
3 Clause 9, page 6, line 22, at end insert—
'(1A) Where goods are the subject of two or more claims under section 6 this section shall apply as if any claim under section 6(3) were a claim for wrongful interference.'
4 Clause 12, page 7, line 42, at end insert—
'(3A) Where subsection (3) applies but the bailor did not in fact own the goods, a sale under this section, or under section 13
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shall not give a good title as against the owner, or as against a person claiming under the owner.'
5 Page 10, line 14, leave out 'state' and insert—

'(a) specify the name and address of the bailee, and give sufficient particulars of the goods and the address or place where they are held, and

(b) state'

6 Page 10, line 19, at beginning insert 'specify'
7 Page 10, line 34, leave out 'when' and insert 'at any time after'
8 Page 11, line 19, leave out 'specify' and insert—
'(a) specify the name and address of the bailee, and give sufficient particulars of the goods and the address or place where they are held, and'
9 Page 11, line 20, at beginning insert 'specify'
10 Page 11, line 22, at beginning insert 'specify'.
The LORD CHANCELLOR: My Lords, with the leave of the House, I beg to move that this House doth agree with the Commons in their Amendments Nos. 1 to 10 en bloc. These are all minor Government drafting Amendments which clarify the Bill and make no substantive changes in it. Most of them have been suggested by the Finance Houses Association, and I am most grateful to them for their help. I think it would be for the convenience of the House, if the House agrees, for the Amendments to be moved en bloc, but if an explanation is sought about any one of them, or indeed each of them, I shall be happy to endeavour to give the appropriate explanation. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendments.—(The Lord Chancellor.)
On Question, Motion agreed to.

CONTROL OF OFFICE DEVELOPMENT BILL
3.15 p.m.
Report received.
Clause 1 [Continuance in force of provisions relating to control of office development]:
Baroness YOUNG Baroness YOUNG moved Amendment No. 1:

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Page 1, line 12, leave out ("seventeen") and insert ("fifteen").
The noble Baroness said: My Lords, I must apologise to the House for returning to this very narrow point on a relatively narrow Bill. We had considerable discussion on this at Committee stage, but, having had a chance to read the Committee proceedings, I did not feel very happy about the arguments which were put up then, and I felt it only right that we should return with a slightly differently drafted Amendment on Report. The difference between our Amendment on this occasion and that on Committee is that this time we are suggesting that the office development permit system should last for another three years only, instead of, as we originally proposed, two years, as compared with the proposal of the Government that it should be kept for another five years, with presumably the alternative then of renewing yet again.
On this point, the reason that the noble Baroness, Lady Birk, gave for not accepting our original Amendment was that there was a very great need for office development in assisted areas, which are defined as either being areas that are known as special development areas or development areas, or intermediate areas, in each case where unemployment is high. However, when we looked at the figures it was perfectly clear that no office development had taken place in any of these areas up to 1972, and the reason why office developments had taken place since then was that the Department of Trade and Industry had in fact given grants to firms wishing to develop offices in those particular areas, and the effect of the grants, coupled with the work of the Location of Offices Bureau, had meant that firms had moved out.
The noble Baroness was not able to produce any evidence at all that the whole negative control of office development permits had helped, and it is because we have not had any evidence that it seemed to myself and my noble friends on this side of the House that it was not good enough to continue this piece of bureaucracy, which really was not doing any good at all, when it was not necessary. The real control on office development rests with the local planning authorities, which can decide whether or not they
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wish the development at all. They have very powerful planning laws at their disposal, and they can therefore determine whether or not an office shall go in any particular place; and it would certainly answer the problem that there could well be too many offices in London.
This, again, was one of the arguments put up, and I noticed, on reading the Official Report of our proceedings on the 12th July, at column 860, that the noble Baroness said:
"… the unemployment percentage for the whole of the GLC area is 4 per cent., in the special development areas it is 10·1 per cent., in the development areas 8·9 per cent., and in the intermediate areas 5·9 per cent.";
and she used her argument to show that unemployment was nothing like as high in the Greater London area as it is in others. I thought at the time that this could possibly be thought to be somewhat misleading, because Greater London includes central and inner London as well as outer London, where, of course, the position is quite different.
I have now had the opportunity to check the unemployment figures for central and inner London, the two areas that were referred to by her noble friend Lady Stedman, when we were talking about the order for the Location of Offices Bureau, as being two areas in which the Government wished to encourage office development. The Greater London Council has not based its unemployment rates precisely upon the Department of Employment formula for calculating unemployment, which expresses the registered unemployed as a percentage of those working in each area. The GLC has taken a residence basis for each area. On this basis, inner and central London have very high unemployment rates, indeed. Looking at places like Canning Town, with 9·7, East Ham, with 5·1 Hackney, with 7·4, Holloway, with 10·2, Poplar, with 14·1 and Stepney, with 12·7, it is easy to see that unemployment in central and inner London is just as high as in the development areas. Therefore, it is not necessarily to the advantage of the unemployed that offices should be moved away from central London. I believe that the argument on unemployment is not one that can be substantiated and I think that we should look at this again.
I then asked the noble Baroness, Lady Birk, to tell me the circumstances in which she felt that the office development permit system could be dropped. She said at the beginning of her remarks in col. 859 that the office development permit system should be maintained if the economy picked up and that, as it was expected to pick up within the next two years, the system should be maintained in order that there should not be too many offices in Greater London or elsewhere. Later in her remarks, having been asked when she thought there would be a relaxation in the office development permit set-up she said:
"I should say that this would be when we get an upturn in the economy …"—[Official Report, 12/7/77; col. 868.]
It is difficult for those of us who are trying to consider the length of time that the office development permit procedures should hold to be told that they should be maintained if the economy picks up, because it will be a good thing to have them, and at the same time to be told, that they should be relaxed if the economy picks up because it will not be necessary to have them.
One cannot argue both ways in one speech. For that reason, I have put down my Amendment. I think that the House is entitled to know what the Government believe about this matter and whether they are hanging on to quite unnecessary controls that are not wanted by local government, will not assist the unemployed and certainly will not help the very serious situation existing in inner London. I beg to move.
The Earl of KINNOULL: My Lords, I rise to support my noble friend in her usual persuasive speech. I find myself more and more passionate about this small Bill as each stage goes by. I am passionate because, on each successive occasion, the Government case seems to become weaker and more threadbare, and the need for the continuation of office development permits appears more unproven. I think that it was on the last occasion that the noble Baroness's case became so threadbare and the paucity of her argument such that she was reduced to claiming that the Opposition were simply using dogma as a reason for their objection.
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That is uncharacteristic of the noble Baroness who always delights us with her presentation, her preparation and her wit. I myself suspect that her advisers had unguardedly said that this was a small Bill which would go through the House of Lords "on the nod" and that they would not bore her with hard facts or figures, for that would only widen the argument. How far have they misjudged the vigilance of my noble friends Lady Young and Lord Sandys in scrutinising the stream of indifferent Bills which have come before this House during the present Session!
In 1972, Parliament approved the continuation for another five years of office development permits. It was then, I think, satisfactorily proved that there was a real need for this system. Today, we look again to see whether another five years should be granted. I am sure that the noble Baroness would agree that we are entitled to ask the question: "Why another five years?"—and to be convinced by the answer. What is the real evidence? Are the office development permits really proving a positive achievement in the general strategy of the Government? The noble Baroness' reply so far is that office development permits are a vital component in her three-pronged strategy to help assisted areas.
My Lords, that is all very well except that the noble Baroness produces no evidence to show why it is so vital. Why, for instance—and this is a point which always occurs to me—cannot the planners look after the planning? Why should the Government come in with office development permits in relation to which there is no right of appeal and no time sanction by which the permits must be granted?
I feel passionately that the office development permits introduced in 1965 are now a worn-out, negative and irrelevant part of our planning procedures. Conditions today no longer demand office development permits; the assisted areas could be assisted with far greater effect by other positive means and, indeed, the three-pronged strategy has now only two prongs left.
My noble friend's Amendment is a very reasonable Amendment. It seeks to allow Parliament a further three rather than five years to consider office development permits. The last time this was discussed,

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the noble Baroness assured the House that, of course, it might well be that the life of the office development permit would be ended will before five years. I do not know whether that was the undertaking; but we should have a great deal more confidence if we felt that the Government had another five years' life. I hope that my noble friend will stand firm on this Amendment. I think that it is a reasonable Amendment and that it would be of great benefit to planning as a whole.
3.28 p.m.
The PARLIAMENTARY UNDERSECRETARY OF STATE for the ENVIRONMENT (Baroness Birk): My Lords, may I first thank the noble Earl, Lord Kinnoull, for his very kind remarks? I find it difficult to be witty about this Bill. Somehow, it does not lend itself to wit. As the noble Baroness, Lady Young, has said, we have been over this ground before. I would not say that the arguments were threadbare; it is that the ground has become bare from so many years of treading over it in our discussions as to whether controls should or should not remain.
I think that we must be quite frank about this. There is a complete divergence of opinion over this whole subject. The Opposition would much prefer not to have any controls at all. At the Committee stage, the noble Baroness moved an Amendment to cut down the period from five years to two years; that Amendment was not pressed. Now, as she has said, she has looked again at the matter and has come back with a period or three years. It seems to me that whether you say three years or two years does not make much difference. She and her supporters make no secret of the fact that they dislike the system and they use every argument against it.
We believe that it is a necessary part of the strategy. On the argument on which the noble Baroness based most of her case for a three-year period, if we get an upturn in the economy in the next year or two, it will be or vital importance that office accommodation and building should be steered—and this would mean commerce and work and employment—to the assisted areas during and after that time. You do not, at the beginning of an
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upsurge, suddenly stop your controls which are beginning to work and say: "We will not do anything about this", and have a free-for-all.
Regarding unemployment, I am sorry that the noble Baroness thought that she was being misled. I do not think that she was misled at all. What I had said was that the unemployment percentage for the whole of the GLC is 4 per cent. I had also said that it is true that in some areas of London unemployment is extremely high. I also explained, in a different part of the Committee stage, that parts of the inner areas of London were treated as assisted areas, whereas what we were talking about were the attractive places where people want to build office blocks, which is in Central London and the City.
I said that in the special development areas the unemployment figures are 10.1 per cent.; in the development areas, 8.9 per cent.: and in the intermediate areas, 5·9 per cent. I am not undermining the argument that in some areas of London unemployment is extremely high, but if you take the area represented for so many years by my noble friend the Leader of the House, Workington, the unemployment figure is 14 per cent. The noble Baroness, Lady Ward of North Tyneside, will support what is happening in the North-East and over the rest of the country. This is not an argument for saying that it is better to be unemployed in London than to be unemployed in Newcastle or Workington. Nevertheless, it is a fact that it is easier to find office jobs in London than it is outside London.
Therefore I am afraid that the argument against three years is, so far as I am concerned, exactly the same as the argument against two years. As you know, in recent months the Government have been looking closely at the office employment location policy. It is perfectly true that the grants made by the Department of Industry—which have now been increased—are a great incentive for industry to locate itself in the assisted areas. Nevertheless, we believe that the three things together, the Location of Offices Bureau Advisory Service—which has been praised all round the House—the industrial grants, and the ODPs must work together.
What we do not know, and it is impossible to find out but it has very great

193
importance, is how far the existence of ODP control acts, if you like, as a deterrent to attempt to build offices in the Central London area and the South-East. Take the case of somebody who wants to build an office block. He may decide that he is not even going to apply for an ODP because he knows exactly what the form is and that it is very unlikely that he will get one. It is not possible for that to be shown up in statistics. Nevertheless, it is something which the Government consider extremely relevant, and that is one of the reasons why we are anxious to keep these controls for another five years.
This does not mean that it is mandatory for the controls to exist for five years, because at any time by order the control can cease. The noble Baroness said this was a narrow point in a narrow Bill. We are now at the stage, with her increase from two years to three years, of asking: "What is all the fuss about? Why not then settle for five years, which is the Government's view and is in the Bill? "If at any time during that five years it is possible to lift the controls—and there is no point in having controls if you have a surging economy, and are trying to build up employment, industry and commerce everywhere—the Government will bring the controls to an end. For these reasons, I ask the House to resist the Amendment and leave the Bill as it is.
3.35 p.m.
Baroness YOUNG: My Lords, with the leave of the House, I should like to thank the noble Baroness, Lady Birk, for the trouble that she has taken over her reply. She began by saying that she felt there was a divergence of opinion between us on this matter; yet she knows as well as I do that this particular Amendment has all-Party support from the Great London Council. It is not one which has divided the Parties in local government, although it may in national Government.
Baroness BIRK: My Lords, just to get this clear, I was referring to the political philosophy behind the divergence so far as national Government are concerned. In order not to take up more time, I did not go over what we discussed about the GLC. It would be extraordinary if the GLC, representing London, did not take this view.
Baroness YOUNG: My Lords, I am not sure that I would think that was very extraordinary. In my experience of local government, it is not always unanimous in its views on these matters. However, that is a fact on this case and we do not need to debate this. It is something which has the support of all Parties on the GLC. The argument on this Amendment is an attempt to find a compromise out of the two views that have been expressed. I and my colleagues believe that this is an unnecessary system of control which has outlived its usefulness.
The noble Baroness has not produced any facts to support her case that office development has taken place in the assisted areas because of the ODP system. She said that it was not possible to show this in statistics, but the Government thought that it was important. As my honourable friend Mr. Rossi said in another place, not one office of 10,000 square feet or more, for which an ODP had been refused, had ever found its way out of the South-East. He said that the way to get these developments in the assisted areas—and it is a point I support and should like to see implemented—is by giving Government grants and by the work of the Location of Offices Bureau. He said that we should not forget London because, terrible as unemployment is in the North-East—and we have all this as a background to our minds—it also rises to over 14 per cent. in parts of London. He also said that unemployment, wherever it is, is a terrible thing so we want to do all we can to help developments wherever they may help to end unemployment, which at the end of the day will only be helped if more jobs are created.
I was concerned because the noble Baroness repeated yet again the contention that, if there was an upturn in the economy, the ODP system would be necessary and, if there was an upturn in the economy, it could be relaxed. She used one argument at the beginning of her speech and one at the end. I have the feeling that it is not the Government's intention to relax this system.
Baroness BIRK: My Lords, I am sorry to interrupt the noble Baroness again. What I said was that if there was an upsurge in the economy, it would be wrong to relax the ODP controls immediately. I said that there had to be an opportunity

195
for the boom to continue. I said specifically that to stop it immediately could have counter-productive effects.
Baroness YOUNG: My Lords, we are agreed on this point, and that is why we put in the three-year principle for the ODP system to be introduced. We have considered this matter carefully. It is something about which our colleagues in local

CONTENTS

Ailsa, M.

Garner, L.

Nunburnholme, L.

Alexander of Tunis, E.

Glenkinglas, L.

O'Hagan, L.

Allerton, L.

Greenway, L.

Reigate, L.

Alport, L.

Gridley, L.

Robbins, L.

Atholl, D.

Grimston of Westbury, L.

Rochdale, V.

Avon, E.

Hailsham of Saint Marylebone, L.

Sackville, L.

Barnby, L.

St. Aldwyn, E.

Belstead, L.

Hampden, V.

St. Davids, V.

Berkeley, B.

Harding of Petherton, L.

St. Helens, L.

Blake, L.

Home of the Hirsel, L.

Sandys, L.

Broadbridge, L.

Inglewood, L.

Selkirk, E.

Caccia, L.

Ironside, L.

Sharples, B.

Campbell of Croy, L.

Killearn, L.

Skelmersdale, L.

Carr of Hadley, L.

Kimberley, E.

Spens, L.

Carrington, L.

Kinnaird, L.

Stamp, L.

Clifford of Chudleigh, L.

Kinnoull, E.

Strathclyde, L.

Clwyd, L.

Lauderdale, E.

Strathcona and Mount Royal, L.

Cork and Orrery, E.

Long, V.

Strathspey, L.

Cranbrook, E.

Lucas of Chilworth, L.

Sudeley, L.

Cullen of Ashbourne, L.

Lyell, L.

Trefgarne, L. [Teller.]

Daventry, V.

Mancroft, L.

Vernon, L.

Deramore, L.

Merrivale, L.

Vickers, B.

Derwent, L.

Montgomery of Alamein, V.

Vivian, L.

Ebbisham, L.

Mottistone, L.

Wakefield of Kendal, L.

Eccles, V.

Mountgarret, V.

Ward of North Tyneside, B.

Effingham, E.

Mowbrav and Stourton, L. [Teller.]

Ward of Witley, V.

Elliot of Harwood, B.

Westbury, L.

Elton, L.

Moyne, L.

Willoughby de Broke, L.

Emmet of Amberley, B.

Newall, L.

Young, B.

Exeter, M.

Noel-Buxton, L.

NOT-CONTENTS

Aberdeen and Temair, M.

Energlyn, L.

Ritchie-Calder, L.

Amherst, E.

Fisher of Camden, L.

Roberthall, L.

Amulree, L.

Gaitskell, B.

Rusholme, L.

Avebury, L.

Gordon-Walker, L.

Sainsbury, L.

Aylestone, L.

Grey, E.

Samuel, V.

Banks, L.

Hampton, L.

Segal, L.

Beaumont of Whitley, L.

Henderson, L.

Shepherd, L.

Birk, B.

Henley, L.

Shinwell, L.

Brockway, L.

Hughes, L.

Sligo, M.

Buckinghamshire, E.

Hunt, L.

Snow, L.

Burntwood, L.

Janner, L.

Soper, L.

Castle, L.

Kirkhill, L.

Stone, L.

Champion, L.

Leatherland, L.

Stow Hill, L.

Chorley, L.

Listowel, E.

Taylor of Mansfield, L.

Collison, L.

Llewelvn-Davies of Hastoe, B.

Thurso, V.

Cooper of Stockton Heath, L.

McCluskey, L.

Wade, L.

Crook, L.

Maybray-King, L.

Wells-Pestell, L. [Teller.]

Cudlipp, L.

Morris of Grasmere, L.

Wigoder, L.

Darling of Hillsborough, L.

Oram, L. [Teller.]

Williamson, L.

Delacourt-Smith of Alteryn, B.

Paget of Northampton, L.

Wilson of High Wray, L.

Donaldson of Kingsbridge, L.

Pannell, L.

Wise, L.

Douglas of Barloch, L.

Parry, L.

Wootton of Abinger, B.

Douglass of Cleveland, L.

Peart, L. (L. Privy Seal.)

Wynne-Jones, L.

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

Raglan, L.

government feel strongly. We believe it is a negative control which has outlived its usefulness and on this Amendment we should like to test the feeling of the House.
3.39 p.m.
On Question, Whether the said Amendment shall be agreed to?
Their Lordships divided: Contents, 87; Not-Contents, 71.
Resolved in the affirmative, and Amendment agreed to accordingly.
3.47 p.m.
Baroness LIEWELYN-DAVIES of HASTOE: My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales that they, having been informed of the purport of the Control of Office Development Bill, have consented to place their prerogative and interests, so far as they are concerned on behalf of the Crown, of the Duchy of Lancaster and the Duchy of Cornwall, at the disposal of Parliament for the purposes of the Bill.
Then, Standing Order No. 43 having been suspended (pursuant to Resolution), Bill read 3a with the Amendment, and passed and returned to the Commons.

LOCAL AUTHORITIES (RESTORATION OF WORKS POWERS) BILL
3.49 p.m.
Baroness BIRK: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, that the House do now resolve itself into Committee.—(Baroness Birk.)
On Question, Motion agreed to.
House in Committee accordingly.
[The BARONESS WOOTTON OF ABINGER in the Chair.]
Clause 1 [Restoration of powers conferred by certain orders]:
Lord SANDYS Lord SANDYS moved Amendment No. 1:
Page 1, line 5, leave out Clause 1 and insert following new clause:
Restoration of Powers
.—(1) Any authority named in Column (1) of the following table may enter into agreements with any local authority for the construction of buildings or works wholly or substantially in the area of the former borough specified in respect of such authority in column (2) which will engage the services of the officers of the first mentioned authority.
(2) In this section "officers", in relation to any authority, includes the holders of any offices or employments under that authority.

TABLE

(1)

(2)

The Borough Council of Barrow-in-Furness

Barrow-in-Furness

The Borough Council of Blackburn

Blackburn

The Borough Council of Bolton

Bolton

The City Council of Bristol …

Bristol

The Borough Council of Burnley

Burnley

The City Council of Cardiff …

Cardiff

The Borough Council of Derby

Derby

The Borough Council of Gateshead

Gateshead

The Borough Council of Grimsby

Grimsby

The City Council of Kingston upon Hull

Kingston upon Hull

The City Council of Lincoln

Lincoln

The City Council of Liverpool

Liverpool

The City Council of Manchester

Manchester

The City Council of Newcastle upon Tyne

Newcastle upon Tyne

The Borough Council of North Tyneside

Tynemouth

The City Council of Plymouth

Plymouth

The Borough Council of Rotherham

Rotherham

The Borough Council of Scunthorpe

Scunthorpe

The City Council of Sheffield

Sheffield

The Borough Council of South Tyneside

South Shields

The City Council of Stoke-on-Trent

Stoke-on-Trent

The Borough Council of Stockport

Stockport

The Borough Council of Sunderland

Sunderland

The City Council of Swansea

Swansea

The Borough Council of Wigan

Wigan

The noble Lord said: I beg to move this Amendment standing in my name and in the names of my noble friends. My noble friend Lady Young made it quite clear in her closing remarks on Second Reading that we regard this Bill as completely unnecessary. However, we are making a genuine attempt in this Amendment, and indeed in those following it, to improve the Bill. That is what we seek to do by this series of Amendments. The Bill, as drafted, may be short as it consists of only two clauses, but in our submission it is confusingly so because it follows a pattern of drafting which was much criticised by the Renton Committee on the preparation of legislation. If I may trespass on your Lordships' time—
Baroness BIRK: May I interrupt the noble Lord? I think it was agreed that

199
we should speak to Amendments Nos. 1 and 6.
Lord SANDYS: I beg your Lordships' pardon: I should say that I beg to move Amendment No. 1 and I should like to speak to Amendment No. 6 at the same time. These two Amendments are linked, and I return to the fact that the Renton Committee on the preparation of legislation made a very special point in Recommendation No. 39 on page 152 of the report, which read as follows:
"The needs of the eventual user of Statutes must be given priority over those of the legislator when proposals for amending existing legislation are being framed".
That was paragraph 13.17. Then, in Recommendation No. 41, the Renton Committee further added:
"The present practice of amending legislation textually, wherever convenience permits, should be applied as generously as possible".
Unfortunately, the Government have set aside the very wise words of the Renton Committee, because there is no doubt whatever that they have presented your Lordships and another place with a Bill in totally different terms. We believe that the manner in which the Government have presented this Bill, that is to say with a recitation of references to orders which have now lapsed, does not make for clarity for the users of legislation.
I believe that it will assist noble Lords who may not have had the opportunity to follow the proceedings of the Bill through Standing Committee in another place if I explain the list of 25 authorities which is set out in our Amendment. These authorities are now district councils which no longer have responsibility for the functions that their predecessors, the old county boroughs, had at the time of the passing of the Local Government Act 1972 relating to the control of direct labour departments. The list is a little difficult to understand. The Government have created the problem, which perhaps my noble friend Lady Young put most succinctly at Second Reading when she 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".
The problem arises because only 12 of the named authorities have made use of their
200
powers, while no fewer than 13 have made no use of them. May I give some examples. Stockport is not anxious to be included in the list. Grimsby, which I regret to say is incorrectly spelt in column 2 of the Amendment, has not used its powers. At a council meeting in May of this year Grimsby passed a resolution, which was forwarded to the Secretary of State, requesting that it should be permitted to relinquish the said powers.
At this point I should draw your Lordships' attention to Amendment No. 6 which sets out in simple form the manner of relinquishment of powers. This Amendment will be no surprise to many noble Lords who followed the course of the Bill through another place, for they will recognise the terms of the Amendment moved there. The fact that Derby is referred to in this list a as borough council may cause some surprise. It was a matter of warm congratulations that Derby should have City status conferred upon it at the time of the Silver Jubilee. Derby is not anxious to use the powers which are to be conferred by the Bill.
What, therefore, are we left with? We are left with a group of authorities which are anxious to use their powers, and prominent among those authorities which have specifically asked for powers are Rotherham and Sheffield. Sheffield has a problem with regard to highway construction where a quite substantial works contract amounting to over £1 million was concerned. Furthermore, Stoke-on-Trent, the very largest user of these powers in terms of finance and whose works in the past year were valued at £1.2 million, is particularly anxious to pursue their use. At this point, however, I must refer to the fact, to which I have no doubt my noble friends will also refer, that there were no fewer than 13 unfavourable district auditors' reports on direct labour organisations which are now functioning. I will not refer at this stage to specific cases, because I know that they will come into later arguments.
It is not my task to make a Second Reading speech; my purpose is to explain the two Amendments. Because of the manner in which the Amendments are set out I believe that they follow the very apt suggestions of the Renton Committee regarding making it clear what the legislation is about. I am quite

201
certain that to any user of the legislation who was presented with the Bill it would not be apparent which authorities are involved. Now we have a complete table and a means by which those authorities that are not anxious to use the powers conferred by the Bill are able to relinquish them.
So far as the very important matter of boundaries is concerned, I believe that special powers already exist. In Section 254, which is to be found in Part XII of the 1972 Act, there is a quite specific instruction for the Secretary of State's guidance, should be wish to identify a local authority to which any particular functions are to be transferred. Furthermore, by Section 67 of the 1972 Act the Secretary of State was given additional powers. At this stage I do not believe that it is necessary to explain in greater detail the functions of those sections, although I should be happy to try to do so, if necessary. I beg to move.
3.58 p.m.
Baroness BIRK: I cannot see any merit in changing the Bill in the way proposed by this Amendment. Indeed, it could result in a considerable disadvantage, for to name each of the 25 authorities could make the Bill hybrid. The merit of the present drafting is that it indicates clearly the reason why the Bill is necessary. The Amendment, together with the proposed change of title, suggests that new powers are to be given to 25 authorities, whereas all that is proposed is the restoration of powers which these authorities had up to 31st March 1977. This is made absolutely clear by the form in which the Bill is drafted. The fact that the Bill does not indicate which are the 25 authorities is no reason for approving this Amendment, which goes much further than that. The names of the 25 authorities can easily be established by reference to the Statutory Instrument.
So far as relinquishment is concerned, the powers conferred by the Bill are permissive, not mandatory. I know that the noble Lord, Lord Sandys, dwelled upon the point, which also came up at Second Reading, that certain authorities had not used the powers, but it is for each of the 25 authorities to decide whether it wishes to seek to use the powers. No
202
duty is placed on them to do so and, indeed, whether the powers are used depends upon whether another authority awards work to the DLO, because that is what we are talking about under this Bill.
I do not think it would be right to enable a particular authority by resolution to relinquish the powers conferred on it by the Bill because the policies of local authorities change over the years, particularly where there are changes in political control. To enable an authority of a particular persuasion at any given time to relinquish powers which the authority might wish to use in the future would not be acceptable, and, as I think we are all aware, there are numerous permissive powers held by local authorities which they may choose not to exercise. We are not aware of any precedent enabling an individual authority to abdicate the powers given to it.
When the noble Lord, Lord Sandys comes to the point about the DLOs and how some authorities have not exercised them correctly, that is possibly true on occasion, in the same way as it is true that certain private contractors do not always behave as they should. Indeed, many DLOs have been used when a private contractor has gone bankrupt, so this is six of one and half a dozen of the other.
The Bill is drafted in this form because the powers with which it deals were conferred on the authorities by orders under the Local Government Act 1972 for a fixed period only. Therefore, the purpose of the Bill is to do away with the terminal date, to make the powers permanent, and for that reason it is drafted in terms of an Amendment to the orders and not in terms of new powers. Except for changing the Bill and turning it inside out, with which the Amendments to which we shall be coming are concerned, it seems to me that there is no reason for this Amendment.
There is only one further point I wish to make. If the real purpose of it is that the noble Lord and his colleagues feel that the actual authorities should themselves be spelled out, I have some sympathy with not having to turn from one Act of Parliament or one Statutory Instrument to another in order to seek information. I believe the more easily

203
one can make information available, the better, and I should be prepared to consider whether we could list the 25 authorities in the Schedule to the Bill for information purposes only, provided this would not raise questions of hybridity. If that is the main purpose of the Amendment I can certainly give that undertaking.
Lord SANDYS: The noble Baroness has agreed one simple point in connection with the drafting. We believe that legislation by reference to Statutory Instruments should be avoided. As in this particular case no fewer than three Statutory Instruments are concerned and have to be consulted if one is to achieve the full list of 25, it seems to be very satisfactory if the Government agree that a Schedule to the Bill should be attached and we would warmly welcome that suggestion. Bearing that in mind, and further reserving our position upon the situation as it now stands, so that we may return to this issue at the Report stage, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
4.4 p.m.
Baroness YOUNG Baroness YOUNG moved Amendment No. 2:
After Clause 1, insert the following new Clause:
Provisions concerning exercise of powers
.The parties to an agreement or intended agreement whereby any building or work (in this Act called a "relevant work") is to be constructed by a district council (in this Act called a "contracting council") under an agreement made by virtue of section 1 above shall comply with sections (Obligation to put work out to tender) (Form of Contract) and (Separate accounting)) of this Act.
The noble Baroness said: In moving this Amendment I wish to speak at the same time to Amendments Nos. 3, 5, 8 and 9. This is a series of linked Amendments and they are based on the recommendations which are known as the CIPFA recommendations—which stands for those made by the Chartered Institute of Public Finance and Accountancy. This series of Amendments would have the effect of making the authorities which would have these powers present their accounts in the form recommended by CIPFA. I do not think it is necessary for me to explain in detail how these accounts will work, so
204
far as I understand it, the Government themselves have accepted the principle of the CIPFA accounting. They believe it to be the right way of presenting accounts and what they are concerned about is the time when they should be brought in.
I believe also that the principle of the CIPFA accounting has the support of the Liberal Party. May I quote what the honourable Member, Mr. Stephen Ross, said in another place on 17th May:
"I support the Conservative Opposition in their request to the Minister that the CIPFA basis of accounting should be written into the Bill."—[Official Report, Commons, 17/5/77; col. 269.]
This matter was debated in Committee in another place and there was a tied vote. Therefore, I believe the principle of this matter has the support of all Parties, and the reason why I believe it has support is that it has been produced by accountants for local authorities and the fact is that direct labour departments more than any other departments in a local authority are themselves in direct competition with private builders. So it is necessary that comparisons of costs should be fairly made. The only way these comparisons can be made is if a similar system of accounting is used for direct labour departments as would be used by private building firms. This is not only in the interests of other private building firms who are in competition with the direct labour departments; it is of course very much in the interests of ratepayers that they should be able to understand the accounts and it is therefore very much in the interests of local authorities as a whole.
One has only to look and see the latest difficulties that a direct labour department has got itself into. I refer to those figures that have been produced since June of this year from the Wakefield Council, whose leader I believe is Councillor Smart, who recently wrote of the advantages of direct labour departments in the magazine Municipal Review. The figures show that on 22 building works the deficit is now £1,082,551. At a time when local government is going through a great financial crisis it seems to me quite wrong that it should be incurring this kind of deficit, and I cannot believe that it is in the interests of local government or of the building industry that this should be so.
Furthermore, the CIPFA recommendations have already been included in two local Acts; namely, the Tyne and Wear Act and the South Glamorgan County Council Act, and the Committee will recall that those two Private Bills were subject to very full debate in your Lordships' House. This said, it is necessary to try to understand the reasons why the Government have been unwilling to accept these accounting proposals. The first reason that has been given is that the 25 authorities listed, who would be the only ones to whom this would by Statute apply, would then have two different accounting systems. Where the direct labour department was doing work for the district authority itself it would use one accounting system; where the district council was doing work for the county council or a neighbouring district authority it would have to use the CIPFA recommendations, and it was thought that this would be too complicated for it to apply. In my view, this argument simply does not stand up when one considers the Tyne and Wear Act and the South Glamorgan County Council Act where in fact the CIPFA recommendations apply.
Furthermore, as to the argument used by the noble Baroness, Lady Birk, which was that if a county council was going to accept a tender from a direct works department of a district council it would want to ensure that it was getting value for money, it could not tell if it was getting value for money unless that authority had the same kind of accounting procedures as were being used by a private builder who submitted a tender. So the fact is that the county council could not know what it was going to get. This point was very well made when a similar Bill which would have applied to Scotland was going through another place, when the honourable Member Mr. Ewing made it quite clear that it could well be that a county council was going into a completely open-ended commitment if there was not a proper statement of accounts showing the proper costing of the direct works department.
Such accounting would, therefore, be helpful to the other authorities that were contemplating using this direct labour; and at the end of the day, although, as the noble Baroness said on the preceding Amendment, there may well be
206
inefficient private builders, if private builders are inefficient sooner or later they go bankrupt, and they therefore suffer for their inefficiency. If a direct works department is inefficient, the ratepayers can simply subsidise it for years to come without anybody realising what has happened. As my noble friend Lord Sandys indicated, it is a terrible indictment that 13 authorities—it is true that none of them is on this list—have been up-braided by a district audit because of the inefficiency of their direct works departments.
We believe this is an important Amend ment. We are not asking for anything which has not got agreement in principle between all the parties. The question we need to ask the Government is what they are waiting for, and why will they not include these proposals in this Bill? The CIPFA recommendations were published in June 1975. The noble Baroness said that there was a Departmental Working Party reporting on the proceedings for accounting for construction work and that it was expected to report later this summer. She then said that the problems of accounting for maintenance work would be undertaken. I do not know how long it is expected that all this will last, but it does not look to me as if there could possibly be anything in the Queen's Speech in November which would bring in these procedures for direct labour organisations, and presumably if there is no indication at the beginning of the new Parliamentary Session we could wait at least one more year, if not longer, for these procedures to be brought in.
I should have thought, on the contrary, that there was every argument for bringing them in now. The 25 authorities could be used as a pilot scheme to see how they worked and to see whether any further refinements were needed, because it seems to me that once the principle is agreed it is only right that it should be carried out in practice. This is particularly important at a time when we need to encourage efficiency in local government. It in no way prevents a local authority, if it so wishes, from having its direct labour department; but it does make sure, from the point of view of the customer and the ratepayer, that the true accounts are shown up, so that everybody

207
knows whether or not they are getting value for money. I beg to move.
Baroness BIRK: May I ask the noble Baroness whether I am right in thinking that she included Amendment No. 5 in the group she was speaking to?
Baroness YOUNG: Yes, I did.
4.14 p.m.
Baroness BIRK: It is understandable, and I share noble Lords' concern, that there should be a proper financial framework for the operation of direct labour organisations. I do not think there is any argument between us on that. I also appreciate that since similar Amendments were tabled in another place some effort has been made to remove certain weaknesses to which attention was then drawn. In particular, in the new clause, Clause 3, a limit has been included below which competitive tendering is not required. Some provision has also been included to deal with negotiated contracts. But none of the new clauses, however, adequately covers the provisions which would be needed to give DLO authorities power to charge on the basis of a quoted price. Without such a power the use of standard contract forms providing for contract price would be largely inappropriate.
It is not really clear what is meant by the reference to "proper charge" in the new Clause 9. A clear indication would need to be given of the way in which proper charges were to be assessed. Also on Clause 9, which would require a DLO authority to ensure that in respect of such projects income is sufficient to defray expenditure, private contractors do not necessarily operate in that way in respect of each contract, and in fairness DLO authorities really should not be expected to do so either. So a financial objective should operate in relation to a DLO's activities over a period. This, I accept, is really just picking on points on the various clauses. My basic exception to them all is that, although I accept that the general intent behind these clauses certainly accords broadly with the Government's view on the way in which the accounting system should develop, the weaknesses in the drafting demonstrate the need for the provisions to be properly worked out.
208
The most important point of all, as I previously explained on Second Reading, is that the place for introducing a new financial system is comprehensive legislation dealing with DLO activities generally. I explained this on Second Reading but I am afraid I shall have to go over the argument again. It would be completely inappropriate to have these provisions in the Bill, because they would apply to only that part of the DLO activities of the 25 authorities which is undertaken by virtue of this Bill. The provisions would not affect the other DLO activities of the 25 authorities which represent by far the greater proportion of their DLO work; that is, the work they do for themselves. Nor would they affect the DLO activities of all other local authorities.
It would seem to me, and I hope to the Committee, that it would be quite anomalous to have special accounting provisions simply for 25 authorities, whose powers were merely being restored as a result of the reorganisation of the 1972 Local Government Act. It would also be confusing to have different systems operating within a single authority, which would be the case for the 25 authorities. If this were inserted in this Bill they would have to operate two different accounting systems, which I do not think can make for great efficiency. It would also be wrong to provide a new financial system to bring DLOs into line with private contractors without giving DLOs an ability, like private contractors, to seek work on a wider basis. What we need to do is to provide a proper framework covering not only the financial arrangements but also the scope of DLO activities.
We accept that until there is comprehensive legislation there should be a continuing dialogue. In our Consultation Documents last year we set out the main principles we proposed to embody in the comprehensive legislation. We expect to receive in the summer a report from the Departmental Working Party on the detailed arrangements in relation to new construction work. A further CIPFA report is expected before long in relation to maintenance work, and I hope the Working Party will be able to advise on the detailed arrangements on that aspect early next year. When we have a report from the Working Party we will consult those concerned on these issues, and this will enable the discussions to be continued.

209
Regarding this Bill, however, it would not be right, for these reasons, to accept these new clauses. I think I should say a word on the new Clause 5, which is included in the group, which deals with the suspension of powers. Before one can contemplate suspending a local authority's powers under general Statute one must have established clear-cut criteria to enable a sound and fair judgment to be made of the need for such action. Until there are satisfactory accounting and charging arrangements this cannot be done. There must be a proper basis for considering the form of the sanction in the case of a DLO which does not operate effectively.
Under the comprehensive legislation that the Government had hoped to introduce, a DLO authority would have been under a duty to avoid making a loss (having been given power to charge on the basis of a firm price); the Secretary of State would have had power to direct that all or part of a DLO's activities should cease if a DLO failed to meet the financial duty in three consecutive years; and, in deciding whether to exercise the power, the Secretary of State would have had regard to whether the DLO authority was likely to meet the financial objective within a reasonable period. In all these instances the client authority would take into account the fact that it would have to pay the actuals costs of the DLO authority in deciding whether it was economic to award work to a DLO. Therefore, in that way its financial responsibilities are the same as regards whether it awards the work to a DLO or to a private contractor. A client authority usually puts its work out to tender and it is in its interest to choose the most economic course.
The noble Baroness, Lady Young, quoted the examples of Tyne and Weir and Glamorganshire. It is perfectly true that when the Bills were drafted it was pointed out that there were financial problems. However, the Promoters at the time decided to go ahead as this whole question was then being raised and discussions were taking place. However, it is certainly extremely improbable and unlikely that this would happen in any further private Bills.
Lord O'HAGAN: It is always interesting to listen to the noble Baroness,
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Lady Birk, and she adopts a patient and motherly tone as if she were a world weary elder relative dealing with difficult and irresponsible children raising awkward questions. The noble Baroness has put up a barrage of technical points about the drafting of some of the Amendments moved by my noble friend Lady Young, and has also attempted to drown us with a whole series of points which claim to show that it would be impossible to introduce a proper system of accounting for direct labour organisations.
I should like to ask the noble Baroness, Lady Birk, the question that I asked on Second Reading, because she has not yet answered it. It is a question that I think your Lordships need to hear again and we should like to hear the noble Baroness' answer, if she has one. We understand that when the Government had a plan for a much more comprehensive Bill, they were to introduce a system of thorough, overall control over direct labour organisations. If that system is ready now why can it not be used as a pilot experiment in the Bill now before the House? The noble Baroness, Lady Birk, made great play with the drafting defects, as she explained them, of the Amendments before the House. I always take it as a compliment if the Civil Service pick holes in the drafting, because they must think that there is something in the Amendment that is worth pointing out as a drafting defect.
The noble Baroness then explained in great detail why it would be so difficult to introduce proper accounting methods. Yet, at the same time, she continues to proclaim the Government's intention and desire to bring those proper accounting methods into practice. We need to know why this Bill, the Government's own Bill, cannot be used as the trial run for these accounting methods. They have been worked out by the CIPFA Working Group since 1975. The Government support the recommendations. I do not know whether the Liberals in this House support the recommendations, but the Liberals in the other place support them. Why did not the Government take this opportunity to put them into effect? It is not a technical or an ideological matter; it is concerned with large sums of money.
I shall not repeat some of the horror stories that are known to your Lordships

211
about things that have gone on in direct labour organisations in Glasgow, Wandsworth or other places. However, I should like, briefly, to give your Lordships an idea of the comparable return for the money between building operations carried out by private operatives and direct labour. The figures are taken from the statistics that the Department of the Environment publishes. The figures that I have for last year show that the output per man as regards direct labour was 1,084 and the private figure was 2,861. We must get some common sense into the accounting of direct labour organisations. If they fail, or if they are inefficient, it is not the Government who pay: in the end it is us. This is an opportunity for the Government to show their good intentions and to put tough accounting procedures into the Bill, because we still have not had a good explanation as to why they will not do so.
Baroness BIRK: I think that the noble Lord, Lord O'Hagan, was so busy working out his phraseology to describe how I was replying to the Amendments that he omitted to listen. I explained the position exactly and not in technical language. Incidentally, the Bill is very technical and I felt that it would be for the convenience of the Committee to get all the technical matters off in one go without having to go backwards and forwards. I shall repeat what I have said and I should be extremely grateful if the noble Lord, Lord O'Hagan, would, in his boyish way, listen to what I am saying. I accept that the general intent behind the clauses accords broadly with the Government's view of the way in which the accounting system should develop, but I said that it would be completely inappropriate to have these provisions in the Bill because they would apply to only that part of the DLO activities of the 25 authorities which was undertaken by virtue of the Bill.
The provisions would not affect the other DLO activities of the 25 authorities—that is to say, where they do work for themselves and not for other client authorities; I shall make sure that the noble Lord, Lord O'Hagan takes these points in, so he must be patient—which represent by far the greater proportion of their DLO work. Nor would they
212
affect—and this is extremely important—the DLO activities of all the other local authorities. Therefore, it would be quite anomalous to have special accounting provisions simply for 25 authorities whose powers were being restored. In addition, it would be confusing to have different systems operating within a single authority which would, in fact, be the case for the 25 authorities.
As we intend to introduce a Bill which deals with a much more comprehensive approach to DLO activities generally, that would be the time to bring in all the provisions that we have been discussing. There is no difference between us as regards the need for these new accounting and charging provisions. After all, we set up the Working Party and we have accepted its report. However, this Bill is not the instrument to do it. All the argument in the world will not change what is, frankly, an obvious fact.
Baroness YOUNG: Would the noble Baroness, Lady Birk, care to answer the point made by my noble friend Lord O'Hagan, as to whether or not the original Bill that was drawn up and dropped included these recommendations? If it did include them, will she tell us whether the Government have clauses in draft which could go into a Bill at any time?
Baroness BIRK: The general recommendations on the wider issues had been worked out and were being worked out. They would have to be scrutinised again but they could probably go into a Bill. However, it would be a quite different Bill because it would be dealing with DLO activities of all local authorities and not just these 25—it was only because the order finished on 31st March 1977 and it was just to bring them into line. Noble Lords opposite are trying to build an edifice on something which is just a small rearrangement, a correction, in order to bring the activities of the 25 authorities within the new boundaries which have now encompassed them since the Act of 1972. If the Opposition come forward and say, "Yes we would love to have this Bill which has not yet been put before us" we would respond very gladly and bring it forward, no doubt, for the next Queen's Speech.
Baroness YOUNG: We have listened with very great care to what the noble

213
Baroness, Lady Birk, has said about this series of Amendments. I fully appreciate the objectives of the Bill and what it seeks to do, but I cannot accept that it is so difficult for these 25 authorities to have these accounting procedures on the occasions when they will be doing work for a county council or a neighbouring district council. There is nothing whatever to prevent them bringing the accounting procedures for their direct labour departments that are working for themselves into line with the CIPFA recommendations. Then, of course, they would not have the two procedures together. That is an argument that does not stand up to the test when one considers what the reality of the situation in a local authority would be.
I quite recognise that many of these Amendments may be incorrectly drafted. Anyone who has ever attempted to amend a Bill knows perfectly well that no Amendment is ever correctly drafted. I should be quite prepared to withdraw the Amendments if the Government would come back and draft them correctly. However, that was not what the noble Baroness promised. She has agreed with us that in principle they are right and that they ought to apply in local authorities.

CONTENTS

Ailsa, M.

De Freyne, L.

Mackie of Benshie, L.

Airedale, L.

Denham, L. [Teller.]

Macleod of Borve, B.

Alexander of Tunis, E.

Deramore, L.

Mancroft, L.

Allerton, L.

Derwent, L.

Mansfield, E.

Alport, L.

Eccles, V.

Merrivale, L.

Amory, V.

Effingham, E.

Montagu of Beaulieu, L.

Ampthill, L.

Elliot of Harwood, B.

Montgomery of Alamein, V.

Amulree, L.

Elton, L.

Mottistone, L.

Arran, E.

Emmet of Amberley, B.

Mowbray and Stourton, L. [Teller.]

Atholl, D.

Falkland, V.

Avon, E.

George-Brown, L.

Moyne, L.

Banks, L.

Gisborough, L.

Newall, L.

Barnby, L.

Gladwyn, L.

Noel-Buxton, L.

Beaumont of Whitley, L.

Glasgow, E.

Nunburnholme, L.

Belstead, L.

Glenkinglas, L.

O'Hagan, L.

Berkeley, B.

Greenway, L.

Onslow, E.

Blake, L.

Grey, E.

Rankeillour, L.

Broadbridge, L.

Gridley, L.

Reigate, L.

Brock, L.

Hailsham of Saint Marylebone, L.

Rochdale, V.

Brougham and Vaux, L.

Hampton, L.

Sackville, L.

Caccia, L.

Hanworth, V.

St. Davids, V.

Campbell of Croy, L.

Henley, L.

St. Helens, L.

Carrington, L.

Home of the Hirsel, L.

Sandford, L.

Cathcart, E.

Inglewood, L.

Sandys, L.

Clancarty, E.

Kinloss, Ly.

Selsdon, L.

Clwyd, L.

Kinnaird, L.

Sharples, B.

Cork and Orrery, E.

Loudoun, C.

Skelmersdale, L.

Cranbrook, E.

Lucas of Chilworth, L.

Spens, L.

Cullen of Ashbourne, L.

Luke, L.

Stamp, L.

Daventry, V.

Lyell, L.

Strathclyde, L.

This Bill, which we do not believe to have been necessary but which nevertheless is before the Committee, provides an opportunity to have these accounting procedures in 25 authorities on certain occasions. It seems to us on this side of the House to be something that would be well worth trying out as a pilot scheme. If they are based on the CIPFA recommendations, we shall welcome the Government's proposals when they come forward. However, as I understand the timetable, the report will not be complete until next summer, and it will be at least 18 months before anything could happen. We have an opportunity in this Amendment to do something immediately which we believe to be in the best interests of the building industry, the ratepayers of authorities and, above all, local government itself, because it will be seen to be fair and right. For that reason I cannot withdraw the Amendment.
4.32 p.m.
On Question, Whether the said Amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 104; Not-Contents, 57.

Strathcona and Mount Royal, L.

Trefgarne, L.

Ward of North Tyneside, B.

Strathspey, L.

Vernon, L.

Ward of Witley, V.

Sudeley, L.

Vickers, B.

Westbury, L.

Terrington, L.

Vivian, L.

Wigoder, L.

Thurlow, L.

Wakefield of Kendal, L.

Young, B.

NOT-CONTENTS

Balogh, L.

Gaitskell, B.

Phillips, B.

Birk, B.

Greenwood of Rossendale, L.

Raglan, L.

Blyton, L.

Gregson, L.

Rhodes, L.

Boothby, L.

Hale, L.

Ritchie-Calder, L.

Brockway, L.

Halsbury, E.

Roberthall, L.

Buckinghamshire, E.

Henderson, L.

Rusholme, L.

Burntwood, L.

Houghton of Sowerby, L.

Sainsbury, L.

Castle, L.

Hughes, L.

Shepherd, L.

Champion, L.

Janner, L.

Shinwell, L.

Chorley, L.

Kirkhill, L.

Snow, L.

Collison, L.

Leatherland, L.

Stone, L.

Cooper of Stockton Heath, L.

Llewelyn-Davies of Hastoe, B.

Stow Hill, L.

Crook, L.

Longford, E.

Taylor of Gryfe, L.

Darling of Hillsborough, L.

McCluskey, L.

Taylor of Mansfield, L.

Davies of Leek, L.

Maelor, L.

Wells-Pestell, L. [Teller.]

Delacourt-Smith of Alteryn, B.

Milford, L.

Williamson, L.

Donaldson of Kingsbridge, L.

Oram, L. [Teller.]

Wilson of High Wray, L.

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

Pannell, L.

Wootton of Abinger, B.

Fisher of Camden, L.

Parry, L.

Wynne-Jones, L.

Resolved in the affirmative, and Amendment agreed to accordingly.
4.42 p.m.
Baroness YOUNG Baroness YOUNG moved Amendment No. 3:
After Clause 1, insert the following new clause:
Obligation to put work out to tender
.—(1) A local authority which desires a contracting council to carry nut a relevant work shall either—

(a) put the relevant work out for competitive tender and in respect thereof comply with the provisions of the Code of Procedure for Selective Tendering (1972 Edition) published by the National Joint Consultative Committee of Architects, Quantity Surveyors and Builders or such other code of procedure as shall from time to time be published by that committee in collaboration with the Secretary of State; or, if the Secretary of State so directs, shall comply with such other code as may be prescribed or approved by him for the purposes of this section; or

(b) negotiate a price which shall not exceed the limit specified in subsection (2) below.

(2) The limit specified for the purposes of subsection (1) above shall be £50,000 or a higher sum being the same proportion to the said sum of £50,000 as shall be borne by any increase in the Index of Retail Prices to the figure shown therein for the month of July 1977.
(3) The Index of Retail Prices means the Index of Retail Prices published by H.M. Stationery Office or any official publication substituted therefor.
The noble Baroness said: I have spoken to this Amendment. I beg to move.
On Question, Amendment agreed to.
[Amendment No. 4 not moved.]
Baroness YOUNG Baroness YOUNG moved Amendment No. 5:
After Clause 1, insert the following new clause:
Suspension of powers
.The Secretary of State shall have power by written notice to suspend for such period or periods as he thinks fit the operation by a district council therein named of the powers conferred by section 1 above if after consideration of the specified accounts prepared by that Council in accordance with section (Separate accounting) of this Act or the reports of the District Auditor on the new building and construction works carried out by that council on its own behalf he is of the opinion that there is an unreasonable risk that the exercise of those powers will result in loss to the council.
The noble Baroness said: Again, I have spoken to this. I beg to move.
On Question, Amendment agreed to.
[Amendment No. 6 not moved.]
4.44 p.m.
Lord O'HAGAN Lord O'HAGAN moved Amendment No. 7:
After Clause 1, insert the following new clause:
Duration of Act
.—(1) This Act shall continue in force for the period of year beginning with the date of the passing of this Act and shall then expire unless it is continued in force in accordance with subsection (2) below.
(2) The Secretary of State may by order made by statutory instrument provide that this

217
Act shall continue in force for a period of one year beyond the date on which it would otherwise expire.
(3) An order shall not be made under subsection (2) above unless a draft of the order has been laid before Parliament and approved by a resolution of each House of Parliament.
The noble Lord said: I rise to move Amendment No. 7, which stands on the Marshalled List in the names of my noble friends and myself. There has been some misunderstanding about the origins of this Bill. In the Local Government Act 1972, certain transitional provisions were made for the consequences of the alteration of local authority boundaries. One of those provisions was to enable the direct labour organisations to continue working and so make for an easy transition to the new system of local government when fully implemented.
What the Government have chosen to do is to attempt to perpetuate those transitional provisions and to fossilize and make them permanent, and so to prove the truth of an old French proverb which I shall quote only in English "There is nothing that lasts except the provisional". This is not a good way to make laws nor is it a good way to enable local government to carry out its proper functions.
There is another reason that led me to think about the way the Bill is phrased. It is this: as we can see from the words of the Bill itself, it seeks to establish on the Statute Book, permanently and for ever, direct labour organisations working to, and within, boundaries that are now wholly out of date. We may well find in years to come that there are difficulties because there will be no other piece of legislation in relation to which it is relevant, and continues to be relevant, to take into account the location of the boundaries of the old boroughs before the local government reorganisation.
I am not resting my case on the fact that local authorities may not know where the boundaries were some while ago. Nevertheless, with a constantly evolving landscape and townscape, it is difficult to keep track of boundaries that have nothing but historical interest except in this one particular instance. Therefore, because the Government are choosing to attempt to perpetuate something that was meant to be merely temporary in a permanent Statute, I want both Houses
218
of Parliament to be given a chance to keep an eye on it and see how things are developing.
If ever there was a case for a Bill being referred to one of the new Standing Committees proposed by your Lordships' Practice and Procedure Committee, in which evidence could be taken from Departments and outside organisations as to the desirability and workability of the Bill, it is this one. I have in my hands newspaper articles, one of them headed:
"More facts needed before role of direct labour departments expanded".
Another one concludes:
"Direct labour is as good as the men who manage it. Before the Government legislates to extend the system it must pause for a moment from the politics and look to its managers".
That has not been done. That full survey has not been carried out.
Because this Bill is giving permanence to something that was not designed to be permanent, I feel that Parliament needs to keep an eye on how the situation develops, and at the same time Parliament needs to be able to take stock of how direct labour organisations are working. They are controversial, they are costly, and often they are disastrously inefficient. I am attempting in this Amendment to provide that this Act shall not continue in force without an Instrument being passed through both Houses of Parliament annually. That would give both Houses a chance to examine how things were developing and whether the Bill was working as intended. It would give both Houses a chance to see how direct labour was facing up to the new challenges. It would give both Houses a chance to examine whether difficulties had arisen because of the out-of-date nature of the boundaries on which this Bill is based. It is a piece of common sense to make sure that this Bill works. If the Government intend to have this Bill, surely they want it to work. In the interests of greater Parliamentary scrutiny of this legislation—post-legislative scrutiny, if you like—I beg to move this Amendment.
Lord SANDYS: I should like to support this Amendment, so cogently moved by my noble friend Lord O'Hagan. In parenthesis, I should like to say that the Government should take note of the ingenious way in which it is drafted, for it could have been the sort of Amendment

219
which the Government might have had in mind for the Control of Office Development Bill to which we have so recently given our attention.
To turn to the Local Government Act 1972, I believe that, when that Act was before Parliament, great consideration was given to the consequential and transitional arrangements. The section with which we are concerned, Section 254, laid particular stress on the problems of the boundaries of local authorities. There is a subsection there, subsection (4), which I shall not quote in detail but which I have had before me and which permits the Secretary of State to give a specific direction on this matter. Further, the Secretary of State can call upon additional powers under Section 67, which deals with a much wider range of transitional and consequential provisions. The Amendment is entirely in keeping with both those sections of the 1972 Act and would give Parliament the opportunity to examine this matter in a year's time.
Baroness BIRK: I agree it is an ingenious Amendment, but ingenuity is not the only criterion for accepting Amendments, and while I give credit for its ingenuity I am afraid I must urge the Committee to resist it. What the noble Lord, Lord O'Hagan, would be doing would be restoring the powers for only one year with provision for one extension for one year by order of the Secretary of State. There is no sufficient reason for limiting the operation of such powers in time. This arose only because the measure introduced by the last Conservative Government on local government reorganisation failed to deal with the position of direct labour organisations. The 1972 Act should have made permanent arrangements regarding the scope of their activities, and the only reason why the orders were time limited originally was that it was not possible under Section 254 of the 1972 Act—this was a consequential and supplementary provision under which the orders were made—to provide the powers on a permanent basis because the Local Government Act powers were not wide enough to enable the orders to do that.
This Bill will be supplanted at a later date by comprehensive legislation on local authority direct labour organisations—we discussed this on earlier Amendments—
220
and this will provide a uniform basis for the operation of DLOs throughout the country and in the context of the present local government boundaries. Unfortunately it is not possible at this stage to say when that comprehensive legislation will be introduced, but it would be a nonsense and an unnecessary waste of time and effort to have to legislate again simply to enable the 25 local authorities to continue to have these powers. I cannot see the sense of trying to run a DLO on a yearly expectation of life because that must make forward planning impossible.
Lord O'HAGAN: I hesitate to interrupt, but I think I heard the noble Baroness say that she could not see how it could be a good idea to legislate again. Surely she understands that the Amendment would mean that this legislation would become annually renewable.
Baroness BIRK: My Lords, if the comprehensive legislation comes forward, we shall have to be legislating on that and there does not seem to be any reason in the meantime to look at this every year and to try to run it on a yearly expectation of life; perhaps I used the word "legislate" when I did not mean to do so.
This arose out of an anomaly and the anomaly, when it was discovered, was corrected temporarily by the transitional orders. It was a stop-gap measure and it was hoped that before the temporary orders expired we should have introduced the comprehensive Bill, but unfortunately that was not to be, and while we still intend, as I have said in discussing the Amendments today, to bring forward such a measure, it is necessary now to take action to continue the effect of the transitional orders. There seems no reason considering the history of this whole episode arising out of the 1972 Act, to depart from rectifying it for the time being, until new legislation comes in, and to make this rather extraordinary exception of having it on a yearly basis. I do not think that would make sense one way or the other.
Baroness YOUNG: The noble Baroness said she did not feel it made sense, yet she herself has argued consistently throughout our debates on the Bill that it does no more than continue what is the present practice. We have

221
argued quite the contrary, that the Bill is putting in statutory form orders which have been renewable, and therefore there is a difference. This Amendment—and I congratulate my noble friend Lord O'Hagan because it is ingenious—says what the Government are saying and what they are intending to do. I should have thought therefore that it was worth accepting.
Baroness BIRK: I cannot see any point in accepting the Amendment unless the noble Baroness feels, returning to the point of the other substantive Amendments, that she would like to go over to the new system of financing just for 25 authorities under which each would have to be operating by two different sets of accounting. In addition to that, there would be uncertainty as to what would happen at the end of each year. I should have thought that with her Party's view on public expenditure—she is always keen, and rightly so, to ensure that expenditure and personnel are not wasted—she would have realised that the effect of all that has been said throughout the discussion on the Amendments to the Bill would result in greater expenditure and more manpower being used in what would be a rather ineffectual and inefficient way for 25 authorities and only for a small part of their work. This is an extension of the argument we have had previously.
Lord O'HAGAN: I am disappointed by that answer because my Amendment would not take away from the Government their objective in putting forward this Bill. My Amendment would, while safeguarding the Bill itself, give Parliament an annual opportunity to see how things are progressing. We have heard on all sides that the DLOs are in need of examination, particularly on the accounting side—that is something on which there is almost unanimous agreement in the Committee—and I am sad that this constructive Amendment has not met with a better reception. I will reflect on what the noble Baroness has said and, in the meantime, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Baroness YOUNG Baroness YOUNG moved Amendment No. 8:
222
After Clause 1, insert the following new clause:
Form of contract
. Any agreement for the carrying out of a relevant work shall incorporate the appropriate standard form of building contract for the time being published by the Joint Contracts Tribunal (commonly called the RIBA Standard Form of Contract) or that published by the Association of Consulting Engineers, the Institution of Civil Engineers and the Federation of Civil Engineering Contractors (commonly called the ICE Standard Form of Contract) or such other standard form as shall be in common use.
On Question, Amendment agreed to.
Baroness YOUNG Baroness YOUNG moved Amendment No. 9:
After Clause 1, insert the following new clause:
Separate accounting
.—(1) The accounts of the contracting council shall include a separate account (hereinafter called "the specified account") in respect of each relevant work carried out by that council under an agreement made by virtue of section 1 of this Act and which shall be included in the accounts next following the expiry of nine months after the issue of the final certificate for that work; and subsection (1) of section 159 of the Local Government Act 1972 (which relates to the inspection and taking of copies of accounts) shall have effect as if the reference to the accounts to be audited included a reference to the specified account.
(2) The contracting council shall bring into the specified account all costs, liabilities, charges and expenses including financing costs attributable to the relevant work to which the account relates and shall in particular without prejudice to the generality of the foregoing ensure that the specified account shall—

(a) include a proper charge in respect of—

(i) labour and labour overheads;

(ii) the use of premises in connection with the carrying out of the relevant work,

(iii) building and works department administrative and supervisory expenses;

(iv) central administrative expenses;

(v) capital, operating, maintenance and finance costs for all plant equipment, vehicles and workshops, and used in carrying out the relevant work;

(vi) any supplies taken from stock for the purpose of carrying out the relevant work; and

(vii) in relation to goods manufactured by the contracting council and used in the carrying out of the relevant work, labour materials and all other relevant expenses; and

(b) where an item is attributable partly to the relevant work and partly to other work or to two or more relevant works show a fair apportionment having regard to the respective values of the works in question.

(3) After audit the specified account shall be available to the public for examination.
(4) The contracting council shall use their best endeavours to secure that (having due regard to the provisions of subsection (2)

223
above) the income derived from the carrying out of each relevant work is sufficient to defray their expenditure in respect of that work.
The noble Baroness said: I spoke to this Amendment earlier. I beg to move.
On Question, Amendment agreed to.
Clause 2 [Short title and extent]:
4.58 p.m.
Lord O'HAGAN Lord O'HAGAN moved Amendment No. 10:
Page 1, line 22, leave out ("Local Authorities (Restoration of Works") and insert ("Direct Labour (Extension of").
The noble Lord said: In moving this Amendment, I seek to tell your Lordships and members of the public, and those who are concerned to examine the Bill, what the Bill actually is, and I think that is a good Parliamentary principle. Governments—this is no doubt a criticism which could be applied to all Governments—tend to want to find the most flattering or else the most obscurantist Titles for their Bills; they either wish to make them sound better then they are and gild them, or they wish to be what I believe is called obfuscatory and make it wholly unclear what the Bill is for. My noble friend Lord Sandys told me that when he first looked at the Bill and saw the Title, Local Authorities (Restoration of Works Powers) Bill, he thought it was a conservation measure. The Title as it stands gives very little indication of what the Bill is really intending to do.
To give Bills Titles which indicate what they really are should not be considered simply a joke. It is necessary to make the objects of our legislation clear both to the average citizen trying to find an Act relevant to his particular anxiety and to the practitioners of the law. The words Local Authorities (Restoration of Works Powers) Bill give no clear idea of what the Bill does. The Bill extends the powers of direct labour, and my Amendment seeks to make this clear. This is a simple, small Amendment designed in Parliamentary terms to comply with the principles of the Trade Descriptions Act. It seeks to describe the Bill as what it really is, and to remove the cloak of the rather long and complicated Title which at present obscures the true nature and purpose of the Bill. I beg to move.
Lord SANDYS: I should like to support the Amendment because I believe it to be important, and my noble friend has referred to a difficulty which I had in placing the Bill in its correct pigeon-hole. I again referred to the report of the Renton Committee on the Preparation of Legislation, which I mentioned earlier, to see what it had had to say about the arrangements for Short Titles. It is interesting to note that the Statute Law Society had an important suggestion to make. It contended that Titles should not be chosen
"…at random, inconsistently, or unsystematically, but should be selected by a designated person or body charged with this task and according to prescribed rules ".
That is the view of the Statute Law Society on the matter. The Society goes on at greater length to enlarge upon its argument, but I believe that the case is very largely self-explanatory from what has been written into the Amendment and from the argument presented by my noble friend Lord O'Hagan.
Baroness BIRK: In a period of inflation the noble Lord, Lord O'Hagan, is certainly inflating this Bill because he is trying to make it much wider. I do not think that he is entirely clear as to what the Bill is about. All the Bill is concerned to do is to restore the powers of 25 authorities. I agree that there are occasions when the Titles of Bills are not quite so comprehensible as they might be, but this is the Local Authorities (Restoration of Works) Powers Bill, and anybody who has sat through the Second Reading and Committee stage ought to be quite clear that what we are doing in the Bill is to restore powers to 25 authorities which lost them because of a change of boundaries due to the 1972 Local Government Act. The phrase "Restoration of Works Powers" is absolutely correct nomenclature. To use the Title "Direct Labour (Extension of)" would, in my view, be quite wrong and inaccurate. For this reason, the Amendment is unacceptable. It does not convey with accuracy the meaning of the Bill, nor what the Bill is about. It would be grossly misleading to suggest that the measure is concerned with the general extension of the power of direct labour organisations, which is what the noble Lord's Amendment would suggest, and even if he did not see it that way, that is

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how it would normally be read. Therefore, I hope that the Committee will resist the Amendment.
Lord O'HAGAN: I thank the noble Baroness for her stout defence of the Parliamentary draftsmen and her departmental advisers. This Bill does indeed extend direct labour, and extends it into infinity. The object is to make it go on without stopping. We shall not continue the argument; we shall return to it another day. In the meantime, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
On Question, That this be the Title of the Bill?
Baroness YOUNG: Before we pass this point, I should like to say that I am conscious that, now that the Committee has accepted the series of Amendments on the proposals on accounting, I believe that there needs to be an Amendment to the Long Title of the Bill, and that I wish to consider this at the next stage.
Title agreed to.
House resumed: Bill reported with the Amendments.

EEC COMMON COMMERCIAL POLICY: 40th REPORT OF THE ECC
5.7 p.m.
Lord TREVELYAN Lord TREVELYAN rose to move, That this House takes note of the Fortieth Report (HL 226) of the European Communities Committee on the EEC Common Commercial Policy. The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. It is, as I understand it, the policy of the Select Committee both to comment on specific proposals made in the Community which affect British interests, and to examine in general major aspects of Community policy. Today the Select Committee, with notable assistance from the Department of Trade and the noble Lord, Lord Reay, the rapporteur for the Loma Convention in the European Parliament, submits to your Lordships a review of the Community's Common Commercial
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Policy; that is, the commercial policy of the Community towards the world outside the Community. We hope, thus, to draw the attention of the House to a matter, the importance and scope of which we believe are not generally understood. The Committee has also been greatly helped by the visit of its Sub-Committee to Brussels, and the advice which the subcommittee received there.
We consider that this is one of the Community's successes, largely due to the efforts of Sir Christopher Soames and his able team of officials. It was adumbrated in a period of European prosperity. It would probably not have developed in precisely the same way if the severe recession could have been more clearly foreseen, but, by and large, I do not think that it would have come out much differently.
Let me first single out three aspects of the policy. First, the Community forms the largest trading bloc in the world. To belong to this bloc must surely be of continuing advantage to the interests of this country. Secondly, the Community has achieved a high degree of integration of its Members in its commercial relations with non-Member countries. Thirdly, it is a generous outward-looking policy, and has little of the narrow, inward-looking quality which, in the early days of the Community's existence, we had feared it would have. In this respect, the policy suits the interests of this country which thrives on an expanding basis of international trade, and accords with our recognition of the importance of the advancement of the developing world. It is a policy with which we should be well satisfied. The main basis for the commercial policy is the Common External Tariff, which is now lower than the average level of duties imposed by the other great trading blocs—a tariff to which this country now fully adheres during this year, at the close of the temporary transitional period applying to it.
As will be seen from the report, the picture is by no means simple. This is largely due to the need for flexibility in dealing with the many different trading situations. An over-rigid framework would not have met the needs of the Community or its trading partners, which are numerous and diverse, for many countries

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have eagerly sought trade agreements with the Community. The Member States may continue existing bilateral agreements when they are due to expire, but only after consultation with the Commission, which must check that such agreements do not run counter to Community policy, but any agreement made by the Community with a non-Member State overrides existing bilateral agreements. New agreements are negotiated only by the Community, and the major trade agreements to which the United Kingdom is a party are now Community agreements.
I do not want to weary your Lordships with a repetition of the details of the various types of agreement which we have set out in the report, but I should like to comment on four types of agreement: those with the EFTA countries, those with the countries of the Mediterranean littoral, those with the State trading countries and those with the members of the Lomé Convention. The free trade agreements with the EFTA countries followed the enlargement of the Community in 1973, and reflect both the comparable degree of economic development in the Community and the EFTA countries and the long-standing geographical and economic ties existing between them. Secondly, the agreements with the Mediterranean countries also reflect geographical and long-standing historical ties. They comprise three types: preferential agreements with Greece and Turkey which contemplate their possible adhesion to the Community and, in that event, would ease their way to membership; agreements with Spain, Israel, Malta and Cyprus, which contemplate ultimate free trade with the Community; and agreements with other countries of the Southern and Eastern shores of the Mediterranean, which are conceived more in terms of aid than of free trade.
The Community is now engaged in bringing balance and cohesion to its Mediterranean policy. There is urgent need of a coherent policy for this area in the agricultural sector. The Government stress the view that the current problems of the Community's Mediterranean producers arise from structural causes, and not from the agreements with non-Member countries. The Committee accept this view, but point out that the probable accession to membership
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in the next five to ten years of some Mediterranean countries would make it essential to relate the concessions in agricultural products granted to non-Member Mediterranean States to the output of the Mediterranean Member States in the same products. It is an example of the need to co-ordinate the Community's internal and external policies. This touches the difficult problems of the enlargement of the Community, requiring a separate report which the Committee hope to submit to your Lordships later this year.
The present report explains the Community's machinery for dealing with the Arab boycott. We note that this machinery has not yet been invoked, and doubt whether it will provide a more practical approach to this difficult question than the present policy of the Government. The Committee believe that the Community's policy for dealing with the State trading countries is sound. COMECON's aim appears to be to negotiate with the Community on behalf of all its members, which show no eagerness to support this procedure. The Community has agreed to have formal links with COMECON in the field of information, but has every intention of negotiating trade agreements separately with the individual countries involved. Agreement has already been reached on the conditions for the import of Romanian textiles.
The Lomé Convention, debated in your Lordships' House in November 1976, remains the cornerstone of the Community's relationship with the developing countries, and requires the further discussion of it in the report. We have heard it said that the Convention is based on four principles: that there is a need to link trade promotion with the grant of trading facilities; that, unlike the generalised system of preferences, which is unilateral, the Convention is an international treaty which cannot be varied unilaterally by the Community; that the Convention has established the need to combine trade concessions with co-operation in development which will improve the capacity of the beneficiary to exploit the concessions; and that the Convention's importance lies in the fact that the Community is a group of countries addressing another group of countries.
This is what one might call the ideological basis of the Convention. As I understand it (though my acquaintance with it is only recent), it originated in the concept of establishing a new relationship with the old colonial countries—a relationship which would have a political and psychological, as well as a commercial, aspect. This idea was, I understand, of French inspiration in the Yaoundé Convention, but it has been developed with the accession principally of the former British colonies in East Africa. There is much sense in this line of thought, but the concept of exclusive development of the Community's relations with a section of the developing world carries with it some inherent difficulties. The members expect to have a privileged position, but continually find that their preferences are being eroded by the Community's subsequent policy, either through the general scheme of preferences or through new bilateral agreements. There is a clear division of principle between those who think it would be wrong to treat the Lomé countries as an exclusive club, particularly as some of the poorest developing countries are not members, and those who hold that the privileged position of the Lomé countries should as far as possible be maintained.
An important feature of the Convention which is being developed is the scheme for the stabilisation of export earnings, known as Stabex. The Governments of the Lomé countries may apply for financial assistance if a country's export earnings from certain primary products fall by prescribed percentages. This scheme is now operating successfully, and has in a number of cases made a significant contribution to earnings, though the funds available for transfers under the scheme are as yet very limited. The institutions of the Convention give the impression of being rather top-heavy. There is a Council of Ministers, a Committee of Ambassadors and a Consultative Assembly. The practical working of the Convention can best be managed through the smaller working body; that is, the Joint Committee of the Lomé members and the Council of Ministers.
One important question will be what position in the Community's commercial structure should be given to the South Asian States which are not members of the Convention. Their membership
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would swamp the Convention. However, these are the most populous and poorest countries. The Community already has trade and co-operation agreements with India, Pakistan and Sri Lanka, and India benefits from the Community's food aid scheme and the generalised preferences. It seems inevitable that these countries should be treated as a separate category outside the Convention.
One weak point in the Community's arrangements is Japan. Negotiations have not got very far. It is the opinion of the Committee that renewed attempts to reach agreement should be made very soon, and the Committee hope that the British Government will pursue this further. On New Zealand and Australia, the Government consider that they can do most for these countries' interests by negotiations within the Community on matters such as the reform of the Common Agricultural Policy, rather than by pressing for Community agreements with these countries. Canada has an agreement with the Community for mutual encouragement of trade and industry which it seems to regard as important, and, I think, is not pressing for anything else.
There are some general points which require comment. The Commission speaks for its members in GATT, and the Nine Members seek to co-ordinate their position in the negotiations in UNCTAD. The Community has supported a positive and practical approach to the negotiations for the establishment of a common fund to stabilise commodity prices. It has generally found that it is unrealistic to ask for trade concessions from developing countries comparable to those granted by the Community, but it has emphasised that opportunities to provide security for investments and raw material supplies and for reducing non-tariff barriers should not be overlooked. It hopes to make available reinsurance to complement national schemes of investment insurance.
A serious hindrance to orderly negotiation with the developing countries lies in the proliferation of assemblies devoted to the expression of the needs of the developing world both inside and outside the United Nations and the Community. It is beyond the competence of the Community to rationalise the system as a whole, but there appears to be room for

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rationalising the Community's own agencies in this field and care is always necessary to prevent the establishment of special administrative bodies for tasks which should be performed by the Commission's own staff. Finally, there is the attempt to harmonise export credits in co-operation with non-Member States in OECD. Some progress has been made in establishing guidelines but total harmonisation will take time, particularly while rates of inflation vary so widely among the Member States.
An important negotiation now in progress relates to the multi-fibre agreement. This is a matter that I should judge would have been dealt with on a different basis if the recession and its effect on employment in the European textile industry could have been foreseen. The European Council of Ministers have agreed a mandate for this negotiation which has to be translated into binding international agreements. It is essential for British and other European industry that the Community stands firm on its mandate. Here, in particular, there must be co-ordination of the Community's internal and external policies.
In general, it is noteworthy that the Community has tried to use its power in such a way as to increase the level of mutually beneficial trade with the developing countries. Considerable progress has been made in working out the policy of this great trading bloc. It is one of the areas in which the Community has recorded significant success. The importance of the Common Commercial Policy is often overlooked by the media because it is difficult to find the way in this complicated field. It should be marked, especially by those who are only concerned to emphasise the Community's failures and to prevent this country from making a positive contribution to a great and imaginative idea, the development of which will surely benefit our country. I beg to move.
Moved, That this House takes note of the Fortieth Report (HL 226) of the European Communities Committee on the EEC Common Commercial Policy.—(Lord Trevelyan.)
5.22 p.m.
Lord BANKS: My Lords, as a Member of the Sub-Committee which drew up the report on the EEC Common Commercial
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Policy I am particularly grateful to the noble Lord, Lord Trevelyan—grateful to him not only for the very thorough and comprehensive way in which he has presented this report to your Lordships this afternoon, but also for the efficient and expeditious manner in which he conducted all our meetings. I am quite sure that all the other Members of the Sub-Committee would agree with me on that.
I believe it to be a very important report. As the noble Lord, Lord Trevelyan, has pointed out, it emphasises the scope and significance of the Common Commercial Policy and it describes it in some detail. I think that the report is right to say that this scope and this significance are not always fully appreciated. The EEC has 74 trade and co-operation agreements with 92 countries. There is the establishment of free trade with the EFTA countries; the arrangements with Greece and Turkey and all the countries round the Mediterranean; there is the Lomé Convention to which the noble Lord referred, linking 52 countries to the Community including 22 former Commonwealth countries; there are the arrangements with Asian countries; there is the generalised scheme of preferences and there are the negotiations under GATT. In all these, the nine nations of the Community, as the noble Lord has said, the largest trading entity in the world, are acting as one.
Not all the agreements involve preferential access to the EEC markets but most do so, and the Common Commercial Policy as a whole is a great exercise in the liberalisation of trade. The average level of EEC Customs duties—and the noble Lord referred to this—is only about 6 per cent. compared with 7.1 per cent. for the USA and 9.7 per cent. for Japan. The success of the Common Commercial Policy is an achievement which justifies those who have all along rejected the notion that the EEC must inevitably be a selfish, inward-looking institution. By acting as a unit, the Community exercises great influence in the world, as the report makes clear, and I hope that this will encourage the Governments of the Nine to move towards acting as a unit in other spheres in addition to trade.
Nobody would claim that the relationship between the EEC and the developing world is yet established on anything like

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a final or satisfactory basis. Far from it, alas! But the Lomé Convention, covering 52 developing countries, is nevertheless a remarkable development. The access which it gives to EEC markets is not made reciprocal. Then there are the provisions for aid, for industrial co-operation and for the operation of the Stabex system. The great attraction of the Stabex system is that it supplements earnings without keeping up prices. In that respect, it has something in common with the deficiency payments system of agricultural support. The funds allocated to Stabex are small; but it has, as the report points out, made a very large contribution to the earnings from certain products of some of the ACP (African, Caribbean and Pacific) countries. I very much hope that the Stabex principle can be used on a wider scale to deal with some commodities on a world basis. In this way, operating beyond the limits of the Lomé Convention for certain commodities, the Stabex principle would be used in the operation of the proposed Common Fund.
That thought leads me to express the further hope that in the field covered by UNCTAD (the United Nations Conference on Trade and Development) the EEC will be able from now on to act as a unit in the same way as the nine countries act as a unit under the Common Commercial Policy. The report rather glosses over, perhaps, the disarray in the ranks of the EEC at Nairobi earlier this year and, in particular the hesitancies of West Germany and Britain over the acceptance of the principle of a Common Fund. Much ill will was created which united action could now do much to disperse.
The generalised scheme of preferences which extends preferential tariff terms to a whole range of developing countries must inevitably, as the report points out, erode the Lomé concessions; and the noble Lord, Lord Trevelyan, referred to this. The aim must always be, however, to move towards the widest possible degree of freedom of trade, but Lomé and the GSP are there to see that, on the way, the developing countries suffer least from tariff barriers, and of course Lomé brings in the other important advantages to which I have already referred.
Some members of the Sub-Committee, as the noble Lord indicated, had the opportunity to enter into discussions
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with officials in Brussels about the Common Commercial Policy and I was particularly interested in the discussions on the GATT negotiations. We so often hear of the internal divisions within the Nine, yet here was an example of the Nine acting together and negotiating with other large blocs in the world, such as the USA, for example. The US tariffs, it was pointed out to us, consist of peaks and troughs, some very high and some comparatively low, while the EEC tariffs are fairly level. The USA wanted a percentage reduction in tariffs while the EEC wanted to eliminate some of the US peaks. It reminded me of the negotiations for mutual force reductions in Central Europe where the Russians want a percentage reduction but the West say, "No, we must get down to a given figure" because they claim to be outnumbered by the Russians at the present time. The strategy seems to be rather similar in this negotiation within GATT between the EEC and the United States. But the important aspect was that here was the negotiation being carried out by the Commission on behalf of the nine nations, the EEC acting as a unit.
I have spoken of the Common Commercial Policy as a great exercise in the liberalisation of trade. But if I left it there, it would not be giving a complete picture. The noble Lord, Lord Trevelyan, did not leave it there, either. The world recession, and the unemployment which it has brought, have to some extent revived protectionist attitudes in the world and these are to be found in the EEC as elsewhere.
For some time of course the textile industry has presented particular difficulties, and the GATT multi-fibre agreement was designed to deal with this situation. It is now being renegotiated to make it stricter; but, in the meantime, until the renegotiation is complete, the EEC Commission has further limited the imports of textiles and thus forestalled perhaps even more severe unilateral import restrictions by some individual EEC Members. This action drew United States protests; but more worrying than the need for these particular measures has been the emphasis of the EEC Heads of Government at the recent Summit Meeting in London on the danger which unemployment posed to their commitment to free trade.

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The Prime Minister has recently stated that special measures may be necessary in steel and electronics as well as textiles to minimise the potentially dangerous increase in unemployment. We know of course that EEC trade relations with Japan are crucial in this respect, and I am glad that negotiations—or talks at any rate—have been resumed this week between the EEC and Japan. The French Prime Minister has spoken of the need to make the EEC as protected and self-sufficient a trading unit as possible. There is said to be French pressure to cancel the present round of GATT talks rather than to allow them to drift into failure.
However, Mr. Strauss, President Carter's special trade representative, was full of optimism last week after seven hours' discussion with the Commission. He said:
"We view the problems of the international economies as a reason not for slowing progress on the GATT talks but for pressing ahead faster."
I hope that optimism is justified. I trust that the EEC will not abandon its general commitment to free trade. I hope that the leaders of all the developed countries will be able to agree on an expansionist policy. I am sure that a relapse into protection would lead the whole of the world into a downward spiral of standards. Expansionist policies on a world scale, coupled with the maximum possible freedom of trade, must be the aim. The Common Commercial Policy of the EEC must continue its very considerable contribution to the achievement of that aim.
5.34 p.m.
Lord LYELL: My Lords, the whole House will once again be indebted to the noble Lord, Lord Trevelyan, for giving us the opportunity to discuss the report of his Committee. I will be brief because there is a long list of speakers. Certainly, from past experience of debates of this nature, I know there are a number of specialist speakers here who have a great deal of knowledge in some of the fields that are covered by various aspects of the report.
I believe that all of us are now aware of the size and power of the EEC as a major world trading organisation. The report points out—and we have had it spelt out already by the noble Lords, Lord Trevelyan, and Lord Banks—that
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the Community has more effect on world trade than either the United States or Japan. What is very gratifying to us, both in this House and the Community, is to find that the Common Commercial Policy of the Community has been such a great success, especially in relation to its external aspects and links with the Third World. The report went out of its way to spell out all the aspects of the Lomé Convention and some of the disadvantages of that Convention: how it was unwieldy, and how some of the poorer nations in the Third World were not covered by all the rules and agreements which were drawn up.
The report brings out the importance of the links of the Community with GATT and UNCTAD. It is a tribute to the success of this policy that the Community does not clash greatly with the bilateral relations between Member States and other countries. This proves beyond any doubt that the Community will not be an inward-looking organisation, either with other nations in Europe, former members of EFTA or the Mediterranean littoral who may wish to seek associated, limited or full membership of the Community, or other nations of the Third World or North America.
I believe, also, that the Community takes its responsibilities to the Third World seriously and of course especially to the signatories of the Lomé Convention. The noble Lord, Lord Trevelyan, stressed the point both in his report and in his speech today of the Convention not including the poorest nations which possibly deserve the most help. He mentioned Sri Lanka, but of course we have to consider India, Pakistan and Bangladesh. He mentioned that the various preferences which these countries may enjoy, either bilaterally or as part of a larger agreement with the Community, are gradually being whittled away. This is something which I believe the Community is looking at and it will continue to place great importance on this.
We were happy to find in the report the different types of Community policy. I take special notice of the arrangements under the GATT multi-fibre agreement. The noble Lord, Lord Rhodes, and the noble Baroness, Lady Hornsby-Smith, have spoken many times on textiles, and I am sure that this aspect will be of great

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interest to them. The noble Lord, Lord Trevelyan, has mentioned this agreement and I support his desire that the Community should stand firm on its mandate and should go as far as it can to support intra-Community trade in this sector.
Also in the report particular attention has been drawn, among other things, to what I call the Mediterranean agricultural policy. This combines two major perils—if I may call them that—of agriculture and the CAP, particularly as it affects Italy and the South of France for some of their agricultural produce. The second peril is preferences and access to the Community of agricultural or horticultural produce, from the nations in the Mediterranean littoral. The report seeks our support in the Community's efforts to co-ordinate this trade, and I believe that we should urge the Community to do all that is possible in this particular region.
Trade is always a matter that can cause disputes between nations and, I believe, round the world. I believe that there is much greater risk of this when bilateral relations are in danger of duplication by any supranational organisation and, in particular, the Common Commercial Policy. We had major examples of this danger yesterday when we were discussing the EEC Budget and how necessary it was to see that nations' Budgets were not duplicated in any major respect—were not paralleled—by the EEC Budget. Yet I believe the report spells out how successful has been the common policy, taken over the wide spectrum which is covered—I believe there are five or six more items involved that I feel I ought to cover. I was interested to see that the Committee believe that an agreement should be reached with Japan. The noble Lord, Lord Banks, drew attention to that aspect and we are glad to know that negotiations with Japan are continuing. That is one aspect where the Common Commercial Policy of the Community can help us.
I think the report has shown us how very successful this common policy has been. The noble Lord, Lord Banks, stressed the multi-fibre agreement. Certainly in my home region in Eastern Scotland I know the anxieties which are still present in relation to that agreement, especially with the risk of the continued world and European recession, together
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with the consequential low level of employment in this particular industry. My Lords, I think we are all optimistic that the Community can continue to play a major role in world trade and the report has shown that the Community is taking its responsibilities very seriously indeed, both on a bilateral scale and in connection with Third World countries. Above all, it is showing a sense of responsibility as one of the very largest trading organisations in the world. I think that is one point which should be stressed today. I should like to conclude by thanking the noble Lord, Lord Trevelyan, for giving us the opportunity of discussing this matter today, and I look forward to hearing the rest of the debate.
5.42 p.m.
Lord SHERFIELD: My Lords, this report on the Common Commercial Policy of the EEC is a meaty one and, on the whole, it speaks for itself. But as a member of the Committee, I am very glad to be able to make a few general comments on it, though they will not diverge very far from those already made by the two other members of the Committee who have spoken.
My first point—and the noble Lord, Lord Trevelyan, stressed it at the outset of his speech—is that the report tells what on the whole has been a success story. The starting point is, of course, the Common Customs Tariff, which lies at the heart of the European Community and is at the basis of the Common Market. Round this has grown up the Common Commercial Policy which, in turn, branches out widely into the fields of aid, development and commodity policy. The report shows how the Community has built up the largest percentage of world trade and has become the most powerful trading bloc in the world, with a formidable negotiating "clout" and a powerful attractive force, so that countries from all over the world are more or less driven to enter into negotiation with it. Moreover, the Community has learned to speak with one voice and to control bilateralism on the part of its members.
So far, the Community has used its economic power with restraint and with a good understanding of the needs of less industrialised and less developed countries.

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The Commission have been resourceful in devising forms of association with non-member countries, and particularly with ex-Colonial countries, in the shape of the Lomé Convention. They have developed the Stabex scheme for stabilising the export earnings of the Member States who are members of the Convention, and that has recently been strengthened and extended. Incidentally, in the course of our work, some of us had the opportunity to visit Brussels to discuss trade policy, among other matters, with the Commission. We were, I think, all very much impressed by the high quality and ability of the officials who are dealing with these subjects.
I have referred to the outward-looking nature of the Common Commercial Policy, on which the Committee has commented with approval. The question is whether that attitude will be maintained. As the noble Lord, Lord Banks, said, there are some rather ominous signs that protectionism, under various forms and under various other names, may be creeping into Community policy. The negotiations on the important question of non-tariff barriers to trade are making slow progress—although not, as our report concludes, as a result of any lack of will on the Commission's part. The pressures on Governments, in a time of very slow economic growth, to abandon free trade principles are great, but so far the line has been fairly well held through agreements for voluntary restraint and by more structured and elaborate arrangements in particular fields, such as the multi-fibre agreement, which is now up for renewal, and to which other speakers have referred. These have proved acceptable so far, but demands for further measures of trade restriction under the euphemistic name of "organised free trade" are building up, particularly, it seems, in France, and motions with protectionist flavours are appearing in the European Assembly.
I think it would be helpful if the noble Lord who is to reply for the Government could give the House some reassurance that it is their policy to resist these pressures in the further negotiations in GATT and elsewhere later this year. It is, I am sure, an illusion to suppose that a return to protectionism and re-
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strictive trade practices would in the long run be of any benefit to the Community itself or to its trading partners and associates.
In the development of the Common Commercial Policy the members of the Community have worked together closely and well. They have established common negotiating positions; they have bulit up a network of agreements for free trade and aid. Of course, there is a long way to go, but so far it is a success story and that is no doubt why so little is heard about it. The advantages of belonging to such a powerful economic trading bloc are obvious. The disadvantages, had the United Kingdon remained outside, seem equally obvious. Our membership of the Common Market is under renewed attack and yet the Government seem to do very little to defend and uphold it. Cannot the Government, or at least those members of it who are not trying to revive the controversies settled by the referendum, take more vigorous steps to publicise the successes of the Community, possibly even by making some use of the conclusions of this report and of others which the Select Committee on secondary legislation produces from time to time?
5.48 p.m.
Lord CHELWOOD: My Lords, I should like to apologise at the outset for not being in my place when this debate started and to apologise also for any discourtesy of which I may have been guilty. I understand that the debate started rather earlier than was expected and my plane was an hour late; so I apologise. My Lords, I hope that the Select Committee's report on the Common Commercial Policy of the Community will be widely read. Certainly, I think it deserves to be. When I was a Member of the European Parliament and Deputy Leader to Sir Peter Kirk, I was a member of the Committee which studied these matters and, in spite of having some knowledge of them, I learned a great deal from the investigations made by Sub-Committee B under the quite outstandingly good chairmanship of the noble Lord. Lord Trevelyan.
I am sure it is true that the Common Commercial Policy is a success story but, in addition, it is something unique in history. I do not think that is an exaggeration because, for example, who would

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really have thought in 1945 that, after so many bitter and bloody confrontations, two countries—France and Germany, not to mention any others—with totally different brands of narrow chauvinism, were shortly to co-operate for their mutual commercial benefit and, incidentally, for the commercial benefit of many of their trade rivals too? So I feel that we can safely say that the Community has set a very good example through its Common Commercial Policy, although I recognise that it has only made a start. What a pity that we did not join as early as we could have done. The blame for that certainly rests on both of the major Parties, although we can say that we have made a real contribution in this field by using our considerable influence and experience to excellent purpose.
The report shows very clearly that the Community has been less protective and more liberal generally in its trading policies than any other trading bloc or country. I have two related criticisms which can fairly be made, and I shall put them in the form of questions. First, has the Community been firm enough in seeking reciprocity, to which we refer in paragraph 51, in their agreements with non-Member countries? I am not thinking of the developing countries where to a large extent reciprocity is impossible, although not in certain ways. I am suggesting that the Community should be more firm and should say to the developed countries with which it enters into commercial agreements, "If you will, I will".
Secondly, when a country is faced with the kind of recession which we and some of our partners in the Community have faced during the last few years, with unemployment unacceptably high and rising prices that hurt the lower paid and the needy, liberal policies come under severe strain. Obviously it requires courage for Governments to take full account of the hurt which may be done to an exporting country. Also, it requires statesmanship to weigh this factor against the problems and pressures which Governments face at home. Therefore my second question is this: is there a risk at the moment of backsliding from the liberal attitudes which the Community has so rightly adopted and which are so rightly praised in the Select Committee's report?
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During the last three days I have noticed headlines in The Times and the Financial Times which I should like to quote:
"India angry over EEC quotas;
EEC plans duty on Japanese bearings;
EEC draws up plans to curb imports of cheap textile products;
EEC may erect new trade barriers, warns Barre; Australia complains of EEC steel barriers".
As I have said, these headlines have appeared during the last three or four days, so quite clearly there is something in the wind. Where there is a clear-cut case that a country is exporting something below the domestic price, which is the correct definition of dumping—one might go even further and say where there is a clear-cut case that a country is exporting something below the cost of production—or a clear-cut case that imports from them are genuinely likely to disrupt the domestic market, there is probably justification for some protection through quotas or tariffs. I believe that it was the noble Lord, Lord Brimelow, who I do not see here today, who was reported in the Press as saying that quotas and protective tariffs should not be hung up on Christmas trees; one should be very careful what one hangs on such trees. Therefore it is very much to be hoped that the Community will do everything that it possibly can to stick to its liberal policies and to continue to set a good example in this respect.
Next I should like to say a word about Parliamentary procedure. I have found the question of the Ponsonby procedure and the related question of Community trade agreements, which are the subject of Orders in Council, very confusing. As noble Lords know, these orders are subject to the Affirmative Resolution procedure. It is very strange indeed that the British Parliament—I am speaking of both Houses—which has not used the Ponsonby procedure for more than 50 years should, none the less, be expected to debate and endorse treaties made by the Community with the full approval of Her Majesty's Government: treaties which, because of some legal quirk, are not defined as Community treaties, although they are precisely that. I do not understand this, and I believe that this point must be looked at very carefully indeed.
I noticed—we quote this in the report—that in their Fifteenth Report the Joint

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Committee on Statutory Instruments expressed dissatisfaction with designation orders, although I believe that their main concern was about the form which these orders take. When, therefore, he makes his contribution to our debate from the Government Front Bench it would be encouraging if the noble Lord could say a word about whether the Government are satisfied with this procedure which seems to me to be very strange. Perhaps I may put it more simply and say that it does not seem to me to make sense—when we have never insisted on our undoubted right to debate trade agreements made by Her Majesty's Government in this century—that when the agreements are made by the Community, with the full approval of Her Majesty's Government, there has to be an Order in Council which is subject to the Affirmative Resolution procedure. I hope that I have explained that clearly; I am so confused about it myself that I may even be confusing noble Lords.
I do not believe that the report makes any mention of New Zealand. It is, of course, quite true that there is no actual Treaty with New Zealand. However, I am very concerned—and I believe that noble Lords will share my concern—about the present position regarding New Zealand dairy exports. I was not very impressed by the so-called renegotiation which was undertaken by a Labour Government. I thought that it was an unnecessary exercise which achieved very little indeed, although when the referendum come to be held the outcome was highly satisfactory. However, what appears to have been achieved by the renegotiation is a much clearer understanding of what New Zealand may expect after 1980 so far as their dairy exports to the United Kingdom are concerned.
I do not believe that it was made absolutely clear—it may have been clear in spirit but it was not clear in the letter—in, I believe, Protocol 18 of the Accession Agreement what preference would be given to New Zealand dairy exports after 1980. It was left to the good will of our Community partners. In Dublin, however, in 1975 the European Council took the view that the Accession Agreement should remain the basis for continuing imports of New Zealand butter after 1980. It was the Leader of the House in another place, who was then the Minister of Agriculture,
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who described the endorsement of the agreement in Luxembourg in June 1976 as full and satisfactory. Now, however, we understand from the Press, and I believe this to be probably correct, that a legal ruling could upset this agreement upon what seem to me, as a non-legal person, to be quite spurious grounds. We all know that this could result in quite a grim situation for New Zealand whose economy, despite the most strenuous efforts at diversification, still rests very heavily indeed on dairy exports and on sheep meat. Therefore it would be comforting to have some reassurance that things are not quite so bad as they have been painted in the last few weeks and days.
At the same time, I have also read the suggestion that New Zealand should get a price rise of only some 10 per cent. for their butter and cheese exports to the United Kingdom when the price is renegotiated in the near future. I understand that this is considerably less than half the increase in the cost of production. This seems to me to be unfair and inconsistent with the spirit and letter of the promises made by the Community at the time that we acceded.
For the French Farm Minister to comment, as I understand he did, that he was "fed up" with the problems of non-European Community countries is surely just adding insult to injury and I feel that there is an obligation on Her Majesty's Government—and I think that your Lordships will endorse this—to ensure that New Zealand is fairly treated in this very important respect.
Next, I wish to say a quick word about the Euro-Arab dialogue. One thing which does not come out in our report, which deals fairly fully with this question in Paragraphs 24 and 25, is the importance of the Community trade with the Arab countries. I was given some figures last week which emphasised the importance of that trade. The Arab countries' exports to the Community account for more than half their total exports, I was surprised to learn, while their imports from the Community amount to only just less than half their total imports. That emphasises the great importance of the Euro-Arab dialogue, which is largely concerned with commercial matters, though those cannot of

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course be separated from political questions.
As to the boycott referred to in Paragraphs 22 and 23, while the Commission quite rightly officially deplores discrimination, as do Her Majesty's Government, it is sensibly left—I think sensibly, anyhow—to the individual companies to decide how they should respond to any pressures brought to bear on them to observe the boycott. I feel that some account must be taken of the fact in this context that large parts of Arab territories, particularly large parts of Egypt and Jordan and a smaller, though important, part of Syria continue to be occupied in total defiance of Security Council resolutions. Therefore it is not difficult to sympathise with the Arab point of view even though some of us may not fully agree with it.
Paragraph 26 refers to COMECON and I simply want to say here that I feel that the Community attitude is a correct and proper one, bearing in mind that, apart from the period from 1965 to 1975, when trade between the formerly independent countries of Eastern and Central Europe with the Soviet Union was on a fairly normal basis, the Soviet Union has used COMECON as a means to exploit the satellite countries by selling their raw materials at very high prices and requiring barter arrangements with them, which means that the countries of Eastern and Central Europe have, in exchange, to sell back finished and semi-finished goods at very low prices. Therefore, I feel it absolutely right that the Community should insist that it should enter into bilateral agreements with the COMECON countries and not deal with COMECON itself, which, in any case, refuses to recognise the Community.
The Select Committee's report says nothing directly about the Common Commercial Policy from the British point of view and I think it not a bad idea to ask how we fared and, in particular, to consider whether some of the grave economic problems which we face at the moment—for instance, the weakness of the pound, our balance of trade problems, very high inflation, low productivity, heavy unemployment, high taxation—would be noticeably better had we not joined or were we to pull out.
I myself cannot see that this would be the case. I have made a careful study
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of the matter and followed all the correspondence in The Times and I think some of these problems might be considerably worse. Who, for instance, supposes that the massive support for the pound that was so readily forthcoming from our Community partners would have been so easily obtained had we turned our backs on Europe So I feel that the suggestion from some people that we should now pull out is sheer folly.
I come to my conclusion and I apologise for speaking for a quarter of an hour. In my view, it is time that the Community, with its immense economic strength, should flex its political muscles a little more and become a world Power in the very best sense of the word. I think it has failed in this. The basis for achieving this is to have a strong and successful commercial policy and strong economies. So in this field there has been disappointingly little progress. Perhaps there are understandable reasons for this. I think that probably there are. They include the effort needed to build war-shattered economies; the caution with which former enemies and rivals moved towards any form of political unity; inevitable fears, mistrust and national jealousies. All are quite understandable, but I think that this country could and should give a better lead than it has so far. I think that we could perhaps take better advantage of our belated entry, bringing a degree of objectivity to these questions that is rather lacking at the present moment. That certainly is the role that our partners in the Community hoped that we would fulfil when we joined in 1973 and when we received such a warm welcome, reflecting the confidence that they had in us. If we were to betray that confidence we should indeed be a nation in decline. My Lords, I am sure that we are not.
6.6 p.m.
Lord RHODES: My Lords, we are indebted to the noble Lord, Lord Trevelyan, on two counts: first, for having introduced this subject this afternoon and, secondly, for having chaired so well the Sub-Committee which has produced this report. It is a good report; it highlights successes in the EEC and also some of its shortcomings. The successes are the external relations and the shortcomings are its internal and industrial policy. This is historical. It was easier to whip up

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enthusiasm for external measures which benefited everybody in the Community than it was for internal Community policies which had to do with the national interest of its members, resulting in trivial arguments like, "How much do we pay and how much are we going to get?".
So success attended the external policies, which in consequence got the lion's share of EEC resources and manpower. That was all right so long as times were good; we can all be generous when times are good. Full employment and reasonable growth give everybody a sense of encouragement to go on. But since 1974 there has had to be a re-think. Massive unemployment and little or no growth have caught the EEC without the necessary strength in its industrial departments to cope with the job. The problem is that nearly three-quarters of the EEC Budget is devoted to agriculture alone and that is why the industrial sectors of the EEC will face a good deal of difficulty in the years ahead.
Nothing illustrates this dichotomy of interests better than what is happening about the multi-fibre agreement. When it was signed in 1974, there was full employment and growth; there was general optimism about an orderly liberalisation in world trade in textiles. Since then, we have had OPEC and a downturn in world trade, together with massive imports from old and new sources and these have resulted in a catastrophic decline in the clothing and textile trade in Europe.
At long last everybody concerned is seized with the necessity for action to be taken. We claim the Community to be a big industrial and commercial entity. It is showing some of its muscle now, and the textile trade of this country can thank its lucky stars that we joined the EEC when we did, because in the years that have followed 1973, being members of the EEC has put a restraint on the internecine competition which would have taken place, without any question whatever, if we had not been in it. If GATT had been the only resource we had we would have had far more closures and for more unemployment. Our thanks are due in very large measure to our Ministers in this Government and to their officials, and also to the EEC officials and Ministers now renegotiating the multifibre agreement in Geneva. May I say
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that, by and large, the EEC Ministers have accepted the British line.
A year ago I made a speech here on this matter. I will quote from it because it is still topical, and I should like some of these points to be highlighted so that they can be dealt with to the benefit of the textile trade in Europe:
"We want it—
this multi-fibre agreemen—
to be renewed, but it must be improved to meet up-to-date requirements, and we want it for a minimum of six years. As it now stands, a bilateral agreement for more than 12 months carries with it a growth rate of 6 per cent. per annum. Think of that on an exponential basis. A 6 per cent. growth rate bears heavily on countries like ours with high import penetration—in some cases up to 60 per cent. This is insufferable because in 10 years the amount allowed is doubled. It certainly cannot be tolerated in a recession, particularly in those areas of the trade which have suffered the most distortion. So the safeguard clauses in the multi-fibre agreement must be strengthened at once and their application speeded up".—[Official Report, 30/11/76; cols. 211–12.]
In that same speech last year I made criticisms of the EEC officials for having dragged their feet. I withdraw that criticism, on this count, that they are undermanned. I find on visiting Brussels that there are only half a dozen really first-class men engaged on the industrial side of the negotiations. They are all on agriculture. So I withdraw some of the strictures that I made in that speech last year. These six men have had to negotiate during the last few months 13 bilateral agreements on increase in the volume of imports. It took a long time. It is all right quoting America as being very speedy in their decisions, but they are an entity; they can bring something in overnight. We have to think in terms of nine members, and with a staff of only six. I would ask the Minister to press that the negotiating team be enlarged to cope with the many and complicated agreements which will have to be completed by the end of this year. I would ask him, too, if he has considered recruiting people from industry to help. I have in mind people like Mr. David Price, who was a tower of strength to the wool trade before he retired last year. Such men are available, and they could be of tremendous help to the negotiators in Brussels and Geneva.
Our negotiating team has a mandate. It has been said from all parts of the House

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this afternoon that the negotiating team must stand firm, and so it must. The whole of the textile trade of Europe has had a really serious setback during these last three years. It may be that the multifibre agreement itself might have to be not only renewed but amended. This is mid-July and in terms of complicated agreements there is little time between now and the time when the multi-fibre agreement lapses.
I should like to ask the Minister another question. What happens at the end of the year if there are still outstanding negotiations to be completed? Are we to understand that the existing import levels will be frozen until those outstanding negotiations are completed? In concluding this part of my remarks—and I will not keep the House long on my other point—I would say that it is in the interests of the developing world, and the EEC as a whole, to get these negotiations completed before the end of the year.
I want to mention only one more topic, and that is on paragraph 45 of this report. It is the matter of Japan. Just as the EEC is now a powerful entity and can speak on behalf of its members in the courts of the world, so the EEC—mark my words!—within the next year or two will have to speak up for the nations of the Free World in terms of growth rates throughout the world. Paragraph 45 mentions Japan. It has been mentioned that a small delegation is in Tokyo at this moment. I do not think they are getting on very fast. On the question of growth rate, I make the plea that in the next round of negotiations this should be brought to the fore. Japan cannot exist without a growth rate of 9 per cent. On that sort of basis she is going to take most of the surplus trade throughout the world. It is to the EEC and its power, its closer-knit policies as enumerated in this Common Commercial Policy which we have been discussing this afternoon, that we can look for help.
6.19 p.m.
Lord BARNBY: My Lords, the noble Lord, Lord Trevelyan, to whom we are all indebted for having introduced this Motion, naturally covered a wide range of possible points in connection with trading within the EEC, and, of course, the
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words of the Motion made possible the covering of a wide field. I shall address myself in the main to the wool textile industry, the textile industry to which the noble Lord, Lord Trevelyan, referred, and the multi-fibre agreement to which Lord Rhodes referred, which is an important consideration in these discussions. The House must forgive me if I am to some extent repetitive, but I think these points are important.
The noble Lord, Lord Rhodes, has been closely associated with the wool textile industry and speaks with great authority. Moreover, he had experience in commercial matters when he was a Minister. I have been associated with the wool textile industry all my life and since my retirement, because of my association with the industry, I have managed to keep in close touch with it.
The industry has been in great distress during recent years largely because of imports from Asiatic and other countries which pay lower wages than those paid in this country. For several years the industry has feared that in high places in Government there has been the belief that the textile industries are expendable, that we should sink our long-established employment relations with a great number of other countries throughout the world in favour of the less developed countries and that we should forego our established position in their favour. That feeling which has caused so much anxiety in the industry for so long has now changed, and the attitude of Government Departments has also changed a good deal.
I should like to say a little about imports. I have referred to low wages which have been an important factor as regards the distressing import levels. Moreover, the State trading countries sell at prices which are decided quite irrespective of the cost of the article. In other words, the technical term "State trading" really means "political prices". I remind your Lordships that the dangerous attitude, to which I have referred as having existed with regard to the textile industry, has now become less prominent. However, I must at the risk of repeating what the noble Lord, Lord Rhodes, has said, emphasise various points about the wool textile industry. I said that I would speak to the wool textile industry, although my comments apply largely

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to the cotton textile industry. As regards the cotton textile industry, in the first decade of this century you could go from Bradford to Liverpool and see mills springing up like mushrooms. We held the world. We traded everywhere, but what is the picture today? A great many of those mills have passed out of existence as textile mills.
As regards the wool textile industry, its overseas selling capacity has been equalled by no other industry. When I was President of the Confederation of British Industry I often said: "You talk about exports—go to the wool textile industry! You will find that there is not a market in the world that is not penetrated by a salesman for someone in the wool textile industry". Schools for teaching export salesmen and so on were negligible. People could learn from the wool textile industry.
I have been in the industry all my life and have seen what it was in the past. I have recently been supplied with tragic figures which show that in the past 10 years the firms have decreased from 222 to 117. Many firms have gone out of existence. Employment has decreased from 242,000 to 117,000. It is a tragic story. The people in the wool textile industry believe in their efficiency. They have good employer organisations. No industry has had better relations with the working sector of the community than the wool textile industry. I think that there has been only one strike in 50 years. The worker representatives in the wool textile industry have been of a calibre much better than in a good many other industries.
I return to the question of exports. To have efficient exports there must be a strong home market. The home market has been penetrated by imports and I think that the figures show that imports have increased from £400 million to £1,600 million. Those imports have caused great distress and have been most unfortunate. As the noble Lord, Lord Rhodes, has said, the present situation is governed by the multi-fibre agreement which was arranged four years ago and which terminates at the end of this December. The time is short to start a renewal. The agreement depended on a 6 per cent. increase and was negotiated at a time when trade was good and those in the
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industry felt that they could absorb imports on that scale. In the event we have had a world depression. I do not know to what extent the present Government are the cause of it, but they are certainly not likely on their present financial policies to improve the trading situation very much; but we may hear more encouragement from the noble Lord, Lord Oram, than recent events have indicated. The EEC as a whole accepted these imports which affected their industries on a scale which was harmful to them as well. They were rather costive in taking action to resist this and correct it.
Turning to the employer organisations, one can take pride in the degree to which all these international employer organisations are said by the leading officers from this country to have contributed so much. As I have said, the important multi-fibre agreement must be revised. Imports have come from a variety of Eastern countries—from not only Hong Kong, Singapore, South Korea and Taiwan but also there has been a vast amount of imports from politically priced countries. The leaders in developing countries will be required to make some sacrifices in the general adjustments, because they must see that there are some less fortunate and less developed people in the developing country league who must have a better bite at the cake.
If negotiations fail we must know what fallback the Government have. Perhaps when the noble Lord, Lord Oram, replies, he can give us some idea where the negotiations stand at present. Certainly, we hope that he will have absorbed the degree to which the textile industry has been the victim of what may be called unfair competition.
The EEC has the lowest tariffs of any major trading country. The textile industry in this country employs 800,000 people. How is it that the shipbuilding industry has received major infusions of Government money but that the Government have been so niggardly in the amounts they have advanced to the wool textile industry? Is it not just as important to have the bodies employed in the wool textile industry? Is there a political reason for the shipbuilding industry receiving more help than the textile industry in order to avoid unemployment? I have already emphasised

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the way in which the textile industry is efficient in its operation and in its exports. It is for that reason that the Government must forthwith give their greatest help to the EEC negotiations on the multi-fibre arrangement and recognise that the past neglect must be corrected. There is not much time until the end of the year so the greatest emphasis must be placed on the matter. The textile industry as a whole and the wool textile industry in particular merit the strongest possible Government support.
6.32 p.m.
Baroness HORNSBY-SMITH: My Lords, I also must apologise for my late arrival, for, although we are usually accustomed to precise analyses of how long Members will speak and although our Whips Office informs us when a certain debate will come on, for once the estimate went awry. I was assured that this debate would not start until 6.15 p.m. and I apologise to noble Lords, especially to the noble Lord, Lord Trevelyan, for not being present at the beginning of the debate.
I congratulate the noble Lord, Lord Trevelyan, on bringing this very informative report before the House, and not least on the valuable analysis that it has given us of the many and very complicated commercial activities of the Community. I particularly welcome the evidence of the growth in EEC trade and the extensive Community agreements with countries outside the EEC. This gives the lie to those earlier critics who were sure that the Community would be inward looking and rigid when, in fact, it has by a combination of aid and trade, extended and speeded up support for the less industrialised and newly emerging nations.
If I confine my speech to two points of criticism of policy—not of the report—rather than speaking about the very substantial part of the report with which I am wholly in accord, it is solely in the interests of time. First, I should like to say a few words about paragraph 22, which deals with the Arab boycott of Israel. Here I found myself—perhaps for the first time—in disagreement with my old friend and colleague in both Houses, Lord Chelwood. The Arabs who refuse to trade with Israel can be
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recognised as using this method as an instrument of economic warfare between nations still seeking a peaceful settlement of their conflict. But that the Arabs should tell other nations whom they are to trade with if they want to keep their Arab business is sheer discriminatory blackmail.
The Committee's report confirms that the Community has taken a stand against such commercial discrimination and provides a forum to investigate such complaints. Our Government accept, and are therefore committed to, this policy. But it really is not good enough to place all the responsibility on the Commission and leave it to individual firms to make representations if the Government can, in complete conformity with the EEC, formally add some muscle to their oft-expressed regret. They could do this not merely for individual firms but, with the weighty evidence that they obviously have in the Departments' for a host of firms whose desperately-needed export trade is being so adversely affected by this wholly unethical discrimination.
When shipbuilding firms are deterred from tendering for a £3½million order for tugboats and when construction firms are frightened to tender for the Haifa port; when both the shipbuilding and construction industries are suffering from heavy unemployment and are listed, with textiles, as the three industries most affected by the current unemployment, it really is time for the Government not merely to bark but to add some bite to their activities in support of the many vital exporting companies in this country which are being deterred from exporting freely wherever they wish.
My Lords, we have passed massive legislation to prevent discrimination against the individual. We protect him from unfair dismissal, and if he is made redundant. we make the employer pay considerable compensation and redundancy money. But, if the Arabs discriminate and that massive discrimination is the reason for lost exports and reduced production leading to redundancies, the Government seem to sit back and say, "Let industry fight its own battles". That is not only discrimination against some high-sounding industrial name on a letter heading; it is discrimination against the British workforce. As such,

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the Government should fight it as strenuously as they would fight the sacking of an individual from a firm at home.
I now turn to the issue raised by the noble Lord, Lord Rhodes and my noble friend Lord Barnby; that is, the question of textiles. I very much agreed with the noble Lord, Lord Rhodes, when he raised the matter of the limited number of people who are, in fact, detailed to deal with the commercial side of the problems of the Community. To the vast number in agriculture I would add the vast numbers in all the social welfare departments of the EEC, and all those concerned with harmonising the professions, including lawyers and academics galore. Although I have great respect for the many brilliant minds, there are far too few practical industrially-trained people who, in the end, have to furnish the prosperity—the national products—from which we can fulfil the tasks we hope to achieve in social and other fields.
It is, perhaps, unfortunate that this debate precedes by a few days the wealth of factual evidence collated in a report by the British Textile Confederation, representing both employers and employees. I believe that the report will be presented to the public this week. Certainly it will be to Members of Parliament. Over 12 years and in three divided doses, I have earned my living in the textile trade. Therefore, noble Lords will not be surprised that I should like to support all that has been said so far in the debate about the crucial importance of amendments to the multi-fibre arrangement.
First, I should like to say a few words about the proposed agreement with Romania on textiles, mainly in garments. If COMECON achieves its aim to have the right to negotiate on behalf of all its members, then an agreement on behalf of one nation, such as that currently being negotiated with Romania which may have a limited impact on Community trade, could—and I believe would—be used as a thin end of the wedge to make an agreement a pro, forma for the same concessions (the same terms) to be granted to other Eastern European countries such as Poland, Russia and Czechoslovakia which have a much larger and wider textile trade. This could, amalgamated under
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COMECON, have serious results indeed on the textile industry in this country.
In a previous debate I dealt with cheap suits—having attended two joint meetings of Members of the other House with employers and employees from the industry, I make no excuse for dealing with them again—which every expert in the trade knows well are being exported from Eastern Europe and imported into this country at a totally uneconomic cost. A European analysis of the man-hours worked to earn sufficient money to purchase the various needs of life has time and again established that in the Eastern territories it takes four to six weeks' work to equate to the price of a suit, and if you want a good one it is two months.
The anti-dumping regulations appear only to be invoked against free enterprise countries, and time and again in answer to Questions in this House and in another place the Government fall back on the excuse that the Governments of the Eastern bloc, controlling all the means of supply and demand, refuse the evidence on which a case could be brought. If I and thousands like me have seen with our own eyes such suits selling for the equivalent of £60 or £80 in Eastern European stores while those same suits have been landed here at £8, then in any practical understanding of the word that is "dumping". It requires neither a statesman-politician nor a mathematical genius to recognise how it is achieved. If you make 10,000 dozen garments and you sell them to your own countrymen at a mark-up of 200 per cent, or 300 per cent. you can dump 2,000 dozen on the foreign market below cost, and overall you could still make a better profit than any British manufacturer would be allowed to do under the present restrictions. In the process the countries exporting are able to undermine the bête noire of all Communist countries, private enterprise, by putting firms out of business and employees out of work.
I turn now to the negotiations on the multi-fibre agreement. The impact of the far too generous initial quotas, while most adversely affecting the British textile trade, has also had an adverse impact on France, Germany and Italy. It was understandable that in their post-war boom, and when we were not involved in the negotiations as a member of the Community, they were generous and

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anxious to help to their utmost capacity when they had high employment themselves and a booming market. However, it is one thing gradually and rationally to help the underdeveloped countries, but if you do it with too great a speed and in times of recession and slit the throat of your own industries and produce mounting unemployment, you are destroying the gross national product through which, in the end, the great industrial countries can import or even grant aid.
In the last three years EEC textile imports have increased by 80 per cent. in tonnage and reached the huge total of 9·3 billion dollars. During that four year period the EEC has moved from a surplus on textile trade of 956 million dollars to a deficit on textile trade of almost 1·3 billion dollars. To shrug off this merely under the cover of aid to the Third World is lunatic to our own people and our own industry. When these agreements were entered into there was little unemployment in the Six, and undoubtedly their generosity and genuine desire to help the Third World outstripped their forecasts of their own future trade and level of employment. Have not we had forecasts over the last four years that have gone awry?—and one must be understanding of the fact that so too can the Community make mistakes, but we must also see that they are rectified.
At a time of massive unemployment it is asking too much that we should be importing two-thirds of the textile demand in this country. Little though your Lordships enjoy figures I hope you will suffer a few to illustrate the quite dramatic change of scene in three short years. Seven out of 10 shirts sold in this country today are imported; seven out of 10 pairs of jeans; five out of 10 blouses; four out of 10 costumes; six out of 10 men's jackets. As a result of these three years, at least 100,000 jobs have been lost to British textile workers. In 10 years, when we have been struggling for economic survival, we have allowed textile imports to rise by 600 per cent. as the noble Lord, Lord Barnby, said, to the terrific figure of £1,659 million.
In the debate which took place in the other place on the 21st February, the Under-Secretary of Trade, Mr. Michael Meacher, gave the strongest and most welcome undertakings we have so far had from any member of the Government,
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and he confirmed the disastrous effects on the current application of the MF agreement on the British textile industry, and indeed the European textile industry. He showed his awareness that the MFA does not provide adequate protection for our domestic industry during a recession. I hope that, with the unanimous backing of both sides of the industry and the very important document about to be produced, and the backing of this very important report, where this problem is most fairly laid out and underlined, our negotiators in the MFA will fight long and hard for the essential amendments on the basis of the hard and true facts which the Minister enunciated, and so provide a fair deal for this vital and highly efficient British industry.
6.47 p.m.
Lord ORAM: My Lords, I am very glad to join in the tributes which have come from all sides of your Lordships' House to the noble Lord, Lord Trevelyan, and his Committee for having produced this report. The report itself, as many have said, is an extremely valuable one. I hope that the members of the Committee who have spoken will take satisfaction out of the excellence of the debate to which their report has led. I say these things, if I may, not just on behalf of the Government but personally in that over the years in various unofficial capacities I have tried to wrestle with a number of the problems that are dealt with so ably in this report. One thinks of EFTA; the Lomé Convention; UNCTAD conferences.
As I say, having taken those subjects very much to heart in various capacities I can say that this report we are dealing with is, in my view, the only, certainly the best neat bringing together of all the issues involved, and we must be extremely grateful to the Committee for the excellence of their work. Indeed, if I may take up a point that the noble Lord, Lord Sherfield, made in this connection when he was urging that the successes of the Community should be advertised, I entirely share his view on that matter. I am sure that he will agree that this report can be one of the means of achieving that end. I have in mind particularly the Lomé Convention, which I regard as a real breakthrough in terms of relationships between the developed world and the developing world, and which is one of the

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great achievements, as I see it, of the enlarged Community.
It will not be possible for me to respond to all the points that have been made in the debate. Indeed, I shall be able to manage only a few because as I have listened to the debate, points have been coming thick and fast. However, before dealing with some of them it may be helpful if I commented in more general terms on the nature of the Common Commercial Policy.
The Community is founded on the idea of a Customs union between its Member States, with complete free circulation of goods across the national boundaries and a common tariff on imports from non-Member countries. So any changes which any Member State wishes to make to its trading arrangements generally are bound to have a direct effect on the rest of the Community. For this reason alone the Community clearly had to have a coordinated commercial policy from the start. But there is another reason as well. The Member States of the Community are small to medium sized Powers in world economic terms and, acting separately, they cannot seriously hope to have a decisive influence internationally. The CCP is a means of co-ordinating and reconciling national views into a single authoritative European voice in international trading matters. As a united whole, the Community is the largest single trading bloc in the world, and its influence is correspondingly great. This can be seen in the Community's role in both multilateral trade negotiations and in its bilateral dealings with specific countries. The CCP is, I suggest, very much a case of the whole being greater than the sum of its parts.
As the report reminds us, the basis of the CCP is enshrined in the Treaty of Rome itself. It sets out in general terms those areas of policy which fall within the CCP. It also defines the balance of powers and responsibilities of the Commission and the Member States. The Treaty sees the Commission as the main initiator of policies and as the Community's sole negotiator with other countries on trade matters. But although the Commission can initiate, it cannot act until it has the approval of the Council of Ministers. This means that each Member State, including the United Kingdom, can
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ensure that its own vital national interests are safeguarded by amending or vetoing Commission proposals. In practice, the Commission will normally try to put forward proposals that command support from the Member States and the Commission often discusses particular problems with the Member States to ensure that its proposals will satisfy their concerns.
I have said a little about the reasons for having a Common Commercial Policy, and the way it works institutionally. I now turn to some of the more important aspects of the policies the Community actually pursues within this framework. The cornerstone of Community commercial policy is the GATT—the General Agreement on Tariffs and Trade. The GATT is essentially a set of rules governing the conduct of international trade. These rules are designed to foster a general expansion of world trade on a multilateral and mutually beneficial basis. All the major trading nations of the world, including all the Member States of the EEC, are signatories. The Commission now speaks for the Community in GATT matters, subject to Directives from the Council of Ministers.
Perhaps in this context I might take up a point raised by several noble Lords about the danger, as they see it, of protectionism creeping into the world scene. I would remind noble Lords of the Declaration of the Summit Conference in May of this year, a Declaration which had the full support of Her Majesty's Government. That Declaration stated that the multilateral trade negotiations must now be pursued vigorously, partly in order to contain the forces of protectionism. Thus, the points which noble Lords have raised today have indeed been very much in the mind of Her Majesty's Government in taking part in that Summit meeting.
Reverting to GATT, the importance of the GATT lies not only in the series of rights and obligations it sets up. It also provides the background against which trading problems can be examined internationally. For example, the Commission has regular high level consultations with the Community's major trading partners, such as the United States and Japan. On these occasions, current problems are discussed and solutions sought which are compatible with the

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GATT ground rules. The GATT also lays down the conditions in which antidumping duties may be imposed or protective measures, such as import quotas, may be applied. Actions of this type lie within the scope of the CCP, though it is an area where the Commission must necessarily work in particularly close contact with Member States and, on occasion, with the industries concerned.
Another important aspect of the GATT is that it provides a convenient multilateral negotiating forum. The current round of multilateral trade negotiations are the latest of several rounds of trade negotiations aimed at lowering world-wide tariff levels and other barriers to trade. A second major GATT negotiation currently in progress is the renegotiation of the multi-fibre arrangement—a matter referred to by a number of your Lordships—which regulates the international trade in textiles and clothing.
It was my noble friend Lord Rhodes, the noble Lord, Lord Barnby, and the noble Baroness, Lady Hornsby-Smith, who particularly had the importance of these negotiations in mind. I was asked about the situation at the end of 1977 and it was pointed out that the matter was urgent because of the need for a new arrangement at the end of this year. The points that have been made are fully in the minds of the Government negotiators, but it is too early to give a firm answer as to how we see the situation at the end of the year because, as noble Lords will appreciate, serious negotiations on a new multi-fibre arrangement started only this month in Geneva, so it is a little early to be categorical. But we certainly see a revised MFA, along the lines proposed by the Community, as the best way forward. In consultation with our EEC partners, we are certainly preparing to meet any contingency that arises from those negotiations.
I have referred to the two sets of negotiations under the aegis of GATT. Both these complex sets of negotiations illustrate the Common Commercial Policy in action. Before the Community can participate properly in the negotiations, it has first to agree on common positions internally. Achieving unanimity can be a lengthy and time-consuming process, particularly if the Member States hold differing and strongly-held views. Major
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national interests must be safeguarded and reconciled. A case in point is the fierce debate which has occurred within the Community over the negotiating position to be adopted regarding the multi-fibre arrangement, to which I have just referred. But once the Community has agreed its position—as is now the case over the MFA—then its views can have a decisive influence over the outcome. In the multilateral trade negotiations, the Community, the United States of America, and Japan are probably the three determining voices. In the multi-fibre arrangement the Community's importance matches its position as the largest single importer of textiles from the developing countries. This is the reason why the Community believes that the difficult task of co-ordinating the Community behind a single voice, speaking a single view, is, in the end, worth while.
I have dwelt at some length on the GATT framework within which the Community's policy operates. I have done so partly because it is easy to forget the all-pervasive, yet half-invisible influence it has had, to so beneficial an effect, in the last 30 years. I have done so also because the series of bilateral links the Community has forged in recent years must be viewed against the GATT background, and perhaps I may say a few words about the bilateral links. The network of bilateral links that the Community has made with other countries in recent years is probably the most distinctive and tangible feature of the Common Commercial Policy. It is, therefore, natural and entirely appropriate that the Committee chaired by the noble Lord, Lord Trevelyan, should have devoted a large part of its report to it. Its report gives a detailed and lucid account of all the various types of agreement that the Community has negotiated, and the wide geographical spread that has been covered. The noble Lord, Lord Trevelyan, in introducing the debate this evening, summarised the four categories of agreements that the Common Commercial Policy has covered.
The Community today is by far the dominant economic influence in Western Europe. It is, therefore, hardly surprising that the other non-Communist countries of western Europe, and around the Mediterranean, have sought close ties

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with the Community. These take two forms. As a consequence of our accession to the Community in 1973, free trade agreements were negotiated with the remaining EFTA countries so that tariffs would not have to be re-establish between them and the United Kingdom. Following a four-and-a-half year transitional period, there is now effectively a 16 nation EEC/EFTA free trade area.
The second group of agreements comprise those with the Mediterranean countries. These are more disparate in form, reflecting the varying stages of development of the 13 countries concerned, from Tunisia and Turkey, to Israel and Spain. These agreements also arise in large measure from geographical proximity, or long-standing historical ties. They have been extensively revised and extended in scope in recent years in an attempt to bring coherence and some degree of consistency to their provisions. The only major exception is Spain, where the Community hopes to negotiate a revised agreement later this year.
The future development of these agreements is very much bound up with the question of enlargement of the Community to incorporate Greece, Portugal, and possibly Spain. As the report rightly points out, a major issue arising in this connection is the problem of Mediterranean agriculture. No one would dispute that there are serious problems in the Mediterranean areas of the existing Community, as well as in the three potential new Member States. We believe these problems to be essentially of a structural nature, for which suitable and cost-effective solutions must be sought, and this was, I believe, the view of the Committee. What would be wrong would be to attempt to solve structural problems by unduly rigid internal, or external, market mechanisms. These could be damaging both to Community consumers and to trade with countries outside the Community, without making any real impact on the underlying problems.
Looking further afield, the report devotes a good deal of space to the Lomé Convention, to which I have already referred. I think it is now well recognised that this agreement with 52 African, Caribbean and Pacific countries, is something of a landmark in relations
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between the industralised countries and the developing world. As well as granting duty and quota free entry into the Community for almost all products, it includes a major element of aid and technical assistance. It also includes a major innovation in the form of the Stabex scheme for stabilising the export earnings of the producers of certain primary products. It is too early to give a considered view on the effectiveness of these arrangements, but all the signs so far are that they have had a significant and beneficial effect.
My Lords, in the course of my general remarks I have, I think, taken up a number of the specific points made by various noble Lords who have participated in the debate, but if your Lordships will bear with me, there are one or two other points that I should like to make. One or two noble Lords referred to the importance in the world of trade with, or the trade of, Japan; in this connection I would say that progress towards a formal trade agreement with Japan in the future will depend on what progress is made in the multilateral trade negotiations towards a mutually satisfactory safeguard clause. In the meantime, we should not lose sight of the useful steps being taken by the Commission to establish closer and more regular discussions of trade problems with the Japanese.
The six-monthly high-level consultations are developing as a valuable forum for the discussion of trade matters between the Commission and Japan, and, as the report of the Sub-Committee notes, have made some progress towards removing obstacles to Community exports and towards restraining Japanese exports of steel to the Community. It is to be hoped that these consultations will be continued on a regular basis at a high level, and that both sides will continue to use them as an instrument to help resolve the outstanding problems in Community-Japanese trade.
One other subject that was common to two or three of the speeches to which we have listened was the situation in respect of New Zealand. On this subject, the noble Lord, Lord Chelwood, in particular, made this point. Despite recent changes in our trading patterns, Australia and New Zealand remain very important to us, and I agree with the noble Lord on that.

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We shall certainly do all we can to maintain and strengthen the trading partnership within the framework of our membership of the Community; and this, of course, includes seeking satisfactory arrangements on access for New Zealand dairy products.
Lord CHELWOOD: After 1980, my Lords?
Lord ORAM: I am establishing a general principle that that should be our objective, yes. I think I have already dealt with the multi-fibre arrangement, which was raised so forcefully by the noble Lord, Lord Barnby, and the noble Baroness, Lady Hornsby-Smith, but in this connection I shall certainly take note of what my noble friend Lord Rhodes said about the undermanning of the team in Brussels which deals with this. I think he made a most important point in this connection, and I shall certainly pass on what he has said in that regard.
If I may now conclude—and I apologise for having taken so long, but it is a complex subject and an important report—I should like now, very briefly, to look ahead to the future of the Common Commercial Policy. I am sure that the Community will wish it to retain its basically open and outward-looking character, and this is certainly the Government's view. We see the present round of GATT multilateral trade negotiations as helping towards this objective. There is the possibility of establishing more satisfactory relations between the Community and the East European countries. This process has already begun with the exchanges of letters between the Community and COMECON, and with the negotiations with some of these countries on textiles and on fisheries matters. We hope that this will lead on to the establishment of formal relations. Then there is the question of the enlargement of the Community, where I look forward to the further report which the noble Lord, Lord Trevelyan, referred to as being forthcoming later in the year. Then, by 1980 we shall have to have renegotiated the Lomé Convention. This, in turn, leads on to the wider issues of how to regulate the Community's trade with the developing countries of the Third World; and this, I am sure, will prove to be one of the dominant political and economic issues of the 1980s.
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In conclusion, I should like again to say how much I appreciate the work of the Select Committee and the opportunity it has given us for today's debate. The subject, as has been recognised by all who have spoken, is one of great importance to this country, and, as the Committee remind us, one which is given insufficient attention in the media and elsewhere. I hope that this debate will have done at least something to remedy that situation.
Lord CHELWOOD: My Lords, before the noble Lord sits down, I know that noble Lords more than understand that it is not possible in a debate like this to answer off-the-cuff all the questions which are put to a Minister, but would the Minister be good enough to write to those noble Lords who have raised questions with him which he has not been able to answer?
Lord ORAM: My Lords, that is a tall order, because there were masses of points raised, but perhaps the noble Lord, Lord Chelwood, would accept my undertaking to look at the main ones. I hope I have answered quite a number, but I shall certainly look at the main ones, though I should not like to give an undertaking that I will write to every noble Lord on every point.
7.15 p.m.
Lord TREVELYAN: My Lords, I think we must all be grateful to the noble Lord, Lord Oram, for his wide survey of Government thinking, which has been of great interest. I am very glad that our report has stimulated a debate of real substance, which I have found very interesting throughout I must also thank noble Lords who have shown their appreciation of our report. Every now and again of course, when we produce these reports, we wonder whether we are doing any good. I think a debate like this gives us a lot of encouragement.
It seems to me that there are really four ways in which these reports can do some practical good. First, they create a dialogue between your Lordships and the Departments of Government, and that improves the decision-making process. Secondly, our reports can be useful as a background and a brief for Members of the European Parliament. Thirdly,

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they can be of use to members of the Commission and of the United Kingdom delegation in Brussels, as giving an outside view of the Community. Lastly, there is, I think, some danger that the Community's business should be regarded in this country as something alien to us, instead of something of which we are an integral part and something, therefore, about which we should know a lot. I very much hope that our labours will be of practical use if only as a reference book to an important part of Community policy.
On Question, Motion agreed to.

ETHYL ALCOHOL: 37TH REPORT OF THE ECC
7.18 p.m.
Lord RAGLAN Lord RAGLAN rose to move, That this House takes note of the Thirty-seventh Report (HL 191) of the European Communities Committee on Ethyl Alcohol (R/2959/76). The noble Lord said: My Lords, your Lordships have been having a most interesting discussion on the broad principles or bare bones of the Common Commercial Policy. In the CAP, we have a policy which is fully operational although it is limping, rather, under the weight of the green money system; and your Lordships' committee, Sub-Committee D, is continually employed in scrutinising a steady flow of proposals of a technical kind which, as my noble friend Lord Peart knows very well, are the flesh and blood of a working policy.
This proposed Directive is one of these. I am very pleased to see so many members of the Sub-Committee present, and I should like to take this opportunity to thank them publicly for the contribution they have made towards producing this report. I am glad that several of them (more than are on the list of speakers) are going to speak this evening to the report; it greatly helps me to have them here to support me.
I am not going to go through the report, but rather I will take what I think are the essential elements of this draft Directive and try to set them in a wider policy context than it is strictly possible to do within the formal confines of one of our reports. It is a very complicated
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Directive, and your committee had quite a puzzling time unravelling it—and it is unfortunate that we do not altogether like what we found. Your Lordships will know that ethyl alcohol is the principal active ingredient of many drinks, but the Directive does not refer to wine, beer, cider or other such drinks which acquire their alcoholic strength by the normal, natural process of fermentation. It embraces only alcohol of the kind which is obtained by putting similar ferments to these, including, incidentally, potato mash, through a process of distillation to make either spirit drinks or alcohol spirits for industrial use. It also embraces synthetic alcohol which is obtained from petroleum. It is not the ordinary vinous or "beery" drinks which it refers to, but the distilled spirit obtained from these types of ferment. Ethyl alcohol is a very important industrial raw material which is used in large quantities for many things; for example, it is used as a solvent base for perfumes and inks and as a liquid vehicle for aerosol sprays of many kinds. When it is used for this purpose, it evaporates quickly and harmlessly in a short time.
I shall try to explain as briefly as possible the need for this Directive. As your Lordships will know, more wine and other fermentable produce is being produced in certain areas of the Community than can be sold in the normal way as drinks. This is not a new problem. The way in which the countries concerned have traditionally dealt with their surpluses is by distilling the produce to make industrial alcohol. In Holland, grapes are not grown and potatoes are used in the same way as surplus wine is used in France and Italy. In France, Germany, Italy and Holland, this distillation is carried out under the auspices of a State alcohol monopoly. This governs all output, whether of agricultural or of synthetic origin. However, synthetic alcohol is very much cheaper than the cheapest agricultural alcohol except the alcohol which is derived from molasses—and your Lordships will see a table of comparative costs on page 15 of the report.
In order to make the production of agricultural alcohol viable, certain industries in these countries are required to buy it. This specific industrial use is

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known as a reserve sector and having a reserve sector is considered to be justified in the interests of relieving these countries of an otherwise embarrassing surplus of wine, potatoes or molasses which is made from sugar beet. Since the famous Charmasson judgment, these State alcohol monopolies have been declared illegal obstacles to intra-Community trade as they interfere with imports from other Member States. Now the Commission is having to try to get agreement on a compromise régime and, not unnaturally, it has come up with a hotchpotch of existing practices in the Nine, including the provision of reserve sectors and the proposal to tax spirit drinks in order to subsidise the production of this costly agricultural alcohol and make it more nearly competitive with synthetic alcohol.
This tax is euphemistically known as an equalisation charge. Our gin industry reckons that it would work out at about 10p a bottle while the Ministry of Agriculture thinks that it would be more like 3p. Whatever the charge, or the sectors that it is proposed to reserve—principally the pharmaceutical industry, which, your Lordships will be interested to know, uses 600,000 hectolitres of this stuff each year—the whole idea comes as strange and wonderful to this country. This is because we make only enough alcohol from agricultural produce to satisfy our own spirit drinkers and to support a valuable export trade in spirits which will be quite hard hit by the proposals in this Directive. Our industrial alcohol is almost all found from petroleum. There are no reserve sectors, no governing régime and the imagining of an alcohol surplus I think stretches only so far as a vision of wilder scenes of "Whisky Galore".
In certain areas of the Community however, the livelihood of many people—and they are poor people, many of them—depends on the production of grapes and, sometimes beet, which nobody wants. The advent of this Directive must prompt the question whether it is right that they should continue to be subsidised in their uneconomic employment by a requirement for certain industries to take their expensive alcohol through what amounts to a tax on spirits.
Your Committee did not think this right. As I mentioned earlier, this alcohol surplus has been a problem for a long time,
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particularly in France, and because of tradition, political difficulties and lack of means to find alternative employment in the areas concerned, it has not been tackled. Now it is the Community's problem; but the Commission is not trying to solve it in the spirit of free trade which inspired the Charmasson judgment. It is trying to use the same kind of controls which the State monopolies have been using.
I do not think that we in this country are in a position to criticise State monopolies. We have them in the shape of our Milk Marketing Board, which we are fighting strongly to retain, because we think that producers and consumers alike would suffer if it went and if there were a free-for-all. Furthermore, our marketing boards keep in business producers who would go to the wall if there was free competition: the economy of whole regions—those furthest from the centres of consumption—would suffer badly. If the régimes of the alcohol monopolies were suddenly abolished without special remedies being sought and applied, the economies of whole regions would suffer likewise. Whereas, if our boards were abolished, consumers would find themselves paying more for less, it is fully recognised that, in this case, consumers are already paying more than they need, and it is proposed to deal with what is essentially a structural surplus without taking steps to tackle the causes of that surplus.
Again, we have no reason to be particularly proud in this country of our record in regard to structural surpluses. Our industries are rife with them and we have been battling with the problem for years, propping up traditionally uneconomic industries to save jobs because we recognise that the economy of whole cities and whole areas depends on retaining these jobs. We know, too, that upsetting a traditional way of life is a painful business; but, in our case, we have at least insisted that the Government, as representatives of the general taxpayer, should take some general responsibility in helping to put structural surpluses to rights.
What this proposed régime would do is to put responsibility for the cost of the surplus onto the consumers of alcohol alone. It would do this indiscriminately, whether they were bibulous or industrial

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users and without setting aside provision to reduce the surplus. The surplus is not being recognised for what it is—a socioeconomic matter of great seriousness affecting a very wide area and something which should, I believe, be made the responsibility of a Community regional policy.
If the Government accept the Commission's proposal, they will be accepting the principle of a tax only on the consumers of certain products to pay for the scheme; they would be accepting that the Common Agricultural Policy can dictate the source from which certain industries get their raw materials. They will also be endorsing the institutionalisation of a perpetual surplus of agricultural alcohol. For those reasons which underline the views which we give in paragraph 35 of our report, your Committee advise the Government not to agree to these proposals in their present form.
I should like to end with a personal view which I am sure will fall on receptive ears in the person of my noble friend Lord Peart. In trying to deal with this surplus of alcohol we should be understanding of the real difficulties which some of our partners are in. If we do not show them sympathy, we cannot expect sympathy from them when we have problems. We must be prepared to yield occasionally and not stand up rigidly for everything we want. That is in the nature of a partnership. But we should make it clear that these proposals will not help or solve anything in the long run. It will be far better if the Commission take them back again and get it right next time. I beg to move.
Moved, That this House takes note of the Thirty-seventh Report (HL 191) of the European Communities Committe on Ethyl Alcohol (R/2959/76).—(Lord Raglan.)
7.32 p.m.
Lord SAINSBURY: My Lords, I want to make the briefest of interventions this evening merely to reinforce what my noble friend Lord Raglan has already said about this proposal. In my opinion, this Directive is just another example, as paragraph 20 of our report makes clear, of what is now the Community's standard reaction to the development of any product that threatens the market for a
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CAP product: in other words, an attempt to restrict the marketing of a rival product. That is what has happened here with agriculture and synthetic alcohol.
The proposal as it stands at present will lead to control over both the types and prices of alcohol used in industry. I can find no justification whatsoever for this substantial infringement on the right of manufacturers to choose those raw materials which are best suited to their businesses at the most advantageous prices available. I endorse the Committee's view that there should be no constraint on how manufacturers run their businesses in an endeavour to mop up unwanted surpluses. I hope that my noble friend the Leader of the House, who is to reply to the debate, may be able to shed some light on how the Community justifies its interference in the industrial process.
To make things worse, the actual system of control proposed is bureaucratic in the extreme. As the report points out, it will hardly work satisfactorily since it calls on national civil servants to display commercial and industrial expertise which their training has not given them. I hope Brussels will take note of this report, and that it will be one more nail in the coffin, not of the Market itself, of which I remain a strong supporter, but of the excessively interventionist and bureaucratic measures which are being put forward.
7.35 p.m.
Lord ELTON: My Lords, I must apologise for not having my name on the list of speakers but it was not until after it was printed that it was clear that I was going to be able to be here to intervene in this debate. But I think it is a subject of sufficient importance to justify such an intervention. I should like at the outset also to congratulate the Committee on their lucid explanation of a subject of great complexity. That complexity deserves an adverse comment from this House. If I may quote paragraph 23 of the Report:
"A further feature of the proposal to which the Committee wish to draw attention is the bureaucratic and highly complex nature of the actual system of control proposed. An official of the Ministry of Agriculture in oral evidence said that the Ministry itself had had difficulty in understanding the proposals because of their complexity and ambiguity. It is not surprising therefore that trade bodies in giving evidence

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should speak of their difficulty in making sure they had correctly understood the proposals, especially as, apart from their complexity, many of the Articles as drafted are still ambiguous and imprecise in their meaning".
This is the second shot at the document we are looking at: it is not the first draft. Any document which can be commented on in those terms by three separate groups of intelligent human beings is very severely wanting. We are accustomed already in this House to doing battle on behalf of lucidity and conciseness with Parliamentary draftsmen in this country. One is somewhat daunted with the prospect of another phalanx ranged behind them of draftsmen in Europe, and I think we ought to make our views known at an early stage.
The background to this document is more simple than its contents. If I may give a not altogether simplistic interpretation: as I see it, large sectors of the European Community are dependent on producing stable products, and prominent among these are sugar beet, grapes and grain. These communities within the Community are economically dependent on selling them at a good price. Their Governments have paid such attention to the good price that they have produced a surplus of them, and this is the policy pursued by the Community.
The fate of agricultural surpluses, if left unattended, is naturally to go rotten; in other words, to ferment. Happily, this process produces fermentation which results in alcohol. This alcohol can be distilled to a purity rendering it useful for a number of purposes. But, unhappily, alcohol produced by this means from grape and grain works out at from two to five times as expensive as alcohol produced synthetically from petroleum, as listed in Table III to which the noble Lord, Lord Raglan, has referred. The substances produced resemble one another closely, and no one in his senses will pay, for instance, £1,230—the top price shown in Table HI—for a metric tonne for ethyl alcohol produced from the wine lake, when he can have an equal quantity from, as it were, North Sea oil at £270.
Thus though you have reduced the wine lake by distillation, you have in no way made it more saleable. Meanwhile, the grapes inexorably ripen on the vine. You have therefore to intervene in the market
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to make it operate to the benefit of the producer. This is something that the draftsmen of this document propose to do by reserving certain substances in which it shall be illegal within the Community to incorporate synthetic alcohol. These substances are specifically those for oral consumption, vinegar and pharmaceuticals. There is a semantic oddity which distinguishes vinegar and medicines from things which are intended for oral consumption, but I will pass over that because I am sure your Lordships understand the intention.
These substances provide the producers of surplus grain and grapes with three convenient groups of captive consumers who must be supplied with expensive alcohol of agricultural origin. I find this phrase very difficult: "Alcohol of agricultural origin". I should prefer to call it "agrihol" and have done with it. Incidentally, what better harvest-home could you have than an "agriholiday" when all this is safely gathered in?
However, the intention is that this expensive "agrihol" should be substituted for the less expensive and equally acceptable "industrihol", if that is the word. In any case, even these provisions should not suffice to maintain the price of "agrihol" at a sufficient level and intervention agencies would be required to purchase an agreed but substantial quantity of it at an agreed and equally substantial price. That is reducing the supply, increasing the demand, and keeping up the price. That is the scheme in outline—and a pretty unacceptable one it is.
We have to recognise the necessity for a Common Agricultural Policy and we have to recognise the wisdom of budgeting for occasional small surpluses in individual commodities, in order that in bad seasons there shall not be dramatic shortfalls and unacceptable price increases such as we have seen recently with potatoes. What is not necessary and, in my view, not acceptable, is to budget and plan for permanent, recurring and cumulative surpluses and then to start to invent means of getting them taken out of stock at artificial prices by consumers, unwillingly and—but for the vigilance of Parliament and, in particular, of your Lordships' Committee, who are to be congratulated—unwittingly created. That is not merely unfair to the consumer

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but it distorts trade by a completely unwarranted intervention. How would it be, by analogy, if there were to be a regulation that all cans for vegetables, baked beans and so on, were in future to be lined not with tin but with silver? The economic implications would be in some ways approximate to those we are examining now.
Furthermore, these are means of restricting innovations. If you insist on depending on old processes, although new ones are more efficient, you are in fact reducing the efficiency of the Community as a whole. For at least as long as we cannot import food at competitive prices on the world market, persistent surplus on the grand scale has no more place in our agricultural policy than persistent deficit on the grand scale ought to have in our economic plans. Glut and slump are the twin enemies of sensible planning.
Having looked at the outline, let me briefly turn to the niceties. Who is to pay for this? Presumably the purchaser of the medicine, the vinegar and the wine. The volume of alcohol qualifying under this heading in the pharmaceutical industry is probably small: I do not know how small. I rather hope that the noble Lord, or those who stand ready to advise him, may be able to have this information by the time we come to the end of the debate; it is not vital but it is interesting. By far the greatest purchaser, in any case, will be the State, in the form of the National Health Service, and I hope that Her Majesty's Government have calculated the additional cost to the Exchequer of that item. It may or may not be formidable, but I see no reference to it in the document. I am not an expert on vinegar and in fact many would claim that I am not an expert on alcohol either. I think that alcohol used in spirituous liquor needs to be of agricultural origin, and I think there have been scandals both in Italy and Germany which suggest it is not popular or advisable commercially to use chemically-originated alcohol—"industrihol "—in drinks of this sort, which are intended to reflect the season in which they are made.
Before I go too deeply into this subject, I should like to reflect on the purpose this debate is supposed to fulfil. As I under
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stand it, our only purpose, apart from increasing our own information on a quite important subject, is to have some influence on events in Europe, which we can only achieve by any influence we exert upon the Minister who will place the views of the British people before the Community. The material that has been made available to the Committee is available to the Minister. The conclusions which this has enabled the Committee to arrive at are available to the Minister, and so indeed, without any great effort on his part, will be any representations made to your Lordships other than through the Committee. So what we really have to do is merely to place our emphasis on this available material and not to recapitulate it to the great tedium of many of your Lordships here present.
I would say, then, that this House endorses the strictures which the Committee has seen fit to draw against this draft document and its conclusions. I should like to take the opportunity to say that, in my view, it is not the business of the Community to legislate for permanent grand-scale surplus. The report tells us that there are 5 million hectolitres of "agrihol" already available. For those of your Lordships who, like myself, have not gone metric with any facility, I am told that represents 109,990,000 gallons—a figure to make the mind boggle.
It is not the business of the Community to instruct industries on the raw materials they may use. The noble Lord, Lord Sainsbury, has said that very powerfully, and I might add that that appears to be clean contrary to the intentions of the Treaty of Rome, in the name of which this policy is instituted. I think it is the business of the Community to protect the interests of its industry as well as its agriculture, and I believe the Minister ought therefore to pay careful attention, for instance, to the representations made by that most important exporting industry, the Scotch whisky industry. Your Lord-shops will be apprised of the fact that anything which can be made to look like a subsidy received by the distillers of whisky will be seized on, for instance by the Americans as an excuse for slapping on a compensatory import tax at the other end of the Atlantic voyage. Therefore, the intention and the drafting of the document must be clear and there must be

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guarantees in it to define whisky and the payments that are made. Your Lordships will be aware—if it is not entirely germane to this debate, I think it is not irrelevant—of the heavy discrimination under which whisky labours in the European Market against, for instance, cognac and rum. We are supposed to be a unified Common Market. It is rather distressing when one finds there is so much antagonism actually introduced by legislation into the Common Market.
In the report there is also an argument, to which the noble Lord, Lord Raglan, referred, about the cost to gin and, of course, to the gin drinker, the consumer, who is on the end of this legislation. I would hope that the Minister will take on board that this is not a matter of Party rancour. On either side of the Floor we are saying things which sound remarkably alike, and the same is true of the other place. We wish to see fair play, and we do not think that is something which will arise from the adoption of this document as it now stands, unless it is very radically altered.
7.49 p.m.
Lord COLLISON: My Lords, when I looked at the list of speakers this afternoon I was quite surprised and a little worried because there were so few. For that reason I decided to say a word or two this evening. If anything, it is out of respect and appreciation for the work done by our chairman, the noble Lord, Lord Raglan, who introduced the report and went very thoroughly into the technical details. Other people have mentioned those and so I need not repeat them. The strictures levelled at the report have been quite devastating: that is clear from what one has heard, and in one sense I join in them.
I think the attitude of the Committee is summed up in paragraph 20 of the report, which says:
"In the opinion of the Committee, this proposal for an ethyl alcohol régime is another example of dealing with Common Agricultural Policy surpluses through a policy of taxing consumers. It is also a further example of what appears to be the Community's standard reaction to the development of alternatives which threaten the market for a CAP product".
Because of my background, obviously I shall be the last person in the world, in principle, to criticise support for the agricultural industry. I believe that the
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industry is entitled to that support in order to enable farmers and workpeople to enjoy a standard of living and other standards which are consistent with this day and age.
May I make my position quite clear. Agriculture has been allowed to suffer for too long at the hands of developed industry, and in those places where developed industry has been able to exercise tremendous influence I believe agricultural support to be right. The question is how that support is to be given. One understands, of course, that our European colleagues have the problem of surplus production with which to deal. In this case it is wine, but the production of wine presents no problem to this country. Indeed, it is because we do not have a surplus of wine that the production of synthetic alcohol as an alternative to agricultural alcohol has developed, and the industry is growing. In our case, therefore, this proposal offers no advantage to agriculture. There may be an advantage to the producers of ethyl alcohol if they are guaranteed easy access to the Continent. On the Continent, however, very little ethyl acohol is used. Consequently, there are no advantages so far as agriculture is concerned and, as has already been made clear, there are also disadvantages in the case of other industries.
As has been said, the proposals represent a substantial constraint upon the freedom of manufacturers to buy the raw materials which are best suited to their businesses at the most advantageous prices that are available. Indeed, it is suggested in our report that this policy conflicts with the principles of the Treaty of Rome. It is interesting to note that when they had considered the proposal the Committee on Budgets of the European Parliament reported that they were struck by the fact that what is envisaged in the balancing arrangement appears to be the placing of a burden on an efficient industry which produces potable spirits to subsidise the inefficient production of alcohol obtained by distilling other agricultural products. They add that a proposal of this nature is difficult to justify. To be quite fair, we should report, too, that on balance the Agricultural Committee of the European Parliament favoured the proposal.

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When noble Lords debated yesterday the report of Select Committe A they will have noticed that in paragraph 39 the Committee said that they considered that a general review of the Common Agricultural Policy was desirable, paying particular regard to the comments made in the earlier paragraphs of the report. I agree with this point of view. In my time I have tried to serve the community in a number of ways, but my first loyalty and love is for agriculture. Also I have a loyalty towards and a firm belief in the principles of the Common Market. Right from the beginning I was in favour of our membership for wide, not only agricultural, reasons, although I believe that in the long run the Common Market will prove to be beneficial to those who are engaged in agriculture. One has only to think of the importance of this powerful economic trading bloc.
This was emphasised in the previous debate. Indeed, if one looks at what happened in Europe in the past and the constant conflict, a Common Market which brings countries together must be an advantage and must be supported. Therefore, I want to make it quite clear that if I appear to criticise certain aspects of the Common Agricultural Policy my criticism must not be taken as a dislike of, or opposition to, the Community itself. As I have said before, certainly I do not oppose a proper support system for the agricultural industry.
I have two worries—I know that t am widening the debate but I believe it to be quite proper that I should—about what is happening. My love for agriculture causes me to feel concern about the reputation of agriculture as a result of the policy of the Common Market to give support by way of intervention, since this encourages producers to produce more than can be consumed. It is an open-ended and quite costly policy. I believe that people who do not understand what it is all about view agriculture in a bad light because of this policy—I think, quite unfairly. Also they imagine, and sometimes say quite bluntly, that it is because of this policy that food is so costly. Manifestly this is not true, and we all know that it is not true. The difficulty is that people see that the result of an intervention policy is the creation of enormous surpluses—a beef mountain,
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a wine mountain in this case, and a butter mountain—and they believe that this is absurd. I have said this before in our Chamber and I say it again. Therefore I am in total agreement that the Common Agricultural Policy needs to be revised, if only to safegurad the reputation and good name of agriculture itself.
My second worry stems from my regard for the Common Market. In a sense we are new boys. It could be thought by our colleagues abroad that we do nothing but criticise, condemn and (I hope noble Lords will forgive the word) bellyache about their policies in regard to the Common Agricultural Policy. I do not wish it to be like that. I should hate to feel that we are regarded as carping critics. On the contrary, I want our contribution to the whole of the Common Market system, including the agricultural part of it, to be seen as sympathetic, understanding, positive and creative. We are an old country, in the sense that our agricultural industry is the most developed agricultural industry in the world. Those of us who are engaged in the industry are proud to say that we have the most efficient agricultural industry in the world. We have a sophisticated system. Our marketing system, for which we are fighting now, is sophisticated and we do have something to offer.
May I therefore say to noble Lords that I have these two worries. Fully supporting the Common Market as I do, believing that the Common Agricultural Policy will eventually be an advantage to the agricultural producer and to the other members of the Community, but believing also that the Common Agricultural Policy needs revision, I put in a plea that we should be seen to be friends. In this case, for example, my right honourable friend John Silkin has put up a firm defence of our system. We have no problem over wine, although we do have a problem over the large-scale production of synthetic alcohol. When my right honourable friend has to put up a firm defence, he is not seen by anybody to be merely destructive.
I am grateful to noble Lords for listening to me for 10 minutes. I believed this to be an opportunity to deal with the wider issues of my concern regarding the image of agriculture and my concern for my friends in the Common Market. I

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finish as I began by thanking the noble Lord, Lord Raglan, and his Committee for producing what I feel to be an excellent report, towards the end of which certain suggestions have been made. I shall not run through them, although I hope that the Government will bear them in mind when they consider the report. It was not possible to come to really firm decisions about this because there is so much vagueness left in the situation and the explanations are not good enough. There are certain things which we ought to be trying to achieve by ourselves and our friends elsewhere, and I hope the Government will take account of these comments in the report.
8 p.m.
Lord RITCHIE-CALDER: My Lords, I did not put my name down because I had not intended to speak but I noticed a deplorable absence of Scottish—or "Scotch" men—in this debate and it seemed to me that this involved us, as Scots, very profoundly indeed. I can understand that many noble Lords did not recognise in the term "ethyl alcohol" a sort of femme fatale threat to Scotch whisky. If it had been Poosie Nancy we might have understood it. Implicit in this whole discussion—and I want to say to the speakers who have preceded me that I endorse what they have said—I take as some reinforcement the general opposition to this approach by the Commission and I want to say that we realise just what is involved here. I follow my noble friend Lord Collison in his views about the wonderful and justifiable claims of British agriculture and I should like to say that in agriculture in Scotland there has been produced a by-product which has been historically longer lived—and will be longer lived—than North Sea oil; that is, Uisge Beatha.
What we are looking at is something that is, if I may say so, vulgarising the whole of our attitude to Scotch whisky, which some of us think is in fact bottled poetry and history. I do not think my Band of Hope friends would agree with me, but I am sure that others do. In this somewhat sterile and depressing discussion, we are dragging in things like synthetic alcohol made from oil, and the dreadful prospect of Scotch whisky being treated as a surplus. It never is surplus. We never can get
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enough of it. Here, we have a situation which I think my noble friend on the Front Bench will recognise as important. It is the fact that, in this type of discussion, we are being dragged into the kind of almost unrealistic discussion of how one treats the manifest facts of the Scotch whisky industry, with its enormous exports. We are treating it as though it was something that we could dispose of in what one might think was a lac d'alcohol, or whatever one likes to call it.
In Scotland, we do not look at it that way and we never will. We put a lot of peat and a lot of inspiration and a lot of time into it and also age is the big contribution that we make. I have no brief from the whisky people beyond what I myself feel: I am certainly declaring an interest which is a natural interest in the end product and not in the method of production. Therefore, I want to say that those who are representing us in this discussion should recognise that ultimately, we have our peculiar rights, just as the other producers in Europe have. One of our important, historical products is in fact Scotch whisky and we have to protect it by any means we can. We must not allow the degradation of something which we respect into something which is called "agricultural alcohol".
8.5 p.m.
Lord PEART: My Lords, first, I should like to thank my noble friend Lord Raglan for initiating this debate and for his work as chairman of the European Communities Committee, which has produced what I think is an extremely erudite report. Indeed, I think that this House can take credit for the fact that its documents are, I believe, appreciated far more than noble Lords give credit for: they have now reached such a high standard that there is recognition in another place of the good work that the Committees in the Lords have done. I think that should be put on the record and I am grateful for the opportunity afforded to me by this debate to explain the Government's view of the EEC draft proposal for an alcohol regulation.
The Community is still at an early stage of the discussion of the draft proposal. Indeed, it has not yet been before the Council. It is in a Council working group but it must go to Ministers

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for the first time by the end of 1977. So all is not lost, and I say that to the supporters of the report and to those who have participated in the debate this evening. So the Community is still at an early stage in discussion of the draft proposal and our view of it will need to be defined further as discussion progresses.
No doubt, our negotiators will be helped by the report which is before us. Noble Lords will understand why—as is customary—I cannot be entirely explicit about the negotiating line we shall take on certain issues. It would be very wrong for me, a former Minister of Agriculture who used to negotiate, to try to spell out our negotiating position to the House this evening. To do that could be prejudicial to the United Kingdom interest.
The questions raised by noble Lords have demonstrated the complexities of the issues involved, and I am grateful to all those who have contributed to this debate. The Government will certainly give careful consideration to all that has been said. I should like to say to the noble Lord, Lord Elton, in regard to the financial implications for the United Kingdom that I have checked a little and obviously, with no production of alcohol from materials more expensive than cereals and nearly all our production going into drinks, the United Kingdom would be unlikely to receive any compensation. The costs to the United Kingdom would derive from our usage of molasses, the amounts being dependent upon the quantities used and the price levels and from our intervention contribution. Again, how much? The figures used are notional and the mechanisms are not yet clarified. Therefore, any estimate would be very much a guess and it would be wrong of me to make a guess at this stage, but I will look into the matter more carefully and will write to the noble Lord.
Lord ELTON: My Lords, the noble Lord is most kind, and when he comes to read Hansard he will see that what I was specifically asking about was the increased charge to the National Health Service. I recognise that it is a recondite question, but I hope when he writes to me he will answer that question.
Lord PEART: My Lords, I cannot say. It would be absurd for me to attempt to because I would be speculating. All I can say is that we are concerned about its impact on the industries involved and the effects, direct and indirect, which the draft Regulation could have on the United Kingdom industries. Here I endorse very much what my noble friend Lord Raglan said, in explaining his proposals and also what the noble Lord, Lord Sainsbury, has said about the impact on the industry and also the bureaucratic nature of the proposal. I must emphasise that we have been in very close touch with these industries since the proposal emerged and they have put their views very fully to us.
We share their concern about many aspects of the proposal. The proposal is a revision of a draft originally tabled by the Commission in 1972. The earlier proposal was shelved in 1973 after lengthy discussion in the Council, and has only recently re-emerged in its considerably revised form. In a nutshell the problem is one of over-production within the Community of agricultural alcohol. On many occasions I remember hearing the arguments affecting particularly the wine producing countries and how they must reduce their wine lake through distillation, which is mentioned in detail in the report and has been described by my noble friend Lord Raglan and others.
It is directly attributable to overproduction of certain agricultural raw materials for which distillation is a convenient outlet. This may not be a United Kingdom problem since we have no surpluses in this sector. But it is one which we cannot ignore, for it will not go away until some forceful and positive steps are taken to resolve it at Community level. Questions raised by certain noble Lords illustrate the need for clarification of some detailed points of the Commission's proposal. The basic problem, as noble Lords recognise, is that for certain agricultural products, upon which certain Community farmers depend, there are no viable outlets except by way of distillation into alcohol. In addition, virtually any agricultural product can be fermented and distilled, so that surpluses (in particular of fruit and wine) are made into alcohol instead of being thrown away. Unless there is rationalisation

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of agricultural production it is clear that the alcohol market must be very unstable.
The national protectionist monopolies set up by several Member States in order to regulate the market in alcohol have been declared illegal by the European Court of Justice. There is, therefore, a two level structural problem—one problem at the raw material stage and another at the distilling stage. The draft regulation aims to solve these problems by protecting producers of high-priced agricultural alcohol—both the growers of the raw material and the distillers—from competition by lower-priced alcohol. This latter uses a cheaper raw material, or is more efficiently produced, or both.
Under the Commission's proposal, certain market sectors—drinks, vinegar and pharmaceuticals—would be reserved for agricultural alcohol; distillers would be allocated annual production quotas; and the sale of these quotas into the reserved sectors would be supported by subsidy. Sales into intervention would be possible for any alcohol under quota which could not otherwise be disposed of. Alcohol in excess of the quotas would receive no support, and molasses alcohol (the lowest priced agricultural alcohol) would also be without protection, since the Commission maintains that it is price-competitive with synthetic alcohol.
The scheme would be financed by a flat-rate consumption tax on all agricultural alcohol and spirit drinks used in the European Community. Thus, although spirit drinks (with a few exceptions irrelevant to the United Kingdom industry) are excluded from the market regulation as such, they are expected to help to pay for it. If the United Kingdom sees difficulty in accepting some aspects of the proposal, I think it is fair to put on record that most other Member States also have considerable reservations about it. We, therefore, expect that there will be some lapse of time and a fair amount of modification to the proposal before an acceptable text emerges. We shall certainly be pressing for changes, and we shall ensure that there is adequate time for consultation with our industries as the negotiations proceed.
As I hope I have already made clear, the Commission's proposal is in many
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respects objectionable to us. For example, we question whether it is proper, both in the terms of the Treaty of Rome and in terms of commercial practice, to reserve certain market sectors for goods of a particular type. I think this was the main point made by my noble friend Lord Sainsbury.
This implies restricting manufacturer and consumer choice, encouraging price increases, and represents interference by an agricultural regulation in the affairs of non-agricultural industry. And again, subsidised sales into the free sector mean that our considerable synthetic alcohol industry would be subjected to a squeeze by agricultural alcohol, without the means of defending itself. I can assure noble Lords that we have already voiced strong objections to these points in Brussels and will continue to do so.
We have also been questioning why our spirit drinks, which are not part of the alcohol problem, should be expected to help pay for it. Another pertinent question, in the interest of both producer and consumer, is why our gin and vodka industry should be deprived of its traditional supplies of raw materials, or forced to pay increased prices because of levies on molasses alcohol.
We would wish the regulation to contain clear provisions for restructuring the industry, that is, for discouraging the uneconomic production of alcohol, so that we do not have to go on indefinitely supporting unnecessary or inefficient production. In negotiations in Brussels, which are at present still on an official level, we shall aim for remedies to the ills I have listed.
Before concluding, I should like to emphasise that the proposed alcohol régime already includes some features which are not entirely bad for us. The dismantling of protective régimes in other EEC Member States could lead to the opening up of new markets for synthetic alcohol, and could give increased opportunities for exports of spirit drinks. The undoubted quality and prestige of our spirit drinks would be recognised and would be protected under the new régime. And we would be entitled to an export restitution or production refund on our very substantial exports of Scotch whisky made from Community cereals.

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It is clear from the draft proposal that the Commission have tried to meet the points made by the United Kingdom during discussions of the previous draft—although they have succeeded only to a partial extent. Discussion in the EEC Council will give us the chance to examine both the extent of the changes made so far and the possibility of obtaining others. I should like to emphasise to the House our firm intention of working for such further improvements—particularly with a view to minimising adverse financial effects for the consumer and to maximising opportunities for future restructuring of uneconomic production.
My noble friend Lord Collison spoke feelingly about the role of agriculture in the Community and the importance of the Common Agricultural Policy. I was glad to welcome his constructive approach to this, as a distinguished former leader of the agricultural industry. I always detect too much carping criticism of the Community by many people, I am sorry to say on my own side, and indeed on the other side as well. I am never worried too much about surpluses to that extent. I am more worried if we have an agricultural system which produces scarcity, and that has happened in the world. Let us not denigrate the system which is emerging. I know there are problems. I got rid of intervention as the sole means of support for the beef industry. Noble Lords will remember that I brought in a premium system, which has not been destroyed by the Community, and which gives our farm producers considerable security, rather similar to our old deficiency payments system, although even that system did not always work. No system is perfect.
Naturally, I do not want to see surpluses destroyed, or some products put into intervention; when that intervention period is carried on for a long time the quality of food put into intervention deteriorates. We all know that. Eventually the CAP will play a positive role, I hope, in world agricultural matters. After all, if the United States of America can dispose of its surpluses of cereals by valuable export markets, there is no reason why we in the Community or we in Britain should not export many of our valuable products—after we have satisfied the needs of domestic consumers—to the markets of
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the world. Therefore, on this issue, believe that the criticisms that noble Lords have made in their report are correct and justifiable. They will help our team in Brussels. At the end of the day, I hope that we shall finally come out with something which will be sensible and to the benefit of our economy.
Lord VERNON: My Lords, before the noble Lord, Lord Peart, sits down, being a member of the Sub-Committee, I should like to refer to a misapprehension which has arisen in the debate. The draft report from Brussels is injurious to the Scotch whisky trade. The evidence given by the Scotch Whisky Association—I am sure that the noble Lord, Lord Raglan, will put me right if I am wrong about this—was that it welcomed the Directive which would help to sell its product in Europe. I felt that that should be put on record.
Lord RAGLAN: My Lords, I do not think that I can answer the point raised by the noble Lord, Lord Vernon, without notice because I am a little confused with this Directive and the Excise Directive which the Committee was examining at the same time. I am not sure whether the evidence from the Scotch Whisky Association was in favour of the Excise Directive rather than this Directive. I must check, but I do not have time to do so at present.
Lord ELTON: My Lords, although I am not a member of the Committee, perhaps I may presume to come to the aid of the House. It is my distinct impression from all the material that I have seen that the Distillers' Association has shown considerable alarm about what might be the results of this Directive if it were enacted as it now stands. There is no proposal to introduce industrial alcohol into whisky as the noble Lord, Lord Ritchie-Calder, tried to terrorise us into fearing. The Association is very apprehensive about the document as it now stands.
Lord RAGLAN: My Lords, I think that that point was borne out by what the noble Lord, Lord Ritchie-Calder, said, but I should like to see it in writing. We referred to the matter on page 12 of our report at paragraph (c).
Lord VERNON: My Lords, if I was wrong about this matter, I apologise to the House.
Lord RAGLAN: My Lords, the noble Lord, Lord Elton, questioned the usefulness of this procedure whereby we produce a report and then have a debate on the matter and repeat ourselves. I would point out that in the Select Committee we discuss whether a report should be debated. The decision to debate a matter is nearly always taken if it is judged to be a controversial matter upon which noble Lords who are not members of the Sub-Committee which examines the problem, might like to express an opinion, as has happened today. It also gives one an opportunity to philosophise about a proposal, as I have attempted to do this afternoon, and to examine it from more angles than is possible within the strict confines of a report. Moreover, one has the opportunity formally to voice one's concern about certain matters and thus get details of them into the Parliamentary record. That is, as the noble Lord, Lord Peart, has just remarked, very helpful to the Government, when they are negotiating in Brussels and wish to be reinforced in their attitude from behind. We have other means of calling Ministers' attention to matters, and I should not like the noble Lord, Lord Elton, to think that all we do is produce reports for debate.
I was most grateful to my noble friend Lord Peart for, as always his summing up was so authoritative. He is well practised in the mysteries of the CAP. I know that this is a very slow-moving Directive. It has been going for five years and it may be a long time before it comes to fruition. I am pleased that he has noted our reservations and I am glad to have his assurances. Finally, it is because the carrying liquid is alcohol that the nice smelling squirt from the aerosol that is directed into the armpit feels so cold. Unlike the case of drink, the origin of that alcohol is really irrelevant to the user. It is not right that drinkers of spirits who are taxed for other reasons in other ways should pay to make the alcohol in the aerosol cheaper, but not so cheap as it could be if it came from elsewhere. That is a distillation of our main criticism of the proposal.
Lord ELTON: My Lords, I apologise for rising again, but I should like to put the record straight. I attempted to congratulate the Committee on having carried out an extremely useful function. I said that our function was not to repeat it but to endorse it, which is very different from what the noble Lord was attributing to me. I hope that he will accept my congratulations as chairman of the Committee.
Lord RAGLAN: My Lords, I thank the noble Lord, Lord Elton, for his nice remarks and I am sorry that I misunderstood him.
On Question, Motion agreed to.

BRITISH RAILWAYS BILL
Reported with Amendments.
GREATER LONDON COUNCIL (MONEY) BILL
Report from the Select Committee that the locus standi of the Petitioners against the Bill is disallowed; a Special Report made and to be printed; Bill recommitted to an Unopposed Bill Committee.
CITY OF LONDON (VARIOUS POWERS) BILL [H.L.]
Returned from the Commons agreed to with Amendments; the said Amendments considered and agreed to.
LONDON HYDRAULIC: POWER BILL
Returned from the Commons with the Amendments agreed to.
  SALMON PROTECTION LEGISLATION
  SALMON PROTECTION LEGISLATION
  AERODROME SURFACE MOVEMENT INDICATORS
  AERODROME SURFACE MOVEMENT INDICATORS
  OVERSEAS INVESTMENT INCENTIVES
  OVERSEAS INVESTMENT INCENTIVES
  EX-ARMY ACCOMMODATION, EDINBURGH
  EX-ARMY ACCOMMODATION, EDINBURGH