Sitting of 2 March 1977

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

    Rhodesia
    Mr. Farrasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the situation in Rhodesia.
    Mr. Dykesasked the Secretary of State for Foreign and Commonwealth Affairs what recent proposals he has received from the Government of South Africa concerning possible solutions to the Rhodesian constitutional crisis.
    Mr. Whiteheadasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement about the situation in Rhodesia.
    Mr. Brocklebank-Fowlerasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement on Rhodesia.
    The Secretary of State for Foreign and Commonwealth Affairs (Dr. David Owen): As the situation in Rhodesia deteriorates, the need for a negotiated settlement becomes more urgent. We are consulting closely with the new United States Administration. We are also keeping in touch with the other interested parties to see whether it is possible to find a basis for resumed negotiations. Meanwhile the Geneva Conference, which was adjourned in mid-December, remains in recess.
    Mr. Farr: I thank the right hon. Gentleman for that reply, but will he bear in mind that it is important not to
    340
    allow events to drift too much and not to wait too much upon an initiative from the new Administration in the United States? Will he consider, for instance, introducing a new initiative from the British side, perhaps by arranging for a sub-committee of senior Commonwealth Ministers to investigate the Problems of Rhodesia with a view to bringing about a formula whereby an orderly achievement of majority rule within a two-year period can be achieved?
    Dr. Owen: We still feel that the proposals put forward by my predecessor represent a realistic basis for bringing about a peaceful settlement. As the House knows, we are in close touch with the United States. Discussion is taking place at official level. I expect to have discussions with the new Administration when I am in Washington next week.
    Mr. Speaker: I call first those whose Questions are being answered. Mr. Dykes.
    Mr. Dykes: I wish the Foreign Secretary and his colleagues well in getting negotiations going again. What does the right hon. Gentleman think the South African attitude would be to joint United Kingdom-United States chairmanship of resumed negotiations? Is not the key to the South African attitude, as well as the general attitude, the bringing into the negotiations of moderates from all races—for example, the liberals in Rhodesia, the moderate black members of the Rhodesian Assembly and all the others— so that there is a much broader range of negotiating parties?
    Dr. Owen: I think that a pretty broad range of negotiating parties is already represented at the Geneva Conference. However, I shall consider any proposals. On the central issue, which is that the United States and the United Kingdom should remain in close contact, that is certainly central to my objectives for the future. The question of co-chairmanship is something that we can consider, but it presents obvious difficulties.
    Mr. Whitehead: I should like to put to my right hon. Friend a question I put to the late Anthony Crosland before the Geneva talks collapsed. What contacts are we maintaining with sections of the white community in Rhodesia that are

    341
    not represented and would not wish to be represented by Mr. Smith and the Rhodesia Front Party?
    Dr. Owen: This presents obvious difficulties. I have always adopted an open door policy, discussing many difficult issues with a variety of different people, and not always those who are the elected or declared representatives of the people. I think that we have to keep in touch. We must also try to ensure that all views in Rhodesia recognise the essential reasonableness of the proposals put forward by the British Government.
    Mr. Brocklebank-Fowler: May we infer from the Secretary of State's remarks that he does not accept the recent decision by the front-line Presidents, subsequently endorsed by the OAU, that the Patriotic Front should be the sole representative of black African Rhodesians in the forthcoming negotiations? If so, will he advocate a referendum inside Rhodesia to determine the leadership of the African people in any forthcoming negotiations?
    Dr. Owen: I do not believe that they have actually said that the Patriotic Front should be the sole representatives. I remain solidly of the view that we should have a wide representation, and this was represented at the Geneva Conference. That is the formulation with which I should like to remain. The Geneva Conference is only in recess.
    Mr. Robert Hughes: Has my right hon. Friend yet received a report from the International Red Cross on the alleged abduction of children from Rhodesia into Botswana, which was the subject of an emergency debate a couple of weeks ago?
    Dr. Owen: Unfortunately, we have not yet received a report from the Red Cross. It would obviously be helpful to have it, but we have been keeping in the closest touch with developments, and I have seen reports of the situation.
    Mr. Maudling: Is it a fact that the British proposals turned down by Mr. Smith were, as we were told by the right hon. Gentleman's predecessor, different only in detail from the Kissinger proposals that were turned down by the nationalists? If this is so, why do the Government continue to blame Mr. Smith and help the nationalists?
    Dr. Owen: If the right hon. Gentleman is to be fair—and he is fair on these matters—he will agree that the manner in which Mr. Smith turned these proposals down seemed to foreclose the option of using them as the basis for negotiation. The proposals put forward by the British Government were a genuine attempt to try to bring the parties together into negotiations, difficulties having arisen over the five main Kissinger principles. It was the rejection of even the chance of discussion which presented the central problem.
    Mr. Thorpe: When the right hon. Gentleman has talks with the American Government, will he be in a position to assume that Mr. Smith still favours accepting African majority rule in two years?
    Dr. Owen: I am told that this is the case, and it is extremely significant and important that it should remain so. That was the single most significant achievement of Dr. Kissinger. It was a considerable achievement to get Mr. Smith publicly committed to eventual majority rule on a time scale. I hope that there will be no shift from that position. If we can build on that as the basis for progress over the next few months, at least we shall have something concrete with which to work.
    Mr. Lee: Is there not a danger that Mr. Smith may be repudiated by people even further to the Right than himself since he appears to be in danger of repudiating his own belated attempts to remove offensive racial legislation within his own domain?
    Dr. Owen: There is that danger, and there have been occasions when Mr. Smith has taken a stance which he has had difficulty with some of his more extreme followers in carrying. But the history of the negotiations shows that it is usually Mr. Smith who is able to keep his own caucus in line, and it is most important that he should be the person to whom we should pin the commitment to majority rule.
    Mr. John Davies: Does the right hon. Gentleman wish to reconsider his answer to my hon. Friend the Member for Norfolk, North-West (Mr. Brocklebank-Fowler)? Surely the truth is that the

    343
    front-line Presidents made a clear statement of the need to prefer the Patriotic Front to the exclusion of all others in the ongoing negotiations. Was that not a primary factor in Mr. Smith's rejection of the Government's counter-proposals? If the Foreign Secretary has a real new initiative to take, it is to set aside that consideration and to make it very clear that he wishes all parties to be deeply involved in the selection of any majority Government.
    Dr. Owen: I want to make it clear that we want all parties to be deeply involved. As I understand it, the front-line Presidents did not go quite so far as the right hon. Gentleman infers as to use the word "sole". The statement went further than I think was desirable—and I have made this clear—in giving a primacy in the discussions. But I do not think that the statement went so far as totally to exclude other involvement in the negotiations.

    Suppression of Terrorism (Convention)
    Mr. Biggs-Davisonasked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a further statement on the bringing into effect of the European Convention on the Suppression of Terrorism.
    The Minister of State, Foreign and Commonwealth Office (Mr. Frank Judd): I refer the hon. Member to the reply that my right hon. Friend gave the hon. Member for Southend, West (Mr. Channon) on 4th February. Her Majesty's Government will ratify the convention as soon as the necessary legislation has been passed by Parliament.
    Mr. Biggs-Davison: In view of the difficulties presented by both the Irish constitution and the French Government, what consideration has been given to the Irish Government's idea that the principle of the parallel criminal jurisdiction legislation passed here and in Dublin should be extended to Europe so that terrorists can either be extradited or tried locally?
    Mr. Judd: I have nothing to add to the remarks of my right hon. Friend the Secretary of State for Northern Ireland and my right hon. Friend the Prime Minister in the House on 10th February. Reciprocal extra-territorial legislation is
    344
    in force between Northern Ireland and the Republic. As for discussions in France and Ireland, I am sure that the hon. Gentleman will recognise that it would not be appropriate for me to comment at this stage.
    Mr. Powell: May I ask the Government to give no countenance to the suggestion of extending the inherently objectionable principle of extra-territorial jurisdiction?
    Mr. Judd: I shall bear in mind the strength of what the right hon. Gentleman said.
    Mr. Marten: As the Common Market countries agreed some months ago to do all they can to suppress terrorism, what have they done about Abu Daoud? Have they avoided the matter because it was inconvenient, or are they doing something about it?
    Mr. Judd: This is not a matter for me to comment upon. It is essentially a matter for the French Government. In that connection it should be noted that the convention is not yet in force, and when it enters into force it will be binding only on those States which ratify it.

    Arms Trade
    Mr. Robin F. Cookasked the Secretary of State for Foreign and Commonwealth Affairs if he will initiate discussions with the United States Government on the issue of international restraint on the arms trade, in the light of recent suggestions by President Carter.
    The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Evan Luard): Her Majesty's Government are in touch with the new United States Administration on this question. As my right hon. and noble friend said in another place on 17th February, we await with interest further details of President Carter's proposals.
    Mr. Cook: In the meantime, will my hon. Friend clearly inform the House what response the Government made to Vice-President Mondale's invitation to co-operate with the United States Government in achieving multilateral talks on the restriction of arms sales? In particular, does my hon. Friend accept President Carter's view that the Middle East

    345
    is an area that particularly requires restriction on the volume of arms sales to it?
    Mr. Luard: We have noted with interest Vice-President Mondale's remarks in the conversation he had with my right hon. Friend the Prime Minister two or three weeks ago. I agree with my hon. Friend that any action on this subject must be on a multilateral basis and involve commitments by a large number of Governments. I agree that the Middle East is one of those areas where we would most like to consider restrictions of this kind. We restrain our own sales of arms to the area so as not to upset the military balance.
    Mr. Corbett: Will my hon. Friend consider going a little further and recognising that there is no future either in terms of employment here or for our foreign policy if we continue with this vile trade in arms? Does he agree that we should be trying to set an example to other countries, including the United States, by being much more restrictive in terms of those to whom we sell these offensive weapons?
    Mr. Luard: We exercise considerable restraint on the sale of arms. We consider each case on its merits. We do not sell arms to South Africa or Chile, other than those which we have an absolute legal obligation to provide. It would not be sensible for us unilaterally to cease sales of arms, however, if the only result of that was that similar arms were supplied by another country.
    Mr. Farr: If the hon. Gentleman enters discussions with the United States Government on this matter, will he also call to their attention the illegal supply of arms to terrorists in Northern Ireland? In view of the United States Government's recent declaration in this respect, will the hon. Gentleman supply them with all the material aid that they need?
    Mr. Luard: We have repeatedly drawn the attention of the United States authorities to the support that appears to be given to the IRA and others in Northern Ireland from certain sections in the United States. The authorities there are giving us the maximum possible co-operation on that.

    Rhodesia (Sanctions)
    Mr. Clemitsonasked the Secretary of State for Foreign and Commonwealth Affairs if he is satisfied that no major
    346
    British companies have been involved in the breaking of sanctions against Rhodesia.
    Mr. Robert Hughesasked the Secretary of State for Foreign and Commonwealth Affairs what evidence he has received about the breaking of Rhodesian sanctions.
    Dr. McDonaldasked the Secretary of State for Foreign and Commonwealth Affairs if he is satisfied with the operation of sanctions against Rhodesia by British companies.
    The Minister of State, Foreign and Commonwealth Office (Mr. Edward Rowlands): I am generally satisfied with the observance of sanctions against Rhodesia by United Kingdom firms, but where we have evidence suggesting breaches of sanctions we certainly investigate these. Our record in this respect is second to none.
    Mr. Clemitson: Has my hon. Friend seen the documents "The Oil Conspiracy" produced by an American church group and "Shell and BP in South Africa" produced by the Anti-Apartheid Movement? If he has, does he agree that they contain allegations and evidence that British oil companies have been involved in breaking sanctions, which allegations and evidence warrant a full and independent inquiry? Does he agree that this is particularly important in the case of BP, since the Government have a majority shareholding in that company?
    Mr. Rowlands: As the reports to which my hon. Friend refers were published only yesterday, I have not had a chance to look at the evidence collected in them. I shall certainly look at it very seriously indeed and if there is evidence relating to sanctions-busting by British companies we shall take appropriate action.
    Mr. Hughes: While appreciating that it is only yesterday that the reports were published, may I ask whether it is not a fact that the Rhodesian régime can exist only for so long as oil is delivered to it in large quantities? Since the only companies that can deliver that oil are Mobil, Shell and BP, there is a strong circumstantial case that they are breaking sanctions. Will my hon.

    347
    Friend refuse to allow parent companies in London to say that these are subsidiary companies over which they have no control, in view of the large ownership that the companies in this country have in Southern Oil, for example?
    Mr. Rowlands: I do not think it would be right and proper for me to comment on what my hon. Friend has rightly described as circumstantial evidence. There have been occasions in the past when evidence that has been brought forward on this score has not been proved sound enough to take action. Any additional evidence will, of course, be looked at extremely seriously.
    Dr. McDonald: When my hon. Friend considers the reports that have already been mentioned, will he bear in mind that BP Southern Oil is 100 per cent. a British-owned company and that one of the managing directors of BP is also a director of Southern Oil? In view of this fact, will my hon. Friend seriously investigate the claims made by the parent companies and the claims made against them by the anti-apartheid group?
    Mr. Rowlands: We shall certainly look seriously at any new evidence that is brought forward relating to sanctions-busting by any British company, irrespective of its ownership.
    Mr. Amery: Is the hon. Gentleman aware that sanctions were introduced long before terrorism began, with the idea of exerting peaceful economic pressure on the Smith Government? Is he further aware that terrorism has increased to a large extent since then and that to maintain or even tighten sanctions at present means that we are becoming accomplices of the terrorist war against Rhodesia? Does the hon. Gentleman think that this is an acceptable position for the British Government to be in?
    Mr. Rowlands: The right hon. Gentleman referred to our being accomplices of the terrorists. But if we lifted sanctions at this stage we would be accomplices of the Smith regime. Only a couple of months ago this House debated sanctions and approved the order, which it has done for the past 11 years. We would be willing to lift sanctions if we could establish an interim Government who were acceptable to all.
    Mr. Brotherton: Does the hon. Gentleman agree that sanctions have totally failed, particularly as the only people they have hurt are the black Rhodesians? Does he also agree that the time has now come for the Government to go to the United Nations and say that it is right for sanctions to be lifted?
    Mr. Rowlands: Of course, sanctions have not been effective as they ought to have been. Nevertheless, they are a clear demonstration by this country that we stand by what we said—that the Smith regime is illegal and that we do not intend to condone it in any way.
    Mr. George Rodgers: Does my hon. Friend agree that if sanctions had been applied vigorously and efficiently, the Rhodesian economy would have collapsed years ago? Will he conduct an independent inquiry into the allegations that were made yesterday?
    Mr. Rowlands: There are well-known and established procedures for dealing with evidence in relation to any cases of sanctions-breaking. Those procedures should be followed in this case as, indeed, they have been in previous cases.

    Middle East
    Mr. Luceasked the Secretary of State for Foreign and Commonwealth Affairs when he next plans to have consultations with the United States Administration and Great Britain's partners in Europe regarding the prospects for a peace settlement in the Middle East.
    Dr. Owen: We are in constant touch with our partners in the Nine, and with the United States Administration, on this subject.
    Mr. Luce: Will the Secretary, of State encourage a joint American-Community policy that encourages the Palestinians to recognise Israel's right to exist and also urges the Israelis to dismantle the 80 settlements in Arab-occupied territory, which in itself is highly provocative? Is it not essential to get concessions from both sides before any progress can be made?
    Dr. Owen: It is probably true that we shall not get a peace settlement without a change in the present position of both the main parties to the dispute. With regard to a joint position with the United

    349
    States Administration, there is great value in having as strong consultation and co-operation between the Community and the United States Administration as is possible and feasible. But they are both independent decision-making bodies. The political co-operation machinery in the Community is used to the full, but the Community is sovereign and will make decisions in its own right. Similarly, so will the United States Administration. What we wish to do is try to encourage both to keep in step and keep each other as fully informed as possible of the views of the member States of the Community and the United States.
    Mr. Roy Hughes: Does my right hon. Friend agree that it is no good trying to leave out the Soviet Union, because that country has a vital part to play in any peace settlement in the Middle East? Does he not further agree that it is now an urgent need to reconvene the Geneva Conference with a distinct Palestinian entity at that conference?
    Dr. Owen: I agree that the Soviet Union, as part of the Geneva Conference, will have to be involved. There may be a case for going to Geneva, but there is no case for going to Geneva until there is a sensible basis for a negotiated settlement. One of the issues that still have to be resolved—it is perhaps central to whether we can go to Geneva—is the present attitude over representation, about which there are strongly held views on both sides. As a result of the efforts of Dr. Waldheim and Secretary of State Vance, it should be possible to get around this real difficulty.
    Mr. Hurd: The Secretary of State said yesterday that he himself would be going to the Middle East before long. Will he do so, at least in part, in his capacity as President of the Council of Ministers? How does the right hon. Gentleman see European interests in a settlement being brought effectively to bear on the situation?
    Dr. Owen: I said that I was going to visit Egypt in a few weeks' time and that I would also be going to visit Israel. When I visit Egypt I shall still be holding the presidency of the Council of Foreign Ministers. Already the French and German Foreign Ministers have been to the area, and I believe that the Com-
    350
    munity will fairly soon discuss their reports and impressions. It is impossible to go without holding the presidency, but whether one would act in the capacity of the President depends on the decisions of the other eight member States.
    Mr. Rifkind: Will the Secretary of State press for a joint initiative with our allies to protect European business men from improper pressures from the Arab boycott office? Does he realise that the initiative already taken by the American Secretary of State has led to subsequent concessions by the Arab boycott office with regard to American exporters? Will the right hon. Gentleman now take similar action to protect British exporters?
    Dr. Owen: I am firmly opposed to the boycott. I have made that categorically clear and I do so again at this time in my capacity as Foreign Secretary. I should welcome discussions with the new American Administration about their new measures.

    United States Secretary of State
    Mr. Corbettasked the Secretary of State for Foreign and Commonwealth Affairs when he next plans to meet the United States Secretary of State.
    Dr. Owen: President Carter has invited my right hon. Friend the Prime Minister to visit Washington from 10th to 12th March. I shall accompany my right hon. Friend and I also look forward to holding discussions with Mr. Vance in the course of the visit.
    Mr. Corbett: During that visit will my right hon. Friend consider talking to Mr. Vance to see what help Britain, as a second-rate nuclear Power, can give to the fulfilment of President Carter's inauguration pledge to rid this planet of the scourge of nuclear weapons? Will my right hon. Friend also discuss with Mr. Vance what specific joint Anglo-American initiative can be taken to make some real progress in the SALT talks, as one vital way of helping to cure the economic problems of this country?
    Dr. Owen: The Strategic Arms Limitation Talks are between the United States and the USSR, although Britain has a vital interest in them. I have already made it clear to the House that I consider a successful conclusion to these talks

    351
    is very strongly in the interests of everyone in the world. I have never made any secret about the fact that I believe in nuclear disarmament. What we need are sensible and realistically negotiated settlements. I think that is the clear intention of the new American Administration, and it was highlighted by President Carter in his inaugural speech.
    Mr. Churchill: Will the Secretary of State appreciate that the United States Government are very much concerned about the Soviet Union's nuclear supersonic strike bomber, the Backfire, and that they are particularly concerned by the fact that, at the encouragement of Her Majesty's Government, certain British firms, principally Lucas Aerospace and Plessey, are providing very high technology indeed for improving the engine of the TU 144, which happens to be the same engine that powers the Backfire, and that this might give this nuclear strike bomber a two-way capability of crossing the Atlantic from Soviet bases to the United States?
    Dr. Owen: The question of the transfer of high technology is a matter of concern and is usually discussed on a confidential basis between us and the United States Administration. If there is concern about this matter, no doubt they will raise it with me when I am in Washington.
    Mr. Greville Janner: When my right hon. Friend sees Mr. Vance, will he express appreciation for the support given by the United States to Britain's proposal to the Human Rights Commission of the United Nations that there be an independent inquiry into the deaths of Archbishop Luwum and the two Ministers? Meanwhile, is it not disgraceful that this proposal was rejected? Will my right hon. Friend tell the House which of our Commonwealth colleagues saw fit to vote against it or to abstain?
    Dr. Owen: I welcome the United States' position on the whole vexed and deeply disturbing problem of Uganda. I am deeply disappointed that our proposal, made under the confidential procedure, for an investigation of the human rights situation in Uganda, was narrowly defeated in Geneva yesterday. I regard the resolution that was adopted as insufficiently firm, far-reaching or effective.
    352
    This leaves us with no alternative but to press for an investigation in the open debate that is due to take place shortly. Our proposal would accord with but be rather wider than the United Nations Secretary-General's call for an impartial investigation of the recent deaths of Arch-bishop Luwum and two others.
    Mr. Townsend: When the right hon. Gentleman is in Washington with his right hon. Friend the Prime Minister, will he discuss the recent talks between President Carter and Mr. Bukovsky, and will he then try to persuade the British Prime Minister to be rather more robust and effective in giving leadership on this vital question of human rights in Russia?
    Dr. Owen: I have never made any secret of my own concern or the Government's concern on the whole issue of human rights. As to Mr. Bukovsky, he was asked to see my right hon. Friend the Minister of State, who was looking forward to seeing him. Unfortunately he was not able to keep the appointment. There are no major differences between us on this issue.

    Nuclear Technology
    Mr. Formanasked the Secretary of State for Foreign and Commonwealth Affairs whether Her Majesty's Government intend to respond positively to proposals by the new United States Administration for further limiting the spread of nuclear technology.
    Mr. Luard: As my right hon. Friend's predecessor said on 22nd December 1976, we wholeheartedly welcome the high priority which the new United States Administration are giving to this question. When they put forward firm proposals, we shall study them with care, and I expect our response to be positive.
    Mr. Forman: Is the hon. Gentleman aware that I welcome that positive response to the indications of the new American Administration's attitude? Is he prepared, on behalf of the British Government, specifically to follow up what the Foreign Secretary himself indicated yesterday—namely, that he would give a fair wind to some of the specific proposals involved, such as a moratorium on commercial reprocessing until the need, cost and safety have been fully

    353
    assessed, and a strengthening of the International Atomic Energy Agency, particularly on the very important safeguards side, where the Agency is very undermanned?
    Mr. Luard: I certainly assure the hon. Gentleman that Her Majesty's Government are as concerned about this question as the United States Administration or any other Government. On the question of reprocessing, we certainly share the concern about the export of this technique and we support attempts to limit the export of either reprocessing or enrichment or the production of heavy water. On the final point, we certainly agree that an essential element of this is to improve the inspection and other techniques of the IAEA.
    Mr. Frank Allaun: Has not the American President recently proposed stopping all tests, underground as well as in the atmosphere, and would this not probably prevent the invention and the production of further nuclear weapons? Why has Britain not publicly supported this great initiative, which has received a response in Russia? When the Foreign Secretary goes to Washington, will he publicly acclaim this great move towards peace?
    Mr. Luard: I certainly expect that my right hon. Friend and the Prime Minister will discuss this question when they go to Washington. Certainly we notice with great interest this proposal and, as my hon. Friend has said, the response that has come already from the Soviet Union. including the suggestion that there might be on-site inspection, which is one of the most important aspects of the question. We should like to follow that up and see whether it means what it appears to mean.
    Mr. Robin F. Cook: As it requires only three months to withdraw from the proposed non-proliferation treaty, is it wise for Great Britain to agree reprocessing contracts with countries such as Japan, whose contract, if fulfilled, would provide for the return of a very large volume of plutonium to that country?
    Mr. Luard: We certainly see no reason to suppose that Japan will withdraw from the non-proliferation treaty. How-
    354
    ever, this aspect of the matter to which my hon. Friend has drawn attention is important, and we shall certainly bear it in mind.

    East of Suez
    Mr. Newensasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on current British policy east of Suez and indicate any direct commitments which remain.
    Mr. Judd: The Government's broad policy east of Suez is, of course, to promote British and general Western interests there, within the limits of our resources. Our direct commitments are to our British dependent territories and those arising from bilateral and multilateral links which we have with independent countries.
    Mr. Newens: What commitments does Britain still have through CENTO and SEATO? Is it not time that both these alliances were wound up, and should not Britain in any case sever any arrangements that she has with them, if for no other reason than the very practical reason that it is no longer physically possible for Britain to deploy military forces east of Suez?
    Mr. Judd: I am sure my hon. Friend will recognise that we continue to be a party to the Manila Pact. The South-East Asia Treaty Organisation will be wound up by June this year, but the treaty itself will remain in being. Concerning CENTO, as we announced following the defence review, we retain our membership.
    Sir Anthony Royle: Will the Minister confirm that the British forces in Brunei are there at the cost of His Highness the Sultan and that no burden falls on the British taxpayer for them?
    Mr. Judd: Brunei is a sovereign State in treaty relationship with the United Kingdom. We are responsible for external relations and we have a commitment to consult in the event of any external threat. A British Gurkha battalion is stationed in Brunei. We are now discussing with the Government in Brunei proposals for withdrawing this battalion and modernising our relationship.

    Mozambique
    Mr. Brothertonasked the Secretary of State for Foreign and Commonwealth Affairs if be will visit Mozambique.
    Mr. Rowlands: My right hon. Friend has at present no plans to do so.
    Mr. Brotherton: Will the Minister get his right hon. Friend to follow the lead given by my noble Friend Lord Home of the Hirsel, and get him to condemn unequivocally the activities of the guerrillas operating in Rhodesia from Mozambique? Will he also get his right hon. Friend to tell the Government of Mozambique that until they stop harbouring those guerrillas not one penny piece more of British taxpayers' money will be given to them in aid?
    Mr. Rowlands: On many occasions we have made very clear our position on the guerrilla war. I have myself spoken twice last year to President Machel. As for aid to Mozambique, our aid is in part to offset the impact of sanctions, which the Mozambique Government have adopted in accordance with the wishes of this House and the British Government.
    Mr. Maudling: Are the Government really intending to continue financial aid to Mozambique while the Mozambique Government are conniving at and encouraging the activities of terrorists from Mozambique in Rhodesia?
    Mr. Rowlands: We shall fulfil the aid programme that we have established under the normal aid criteria.
    Mr. Robert Hughes: May I ask my hon. Friend not to be at all deterred by the noises from the Opposition Benches and to continue to give aid to Mozambique, which is playing a very large part in trying to bring down the Smith régime? How much aid has reached Mozambique? How much humanitarian aid to help refugees in Mozambique has actually reached the camps?
    Mr. Rowlands: I cannot give details on the last point. A loan agreement for about £5 million has been signed.

    Hong Kong
    Mr. Parryasked the Secretary of State for Foreign and Commonwealth Affairs if he is satisfied with the social advance of Hong Kong.
    Mr. Luard: Her Majesty's Government have welcomed the Hong Kong Government's plans for further progress in labour, social and allied fields. My right hon. Friend is satisfied that the Hong Kong Government are making good progress in dealing with their social and other problems.
    Mr. Parry: Is my hon. Friend aware of the deep resentment that is felt among many grass-roots organisations in Hong Kong? Does he not agree that unless there are further aids and reforms there could be disturbances and, indeed, riots similar to those that occurred in 1967?
    Mr. Luard: I know Hong Kong quite well. I have spent a year of my life there. I do not honestly expect the kind of disturbances that my hon. Friend has mentioned in the immediate future. I am sure my hon. Friend knows that at the opening of the current session of the Legislative Council this year the Governor of Hong Kong announced rather sweeping measures in the very field about which my hon. Friend has spoken—social reform—for example, not only measures concerning labour relations and social welfare but measures that will raise the school leaving age to 15 by 1980 and double the rate of State house building.
    Mr. Blaker: Will the Minister bear in mind the burden imposed on the Hong Kong Government by a population which has increased eightfold since the war? In view of this, Hong Kong has achieved remarkable social and economic advances and now has one of the highest standards of living in Asia. Its GNP last year increased by 16 per cent. while the rate of price increases was less than 4 per cent. Will the Minister invite a team of advisers from Hong Kong to come here and advise our Government?
    Mr. Luard: I accept that the rate of economic advance in Hong Kong has been very striking. On the other hand, I do not deny that we have a responsibility for this very important colony—the largest of our remaining colonial possessions. It is up to the Government of Hong Kong to ensure that social conditions correspond to the high standard of living to which the hon. Member has just drawn attention.

  EUROPEAN COMMUNITY

    Direct Elections
    Mr. Martenasked the Secretary of State for Foreign and Commonwealth Affairs whether he will discuss direct elections with the French Foreign Minister.
    Dr. Owen: I am ready to discuss this matter on any suitable occasion.
    Mr. Marten: In view of the increasing unpopularity of the Common Market in both Britain and Denmark, would it not be wise—I mean this as a helpful suggestion—for the Common Market to reconsider the whole question of direct elections? Also, in view of the possible enlargement of the Community with Spain, Portugal and Greece, would it not be wise to consider at the same time the real aims of the EEC today?
    Dr. Owen: I always take questions from the hon. Member as being asked in a most helpful spirit, particularly on EEC matters. I think that a reconsideration has, in fact, occurred in Denmark. The Danes are taking steps towards meeting the May-June 1978 target date. Every Government must try to seek to carry public opinion with them on any aspect of policy, but particularly on direct elections. That is the British Government's view too.
    Mr. Jay: Would it not be better to clean up the scandal of the common agricultural policy before we wade further into the Brussels quagmire? Is it not wholly disreputable that, with the connivance of the Commission, 30,000 tons of butter has been sold to the Soviet Union at one-quarter of the price at which it is sold in member States in order to make further profits for a French Communist millionaire?
    Dr. Owen: I have a great deal of sympathy with what my right hon. Friend has said. I made it clear to the House yesterday that this deal can be criticised very strongly on many different grounds. Although my views do not always coincide with those of my right hon. Friend on EEC matters, I have made it clear that where there are grounds for criticism we will criticise.
    Mr. Henderson: Will the Foreign Secretary accept that we are encouraged by his views about the common fisheries policy and the results that have been achieved to date? What are his views on the Irish Government's proposal to limit, as a conservation measure, fishing within 50 miles—
    Mr. Speaker: Order. I think that the hon. Member's supplementary question comes later. We are discussing direct elections.
    Mr. Henderson: Then I will have another supplementary—
    Mr. Speaker: Order. Hope springs eternal, even in Scotland.
    Mr. Jim Spicer: Is the Foreign Secretary aware that there were some initial difficulties on direct elections for the French? Will he confirm that those difficulties have now been removed, and will he indicate at the same time what other member States within the EEC seem to have problems in their approach to direct elections, other than the United Kingdom?
    Dr. Owen: I believe it is true to say that the constitutional court's ruling leaves the way open for the French Government to put proposals before their Parliament. They have not yet produced these proposals, and it is true that as yet no member State has passed fully the necessary legislation for direct elections. The Government with the most difficulties hitherto appear to be the Danish Government, and they are reconsidering their position. The promised White Paper will cover the question of the electoral system and will make an assessment of the various systems. At the moment, if we follow the Select Committee's proposals, we will be the odd man out. However, there is nothing against that as there is no necessity for a uniform electoral system.
    Mr. Whitehead: If it is true that the Commission and a French Communist millionaire are making the EEC more unpopular, is that not all the more reason for hastening direct elections? It would be a total mistake for this party, above all others, to turn its back on the elective principle in these matters.
    Dr. Owen: I believe in democratic Socialism, and I always have done. I have never believed that it is in the tradition of the Labour movement to turn aside from any democratic process. What we wish to ensure is that the democratic process is reflected in a variety of different ways. I would argue that it should be reflected in the decision-making of the Council of Ministers and in discussion on the Common Market in this House. Most hon. Members would agree that a system of nomination of Members of the European Assembly is not wholly appropriate to the full democratic process.
    Mr. Hurd: May I press the Foreign Secretary on the matter raised by my hon. Friend the Member for Dorset, West (Mr. Spicer)? Can he confirm from his own sources the information that was given in an interesting survey in The Times last week that all other EEC countries, including France, now see their way clear to meeting the target date, both politically and legally? If that is so, will the right hon. Gentleman use his best endeavours to bring this matter before the House without further delay and in a form which would turn to practical effect the broad support that the majority of this House would give to the principle of direct elections?
    Dr. Owen: My right hon. Friend is not keen for me to be pressed too far. I have already indicated that the White Paper will be put before the House in a matter of a few weeks, and I cannot be dragged into the argument any further. The House will then debate and discuss these issues, on which we have not yet had a full discussion. It is perfectly clear that there are differing views on both sides of the House on this matter, which would mean a constitutional change. We need to carry the agreement of the House as a whole, and that is what we intend to do.
    Mr. Thorpe: Will the Foreign Secretary take comfort from the fact that we shall have a very good debate on this matter, which is one of the very few issues on which the Government are sure of a majority? That is a very happy change.
    Dr. Owen: I choose my friends with circumspection. I am very fond of the right hon. Gentleman, who is a fellow
    360
    Devonian Member, but I will look for support from my hon. Friends on my own side of the House. I am prepared to take time to persuade my hon. Friends, even my hon. Friend the Member for Bolsover (Mr. Skinner), that it is in the interests of what many of them hold very close—proper scrutiny of the Common Market and of the Commission—to have that scrutiny through a properly elected European Assembly.

    Commission Proposals
    Mr. Spearingasked the Secretary of State for Foreign and Commonwealth Affairs what arrangements he has made for Departments of Government to obtain updated proposals of the EEC Commission.
    Mr. Judd: The EEC Commission very seldom puts forward updated proposals for Council legislation. When it does so, those proposals are made available to Government Departments in the usual way. They are also deposited in Parliament. No special arrangements are required to cater for this possibility.
    Mr. Spearing: I thank my hon. Friend for that reply. Does he agree that, in pursuing proper scrutiny of the EEC proposals, it is necessary for this House to have available all the relevant documents? Although we know that the Government have done their best, it is clear that some documents are available to some citizens and bodies in this country—documents which the EEC will not allow to come to this House. If that is so and my hon. Friend can confirm the situation, will he make representations to the EEC to change that classification?
    Mr. Judd: The Government recognise the force of my hon. Friend's remarks. Obviously the House wants to have at its disposal the fullest possible information as a basis for any debate, but documents produced in the framework of the Council are normally confidential. The United Kingdom, in common with other member States, is required to observe that confidentiality. If hon. Members obtain their own copies of such documents from other sources, that is not a matter for the Government. The Government will seek to ensure that full information is available to the House in time for debates on EEC documents.
    Mr. John H. Osborn: Will the President of the Council of Ministers, in taking office next week—and I hope to be there to welcome him—bear in mind that the European committees as well as the House would welcome information on the proposals? We would particularly welcome the views of this House before we go into committees and into the Assembly. It is difficult to obtain an adequate correlation of information, and I very much hope that the Minister will take up this matter when he goes to Strasbourg next week.
    Mr. Judd: I assure the hon. Gentleman that all Ministers concerned in this matter understand what is at stake. It has fully registered with us all. We shall be seriously examining the matter with our colleagues.
    Mr. Raphael Tuck: Will my hon. Friend consider updating the proposal for stopping the disgraceful sale of subsidised butter to Russia or any other country? When we joined the EEC, were we not sold a pup?
    Mr. Judd: My right hon. Friend has already dealt with that point, and the action taken by the Government this week shows how strongly we feel about this matter.
    Mr. Ronald Bell: Does the Minister realise that the fact that occasions when the Commission comes forward with new proposals are so rare points exactly to the difficulty, namely, that the development of legislation and its redrafting are carried out within the Council of Ministers, without any new proposals emerging from the Commission, and that whereas new proposals from the Commission would come to this House, the process inside the Council of Ministers is confidential. What would the Minister say if the legislative process in this House were also secret?
    Mr. Judd: I am sure that the hon. and learned Gentleman will accept from what has been said in all parts of the House that his point is well taken. The Government are concerned about this matter and are closely examining the situation. I am sure that he will recall that my right hon. Friend the Lord President of the Council told the House on 28th February, in reply to a Question tabled by the hon. Member for Broms-
    362
    grove and Redditch (Mr. Miller), that he is now considering the problem and will provide the House with updated information on the progress of proposals for purposes of debate in this House.

    Helsinki Final Act
    Mr. Blakerasked the Secretary of State for Foreign and Commonwealth Affairs what recent consultations he has had with the other EEC Foreign Ministers about the observance by the Union of Soviet Socialist Republics and other Eastern bloc countries of the provisions of Basket III of the Helsinki Agreement.
    Dr. Owen: Compliance with the provisions of Basket III of the Helsinki Final Act by signatory States is one of the questions on which EEC Ministers have already consulted, and these discussions will continue amongst the Nine in preparation for the Belgrade review meeting. It is an important part, but only a part, of the whole framework of the Helsinki Agreement.
    Mr. Blaker: Is the right hon. Gentleman aware that I welcomed his statement yesterday that the Government will not hesitate to speak frankly when they consider that the performance of obligations under the Helsinki Agreement by other signatory countries is unsatisfactory? Is that also the view of the other Common Market countries? In view of the unanimous advice by the Russian dissidents that the best way of helping dissidents in the Soviet Union is to speak frankly, will he encourage his right hon. Friend the Prime Minister to emulate President Carter in that respect?
    Dr. Owen: The Government's stance on human rights issues is well known. There are other aspects of the Helsinki Agreement and the Final Act to be taken into account. The way in which we should respond to a given violation of human rights requires careful judgment. I make no secret of the fact that we shall put our views frankly—sometimes publicly, sometimes in speeches, and sometimes by exerting varying forms of pressure. This is a very complex and difficult area, but what is important is the progress that is made. We hope at Belgrade to assist the progress that has been made in the past 18 months. I have made no secret of the fact that pressure will have to continue

    363
    long after the Belgrade review conference if we are to be satisfied with the completion of the Final Act.
    Mr. Flannery: Does my right hon. Friend agree that any struggle to free peoples from torture or from having peen wrongly gaoled is welcome in any country, and certainly that applies to the Soviet Union or Eastern Europe? Would it not be helpful if Opposition Members would also struggle to free people in Chile and Fascist States as well as in Eastern Europe and the Soviet Union?
    Dr. Owen: I very much agree with my hon. Friend. In dealing with human rights, when there are violations we shall carry more conviction if we are seen to apply our standards around the globe. I said that to the House yesterday. It would be helpful if on more occasions we could have the same degree of support from the Opposition Benches when dealing with violations in Chile and in some areas of South Africa as when there are violations of human rights in Communist countries. We must all of us be concerned about violations, from wherever they come. We shall carry more weight with Communist countries if they see that we condemn violations of human rights elsewhere in the world.
    Mr. John Davies: Does the right hon. Gentleman realise that his remarks will cause resentment among the Opposition? He has only to read the speech made by my hon. Friend the Member for Horn-castle (Mr. Tapsell), in replying for the Opposition Front Bench to yesterday's foreign affairs debate to know how much support we give to these considerations.
    Dr. Owen: I am the first to admit that the speech made by the hon. Member for Horncastle (Mr. Tapsell) in yesterday's debate was an extremely thoughtful and helpful contribution to the African debate. I recommend it to my hon. Friends. I think I made a fair comment on the situation. I must tell the right hon. Member for Knutsford (Mr. Davies) that I did not intend to refer to him personally.
    Mr. Burden: Many of us resent the Minister's remarks.
    Dr. Owen: The hon. Member for Gillingham (Mr. Burden) will know that many criticisms have been levelled at
    364
    some of my Labour colleagues who have been concerned about the situation in Chile. I strongly welcome what was said by my hon. Friend the Member for Sheffield, Hillsborough (Mr. Flannery), with his well-known views about violations in Chile and in Communist and Eastern European countries.

    Euro-Arab Dialogue
    Mr. Waltersasked the Secretary of State for Foreign and Commonwealth Affairs if he is satisfied with the progress of the European-Arab dialogue; and if he will make a statement.
    Mr. David Watkinsasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the United Kingdom's contribution in the dialogue between the EEC and the Arab League.
    Mr. Judd: The second meeting of the General Committee of the Euro-Arab Dialogue took place in Tunis from 10th to 12th February. The atmosphere was positive and frank and both sides were satisfied with the outcome. The Government played their full part in the Nine's preparation for the meeting and, as holders of the Presidency, the United Kingdom led the Community delegation.
    Mr. Walters: When we bear in mind the enormous potential advantages that could arise from Euro-Arab co-operation, has not progress been regrettably slow? Is it not time to remove one obstacle at least, namely, the question of Palestinian representation, and should not the EEC accept the reality of the situation as the United Nations has done?
    Mr. Judd: The hon. Gentleman will be pleased to know that the British Government attach great importance to this dialogue. At the recent meeting valuable work was carried out on the transfer of technology, commercial and cultural co-operation, protection and encouragement of investment, and labour and agricultural projects. The remainder of the hon. Gentleman's supplementary question raises a wider issue.
    Mr. Watkins: Will my hon. Friend assure the House in regard to the EEC statement—which was agreed at a meeting in London on 29th January but which was not made public—that the

    365
    Government exerted their influence to try to make that statement public—and if not, why not?
    Mr. Judd: I hope that this afternoon I made our position plain on the dialogue. The British Government welcome the dialogue, and we feel that it has made a valuable contribution to Euro-Arab relations, to which both sides remain committed.
    Mr. Peter Bottomley: Will the Minister assure the House that the EEC will take up the question of the boycott of trade on the same lines as the United States now appears to be following?
    Mr. Judd: The hon. Gentleman will have noted what my right hon. Friend has already said on that subject.
    Mr. Greville Janner: I greatly appreciate what the Foreign Secretary has said, not only this afternoon but many times, and his unequivocal denunciation of the Arab boycott. Will he take up with his European colleagues the question of how such blackmail can be made unremunerative by international action?
    Mr. Judd: My right hon. Friend has made his position absolutely clear. The way forward is one that we shall consider together with our colleagues in Europe.

AIRCRAFT AND SHIPBUILDING INDUSTRIES BILL
The Secretary of State for Industry (Mr. Eric G. Barley): In the light of the findings of the Examiners in the House of Lords that the Aircraft and Shipbuilding Industries Bill is hybrid, the Government have considered what action should be taken.
The Government have decided that, in view of the grave industrial consequences of further delay to the Bill, they intend to deal with the situation created by the Examiners' findings on hybridity by proposing amendments for the deletion of the 12 ship repairing companies listed in Schedule 2 of the Bill.
Consultations have taken place with the Opposition through the usual channels and the Opposition have agreed that the Bill should now proceed to Royal Assent as a Public Bill in its present form, apart from the deletion of the 12
366
listed ship repairing companies. It has been agreed the Bill should receive its Second Reading in another place on Tuesday 8th March, with Committee and remaining stages on 10th March. The Bill will then return to this House for agreement to the necessary amendments. It has been further agreed that the Bill should proceed to Royal Assent forthwith. I hope that the House will be content to proceed on this basis.
Ship repairing will remain one of the duties of British Shipbuilders. Several of the listed shipbuilding companies have ship repairing operations, and three of the 12 ship repairing companies now listed in Schedule 2 are already publicly owned and will be transferred to the Corporation. The Government understand that other privately-owned ship-repairing companies wish to be acquired by the Corporation, which will be free and willing to negotiate their acquisition.
The Government intend that vesting of the aircraft companies will be next month, if that can be achieved, and of shipbuilding companies in the late spring. A statement on this will be made as soon as possible.
Sir K. Joseph: Is the Minister aware that although we deplore the Bill and think that it is thoroughly bad for the country and the industries concerned, and although we have fought it every inch of the way, we welcome the Government's belated acceptance of the implications of the rules of procedure and of natural justice?
Will the Minister agree that my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) performed a valuable service in the protection of the rights of the citizen in identifying the hybridity which the Government then dodged and wriggled to deny but which has now been confirmed by a Committee containing two officials of this House and two officials of another place?
Will the Secretary of State agree that had the Government chosen to accept months ago what they are now accepting—the elimination of ship repairing from the Bill—we could not have stopped them from having the Bill last autumn? The delay of many months has been entirely the result of the pique of Ministers.
Will the Minister accept that we on this side are pledged to seek to return

367
the nationalised companies to the private sector when we have the opportunity?
Mr. Varley: If hon. Members look at the Examiners' report objectively they will find that no credit is due to the hon. Member for Tiverton (Mr. Maxwell-Hyslop) because the Examiners rejected most of the grounds upon which he said that the Bill was hybrid. On close examination of the report it will be found that the Examiners used such phrases as that they had to consider "arid and trivial points" and "grotesque questions".
But I do not want to go over the ground too much because the Bill has been before Parliament for three Sessions now and, quite clearly, the damage that was being caused to the industries was severe. That is why we found it reasonable to come to this arrangement.
In our view, the Examiners' findings leave the general position of hybridity in an unsatisfactory and uncertain state. The implications of the report for future legislation will have to be considered extremely carefully by the Government, and we shall do that as a matter of urgency.
Mr. Russell Kerr: Having regard to the widespread economic damage that has been caused by the politically—motivated campaign—particularly the campaign conducted in another place—is the Minister aware that his decision will be regarded by most hon. Members on this side as unavoidable in the circumstances and that it will be welcomed, particularly by hon. Members who have shipbuilding and aircraft interests?
Mr. Varley: I thank my hon. Friend for that comment. There is no doubt that extremely severe damage to the industry would have resulted from further delay, not only in shipbuilding, but particularly in the aircraft industry. British Aerospace could not have entered into the collaborative arrangements that are absolutely essential if that industry is to survive.
Mr. Richard Wainwright: Bearing in mind the ready co-operation of Opposition parties over the main parts of the Bill, will the Minister give an assurance that those of the 12 listed ship repairing companies that positively wish to remain private enterprises will not be subjected,
368
at any time, to any form of industrial discrimination or financial pressure from the nationalised sector or the Government?
Mr. Varley: I do not really understand that question. If the hon. Gentleman is saying that some of the ship repairing companies that are not to be nationalised—because they are included in the schedule to the Bill containing the list of the 12 companies which are to be excluded—ought to receive Government aid, that is something we shall look at extremely carefully.
Mr. Cledwyn Hughes: Is the Minister aware that the Government are to be warmly commended for taking this realistic step to resolve what had developed into a complex problem? Is he satisfied that there are viable boards to run the industries, particularly shipbuilding?
Mr. Varley: My right hon. Friend will be aware that over the last two months we have been rebuilding British Shipbuilders and its Organising Committee. I am confident that we have the men there to run the industry successfully, and I am sure that the managements of those companies that are to be taken into public ownership are ready to co-operate with us.
Mr. Maxwell-Hyslop: Will the Secretary of State congratulate the Minister of State, the hon. Member for Manchester, Ardwick (Mr. Kaufman), on his success in persuading the Cabinet to take this obvious step while the Secretary of State was away ill?
Has the Secretary of State noted that the facts concerning the Westminster Dredging Company that were denied on behalf of the Government in another place by Lord Peart were admitted as the truth by the Government's own witness at the hearing before the Examiners? Had Government Ministers admitted the true facts last year—which they could have discovered just as easily as Mr. Bailey—nine months would not have had to pass before we arrived at the point at which we have arrived today.
Mr. Varley: The hon. Gentleman is given to hyperbole and he exaggerates the truth. He has said on many occasions that the Bill was riddled with hybridity and, on the basis of a close

369
examination of the Examiners' report, he knows that that is not the case. We want to see the industries taken into public ownership as quickly as possible.
Mr. Heffer: Is my right hon. Friend aware that I trust that all hon. Members on this side will welcome the Government's acceptance of the reality of the situation, albeit with bitterness because of the objections that were raised and the fact that many of us still believe that there was no basic argument on the question of hybridity.
Would he agree that when Mr. Bailey and Bristol Channel Ship Repairers approach the Government next year—as they undoubtedly will—for financial aid from the Department of Industry, they should be asked to go to the new shipbuilding corporation and to consider becoming part of the nationalised industry?
Mr. Varley: Under the terms of the 1972 Industry Act, if a company comes to the Government and asks for assistance we have to consider the application. If Bristol Channel Ship Repairers or any other company which is not to be taken into public ownership came to us with a proposition, we should look at it—but only in relation to the overall corporate strategy of British Shipbuilders.
Mrs. Bain: Does the right hon. Gentleman agree that, having made one concession in an area of controversy, he has set a precedent, and will he therefore give a commitment, bearing in mind the rôle of minority parties in the House, that the Government will review another area of controversy—the establishment of a Scottish shipbuilding company?
Mr. Varley: We indicated during the passage of the Bill that we should want to look at the overall organisation of British Shipbuilders. Not only merchant shipping, but warship and marine engine companies are being taken into public ownership and certain divisions of the industry may have to have some capability in countries other than England and Wales.
Mr. Wigley: Is the right hon. Gentleman aware that my hon. Friends and I welcome his statement and regret only that it was not made six or nine months ago when we were advocating this
370
course? In order to ensure the trading situation of the companies that are not to be nationalised, can the right hon. Gentleman give an assurance that the Government have no intention of bringing in a separate Bill to nationalise any of these firms?
Mr. Varley: No.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. According to the Minister's statement, this matter will come before the House within a few weeks. I propose to call two more hon. Members from each side.
Mr. Blenkinsop: Will my right hon. Friend do his utmost to mitigate the damage caused by the action of hon. Members opposite by encouraging investment in the main ship repair yards, many of which are already in public ownership, and stimulate work towards achieving better worker relations in these yards?
Mr. Varley: We intend that there should be a viable shipbuilding industry with a long-term future. It would be unthinkable to allow that industry to be eliminated, and that was one of the reasons that we put forward time and again in justification of public ownership. Apart from the intervention fund that was announced a few days ago and was established so that we could obtain orders for British Shipbuilders—my hon. Friend is clearly right to say that if we are to have a viable shipbuilding industry, there must be an investment programme in the major yards.
Sir D. Walker-Smith: Would it not be appropriate and seemly for the Secretary of State to make some expression of regret for the delay which has resulted from his curt and contemptuous refusal last summer to heed the clear warnings of this side of the House about the undoubted hybridity of the Bill?
Mr. Varley: The right hon. and learned Gentleman makes the same mistake as his hon. Friend the Member for Tiverton. He also used exaggerated language in all our debates and talked not just of the Bill being riddled with hybridity—which the Examiners' report shows is not the case—but about an open and shut case. That is not true

371
either. If the right hon. and learned Gentleman wishes to be fair—which I very much doubt—he will agree that he claimed that there was hybridity not only in the ship repair section of the Bill but in other sections.
Mr. Small: Is my right hon. Friend telling the House that his statement was edited and endorsed by the Tory Front Bench or are we, as they say on the Clyde, gradatione vincimus that is, conquering step by step?
Mr. Varley: My statement had been discussed and agreed with members of the Opposition.
Mr. Tebbit: Will the right hon. Gentleman not agree that the Bill is hybrid and that one cannot exaggerate or minimise the truth of that statement? The Bill is hybrid—not a little bit or a great deal, just hybrid. Why has he delayed six or nine months in making a statement that he must have known was inevitable? Is the Government Chief Whip going to whip Government supporters through the Lobbies to take ship repairing out of the Bill? Would the right hon. Gentleman not agree that Christopher Bailey has shown, as has Freddie Laker, that if a person is prepared to fight, he can save his company from the Government?
Mr. Varley: My statement has been discussed between the two Front Benches and agreed. The Bill has been before the Examiners in another place and they have decided that there is hybridity in the ship repairing section. We accept the position and are removing that section. That is a simple statement of fact.
Mr. English: On a point of order, Mr. Speaker. Should the House not now investigate how much money was spent in the attempted bribery of hon. Members in order to achieve, apparently successfully, a change in Government policy?
Mr. Speaker: If the hon. Gentleman has proof of any bribery, he knows the course that he ought to adopt.
Mr. Burden: Further to that point of order, Mr. Speaker. The hon. Member for Nottingham, West (Mr. English) was not even listening to what you just said. In the circumstances, I suggest that he should do you and the House the courtesy of doing so.
Mr. Speaker: The hon. Gentleman will read in Hansard what I said. If he has any proof of bribery, he ought to bring it forward.
Mr. English: Further to that point of order, Mr. Speaker. I was careful in my choice of words. I said "attempted bribery" and I can prove that if you wish it.
Mr. Speaker: Order. I am always willing to look at any matters that hon. Members wish to bring before me.
Mr. Tebbit: Further to that point of order, Mr. Speaker. The hon. Member for Nottingham, West (Mr. English) has said that attempted bribery has caused the Government to change their policy. That is clearly an allegation that members of his Government have been influenced by bribery. Would it not now be appropriate for the hon. Member to withdraw his allegation against his own colleagues on the Front Bench?
Hon. Members: Oh.
Mr. Speaker: Order.
Mr. Buchan: Further to that point of order, Mr. Speaker. In view of the remarks that have been made, the most appropriate course of action would be to establish a board of examiners in the form of a Select Committee to investigate the activities of Bristol Channel Ship Repairers Limited throughout the last two years.
Mr. Speaker: We would be better advised to hear the application under Standing Order No. 9.

CHIEF CONSTABLE OF LANCASHIRE
Mr. Kilroy-Silk: I beg to ask leave, Mr. Speaker, 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 conduct of the Chief Constable of Lancashire as outlined in the report of the Chief Constable of Hampshire."
This concerns the extremely serious and grave allegations that have been made by Sir Douglas Osmond, the Chief Constable of Hampshire, in a report which, unfortunately, has been widely leaked in the Press in the North-West and which

373
has created a great deal of public controversy and dismay. The report shows that the Chief Constable of Lancashire, amongst other things, intervened in criminal cases at the behest and on behalf of his friends or friends of his friends, that he frequently associated with undesirable characters, and that he used his official car and public manpower for private visits and functions for himself and his family. The lengthy report, which is being published in full in local newspapers, shows a distressing and alarming abuse of powers by the Chief Constable of Lancashire and his potential to abuse those powers further.
This is an important and grave matter of great public importance. The credibility and impartiality of both the police force and the system of justice in Lancashire has been damaged by the activities of the Chief Constable in the revelations contained in the report by the Chief Constable of Hampshire. The morale of the police in Lancashire has been understandably affected.
It is not only a clear and specific case and one of public concern, but it is urgent. The report has been leaked, and it is a common cause of controversy and distress in Lancashire. It raises grave issues about the conduct of the police force as a whole and of the Chief Constable in particular and of several of his officers who have been said to be lying and covering up the abuses of the Chief Constable.
The matter is urgent because there are fears that the issue will be covered up and swept under the carpet. Two members of the police authority are named in the report. Too many local people arc involved in this for it to be dealt with by the Lancashire Police Authority. The issue should be debated in the House so that the Home Secretary can reply to the charges. The Home Secretary should institute a public local inquiry into the activities of the Chief Constable of Lancashire under Section 32 of the Police Act.
374
I submit that this is a far more serious matter and one that is far more important than the debate we are now to have, which can only exacerbate an industrial dispute.
Mr. Speaker: The hon. Member 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 conduct of the Chief Constable of Lancashire as outlined in the report of the Chief Constable of Hampshire."
The hon. Gentleman gave me notice that he wished to raise this matter today. As the House knows, under Standing Order No. 9 I am directed to take into account the several factors set out in the Order but to give no reasons for my decision. I have to rule that the hon. Member's submission does not fall within the Standing Order and, therefore I cannot submit his submission to the House.
Mr. Ronald Atkins: On a point of order, Mr. Speaker. Would it be in order for me to inform my hon. Friend—
Mr. Speaker: I have no doubt that the hon. Member will meet his hon. Friend in a short while.

BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 18TH MARCH
Members successful in the Ballot were:
Mr. Mayhew.
Mr. Le Marchant.
Mr. Brooke.

BUSINESS OF THE HOUSE
Ordered,
That, at this day's sitting, the Coal Industry Bill may be proceeded with, though opposed, for a period after Ten o'clock equal to the time spent on the proceedings on the Motion in the name of Mr. Hal Miller relating to the Adjournment of the House.—[Mr. Snape.]

MAPS
3.58 pm.
Mr. Clement Freud: I beg to move,
That leave be given to bring in a Bill to make illegal the publication or sale of maps that do not bear the date upon which the information contained thereon was valid.
I am sure that I am not alone among hon. Members in having bought maps on which the motorway ended at Watford or maps of a town on which half the streets in that town were not marked. In this day and age one has to tread a delicate balance between consumer protection and manufacturers annoyance; as the right hon. Member for Huyton (Sir H. Wilson) once said,
"One man's wage rise is another man's price increase."
If too many people spent too long trying to protect consumers we could have a totally absurd situation. We have already become something of a nation of litigants looking at the small print and wondering how it might be possible to embarrass producers. Without doubt many of the laws are verging on the absurd. At my local grocery shop the other day I bought a package of long-life milk on which it said that the contents should not be consumed after 15th September 1977. We are thinking of having a party on 16th September to see what has happened to the milk.
I have sought in the Bill to steer a careful middle path because it is not my desire in any way to embarrass cartographers any more than it is to cause the vast number of genuine consumers to be sold maps which are inaccurate, and thereby cause very considerable expense and annoyance. My Bill would make it obligatory for cartographers and map publishers to disclose the date at which the information contained is valid and would equally make it obligatory to print the price of the map on the cover. This is not only to protect the tourists, who are the prime purchasers of maps, but also to stop the totally unfair practice of selling remainder maps by covering up the original price and making it, by virtue of the new high price, appear to be more relevant than it is.
In any proposed legislation of this kind there is a duty on the part of the presenter to go to the industry and find
376
out whether it would accept the legislation. I began in the first instance by approaching the Secretary of State for Prices and Consumer Protection. He said that he was in favour of it. As a result, I wrote to his Department and was told that the Department was against it. I telephoned the person who had written to me and explained that the Secretary of State had been for it and the man expressed surprise and said "In that case we will look at it again". I am awaiting a letter from the Department, and have been waiting for one for over four weeks.
Oddly enough, the complaints that came to me regarding this proposed legislation came mostly from those people whom I actually thought that the Bill would protect—that is to say, the most reputable map companies. One of them wrote:
"A dated publication would lead the customer reasonably to expect the information to be correct to the date shown and this would, of course, be the intention of the Publisher. But the Publisher is at the mercy of the source of the information upon which he prepares his drawings and the accuracy of the compilers and draughtsmen. It may well be that information shown could be incorrect and that roads in existence for many years have been omitted and not brought to our attention. Making a claim that the publication was revised to a certain date would render the Publisher liable to infringement of the Trade Descriptions Act …".
I accept that no map is ever totally accurate; that even on the day a map is published there will have been some change. For example, if it is a town map, a road may have become a one-way road in the other direction or a new housing estate may have been built. But what I am seeking to do is to force publishers of maps to state from which source they got their information and when.
Another helpful cartographer wrote to me:
"We have just heard that the Ordnance Survey memorandum expresses the opinion that such a Bill would put an end to the publishing of maps both public and private in this country."
That is an extraordinary contention because every Ordnance Survey map already has a date printed on it. Why it should be felt that if all maps had their dates printed on them it would be the end of the Ordnance Survey and all other maps is beyond me.
Another letter said:
"Although your bill is well intentioned, as with all other bills it will ensnare those for

377
whom it was not intended …Another fear is that should your bill become law, the hundreds of helpful letters we receive each year drawing to our attention where we are wrong, would be replaced with threats of litigation …".
I totally reject that. People do not buy maps in order to litigate, and it is as easy for all map publishers to go on doing what some are doing now, which is to state that at the time of making up the map the information contained was as accurate as possible and that it was derived from or based on Ordnance surveys, or whatever.
I have had a helpful letter from the RAC, though it also felt that the Bill might hail the end of cartographers. It wrote:
"In considering the proposed Bill, whilst would readily agree that maps should include the date on which the information was correct, there has always been, and there always will be, opposition to the dating of maps because there must be instances whereby a map remains correct for the major part of its detail over many years."
That is no part of my Bill. I am happy for a map of the sea to remain there for ever until they find an island which may not be charted. The RAC letter went on to say:
"In order to keep costs to the minimum, publishers of maps must have long print runs. But if dating was made compulsory, this would have the effect of increasing prices by encouraging publishers to print annually."
I am totally in favour of publishers publishing maps annually. Roads are built annually; new streets in towns are constructed annually; new housing
378
estates go up annually. Why in these consumer protection days we should give someone leave to print and sell out-of-date maps is beyond me.
The point about town maps is slightly different. In their case, there used to be a great proneness on the part of shops to advertise on a map of a town, and this trade helped to finance the cartographer's job. I believe that it is the duty of the local authority to see that its main conurbations are charted, and charted as contemporarily as they can be. One might well ask "How can they afford it?" I remind the House that a great deal of money is spent pointlessly by people looking for places which they never find because they do not appear on the map—so how can they afford not to? It is for this reason that I seek the leave of the House to introduce this Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. Clement Freud, Mr. Jeremy Thorpe, Mr. A. J. Beith, Mr. Cyril Smith, Mr. Andrew Welsh, Mr. Dafydd Wigley, Mr. Ivor Clemitson, Mr. Tom Bradley, Mr. Antony Buck and Mr. George Younger.

MAPS
Mr. Clement Freud accordingly presented a Bill to make illegal the publication or sale of maps that do not bear the date upon which the information contained thereon was valid; And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed.

BRITISH LEYLAND MOTOR CORPORATION
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Hal Miller.]
Leave having been given on Tuesday 1st March under Standing Order No. 9 to discuss:
The worsening situation at British Leyland as a result of the continuing refusal of the toolroom committee to recommend a return to work on the advice of their union.
4.7 p.m.
Mr. Hal Miller: I make it plain at the start of this debate that my purpose in requesting it is wholly constructive. I very much welcome the return to the House of the Secretary of State for Employment, and I hope that he is strong enough to take part in a constructive and helpful debate on this very difficult question.
Let no one in the House underestimate the difficulty. It is no part of my purpose to rake over old ashes of controversy or to be wise with the benefit of hindsight. I think, however, that it would be for the convenience of the House if the Government could give an early indication in the debate that the Secretary of State will still be making a statement on the position vis-à-vis the National Enterprise Board and its recommendation on British Leyland, so that the minds of later speakers can be clear as to whether we are to concentrate today solely on the worsening situation as a result of the continuing refusal of the tool makers rather than on the whole question of the strategy of British Leyland, for which time does not allow.
My starting point, therefore, is the worsening situation. I ask the House to understand the very real sense of bitterness, isolation and loss of confidence amongst the tool makers, a body of skilled people who have undertaken a long apprenticeship and have a vital rôle to play, not only in this company but throughout our industry. One of my main worries is that unless their problems are resolved we shall be faced with a grave shortage of people offering themselves for apprenticeship, thus depriving the country and the company of much-needed skills.
380
I can testify to the feeling of bitterness from my constituents, some of whom have had to give up their cars and send their wives out scrubbing for the first time or seeking other forms of employment, so that when the men return from the night shift they have to stay up during the school holidays to look after the children until their wives come home. There is a feeling of bitterness which I ask hon. Members on both sides of the House to understand. My purpose in introducing this debate is to try to see whether this afternoon we can offer the tool makers some way out of the impasse in which they find themselves as a result of the various policies which I shall go into.
First, the tool makers find themselves trapped by the provisions of the pay policy, in the same way as the company finds itself trapped by the provisions of the pay policy. The company is unable to offer a common starting date for the various rates of pay in different plants and is unable even to offer a common rate of pay for the same job in different plants. The company's position is fixed, through no fault of its own.
The tool makers have been driven by their frustration and bitterness to make an impossible demand for a separate negotiating unit, which must clearly run counter to the whole thrust of company policy, which is to reduce the number of negotiating units, as recommended in the Ryder Report. It is also unreasonable of the tool makers to expect their union to agree to the formation of a separate negotiating unit for tool makers. We have real difficulties here. Unless the Government can tip their hand and show these people that there is some hope of reward for skill and some incentive for acquiring skill and for work, the bitterness and frustration will continue and the company will remain in its straitjacket.
Secondly, the situation is grave because it raises serious doubts about the effectiveness of our present system of industrial democracy. The tool makers are in a real difficulty because they fear that they will be outvoted on the Leyland shop stewards' combine and that they will be unable to obtain satisfactory negotiation of the differentials which they are seeking. This is a real difficulty and leads us to explore the whole meaning of industrial

381
participation, because, despite the progress that the company has made in establishing machinery for further worker participation, the tool makers are still left with a feeling that they are unable to have any influence on the situation.
The situation is also serious because of the manner in which a genuine grievance—I hope I have carried the House with me in understanding that it is genuine—is being used by people who have totally different purposes. Here I quote what was said by Mr. Bert Benson, district secretary of the Birmingham West District of the Amalgamated Union of Engineering Workers.
Mr. Tom Litterick: Are they red tool makers?
Mr. Miller: The tool makers are largely Conservative, as the hon. Gentleman should know.
Mr. Russell Kerr: That is where the trouble lies.
Mr. Miller: Mr. Benson said:
"The tool makers are being used as a battering ram against the social contract, with a direct liaison between a group within the tool makers and a Communist-backed organisation. 'Defence of Free Trade Unions', which held a meeting in London last Saturday."
There is also a serious question for industrial democracy in the fact, reported by Mr. Benson, that three former shop stewards from the Rover car plant, which is not supporting the strike, who had been rejected on a vote by the union membership nevertheless still attended the unofficial tool room committee's meeting on Saturday, when it was decided to continue the strike. As I have shown, there is real concern about the whole process of industrial democracy in relation to the tool makers.
I turn now to the question of industrial strategy, which has been very much called into question by this strike. I referred yesterday to the fact that in this country we have excess capacity for the manufacture of motor cars yet somehow we are unable to manufacture the output to meet domestic demand. The Prime Minister himself said that floods of cars were waiting to come into the country which would never come in if we were
382
able to utilise the industrial capacity that we have available.
It is not an easy question of simply adding further investment, as our whole experience in British Leyland has shown. It has raised the whole question of the Leyland industrial strategy, on which the Minister—I hope he will confirm this—will be making a statement later. It has been shown at Leyland that the injection of finance is not enough in itself to restore confidence, to motivate the company and all involved in it, or to solve the problems of management and production.
There may be some who feel that the more successful parts of the company—there are still some very successful parts, such as the Truck and Bus Division and the Special Products Division—should be separated off so that their development and success is not held back by the troubles affecting the other parts of the company.
I realise that many hon. Members wish to take part in the debate, so I shall draw my remarks to their conclusion. My whole purpose has been to try to find a way out for the tool makers involved in this most unfortunate dispute, who are not accustomed to striking. For most of them it is the first time they have taken any industrial action whatever, but it raises the question of how people are to be motivated to produce the potential output that can be obtained from our factories. How is their confidence to be restored to enable that to come about?
It was most disappointing to hear the Minister of State suggest that this was simply a matter for the union and the company and that the Government had no part to play. I hope I have shown that the company and the men are caught in this bind by Government policies. That is why I am requesting the Government to tip their hands about the next phase of the pay policy and to offer some possibility of a way out. The Government should understand how great is the lack of confidence among the men. There is lack of confidence in the management, lack of confidence in the ability of their union to deal with the problem and lack of confidence in the Government, who have shown no consistent policy towards the industry, and who have given the impression—I hope falsely—that simply by ladling out taxpayers' money all these

383
problems will be solved. That is far from true.
Unless the Government can this afternoon give some reason for confidence, I warn them that the loss of confidence will spread from the toolroom throughout the company, throughout industry and throughout the country.
4.20 p.m.
The Secretary of State for Industry (Mr. Eric G. Varley): I shall take up some of the detailed observations of the hon. Member for Bromsgrove and Red-ditch (Mr. Miller). First, I should like to respond to his wish that I should set out the current position at British Leyland.
Today a total of 3,500 British Leyland workers are on strike, of whom approximately 3,000 are tool makers. Some 28,000 workers are laid off, of whom about 21,000 are unable to work because of the effect of the tool makers' dispute. There are a dozen smaller disputes, of which all but one are unconstitutional. The agreed procedures have not been followed.
The tool makers' dispute is led by an unofficial group of shop stewards who are demanding separate negotiating rights for tool makers. The executive of their union—the Amalgamated Union of Engineering Workers—has expressed sympathy with the aim of the tool makers to improve their wage position, but it has not supported a call for separate negotiating rights and has told the men to return to work.
Since last summer, disputes have taken an increasing toll of British Leyland's car production. In 1976 British Leyland lost about one-fifth of its planned production schedules. While disputes were not the sole cause, they were by far the largest factor.
This year, after a brief improvement during January, the position got steadily worse during February. Last week production was down to only one-third of the planned level. The prospects today are that this figure will diminish still further.
I should emphasise that we are concerned not simply with the effect of the present tool makers' dispute, serious though that is. The matter goes much wider than that. There has been since
384
last summer a failure to maintain the improvements that were achieved during the first eight months of public ownership—improvements which I described to the House last August—which justified the approval of the first tranche, against which the Opposition did not vote.
The poor record since then has meant that British Leyland's market position in the United Kingdom and abroad has fallen far short of what could be achieved with a proper supply of vehicles. This failure to make the most of our opportunities is not a once-and-for-all loss. It is fast eroding the foundation on which British Leyland's future as a volume car manufacturer must rest.
The whole future of the strategy for British Leyland is being devastatingly undermined. The effect on profits is crucial to the whole operation. Calculations show that, as a result of the stop-pages so far this year, including the tool room dispute, the British Leyland cash position at the end of April will be £70 million worse off.
If there were to be an early full return to continuous working, by the end of the year a substantial part of that loss might—I emphasise "might"—be recovered. But if the strike continues, the harm to British Leyland's cash position will escalate rapidly. At the same time, the confidence of customers at home and abroad, and of the public, will be rapidly eroded.
My hon. Friend the Minister of State reminded the House on Monday that the failure to generate sufficient cash within the company will be crippling to its long-term plans, quite apart from any decision by the Government to withhold funds.
I confirm that the company's present plans call for £1,500 million to be generated internally in profit over the next seven years, as well as the £1,000 million needed from external sources. That ratio of 1½to I makes all too clear a point which the Government have repeatedly made: that public funds alone cannot in any sense secure the future of British Leyland or, for that matter, of any British company.
Mr. Michael Grylls: As the Secretary of State has just told us that the whole basis on which the Ryder Report was approved by the House in 1975 is not being met, because the company is not providing the 1½to 1 ratio

385
from its own resources, will the right hon. Gentleman instruct the National Enterprise Board to renegotiate the Ryder Report, because clearly all assumptions are now no longer valid and are totally out of date?
Mr. Varley: I have not finished by any means. I shall say something more about the attitude of the British Leyland board and of the NEB. I shall tell the House as much as I can about the discussions that I have had with the NEB and Lord Ryder, its chairman.
The future of British Leyland rests largely in the hands of the company's management and employees. It is some of them—not all, certainly not the majority—who are jeopardising its future by the action now being taken. The great majority of disputes which interrupt British Leyland's production take place without exhausting the agreed procedures for settling disagreements.
When I visited Longbridge recently in the company of my colleagues on the motor industry tripartite group—Jack Jones and Hugh Scanlon—we emphasised as strongly as we could that if only agreed procedures could be observed, that in itself would bring about a massive improvement in the continuity of production. Again and again comparisons made between the performance of our industry and industries on the Continent show that the fact that we do not get continuity of production is one of our greatest weaknesses.
Mr. Litteriek: Does the Secretary of State recognise that the phenomenon that he has described has been familiar to us for the last 25 years? Does that not indicate that there is something intrinsically wrong with the procedures, not with the people concerned?
Mr. Varley: The procedures governing disputes, which have recently been revised with the full support of the AUEW and the trade unions involved, should be observed. That point was put across extremely strongly by those who have the responsibility for leading the major trade unions in the industry.
I am not suggesting that the situation is perfect—of course it is not. We must see whether we can bring about an improvement. But I am bound to tell my
386
hon. Friend that there is no justification for the level of disputes which has taken place. In 1976 there were 700 disputes of one kind or another at British Leyland. That was not solely the result of the pay policy or the serious issues to which my hon. Friend referred.
Mr. Hamish Watt: Does the Secretary of State agree that he can no longer continue to blame the workers or the management for these problems? Until such time as he gives the motor vehicle industry and the whole of British Leyland a complete shake up and shake out, he will not get anywhere.
Mr. Varley: I am sure that that intervention was just in case the hon. Gentleman failed to catch your eye, Mr. Speaker. I think that he has probably made a speech and does not require any comment from me.
I was referring to the procedures, which have recently been revised at British Leyland. The procedures were revised only after the most lengthy and detailed discussions with those who were directly elected to represent the work force. The work force and its representatives were fully involved. In my opinion and that of the Government, there should be no circumstances in which it is justified to take strike action before the agreed procedures have been fully explored. To do so puts at risk the livelihood of everyone who works in British Leyland. I cannot emphasise too strongly that the livelihood of everyone who works there is being put in jeopardy by this constant interruption.
The hon. Member for Bromsgrove and Redditch mentioned the bargaining structure at British Leyland. British Leyland has said time and again over the past few years that it fully accepts the recommendation in the Ryder Report that reform of the bargaining structure there is long overdue. It is widely known that movements in this direction have not been possible so far because they need to be preceded by movements towards a common negotiating date. This in turn is not permitted under the present pay policy, but the 12-month rule is an essential part of the present policy negotiated with the TUC.
A bargain has been made, and, as Hugh Scanlon told the Leyland workers

387
at the meeting three weeks ago, when we met 600 shop stewards,
"A bargain made is a bargain kept."
Discussions are now going on about the next phase of the pay policy. As the Prime Minister reminded British Leyland workers from this Box yesterday, it will be a more flexible policy in the next phase.
However, the demand being made now for separate negotiating rights for different groups of workers would not in any case help to rationalise the bargaining structure of British Leyland. In fact, it would have the opposite effect: it could be argued that it would only exacerbate the existing already unsatisfactory situation. No one should be in any doubt about that.
As I have tried to make clear to the House, Leyland was in danger of reaching crisis point even without the current devastating series of disputes. The Leyland board has been considering what action should be taken to deal with this crisis and give the company the hope that even yet it may survive and prosper, but already it is clear that present plans must be reviewed.
Consultations have taken place between Leyland and the NEB. The NEB in its turn has considered the position over a period of days. It reported to me the evening before last, 28th February, and the Government have urgently considered its conclusions. For reasons of commercial confidentiality that I hope the House will understand, it would not be right to make available the whole correspondence, but I can give the House the outline of the main points.
British Leyland has reported to the NEB that since the major review of progress last summer there has been insufficient evidence of a reduction of industrial disputes or of improved productivity in Leyland Cars and that the situation has deteriorated sharply in recent months. British Leyland has also stated that, unless there is a substantial improvement in performance, the generation of cash by Leyland Cars—an essential component of the Ryder Report strategy—would be insufficient to support the Cars Plan. British Leyland would then be unable to recommend to the NEB and the Government the injection of further funds for modernisation and expansion of Leyland
388
Cars. The NEB has decided that in those circumstances it would be unable to make further funds available for the Cars Plan and I can tell the House that the Government accept that position.
Several Hon. Members Several Hon. Members rose—
Mr. Dan Jones: I address this remark to the Minister as a former toolroom worker. I am not prepared to go too far back, but there is no doubt in my mind that this dispute is strictly and almost entirely related to differentials. In the toolroom, that is asking for trouble. Trouble is bound to happen. With great respect to my right hon. Friend, may I ask whether any decision has been taken, first by the company, second by the NEB, and third by the Government that differentials will be restored as soon as possible?
Mr. Varley: So far as this Government are concerned, phase 2 of the pay policy is absolutely sacrosanct. That is inviolable. There is no way in which we can break that and we refuse to take any action that will break it. But my hon. Friend should know that yesterday the Prime Minister said and others have said that, pay policy permitting, the next phase, phase 3, of the pay policy should be more flexible and that under it some of these things can be taken into consideration.
Mr. Geoffrey Robinson Mr. Geoffrey Robinson (Coventry, North-West rose—
Mr. Varley: I should like to go on a little further. In the context of what I have just said, there are other things that I ought to say. Then I shall certainly give way to my hon. Friend, if he still wishes to intervene.
If no further funds are available, the inevitable consequence is a drastic revision of the Cars Plan. The NEB's aim remains that it wants to see British Leyland become a viable car manufacturer. This also remains the Government's wish. There is, however, no prospect of achieving this aim unless urgent action is taken with the following objectives.
First, a complete return to normal working and to planned and agreed levels of output and productivity should be achieved quickly. If, as a result of lost production through industrial disputes,

389
cash continues to flow out of the company at the present rate, the drastic review of the Cars Plan will have to take place at the latest during March, and the consequent cut-back in major investment plans and substantial unemployment will become inevitable at that stage.
Second, after continuity of production has been established, it must be sustained and the planned and agreed levels of output and productivity must be achieved steadily and regularly. Failure to achieve this will bring about the same serious financial consequences and the same need for a drastic review of the Cars Plan.
Third, if the first two objectives can be achieved, the period between now and the time when the next tranche would need to be sought must be used for discussions among management, trade unions and the work force which will result in tangible measures offering the prospect of a radical improvement in industrial relations in Leyland Cars in the future. Without these solid assurances for the longer term, in addition to the achievement of the first two objectives, there will still he no basis for the provision of further funds, and a drastic review of the Cars Plan will again be inevitable.
The Government have carefully considered the NEB's conclusions and objectives and I feel it right to inform the House that we fully endorse them.
Mr. Norman Atkinson: On that basis, what my right hon. Friend is now enunciating is an entirely new concept in the whole purpose of industrial relationships. Would he not agree that if any private manufacturer, such as General Electric or ICI, were to make the injection of new capital into its organisations conditional upon industrial relations and the number of disputes, that would be treated in this House as an absolute scandal? Therefore, is it not a disgrace for a leading trade unionist in this country, as my right hon. Friend is acknowledged to be, suddenly to enunciate a new method of this sort and to say that the future of a company depends upon its industrial relationships, when the management is the cause of many of the problems?
Mr. Varley: What I have been enunciating is the policy which has been decided by the NEB, which has put certain proposals to the Government and asked whether we will endorse them. As my hon. Friend knows, the NEB does not wholly consist of hard-nosed industrialists. Three trade unionists are among its members. While I do not say that they are necessarily the sole arbiters, the views which I have put to the House and endorsed on the Government's behalf are the views of the NEB collectively.
I cannot go further than that. The simple point that I want to emphasise is that no one is more sick than I am about this situation. I want Leyland Cars to be a volume producer of cars. I shall say exactly in a little while what I have done and what part I have played in this. The simple fact is that if the company is to be successful not only the £1,000 million of Government money is involved but the profits which British Leyland can make.
Apart from the Ryder strategy, there was not only the £1,000 million of public funds or funds from external sources but the £1,500 million which Leyland would have to generate itself. It is clear from what has happened so far that the 1977 Cars Plan cannot be realised unless a dramatic improvement takes place immediately.
Several Hon. Members Several Hon. Members rose—
Mr. Varley: I give way to my hon. Friend the Member for Sheffield, Hills-borough (Mr. Flannery).
Mr. Martin Flannery: Will my right hon. Friend take note that on this specific point all the support is coming from the Opposition Benches? There are many Labour Members who, like himself, know a great deal about industrial relations—[HON. MEMBERS "What does the hon. Gentleman know?"] The barracking from the Opposition is welcome. On the Government side there is quietness and a willingness to listen. I hope that my right hon. Friend takes note that we think that the Government's stance is liable to intensify the problem and to make a solution more difficult.
Mr. Varley: My hon. Friend is entitled to that view. We are sorry that

391
we have had to make this statement. The NEB, which was set up by this Government to monitor the performance of British Leyland, has made a recommendation to the Government on certain action. What have we to do as a Government? Do we say to the NEB that it has no right to make those recommendations? Do we deny it the right to make them? If we did that, it would be serious for the NEB and for those who are charged with responsibility for it. No one should act on any assumption other than that the Government, the NEB and the British Leyland board mean what they say and accept fully the implications and consequences which will follow unless the situation is quickly put right and stays right.
As my right hon. Friend the Prime Minister made clear yesterday, the position will be reviewed thoroughly before further funds are committed. The implications for employment in many areas of the country, particularly the West Midlands, could be profound. I want all workers at Leyland, including those on unofficial strike today, to be quite clear that their own future employment and the future of their company is now in their hands. They can kill it or they can save it. They will have no one else to blame or to thank.
Sir Keith Joseph: Could the right hon. Gentleman help the House by telling us what happened to the existing authorised tranche of £100 million of which, I understand, £25 million has already been drawn? Is the other £75 million, destined for investment, available only for investment, or is it for working money?
Mr. Varley: The £100 million approved last August by this House will still go to British Leyland. As the right hon. Gentleman said, £25 million was drawn by British Leyland last week, and a further £25 million will be required very shortly—
Sir K. Joseph: For investment?
Mr. Varley:—for commitments that have been entered into by British Leyland for investment. If the situation deteriorates further, I shall take an early opportunity of informing the House. The situation is changing rapidly from day to day because of British Leyland's cash
392
position and the fact that car production targets are not being met.
A year and three quarters ago I had responsibility for asking the House to approve the proposals for placing British Leyland in public ownership at a cost of £246 million. Seven months ago I asked the House to approve the Department of Industry's share of the first £100 million tranche of loan finance for British Leyland. Since then I have approved the plan for the new Mini, on which rests the future of Leyland as a volume car producer. I have always had high hopes that Leyland could win through and succeed, for its work force and the country. That hope now depends on the actions of the work force from today onwards. Even now that hope can still be fulfilled, But time is running out fast. I hope that the serious statement which I have made will be taken fully into account by all those in British Leyland and that action will be taken quickly to put the situation right.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Before I call the next hon. Member, may I tell the House that a large number of hon. Members have indicated to me that they hope to catch my eye? Brevity, therefore, would be a great help.
4.46 p.m.
Mr. Charles Morrison: The Secretary of State has described a bleak and grave situation, but he has spoken with considerable firmness, which has not always been self-evident. It is encouraging that he has spoken in that way in order to bring home the seriousness of the situation to all those concerned with Leyland.
Last night I had a long telephone conversation with the AUEW convener of the Leyland factory outside Swindon in my constituency. He was a very worried man, not about his factory but about the whole future of Leyland. He, too, emphasised many of the points which have been made today by my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) and by the Secretary of State about loss of confidence. The convener asked how any company could continue to lose £12 million a day through lost production and yet remain in business. As the Prime Minister said yesterday,

393
200,000 cars, which were included in the Leyland plan for last year, have been lost.
There is a total lack of realism on the part of some tool makers, but not all, which put the whole future of Leyland at risk. Adjacent to Swindon in my consituency there are 1,011 tool makers, maintenance men and machine maintenance men, who make up the biggest Leyland toolroom and, I am told, supply 45 per cent. of presswork needs. They are not on strike and they do not support the unofficial strike.
The AUEW members were consulted about the tool makers' strike but believed it was untimely and would create a loss of money and hardship for their families. They are resting their hopes on phase 3 of the pay policy. Yet the Swindon tool makers are among the lowest paid. Their differentials have been steadily eroded. Phase 1 and phase 2 of the pay policy precluded them from achieving their objective of comparability with Cowley, which was agreed with management before the introduction of the incomes policy. Therefore, undoubtedly there is bitterness and they have more reason to strike than many.
Why are they not doing so? The explanation I have been given is "sheer common sense" and an appreciation of the serious consequences of a strike for the future of the company, coupled with their loyalty to their union. That that common sense and realism are not prevalent elsewhere is self-evident.
It is worth recalling the comments made by the Expenditure Committee's Trade and Industry Sub-Committee in its conclusions to the report on the motor vehicle industry, published in August 1975. It said:
"There is an urgent need …for the greatest degree of co-operation between, and effort on the part of, management and workforce …The possibility of concerns becoming permanent pensioners' is something which neither Government nor Parliament should contemplate."
Parliament and Government cannot contemplate permanent pensioners, simply because the country cannot afford them. Therefore, the alternatives for Leyland are to die or to rejuvenate itself by a much greater effort by the management
394
and work forces. The Secretary of State strongly repeated this today.
Why have there not been that effort and co-operation in the past? I think that there are two reasons. The first is the Government's inability so far to communicate to the total work force that the money is limited. That is barely surprising. To publicise all the Ryder proposals and to make a commitment to them was to imply that money from the National Enterprise Board or the Government was to be available regardless of productivity, regardless of unofficial action by labour and regardless of any cause of disturbance to the flow of production. Not to insist on firm productivity agreements was highly irresponsible in the use of the taxpayer's money.
The right hon. Gentleman and the House may remember the words of the hon. Member for Sheffield, Attercliffe (Mr. Duffy), who said on the publication of the Expenditure Committee's report:
"We were left with the feeling that Ryder and his team thought of money rather as confetti."
If that was true of the Sub-Committee's Chairman and its members, of whom I was one, it was bound to be true of the Leyland work force. If money was thought to be so plentiful, why should anyone worry?
The second reason why there was no adequate co-operation or effort stems from the pay policy's inflexibility. It does not allow for the consideration of differentials, productivity, special cases, and so on. But it should, and it would have done if there had been any consistency in economic or incomes policies.
Mr. Hal Miller: Does my hon. Friend agree that the Secretary of State's response this afternoon has been most disappointing in that he has given no clear commitment to recognition of differentials at the end of phase 2 in August, but will, as I understood him, take a decision on the company's future in March?
Mr. Morrison: My hon. Friend has anticipated what I was going to say. I agree that that is a considerable shortcoming in what the right hon. Gentleman said this afternoon.
We are now considerably concerned with differentials, as my hon. Friend

395
implied. Early in 1974 we were concerned about what were then termed relativities. Logic may have very little to do with politics, but it seems to me that if there had been a logical progression and development of incomes policies from, say, the Roy Jenkins freeze of 1966, by now we should have an incomes policy which took account of many if not all of the points now in dispute, and the country would be far better off. Instead, each Opposition in turn have believed that they could do without an incomes policy, until 18 months after taking office they discover that they cannot. Therefore, some of the pressing Leyland problems stem from the lack of continuity and consistency provided by the British political system.
Mr. Norman Tebbit: Does my hon. Friend agree that after two or three years of having an incomes policy each Government have concluded that it will not damned well work?
Mr. Morrison: I do not accept that. Each Government have concluded that if they are to continue with the incomes policy they will become somewhat unpopular before the next General Election. If each Government tried harder, they might bring about progress with an incomes policy, even though they might not improve their chances of winning an election. The consequences of the present chopping and changing are adverse for the whole country.
The Secretary of State says that if any pay concession were made to the tool makers now it would be seen as a concession to extremism. I was glad to see the right hon. Gentleman standing so firmly by phase 2. If there were a concession, it would totally undermine the position of moderate shop stewards such as those at Swindon, and would immediately cause trouble amongst other skilled unions. Therefore, what the Government must do now is to reiterate, as the Secretary of State has, that there will be no more funds without a firm productivity agreement, and that if there are no funds Leyland will indeed gradually bleed to death.
There must be a terminal date before which agreement must be reached and after which, without an agreement, Leyland will be broken up. That was done in the case of Chrysler. If the unions
396
there had not accepted and signed the details of the statement of intent of, I think, 16th December 1975, Chrysler would have gone into liquidation on 31st December. I believe that a similar approach in Leyland will mobilise the moderate majority of people working for that company. It will stop them believing, in a good old-fashioned English way, that somehow the company will muddle through.
This sort of shock treatment is the only hope for the future. If it is coupled with the repetition of a commitment to flexibility in phase 3 and tax cuts in the Budget, I think that there is some hope of a solution.
The possibility that Leyland might go under, putting at risk 170,000 jobs directly and several hundred thousand more indirectly, is a very grave one for British industry. It is by no means certain that our political and social fabric could stand the strain of such a disaster. But every day that passes in the present crisis makes what is a possibility more of a probability.
The Government must from now on act without the ambivalence which they have sometimes shown and with a firmness that has been far too intermittent so far.
4.58 p.m.
Mr. Geoffrey Robinson: I shall be brief and to the point, because I know that many other hon. Members wish to speak. I agree with the statement of my right hon. Friend the Secretary of State that the scope of the debate must be the worsening situation at Leyland. It is not about any particular dispute, the present dispute being only one of a deplorable succession that have led to what must now be a critical cash crisis at British Leyland.
However, what saddened us on the Labour Benches, and where my right hon. Friend was getting the matter fundamentally wrong, was my right hon. Friend's attitude that it was all the men's fault. We have heard it every time. My right hon. Friend still maintains a one-sidedly critical and minatory posture, that if only the unions would go back to work and be good boys, if only they would do this or do that, there would be no problems at British Leyland.

397
On a previous occasion—I think it was the first time I had the pleasure of intervening during Question Time and before my maiden speech—I pointed out that in 1975, for example, many tens of millions of pounds must have been lost by mistaken management decisions. There are more fundamental problems with the basic organisation of British Leyland than my right hon. Friend has cared to touch upon.
I have kept pretty quiet about the company since I left it. I say what I have to say today with some regret and with knowledge that the reasons I gave for my resignation have been proved sadly but fundamentally well founded. With due consideration I shall outline about seven things that I believe need saying and which if implemented would give us some chance of reversing this worsening situation, this perpetual downward trend in a company that is so vital a contributor to our economy.
Whatever Conservative Members say, there can be no question of closing down the company. There is no point in saying that one sector should be hived off or another closed down. That is a self-mutilating negative approach. The company is too big and too fundamental for such an approach. The whole point of the debate should be "Why is it going wrong? What do we do to get it right?" I shall make a few comments about the way in which I believe matters are going wrong.
First, we must realise where we went wrong. We went wrong in some ways in 1968. We failed to learn the lessons when we went wrong again with the Ryder Report—I note that Lord Ryder is gracing our debate—when we put the whole lot together and kept it together. We have put together something that is too big and too complex for any management to cope with properly.
Secondly, we must recognise that it is pure fiction to pretend that British Leyland is in any meaningful sense a private sector company with its own quote on the Stock Exchange. It is not. We all know that it is 95 per cent. State-owned. We all know that its destiny in so many respects is controlled by the State. That must be accepted as a reality. Therefore, it follows that it is no good living with
398
fiction. Let us buy out the remaining 5 per cent. Let us treat it for what it is—namely, a State-owned enterprise.
I would go further and disband the board of British Leyland. The board has no function to play because the company is not a coherent entity. It has many different parts, and each part has to be dealt with separately. We should have a proper and coherent national strategy for each part. It bears repeating that there are many vital sections in British Leyland quite apart from the Car Division—admittedly by far the biggest—that are none the less very crucial entities. There are, for example, the Material Handling Division and the Construction Equipment Division. They are part of huge international industries where we have been falling behind our main competitors and for which we should have a boldly conceived national strategy.
I would then close the British Leyland headquarters. That would save a great deal of taxpayers' money and we are rightly worried about money. Let us close the headquarters and then make the four divisions report directly to the National Enterprise Board. After all, the NEB is the shareholder. That is where the real responsibility for the success of British Leyland lies. It does not lie with some board that is there because it is a fiction of our imagination that British Leyland is a private sector company. I do not think that responsibility would be shirked by Lord Ryder. We should then redeploy the headquarters' staff. There are some very able people in head office who could be redeployed to the divisions on the one hand and to the NEB on the other to strengthen the NEB's monitoring and control capacity.
Mr. Grylls: Does the hon. Gentleman agree that rather than disband the Leyland board it would make more sense to disband the NEB so as to avoid having a bureaucratic layer in between?
Mr. Robinson: I had great pleasure seeing and hearing the hon. Gentleman on television the other night when he said that he would not disband the NEB. I am happy to agree with him. I should not take that course either.
If we redeployed in the way that I suggest, the process would serve the useful function of having a direct effect

399
in improving the situation in Leyland Cars. The situation at present is one of widespread dismay among management and the work force. There has been too much centralisation, a lack of direction and a lack of a sense of accountability and direct control in particular plants. I have very much in mind the factories that comprise the company. We must restore more decision-making down the line.
The disbandment of the British Leyland board would remove one layer of review and one layer of complication. At present the divisions have to agree their plans. Anyone who has run a division knows what it is like to try to reconcile the important and justifiably competing elements within a division. Anyone who has been in that position will know of the pressures involved. Once agreement has been established within the divisions, it is then necessary to go to the board of British Leyland, then to the NEB and finally to the Government. That is far too complicated a review process. What I have suggested would get rid of one of those stages, and that is the first thing that should he done. That in itself would eliminate a stratum of Byzantine encrustation, which in itself would bring a sense of direction to a company which fundamentally is lacking precisely that. It would mean that we come therefore to the most important thing of all—namely, a clear sense of responsibility at the point at which that responsibility should reside for strategic manning in the company. That is something on which perhaps the Government and the NEB should have agreed when the Ryder Report was published.
I argue again today that the Government's strategy of saying "If you are all good boys and we have a good run of three months, we shall make commitments" is not effective. Of course, we had a three-month good run last summer. A further six-month good run would take us through this summer if the tool makers and others can be beaten back. However, there would be a smouldering resentment among the men, which would not help in the long term. There would be a hardening of attitude on the part of the management, which, again, would not help in the long term. But I agree that despite those attitudes there might be a good run of three to six months and presumably the Government would be pre-
400
pared to make a commitment on the Mini. The next thing would be to enter into commitments on skin line release for the body dies and tooling. That with other contracts would easily amount to anything from £30 million to £100 million. But if there is another spate of disputes after that, what do we do? Do we stop what has been committed? That is not an effective sanction. In fact, it is nonsense. Having said that I should get rid of the board, we would have the four bodies reporting separately to the NEB. They would be separate, discrete and independent entities.
I have so far refrained from comment on the manufacturing and selling arrangements of the Car Division, but surely one of the early jobs of the NEB would be to have another hard look at that organisation. There is one thing that we should have insisted upon at the very beginning and I believe that with good will, leadership—I emphasise "leadership"—competence and integrity on the part of the managemnt it is something that could still be obtained. However, the thing that must be obtained—I believe that it can be—is a common grading structure across the car company. There should be common rates within that structure and a common renewal date for pay negotiations for the various grades.
If management convinced the men that it meant what it said, such a structure could be obtained. We all know that the feeling on the shop floor—this will be recognised by all those in the House who have car workers in their constituencies—is that management is insincere and incompetent. If those impressions—there may be grounds for them—could be dispelled and if management and the NEB consulted on the basis of phase three, which is to allow for greater flexibility, I believe that there could be an agreement leading to greater productivity along with a common grading structure with common rates and a common renewal date. That in itself would provide the basis of an improvement in industrial relations.
That, however, will not be enough. We definitely need a change in attitude, a change in competence and a change in leadership among management if the men are to respond, as I happen to know from experience they are able to do. I say this directly and unequivocally to my right

401
hon. Friend the Secretary of State for Industry. Any other road will be long, arduous and extremely costly to all of us who are taxpayers.
5.8 p.m.
Mr. John Stokes: I am glad to be able to speak after the hon. Member for Coventry, North-West (Mr. Robinson), because in the past I have made many of the points that he put forward today, and it is important that the House should realise and ponder upon what he said. I am particularly keen that there should not be wholesale condemnation of the workforce in the Leyland factories. The workers are not all bad men. I see many of them in their homes and in the clubs and pubs in my constituency. They seem to me like a cross-section of any other community. I am sure that there are as many good men in British Leyland as there are in other large organisations.
We must ask ourselves what has gone wrong. I hope that that is what the debate is all about. I hope that it will he constructive and that it will give the Minister sonic helpful suggestions. I shall not go too much into the history. We know that the car industry has never had a very good name in Britain. The units have grown too large and the work is probably organised in too repetitive a way. The wage structure has always been haphazard. Nevertheless, I agree with the hon. Member for Coventry, North-West that the fundamental trouble for British Leyland has been a lack of leadership in the boardroom, in the office and on the factory floor.
When Marshal Pétain successfully quelled the mutinies in the French army in 1917 it is true that he shot a few ringleaders. But after that he asked to see the officers of the units concerned. From then on he concentrated on ensuring that the officers led their men properly and cared for them. I do not understand why Labour Members should laugh at that. That is the essence of the trouble in British Leyland.
The standard of the chargehand on the shop floor, the foreman, the manager and the general manager, as well as the director, like much elsewhere in British industry, is unfortunately below the standard that such a large organisation
402
requires. It is certainly, for instance, below the standard of NCO, warrant officer and officer in the Armed Forces. There is no imagination in these large soulless plants. As my hon. Friend the Member for Bromsgrove, Redditch (Mr. Miller) said, confidence is totally lacking in both management and work force.
The state of morale and ésprit de corps is abysmally low. After all, why are not the workers enormously proud to work for the greatest British car manufacturer? Why are there not lots of flags flying on Leyland sites, with wall charts everywhere showing production and sales figures and the strength of competition from abroad? Above all, why do not the sales executives, particularly those who successfully go abroad and bring back big orders, go on to the shop floor and tell the men what they have done, getting them involved and interested in the business of putting British Leyland at the top of the car league in Europe?
We have the ability, the brains, the inventiveness and the design skill. What seems to be lacking is the organisation and leadership of the men. Can anyone doubt that if British Leyland were broken up into its component parts, as it should have been and if, for instance, some of those parts were taken over by a firm such as GEC, in a very short time British Leyland would be making a profit? Can anyone doubt that if the whole of the top management of British Leyland were removed and management of the standard, for example, of Marks and Spencer were substituted, there would be an immediate and startling improvement in the company's fortunes?
British Leyland's troubles are symptomatic of the troubles of the nation. We have lost our pride and for too long many British workers have been poorly led, apart from listening to voices on the Labour Benches which say that somehow or the other the State or the bosses will always bail them out. Extra effort and inventiveness have been penalised by crippling taxation. Successive pay policies, impracticable and often impossible to implement, have eroded differentials, and now we seem to have reached the end of the road.
The tool makers' strike, not the only strike in British Leyland but an important one, is in some senses taking on the State

403
in the same way that the miners took on the State in February 1974. I believe that neither confrontation should have been allowed to happen. I am convinced that some concessions will have to be made to the tool makers, although I admit that Leyland's troubles are far more deep-seated than that. The time has come for heroic measures. The Government certainly are taking a strong line on the availability of finance to the company, and anyhow in the end the British taxpayers' patience will become exhausted. But there is little time left.
As a start the Minister should search for the finest leader in British industry to be put in immediate charge of the company's affairs. That having been done, I believe that he should choose a hoard of directors to run the company. Sooner or later the Government's pay policy will have to be ditched, but if British Leyland is properly led and properly run, it should soon make enough profits to pay its workers the best rates in the country.
Someone is required to inspire the whole organisation in the same way that Montgomery inspired the Eighth Army in 1942. I remember him saying that the men should be put in the picture and that they should be made to feel that they count. Those simple virtues, which are now in all the textbooks, are not as yet observed in British Leyland.
Constantly when I meet the men from these factories they tell me that they have no confidence in their workshop, in the site or in the company as a whole. That is a matter not of systems jargon or technique, but of flesh and blood. We need the men to get this great company right before it goes under.
If money is withheld, as it must be unless the men go back—and I urge them to go back—this company will not only go down but will take with it hundreds of other companies in the West Midlands and elsewhere which depend on orders from Leyland. It will put hundreds of thousands of men out of work and will also probably bring down the present Government. That is the situation which faces us.
I hope that all those who take part in the debate, some of whom may not have Leyland workers in their constituencies, will realise how deeply serious the matter now is and will accept that we in
404
this House should now join together to help to put the situation right.
5.18 p.m.
Mr. Julius Silverman: I have in my constituency the British Leyland Castle Bromwich plant, which employs many thousands of workers. I suppose that the position there is similar to that in the other British Leyland plants. I agree with the hon. Member for Halesowen and Stourbridge (Mr. Stokes) on just one point, which is that the morale of the car workers generally is bad. I am talking not only about the tool makers, about whom I shall make some reference, but about the whole of the work force. That may be for several reasons. One is that the men's position in the wages table has fallen, and they always remind me of that. They obviously resent the fact that their standard of living, like that of many other people in the country, has fallen.
Another reason for the bad morale is the lack of communication between the the management and the people on the shop floor. In many respects I find it inadequate. This may also be due, as my hon. Friend the Member for Coventry, North-West (Mr. Robinson) said, to the organisation of British Leyland. With giant concerns there is always a gap between those at the top and the workers on the shop floor. Whatever the cause that feeling exists. Therefore, somehow or other, a change of attitude has to be realised in British Leyland.
As previous speakers have already said, the toolroom workers are not a militant body. They have had comparatively few strikes. Their major complaint is that no one has taken any notice of them. They have asked for talks with the management but the management has refused to talk with them. Perhaps this is a matter of procedure. I do not know. But I thought that procedures were intended to avoid industrial disputes.
Not knowing where they were, the tool makers decided to go on strike. I regret that just as every other hon. Member regrets it, but it was a deliberate decision taken after many months because they could not get an answer. Of course, there are many problems associated with the tool makers. It is not merely a problem of differentials or of declining purchasing power. The fact is that in British

405
Leyland there are vast dispartites between tool makers in different plants amounting to more than £20 a week. That is obviously bound to create intense discontent in the present situation and that is precisely what it is doing at the moment.
It is essential for the Government to disclose their hand with regard to pay policy at a much earlier date. Yesterday the Prime Minister referred to a more flexible policy. That ought to be spelled out as far as it can be at the present time. I hope that the pay policy will not merely be flexible but will deal with many of the anomalies which at present exist in industry. Unless phase 3 takes an entirely different approach to phase 1 and 2, there is a serious danger that it will not be acceptable to workers.
I hope that it will be possible to settle the toolroom workers' strike. I am glad that the Prime Minister has made a statement and I am also glad that the AUEW has decided to meet the men to see what can be done to settle the strike.
I make one reference to the NEB suggestions. It would be a serious psychological error to use the present moment to announce the abandonment of investment in British Leyland. It would be psychologically bad, because, as I have already said, morale is vital at present. If we say to the workers "If you are not good boys, we are not going to invest" I do not think it will have the effect that the NEB and perhaps even the Minister anticipate. That is a psychological factor which we have to face. I believe that it would have precisely the opposite effect. Morale would sink much further and some of the people who could not care less will ask "Why should we retain good industrial relations?".
Not all strikes are due to the workers. After all, they can arise from a source of conflict on both sides. I hope that my right hon. Friend will take account of that. We must remember that improved investment is not merely undertaken for the purposes of increasing the capacity of the industry but also to increase its competitiveness. Bearing in mind the attitude of the workers, it is vital that we increase their morale. They
406
should feel that they are in a living, dynamic and developing industry, and for many years they have not felt that.
I hope that my right hon. Friend will think again about his words. I also hope that British Leyland will show a better industrial record and that we can emerge into a period of industrial peace, but I do not think the possibility of peace will be enhanced by what amounts to a threat to the workers of preventing any further investment and modernisation in their industry.
5.25 p.m.
Mr. Richard Wainwright: The hon. Member for Birmingham, Erdington (Mr. Silverman), with his intimate knowledge of one of British Leyland's largest and most important factories, stressed the importance of the Government now coming forward with a very much clearer statement of their aims with regard to the sort of pay policy that they seek. I entirely endorse the hon. Gentleman's view that a highly industrial country like ours cannot afford to live from hand to mouth on its incomes policy. An incomes policy must be maintained, but not on a cliff-hanger basis, with the country in suspense until the last days of July about what the rules will be from August onwards. In that regard, the House is entitled to a clear exposition of what the Prime Minister meant when he vaguely referred yesterday to flexibility in phase three of the pay policy.
Is the Prime Minister thinking solely of flexibility with regard to differentials? That is certainly necessary, but very difficult to achieve. Or is he thinking of flexibility—which I and my colleagues believe to be an even more important aspect—with regard to the settling dates for pay bargains?
In connection with this dispute it has to be recognised that the present form of pay policy—with the rule that 12 months must elapse between settlements—frustrates important advances in the scientific assessment of pay and the conclusion of realistic policies within an incomes policy framework. It frustrates the movement towards a situation where we can have one acknowledged date in the year for major pay settlements. Within British Leyland, it frustrates the admirable desire to work towards one single

407
settling day for pay bargains throughout that vast empire.
I hope that we shall hear a little more from the Government about whether flexibility with regard to dates and periods of settlement is intended, as well as flexibility in other ways.
More immediately, there is an opportunity for the Government and the Chancellor, who will open his budget towards the end of this month, to attend to one acute aspect of the problem of differentials. The existing discontent with narrowing differentials between the rewards of skilled workers compared with unskilled work in engineering is, of course, greatly aggravated by the present tax structure and the way that it falls on different earnings.
The last occasion on which there was a meticulous review of the problem was in June 1975, when it was shown that the differentials in gross pay between an average skilled engineering worker and a wholly unskilled adult engineering worker was about 31 per cent. But in terms of take-home pay—comparing the two on the basis of a man with a wife and two children under 11—the differential, after tax and social security contributions, was only 23 per cent.
I estimate that the tax and social security situation has worsened, and that the differential has narrowed still further. Therefore, although attending to the tax anomaly would not remove anything like the whole of the problem it would be a considerable alleviation to the present deeply felt injustices by those who have taken the trouble and pains to acquire very necessary and immediately required skills.
Although the Secretary of State's speech this afternoon was in many ways constructive and helpful, it did nothing to increase the rather meagre credibility, to those most immediately concerned in British Leyland, about Government warnings and indications that the tap of money might be cut off. The Government destroyed a great deal of their flexibility when, all too easily, they approved the British Leyland Mini programme and undertook to make available their share of the finance for that programme at a time when there were no serious indications of improved productivity in British Leyland. I hope that before the close
408
of the debate the Government will do something to add to the rather modest credibility of the statements that they make about the future availability of money.
I turn briefly to the company. Nothing has been said today to indicate in what ways, other than pay, the company is trying to acknowledge the legitimate grievances of toolroom workers as compared with other workers in the concern. What about, for instance, attention to career development prospects for those in the toolroom? It has been said to me, and no doubt to other hon. Members, that the trouble concerning the really highly skilled and efficient toolroom worker is that he is far too valuable in his present job to promote, and that management is very reluctant to move him on to other responsibilities if he has a highly skilled job in the toolroom.
That is an incredibly shortsighted attitude for management to take. I am not making that allegation precisely, because I have not been able to carry out the necessary checks. However, we should like to hear from the Government, on behalf of the NEB, whether the non-financial grievances of toolroom workers are being attended to, as this could be done without in any way infringing the Pay Code.
Finally, on the issue of trying to bring to a close this fairly appalling history of continued disputes and certainly deeply felt grievances over several years on the part of highly skilled men, from this Liberal Bench I should like to endorse what was said, very effectively indeed, by the hon. Member for Coventry, North-West (Mr. Robinson), which is that British Leyland is, and has been ever since the ill-starred original merger, far too big and far too disparate a structure. There ought to be recognition at an early date, even though it comes late in the day, that British Leyland is a very loosely organised collection of factories, on widely dispersed sites, with a great variety of different and sometimes clashing customs, styles of operation and, indeed, traditions and rates of pay, and it is making a very wide variety of products of markedly different types and prices.
In view of what has happened, and the failure of the experiment with such a vast industrial empire, it ought to be

409
reduced to a rational state, as the hon. Gentleman suggested, of four divisions, or possibly five or six. The country would then have—I am not suggesting any change of ownership at present—more manageable units, in which there would be room for variety without causing the sort of strife that we are witnessing now.
Many things that could have been done have been left undone in the past, mainly through lack of courage. However, there is still time to save the essentials of what is now called British Leyland if the Government will show both imagination and some determination.
5.35 p.m.
Mr. Joseph Dean: Successive speakers, on both sides of the Chamber, have put forward their view of this dispute as they see it as Members of Parliament. However, if we are to resolve this very damaging and dangerous dispute it is essential that someone should put himself in the position of the guy involved.
Up to the time of my election to this House, just three years ago, I was a shop steward working in the engineering industry. What is happening to tool makers today is symptomatic of the history of the trade union movement as a whole. It is not merely something that has suddenly arisen. It is the frustration of a continuing set of circumstances that has brought about this dispute.
Anyone who knows anything about the engineering industry knows that it has always been the men of the highest skills in that industry that have been amongst the lower paid. The machine tool industry was notorious. It produced some of the finest machine tools in the world, but the men were always on almost the lowest scale of skilled wages in the country. I could cite my own case of work in the heavy engineering section, doing huge jobs, some worth multiples of thousands of pounds, when I was at my machine for months. Because we had no bargaining power, we never took the lead in the money league.
This is not something that has suddenly arisen. It has come about through frustration. A situation very similar to the present dispute developed in regard to tool makers during the last war.
410
My hon. Friend the Member for St. Pancras, North (Mr. Stallard) has provided me with a little passage from a book that is very important to anyone who wants to study engineering. It is entitled "150 years of Engineering" and was published in 1946. The author, Jeffrey, says,
"The Toolroom Operatives Agreement of June, 1940, gave men in this key section of the industry the average earnings of skilled workers in the same firm—or in some cases the same district—engaged on piecework production. An agreement of January, 1942, provided that skilled maintenance men, inspectors and others, on the basis of a 47-hour week, were to earn not less than 8s. above the inclusive district rate for fitters."
That was the first time in history that a basic differential was established for that type of worker.
I can appreciate the frustration of the men about the situation in which they find themselves. I am extremely sympathetic to their cause and would love to see the dispute resolved in their favour. However, the tool makers do not stand alone in what has been happening in the engineering industry over the last 12 months. I issue a general warning to the Government. They must bring some flexibility into the negotiations on phase 3 of the social contract. Let us not deride the social contract. It was unavoidably necessary and it did a good job, but it has had its time. People in all sections of industry do not want the perpetuation or continuation of a Government, of any colour, determining in the main the size of their wage packet. Therefore, the tool makers are possibly in the forefront of some people who are beginning to shout about some form of free collective bargaining being returned to them on a factory basis.
Some hon. Members seemed surprised when my hon. Friend the Member for Birmingham, Erdington (Mr. Silverman) said that because of different geographical locations, certain tool makers working in the same massive companies earned as much as £20 a week more than other tool makers in the same company. That is not new. It is one of the big problems in engineering. One can work for a company in Manchester and be paid £10 a week less than someone working in Cardiff for the same company.
At the factory at which I worked in Manchester I could have been receiving a

411
certain wage for working on a particular machine while a man doing exactly the same job less than 300 yards away, across the road, would be getting £5 or £6 a week less. That is the whole nonsense of the structure of engineering wages. Also, conditions have crept in in some firms where free collective bargaining has been manipulated by the employers at the expense of the workers. This is a phenomenon that has always been with us—it has not just arisen.
Unfortunately, I do not think that the men can possibly win, because of the way they have gone about this. The corner-stone of the AUEW is that any agreements made in any areas must have the full approval of the district committee. Now there has been some indication from the executive of my union that it wants to meet the men on this subject. I hope that they will be able to find a formula to get these men back to work as quickly as possible.
There is no question about it—tool makers are not the sort of people who proceed to high management positions because they are so valuable that they are kept where they are. Their demands often have not been recognised, and this is now catching up with us.
Mr. Nick Budgen: Will the hon. Member tell the House, from his point of view, of one who has practised the craft, why it is objectionable for tool makers to form their own union, instead of being forced into a great union in which they do not feel confident?
Mr. Dean: Because eventually they may find that they have backed the wrong horse. Other sectors of the trade union movement may opt for the same thing and the result could be a weakening of the movement and the collective bargaining situation.
Personally I think that the tool makers have made their point with the AUEW. I hope that this will have the desired results. Eventually, any industrial dispute must be resolved and should be resolved between the trade unions—representing the workers nationally, locally, or on a factory basis—and the management. I do not want to see perpetual intervention by the Government in industrial disputes. I think that the best people to
412
solve an industrial dispute are those with some involvement and interest in it. At this point in time there is no organisation in the field that can meet the management and put the case for the tool makers as it should be put other than the official negotiating body—the AUEW. The sooner that happens the better.
The tool makers do not have a history of being militant. They have behaved responsibly and have put their demands in a modest way and therefore have found themselves falling behind.
My hon. Friend the Member for Coventry, North-West (Mr. Robinson) talked about management. There is a complaint that has not been aired by anyone here today that the management of this factory has actually sub-contracted out the tool makers' work and then subcontracted it back into their own factory. I would like someone to explain to me how that can possibly reduce costs. In my opinion, that is management going absolutely mad. The work goes out at an enhanced rate and then there are overheads in processing it back. That is a nonsensical way of going about things, and if that is an indication of the efficiency of the Leyland management, it is time it was looked at.
I was saddened to hear the Secretary of State supporting the National Enterprise Board's threat of financial sanctions against the company at this stage. Even people like the toolroom workers, who have waited a long time and are now extremely frustrated, do not react kindly to threats. That sort of talk only exacerbates the situation and makes it worse. It also makes it extremely difficult for my own union to become involved as quickly as possible to discuss subjects like differentials. Also, in other places where the differentials have been destroyed it will be difficult for the trade union leaders to sit down and talk when threats like that are levelled at them.
Having said all that, I would hope that there has been an indication to the tool-makers in this dispute that they are not without friends. We are pressing for a way out and urging the Government to recognise that phase 3 of the social contract must fundamentally widen the areas of collective bargaining so that people can obtain a just rate for their services and special skills. If the Government do not do that, this will be the first of many

413
cases, because the trade union movement does not want a situation perpetuated in which workers' rates of pay are decided in this Chamber. The sooner workers are allowed to negotiate some part of their wages by collective bargaining based on their special knowledge, skills and efforts, the sooner we shall get a better form of industrial peace than we have had for a long time.
5.48 p.m.
Mr. Reginald Eyre: A number of very useful speeches have been made this afternoon. I shall speak very briefly. All sensible people in the West Midlands will welcome the statement by the Secretary of State, and many people will feel that it should have been made before. It is thought that further undertakings should have been required on production in 1975, and on subsequent dates.
There is some difficulty about what the Secretary of State has said because there are undeniable anomalies and unfairnesses in the present situation. The hon. Member for Leeds, West (Mr. Dean) made some telling points in this respect, particularly about the question of differentials and the impact of the Government's incomes policy. The Secretary of State should have gone further to match the words of the Prime Minister yesterday when he talked about the need for more flexibility in these matters. This is very important, because the tool makers feel very strongly and genuinely that they do not have an adequate place in the representational arrangements at this moment and that their case is not getting a full hearing. The Secretary of State should have taken more account of that point in his statement.
People in the West Midlands are increasingly realising what the failure of British Leyland in its present form would mean. Over 170,000 people would be unemployed as a direct consequence of failure and many thousands of other workers engaged in component construction, distribution, and sales forces would also lose their jobs. Therefore, the collapse of British Leyland would deliver a devastating blow to the economy of the West Midlands and would impoverish the area for many years.
414
I believe that the Secretary of State was right not only to refer to the present crisis in the negotiations but also to re-count the history of recent times involving the 700 disputes that took place during 1976. He made the important point that although the negotiating procedures had recently been reviewed and found to be correct, in this dispute the agreed procedures were not valid. The disruption that follows from the interruption of work of this kind causes sickening anxiety among families in the West Midlands and that situation in British Leyland and in the British motor car industry cannot be allowed to continue.
The second inadequacy in the Secretary of State's statement was that he did not give a good enough account of how the trade unions can be involved more effectively in seeing that the agreed negotiating procedure is carried out. This is essential to the health of British Leyland. Therefore, I ask the Government to take more account of the points made on differentials, incomes policy and the poor representational position of tool makers. They should also take account of the need for more effective involvement in seeing that the agreed procedures are carried out, so that we may avoid the terrible loss of production that has been such a contributing factor to the loss of blood to which the Minister referred the other day.
5.52 p.m.
Mr. Norman Atkinson: When Mr. Speaker announced this debate, it was sad to bear in mind that the inevitable result would be that the Minister would have to make the kind of statement he did—namely, threatening Leyland workers with sanctions if they persisted in dispute. In other words, he implied that there would have to be second thoughts about the money that is to be made available by the National Enterprise Board. That is the most unhelpful step the Minister could have taken in this debate—and I have no doubt that there will be a great deal of sourness generated among British Leyland workers as a result of that statement.
Mr. J. W. Rooker: It will not send one worker back to work.
Mr. Atkinson: My hon. Friend is right. Furthermore, it will certainly not assist the executive of the AUEW in attempting to persuade toolroom members to return to normal working. That is is one of the penalties that we pay for a debate of this kind. If ever there were a case for an industrial sub judice rule, possibly this situation is it. We argued these matters throughout the night some years ago in discussions on the Donaldson Report. We believe that the inevitable effect of this kind of intervention militates against any kind of helpful response where public money is involved.
I wish to emphasise the quality of work undertaken in British Leyland, and particularly the quality of toolroom operations throughout the Leyland organisation. It is superb, and certainly second to none anywhere in the world. Engineers throughout the motor industry internationally recognise the quality of the work in Leyland. We do not need to apologise on that score. The design and cost-effectiveness of the tooling operation in British Leyland—work produced in Leyland's own toolrooms—is superb. Indeed, many of the toolroom methods and assemblies developed in this country have now been adopted elsewhere in the world, particularly in Japan, where they have used our design and development practice in their toolrooms. We do not need to make any apology for the work at Leyland or about the quality of production. The Leyland product competes with any throughout the world. Price for price, there is no area in which we need take second place to any other motor car complex. The quality of the toolroom is borne out by the product that is eventually sold on the market.
Leyland has now become a political punchball because the Opposition want the situation to be like that—[HON. MEMBERS: "Rubbish."] It is the purpose of many Opposition Members to seek to prove that Leyland will fail, and indeed that such failure is inevitable.
Mr. Percy Grieve Mr. Percy Grieve (Solihull)rose—
Mr. Atkinson: No, I shall not give way. I have listened so often to Tory Members attempting to prove the inevitability of Leyland's collapse.
Mr. Budgen: Nonsense.
Mr. Atkinson: Opposition Members constantly claim that if the nation has the misfortune once more to be ruled by a Conservative Government, one of their highest political priorities will be the guillotine for Leyland and for the NEB. [HON. MEMBERS: "No."] Indeed, that is the case. The present occupant of the Tory Front Bench, the hon. Member for Kingston upon Thames (Mr. Lamont), time and again, speaking on behalf of the Conservative Party, said that he agreed with the rest of the Tory leadership that the first priority was to abolish the NEB immediately the Tories come to power. Is that not true?
Mr. Ian Gow Mr. Ian Gow (Eastbourne)rose—
Mr. Atkinson: I am talking not about the hon. Member for Eastbourne (Mr. Gow) but about the leadership of the Conservative Party and the priority to abolish the NEB as soon as the Tories return to Government. I take it that the silence of the Tory Front Bench confirms that that is the case. I believe that the future of Leyland workers depends on the continuity of a Labour Government. Those workers can look to the future only if there is a continuity in the funds to be provided by the NEB or from the public sector.
Mr. Norman Lamont (Kingston-upon-Thames): Will the hon. Gentleman accept that we do not wish British Leyland to fail, and that if British Leyland can achieve a good level of productivity, can meet proper delivery dates, and can make substantial and satisfactory profits, nobody will be more pleased than the Opposition?
Mr. Atkinson: But the Tory view is that those workers will have to get on without any assistance from the NEB. The Opposition have said that their first priority is to get rid of the NEB and that statement is on record. I want to relate that point to what the Minister said about the use of sanctions or threats against those people who are attempting to make work better than at present the whole matter of industrial relations in British Leyland. That is the real problem that we must face.
It has already been said in the debate that if the thing that matters most in British Leyland is the rate of investment and the sequence in which investment

417
decisions are taken, it would be utterly disastrous—in the event of some further disruption—for management to back out of the investment decisions that it had already taken. The whole business depends upon those investment decisions being allowed to be self-generative. Self-investment must be part of the process within the industry.
Certainly the future of the Mini, the decisions that have been taken by the NEB and Leyland, and the confidence that has been expressed by all those connected with that decision to build the Mini, will depend upon the continuity of investment and upon some smooth process whereby it will be possible to regenerate the investment funds that will be available at various stages in its production. That is important.
That brings us on to toolroom and the decisions that have been taken there because they are contradictory to the decisions that have been taken by those controlling the rate and timing of investment. Much of the toolroom work is now being taken out of Leyland and sent overseas. Leyland management is now placing sub-contracts for tooling overseas, for example, with certain German firms. That is symptomatic of the problems that Leyland has had in the past. Toolroom workers have never been able to develop confidence in their future because of this cyclical behaviour by management. Management has taken the easiest way out in deciding to sub-contract and use firms overseas yet in 1975 it announced 15 per cent. toolroom redundancies. What sort of announcement was that? Now there is a great shortage of toolroom skills and we cannot attract people into the toolroom, yet in 1975 management was sorting people out for redundancy saying that there was no future for those people and that they would have to go. That is the basis for the lack of confidence that has developed amongst tool-room workers throughout Leyland. They say that management has no confidence in their ability to deliver and that that is borne out by the sub-contracts that are now going overseas and adding further problems.
Mr. Dan Jones: Will my hon. Friend give way?
Mr. Atkinson: No. I have promised that I will restrict my speech to as short a time as is necessary to make my case.
Difficulties have been imposed upon management and industrial relationships as a result of the national need for some form of voluntary incomes policy. That is the thing that we must look to now. Unless in phase 3 of the wage negotiations we can devise a scheme whereby we can contrive price ceilings within which wage agreements can be freely bargained—in other words, free collective bargaining within price ceilings—there is no way in which we can restore differentials. Negotiators will not have negotiating freedom and sufficient flexibility to restore the differentials involved without cutting across the whole effort to reduce the rate of inflation within the time scale that has already been referred to. We must look for such a solution.
It is most difficult to do this in industry today, but there is sufficient sophisticated understanding and experience within trade unions, particularly the craft unions, that they should be able to find such a solution. For instance, Leyland now knows the actual work load that is required to fulfil the four-year programme. The company knows that it needs 1,600,000 hours of toolroom work and the conditions under which that work may be done. The work can be costed. Enough is known of what is required in the running and timing of that programme for conclusions to be reached about cost. That can be fitted into the phase 3 programme in which prices will be of the utmost importance. The company will be able to say to toolmakers' negotiators that they can bargain within that framework, knowing that the company will be able to deliver within the costs set and the work required in order to ensure success of the four-year programme. Of course that can be done.
I am referring to some of the most experienced cost estimators in the business. The Americans would pay a fortune for some of these lads and girls who are able to use their analytical skills in proportioning cost to such a production programme. It is not beyond their wit to devise such a system to overcome the problems facing Leyland, a system that would give the flexibility required in the

419
restoration of differentials, that would still keep within a price strategy and programme, and that will deliver, at the end of the day, something for the company and something for the nation.
The negotiators now ought to say to Leyland that the toolmakers are not asking for an immediate increase in their earnings, but they are asking for an understanding on phase 3. Such an understanding can now be given without pre-empting all the discussion that is to take place with the TUC and the others who will be involved in phase 3. It will not involve the Chancellor of the Exchequer and tax concessions. That is another matter. Leyland can now come to some conclusions that would be a basis for saying to the toolroom workers "Yes, we shall honour the commitment that we are now making and restore the differentials in the way that you ask. We know that we can do that without breaching the principles upon which the Chancellor hopes to conclude some sort of reasonable phase 3."
That can be done by free bargaining within that framework. There is a possibility of transitional arrangements being made and of a decent industrial understanding that will ensure greater smoothness, particularly in a company such as Leyland, being achieved.
I know that the Minister cannot take back the words that he has said. It is too late for that. He has said "Look, if there is any more of this the money will not be forthcoming". He said that without making any attempt to analyse the cause of the bad industrial relations in Leyland and without making any effort to understand. He suddenly thought that the stick without the carrot was essential to make sure of getting some return. That is the last thing that he should have done. I appeal to the Minister to try to get over some of the damage that has been caused by his statement that from now on all these things will be conditional. That statement applies to management as well as to workers. The money will also be conditional upon management decisions.
We must now make a much more constructive suggestion about the investment programme. We must say that we have sufficient confidence in the self-generative prospects within Leyland and that the Government will meet what is coming from the NEB. The Government must
420
consider the proposals that have been made for a reorganisation of top management.
The Minister must be helpful by rephrasing the terminology that he used about sanctions and the statement that he made. He must present it in a different way. I do not believe that he meant all that he said, and I doubt that anyone else does either. If he can rephrase the presentation of his statement I am sure that there will be a response in Leyland and in the toolroom. We can then start to look to the immediate future with a great deal of confidence, knowing that the Government are behind the workers of the nation. We shall then see that we have a car industry with a future, with a quality of production second to none, and with toolroom workers and other workers who know what they are doing and who are intent on making the industry a success.
6.10 p.m.
Mr. David Madel: I am sure that we are all grateful to my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) for initiating this debate, because many of us see it as the first of many debates on what, if anything, should be done about stage 3 of the incomes policy. There is nothing unique in skilled men getting restless after a pay policy has compressed differentials for two years.
I start with a few words about my constituency interest. The Leyland plant at Dunstable employs more than 300 people, and about 120 toolroom men are in dispute. The plant has had no strike for more than 22 years, and some of the employees are aged over 50, have worked for 30 years and have never been involved in an industrial dispute before. This therefore underlines the deep feeling of the toolroom men.
I wish to emphasise the point made by other hon. Members that if this great British company collapses it not only will bring down with it the Dunstable plant and goodness knows what else locally, but will create a real risk of an uncontrollable whirlpool that will bring down hundreds of other firms as well.
The problem over toolroom rates has built up over many years. The employees at Dunstable made the point to me in a

421
letter in December which I should like to emphasise to the House. They said:
"Many thousands of toolmakers are turning to other employment, because in other jobs it is so much easier to obtain better rewards for a less exacting occupation without any of the frustrations involved as a toolmaker."
They underlined the point at a meeting with me this morning, when they said that the apprenticeship required for a toolroom worker was four years and was, therefore, considerably longer than other apprenticeships generally and much longer than those for many jobs in the car industry.
I wrote to the Minister of State at the Department of Employment, following the letter from the Dunstable plant, and he replied:
"As I understand it, the British Leyland Toolroom Committee is seeking to put right the problems to which it has drawn attention, by securing recognition from the company of the Committee's rights to negotiate on behalf of its members employed in BL UK toolrooms. This, of course, is a matter to be resolved between the company and the Committee and is not an issue in which the Government would seek to intervene or influence the parties concerned."
The Government cannot he so neutral, given the number of men laid off and the financial position of Leyland.
The background to the dispute and the whole question of rates for skills is underlined in the Government's consultative document "Training for Vital Skills", published last summer. The document refers to the sort of skill short-ages that might occur when there is the next industrial upswing and refers specifically to mechanical, instrument, electrical, shipbuilding and marine engineering. The Expenditure Committee's Report on the motor industry underlined this when it referred to the danger of a shortage of tool makers unless there were more training for skill. In chapter 5, under the heading:
"The Industry's Significance and Strengths"
the report says:
"there is a world demand for the body department of the former Pressed Steel building technology of the tool and die Company".
There is a world-wide demand for many of the skills that we go to great trouble to train people to acquire. If the dispute continues, there is a danger that many British Leyland toolroom
422
workers will take up the advertisements now appearing in newspapers for skills required abroad. This is the general difficulty and background facing the Government in training people for skills and what their pay should be. When in their consultative document, the Government talk about collective funding of training for skills being needed, they rightly underline the fact that among the occupations that might be considered for inclusion in collective funding are toolmakers, tool fitters and markers out. That is further evidence of how seriously the Government regard the present situation in relation to skills.
According to a report in today's Financial Times, British Leyland hopes to agree the centralisation and integration of the group's vital engineering facilities by 1979. Has there been sufficient consultation with the shop floor on that programme, and can it be brought forward from the date that the company intends?
There is a need to solve the dispute very quickly. Tool room workers are leaving the industry, and many people aged between 25 and 45 are going abroad in response to the demands for their skills. This leaves us with many people aged over 50 who have done the apprenticeship for the skill and many young people of 18 or 19 who might just be starting the apprenticeship.
We are in danger of knocking out a vital section of the labour market—men who have been trained in these skills. They have done the work and we must keep them if the motor manufacturing industry is to survive.
The efforts that the Government are putting into training for skills are shown in the report of the Manpower Services Commission, which sets out a programme that involves £400 million being spent in two years' time on training for skills. That is an increase on the present expenditure of £363 million.
If we do not get this right and fail to keep skilled men the Government will be indirectly financing overseas technology and development by the efforts that they are putting into training for skills.
There are three points that must be borne in mind if we are to find a way out of this situation. First, British Leyland

423
in public ownership is a new venture for any Government, and the negotiating procedures must always be open to change. Unlike other industries in public ownership, such as coal, gas, electricity and British Rail, the motor industry does not have trade union stability or stable relationships between trade unions in the industry.
Nothing has made it more difficult to get the relationships right in the motor industry than the wild fluctuations in demands for its products that have been caused by constant changes in tax policies by successive Governments of both parties. The problems of the company against this background must be borne in mind.
Secondly, the management and unions of the company have been so overwhelmed with problems and disputes that they need easy access and reference to a third party to help them. The obvious third party is a unit of ACAS which should be permanently on hand to help the management and the unions sort out their difficulties that we have, alas, become too accustomed to in British Leyland.
Thirdly, the Ryder Report envisages rising output and a reduction in manning levels over the next few years. I suggest that it is possible to get that reduction only if there is some growth in the economy. If there is not some growth, the Government will not even get stage 3 of the pay policy.
The first step in that direction, which will make it easier to implement the Ryder Report's recommendations, lies with the Chancellor in his Budget on 29th March.
This is a tragic dispute and it underlines the difficulty that we have in this country in paying the right amount for skills. Unless we get it right quickly, our overseas competitors will benefit from the trainig and education that we give in this country and we shall slip further behind.
6.9 p.m.
Mr. Dan Jones: I agree with the hon. Member for Bedfordshire, South (Mr. Madel) in one respect, and that is that this is a tragic dispute. With apologies to no one, I shall reduce the political emphasis in the debate and increase what I call the social and industrial emphasis.
424
I am concerned with the thousands of people walking the streets in towns that have Leyland factories who are virtually unemployed through no fault of their own and under circumstances with which I tremendously sympathise.
I should not have participated in the debate had it not been for the report in the Evening Standard last night in which it was said that the Chairman of the National Enterprise Board had declared that there was no more money available That appears to be an ultimatum, and that is wrong. Such an ultimatum at this time could be more inflammatory than the occasion demands.
On whatever side of the political spectrum one is, there can be no arguing that the dispute is doing harm to the nation, to the company and to the workers in that company. Those of us who have suffered unemployment have a realistic approach to the situation. Few Opposition hon. Members know anything about it. I do not blame them for that. They have been fortunate. But hon. Members on this side of the House know the situation well and I sympathise with my hon. Friends.
However, one can truthfully say that if one aspect of this dispute were settled the present situation would not continue much longer. We have been told of past disputes, but I am directing my remarks to the present situation.
Since I have worked in a toolroom I can say that anyone who expects tool-room workers to accept the type of differentials that exist at British Leyland is totally devoid of experience. From 1945 to date there have been various levels of unemployment in the country but throughout the whole of that period there has never been an occasion when tool makers have been unemployed. The need for them has been constant.
Mr. Budgen: Will the hon. Member explain why he voted for an incomes policy when he is now making a speech about the importance of differentials?
Mr. Jones: I do not see the necessity for allying those two aspects. It is a matter of common sense. There were differentials when the incomes policy was first introduced and those differentials should be maintained. Perhaps I shall be criticised for that opinion, but at least people

425
will now know what I think. The toolroom is the centre of any engineering enterprise and to erode differentials is to ask for trouble.
Mr. Grieve: The hon. Member is saying that the consequence of the incomes policy, when it is applied rigidly is to erode the very differentials that he says are essential for the well-being and well-working of industry.
Mr. Jones: That is an opinion that one must respect.
I keep in mind that the Minister who spoke in today's debate was employed in the coal mines, as I was. Differentials are maintained in the coal mines. If they were not, there would be hell on earth. Only working-class logic with no pretensions can solve the problem, and I cannot understand how tool makers, who are so vital, can be excluded.
Opposition Members have never had to go through the process of apprenticeship, but we realise that apprentices spend three nights a week at evening classes in technical colleges and often have to study at weekends. If British Leyland go out, if we reach the stage that tool makers are regarded in this manner, it is possible that these young people will say that there is no point in their spending three nights a week and all the weekend studying. They are likely to say they might as well enjoy themselves with their pals rather than suffer the burden of study. If that happened, it would be more costly and more damaging to our nation than the dispute at British Leyland.
A few weeks ago the Prime Minister referred to the greater need for technical education. I agree with him. At the same time I do not despise the artistic patterns of education. My own sons and daughters have chosen that course—not with my blessing or by my wish, but they are entitled to choose for themselves. The apprentices are the young people who will experience that form of technical education by which the economy of the nation can thrive and without which we could be in grave trouble.
I turn to the strikers themselves. Clearly, they are asking for public sympathy for their present position and I endorse that request. However, they must also recognise that they are keeping thou-
426
sands of people on the streets as a result of their action. If they feel that they can ask for sympathy from the people, they should appreciate the plight of those people who are on the streets as a result of their actions.
I know Hughie Scanlon well. I also know members of the national executive council well. It appears that these admirable, efficient people have been sidetracked. If one has the responsibility and the ability to carry out that responsibility, one cannot be pleased to realise that those people who are one's representatives are being sidetracked. I appeal to those people to turn to Hughie Scanlon and the national executive of the AEUW. I have been an official of that union for many years. I know these people and they will not let anybody down. It is not too difficult to say "Very well, there has been a serious dispute. We will go on record as saying that at the next pay review all differentials will be restored." I trust Hughie Scanlon to work to that end.
Mr. Litterick: My hon. Friend has said that before.
Mr. Jones: I cannot speak for Hughie Scanlon.
Mr. Litterick: Is my hon. Friend aware that not six weeks ago the advisory officer of the AEUW flatly refused to meet the toolmakers at Birmingham? Now he is playing a different tune because they are on strike.
Mr. Jones: I was not speaking for the divisional organiser for the Midlands; I was speaking for Hughie Scanlon. I know him very well, and I shall defend him. I appeal to those on strike at British Leyland to think of those out of work as a result of their action, to think of their own families, to think of the basic needs of the nation, and to turn to work so that the negotiations can go on and their own rights be effectively restored.
6.30 p.m.
Mr. Michael Grylls: I think that towards the end of this debate we should pay our respects to the Secretary of State for Industry, who made a firm statement. It would be churlish not to respect his statement. He has responded to, sadly, yet another crisis in British Leyland with a firmness which

427
has been missing in the past. We are grateful to him for firmness now.
The history of British Leyland is sad. One of the severest blows dealt to it was, ironically, by the present Secretary of State for Energy, when he forced through a shotgun marriage under the auspices of the Industrial Reorganisation Corporation in 1967. Many of British Leyland's troubles, which it has had to struggle against since then, arise from that decision. But that is past history. We are dealing now with the aftermath of the situation created by the Ryder Report. As I said earlier in an intervention, I believe that the Secretary of State will have to renegotiate the Ryder Report and that the sums will have to be done again. As the right hon. Gentleman admitted, British Leyland is not producing its share of the investment that it needs in order to prosper.
As my hon. Friend the Member for Kingston upon Thames (Mr. Lamont) said, we on this side wish British Leyland well. All we are saying is that there is a firm rôle for this House and the Government in monitoring the taxpayers' money going into it, and that must be in British Leyland's interest as well as in the interest of the whole country. I am sure that the Secretary of State and the National Enterprise Board realise that the huge losses of the past in the Austin-Morris Division must be stemmed somehow. I understand that up to this most recent crisis some of the losses have been reduced over the last few months, and we should be glad of that.
I suspect, however, that the strong words of the right hon. Gentleman today will not really be believed by the work-force. The trouble is that there is a credibility gap. One questions whether the right hon. Gentleman's statement that he is withholding funds will be believed. We have heard firm words before from the right hon. Gentleman and also from the right hon. Member for Huyton (Sir H. Wilson) in April 1975. On 21st July last year, the Secretary of State said that there had to he firm action. Whether the Leyland work force believes it, is part of the problem.
I was disappointed not to have from the Secretary of State, despite what he said in a letter to me this morning, more information as to whether British Leyland
428
is meeting its targets, what its productivity is, how much is being lost through the strikes and what its share of the United Kingdom market now is Its share of the United Kingdom market dropped from 32 per cent. to 27 per cent. in July. These are things we want to know.
There is a certain ridiculousness about these debates. When we had short debates on 21st July and 4th August, we were not given this information. We are having another short debate today, and we are still not getting the information. We are given a firm statement, and that is all. It is difficult for us, who are supposed to be the guardians of the taxpayers' money, to know the state of profit and loss in British Leyland.
Again, the House approved £100 million for British Leyland on 4th August, and I understand that £25 million of it was drawn last week. It seems an odd time to draw that money when 40,000 workers are on strike. I noted carefully that the Secretary of State did not promise my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) that the balance of £75 million would be with-held until British Leyland started showing better results. In a sense, therefore, the Secretary of State's earlier promise to freeze the investment money has not been kept.
The Government must make their firm words stick with British Leyland. They have to do so on behalf of the taxpayer, who has a commitment. I believe that the taxpayer will not grudge that commitment if British Leyland is successful, but he will grudge it if the money goes in and the results are not forthcoming. What was the £25 million apparently put into British Leyland last week for? Was it for buying new machines or for covering current losses? We should be told. Will the balance of £75 million be frozen? That was the original understanding of what the right hon. Gentleman said, but it seemed to weaken when he was cross-examined by my right hon. Friend. We should expect a firm answer.
If this debate shows that the Government are standing firm, we should applaud it to that extent. But the Government must watch their credibility. If they stand firm, there is some hope of getting British Leyland moving again and

429
of getting the internally-generated funds—this was, indeed, the basis of the Ryder Report when it argued that £1·4 million could come from British Leyland itself through internally-generated profits—and the public at large will not mind making their contribution, because it will mean that at the end of the road British Leyland will be successful, profitable and viable. That should be the target. If the Government take the right path in pursuing that target, they should have support from this side of the House.
Mr. Litterick Mr. Litterick rose—
Mr. Rooker Mr. Rooker rose—
Sir K. Joseph Sir K. Joseph rose—
Mr. Speaker: In calling the hon. Member for Birmingham, Perry Bar (Mr. Rooker), I ask him to be kind enough to confine his speech to a few minutes, because I see that the winding-up of the debate is about to begin.
6.38 p.m.
Mr. J. W. Rooker: I appreciate your calling me, Mr. Speaker, and I shall be even more brief than I had intended to be. I have watched the right hon. Member for Leeds, North-East (Sir K. Joseph) tear up one speech earlier today because my right hon. Friend the Secretary of State for Industry had clearly made it for him. That was certainly my impression. Some-where in this Chamber there is stored a black top hat. I think that my right hon. Friend has laid claim to it today and will appear in the cartoons tomorrow as a nineteenth century capitalist in black top hat holding a shotgun at the heads of the workers.
I make an unabashed speech in favour of the strikers. Many of my hon. Friends have referred to them in glowing terms, and I appreciate that they have done so. I also appreciate that they are members of the AUEW and feel a certain inhibition in drawing the attention of the House to the problems of the toolroom workers.
The leaders of the strike came to this House three weeks ago to talk to Labour Members. They gave chapter and verse to show how, in the last two years, they have tried to get this issue raised through their normal, legitimate trade union machinery, not as unofficial shop stewards
430
in an unofficial committee but at district meetings. They failed. I want to refute some of the allegations that these workers do not care a tinker's cuss about the company, the country or their industry.
Most of the tool makers are long-service men with 15 to 20 years' service, and many of them have put their sons into the trade but are now beginning to regret having done so. It is to the credit of Mr. Fraser, chairman of the unofficial shop stewards' committee, that his son is an apprentice tool maker. It shows that he has confidence in the future of a company.
These workers are concerned because British Leyland is pushing out to overseas contracts work that they should be doing. Only 15 months ago Leyland made 400 tool makers redundant, and the tool makers saw the work go abroad. Lord Ryder admitted that Leyland wants to recruit 600 tool makers but cannot find the men in the Birmingham or Oxford areas because skilled men are not prepared to work for the rates of pay that British Leyland is offering. My concern is that of the skilled craftsmen, of whom I was a member at one time.
I know that you want to shut me up, Mr. Speaker, so that we can listen to the guru on the Conservative Front Bench, so I shall come to my final point. My right hon. Friend has to decide whether to have a major inquiry into the engineering profession. Although it may not look like it, that is part and parcel of the same problem. Many hon. Members have said that the problems facing the tool makers is lack of promotion prospects. This is because the major institutions in the engineering profession have closed their doors to them. Workers cannot use the door that I used to come from the shop floor to obtain chartered engineer status. The fact that the avenues of promotion in their industry are closed to the engineers is all part of the decline in their status. When my right hon. Friend considers an inquiry into the engineering profession, I hope that he will take this into account.
6.41 p.m.
Sir Keith Joseph: I think the whole House will agree with me in regretting that it is not my hon. Friend the Member for Oswestry (Mr. Biffen) making this speech this evening.

431
We are very sorry that, for reasons we understand and respect, he is not taking the very full part in this debate that we would all have hoped.
I do not think it is necessary for me to give all the ingredients of the story that we are discussing. My hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller), in an excellent opening speech—he has explained that he would have to be absent during part of the debate—set the picture before us, and Members on both sides, including my hon. Friends the Members for Devizes (Mr. Morrison), Bedfordshire, South (Mr. Madel) and Surrey, North-West (Mr. Grylls) have filled in much of the detail.
My right hon. and hon. Friends, as Labour Members have suspected, welcome the general tone of the Secretary of State's statement. We are glad that he and his colleagues in the Government have decided to stand by the conditions on which the Leyland rescue plan was postulated, but we believe that he is on a slippery slope and that it will need great resolve by him and his colleagues to hold firm. We know that he will come under what we regard as ill-conceived pressure from Labour Members below the Gangway to take a much softer attitude. We think that the right hon. Gentleman's Friends below the Gangway misunderstand the interests of the people whom they are particularly trying to help.
We know the sequence of errors, reaching back a long way, with which the Government are having to try to cope. We regret, and regretted at the time, the creation of British Leyland and the NEB. Some would say that the Ryder Plan itself was ill-conceived. The NEB has succeeded in giving the impression of a casual attitude to its own conditions and to public money, which must have contributed to the demoralisation of the workers in British Leyland. All these problems have been compounded by the incomes policy and the social contract. As my hon. Friend the Member for Surrey, North-West has rightly emphasised, what has made the Government's task particularly difficult, after they have embarked on an ill-conceived strategy, is the credibility gap. That is the problem that the Secretary of State has to overcome. We respected his words this afternoon. He gave the impression to the House of firmness.
Mr. Flannery: He would be embarrassed by the right hon. Gentleman's support.
Sir K. Joseph: The hon. Member for Coventry, North-West (Mr. Robinson), with his experience of the motor industry, expressed doubt about the effectiveness of conditions established by the source of finance. The Government must stick to the resolve expressed by the Secretary of State, not just because of British Leyland and the disaster that could come about if the Secretary of State withdrew from his resolution, but because of the infection elsewhere in the country, an infection which will spread if his word is seen to be alterable.
After all, the attitudes that the experts have always identified as the principal problems of British Leyland—negative attitudes to wealth creation, productivity and co-operation with management—are evident not only in British Leyland but in many other parts of industry, particularly where the Government are the owners or the source of subsidy. If the Secretary of State, either because of his own lack of resolution or because his colleagues do not back him up, with-draws from the position that he took up this afternoon, he will do great harm to the industrial future of this country, as well as to his Government.
In the last two years we have witnessed in the British Leyland saga a textbook demonstration of the damage done by public ownership. We are not here discussing good intentions, about which we have heard so often. Public ownership, however well-intentioned, erodes self-discipline, and the recognition of the reality that money is limited, and that sustainable jobs depend on pleasing the customer at home and abroad. The moment that public ownership arrives, it is supposed that there is a bottomless purse and that there is, for those who work in the firm concerned, immunity from closure and redundancy. We have seen these illusions at work in British Leyland, and the result tends to be—
Mrs. Audrey Wise Mrs. Audrey Wise (Coventry, South-West)rose—
Sir K. Joseph: I apologise for not giving way to the hon. Member for Coventry, South-West (Mrs. Wise), but she has not been here for all of the debate.

433
[HON. MEMBERS: "She has."] I beg her pardon.
The result of these illusions tends to be overmanning, bad value for money, and a take-it-or-leave-it attitude by those employed in public industry. Public ownership tends to create industrial pensioners, whether it is British Leyland, British Rail or British Steel. Labour Members below the Gangway who object to the Secretary of State's attitude, in their obsession with jobs, would destroy far more jobs than they would create. Every penny that the Government pay out, either directly or through the NEB by way of subsidy to nationalised industries, or to British Leyland, has to be paid for through higher taxation, by printing money, by borrowing and the consequent increase in interest rates.
Mr. Flannery: The right hon. Gentleman wants to get rid of British Leyland.
Sir K. Joseph: The hon. Gentleman regards the Secretary of State as automatically wrong because for once I am supporting what he has decided to do. Yet my hon. Friends and some sensible Labour Members realise that it is the secretary of State who will do far more for employment and job creation in this country by injecting realism into places where public ownership has destroyed realism. The crusading destroyers of jobs—hon. Gentlemen below the Gangway—are not serving the public interest at all.
In paying the cost of subsidies to British Leyland, as many jobs are destroyed as are maintained. The money has to come from the consumers or from investors. The jobs destroyed are generally sound, sustainable wealth-creating jobs and those saved are often wealth-destroying jobs and not sustainable. The jobs that are destoyed stay destroyed, and the jobs that are saved will not long remain safe.
I believe that the Secretary of State and his colleagues will do more to help employment by standing in their posture this afternoon than by being what hon. Gentlemen below the Gangway wish him to be—a soft touch at the expense of the British taxpayer and of other people's jobs.
434
The hon. Member for Coventry, North-West said that it was unthinkable that the volume car decision in the Ryder Report should be reconsidered, but the logic of what the Secretary of State said to the House is that that decision may have to be reconsidered if management and labour in the relevant parts of British Leyland cannot fulfil the conditions laid down. [Interruption.]The alternative is that—[Interruption.]
Mr. Speaker: Order. Sustained interruptions from a sedentary position are unfair in a debating chamber.
Sir K. Joseph: The alternative is that British Leyland should be subsidised permanently. That means that other people will be put out of jobs in order that money which could have gone to pay them in wealth-creating jobs will go to wealth-destroying, loss-making jobs in British Leyland. Surely Labour Members cannot wish for that. It is another illusion that jobs are destroyed, but not replaced.
Overmanning is probably this country's biggest industrial handicap. I have looked up some figures. In the 10 years or so following 1960, when there were some years of a Conservative Government and other years of a Labour Government, 400,000 mining jobs were destroyed. It is said that 200,000 jobs in textiles were destroyed. Also, 200,000 jobs on the railways were destroyed. That makes a total of 800,000 fewer jobs in just three industries. Yet, at the end of that decade, there was not less employment, but 1·2 million more people were employed than at the beginning of that decade. If the economy is run on an encouraging basis more than enough jobs are created to replace the jobs that are destroyed by inevitable change and the occasional areas of inefficiency.
We are told by the experts that British Leyland can be as competitive in productivity and performance as its rivals. If the conditions called for by the Ryder Plan are fulfilled, the debilitating, demoralising belief in immunity may be removed. If the conditions are not fulfilled, the belief that jobs in publicly owned companies are immune from redundancy will be shown to be an illusion. That depends upon the Government standing by their resolution.

435
The Government have a number of options before them. Inside this sprawling giant of British Leyland are several lean, potentially efficient, competitive and even world-beating companies. Those companies need not necessarily be forced to cross-subsidise one another as they are doing now. It may be necessary to rescue British Leyland from the British Leyland rescue, and it will be necessary at least to rescue the British taxpayer from the British Leyland rescue. So much depends on the resolution of Ministers.
The story has it that over Chrysler the Secretary of State was right, but that he was defeated by his colleagues. The right hon. Gentleman deserves credit belatedly for calling a halt to what is going on at British Leyland today. I think that he will be serving the interests of all in this country by getting British Leyland to accept conditions, or by reviewing the whole of the Ryder Plan.
6.55 p.m.
The Minister of State, Department of Industry (Mr. Gerald Kaufman): I join the right hon. Member for Leeds, North-East (Sir K. Joseph) in regretting the departure of the hon. Member for Oswestry (Mr. Biffen) from the Opposition Front Bench and the reasons for that departure. I regret his departure not only because of the personal regard in which we all hold the hon. Gentleman but because we would have heard from him this evening a very different speech from the one to which we have just listened.
The hon. Member for Oswestry, who was a former parliamentary candidate in Coventry, is acquainted with industrial problems. The right hon. Member for Leeds, North-East, on the other hand, whose access to the Opposition Front Bench in his present rôle I certainly welcome with considerable glee, seems to forget his participation in industrial policy as a member of the previous Conservative Cabinet. It is fascinating to hear him denounce public ownership. It is intriguing to hear him call public ownership a soft touch at the expense of the British taxpayer. Yet he was a member of the Cabinet which pushed the nationalisation of Rolls-Royce through Parliament in 17 hours, much to the satisfaction of his hon. Friend the Member for Derbyshire, South-East (Mr.
436
Rost), who supported the remarks made by his right hon. Friend this evening.
My hon. Friend the Member for Tottenham (Mr. Atkinson) was right in what he said about deploring the short-comings in the nature of the debate that we have had today. The debate has been triggered by and has dwelt largely on a number of industrial disputes. But that misrepresents the nature of the problem and crisis at British Leyland. The crisis at British Leyland is not simply one of industrial disputes or of pay policy. Hon. Members on both sides have referred to the pay policy having created grievances among workers at British Leyland. We know all about that. I have discussed this problem with workers at British Leyland. I visited British Leyland, Solihull, last Friday and met the convener and his fellow shop stewards. They told me quite flatly that if the lid were lifted off the pay policy and free collective bargaining were to operate tomorrow, that would not provide a solution to the problems facing British Leyland.
Therefore, I point out to my hon. Friend the Member for Birmingham, Erdington (Mr. Silverman) and the hon. Member for Colne Valley (Mr. Wainwright) that spelling out the pay policy at this stage would not solve British Leyland's problems. In any case, there seems to be the misapprehension that it is in the Government's hands alone to spell out such a pay policy. But it is not the Government's pay policy alone. It is the pay policy of the Government and the Trades Union Congress. It is as much the pay policy of the TUC as it is of the Government. The pay policy would not be possible if it were not as much the policy of the TUC as of the Government. It is impossible therefore, to spell out what the pay policy will be, because to spell out the Government's ideas on the next stage of the policy is not to spell out the next stage of the pay policy which has to be negotiated with and agreed by the TUC.
As this is not a statutory pay policy—unlike the policy of the previous Government—it will not be for the House of Commons to pass an Act imposing a counter-inflation policy as was twice done in the period 1970 to 1974. That is why, in what was otherwise, I thought,

437
a valuable contribution, my hon. Friend the Member for Leeds, West (Mr. Dean) was not accurate in saying that the rates of pay are decided in this Chamber. They will be decided upon the basis of the negotiations, when they are concluded.
Just as it is not simply a question of the pay policy being only the Government's pay policy, so it is not simply a question of the finance for working capital and investment in British Leyland being only Government finance. My hon. Friend the Member for Tottenham said that in what he had said today the Secretary of State was threatening Leyland workers with sanctions. However, the problem is that what the Secretary of State said is that Government money could not be advanced through the NEB or through the Department of Industry if the matching money which was essential as part of the Ryder scheme was not flowing forward.
There is provision for £1,500 million to be part of the Ryder investment scheme as part of the cash flow of British Leyland. If that cash flow is not forthcoming, the Government can advance every tranche of money ever year and the Ryder strategy still will not be fulfilled, because the Government tranches, if they are all transmitted, will amount, as I have said, to less than half the money that is needed.
That money can be advanced only through profits earned by Leyland, and, if Leyland is not meeting its production targets and the profit, the failure of Leyland to generate the finance will destroy the Ryder strategy even if the Government at every stage advance all the money which is expected from them.
Mr. John Mendelson: The issue between us is not that the Minister and his right hon. Friend have restated the policy correctly. The issue is that restating it today is not helpful. What we need is a way out on the lines suggested by Mr. Scanlon. The Government should add their weight to what the President of the AUEW is saying.
Mr. Kaufman: We certainly give Mr. Scanlon full support in his efforts to solve this problem: I say that unreservedly. Mr. Scanlon has been a great help and has been acting constructively throughout.
Mr. Tebbit Mr. Tebbit rose—
Mr. Kaufman: I hope that the hon. Gentleman will forgive me; I have very little time. I undertake to give way to him a little later if I have time.
It is important that I make it clear that the money has to be generated by profits provided by the products of British Leyland being produced competitively and on time. The problem has been, quite apart from the present crisis caused by this series of industrial disputes, that Leyland is just not meeting any of its production targets. That has been a consistent failure.
When he announced the Government's approval of the tranche last summer, my right hon. Friend the Secretary of State was able to point to a number of encouraging developments which justified the Government in approving that £100 million and in requesting the House to grant £30 million under Section 8 of the Industry Act. But the sad fact is that since then the situation has deteriorated and Leyland has been failing to meet its targets.
I want to make something else clear. I agree with my hon. Friend the Member for Penistone (Mr. Mendelson) that the very nature of this debate has not been illuminative of the problems and the necessary solutions for Leyland. Leyland is foundering not just because of the toolroom grievances, on pay or otherwise. Leyland's problems extend far beyond pay differentials and the pay policy. Its problems are inherent in the experience which has been undergone.
That is why, while I would not agree with every particular of the speech of my hon. Friend the Member for Coventry North-West (Mr. Robinson)—he would not expect me to—his analysis of the situation has certainly been relevant in the sense that it sought to deal with the deep-seated problems of Leyland and the way in which the Ryder strategy can be achieved rather than on the basis of, we trust, transitory industrial disputes, certainly immensely damaging but nevertheless irrelevant to the basic problem.
The disputes are immensely damaging. It is essential, as my hon. Friend the Member for Burnley (Mr. Jones) said, that they come to an end. But the end of the disputes will not be the end of the Leyland crisis. Let us be clear about

439
that. My hon. Friend the Member for Leeds, West said that the tool makers did not stand alone in their problems. With his great experience of the engineering industry, he was of course right.
On Monday afternoon I told the House that other workers in other industries faced similar problems—not identical problems, of course, because every industry has its own specific circumstances. But I would say through my hon. Friend to the workers in Leyland who are taking industrial action that after I went from Solihull to Coventry on Friday I discussed with the shop stewards at Alfred Herbert these very same problems of differentials. They are concerned about them and they told me that they required to be dealt with, if they could be, in the next stage of pay policy.
These are problems in many spheres, but the workers at Alfred Herbert do not feel it necessary to take industrial action to draw attention to their grievances. They are drawing attention to their grievances through the procedures—
It being three hours after the commencement of the proceedings, Mr. SPEAKER interrupted the proceedings pursuant to Standing Order No. 9 (Adjournment on specific and important matter that should have urgent consideration) and the motion for the Adjournment of the House lapsed, without Question put.

ORDERS OF THE DAY

  COAL INDUSTRY BILL
  Order for Second Reading read.
  7.7 p.m.
  The Secretary of State for Energy (Mr. Anthony Wedgwood Benn): I beg to move, That the Bill be now read a Second time.
  As this debate is starting late, I shall try to be brief. The Bill implements the tripartite document "Coal for the Future", which was published recently and provides a framework for the future of the industry. Judging by the recent debate on nuclear fuel, I think the whole House recognises that the energy crisis continues to dominate the thinking of all Governments, world-wide. Not only in this country but in the Community, interest in coal is now much greater than it was a few years ago.
  I have asked for figures to be prepared of EEC subsidies to the coal industry. I am naturally giving very rough figures, but these show that the subsidy per ton in the United Kingdom in 1975 was about 33p. In Germany the figure was about five times as high, in France about 12 times as high and in Belgium 20 times as high. Many other countries have thought it right to support their industries. Taking the figures of support for three of those countries, in 1975 subsidies to the coal industry in the United Kingdom totalled about £29 million, in France about £92 million and in Germany about £180 million.
  Although we are very rich in resources of oil and gas and have a great deal of skill in nuclear energy, and although there is an enormous amount to be gained still from conservation and some from renewable resources, coal is without doubt our surest long-term energy resource.
  The problem about all energy—it applies to coal as much as to other forms—is that it involves a high capital cost, a long lead time and a measure of uncertainty. We have tried to reduce that by the tripartite report recently published. Although that report deals with the industry up to 1985, the National Coal Board brought forward at the meeting its Plan

  441
  2000, which we shall process in due course.
  I shall turn first to the provisions of the Bill. It increases the borrowing limits as is obviously necessary for an industry with such a big investment programme. Secondly, it renews legislative authority for grants to the coal industry to deal with short-term fluctuations. It is not possible to contemplate a long-term plan if it is undermined or destroyed by short-term fluctuations. Thirdly, it provides for social payments, of the kind with which the industry is all too familiar, to cope with problems of exhaustion in certain areas. Fourthly, it extends the statutory powers of the National Coal Board.
  The difference between this legislation and earlier legislation, which hon. Members will recall, is that very often in the past legislation was to cushion the decline of the industry. This legislation is to stimulate the extended investment of the Board.
  Mr. Peter Rees: May I raise a point of clarification? Apparently, under Clause 2 grants are to be made
  "for the purpose of promoting the sale of coal to the Central Electricity Generating Board".
  Can the Secretary of State explain what exactly is envisaged in the way of promotion of sales to the CEGB?
  Mr. Benn: Promotion does not mean public relations in that sense: it means making long-term contracts possible. My hon. Friend the Under-Secretary of State who will be replying to the debate, has been involved in negotiations over the past 12 months between the National Coal Board and the South of Scotland Electricity Board. They have been concerned with the question of what is necessary to provide long-term contracts for the coal industry in Scotland following the expiry of the Longannet contract. We have similar problems in Wales, and the Bill provides legislative power for this to be done.
  The hon. and learned Member for Dover and Deal (Mr. Rees) may appreciate that there is a parallel in the Community, where proposals are now before us not only for stocking, to cope with
  442
  short-term problems, but also to provide some Community assistance to permit the conversion to coal of other fired power stations, in order to use the coal that is available. This is one of the instruments by which we hope to help the market for coal as the investment goes through. I should take this opportunity of the hon. and learned Gentleman's timely intervention to say that there is not much point in having a big investment programme for coal unless we are concerned to ensure that the markets for coal are also available. That applies to the export market and to the market that may develop for coal in petrochemicals. That also involves Clause 2.
  Clause 1 of the Bill increases the limits under the 1976 Act from £1,100 million, rising to £1,400 million, to £2,200 million, rising to £2,600 million, subject to parliamentary approval. That should take us into the early 1980s. We have included the higher figure but we hope that the lower limit will be sufficient. This is necessary for the massive programme of investments of which perhaps the best known is Selby. The productivity increase that will flow from Selby is massive compared with that of older pits. That will certainly justify the investment. Selby alone will provide 10 million tons a year as it comes on stream. If the Vale of Belvoir—
  Mr. Michael Alison: Since the Secretary of State has quoted a peak output figure, can he tell us what the cost of generating that would be?
  Mr. Benn: I shall ask my hon. Friend the Under-Secretary to see what figures can be provided. I do not carry the figures in my mind. All I can say is that nobody disputes that the return on the Selby investment will fully justify its taking place. It is in the development of new higher productivity pits that the National Coal Board hopes to achieve its long-term production for its energy needs.
  Mr. Dennis Skinner: Does my right hon. Friend agree, however, that, although we cannot calculate precisely what productivity will be at the Selby complex, recent drift mines, including the most recent one, are running at about thre times the average productivity level and, therefore, we can assume that Selby would be of that ilk?
  Mr. Benn: My hon. Friend is better qualified than I to give that view. It certainly confirms what I understand to be the case.
  Perhaps I should say a word about Drax B, because I recall that as Minister of Technology in 1969 I arranged for a statement to be made to the House by the present Chancellor of the Duchy, who was then my Minister of State. The link between Drax and Selby is seen from the outside as a natural one. It bears on other matters, although those matters are more for my right hon. Friend the Secretary of State for Industry.
  There has been a great deal of public discussion about the Vale of Belvoir. There is thought to be 500 million tons of coal there and it is worth about £10 billion. Any coal industry which did not promote the recovery of that amount of national wealth would be totally failing in its national duty, although this, as other matters, will be subject to the normal planning procedures.
  Mr. T. H. H. Skeet: Can the Secretary of State say what the output per man-shift will be for the Vale of Belvoir? We already know the figure for Selby.
  Mr. Benn: The hon. Gentleman is so attractive that he would tempt any Minister into making a silly statement. I cannot anticipate what the OMS will be for the Vale of Belvoir. I understand that it would be a very good coalfield to work. It will not be approved until detailed examinations have been made, and it would have to go through the normal planning stages and be cleared with me and the Treasury to establish that the investment justified it. I cannot specifically give a figure for a field which has not yet been opened up.
  Mr. Skeet: The Secretary of State has a figure for Selby.
  Mr. Benn: No, I am afraid I cannot give a figure for the Vale of Belvoir. In terms of the amounts of investment, I have already mentioned Selby and the Vale of Belvoir, but there are also extensions and improvements to about 100 other collieries. The rate of investment is now running at about £300 million to£400 million a year. The National Coal Board expects its own financial out-
  444
  turn to rise towards 50 per cent. self-financing.
  The costs are higher than in 1974. At that time the National Coal Board had no experience of investment programmes of this magnitude. There is also the general problem of inflation and the learning curve. But all projects are carefully appraised and, whereas in the past public money was provided to write off old debts, the new debts acquired as part of expansion will, to the extent to which I have referred, have to be paid off.
  Clauses 2, 3, 4 and 8 of the Bill provide for various types of grants. These include grants for the promotion of the sale of coal to power stations and for stocking provisions. I have already referred to the relevance of Scotland in one context. Wales is particularly relevant to stocking, and my hon. Friend has been involved in the Welsh working party as well. There is also provision for assistance with coking capacity and regional grants. We recall that 70 per cent. of the work force in the mining industry work in assisted areas.
  Clauses 6 and 7 provide for the redeployment of manpower resources scheme, which would not continue beyond 1978 for new cases, although existing cases would go through without renewal.
  Clause 9 extends the powers of the National Coal Board, which has always been engaged in activities outside the strict business of digging and selling coal. The coke ovens, the briquette works, the tar works and the benzole works are now united into NCB (Coal Products), which includes National Smokeless Fuels. The Board has always had such activities and has had links with the British Steel Corporation and Staveley in, for example, the production of PVC. Now, however, coal must be seen as a substittue for oil, and it is necessary for the Board to gain experience of refinery work. NCB (Coal Products) and British Steel Corporation Chemicals were working on joint plans for petrochemical plant. The clause clarifies the legal position. I say "clarifies" because the Board believed itself to be empowered to engage in these activities, but in view of a statement made in the House by a Minister it was thought necessary to clarify the position by Clause 9.

  445
  Clause 10 extends the powers in another sense, allowing the Board to exploit other minerals, such as anhydrite, gypsum and aggregates which are discovered in the course of the Board's normal work. The clause gives the Board explicit power to exploit them.
  Clause 11 allows the Board to do abroad what it does at home, subject to Treasury approval. In view of the reputation that the Board has acquired worldwide, and the dependence that the manufacturers of mining equipment have on the Board's success, there is much to be said for the extension of the powers in Clause 11.
  Clause 12 is a technical provision harmonising the pension arrangements for subsidiaries as well as direct NCB employees. This will provide some administrative simplification.
  I turn to some of the other issues of concern to the mining industry and hence to the House. My hon. Friend and I, after discussions with the NCB and the CEGB, have acted to check the flow of imports of coal when coal was already being stocked. We are also engaged, particularly in a Community context, in trying to promote the export of coal, because, despite the high subsidy on coal within the Community, a great deal of coal is coming in from Poland, South Africa and, I think, Australia. In so far as we are serious in trying to develop a sensible Community energy policy, reducing the dependence on imported energy, it would manifestly be sensible that the NCB should retain, restore and expand its existing export markets.
  After much negotiation, the miners by a ballot approved a modest start to earlier retirement. I say modest "because I know that it did not go as far as some would like. But I very much welcome the fact that the negotiations took place. Here again, the Common Market parallels showed us to be at a great disadvantage.
  I have referred to the discussions that my hon. Friend the Under-Secretary has been having about the coal burn in Scotland and Wales. He may say more about that later. I have also made a reference to the EEC dimension, because that is something we shall have to take into account. I think that the mining Indus-
  446
  try will expect us to play an active part there, given that 33 per cent. of all the investment in coal in the Community is investment in the NCB.
  People are perhaps not as aware as they might be that in all the energy fields Britain has a dominant position within the Community. Twenty-seven per cent. of all energy investment in the whole Community—in Germany, France, Italy and all the other countries—is British investment; 51 per cent. of the oil investment is British investment; and 33 per cent. of the coal investment is British investment. Therefore, I am fortunate when I go to the Energy Council—I am currently its President, during our general presidency—that the British voice counts for something in energy because of our contribution. We also have the International Energy Agency interests and the fluidised bed burning scheme at Grimethorpe is a product of that.
  Before I finish, I should like to say something about the human resources in the mining industry. I shall not try to suggest that provisions for investment alone in an Act are sufficient to solve the problems of those who work in the industry. I do not relate this directly to the debate that has just concluded, but I must tell the House that, in my opinion, if we get this matter right it will be the most important contribution of all. The basis of the answer has been tripartism, a horrible word but one which reflects the fact that in 1974 a group of Ministers—my right hon Friend the Secretary of State for Industry, then Secretary of State for Energy, and Ministers from the Treasury and the Department of Employment—and representatives of the NCB, the NUM, NACODS and the colliery managers met together to plan the revival of the mining industry.
  That first tripartite meeting was a significant event, because it provided for those who worked in the industry a direct opportunity to contribute their knowledge and skill to the development of the industry in which they worked. I should like to read some evidence submitted to the Sankey Commission in 1919, evidence which nearly 60 years ago forecast the issue that was finally brought to fruition by the tripartite scheme:
  "Any administration of the mines under nationalisation must not leave the mine worker

  447
  in the position of a mere wage-earner, whose sole energies are directed by the will of another. He must have a share in the management of the industry in which he is engaged, and understand all about the purpose and destination of the product he is producing; he must know both the productive and the commercial side of the industry. He must feel that the industry is being run by him in order to produce coal for the use of the community, instead of profit for a few people. He would thus feel the responsibility which would rest on him as a citizen, and direct his energies for the common good …as that knowledge which has been denied him, grows, as it will do under nationalisation, he will take his rightful place as a man. Only then will labour unrest, which is the present hope of the world, disappear. The mere granting of the 30 per cent. and the shorter hours demanded will not prevent unrest, neither will nationalisation with bureaucratic administration. Just as we are making political democracy world-wide, so must we have industrial democracy, in order that men may be free."
  That remarkable passage was part of the evidence submitted by William Straker, then Secretary of the Northumberland Miners Association. In tripartism we are moving towards the conception that he had many years ago.
  I believe that as the tripartite structure develops it will be strong enough to cope with the serious problems remaining in the industry. I have never felt that a Minister could be very credible when speaking about, for example, productivity. Some of my hon. Friends have at least dug many tons of coal, but it has always seemed to me that a Secretary of State telling miners to dig more coal was a most improbable figure. I have never told them that, and I do not intend to do so. The problems of productivity and all that goes with them must be tackled by those in the industry. There is no one better than the members of the tripartite group and their colleagues at area level to deal with the problems of development, productivity, manpower forecasting, investment, marketing and research and development. It may ultimately be strong enough to provide a forum for discussion about pay structure.
  Mr. Peter Rost: The Secretary of State has just mentioned productivity. Without saying any more about the disappointing trend of productivity, which the right hon. Gentleman himself has described as disappointing in his introduction to the report "Coal for the Future", does he admit not only that the figures are disappointing but that
  448
  he as a Minister has some responsibility to try to get the NUM and the NCB together to get on with this aspect of the problem?
  Mr. Benn: I accept my responsibility so long as I am not required to follow that by exhortation. The NUM and the NCB are well aware of the problem. They have contact and there has been a proper examination of the problem. It is not entirely unconnected with the problems of pay policy. No doubt that is a matter that will arise. That hears back on some of the things that have been said earlier today. I believe that these problems can be resolved within the present framework I shall deal later with another level.
  When we consider the different fuels within the Energy Commission, which is also intended to be tripartite in character, it is clear that coal will have to make its case against the other fuels and that success will not be unconnected with success in dealing with the problems that I have described. Anyone who knows anything at all about the industry will know that simple figures of productivity may conceal problems of geological structure, problems of morale arising from high stocking and all sorts of problems that do not lend themselves—I am not suggesting for a moment that the hon. Member for Derbyshire, South-East (Mr. Rost) was seeking to make this suggestion—to easy resolution by leading articles written in the comfort of an editor's chair in Fleet Street.
  Mr. Nigel Forman: I hope that I am not taking the right hon. Gentleman too far away from the main line of his argument, but he mentioned the Energy Commission—
  Mr. Benn: I am coming to it.
  Mr. Forman: Will the right hon. Gentleman say something about the representation on that Commission? Many of my hon. Friends are concerned that it should be more than just a tripartite suppliers' club of the kind he has hinted at.
  Mr. Skeet: May I ask the right hon. Gentleman a rather pointed question? I was rather interested in his observations. Does he propose to have 50 per cent. NUM representation on the National Coal Board and 50 per cent. of the directors appointed by the Secretary of State?
  Mr. Benn: As a matter of fact, I was about to come to that passage. I always feel flattered if hon. Members intervene to hurry me on to the next part of my speech, because I then know that it is relevant.
  It is my hope that this tripartite structure can work in other industries. I hope that the gas industry will come along later this year, and the electricity industry also.
  I now come to the moment when I hope for general support—namely, the planning agreement concept involving the management, the unions and the Government in so far as the Government in this case are the body who provide the capital investment. The planning agreement concept is the basis. I am not authorised tonight to anticipate what action might follow in the public sector from the Bullock Report—
  Mr. Skeet: Ah.
  Mr. Benn: The hon. Gentleman need not make an interjection. In fact, "Bullock "is written in my notes. I shall show the passage to the hon. Gentleman later. This is not jumping into the two-tier board recommended by the NEDC. I am sure that it will be confirmed by those in the industry that in the tripartite structure, which is slow to build up and hard to establish, very many of the gains of industrial democracy, disclosure, joint discussion and joint strategy for the industry can be achieved if confidence can be won. I believe in it strongly without prejudice to other matters that would not fall to me to announce to the House on Second Reading.
  I now turn to the Energy Commission. It is not possible to consider one industry in separation from another. I go further and say that the view of one industry of the development plans of another should be highly relevant. I have one more quotation to bear me out. I quote from a critique that was written 10 years ago of the then Labour Government's attitude to oil and coal. It states:
  "We believe that government policy of increasing dependence on oil is fraught with danger".
  This is a criticism of the Government of which I was a member. It continues:
  "We think that the assumptions relating to oil prices in the future are based on completely
  450
  baseless and illogical reasoning, and certainly not related to the reality of the new developing situation in the Middle East …
  Our privileged position in the Middle East has largely been obtained and retained by power, and unlike the government we think that situation is changing and will continue to change. We do not think it necessary to be political theoreticians to estimate that the people of the Middle East, who, like ourselves, are anxious to assure and improve standards of living, will in fact demand just that. This eventually can change the whole relationship of oil prices with other fuels, and long-term represents a critical economic factor in the costing of the nation's fuel."
  That was written by the miners. Naturally, they have an interest in the mining industry. There is nothing to be ashamed of in that. In fact, it was written seven years before the OPEC price increase by Jack Dunn, area general secretary of the Kent area of the National Union of Mineworkers. He published that critique of energy policy under the authority of his area. It was based on a forecast that was much more accurate than that of the Government of the day.
  It is important to recognise that in the planning of the whole fuel pattern we should hear, for example, what gas says about electricity, what coal says about oil and what both say about nuclear power. In the Energy Commission we hope to achieve that.
  Mr. J. Grimond: As I understand it, the confidence that the National Coal Board has in its investment programme, which I share, is based upon some estimate of what oil prices may reach in the 1980s. Is that so? If so, what estimate has it made of oil prices?
  Mr. Benn: That is a difficult matter to forecast. Speaking very loosely—I cannot do more than that because no one really knows—people are talking in the world in which I move of a price of $25 a barrel in the mid–1980s. Even that estimate involves many uncertainties.
  It would be a foolish Government that sought to base a long-term energy policy with a 10-year lead time on the assumption that they could forecast with any accuracy world demand, the rate of growth, the impact of conservation, the political factors in the Middle East, which could change, the time that gas will last and the acceptability of nuclear power. That sort of thing cannot be done.

  451
  However, in so far as we can look forward, it is necessary to justify investment according to some criteria.
  My argument is immensely simple. I contend that the best we can do is to bring all the fuel indutries together so that they may examine each other's investment programmes. The fuel industries, above all, will have an interest in seeing that another industry does not get away with too large a part of the cake. If we can get harmonious forecasting and joint examination of investment programmes, rolling that forward as the situation changes, which it often does, I submit that that is the best possible way of arriving at a reasonable energy policy.
  I should like to be in the position of publishing an energy budget every year. I recognise that if I were in that position I should be in an unusual position in comparison with the Treasury and the Budget that is produced by the Chancellor, as I should have to look ahead to 10 years when producing each budget. As events have shown, 10 days is sometimes rather long for the durability of a Budget judgment.
  I have been asked how we prevent the Energy Commission from becoming a producers' syndicate. That is the nub of the question. It is said that we must prevent it from becoming not only a producers' syndicate but a syndicate that leaves out of account the value of conservation and the possibilities for renewable reserves that do not have a powerful lobby behind them. These are extremely difficult matters. The reason why I have not been able to announce the membership of the tripartite group is, candidly, that I have not yet found a complete answer to the question. I do not think that we want a group of 50 people as that would make it a mini-energy conference and nothing would be done.
  The chairmen of the main industries must be on the group. It must have a high level of TUC General Council membership in its representation. The CBI has a tremendous interest in it. Not only is 40 per cent. of our energy consumed by industry but the CBI consists of the major suppliers to the massive investment programme. Consumer representation must also be present.
  452
  Some fuels consume what other fuels produce. One of the major consumers of coal is electricity. The same is true of oil, which electricity consumes. There is a built-in balance. I am anxious to come to a speedy conclusion. It will be a sort of tripartite arrangement. It must include other elements but it may be that the answer today lies in ensuring that even the tripartite commission operates on public documents so that other interests can come in.
  This morning I went to the NEDC. Energy was on the agenda but we did not reach it. I made available to the NEDC our current thinking on energy policy, and that is now going to its sector working parties. In effect, that document became declassified because a lot of interests, including the consumer interests and the TUC—
  Mr. Skeet: Is it published?
  Mr. Benn: It is available. Publication is such a formal thing, and leakage is so illegal. I wonder whether the term "seepage" of information is more appropriate. Perhaps I should say that I hope that a process of progressive declassification of documents will take place. The term "seeping" or "declassified seepage" might ultimately get into a footnote in "Erskine May", which is the only route to immortality. Whichever it is, I am anxious that in the development of our energy policy everyone with an interest should be able to make his influence felt.
  I am absolutely convinced that there is a firm and secure future for coal here and world-wide. We have the actual physical resources—the coal. If the House is kind enough to pass the Bill, we shall have the investment programme capable of winning a great deal of that coal for the nation. We also have the most highly-skilled labour force—managers, colliery overmen, deputies and miners—anywhere in the world. I invite the House, in giving the Bill a Second Reading, to express its confidence in the capacity of these people to contribute mightily to our long-term energy needs.
  Several Hon. Members Several Hon. Members rose—
  Mr. Deputy Speaker (Mr. Oscar Murton): Order. Before I call the next hon. Member to speak, I should explain

  453
  that Mr. Speaker has asked me to inform the House that a considerable number of right hon. and hon. Members are anxious to take part in the debate and that short speeches will be very much in the interests of all.
  7.42 p.m.
  Mr. Tom King: Towards the end of the Secretary of State's speech I almost forgot that we were on the Coal Industry Bill. I do not complain about that, because the implications of coal and its interlinking with the whole spectrum of energy is a very important and complicated matter. I hope that the right hon. Gentleman will not think it offensive in any sense if I say that at stages of his speech I thought that he was positively communitaire. It was refreshing to hear him dealing at length with the importance of the European connection. I did not expect to hear it so soon, but the right hon. Gentleman has the presidency or chairmanship of his Council of Ministers and it is right as we in Britain have an important part to play in any European energy policy.
  The right hon. Gentleman's dwelling on the tripartite approach was brave. This is the second debate today on that aspect, the first having been devoted to the virtual collapse, of the failure of the tripartite approach, of British Leyland.
  The document "Coal for the Future" is an extremely useful publication for this debate, because it covers the subjects in which we are interested more usefully than "Plan for Coal" and "Coal 2000", and it is a useful summary of the current situation.
  The Secretary of State was wise not to forecast anything about the price of oil. I was much impressed with Mr. Jack Dunn in the quotation that the right hon. Gentleman gave concerning the possible increase in the price of oil. I believe that it was Lord Balogh who in the 1960s said that there was the clearest possible evidence that the price of oil would never rise above $2 a barrel, and I notice that the noble Lord still holds some position of influence in the future policy on energy. I do not know whether his position is based on the quality of his previous judgments, but Mr. Dunn appears to have won that round over the noble Lord.
  454
  In referring to the alternative energy sources, and particularly to the question of conservation, which must be always put high on the list, the Secretary of State said that coal was the surest long-term energy resource for this country. We would certainly not dissent in any way from that.
  It is interesting to note that today on the front page of The Times Business News there was an announcement of President Carter's proposals to set up his new Department of Energy with a substantial budget under Secretary Schlesinger. I was interested in one comment, which said
  "It is clear that the department will concentrate on greatly expanding domestic coal production".
  This is to be President Carter's first initiative in energy matters. Against that background it is extremely interesting to note what is happening to coal production, and the importance that the world is attaching to coal, as demonstrated by the recent OECD figures for the expansion of coal production.
  The increase for the United Kingdom—and here we must wonder whether we are doing all we can in this matter—is 6·5 per cent. over the period 1975–85. The other figures, however, are worth attention. The United States of America, not by any means a small coal producer, plans an increase of 58·3 per cent. in the next 10 years. Over this 10-year period Australia and New Zealand propose figures of 58·5 per cent., and Canada 86·2 per cent. The average increase for the whole of OECD in the next 10 years is 36·9 per cent. Our figure is 6·5 per cent. One is bound to conclude that this country and Europe—where, as the Secretary of State pointed out, we have nearly half the total coal output of the Community—are lagging some way behind the targets that have been set in a number of other countries.
  "The Plan for Coal", from which this Bill is developed, was drawn up in 1973, at the time of the Conservative Government. It was endorsed in 1974. There is, therefore, a considerable element of bipartisanship in the belief in the future importance of the coal industry. That does not in any way imply blanket endorsement of the proposals in the Bill, and there are a number of points that I

  455
  wish to make about them. However, the general approach in terms of the importance of the coal industry is not seriously challenged in any part of the House.
  We must, however, recognise that this approach involves spending substantial sums. Under the Bill the increase in the ceiling is £1,200 million. This must not be seen as a blank cheque for random capital expenditure in any spendthrift way; it should be seen as expenditure that must be very closely monitored.
  It is important to say that, because clearly all those concerned with the industry—the management of the NCB, the Secretary of State and the unions—have said that progress so far has been extremely disappointing. The nation is entitled to ask where are the benefits from the substantially increased expenditure on the coal industry. That is certainly a fair question to put.
  The Secretary of State glided effortlessly, as he often does, over the question of the substantial increase in the sums involved. He said that increases of this nature—I noted his words—were obviously necessary in an industry with a major investment programme of this kind. He said that the increase resulted from the effects of inflation and the learning curve. I do not know what the learning curve has cost, but I know what inflation has cost. It is a sorry commentary on the economic policies of the Government that a programme that two years ago was expected to cost £1,400 million is now, purely on the grounds of inflation—according to the figures of the Government and the NCB—to be £2,440 million. An increase of 74 per cent. is a staggering rise for that period.
  The damage that has been done to the prospects of the coal industry by the mismanagement of the economy by this Socialist Government can be most clearly seen in those figures. Obviously, if inflation increases, or continues at that level, it will seriously jeopardise the ongoing investment programme for the industry.
  That is the situation that confronts us when we look at the programme for coal "Coal for the Future". The first is the appalling problem of forecasting demand. The bracket of the Coal Board's own figure for the year 2000, of between 135 million and 200 million tonnes, shows
  456
  the extent of the variation and some might visualise a kind of thermostat, which one can switch up or down when one gets rather closer to the figure. Yet anyone with even the most superficial knowledge of the coal industry realises that it is not an industry in which demand can be turned up and down by ministerial edict; it is something that will have to be worked and planned for with the long lead times involved.
  I have looked carefully at the market forecasts given in "Coal for the Future". I am concerned about them. A number of areas, which the Secretary of State did not touch on, are crucial to the requirements for coal. Things like the efficiency of power stations, the replacement of coal-fired stations to ensure that they are efficient and competitive, and the need for coal-burning capacity in electricity generating, are obviously very important matters.
  In industry, the report refers to the possible withdrawal of gas from non-premium use towards the turn of the century. There is also the importance of fluidised bed, so that coal is efficiently used, and is competitive. Nothing was said about that. That seems crucial to the industrial market, for which a wide bracket is shown in the report.
  A most disappointing aspect of the present coal market is the domestic situation. I have no knowledge of any initiative or discussions about this between the Secretary of State for Energy and his right hon. Friend at the Department of the Environment. A considerable number of council houses and public buildings are being constructed in a way that ensures that they will never burn coal.
  The Under-Secretary of State for Energy (Mr. Alex Eadie): Discussions have taken place with the Department of the Environment on the very thing that the hon. Gentleman is talking about.
  Mr. King: I am delighted to hear that. I apologise if I suggested that no talking was going on. But houses are still being built in the way that I have suggested.
  The words used by the Secretary of State for Energy are "Keep your options open". That seems to be the Secretary of State's cry, and I think he is right. Yet

  457
  coal is the one option effectively closed to many in the domestic market at the moment. In my own constituency, as in many others, many constituents are almost imprisoned within their sophisticated twentieth-century all-electric heating systems, which they cannot afford to use. That is obviously a matter of concern to a considerable number of MPs.
  Another area to which the Secretary of State referred, and which I think is very important, is the potential for exports in the future. Clearly the potential within the Community is very great. I hope that the Secretary of State will use the opportunity, as President, to discuss, not least with the French and Germans, the issue of COMECON coal, the fact that imports are clearly coming into the Community at dumped prices, and the possibilities that may exist for greater exports from this country.
  We also have the problem about markets for coal. The markets for coal will be influenced by how competitive coal is. The report refers to the need to limit costs.
  In terms of competitive supplies, we know that part of the problem lies in the fact that coal is not in such a strong position that it can ignore the need to remain competitive. I have checked the figures that the Under-Secretary of State recently gave in Hansard about what has happened to coal prices. I came to the energy scene only recently, but I must admit that I was staggered to see what the figures really were. Since November 1974 the price of domestic coal has increased by 83½per cent. Clearly, that rate of progress could imperil the future competitiveness of coal.
  The Secretary of State referred to the modest early retirement scheme. It is not entirely modest in cost. I understand that, as yet, this has not been included in any of the calculations put before the House tonight. The implications for the future price of coal is obviously quite a serious matter. Another problem is whether we shall have the output even if we have the markets.
  The next worrying feature in "Coal for the Future" is the confirmation that last year total manpower fell by 5,000. That is particularly serious at a time of rising unemployment elsewhere when one
  458
  might have expected recruitment to have improved, or certainly to have become stabilised. It increased the year before but fell last year.
  The report contains the statement that the coal industry will have to look increasingly to men and boys new to the industry. Whether we shall have the manpower and the ability, in terms of numbers available, to achieve the higher range of target figures must be of real concern. After all, it is the numbers employed and their productivity that will determine their output.
  Productivity is perhaps the most disappointing single feature of the present situation in the coal industry. I appreciate that there are a number of factors, to which the Secretary of State referred, that may affect the situation, but the fact remains that productivity in the past year has been the lowest this decade, for a full year's working. The output per man shift has fallen this year against last, and last year fell against the year before. This has occurred at a time when we are looking for much greater output. Deep mined coal output fell by 7 million tonnes last year. Clearly that is a serious matter.
  I entirely agree with the Secretary of State that we shall not get coal by exhortation. But the Secretary of State does have a responsibility to ensure that the terms and conditions under which people are working in the mines enable incentive to exist and productivity to be achieved. I am not suggesting that the right hon. Gentleman should interfere; ideally, one would like to see this as a matter between the NCB and NUM. But the fact remains that the Secretary of State has actively interfered, in a negative sense.
  The document contains an interesting sentence about productivity. It is full of pious thoughts. I do not see how we shall get round this. It states that
  "We continue to believe that …a sound and effective incentive scheme could make a major contribution in raising the efficiency of production and matching performance to the industry's true potential."
  No one would dissent from that.
  Mr. Skinner: Oh, yes, I would.
  Mr. King: The hon. Gentleman will no doubt have the opportunity to make his views known, but his is certainly not

  459
  the opinion of the miners and the leaders of the NUM to whom I have spoken. I know there are certain members within the NUM to whom the hon. Gentleman is closer than I am, but this must be a matter for democratic decision within the NUM.
  Another important sentence in the document states that
  "Such a scheme has not yet been introduced and it is not possible to initiate one within the current pay policy, but we are glad to know that the NUM has set up a study group to examine the various possibilities."
  I thought that that last phrase was a little unnecessary. It seemed to me pure verbiage. It is a sop to the NUM, but it is saying "You cannot actually do anything about it, because the current pay policy will prevent it".
  It is not the world's greatest secret that the NUM has not yet started phase 2—or, I think, it was due to start yesterday. That phase 2 should last for a year. The question of productivity does not emerge until after that phase has elapsed. If that is so, clearly the Government are facing a very difficult situation if a productivity scheme is thought essential for those in the industry and in the national interest. We shall clearly have a different situation under the current pay policy.
  Mr. Eric Ogden: The hon. Gentleman is making a responsible speech. However, it is not a fact that all those in the industry are in favour of a productivity scheme. It is being discussed. In the hon. Gentleman's quest for productivity, he should not let the price of that be a damaging fall in safety.
  Mr. King: A fall in savings?
  Mr. Skinner: Safety. Lives.
  Mr. King: I am sorry. I thought that the hon. Gentleman said "savings". I entirely appreciate that point. No one who has even the most superficial contact with the NCB, the NUM or the mines could believe for a moment that those bodies would agree to a scheme that imperilled the standards of safety control and management within the mines, which are clearly of the highest order and to which all attach the greatest importance. I should have thought that that went without saying.
  460
  I am sorry if I misled the House, but I am not under any illusion that a productivity scheme is universally approved. However, my impression is that the majority are in favour.
  Mr. Skinner: Not miners.
  Mr. King: I shall leave the hon. Gentleman to fight his own NUM battles elsewhere.
  Having dealt with the very difficult question of productivity, I turn to the question of the new developments. The Secretary of State laid great stress on the potential of Selby. Obviously the whole House will hope that he is right. However, there have been some very disturbing stories. At Question Time last week, my hon. Friend the Member for New Forest (Mr. McNair-Wilson) raised the question whether the water table problems will present difficulties. This is not something that must be kept under a D notice, or anything like that. I hope that the Under-Secretary will comment on the matter at the end of the debate.
  However, we are moving into the new developments, and the Secretary of State fairly put on record the potential importance of the Vale of Belvoir—which is not likely to be the last such development. A massive exploration programme is taking place and it is possible that further coal reserves will be found in other very attractive parts of the country, where there may occur the sort of issues that will cause great local concern, as in the Vale of Belvoir. It will be necessary to find a mechanism for resolving this sort of problem democratically, so that people do not feel that they have been steamrollered by a producers' syndicate, but feel that they have an opportunity to have a say, but we must ensure that such a mechanism is not automatically a blocking mechanism that will prevent anything from happening, and that it does not become a total shackle on the reasonable development of the coal industry. The Government must turn their minds to that serious issue.
  There is a very significant comment in "Coal for the Future", which I think is absolutely right, namely, that planning approval is taking longer than expected. My forecast is that that trend will continue. We must ensure that proper democratic rights are observed, while sensible developments are able to proceed if the case is well made.
  Mr. Gwilym Roberts: As the argument on coal is tied up so much with the national interest, is the hon. Gentleman suggesting that there should be a reduction of the planning difficulties to further the development of coal?
  Mr. King: I am not suggesting the opposite, because I am not suggesting increasing the difficulties. I am saying that in my view it is simply not adequate to present this as a matter that is merely to be dealt with by a county council planning committee, the members of which may be local people who are very concerned about the amenities and who reject it, the matter then going to the Secretary of State and then, perhaps after an inquiry, being overthrown. The difficult issue here is the question of proving a plan, of proving the need for coal as well as the amenity aspects of a particular development.
  This is a very difficult issue. One cannot inject this into the beginning of every development, be it an opencast development or any other development.
  The NCB is planning for the future, and there are now a number of issued plans. There is something here—a document that could form a basis and could get the wider endorsement against which individual planning applications could be considered. However, it is no good approaching these matters, on which very strong local feelings will arise, on the basis of relying entirely on what might have been satisfactory in the past.
  I turn quickly to the central details of the Bill. The main clauses, as the Secretary of State said, raise the borrowing limits—this is a particularly important part of the Bill—and will make possible further developments in the "Plan for Coal". While supporting the principle, we shall want to examine very carefully the costs involved. The increases are of a staggering nature. It would be grossly irresponsible of us, as an Opposition, if, in Committee, we did not examine very carefully exactly how those costs have been arrived at. The grants to which the Secretary of State referred renew in certain cases earlier powers, some enacted by a previous Conservative Government. We shall want to examine whether they are in fact still appropriate in all cases, and we shall look at the matter very carefully.
  462
  The more controversial aspects of the Bill arise in Clauses 9, 10 and 11. Clause 9 deals with the expansion in the activities relating to petroleum. We accept that this is sensible. Coal has a rôle to play in the future and will be an important source of petrochemicals. A good argument can be made for this. However, we see no argument for the looseness of the drafting of the Bill.
  The Secretary of State referred to research, and perhaps the operation of a refinery, but the Bill would allow the NCB to go into downstream activities and even permit NCB petrol stations. It would be an act of irresponsibility if we did not look extremely closely at these provisions. While not wishing unreasonably to shackle the sensible development of coal products, must say that anyone who reads the Bill will see how loosely it is drafted and will appreciate why we want to examine it very carefully.
  Clause 10, likewise, contains the core of what seems a perfectly reasonable matter, which is, that in the course of its work of exploration and extraction, if the NCB comes across other minerals it should be empowered to extract them. On the face of it—and this is the way the Secretary of State presented it—that looks harmless enough. Of course, when one comes to the legal drafting, one finds that it is very loose. It appears from the Bill that the NCB could drill anywhere and could move into salt or potash mining with very little pretext at all.
  Mr. Edwin Wainwright: It might even find gold.
  Mr. King: I am not suggesting that what I have mentioned is the intention, but, again, the House has a responsibility to see that these matters have been properly drafted.
  Clause 11 deals with overseas activities. I think that it was a bit of an anachronism that there was formerly a restraint. We know that British Rail and the Post Office have engaged quite successfully in consultancies overseas and in certain other activities. Clearly, the NCB, which it is claimed is the largest single coal producer in the Western world and is experienced in many different fields of activity, has a considerable expertise, and it would be in the national interest if that could be exploited for the benefit and to the financial advantage of

  463
  this country. We shall want to check on this matter. Again, the clause is extremely widely drawn. If it can be correctly defined the general principle is unexceptional.
  Mr. Skeet: If my hon. Friend looks at Clause 11 he will see that the Board can "do anything outside Great Britain", which would include petrochemicals as well. I am sure that he would agree that the board should not be allowed into that sphere of activity abroad.
  Mr. King: I am grateful to my hon. Friend. That is exactly the sort of point that I made about the looseness of the drafting. I felt that this was a point that we should pursue in Committee. However, the wider exploitation of the NCB's expertise in its primary activities, where its skill is greatest, is obviously something that we would support.
  We know that the development of coal mining has meant that production has increased overseas, not least in Australia. There is a possibility of the Coal Board's playing a part in that expansion. which amounts to about 58 per cent. in both Australia and New Zealand.
  Coal is clearly an essential element in any energy policy. For us, with the coal reserves in this country, the strength of the coal industry and the prospects in front of it, it must play a crucial rôle. We must recognise that progress to date has been very disappointing.
  Neither party has a very good record as far as the coal industry is concerned. The Labour Party presided over the biggest rundown of the industry in the disastrous years—[HON. MEMBERS: "Rubbish"]. Hon. Members may like to look at the figures for the rundown under the late Labour Government. As I was saying, neither party has a clean record. This is now changed, and both parties recognise the importance and future significance of the coal industry.
  Under this Bill, if it proceeds as I expect it will, the coal industry will have available resources to enable it to make considerable progress. The Bill alone will not make anything happen. I was pleased to hear the comments of the Secretary of State at the end of his speech when he said that it is now up to the industry to decide what use it makes of the funds available. The challenge so
  464
  far has not been met. We must recognise that fact, and it would be fairly admitted by all in the industry. The industry has had the opportunity to progress but so far that progress has been extremely disappointing.
  We all recognise that it takes time to get new developments going, but at the same time it is vital to the country that the coal industry succeeds. The Bill opens new opportunities for both the Coal Board and the workers in the industry. This will be an opportunity to show the nation that, given the support, the industry can deliver the goods.
  8.13 p.m.
  Mr. Edwin Wainwright: I was rather surprised—but really not surprised at all—by the speech of the hon. Member for Bridgwater (Mr. King). I was surprised at the way in which he criticised everything and the way in which he tried to slight everyone in the industry.
  Mr. Tom King: Absolute rubbish.
  Mr. Wainwright: Of course he did. He was criticising all the time. He even talked about output, and he compared the mining industry in this country with that in other countries. He compared it with Australia of all countries, which has mainly opencast mines with thick seams and big, modern machines. He also talked about the United States with its large seams and the much better geological ground in which the men work. He talked about Europe as well, but when we talk about other countries and their output and make comparisons we should not forget things like wages and we should compare them with such things in those countries.
  Although I was in favour of joining the EEC, and basically am still in favour of the Community, I know full well that we promised the workers in the mining industry that their wages and conditions would be comparable with those of Continental workers. Of course they are not.
  Of course the hon. Member for Bridg-water is right when he says that neither Party has a clean sheet as far as the mining industry is concerned. The miners are suspicious of Governments, even of this Government today. I remember the period when Jack Dunn made the statement that has been mentioned tonight.

  465
  That kind of statement was made from these Benches time and time again, but neither my party nor the Conservatives when they were in Government took the slightest bit of notice. They were warned continuously of the dangers of oil from the Middle East, but they took no notice because oil was cheap. Their attitude was "Why do we need miners?"
  What about our investments? Even though I welcome the Bill, it will not assure the mining industry of tremendous investment in the future. There is a lot to be done in the pits and at the coalface to make the industry in this country more modern. There is a lot to be done on the roadways. If we do not have the where-withal to get the coal out of the pits, it is no use developing the coalface. There is still a lot to be done. When the hon. Member for Bridgwater talks about the mining industry, he should make comparisons that are fair and just.
  Mr. Tom King: The hon. Member for Dearne Valley (Mr. Wainwright) might have done me the courtesy of listening to what I said. I made no comparison of the output performance of other countries such as Australia or New Zealand. I simply used the example of the increased production that they are planning to illustrate the importance they attach to coal production. I made no use of figures to make disparaging comparisons between British miners and miners in other countries. Bearing in mind the fact that many of the mines in countries abroad are opencast, it would have been a fatuous comparison.
  Mr. Wainwright: I agree that the hon. Member was very subtle in what he said, but the inference was there—
  Mr. King: It was not.
  Mr. Wainwright: Of course it was.
  Let us now ook at the Bill. Clause 1 makes it possible to increase the borrowing limit to a maximum of £2,600 million. Are we quite certain that that amount will be sufficient for developing the coal mining industry, taking account of when we are going to spend it and the developments that will take place? How long will it be before we can get the money? When the Secretary of State talks about a tripartite agreement, I aways think that he is talking about an agreement between
  466
  his Department, the National Coal Board and the National Union of Mine-workers. Of course, there is another Department which has its hands on the money—the Treasury. That must be taken into account, and my right hon. Friend knows from experience that we cannot always drag money out of the Treasury when we would like to do so. We shall watch very keenly to make sure that the Treasury does not hold back.
  Mr. Benn: I look forward to the day when I shall lend the Treasury money. I shall lay down very strict terms that will be very different from the ones that apply now.
  Mr. Wainwright: We would all welcome that.
  Clause 3 refers to grants for the building up of stocks of coal and coke. I think that we must be very careful here. There is always a fear in the mines because often pits close when stocks of coal have been built up. We should talk about exporting coal when we have plenty of stocks, and I believe that more should be done in this respect.
  We have had various objections from Chairmen of the Central Electricity Generating Board about being compelled to use coal. We hope that we shall be able to convince the chairman that in future we shall not be using oil as much as we use it today. We should make certain that coal will be used to supply the fuel for our power stations. We must not waste oil because it may be in short supply, despite the discoveries in the North Sea. I believe that there will be a greatly increased demand for oil in coming years throughout the world.
  I turn to Clause 6, and I shall have a few words to say about pit closures. That very phrase frightens me to death. It certainly puts fears into the miners that the Government are talking about pit closures. It is not easy for us to convince the miners that the Government do not mean that there shall be unnecessary pit closures.
  I recall what happened in the 1960s when there was great displeasure in the mining community at the situation at that time. It reminds me of what was once said by an ex-Cabinet Minister. He said "When I attended a debate on coal mining, I could not understand why the

  467
  mining Members still wanted to have a debate at 2 o'clock in the morning" However, that ex-Cabinet Minister added "One could never doubt the support of those mining Members of Parliament. They always supported a Labour Government no matter what they were putting forward. Even on pit closures they still supported the Government" That politician certainly never doubted their loyalty, but he could not understand why they allowed the Government to take such a course.
  Mr. Ogden: My hon. Friend is right to draw attention to the loyalty of mining Members of Parliament to Labour Governments, but he will recall one occasion when a Labour Government published a White Paper forecasting energy needs, a forecast with which the mining industry violently disagreed. He will remember that meetings then took place and that that set of proposals never reached the Floor of the House.
  Mr. Wainwright: I am grateful to my hon. Friend for reminding me of that situation. However, I remember occasions when pit closures took place time after time.
  Clause 7 of the Bill deals with redundancy payments. A not too marvellous scheme was introduced not very many year ago, but at the age of 55 in many cases men were made redundant. A man of 55 who is made redundant is allowed three years' pay at nine-tenths of his wages but at the age of 58, if he was made redundant, he had to say goodbye to payments. He is told that he is now on the scrapheap and he loses almost everything. At the time the scheme was introduced, the National Coal Board and the Government were keen for it to come into operation and they would not listen to hon. Members who wanted to extend the period during which payments are given beyond three years. We even argued for the age of 60 so that the period should be five years. But nobody would listen, and the scheme was introduced. We still have the same redundancy scheme.
  How can we expect to encourage young people to come into the mining industry when we treat in that way people who have been in the industry for 40 years or more? I hope that the Government will in future be more forthcoming and
  468
  helpful and sometimes make offers to the NCB and the NUM that are greater than anything for which the industry has asked. That is the only way that we will be able to attract manpower into the pits. We must be certain that miners will not be thrown on the scrapheap at the age of 58. The Government should act in the same way over pensions.
  Everybody to whom I speak to about this, no matter what industry he may work in, whether professional or labouring, says "I would not have that job at any price. I would not go down the pit" When we asked for pensions to be given at the age of 60, why had the Government to be parsimonious and mean? They said that it could not be afforded and that pensions would be given at 62. The Government do not even offer a bonus to those who continue to work until the age of 62. How can we expect the mining industry to have a great amount of faith in the Government when the Government at no time make any offers greater than what has been asked for by the NUM?
  Mr. Leslie Spriggs: On the matter of pensions for miners at an earlier age, is it not a disgrace that the Government should expect someone who works from boyhood to the age of 55 to continue to the normal retirement age? Surely my hon. Friend will agree that the time has come when every miner who has worked for 25 years should be retired at the age of 50 or 55.
  Mr. Wainwright: I did not expect anyone from the Opposition side to agree with me, but I thought that someone from this side might say that. I am trying to reduce the retirement age as much as I can, and 60 would be a good starting point, but I hope that it will be 55 in the future.
  When we develop new coalfields, there will be an outflow of miners from the other collieries. That might result in collieries having to close due to lack of manpower. What will the Government do to make certain that other jobs will be provided in those areas, or are we going to allow such areas to run down? Have the Government given any thought to regional grants or something that would be available not just for developing new coalfields but for looking after the old areas as miners leave them?

  469
  New jobs must be found for those who remain behind. Many of them will be men who have given 30 to 40 years of their lives to the industry and who have no hope of employment in any other area. We hope that the Government will do something about that.
  I should like to say a few words about Clause 9. It gives powers to the National Coal Board to develop the manufacture and sale of petroleum, but not petrol stations. What a ridiculous suggestion by the hon. Member.
  We ought to develop the chemical division of the National Coal Board. It is a profitable section and in the future it will be more so. There is an old chemical plant in my area—I am rather narrow-minded in this matter—that is to be replaced. I should like the Minister to take that into account because there is high unemployment in the Mexborough area and this chemical plant is polluting the district heavily. It has almost been condemned in a sense. I hope, therefore, that the Minister will do everything he can to ensure that the new chemical plant is built within the next few years. I should be most grateful for that.
  I promised that I would not speak for long, but I want to make the point that we are still finding new coalfields. A new one has just come on stream in the Doncaster and Trent area. We are told that it is an extraordinarily good one. As new pits are brought into being, however, we shall want young people to come into the mines. Unfortunately, they are not coming in because we do not make facilities available for them and we do not encourage them. We do not give them any strong belief that they can make mining a career, and this must be done. Coal will be an important part of the energy of this country, and over the next two decades it will be more important than ever.
  The matter of supplies of smokeless fuel has been raised with me. Although we have coal in stock, we have not the suitable coal that is required for grates and domestic heating. Anthracite is in short supply, and we are importing it. That is looked on by some of the work-force in the mining industry as something that we should not do because the men do not understand that anthracite is in
  470
  short supply and that, therefore, smokeless fuel is badly needed Will the Minister say something about the supply of anthracite and other smokeless fuels? There has been a shortage in South Yorkshire and other parts of the country, and many people, particularly the elderly, have been going short of fuel.
  The Bill can be readily welcomed. The advantage that will be taken of it will depend on how it is implemented. I hope that the NCB and the NUM will get together with the Government to make sure that this industry, which is so vital to our economy, gets the necessary increases in productivity, but not at the cost of safety. I worked in the mines when safety was not thought to matter so much, and I should not want to go back to that sort of system.
  I hope that we can increase productivity and make the industry more viable so that we can give the men the better benefits to which they are due and make their conditions at least comparable to those of miners in other parts of the world.
  8.33 p.m.
  Mr. Michael Alison: I cannot claim the direct expertise of the hon. Member for Dearne Valley (Mr. Wainwright) in coal mining, but I have a number of pits in my constituency, including two or three traditional pits, a large opencast operation, and a big chunk of the Selby coalfield.
  I wish to draw attention to what I fear may be a blind spot in the attitude of the NCB and the Department towards the very large sums provided for in the Bill. It provides a borrowing power of almost £2,000 million. Clauses 7, 8 and 9 take powers for quite a lot of interesting diversification in other areas, including petroleum, exploring for other kinds of minerals, international activities, and so on. When the industry is concerned with the exploration of natural resources, particularly fuels, it is an easy, but inadequate, philosophy in coal mining for the management and the Minister to take the view that their business is simply to cut coal and nothing else.
  We hear this attitude expressed in connection with the Selby field. The expert, likeable and impressive managerial personnel in the North Yorkshire division of the NCB are enthusiastic coal cutters.

  471
  That is what they are in business for. However, in this philosophy it is fatally easy to overlook the fact that we cannot adopt the attitude that we need think about nothing more than the immediate industrial activity in which we are engaged.
  Perhaps private business could have done this once, but it cannot do so any more. Vast private corporations no longer take the old-fashioned nineteeeth century view that business is business, and nothing else counts. If they are to survive, they must consider the environmental repercussions of the investment and industrial activities in which they engage.
  Paradoxically, it is easier for public corporations to ignore the environmental and indirectly-connected spin-offs of their activities than it is for some private companies. Public corporations do not have a particularly good record in attending to the environmental consequences of what they do. We saw this in the disaster at Aberfan. Public corporations are not necessarily the leaders in worrying about the implications and repercussions of what they are engaged in.
  Mr. Edwin Wainwright: Surely the hon. Gentleman realises that environmental considerations did not matter much to the old mine owners? They made sure that they lived in a nice little spot while dirt and coal were raked out of the ground. The NCB has done a marvellous job and has spent a great deal to level the dirt tips.
  The NCB is having consultations now on how to get the coal from Selby with the least possible environmental disturbance. I believe that it will do that. It is something of a red herring for the hon. Gentleman to talk about environmental disturbance.
  Mr. Alison: The hon. Gentleman and I both represent Yorkshire constituencies and as we drive up the Great North Road and the motorways we see that there has been a great deal of environmental improvement, including grassing, but in general the public corporations have not been a magic wand for environmental and industrial dereliction. Latterly, much more money has been spent on such projects, but they are largely an attempt to mop up pockets of unemployment and it is not a universal effort.
  472
  When starting a big new development such as Selby, let us ensure that we do not repeat the past mistakes of private business and public corporations. Let us have an environmental dimension to the planning from the outset.
  Mr. Gwilym Roberts: I am sure that the hon. Gentleman would wish to make it clear that Aberfan was the result of an inheritance of 100 years of private ownership of the mines in that area.
  Mr. Alison: No doubt the tip grew over many decades, but it was in public ownership for many years before the disaster occurred, and during that time little or nothing was done about the environmental problems. I do not blame any individual for the hidden flaws in that pit but it is surprising that it was not levelled off or landscaped before the disaster occurred. Public ownership is not necessarily a guarantee that the business that occurs immediately outside the direct business of an industry will attract a lot of attention.
  Mr. Harry Selby: Does the hon. Member know how many coal hills there are in Great Britain? There are hundreds that are left over from private ownership. They would cost millions of pounds to shift. When the coalfield at Selby is in operation I can assure the House that there will be no coal hills.
  Mr. Alison: That is a fair point. I am not saying that the Coal Board can be expected to wave a magic wand and clear the tips overnight. I was saying that it does not come naturally or automatically to a public corporation management, any more than it does to private management, to think beyond the business in which it is immediately engaged.
  The management in North Yorkshire are enthusiasts, as is the Minister, for coal cutting. It must think seriously about the environmental responsibilities that it will have in the development of the Selby coalfield.
  Mr. Alec Woodall: The hon. Member knows that the National Coal Board has conducted the most massive public relations exercise that has ever been undertaken by any body in the country. A special officer, to whom the hon. Member has paid tribute, was

  473
  appointed to deal with the public in the area after the inquiry and up to the day when the findings of that inquiry were made known. Pure coal will be extracted from the Selby coalfield. There will be no spoil on the surface. The only likely effect is a lowering of the land and possible flooding. The National Coal Board is taking steps to deal with those problems.
  Mr. Alison: I agree that a huge PR operation took place, but one must see that it is followed up by action. The test of the pudding is in what happens when the machinery starts to roll.
  The housing situation in the Selby coalfield area will not be dramatic or problematical in terms of numbers. Even when the mine is working at its maximum, in about 1985, and producing about 10 million tons a year, only 4,000 miners will be involved. Compared with the scale of manpower that we are used to, that is a trifling number.
  A three-quarter hour journey to work is not unreasonable, and many miners will want to continue to live in York, Leeds or Garforth. The NCB planning proposal mentions York as an area from which it wishes to recruit. York is within travelling distance of the new coalfield. The Selby coalfield planning application also mentioned York. Workers will travel to work from Leeds and Garforth.
  In my pit communities many men to whom I have spoken have expressed opinions on this matter that at first sight seem to be contradictory. They say that if they have to be transferred to the Selby coalfield—and most of them would prefer to stay where they are—they would like to live in their present community. However, they say that if they have to move to another town they do not want to live in a pit village. It is understandable that they do not want to go into miners' ghettos.
  I hope, therefore, that the Secretary of State will take on board the point that, for some at least of the 4,000 miners who will be required in the Selby coalfield by 1985, housing provision will be needed. I hope that he will think seriously about what the NCB could and should do about it, although it is not directly linked to the cutting of coal, and he will probably find local management and perhaps his
  474
  own Department reluctant to get involved in the provision of housing, because that really is not the business of the Board. Nevertheless, housing represents a real local need.
  The Selby District Council has decided in its wisdom that
  "they are not prepared to consider the provision of houses for the Board if by doing so any cost whatever would fall on the Selby ratepayers, either directly, or indirectly, through the operation of rent pooling, or that the situation of applicants on the Council's waiting list would thereby be prejudiced."
  The council is reluctant to put on the shoulders of local ratepayers the extra cost arising from subsidised rents payable as a result of the Government's insisting upon the local authority providing houses for the miners. The NCB must help in the provision of housing in the Selby area.
  One point made by a union representative at one pit is that miners would like the Board to help with mortgages to miners to buy their own houses. Why should it not do so? Most industrialists have taken steps to help provide housing for the workers that they have had to bring in to green field sites. There is no reason why the NCB should not think seriously about helping miners to buy their own houses if they do not want to go on living in the traditional kind of mining community. The Government should not put the whole burden on the local pool of subsidised council accommodation, which is very limited, which Selby District Council disposes of. It has not got a lot of houses, and there is a big waiting list.
  The average earnings of the lower-paid manual workers in Selby range between £50 and £70 a week, which is well below what the miners will be getting. If they are to compete for cheap subsidised rented accommodation with highly-subsidised miners, it will not be fair to them. I hope, therefore, that the Secretary of State will think seriously about the proposition that the NCB should either provide houses itself or provide mortgages for incoming miners.
  My mention of York produced guffaws from miners' representatives on the Government Benches. But one of the environmental features in the area is the A19 main trunk road from York to Selby. It straddles the whole of the coalfield and is one of the principal arteries of communication in that part of the

  475
  country, but it has upon it the ludicrous and notorious Selby toll bridge. Many miners travelling to the new coalfield will use that road. I believe that some will be coming from York, since the NCB is trying to recruit in all areas within travel-to-work distance.
  The Selby toll bridge is an eighteenth century wooden swing bridge, straddling one of the principal trunk roads of the country. It has room for only one large articulated wagon to get across at a time. As far as I know, the Government have no intention of providing extra resources to build a bypass round the bottleneck. The Minister should already be drafting a memorandum urging that if we are to spend £400 million on developing the Selby coalfield and provide borrowing powers for up to £1,800 million for the coal industry in future, we should also provide, in what will be the most modern coalfield in Europe, access that will not require the crossing of a privately-owned wooden toll swing bridge. The Minister should put that priority at the top of his list, so that the Selby coalfield will have its own communications. The NCB has a responsibility both for communications and housing in the context of this massive development, and I hope that the Secretary of State will think seriously about it.
  8.49 p.m.
  Mr. Dennis Skinner: I have been listening closely to the hon. Member for Barkston Ash (Mr. Alison), whose constituency includes part of the Selby coalfield. I may be wrong, but I got the impression that what he was trying to say to the House, roughly, was "My majority is not all that big" and that if my hon. Friend the Minister could find ways, through all the various channels open to him, of ensuring that the miners did not go to Selby or Barkston Ash, he would be very pleased. But if the miners did get to Barkston Ash I think he was trying to say "If we turn them into owner-occupiers they may vote Tory". That just about sums up his attitude.
  However, I agree with some of what the hon. Gentleman said about the problems of mining the Selby coalfield and the Vale of Belvoir, if that comes onstream. I do not think there is any doubt that with the drift of miners and others from manufacturing and wealth-producing industries over the past few decades, the Coal Board will have
  476
  extreme difficulty in finding miners in that area or attracting miners from York, whether or not they are stewards of the local working-men's club, as one of my hon. Friends has put it.
  If alternative occupations are available, younger people will not go willy-nilly into the coal mines, even though conditions are much better than they were several decades ago. One can argue that safety conditions are slightly better, but not that much better.
  It all hinges on wages. The Opposition spokesman commented this evening that manpower had dropped by 5,000 in the last calendar year. We must reflect on the reason why this has happened. Those of my hon. Friends who know this industry extremely well could readily tell me that manpower went up, for the first time in many years, in the periods after the 1972 and 1974 strikes and the consequent wage increases.
  Those strikes were not merely caused by the desire to get miners on top of the wages league; the miners were demonstrating to the nation that if we want coal—and it is clear that we need it—wages must be commensurate with the importance attached to getting that coal. That is precisely what happened in 1972 and 1974. For the first time in perhaps two decades manpower started to rise marginally, even taking into account the wastage of labour in those years.
  Now, since market forces still play a prominent part in this jungle, manpower is beginning to fall. One of the reasons for this, but not the only one, is that miners' wages are less attractive when compared with other industries and—it must be said—not so attractive when compared with the floor level of some of those who receive Welfare State benefits.
  I do not want to exaggerate this point. It happens only in extremely rare circumstances. I am not saying that those who receive welfare benefits get too much. What has happened is that because of successive incomes policies the gap has been narrowed. This is not because those people who have been mercilessly thrown on the dole are receiving less than they should; it is because the differences between the two groups have been narrowed, because of the effect of incomes policy on miners.

  477
  If we want coalfields at Selby and the Vale of Belvoir, and the massive coal-field that stretches right across Lincoln-shire, something really dramatic must be done about wages in the mining industry.
  For the benefit of those who read Hansard and those who are not conversant with this subject, I should point out that the top wages in the industry are £67·50. Take-home pay, based on a man's family, but in many instances after other deductions, is about £40. Only those who manage to work excess over-time can take home a hefty wage packet.
  There are many industries in which wages are much higher than in mining, even on the basic rates. This is the Catch 22 problem that not necessarily the Government, but, more importantly, the industry, must solve.
  Can the problem be solved in the context of an incentive scheme? The idea that miners, as a result of this carrot-and-stick method, could suddenly get three strips off a coalface whereas previously they got only two, sounds beautiful, but it does not work like that. Many pits have, on average, been worked for 85 years. There are some pits, older than average, where geological conditions are crucial and men have to work in seams less than 2 ft. thick. Miners working in such conditions cannot work the faces for perhaps more than three days out of five in any given week. These fellows can be knocking themselves about physically day in, day out, for almost every hour of the day, yet never produce coal at a level commensurate with any productivity scheme that can be devised. The current idea is to have a pit-by-pit productivity scheme, but I warn that it will create serious divisions in the coalfields.
  If hon. Members want to reflect upon industrial disputes, I suggest that they recall the days prior to 1966 and examine the industrial disputes which occurred at Hemsworth and in South Yorkshire—areas represented by my hon. Friends the Members for Hemsworth (Mr. Woodall) and Dearne Valley (Mr. Wainwright). Industrial disputes were continually taking place not only in the Yorkshire coalfields, but in other areas. They were based on arguments about wage levels at different pits. The blueprint looks good,
  478
  but it will be extremely difficult to work, and I do not wish to be associated with it.
  We have had a productivity scheme based on a national average and that has not worked. The House should consider why it has not worked. I can understand some hon. Members getting the impression that miners may not be working as hard as they used to work. But that is only in the context of mechanisation. Miners now have the ability to do the work in a different fashion. But it is not easy work. It is just as difficult in many ways, because the dust problem created by the machines is greater than it was previously.
  The greatest increase and upsurge in productivity in mining between 1950 and 1970 was almost directly the result of two factors. One was the mechanisation that took place after the end of the war and following nationalisation, which went ahead on a scale that was great by any standards throughout the world. The other factor, unpleasant as it was, was the closing of uneconomic pits.
  I do not know whether anyone believes that we can now re-mechanise on as great a scale as we did in the period between 1950 and 1965. I do not know what we should do with it. We have already cut down the numbers of surface workers through mechanisation. We have got rid of many of the outby jobs through mechanisation. We have mechanised coalfaces from beginning to end. We have even got mechanised gates, tailgates and main gates. There is a very small margin for this to be done. It can be done on a big scale only in the new coalfields, and, as I have tried to explain, there is a problem in manning them without high wages.
  The Notts branch of the NUM, a moderate coalfield, passed a resolution calling for £135 a week for miners, and it was supported by 30 branches out of 33. They know that that is the only way to keep miners in the industry. Arthur Scargill—or, more accurately, the Yorkshire miners—have passed similar resolutions in the knowledge that this is the only way to reverse the rundown.
  We should start from the premise that North Sea oil should be used only to offset Middle East imports and not to replace coal. I think that my right hon. Friend accepts that premise. Then we will be

  479
  able to do something about retaining the manpower.
  I think that hon. Members in the Miners Group agree with me that it must not be assumed that the "loyalty of the miners" will be available for all time to a Labour Government. Without a shadow of a doubt, they are on the side of the Labour Government, the Labour Party and the Labour movement. But this smaller number of men—there are now only 200,000 miners, compared with 700,000 only a couple of decades ago—know that security and a job for life depend on making the industry a sound one. That will not happen by their becoming collaborators, co-ordinators or industrial democratisers. It will come if they fight for what they believe in and if the Government to whom they are akin are loyal to them. I think that my right hon. Friend understands that.
  Two points arise from our recent meeting. My right hon. Friend is dealing with one—the amount of money demanded from the National Coal Board for the rating of hereditaments on colliery premises. I am told that a paper going around the Departments suggests an increase from £5 million to £11 million. It is not too long ago that the NCB was relieved of £13 million through its Conoco involvement in the North Sea. That has now ended. It used to be in the NCB accounts and it used to be possible to base some arguments for money on it.
  I want my right hon. Friend to tell the Department of the Environment two things. First, that Department should instruct local authorities to build houses with chimneys. Then we might sell more coal. I have raised the second matter several times before. It relates to the coke stocks referred to in the Bill. I hope that the Minister will say what that reference means in real terms.
  I end on the question of what happens to North Sea oil. The mining industry could grow, but not to a great extent, during the next two decades. The figure of 6·5 per cent. is not one that people should get too concerned about. I cannot visualise our having sufficient miners to bring about a total increase in production of a greater amount than that.
  The question of North Sea oil concerns me. My right hon. Friend the
  480
  Secretary of State, by being at the helm of this industry, has been able to ensure, in verbal ways at least, that North Sea oil will be used in such a way that it will not replace coal in power stations, and so on. We must never allow the situation that occurred in the period when pit closures took place to develop on the scale to which my right hon. Friend referred, but it could. If North Sea oil is left to the free play of market forces—whatever we may think about the Government's economic policies—we need to ensure for our own narrow self-interest and the interest of the miners that those in charge of North Sea oil in the immediate and medium-term future are those who will insist on planning where that oil goes and what happens to it. We have to ensure that North Sea oil does not flood into the pits, as a result of which we not only throw away our indigenous resources but put thousands and thousands of miners' jobs at risk.
  9.7 p.m.
  Sir Paul Bryan: In view of the exhortations from the Chair to keep our speeches short, I shall leave the arguments about the Bill to experts and to my colleagues who know a good deal more about the industry than I do. I shall turn straight to the part of the Bill which interests me—the Selby coalfield half of which is in my constituency and half of which is in the constituency of my hon. Friend the Member for Barkston Ash (Mr. Alison).
  About £400 million of these many hundreds of millions of pounds which we are discussing in this debate will be spent on the Selby coalfield. I am satisfied that that coal mine will be a showpiece. It will be the pride of the NCB and of the men who work in the mine. The Secretary of State is perfectly justified in his optimism about its future. But I am less satisfied with the progress that is now being made to prepare for the reception of the incoming miners and their families.
  We have been told far too little about the plans for housing, schools and all the other necessary amenities. When I say that, I sense a note of impatience from those in the industry. I am told that there is no need to worry and that the NCB has great experience of moving miners around the country—indeed it has

  481
  —but we who come from or are concerned with the Selby area are not reassured, for the following reason.
  The nearest example to us is the Kellingley pit, one of the newer pits, which is only a dozen miles away from Selby. An article in The Guardian in the autumn described what happened at Kellingley in the early stages, when hundreds of miners and their families were moved to the new pit from Scotland and other parts of the country. The article said:
  "The vicar of Knottingley, the Rev. Stuart Pearson, says bluntly: 'The local authority and the NCB made a mess of it. It was a shambolic exercise in twentieth-century planning. When the miners came, there were houses but the social work and welfare side of things just had not happened at all. On the estate where the miners live, there were no services, few shops, no clinics, no pubs. The age of the men had not been considered—they were all having children and yet there weren't enough schools.'"
  That is perhaps a layman's view.
  Let me now quote what is probably a more professional view, that of Mr. Brian Callaghan, Head of Manpower for the North Yorkshire area. In the same article we read:
  "Brian Callaghan admits that other factors contributed to the dissatisfaction. 'We had modern houses, first-time tenanted, to offer, but that was the only plus we had. The housing estate was not imaginative or well planned: for example, some roads were not wide enough for buses. There were houses, but no amenities at all. They came later.
  'What we have learned is that it is not enough to welcome a man, put coal in his bunker, and show him where his locker is at the pit. We've realised that his home life is our problem, too; the environment the miners go into is also our concern. There needs to be closer liaison with the local authority when building houses. A better quality of social life is necessary.'…He is determined to avoid Kellingley's snags when the new Selby coalfield is manned."
  We very much hope that those lessons will be learned, but on the strength of that experience we can be forgiven for requiring strong evidence that they have been.
  My area is rather different from that dealt with by my hon. Friend the Member for Barkston Ash. It is much more countrified, much more rural, than Barkston Ash. The miners and their families will be coming to a community which is settled, relatively prosperous, happy and reasonably well housed. We realise that
  482
  there must be changes but we see no reason why they should be for the worse, either for the miner or for us.
  The main worry is housing. The article in The Guardian said:
  "The key factor in moving miners is housing. The practice now is to give the local authorities incentives which take the form of cash and sometimes land. Discussions take place, if possible, long before the houses are needed. The NCB feels now that at Kellingley— opened in 1965—too many miners are concentrated on one estate. It hopes that there will be greater integration at Selby. And they are now thinking more in terms of owner-occupation."
  Despite those good intentions, I see from a National Coal Board letter of 26th February that the first 100 houses will be required for renting in 1979, only two years hence, yet, unbelievably, it has not yet been decided how those houses will be paid for.
  This is no fault of the Selby District Council, which has been absolutely exemplary in its eagerness to oblige and to co-operate with the Coal Board and the Department of the Environment. Finally, almost in despair, on 1st February the council's policy and resources committee passed the following resolution:
  "That this Committee supports the resolution of the Selby Coalfield Committee recommending a total suspension of all further negotiations with the National Coal Board and or the National Government until firm financial proposals are offered to the Council for consideration."
  That is very much to be regretted. I believe that the council has made tremendous efforts to try to secure co-operation. It is a serious matter.
  To underline the utterly reasonable attitude of the Selby District Council, let me tell the House that the committee had already passed a resolution which expresses my point:
  "That this Council accepts a duty to protect the interests of the residents of the Selby District and acknowledges that some expenses will be incurred in performance of such duty. In respect of such necessary expenditure:
  (a) the Council reaffirms its existing policy and that the provision of housing required for employees of the National Coal Board arising from the working of the Selby Coal-field is the responsibility of the Coal Board and/or the National Government, but that this Council is prepared to co-operate in the provision of such housing if acceptable offers are made by the responsible party or or parties".

  483
  In other words, the council's attitude is entirely friendly to the incoming miners. But it is entirely responsible in its view that it must look after the existing population.
  At this late stage we still do not know who is to pay for several thousand new houses or how they are to be paid for. This is a major worry. All the conversations so far seem to assume that 90 per cent. of the housing provided for the miners will be subsidised council housing. Surely that must be wrong. According to the tentative figures submitted to the National Coal Board by the treasurer, I see that the inclusive capital cost of a council house will be £11,200. Loan charges, repair contributions, supervision and management add up to another £1,522. The economic weekly rent of such a house is £31·70. From that sum can be deducted a Government subsidy of £19·74 and a further reduction of £5·92 under the pooling scheme, leaving a rent of £6 to be paid by the tenant.
  Whatever figure I give will undoubtedly be queried, but I inquired of the National Coal Board about the wages at Kellingley and it appears that the highest wage paid to face workers two weeks ago was £83 net, so that the gross wage must be getting on for £100. I am not quarrelling about the rate of wages. I am all for miners getting well paid. I am merely bringing out the great contrast that there will be between miners' wages and the wages of others in an area such as my constituency.
  All I wish to point out is that a miner will come into the area with a subsidy of £25 a week. If the community is to offer those who are earning a reasonable wage £25 a week to live in a council house, who will buy a house? It is only natural that there will be very few who choose to do so.
  Mr. Gwilyin Roberts: As my hon. Friend the Member for Bolsover (Mr. Skinner) has said, the hon. Gentleman misreads the position of the average miner. Some years ago a new pit was opened in my constituency. The local authority offered miners 100 per cent. mortgages but for financial reasons only a very small number were able to take up the offer. As long as the earnings of miners remain as they are, there can be only the type of housing that the hon. Gentleman is talking about.
  Sir P. Bryan: I do not want to go into that sort of detail. I shall argue the matter at some other time. The case I am putting forward is that the wages that will be earned in such a magnificent mine will be markedly higher than other wages in the area, which on the whole is a farming community.
  In such a community it seems not only ludicrous but unjust that such provision should be made. Nearly £6 of the subsidy comes from the system of pooling the rents of all the houses, both old and new. That is acceptable when the new high rent additions to the housing stock are a small fraction of the total, but when, as in Selby, the miners' houses are likely to number about 2,000, which would be one-third of the total housing stock of the district, the arrangement would be unfair to those who already live in the area. I hope that the Minister will consider how disturbing this general situation will be to the general population.
  I am serious about this matter. In the area of the Selby District Council four out of five of the population either own their own houses or rent them from private landlords. In other words they pay for their own housing, but in a country area such as this their average wage would certainly be below that of the miners. In spite of that, the miners will be housed in brand-new accommodation and will be paid a subsidy to live in it. How can this lead to harmony? This is happening in Kellingley. Perhaps I may quote an article which says that
  "the feeling of 'them and us' persists, aggravated by the resentment of some locals whose houses are delapidated while the newcomers received brand new accommodation."
  Mr. Ogden: Does the hon. Member agree that the difficulties arising between newcomers and those already there were one of the problems referred to in respect of Maplin and Stansted, and that this applies to any situation in which a major industry comes into an area? He should not forget that the local council has the power to veto any proposed development. Over the last 10 years the National Coal Board has been trying to get rid of its housing stock to local authorities. Does the hon. Gentleman recognise that, in addition, new industry coming in makes a substantial contribution to the local authority? It is not all give. It is give and take.
  Sir P. Bryan: I agree with that. I hope the hon. Member will concede that I am trying to forestall aggravation of this sort. A major effort should be made to give the miners the chance to own their own houses, difficult though that may be. Attractive schemes could be prepared. I would have no objection to their being offered houses at less than the cost. It would be cheaper for the State to offer houses at two-thirds of their price than to pay subsidies of £25 a week for the next 60 years.
  From the quotation which I gave earlier concerning the situation at Kellingley, it could be seen that one of the great complaints was the delay in establishing schools until the children were already in the area. It would be reassuring to my constituents to know that plans are being made now to enlarge our schools. It would be folly not to plan ahead. We must avoid the situation in which the children arrive there before the schools are ready. I believe that great efforts have been made in the public relations exercise, but we must see that people are more informed about vital issues such as housing and schools.
  There is a strong feeling in the area that on the construction of the mine money will be no object. Whatever cuts there may be in public expenditure, the mine will certainly not suffer, and that is almost certainly right. In contrast, there seems to be no thought of spending money on what might be called the infrastructure of the mine.
  I must refer again to the ludicrous bridge. Does the Minister realise that, as present plans stand, most of the work force at the mine will live south of the river, so that several thousand miners will have to cross the Selby toll bridge every day to get to work? It is a rickety old structure built in 1792. It is a period piece, not a bridge. We have been waiting for a bypass for 70 years. Now this bridge is to be the gateway to the most modern mine in the world. We are to spend £400 million on the mine, but we will not spend £1 million on the vital bridge.
  The Minister will have his nose rubbed in this problem during the building of the mine; thousands of heavy lorries will have to cross the bridge during construction of the shafts, and many will be
  486
  stuck on the bridge. The queue is often up to a mile long, and the lorries will be seriously hindered in their work.
  Similar arguments may be advanced concerning the Riccall bypass. This was high on the list of priorities. It was about to be commissioned when we were told that because of the coalfield its priority had dropped and the whole situation had to be reconsidered. Of course, the opposite should have taken place.
  Obviously, a matter of great interest is where the work force will be recruited from. I understand that there is an actual shortage of labour in the existing Yorkshire coalfield, which, presumably, will be accentuated by the early retirement plan. I hear from the Coal Board that, in conjunction with the Manpower Services Commission, a labour market survey on the area from Selby to Hull has been carried out and that the results show a potential maximum annual recruitment for the mining industry of 800. That figure includes potential recruits from the Hull area who could either travel daily to work or come and live near the mine. This, of course, is very good news, especially for Hull, which has a very high unemployment rate.
  I am also concerned about compensation—not for subsidence, but for people's houses which may be damaged by the use of small country roads by hundreds of heavy lorries during the construction period. I speak from the experience that I had during the construction of the M62 motorway through my constituency. I can best illustrate my point by a single example. A constituent, Mr. C. W. Cottingham, has his house on a small country road called Sandhome Lane, Gilberdyke. This road, as its name implies, is a narrow country road quite unsuited to heavy traffic. Nevertheless, in the course of the construction of the M62 it became a highway for hundreds of very heavy lorries. Each passing vehicle administered a minor earthquake to Mr. Cottingham's house and, not surprisingly, it was seriously damaged.
  No compensation was available from the contractors, and the answer to my letter of protest to the Minister on this subject reads as follows:
  "If the damage to the property had been caused by actual impact of vehicles, then

  487
  your constituent would have a clear legal remedy against the owner or the driver of the vehicle concerned. However I am advised that, if the damage is caused by vibration from traffic lawfully using the public highway, the Highway Authority is not responsible for any adverse effects on road side property. Much as I sympathise with your constituent it would not seem that there are grounds for a claim for compensation."
  Whether or not my constituent had a claim under the law as it now stands, he most certainly had a very genuine grievance against a society in which a Minister is able to condone the violation of what one might call the natural rights of an individual. I should like to know that that sort of thing will not happen during the construction of the mine.
  I foresee a repetition of incidents of that sort during the construction of the mine shafts at the villages of Riccall, North Duffield, Stillingfleet and Escrick. Each of these villages is served by minor country roads. All these roads have houses constructed sufficiently near the highway to be liable to damage by vibration. A continuous stream of heavy lorries is bound to use these roads during the construction period. I should like a reassurance from the Minister about this.
  The public relations people at Selby have tried very hard indeed; but none of the lessons of Kellingley seems to have been learned. We still do not know the plans for housing, and we are therefore worried. We do not know the plans for schools, and we are therefore worried. We do not know what is going to happen about the roads, and we are therefore worried. It is time that we knew about these things.
  9.30 p.m.
  Mr. Robert Woof: I am very glad indeed to be called to speak following the speech of the hon. Member for How-den (Sir P. Bryan), if only for one reason. This is one of the infrequent opportunities that we have to discuss some of the vital affairs of the National Coal Board and of the coal mining industry.
  I wholeheartedly support the purpose of the Bill. It is imperative that we should do so in order to accomplish its usefulness by assisting the NCB to extract itself from its present trying position.
  This is the sort of subject about which many of us have been anything but happy
  488
  for a long time, especially in terms of how the coal industry has been allowed to deteriorate. But we are now a little more impressed to note some of the prospect of the industry that are now emerging.
  It would be quite wrong to ignore that aspect, as it is in that sense that we regard the Bill as essential to step up the drive for industrial production. I also believe that the Bill should be seen against a background of unmitigated confusion and frustrations, which should never be allowed to be repeated.
  I shall not recapitulate all the details of the circumstances when coal production was needed to meet an almost insatiable demand. We rightly believed it to be the foundation of the country's prosperity. But instead of the kind of security that we imagined would be a feature of the industry under State control and ownership—for anyone with so long an association with that industry—many times we were alarmed to think of its consequent uncertainty.
  Even though sentiments have from time to time been expressed as to the contribution made by the Board and the miners to the economy of the country, and the risks that were taken to achieve it, the industry was nevertheless thrown into perplexity by the effects of the changing pattern of fuel consumption. It was well foreseen. My right hon. Friend the Secretary of State mentioned all the fuel industries. But I think that it would be more accurate to say that as we have a nationalised coal mining industry, a nationalised gas industry and a nationalised electricity industry, all operating in the energy market, the fact of the matter is that the NCB has had to face a deliberate and calculated contraction of the industry.
  However, that may be, it is an unquestioned fact that out of the past and throughout the last 12 years or so, it has been forced to swim against the current, and a very strong current indeed, in commercial warfare. That is the top and bottom of it. Therefore, it comes unbidden to my mind that the Bill before us, by reason of its intrinsic importance, should command general approval.
  I also think that it is fair to say that it is not an absolute issue for the NCB to become virtually supreme in the energy

  489
  field, crushing out all rivalry and opposition. Nevertheless, the measures proposed in the Bill should assist the Board in its major task of strengthening its economic fabric and enable it to play a more important rôle in the energy field, which must be won by efficient effort that will best serve the life and interests of the nation.
  I cannot fail to welcome the Bill, because I believe that there is nothing that can offer any parallel to future energy requirements. Any unwarranted assumption would be an error, but one of the most critical questions facing the world is how are we to increase energy supplies? They can properly enough be termed worldly.
  With that in mind the Secretary of State has given the House this afternoon a detailed explanation of what the Bill is about. He has demonstrated that he has a true grasp of the need for and the meaning of progress in the energy field as a necessity from which we cannot escape.
  One of the most common reasons why I join forces with my right hon. Friend in showing a more graceful imagination in the broad wide-ranging responsibilities of the Coal Board is on account of what has happened in the past. We are entitled to defend our integrity, as throughout the years many of us on both sides of the House who participated in coal debates have tried to impress on Ministers responsible—both Labour and Tory—that a too rapid rundown of the coal industry would result in the slaughter of employment in a whirlwind of pit closures. Naturally we could never conceal our deep concern on that alone but also on the cutting back of valuable coal production.
  I hope that the right hon. Member for Orkney and Shetland (Mr. Grimond) is not laughing at that. If he is, I will tell him that on looking back on the conduct and standards that we have tried to set in this House, with great respect to you, Mr. Speaker, we might as well have got down on our bended knees and talked to the cows in the field, for what notice anyone took of our pleas. Many times we tried to reach a common agreement and understanding. I often approach other Members, both inside and outside the House, only to be told "Sorry, Robert, old chap; you must understand the trend
  490
  of market forces" Of course we knew what was meant by the trend of market forces. We knew the claims of different kinds of fuel. We knew the pressures from the oil lobby and we knew what they were getting at, as to a considerable extent it was the effectiveness that cheap oil would be obtainable ad infinitum.
  But it does not take a college education for anyone to realise that turbulent events since then have proved that that kind of speculation and image of an abiding monument of cheap fuel will never any longer carry a monopoly of such guarantee. The proof, as everyone knows, is that high-priced oil imports are an intolerable burden.
  We never claimed to have a close-knit knowledge of all the economic mechanisms, but we tried conscientiously enough by studying the extraordinary state of affairs and by pursuing the objectives of proper exploitation and development of such a valuable mineral resource.
  But having to cope with the present and to evaluate the future presupposes an understanding of the past. With that in mind, it is instructive to look on the premise that there will be a large market for coal within the next decade and that investment in that direction, in expansion, is required now.
  The measures in the Bill are directed to that end—and, for the removal of any doubts, I wish to draw attention to the editorial in The Times of 9th February, which commented on this issue as follows:
  "Britain has technically recoverable reserves of coal amounting to some 45,000 million tons, enough for over 300 years at current rates of output. It is reasonable that this should be exploited in a more planned way after the post-war experience of decline, culminating in bitter and unprecedented industrial disputes, and the salutary reminders from OPEC of the economic vulnerability of industrialised nations with heavy dependence on imported oil."
  The only thing that I would say in commenting on that judgment is that it has taken a long time to admit it. It seems that former opinions on such economic vitality are dissolving like a dream. But we have the right to say, having been furnished with internal political observation and experience, the intensity of which we were capable of comprehending, and notwithstanding any shortcomings, that it so happened that those in the higher seats

  491
  of learning—those who are possessed of dry-as-dust economic knowledge, with a fine old tradition in marshalling affairs— classified and predicted what was best for the country as the years were to roll on.
  I never envy anyone who knows more than myself, but while it is reckoned to be interesting to go behind the scenes at a circus, it was through dealing with the principal factors and the practical affairs of the industry that I came to the conclusion that our brains must have been made of mutton fat compared with the doctrine propounded by eminent experts who have got us into such a mess.
  As I understand the main purposes of the Bill, they seek to give the National Coal Board sufficient borrowing powers to implement the long-term development of the coal industry, as set out in the recent publication "Coal for the Future", mentioned earlier by my right hon. Friend the Secretary of State for Industry.
  Now that we have been presented with that report, we see that it envisages the need for primary fuel in the United Kingdom amounting to a figure between 500 million and 600 million tons of coal equivalent. Whatever public money is required to be spent should not be regarded as extravagant, because we cannot ignore the fuelling of the country's industrial recovery with as much home-produced energy as possible. That should be regarded as an important task in the Coal Board's requirements, aided by borrowing powers.
  In view of the contents of the Bill and the report entitled "Coal for the Future", with all that it involves, we cannot refrain from thinking that they can afford endless time for discussion. I would not go so far as to describe all that as "the philosopher's stone" if it did not bring wealth, but they are involved in the interlaced which I have referred, is that it is well known that all the geological evidence suggests that the country is lavishly endowed with vast resources of coal for the production of wealth.
  I should, however, agree that the production and consumption of energy involves a complex network of systems—but they are involved in the interlaced structure of the Coal Board in trying to secure its share in the energy market. The Coal Board's policies should have
  492
  support and should be receptive to all ideas to meet the challenge of any energy crisis with the responsibility to do so.
  I want to conclude on this note. The House may think it rather odd, in a debate of this character, when I say that it is many years since I read the life of the late right hon. Joseph Chamberlain, even though he was a hard-boiled Tory. I learned the motto that ruled his life, which he declared in his own words:
  "No work is ever worth doing badly and he who puts his best into every task that comes to him will surely outstrip the man who waits for an opportunity before he condescends to exert himself."
  Having revealed that to the House for the benefit of the members of the "get rid of Tony Benn" brigade, the significance of that little pearl of epistemology is precisely what my right hon. Friend the Secretary of State is trying to live up to, with his penetration and distinctive application of knowledge on such a subject, in introducing the Bill.
  It is by endeavouring to give shape to the Coal Board in accordance with the tidal wave of changes that surround us—and will continue to trouble us deeply—that the measures in the Bill should serve as a means of future confidence to the Coal Board and the industry. Fortified by all the mutual interests and responsibility, it should be geared to stand four-square against all the winds that blow rather than, just like a ball of clay in the potter's hand, be moulded and shaped into an insignificant industrial asset.
  Mr. Speaker: Order. I make an appeal to the House. The debate is due to finish at about 1 o'clock. I fully realise the importance of the debate and the strength of feeling—I need not remind the House that I am a miner's son and therefore I am interested in the debate—but I shall not be able to call everybody in the time allowed unless hon. Members are able to discipline themselves a little more.
  9.49 p.m.
  Mr. Michael Latham: I take heed of what you have said, Mr. Speaker. I shall just say this about the speech of the hon. Member for Blaydon (Mr. Woof). It was sincere. Although I disagreed with much of what he said, he expressed a view that ought to be put in the House.

  493
  I want to relate my brief remarks about the borrowing powers of the NCB under Clause 1 to the future need for coal, obviously in the context of the Vale of Belvoir—although I shall not talk much about that. I will simply say this about it. We must first decide whether it is really necessary to mine that coal in the foreseeable future. The energy case must be made out. If an overwhelming national need were proved, which could not be met acceptably in any other way, my constituents and those of my hon. Friend the Member for Rushcliffe (Mr. Clarke) would reluctantly accept the project and would concentrate on minimising the environmental damage that it would inevitably cause to the beautiful and agriculturally-productive area involved.
  The form of the inquiry into the scheme and how the energy case will be examined is crucial to the whole issue. As I have said to the Secretaries of State for Energy and Environment, the normal planning inquiry procedure will not be sufficient. I suspect that that is increasingly accepted on all sides. Both right hon. Gentlemen have always been most helpful and courteous to me, and I shall be writing to the Secretary of State who opened our debate when I have some reaction from the Council on Tribunals to questions that I have put to them about inquiries. I disagree with many of the right hon. Gentleman's policies, but his method of open government, with full publication of so much information, is greatly to his credit and has lifted the level of the energy debate and public discussion of it.
  I turn to future need for coal and the financial resources for it. The "Plan for Coal" does not effect the Vale of Belvoir, because no one thinks that it will be on stream by 1985. "Coal for the Future" effectively admits that when it says that only 10 million tons of new capacity is expected by 1985. Eight million tons will come from Selby and the rest from Royston or Betwys, or both.
  We must increasingly re-examine the "Plan for Coal" assumptions, let alone those in "Coal for the Future". "Plan for Coal" was drawn up following the Yom Kippur war and the coal strike, when the energy situation was very different. We must also take seriously an important article by the Reader in Geo-
  494
  graphy at University College, London, Mr. G. Manners, entitled
  "The Changing Energy Situation in Britain".
  In the article, which, to my knowledge, has not been seriously disputed, Mr. Manners shows that because of the enormous potential wattage of the oil and nuclear power stations under construction, the electricity system will reduce its dependence on coal from 64 per cent. in 1974–75 to less than 53 per cent. of output capacity in 1979–80. He also argues that far from the 135 million tons target in "Plan for Coal" being realistic, the domestic market for coal in Britain in 1984–1986 is unlikely to exceed 125 million tons a year, and there is no serious export potential. How, then, is the 135 million tons to be marketed, to whom, and at what price?
  There are two crucial assumptions about "Plan for Coal" that were reasonable in 1974 but that look much less good now. As "Coal for the Future" admits, the total energy scene "now looks somewhat different" and "smaller". The report says that the NCB considers it vital to maintain a market for coal of 125 million to 135 million tons a year. Of course it does: that is its job. It wants "temporary support"—that is a subsidy— to achieve this. We know the Board's view, but we do not know from the document whether the Government agree.
  One aspect of this "somewhat different" energy scene is the assumption of "Plan for Coal" that it would become more competitive with oil because of price increases. The CEGB has made clear that recent price increases in coal and railway transport costs have eroded coal's advantage over oil and, as Mr. Manners put last year:
  "it is questionable whether coal in fact retains even in 1976 any real economic advantage over oil in many parts of the country."
  That article was written in 1976, and even in 1975–76 the advantage was very narrow. In an answer to me on 6th August, the Secretary of State said that, expressed as pence per kilowatt hour, electricity generating costs for coal-fired power stations were 0·97, for oil 1·09, but for nuclear power 0·67.
  The second assumption of "Plan for Coal" that has proved doubtful lies in its targets. The January edition of

  495
  Energy Trends shows that the total production of coal fell by 3·8 per cent. in 1976 and by 6·1 per cent. for deep-mined output. Consumption was virtually unchanged, stocks at power stations and elsewhere remained higher than in any year since before 1971, the manpower in the mines fell by 4,000—I agree with the hon. Member for Bolsover (Mr. Skinner) about the difficulty of recruiting miners in future—and electricity consumption increased only marginally.
  Against that specific picture up to 1985, the NCB is asking us to look at the position in the year 2000. The basis for its case for further expansion in "Plan 2000"—sensibly the Government have not accepted it but have merely said that they will consider it—is that there will be an energy gap in the 1990s or, as it is discreetly put in " Coal for the Future ", there will be
  "Global pressure on energy resources ".
  Since it is doubtful that the 135 million tons of coal target for 1985 is either marketable or likely to be achieved, I am even more sceptical about the "Plan 2000" range from 135 million tons to 200 million tons, of which 60 million tons from 30 new mines should be new capacity. I find those targets difficult to accept.
  Let us consider the evidence for an energy gap. Both the Gas Corporation and Mr. Frank Chapple of the EEPTU have expressed scepticism—which I share—about whether it will happen at all. The Secretary of State in evidence to the steam generating heavy water reactor inquiry last August, before the General Sub-Committee, felt unable to say more than:
  "There has got to be agreement, at any rate about broad forecasts within certain parameters, so that we know exactly what the gap is, when it will come and how we might fill it."
  Even the NCB in "Plan 2000" does not say more than
  "By the end of the century North Sea oil and gas could have passed their peak."
  The House would do well to mark the wise words of the previous chairman of British Gas, Sir Arthur Hetherington, at the National Energy Conference last year, when he said:
  "Forecasting energy demand 25 years hence is a chancy business indeed. Many very eminent and wholly disinterested people have
  496
  tried their hand at this in the past and have proved dismally wrong. Only nine years ago the 1967 White Paper got the UK energy demand in 1975 wrong by an over-estimate of 9 per cent. … Any forecast which assumes a constant relationship between GNP and energy demand must be suspect.…Because we cannot speak with even reasonable certainty about energy demand in the year 2000, a rational procedure is to establish the lead times of the various projects which may he necessary and to take each decision as late as possible. It is vital not to take today, on the basis of a speculation, decisions which could cripple the country industrially over the next few years."
  The "Plan 2000" figures are based on four main assumptions, which should be questioned in the House. One major assumption is that oil-fired plant would be converted to coal. The CEGB has specifically rejected this solution, which it has said will increase the price of electricity, reduce its consumption and depress coal production still further.
  A second assumption in "Plan 2000" is that coal sales to industry, in preference to oil or gas, could be increased from the present 11 million tons to between 30 million and 50 million tons. The best that the NCB can say to justify that is that "there is no reason" why it should not happen. But there is no reason why it should happen either. Since no reason is seriously offered, we cannot plan on that basis.
  The third assumption is that there is a predicted increase of up to 10 million tons in additional coal sales—including totally uncosted and unquantified SNG conversions—to the domestic and commercial market for central heating. Such a proposal is against all consumer preference and experience, and it is hard to believe.
  "Plan 2000" talked of the possibility of coal exports to the EEC. It gave no figures, which was just as well, since it would be difficult to take them seriously. "Coal for the Future" does not try to predict any real export potential. If there is any export to the EEC, I suspect that it will come from Poland.
  There is also the cost—the horrific cost. The original March 1974 "Plan for Coal" figures have risen to £2,440 million at March 1976 levels, or £3,150 million if the revisions are taken into account. That was March 1976. What are the figures now? What will they be in 1985? What about Selby, which will

  497
  not start producing until the early 1980s and which was scheduled to cost £400 million at March 1976 prices? What will it cost in the 1980s? As for Belvoir, if it is even mined, I cannot see it costing less than £1,000 million in real money as opposed to "phoney" constant price forecasts. The House will be continually considering coal Bills every year if that is the reality.
  It being Ten o'clock, the debate stood adjourned.

  BUSINESS OF THE HOUSE
  Ordered,
  That the Returning Officers (Scotland) Bill may be proceeded with at this day's sitting, though opposed, until any hour.—[Mr. Harper.]

  COAL INDUSTRY BILL
  Question again proposed, That the Bill be now read a Second time.
  Mr. Latham: The National Coal Board says "Ah, but it will be investment" Certainly it will be investment, but whether the confident predictions in "Coal for the Future" that it will be profitable investment we in this House must at least seriously consider.
  Again, as Sir Arthur Hawkins, Chairman of the Central Electricity Generating Board, said at the Church House discussion 12 months ago, in a statement that was regarded as being almost heresy at the time but should be on record—
  "There is no advantage in capital investment just to keep people happy if it brings no real benefit to them, whether they be miners or electricity supply workers. There is no point in capital investment; it is costly, it puts the ultimate price up, and it reduces still further the demand for the product, so if we are going to keep electricity competitive we must restrict our capital investment as the Government are pressing us to do, as part of the private sector."
  No one, least of all myself, disputes that coal has an important part to play in a four-fuel economy, but as guardians of the wider economic interest we in this House must also try to see the broader picture. I hope that I have asked enough questions to suggest that we have much to do as a country before we can even consider making a decision on "Coal for
  498
  the Future". The Secretary of State's Energy Commission will, I hope, as well as representatives of both management and unions of the energy producers, also include strong representation from sceptics who will ask pointed questions as to how much energy we will really need and who will pay for it. Only then can this House discharge its rôle to the people of carrying out a national financial energy audit. That process has hardly yet begun.
  10.3 p.m.
  Mr. Eric Ogden: The hon. Member for Melton (Mr. Latham) looked far into the future at Britain's needs and requirements for energy. While I disagree with much of his comments, I agree that we should all be extremely sceptical about forecasting which industry will be required to provide what amount of energy and at what price. Every such forecast that I have heard over the last 12 years about our future energy needs has been proved wrong.
  However, I recall one forecast which came true—and it is perhaps a personal matter between the hon. Gentleman and myself. He and I were opponents in Liverpool, West Derby in 1966.
  Mr. Michael Latham: 1970.
  Mr. Ogden: It seems longer ago. The Opposition Benches are becoming full of Members who did not win Liverpool, West Derby. I look forward to seeing many more of them. On that occasion, I forecast, after our confrontation, that the hon. Gentleman would move on to become an extremely good Conservative Member for an extremely good Conservative seat. That forecast at least has been proved accurate.
  I made another forecast only a couple of hours ago. At the top of the notes from which I intended to speak, after hearing my right hon. Friend the Secretary of State make a quiet and responsible introduction of the Bill, followed by the ritual complaints about Socialist mismanagement but an equally responsible speech from the hon. Member for Bridgwater (Mr. King), I wrote "This has been a quiet and responsible debate". But the debate then erupted in speeches from my hon. Friend the Member for Dearne Valley (Mr. Wainwright) the hon. Member for Barkston Ash (Mr. Alison) and others. Nevertheless, I think that it has been a responsible debate.

  499
  So far, no hon. Member has declared an interest. I presume that that is because everyone in the debate has known who has interests to declare. Those of us on this side of the House who are members of the National Union of Mineworkers, as I am, have declared their interest on countless occasions, as I have done, and that they are sponsored by the union, as I am. All this is known already to the House. My views on the Bill would be exactly the same if I had no interest at all to declare. It is noticeable that, whereas in the past there was no great opposition to any important support for coal, in this debate we are all pro-coal.
  I confess that, while I and my hon. Friends have done our best in the past 12 years to persuade the Government of the importance of coal, the oil-producing countries did more to persuade the Government to my point of view than anything that the NUM and its members did. If ever an honour were to be placed on the OPEC countries, we ought to award them honorary membership of the NUM.
  I support the provisions of the Bill. To put the Bill into context, it is different from past Bills in one respect. In the past we have been concerned with where we could get the coal to burn, while before that it was a question of how we could burn the coal that we had. Now we are talking about support for an industry in a difficult period.
  Every Department of Government now has severe limitations on its expenditure. We should all be aware that these financial restrictions must continue and even be increased during the next two or three years at least. It is not simply a case of having financial restrictions this year and then taking the lid off. The restrictions must continue.
  Therefore, we should ask not merely whether the expenditure entailed by the Bill is justified. We have to justify this amount of expenditure in these circumstances. I confess that in the last few years, in spite of what I have just said, I have taken a number of deputations to various Ministers asking for investment in a particular industry or a particular area. I have no shame about that. But I was aware that when I approached any Department there was an invisible sign on the door saying "Please do not ask for
  500
  credit as a refusal may offend" Where the Minister sat there was another invisible sign, "The bank is closed."
  The Minister has to justify not only the Bill, but the Bill in these circumstances. I think that he did so to the reasonable satisfaction of both sides of the House—not an easy task and certainly to my satisfaction.
  There are three reasons for supporting the Bill. Government aid for investment to industry is moving from the geographical basis of assisted areas, which are arbitrary geographical areas, so that instead of having assisted, intermediate and special development areas the trend is to move towards direct investment in a particular industry. The Bill fits in with that exactly. Clauses 2, 3, 4 and 5 deal with grants for promoting the sale of coal to electricity boards, grants for the stocking of coal or coke, grants in respect of coking coal, and regional aid.
  The Bill recognises the responsibility of the NCB for security of supply. One thing that the hon. Member for Melton did not include in his calculations was security of supply, which must be considered in addition to cost and availability. He may have mentioned this point, but not to any great extent. The NCB has more than the normal obligations of a private industry. Clauses 6, 7, 8 and 12 of the Bill are concerned with pit closures, redundant workers, regional grants and pensions. Again, the Government recognise that the NCB has rather more social obligations than most private enterprise industries.
  One point that I wish to put directly to the hon. Member for Dundee, East (Mr. Wilson) is that I hope the Scottish National Members, two of whom have been present during the debate, and the Welsh nationalists, of whom I have not seen any during the debate, will realise that Clause 6 is particularly important for the Scottish and Welsh coalfields. One of my hon. Friends had an Adjournment debate a week or so ago about the difficulties of the Scottish coalfields. The Bill applies to the whole of the United Kingdom and is important to every part of the United Kingdom. The aid is available to every coalfield in the United Kingdom. I hope that if the hon. Gentleman catches your eye, Mr. Speaker, he will be generous enough to recognise that fact.

  501
  Clauses 9, 10 and 11 of the Bill are perhaps more controversial. Indeed, they might become even more controversial if the hon. Member for Bedford (Mr. Skeet) is successful in catching your eye, Mr. Speaker. If it is right for private industry to diversify, it cannot be denied to a national enterprise. I agree that there should be equal opportunity. The NCB in these operations would not be in a monopoly situation, so competition would apply.
  I wish to put two specific questions to the Minister. I hope he will be able to reply to both of them. If not, I know that it is his good custom and practice to write to individual Members with the information, and that is appreciated.
  The coal industry, which includes both public and private interests, believes that there are major coal deposits under the North Sea. Members from the North-East Coast know that coal has been taken from under the North Sea for many decades. In the main, seams have not gone out further than two or three miles from the coastline. Now we are told that there are high hopes, great expectations, of major coal deposits being found far out under the North Sea. Some attempts have been made to discover how those deposits might be extracted and used.
  The normal convention in mining of sinking a shaft or a drift and bring up the coal in bulk will not be possible in the North Sea. Is it possible for the Department of Energy to support research and development by the NCB, which cannot in any way be helpful in the short term but might make a substantial contribution in the long term, directed towards undersea burning, gasification and so on? Is it possible to have research and development contracts for the long term? Too often in this place we look at the next three years, not at the next 20 to 25 years.
  The second question, which has not so far been mentioned, relates to Drax. If I simply say "Drax", Members and the Minister will know what all the other questions are about. I do not expect my hon. Friend to make a statement about the Government's intentions regarding Drax in this debate. However, that is a way of assuring him of the continuing in-
  502
  terest of Members, particularly Members of the miners' group. Perhaps he will indicate when a statement is likely to be made. "Drax" is my shorthand way of putting the question, and I think that all hon. Members will understand it.
  Finally, I should like to mention productivity and costs. Coal miners are not capstan lathes. Most hon. Members understand that. Coal mines are not machine tools. Coal mines work 24 hours a day, so it is not a question of putting on another shift. We cannot really compare productivity and progress one with the other of coal mines in England, Scotland and Wales. It certainly was a disservice by the hon. Member for Bridgwater to say that it was proposed that our coal production should increase by about 6 per cent. whereas the Americans were making plans to increase their production by about 135 per cent.
  Mr. Tom King: About 58·5 per cent.
  Mr. Ogden: I am sorry. There was mention of about 135 per cent. somewhere along the line.
  Mr. Tom King: Perhaps I may help the hon. Gentleman. If I remember correctly, the figures are as follows: Australia and New Zealand, 58·3 per cent; the United States, 58·5 per cent; Canada, 86 per cent; and the average for the whole of the OECD, 36 per cent.
  Mr. Ogden: I am grateful to the hon. Gentleman for that helpful intervention. I must have been adding the figures for Canada and America to reach about 135 per cent. However, as the hon. Gentleman eventually recognised, taking brown coal out of America and hard coal out of Britain arc two very different things. It is not a matter of making a machine to go faster, speeding up a belt and so on. Essentially, real productivity in British coal mines has been increasing, though that is not shown in the output per man-shift. It is more difficult to get coal from a British pit now than it was five years ago. The older the pit, the more difficult it is. We run faster in order to stay still. My only hope for major increases in productivity which will help to hold down costs is the finding and working of new seams and pits. It is a fact of life that any major increase in productivity must come from new pits and new seams.
  Mr. Tom King: I agree with the hon. Gentleman. To put the record straight, since there still seems to be some misunderstanding, my purpose in mentioning the OECD figures was to show the importance that all those countries now attach to coal production. None of this coal would be won without substantially increased capacity. It is an indication that all those other countries are recognising the significance and importance of their coal industries.
  Mr. Ogden: I am grateful: the hon. Gentleman and I have come by different paths to the same point.
  As I was saying, the only hope of major increases in productivity lies in the new pits. Almost all the investment in the industry in the next three years will have to be directly aimed at production, but a great deal of time has been spent tonight on the environmental aspects. That
  504
  is absolutely right. Whether at Aberfan, Barkston Ash, Selby, Belvoir or the new one, we must not repeat the mistakes which the industry, private and public, has made over the past 100 or 200 years.
  I ask only that after the next year or two some of the resources being made available for the new pits should be devoted to the old pits. Some resources, no matter how limited, should be spent on improving their environment.
  The Bill provides large amounts of taxpayers' money for direct investment in an industry which is vital to our future. There has been more agreement tonight than in any other debate on this subject. I do not want to incite the hon. Member for Bedford or any SNP Members, but I believe that the underlying tone of this debate has been a recognition that this is a major British industry which both sides want to assist because of its vital importance to the economy.
  10.17 p.m.
  Mr. John Hannam: The hon. Member for West Derby (Mr. Ogden) has made a thoughtful contribution to an interesting debate. There has been great concord between the two sides about the future of this important industry. In a spirited speech, the hon. Member for Blaydon (Mr. Woof) indulged in a little name-dropping. I should like to do the same by referring first to the person that he mentioned—the President of the NUM, Mr. Joe Gormley. In a discussion that I had with Mr. Gormley a year or so ago at a joint industry meeting, he stated very firmly what has also been expressed by the hon. Member for Blaydon, West Derby that a bipartisan approach was desperately important if we were to obtain the fullest benefits from our massive energy resources. He has developed that theme, of course, on other occasions.
  Therefore, in my approach to the Bill, with all its implications, both financial and otherwise, I retain my fundamental belief that our coal reserves are our most important asset. North Sea oil and gas, vital though they seem in our present dire economic straits, are of limited duration. With all the alternative sources of energy—tidal, solar and wind power and even nuclear energy—coal, if produced economically and used wisely, will increasingly play an important rôle in our industrial processes. I am therefore pleased that once again the House can deliberate constructively on a major Coal Industry Bill.
  Having said that, and declared my unequivocal position as a supporter of the coal industry, I must express, as other hon. Members have done, some concern at the present state of affairs. I know that there is tonight a feeling of unease among some hon. Members and Ministers, shown in the thread which has run through most speeches about the decline in productivity in the mines.
  Writing in the Colliery Guardian in May last year, the Secretary of State said:
  "What is needed is a viable industry to get the coal out of the ground. And to get it out at competitive prices."
  With coal prices rising by nearly 100 per cent. in the last three years, there is
  506
  general anxiety that for reasons people do not undestand vast amounts of their money, the spending of which we are approving, are being poured into the coal industry without achieving anything. There are many reasons why, some of which have been explained tonight. We have heard detailed explanations why we are not obtaining the increases in productivity which successive Ministers when presenting successive Coal Bills have proclaimed would be a direct result of their measures.
  Mr. Grimond: The hon. Gentleman draws attention to a distressing fact, that productivity has been falling, but has he noticed that at the new mine in Royston productivity has risen from 2¼tons per man-shift to 8 tons per man-shift? If this is to be the pattern of the new mines being sunk in Yorkshire and elsewhere, that is encouraging.
  Mr. Hannam: I agree completely. I want later to develop the reasons why I think it is not the miners' performances at the face but other factors which determine the drop in productivity, and which will determine the increase in productivity which we shall achieve in the years to come.
  I have sat on three Coal Bills. Each time we have discussed the whole question of the non-realisation of the hopes expressed in the deliberations on the previous Act. Each time we have had Ministers expressing their determination to come up with a new and acceptable productivity deal so that these new targets could be reached.
  The hon. Member for Bolsover (Mr. Skinner) gave the reasons why he feels pessimistic about any new productivity arrangement. Unfortunately, I believe that all the portents are unfavourable, and I agree with the Iron Gentleman in that respect. But it is still necessary for us to indulge in some plain speaking so that we may restore confidence to people and Parliament that we are nut just pouring money into an industry without any idea of what that industry is trying to achieve.
  There is no dispute, or there should not be, about the rôle of coal. With coal-generated electricity increasing from 67·8 per cent. of all electricity to 77·8 per

  507
  cent. last year, the miners should not feel that there is some gigantic conspiracy, on the part of the CEGB or anyone else, to prevent the fullest possible exploitation of our massive coal resources.
  I do not share the fears of the hon. Member for Bolsover that more oil will be used for generating electricity at the expense of coal. But there is, and there should be, concern on the part of workers and management in the industry about the fall in demand for coal. The Secretary of State is right to stress the need for a viable, competitive industry. But what indication has he given today that the frighteningly large increase in prices of the last year or two will not be added to substantially by a lack of productivity, inflation and other factors, such as bringing forward Drax B, early retirement—the costs of which will have to be added to the price of coal—and a miners' pay claim which could be far in excess of the present voluntary limit?
  As my hon. Friend the Member for Bridgwater (Mr. King) pointed out, miners are just reaching the end of their phase 1 pay agreement. They still have to go through the whole of phase 2 at a time of frighteningly large increases in the cost of living. We are entitled to an assurance from the Government that there will be a satisfactory pay settlement later this year which will relate somehow or other to productivity.
  The overall decline in OMS has not been consistent. I disagree with the hon. Member for West Derby, who implied that we were facing a continual problem of trying to catch up with the year before, because there has in fact been an up-and-down situation for some years. Productivity has gone up for one or two years and then down. It is a worrying situation, because we should be expecting productivity to increase, especially if we are considering investment in new equipment and new mines.
  Various reasons are advanced for the decline in productivity. Unless it is reversed, the Selby field, the first to be developed in Britain for 70 years, may finish up producing very expensive coal. The strategy in the 1974 "Plan for Coal", drawn up by the last Conservative Government, aimed at halting the decline in output. We have seen a
  508
  decline from 184 million tons in 1960 to 120 million last year. The sum of £1,400 million envisaged in 1974 for major improvements has had to be revised upwards dramatically, by over 100 per cent.
  I support many of the objectives and figures being put forward in the Bill, the increased funds for coal research, the gasification programmes already taking place, fluidised-bed combustion and the coal-into-oil processes. But the revised expenditures are vast, and if they are not backed up by increased production and the competitiveness which the Secretary of State has insisted is required they are not entitled to receive our unqualified support.
  The reports of severe flooding problems at Selby are disturbing, because we base our hopes for productivity upon such new fields producing about 60 per cent. more. The overall 4 per cent. a year increase envisaged in the "Plan for Coal" was based on that kind of premise. Therefore, it is crucial to the debate that the Government give us a clear indication of plans to boost production per man-shift.
  I hope that Labour Members will shoot me down if I am wrong, but I suggest that our present shift system of one or two shifts a day, certainly in the newer pits, is not as effective as the Europeans' three-shift system. That is not because the German miner works harder at the face than the British miner. It has been conclusively proved that he does not. But the system there allows for a far better use of the machinery and equipment.
  There is also the question of the reliability and design of our coal extraction equipment. It has been reported that we have only a quarter of the length of service compared with European equipment. We suffer long delays, and, therefore, long weekends are used for the servicing of such equipment. I put this forward as an alternative explanation for falling productivity rather than the general assumption that for some reason the British miner is not working as hard as he has done in the past.
  I have visited old and new pits. I recall a visit to the new Daw Mill colliery, with faces of 250 yards and wonderful new equipment producing vast

  509
  amounts of coal by mechanical means. But I also clearly recall my impression of the mine's dependence upon the reliability of those machines. When I talk of poor productivity, I am not implying poor effort by the miners. But I accept the problem of the older pits—
  Mr. Gwilym Roberts: Does the hon. Gentleman accept that with a three-shift system of the type he was talking about there are greatly increased maintenance problems with some of the machines at the face? Some of the experts who have compared one or two Staffordshire pits with German pits found that total productivity in the Staffordshire pits that they examined was higher, purely because the machines ran better and there was better maintenance.
  Mr. Hannam: That is a crucial point. That is why I related the matter particularly to the need for more reliable equipment and machinery. It appears that the improved productivity in German pits is not a result of producing more in the working time at the face per man-shift but comes about because the Germans are getting longer and better use out of the equipment. I think that the Germans have shown that by using a three-shift system, with better and more reliable equipment, they can achieve a much higher level of productivity, but it is a matter that must be very carefully examined.
  Mr. Spriggs: The hon. Gentleman is now comparing the German coal mining industry with the British industry. I do not know whether he has seen the deep, thick seams of brown coal in Germany where they are outcropping seams that are 30 ft. thick. They are doing so 8ft. at a time. If Britain had seams like that, it would be a wonderful asset to the British fuel industry. When the hon. Gentleman is comparing the German coal industry with the British industry he should take such matters into account.
  Mr. Hannam: I accept that we must be careful not to liken unlike with like—in other words, using pits from one areas as examples when they are totally different from others. I have seen reports and evidence where those investigating the problem have tried to take equivalent pits in Poland, Germany and other coun-
  510
  tries when comparing them with others. I am suggesting that productivity does not necessarily lie only with the working of the miner at the face. There are many other factors involved. I accept the hon. Gentleman's point.
  Another matter that is connected with productivity is the whole question of incentives and labour attitudes. Surely labour attitudes could be better within the industry. It is important to ensure that we have the right shift system that gets the best use of equipment and machinery and that the equipment and machinery is reliable and long-lasting. If the miners can see positive financial rewards from the increased use of available machinery, if they can see a 4 per cent. increase in production per year as originally laid out in the 1974 "Plan for Coal", they will themselves generate greater confidence in the future along with better industrial relations and much higher wages.
  It is not only a matter of financial rewards. If we talk of exports of coal, increased electricity generation and increased domestic and industrial consumption, those increases will not be obtained just by the measures that we have heard proposed by the Secretary of State at Question Time. The premature bringing forward of Drax B, the adding of that generating station to our already under-used generating capacity, will add £150 million to the cost of electricity generation. That will mean a 3 per cent. or 4 per cent. increase in charges, as admitted in answers that have been given in the House, plus the increase of 15 per cent. that we are liable to see added to coal prices, plus the cost of early retirement proposals and the cost of any new wage agreement, and all this will further stifle coal demand.
  We have to be extremely careful not to be led up one alleyway only to find that we defeat our objectives in another. I want to see new and more reliable machinery, earlier retirement to create a younger work force and new fields at Selby and elsewhere bringing about the production that we seek, combined with a forward-looking incentive scheme for the miners. If that could be achieved we could put our industry on the right path, but without it we shall continue to lag behind our competitors and fail to seize the opportunities open to us.

  511
  The best exposition of the case that I am making came from the Secretary of State in the article he wrote in the Colliery Guardian of May 1976. He referred to the opportunities for exports, which it is important that we bear in mind. He wrote:
  "As the European Community includes among its energy objectives, in addition to stabilising coal production at current levels, a potential increase in coal imports from non-Community countries, this offers the United Kingdom some prospect of increasing its trade in coal within the EEC. By 1985 the Commission estimates 'imports' will have to increase by about 20 million tonnes. If the United Kingdom can achieve a surplus of coal at competitive prices, some of this trade may well come to us."
  Clause 11 enables the NCB to operate extensively abroad, and I should want to examine the powers very carefully as they could lead to the opposite of what the Secretary of State was saying. They could lead to competitive coal extraction in other countries. I have no objection, to NCB expertise being used and sold abroad in joint ventures, as is being done with the Queensland coking coal development, but some of these projects could lead to NCB imports coming into this country from developments of coal elsewhere and competing with our own production. We need a clear and detailed case made out for the clause by the Government if these overseas developments are to take place.
  If these overseas developments are to be slanted towards the new developments of oil from coal or other energy techniques I should favour them provided the closest scrutiny is maintained in order to avoid the possibility of huge loss-making ventures being embarked upon. I need cast my mind back only as far as the groundnuts scheme to realise how we can find ourselves not restraining ventures of the sort which take place abroad.
  Clause 9 proposes an extension of the NCB powers to enable it to engage in petro-chemical activities, I know that my hon. Friends will deal extensively with this. The Department's Press notice gave the impression that this clause would not empower the NCB to go downstream with petroleum refining and marketing. The general interpretation of this provision by experts outside the House is that it seems certain that these powers would be given.
  512
  In spite of the qualification which is supposedly included in subsection (1), the clause is so loosely worded that I suspect that a deal has been struck with the Government to compensate the NCB for the arbitrary removal of its North Sea oil activities. I imagine that there is still a group of oil experts in the NCB who would like to retain these oil activities, and, therefore, I suspect that a deal has been struck.
  There must, therefore, be a conflict between the NCB and the oil companies. How are these powers necessary for helping the board to establish long-term outlets for coal, which is supposed to be the object of the Bill?
  I support the Bill since I believe that from the 1990s onwards coal and nuclear power will provide the ever-increasing bulk of our energy. The oil era will end much sooner than expected, and alternative sources of energy—solar, wind and tidal power—will only just enable use to keep pace with demand.
  The latest figures from the Oil and Gus Journal paint a worrying picture of declining proven world oil reserves, with a 9 per cent. decline in 1976. If no further additions to reserves were to be found there would be only sufficient oil at the depressed 1976 level of world production to last for the next 29 years.
  Taking into account new discoveries made, and balancing them with the increased consumption which will result from the pick-up of world demand, we can see that we are coming to the end of these oil supplies.
  We must, therefore, ignore the cynics and look a few decades ahead to a period of nuclear and coal power. The nuclear debate is well tinder way in the House, but coal will be the great source of energy in the 1990s, and not necessarily in the forms we now know. We shall have the new techniques of fluidised-bed combustion, gasification of underground and undersea coal strata, liquefaction and "gas from coal", and "coal-plexes" for petro-chemical processes as already exist in South Africa and elsewhere. These are the coal uses for the future, and it is right to provide for the NCB to carry out research and development on these matters.
  I want all this to take place, and I want our embattled coal industry lifted

  513
  out of any rut of partisan politics that it may be in. I want an end to industrial confrontation, because of the great future that there is for coal. The Government have not convinced me that they have their priorities firmly in view, but I hope that in Committee all of us can assist them to get these priorities right for the future.
  10.40 p.m.
  Mr. Albert Roberts: As promised, I shall try to confine my remarks to about 10 minutes to allow some of my colleagues to enter the debate.
  I would first make reference to the speech of my right hon. Friend the Secretary of State for Energy. I am pleased that the Bill has been brought forward. If the debate has been wide-ranging, it is simply because in the past we used to have an annual debate on the National Coal Board report. This practice has lapsed during the past few years, and, as a result, we are taking the opportunity to go rather wider than the Bill and discuss other matters which are very important.
  On going through the Bill, I feel that my right hon. Friend's comments were very fair. But he must realise that at the end of the day we must face realities. It is an important Bill. I have listened to many coal debates in this House during the last 25 years, and we always seem to get a wide measure of agreement. I cocked my ears when my right hon. Friend made reference to Jack Dunn and the pamphlet concerning oil and energy. That kind of thing has been said in this Chamber for many years and successive Governments have failed to take note of what has been said on these issues.
  Without doubt, the Secretary of State for Energy has one of the most important posts in the Government. Without energy we would have no social services, or education, or civilisation. I was pleased when my right hon. Friend mentioned that he was striving to bring all the energy industries under one umbrella. We have argued for this many times in the past but we have never actually succeeded in bringing it about. However, I am now convinced that my right hon. Friend is making a serious endeavour to bring it about.
  514
  I smiled slightly when my right hon. Friend referred to the Sankey Commission. I wondered whether anyone in the Chamber knew who Lord Sankey was. When I was a young boy in 1920, I remember that he used to come to the miners. Lord Sankey was a friend to the miners. His speeches on mining and the mining industry are still remembered by many of us. He was appreciated, and we fully understand that he was dealing with a very human problem.
  In spite of mechanisation, the mining industry is still fighting nature with bare hands. I have been down about 50 pits and I have also seen opencast mining in Australia and Germany. It is difficult to make comparisons with regard to output per man. But we must look back in retrospect to see where we have gone wrong. As I have already said, this subject always evokes an exciting debate. I am sure that after the debate is finished it will take at least two hours for the coal dust to settle.
  This is an industry which needs serious attention. We have to realize that it takes two tonnes of coal to produce as much energy as one tonne of oil. We know that coal is still a reserve, but we must realise that the reserves in Great Britain will last only 200 years. Not many hon. Members realise that there is coal under Reading which is 12,000 ft deep. The time will come when this will be exploited.
  The coal industry in Great Britain is one of the best in the world. We have some of the best mine workers. Having said that, we must take into consideration that we have a responsibility to society. That is why I say to my right hon. Friend that if we proceed with the Bill, and with the loan, we must have increased productivity.
  I am a sponsored Member of the NUM. I say to both the NUM and the NCB that something has got to be done. Members of the mining group come to the House and support the NUM through thick and thin. We make our speeches in this Chamber, and on many occasions we have been supported by hon. Members on the Opposition Benches. However, as my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) said, we must realise that if we do not get increased production it will be difficult for us to start applying the fringe benefits that we should like to give to those in the mining

  515
  industry. We should like to do far more than we are doing in that respect.
  It is difficult to encourage recruits into the industry. Throughout generations there have been problems in the mining industry and people have made sacrifices to go into it. As an industry producing coal, 100 years ago we were exporting more than half of all fuel entering world trade. Today we can still become the powerhouse of the EEC, and we should do that. Now that we have this Bill, it is up to all of us to see that we play our part, particularly in Western Europe, because if we do there will be a great future for those in the mining industry. There is no reason at all why we should not stimulate confidence within the industry so that we can get the right kind of recruitment.
  At present we are obtaining about 15 million tons per opencast mine. The hon. Member for Barkston Ash (Mr. Alison) was waxing eloquent about Selby and the proposed mime there and how some of his people will suffer. I was born in my constituency and I have continued to live there. We have been ravaged by opencast mining since 1941. There is now a proposal to start a new mine in close proximity to 300 hours. I shall oppose that if at all possible. However, we have experienced this problem. It may be fair for the hon. Member to make a constituency speech concerning what may happen at Selby, but I hope that he will realise that we have had the spoil banks and have made the sacrifices.
  I have always claimed that Yorkshire, with its agriculture, coal and steel, is probably the most important county in Great Britain. But we have made an enormous sacrifice. I have said to my people, "Opencast mining is justified. The coal is cheaper to win than the coal in a deep mine." This coal must be got out at some time.
  Mr. Alison:The hon. Gentleman is a neighbour of mine in Yorkshire. He knows that I have the same problem of the opencast site that spreads dust all over my constituency as it does over his. It is not merely Selby about which I have been talking. We also have the opencast problem in that part of my dividion.
  Mr. Roberts: Of course, that is so, However, I hope that my hon. Friends
  516
  who come from areas that are far away from mining areas will realise what we must put up with, although we know the national need and that we must probably tolerate some of these things.
  Mr. Woodall: Does my hon. Friend agree that one of the problems in that part of Yorkshire in which we live is the shortage of tipping space that is now being experienced with some of the long-established pits? That will never be a problem at all in Selby.
  Mr. Roberts: Yes, and I accept that that is so concerning Selby. But what has been brought out is what may happen in the Selby area. I have a good amount of sympathy with some of the points that have been made, but people in my area have experienced these problems for generations. I do not mind these points being raised as a constituency matter. I have referred to certain opencasting in my constituency. It will continue for 30 or 40 years. That is what worries me tremendously.
  I do not believe that enough has been done, or that sufficient money has been spent, on research. When we talk about oil resources being exhausted within two generations, we should remember that there is a possibility of obtaining oil from coal. It could be done now, but it is a very expensive process. Far more attention should be paid to research. The Bill opens up great possibilities, but I would like to see the whole process stepped up a bit. Whatever we may say about fossil fuels, the fossil fuel that we must bear in mind most is coal. My hon. Friend who is winding up the debate tonight has as much experience of the industry as anyone in this House, but I would like to hear him say that a little more could be done on research.
  I am pleased to say that the blackened panoramas in some of the coal fields have disappeared. This is a tribute to those who have subscribed towards the removal of the tips. In parts of my constituency now one can actually see cattle grazing. I very much appreciate this rural scene.
  The House debates a measure like this with a good deal of agreement, although some hon. Members do bring up the past a little. If we do not get the kind of agreement we are all seeking, it will be difficult for everyone. Our economy

  517
  depends on it, and our direct and indirect services depend on it.
  I want to see full co-operation between the National Coal Board and the National Union of Mineworkers. To a large extent it will help if we can produce more coal. If people are paying £52 a ton for coal, that is a lot of money. I remember the days when I got my ton of coal for 3s. 6d. I do not believe in cheap coal, because I do not believe in cheap miners. We have had cheap miners for generations, and now we must ensure that they are adequately compensated and have suitable hours. I believe that 25 years is long enough for anyone to work in a pit.
  I shall quote from the conclusions of a Government committee under the chairmanship of Sir John Forster which examined the question of juvenile recruitment to the mines in July 1942. It said:
  "The industry has a black record as regards unemployment, and especially since the end of the last war there have been certain districts in which the incidence of unemployment and part-time working has been particularly severe. During that period coal-mining has been subject to a series of shocks which have done serious damage to the prospects of those whose well-being has been dependent on the industry. The memory of these shocks still remains and has operated as a deterrent to recruitment. The wages level, both for boys and adults, does not compare well with other industries, especially taking account of the time lost from sickness, accidents, and short-time working.
  The type of underground work is uncongenial, and will continue so unless improvements in living and working conditions keep pace with those in other industries."
  That was in 1942, and it is still true today. We must achieve unanimity on energy policy. If we can retain confidence in the industry, I believe that there can be a good future.
  The future for the coal industry is exciting. If I were a young man embarking on a career today, I should have no hesitation in choosing coalmining. I welcome the Bill and hope that it will be fairly treated in Committee.
  Mr. Deputy Speaker (Sir Myer Galpern):I must remind the House that this is not an open-ended debate. It must finish at one o'clock, and the Front Bench speeches will begin at 12.20 a.m. We have only 85 minutes to accommodate the contributions of 11 hon. Members. Therefore, I appeal for brevity and hope
  518
  that hon. Members will keep their speeches within a compass of seven or eight minutes. I shall then be able to call all those hon. Members who have sat through the debate.
  10.57 p.m.
  Mr. Gordon Wilson: I see this Bill as part of a wider vision in the new approach to the energy gap, but the energy gap will grow wider sooner rather than later.
  The future of coal is dependent on two particulars: first, price, and, second, productivity. The subject of productivity has been ventilated a great deal this evening, and it plays an important part in considering whether there will be a demand for coal in the market. As oil and gas go into shorter supply, the price of those products will rise. If the price of those commodities rises, coal will become more and more competitive.
  We are now dealing with a partly transitional situation in which coal—which in the 1950s and 1960s was in competition with cheap oil—is now much more competitive than it was because of the policies adopted in the OPEC and the increase in world oil prices. But we still have not reached the situation when coal has come back into its own—to the time when it is regarded as it used to be, as "King Coal".
  This Bill is important in two ways. First, it will provide finance for the development of industry, and I shall return to that matter a little later. The other aspect of the Bill involves the development of chemical products from coal, and it is right that research should be conducted into that situation.
  I hope that the Minister will be able to answer one or two questions about the coal industry in Scotland. I appreciate that a large part of the finances will go to development of the Selby coalfield, if not to others. That is a commercial matter. But what rate of investment is the Minister proposing for the Scottish coalfields? The rate of investment in recent years has been too low, and I shall be interested to hear what sort of investment programme is in mind in view of the increased lending limits proposed in the Bill.
  Will the Minister give some idea when the reserves at Musselburgh, so recently

  519
  discovered, are likely to be developed? Is not the coal agreement with the South of Scotland Electricity Board almost at an end'? Since Clause 2 relates to assistance in the purchase of coal by electricity boards, will the Minister say something about the Scottish situation? Will he give a little more information on what is happening at the Fallin colliery?
  I leave that aside and go on to the matter of petro-chemical developments. Clause 9 contains a most interesting proposal. It gives power to the National Coal Board or, at least, if I can paraphrase what the Minister said, it extends the powers that we are told the Board already has, to go into the petroleum business. My view at the time of the formation of the BNOC was that the NCB had had a raw deal at the hands of the Government. The substantial assets that it had discovered as a result of its own enterprise in exploration, in partnership with the oil companies, were transferred to the BNOC without any compensation other than the refunding of the exploration and other costs that had been associated with the deal. Those oil resources have gone to the BNOC.
  I should like to put a suggestion to the Minister. When the NCB becomes involved with petro-chemical activities and research. it should consider doing so in partnership with existing organisations. We already have two successful examples of this—the experimentation that has been carried out on a joint basis into the gasification of coal and the matter of fluidised-bed combustion. This has been done through a wholly-owned NCB subsidiary, NCB (IEA Services) Ltd., which was the operating agent. The finance has come from the USA, West Germany and the United Kingdom under an International Energy Agency agreement. I suggest that this goes on in other parts of the world. Companies that were not obviously linked with the coal industry—some of them are oil companies—have seen emerging a pattern of fuel in energy development and they have been going more and more into coal. It may be that some of the research work that is required and will be necessary before the costs of refining of coal to produce petroleum products is carried out has been done already. It would be desirable if the experimental costs could be shared inter-
  520
  nationally through governmental action or even by the NCB in co-operation with companies.
  I remember hearing from the Continental Oil Company that was a partner of the NCB. It said that it had a good relationship with the NCB because they were both in the extraction industry. They were both involved in mining and interested each other's ways of thinking. So, although there are the NCB on the one hand and the big oil companies on the other, it may be that for certain specific purposes, particularly in research, there might be some possibilities of co-operation. We must look into the petro-chemical possibilities of coal much more in the future than we do now.
  If we are heading into a situation in which oil will progressively become scarcer or the further supplies that are discovered are in deeper water and, therefore more expensive to take out, coal will gradually come into its own. In that situation there will be a transition from an oil-based economy to coal. But we must start now. I was impressed by the letter I recently received from Mr. Grainger, who is the member for science on the Board, in relation to the atmospheric fluidised-bed combustion system, the commercial exploitation of which is imminent in the United Kingdom. The United Kingdom has a clear lead as a result of the NCB's pioneering work. The most useful demonstration example is the modified boiler at the Renfrew works of Babcock and Wilcox. It is hoped that overseas sales of plant based on this model will grow rapidly. Opportunities for commercial development may come from the experimentation that may be finance and encouraged under the Bill.
  I am bearing in mind your injunction to be brief, Mr. Deputy Speaker. I have said as briefly as I can all that I intended to say in relation to the Bill without going into a critical or analytical examination of the industry as a whole. Having, said that, I shall resume my seat.
  Several Hon. Members Several Hon. Members rose—
  Mr. Deputy Speaker: Order. I am most grateful to the hon. Member for Dundee, East (Mr. Wilson). He took exactly eight minutes, and that was very helpful
  11.5 p.m.
  Mr. Dennis Canavan (West Stirling-shire): I thank my right hon. Friends the Secretary of State and the Leader of the House for bringing forward this Second Reading. I asked during business questions three weeks ago that it should be brought forward because I was concerned about further investment in the coal industry, not just at the national level but also at the local level at Polmaise in my constituency.
  I hope that the increase in the borrowing powers of the National Coal Board from £1,100 million to £1,800 million, with the possibility of a further extension to £2,600 million, will make possible an increase in the investment in collieries such as Polmaise, which employs 600 men and is one of the largest industrial employers in my constituency. There were once many pits in Stirlingshire, but Polmaise is now the only one left.
  On 1st February the Board announced a proposal to close the colliery, despite the fact that, according to reliable information that I have been given, there are enough resources for 15 to 20 years' work. The pit was being closed not because the seams had been exhausted but because of low production. This has arisen not because the miners there do not work as hard as miners elsewhere but because Polmaise is traditionally a difficult pit to work. The miners work very hard, but it is virtually impossible for them to reach the same output per man-ship as men in other pits which are easier to work.
  Geological and technical difficulties have existed for some time, and this is not the first time that the pit's future has been raised in the House. I raised this matter during the last coal industry debate'about a year ago. The hon. Members for Clackmannan and East Stirling-shire (Mr. Reid) and Dundee, East (Mr. Wilson) claimed then that the closure of Polmaise was imminent. The Under-Secretary rightly said that this was mere scaremongering by the SNP, whose declared policy is to set up a separate Scottish coal board, which would have resulted in pits such as Polmaise being closed years ago. I was grateful to the Minister for his assurance at that time, because it is the height of irresponsibility for the SNP to spread fear and alarm about people's job security when it has
  522
  no constructive realistic alternative proposals of its own.
  The NUM has taken a strong line against the proposed closure. On 4th February, a mass meeting, attended by union officials and myself, decided unanimously to oppose the closure and came up with a constructive alternative—a 16-point plan designed to increase productivity.
  I hope that hon. Members opposite who do not believe in industrial democracy or workers' control will note that the unions deserve to be congratulated in this case because the 16-point plan has been implemented and I am informed that production at the pit has recently increased. This was a union plan, not an NCB scheme.
  Last Friday there was a further meeting at the pit with the NCB and there is now a possibility of a reprieve. At least the pit will not be closed in the meantime. But there is still a need for a long-term development of the colliery because the reserves are there. At the time of the closure of the Manor Powis and Cowie collieries, the mining communities in the area received an assurance that Polmaise would be used for access to the seams at the two other collieries.
  Speaking of long-term development brings us back to the need for investment. The Bill will help with its provision for increased borrowing powers. I hope that my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) made a slip of the tongue when he referred to the possible application of Clause 6 as being of particularly great benefit to Scotland. That clause refers to pit closure grants. I hope that he meant to refer to Clause 8, which deals with special grants for assisted areas to enable further development to take place.
  On this point, could the Under-Secretary of State answer the following question: Why is it that in the green booklet produced by the Department, "Coal for the Future", the Government's regional grant assistance to the coal industry in 1974–75 was 07·8 million whereas in 1975–76 nothing at all was given by way of regional grants to the industry?
  The trade unions at Polmaise are opposed not just to closure but to any compulsory redundancies. The socio-economic consequences of closure would be disastrous and the consequences of

  523
  mass redundancies would also be damaging in an area where the male unemployment rate is already at 9·3 per cent. and there is not much alternative employment.
  The nearest large town to Polmaise is Stirling. Stirling has been ruled for many years by a Right-wing alliance—latterly a Tory/SNP coalition, that has been traditionally hostile to industry. Even going back to the days before public ownership of the mining industry there were byelaws forbidding miners coming home from work with dirty faces from walking through the town. They were forced to get off the bus at the burgh boundary and walk round the perimeter of the town. The squalor and degradation of the housing conditions in villages such as Fallin and Cowie at that time had to be seen to be believed and, although housing conditions and working conditions have improved a lot since that time, it is worth remembering that there are still men living who were fined 10s.— a princely sum in those days—for having the audacity to walk through the streets of Stirling with an honest day's dirt on their faces. The authorities are more enlightened now but there is still not enough industry or alternative employment in the Stirling district, despite my efforts to get the Scottish Development Agency to set up a new industrial estate.
  Just as decline in manpower can be disastrous for a man and his family, so would it be shortsighted of the NCB to shed manpower, because there will be a build-up of the coal industry in years to come.
  The NCB's "Plan for Coal" states that by 1985 it is hoping for an output of 120 million tons of deep-mined coal and 15 million tons of opencast coal. By the year 2000 it hopes for ouputs of 150 million and 20 million tons respectively. Those targets suggest the need for a buildup of manpower, not a rundown. It would be very shortsighted to shed manpower now.
  There is another aspect of the Bill which could help Polmaise—aid for the increased use of coal for electricity generation. Polmaise is very much linked with Kincardine power station. Can the Minister say something to reassure the miners of Polmaise and other miners throughout Scotland about coal-burn
  524
  agreements with the electricity boards for Scottish power stations?
  I hope that the Bill will help to keep the industry alive, not only for the sake of the miners of Polmaise and those who work in other pits but because they can play a useful part in providing the energy requirements of the nation.
  11.13 p.m.
  Mr. Patrick McNair-Wilson: I hope that the Bill will have the results suggested by the hon. Member for West Stirlingshire (Mr. Canavan). However, I believe that the coal industry is experiencing a grave crisis; indeed, the gravest crisis that it has faced since 1965, when it was substantially reduced in size as a result of a deliberate plan of action. I make that grim prediction because the coal industry, for whatever reason, is not able to produce sufficient coal for it to take advantage of the real opportunities that now exist. We would be being unfair to our friends in the industry if we did not underline that and try to say how we can solve the problem.
  Next year there will probably be less than 100 million tons of deep-mined coal in the country. The National Coal Board needs 2½million tons of coal a week to break even. It is not getting it, and it is not going to get it. The hon. Member for Bolsover (Mr. Skinner) put his finger right on the problem when he said that we are now faced with a cash crisis. Until it is resolved, we shall not get productivity up.
  Various reasons have been given in the debate why productivity has fallen off. I am prepared to stake my life on the fact that until we get improved cash incentives in this industry, productivity will continue to fall, and as it falls, so the industry will have to face two problems. First, it will be unable to make a profit, so that it will be unable to generate funds for its own investment; secondly, and perhaps even more worrying, it will be unable to satisfy its traditional markets.
  It has to satisfy the electricity market and the iron-making market and, one hopes, the resurgent industrial market when we get out of our present recession. It also, so the Bill hopes, will be producing new coal for chemicals, liquefaction and other dreams that we have been

  525
  discussing since I became concerned with the problem.
  The fact is that we shall not be able to meet these market demands if we do not get productivity to a higher figure. We are this year 4 million tons short of what we were this time last year, and it is no good for us to try to blind ourselves with the belief that some coal faces are doing better than others and that it will be all right. Unfortunately, the output per manshift is lower than it was in 1973. There may be dozens of reasons for that, but my view is that the key reason is cash.
  We have heard in the debate about the problem which faces British coal in export markets. The Secretary of State told us that we had to define the markets and then we would have this great future. We could not satisfy the export markets even if we found them now. That is our situation. We could not export the coal even if we could find the markets to sell it in, because we have not got it. We are now competing with coal at such a low price coming into Europe that we shall never get level with it. Do hon. Members realise that South African coal is being landed in Europe at £8 a ton cheaper than one can get it in South Wales?
  To try to compete with such figures makes one realise the terrible gulf which has opened at the feet of our coal industry. We are like an exhausted swimmer. We can see the beaches of Selby and Belvoir in the distance but falling production is carrying us out to sea. Selby will not be coming on full stream for another 10 years; it is already five years behind schedule, and I believe it will slip still further behind. I have disturbing reports of what is happening there which I will not weary the House with at this hour.
  If the mineworkers ask to be given a free hand in wage bargaining, we cannot possibly say that they have not been patient in the past. If they asked for 30 per cent. more, it would not be unreasonable in the light of the 15 per cent. inflation rate which has so eroded their standard of living in the last two years. These are the problems that the Government should be worrying about instead of worrying about going into petroleum
  526
  refining and trading overseas and all the other exciting things that the Bill has to offer.
  We face a situation where not only is our demand not going to be satisfied but the prices of coal are rising in such a way as to stifle demand. The Minister knows that one-quarter of the domestic fuel market is in concessionary coal, and the 15 per cent. price increase announced last week will destroy the remainder of the domestic market. There are those in the industry who are happy to sell it go, who say "It is a nuisance getting the right size of coal for the domestic market, so we had better let it go" But let us not have the hypocrisy of talking about building council houses with chimneys when the domestic market is doomed unless something can be done to keep prices steady.
  Since 1973 this industry has had a wonderful and unique opportunity, unlike anything it has seen before, certainly since the war. We have failed to take up the full benefit from that opportunity.
  We have seen the foreign car take away our traditional markets. We now see Polish and South African coal stealing our export markets in the North German power stations.
  We in this House spend hours predicting what will happen in 10, 15 or 20 years. We can see this wonderful vision of how marvellous and successful we shall be. I suggest that, rather than worry too much about the "Plan for 2000", we should worry about the plan for next week. That is the problem facing us. It is an immediate problem, and it requires an immediate solution.
  11.21 p.m.
  Mr. Gwilyin Roberts: I welcome the Bill. It is another vital step to securing the future not only of the coal industry but of Britain.
  As I see it, there are three targets in the development of the coal industry. I am not talking in chronological terms.
  The first target—here I find myself in considerable harmony with the hon. Member for the New Forest (Mr. McNair-Wilson)—must be to increase coal production. As has been indicated, that is a complex problem. Almost everyone who has contributed to the debate has dealt with the manpower aspects of the problem. I notice that in a recent article

  527
  in The Sunday Times there is a quotation from Peter Tregelles, who is in charge of the National Coal Board's research establishment at Doncaster. He is quoted as having said that although
  "incentives and labour attitudes are significant… new systems and machinery already nearly developed will soon give answer to the productivity problem".
  Therefore, it is a question not simply of manpower but—I agree with my hon. Friend the Member for Bolsover (Mr. Skinner)—of the money being paid to miners. Frankly, talk such as we have had from one or two hon. Members about miners being affluent is rubbish.
  Recently I met a face worker in my constituency—he is a local councillor—who had attended a meeting the previous day to select a local government employee. He said "Until I went to that meeting and discovered what was to be paid for a very low level job in local government, I did not realise how poor miners were" Miners now genuinely and rightly feel that they are badly paid. This is not a question of productivity agreements or any simple solution of that kind. There must be a new pay deal for miners generally.
  As has been said, when the industry found itself in an advantageous wages position compared with other industries men came into it. We have now reached the desperate situation where manpower is again falling. The answer is not merely some kind of agreement, but a new pay deal for miners generally.
  The problem in the short term is to produce more coal. The medium-term problem may not be the same as we move into the era of the oil bonanza. But in that period there is the danger, as my hon. Friend the Member for Bolsover said, that we may lose sight of the need for the long-term development of coal because we shall have a flood of oil. That could well happen.
  There must be no contraction in the proportion of electricity generation supplied by coal. If electricity generation is expanded, more of it should be supplied by coal. We must also consider petro-chemical developments in this period. I hope that the oil lobby will not raise its head again as it has done in the past to destroy coal's vital role in this area.
  528
  Also in the medium term, we must consider the development of coal exports and possibly the idea, which is being studied by the CEGB, of exporting electricity by wire to the Continent.
  In the longer term we shall rely almost entirely on coal for our energy. Nuclear energy will have a rôle to play, but other forms of energy are now very uncertain. One certainty is that we shall have coal resources for a long time; they must be developed to the uttermost. I hope that the NCB will regard the NCB will as a go-ahead for its development plans.
  I do not want to be hostile in a friendly debate, but I was a little concerned at the rather fussy planning answers that the hon. Member for Bridgwater (Mr. King) gave to a question of mine earlier. Coal is now so important that environmental considerations should not be allowed to obstruct its development. We should all make our position clear on that.
  There has been a great deal of discussion of the major developments at Selby and Belvoir. I hope that we shall go ahead quickly with the proposal to develop Park Colliery near my constituency in Staffordshire. It could supply 300 million tons of coal; already 100 million tons are developable. With a production of about 2 million tons a year it will have an effective life of 50 years. That is a vital development in a constituency where coal is still the lifeblood.
  The Bill is particularly important because it deals with so many different aspects of the industry—both its problems and its potential contributions. I welcome it. I hope that it will be regarded not only by Ministers but by the NCB, the CEGB and all other bodies concerned as the green light for developing this vital resource.
  Several Hon. Members Several Hon. Members rose—
  Mr. Deputy Speaker: The last four speakers took eight minutes, nine minutes, seven minutes and nine minutes respectively. We are doing very well.
  11.30 p.m.
  Mr. T. H. H. Skeet: I shall be equally brief, I shall make my points in Committee in due course, but there are several observations I should like to make at this stage.
  I deal first with productivity. Under Lord Robens, output rose from 27 cwt

  529
  per man-shift in 1961 to 44 cwt in 1971. It then stayed on a plateau, remaining at that level ever since. Lord Robens was a distinguished Chairman of the National Coal Board, probably the best Chairman of the Board.
  The redistribution of investment over a number of existing pits will not prove such a profitable use of national resources as the development of new mines, producing at a much higher rate of return in terms of OMS.
  The redistribution of tonnage from existing pits is set out on page 9 of "Coal for the Future". The 1974 plan was 63 million tons from existing pits and major projects. In the revised estimates the figure is 89 million, down-grading the new mines from 20 million to 10 million by 1985.
  I am surprised that the Secretary of State did not know the OMS figure for Selby, which is 250 cwt., with wages and salaries representing only 15 per cent. of total costs compared with the present 52 per cent. For Royston in Yorkshire the figure is 158 cwt.; for Silverdale, in North Staffordshire, it is 120 cwt.; and for Bettws, in Wales, it is 115 cwt. Although there is a problem with water in the Vale of Belvoir, when that field is developed its OMS figure will probably be equal to Selby's.
  It is probably unfair to say that, while the average OMS today is 43 cwt. to 44 cwt., in North Nottinghamshire and certain better fields it is as high as 57·4 cwt. My point is that Lord Robens provided the spur that increased productivity to a certain level, and now there will be a new surge with the new mines, and a considerable reduction in costs.
  I turn to a matter raised by my hon. Friend the Member for Bridgwater (Mr King), the market for coal. In 1975–76. when total production was 122 million tons, power stations took 61·4 per cent., the British Steel Corporation 14·8 per cent., and other inland markets 23·9 per cent. I have considerable anxiety that not all the coal that the NCB hopes to produce will find a market.
  The Secretary of State will have to take three factors into account. First, coal's forward projections will not be met if the nuclear programme is to go ahead. I doubt whether the Government have a
  530
  nuclear policy, and their fuel policy is not based on low-cost electricity.
  Secondly, indigenous oil from the North Sea will provide stiff competition for coal unless depletion is introduced, and I cannot see that that would be in the national interest.
  Thirdly, strong competition from natural gas will adversely affect the market for coal, particularly in the industrial and domestic heating sectors. The total domestic market for coal in 1965 was 28·4 million tons, of which the miners' concessionary coal accounted for 4·2 million tons. By 1975 this had slumped to 11·5 million, and in 1976 it was 10·66 million. It had fallen by 168 per cent.
  I deduce that the Board is left with two major markets. One is the power stations, a market which is liable to be upset over the years by nuclear power. The other is the BSC, which is likely to be upset by fresh technology and the direct reduction of iron ore by natural gas and other technological developments. What is known as the rest of the inland market is liable to be overthrown by the force of natural gas from the North Sea and indigenous oil.
  I conclude by referring to one or two miscellaneous matters. On the question of the Vale of Belvoir, I want to make one request of the Secretary of State. It would be wrong to sterilise the 500 million tons of coal lying beneath this area, vast as it is, in Leicestershire, but the public and the conservationists should have an opportunity of stating their case at length. I recommend that an application be made, under Section 47 of the Town and Country Planning Act 1971, for a planning inquiry commission so that all factors are taken into account—not merely the issue of this site but issues that arise in all the other locations in the country.
  I am fully in favour of technological change in the industry, such as fluidised-bed combustion and SNG—which process will have to await the rundown of North Sea gas surpluses—but I cannot agree with my hon. Friend the Member for Exeter (Mr. Hannam) that it will run out as early as he supposes. Liquefaction will have to await the perfection of the processes and also the rundown of North Sea oil.
  I shall lump together the diversification clauses—Nos. 9, 10 and 11—but shall

  531
  refer to only one—Clause 10, in which I have an interest. According to the wording of the clause, if the National Coal Board, in the course of searching for coal, looks for it in Bedfordshire and, even if there is no coal underneath, it finds other minerals, it will be in a position to exploit them. I do not think that that could have been intended, and I hope that that provision will be removed in Committee.
  Also under Clause 10 it will be able to exploit gas. I do not think that that was intended, either.
  In overseas activities the Board can do anything. I would mention to my hon. Friend that that would include engaging in the petro-chemicals field. It would be disadvantageous for it to attempt this, because certain markets would be closed to it. It would not go to Rhodesia, where coal is cheap. It would not go to South Africa, because that would not be in accordance with the philosophy of the Government. It would not go far into Australia, because it would have to compete with other oil companies which have got in ahead of it, and it is doubtful whether it would go to the United States, because there most of the coal has been pre-empted by the oil companies and other large mining companies.
  In any event, if the National Coal Board is not to cut its monopoly position in the United Kingdom there is no reason why it should receive special dispensation in the United States.
  As for the Board's oil activities, I am well aware that it produces its own chemicals. It was rather interesting to learn from the Secretary of State in answer to a Question of mine today that to produce ethylene from coal would involve doubling the price of oil; in other words, it would have to go up to roughly $25 a barrel before ethylene could be derived from coal at a profit.
  Therefore, the Board is driven straight to petroleum. Why go to petroleum? Simply because it is working in conjunction with Conoco over PVC and with Dutch State Mines over caprolactam. The Secretary of State indicated that he wanted further experience, but he will not require further experience until about the end of the century, when coal liquefica-
  532
  tion becomes commercial in the United Kingdom. If the BNOC is to operate in the petro-chemical field, why is the National Coal Board coming in? Or is it that the right hon. Gentleman envisages a later Act to cut BNOC out of this sector and let the Coal Board operate in it? There are prospects, too, of a possible link between the British Gas Corporation, or the National Coal Board, and the BNOC, but these are all matters that will have to be unravelled.
  I hope that the Minister will explain the meaning of the words that appear in Clause 9 between lines 20 and 25 that seem to place a restriction on the operations of the National Coal Board. I refer to the words
  "which may lead to new or improved uses of coal or products of coal."
  Do they enable the Coal Products Division to go ahead and make additional profits by going into petroleum chemicals? Perhaps the answers will be satisfactory if my questions are answered in their entirety.
  I fully support money going into the mines but I am saying that too much is going in that direction. I think that production will be too high. We should aim for 120 million tons a year, not the 135 million tons that is envisaged.
  11.41 p.m.
  Mr. Alec Woodall: I welcome the opportunity to make a brief contribution to the debate. It is always a pleasure to follow the hon. Member for Bedford (Mr. Skeet) but I trust that he will forgive me if on this occasion I do not take up any of his arguments. I could argue with him at length about the merits or demerits of Lord Robens but I shall do so on another occasion. I want to talk about something that is more important.
  I want to talk about not what is in the Bill but, alas, what is not in the Bill. Nowhere within the Bill is there mention of the human element of producing coal. We have clauses on borrowing powers, grants for promoting sales, grants for stocking coal and grants for pit closures, but nowhere in the Bill is there anything about the human element.
  I hope that between now and Committee, or Report, my hon. Friend the Under-Secretary of State will consider the certain

  533
  shortfall in the pneumoconiosis compensation scheme fund. Although we all welcomed the Government's contribution of £100 million to the scheme in 1974, I think that there will be a shortfall. I am sorry that there is no mention of that in the Bill.
  I am sure that every Member who represents a mining area will know of men who have given years of service to the industry and now, unfortunately, cannot work any more as a result of pneumoconiosis or other respiratory diseases. I mention in particular chronic bronchitis and emphysema.
  Although nothing of that nature is mentioned in the Bill, I have a report that was presented to the Council of European Communities on 1st June 1976. It is the third medical research programme on chronic respiratory diseases. It is set out on the cover that the programme will involve the expenditure of up to 5 million European units of account, whatever they may be. I do not know whether they are pounds, deutsch-marks, francs or lire, but over the next four years 5 million of them will be made available for the programme.
  What attracts me to the report is that there is a list of research centres and institutes that could be called upon to take part in the programme. When I read the list at the back of the report I find that there are 10 institutions in Germany that could be called upon, five in Belgium and six in France. But when it comes to Great Britain I am disappointed at the listing. I find that there are four gentlemen who work at the Institute of Occupational Medicine in Edinburgh, one gentleman who works at the University of Edinburgh City Hospital, a gentleman who works for the NCB in London, a gentleman who works at the School of Hygiene and Tropical Medicine in London, a gentleman working at the Hammersmith Hospital and another gentleman working at the Brompton Hospital, both in London, and another gentleman working at the Medical Research Council, Pneumoconiosis Department, at Llandough Hospital, Penarth, Glamorgan. That makes a total of seven people, four of them all in one institute in Edinburgh. There is none in Yorkshire and none in any of the other coalfields. The report shows that there
  534
  are five institutes in Italy and others else-where in Europe.
  This is a good report, and it intends well, but I suggest that my hon. Friend should be pressing the presenters of the report, and particularly pressing our representatives in Europe, to see that far more research is done in this country to try not only to establish the causes of chronic bronchitis and emphysema but to find out the relationship between these diseases and this industry.
  I wish to deal briefly with the question of the Selby coalfield. I am glad that the hon. Member for Barkston Ash (Mr. Alison) has returned to the Chamber, and I am sorry that the hon. Member for Howden (Sir P. Bryan) has not. There are some people in Selby who are trying to brainwash the residents there against the miners in spite of all that has been said and the fine words about how they will welcome the development and how they have co-operated. There is a bit of double talk here in view of certain attitudes that they have adopted against the development.
  It seems that the people of Selby welcome the miners every Monday to their open market day. Selby market opens every Monday except if Christmas Day falls on a Monday. It is open on Easter Monday and Whit Monday as well as all the other Mondays of the year. The people of Selby welcome us on those days when we spend our money, but they appear to think that miners today are the same as the old miners of the past. They think that miners wear knotted neckerchiefs, train running dogs and keep pigeons. They think, it seems, that miners go out every Saturday night, get roaring drunk and knock hell out of their wives and children. They have not heard the truth about the male voice choirs, the silver bands and so on. These people should see the exhibitions of arts and crafts produced by miners and their wives. The miners have a lot to contribute, not only through their efforts underground digging coal but through their cultural activities. The people of Selby will find that the miners are the salt of the earth when they get to know them. They will welcome them with open arms, not only on Monday mornings at the market.
  Mr. Alison: The hon. Member is being rather sweeping in his allegations about the people of Selby. The stallholders in Selby market for the most part come not from Selby but from outside, and it is not fair to accuse the people of Selby, in what is almost a slander, of saying that they will not welcome the miners. Many of the stallholders do not come from Selby.
  Mr. Woodall: A lot of them come from Selby. I have some inside knowledge of these matters since a small part of my constituency is in the Selby district. I know Selby well and I have several friends in Selby, including former miners and ex-members of the old Selby town council. The Selby people have no need to be frightened of the miners or of the coalfield development. As sure as eggs' are eggs, the NCB will be transporting most of the men who work in the coalfield, and they will not be seeking the Selby district council or anyone else to provide them with houses.
  I referred earlier to the problem of soil disposal in the traditional Yorkshire coalfield. The problem exists, or will exist, in many of the established pits. They have a very dicey future unless land can be made available for additional tipping, space. But this problem will not affect Selby. All that will be extracted from Selby will be pure solid coal—no dirt. The people of Selby will not have the environmental problems that I and my hon. Friend the Member for Normanton (Mr. Roberts) and others have had.
  With regard to the miners themselves, I can tell hon. Members that they will see far more soccer violence in one match at Old Trafford, or at any London football ground, than they will ever see at Featherstone Rovers, or Castleford, or Doncaster Rovers. Miners are responsible to their families, their job and their country—
  Mr. Deputy Speaker: Order. I shall have to blow the whistle at this point. We cannot go into details of that sort.
  Mr. Albert Roberts: Does my hon. Friend not agree that when the miners take a majority decision they stick to it? It is a different kettle of fish entirely from the car workers.
  Mr. Woodall: Yes, I accept that. As my hon. Friend knows, in the ballots that
  536
  have been conducted in the coalfields there is always bound to be a vote against the point in the ballot. But in the end the majority decision has always been accepted. That is the extent of the loyalty of the miners.
  11.52 p.m.
  Mr. Peter Rees: The hon. Member for Hemsworth (Mr. Woodall) need not emphasise to me the virtues of the mining community since I have the privilege to have the East Kent coalfield in my constituency. I hope the hon. Gentleman will forgive me if I do not go into the questions of pneumoconiosis and emphysema, which I recognise to be important problems. If I do not do so it is only because I shall try to adhere to Mr. Deputy Speaker's invitation to hon. Members to make brief interventions.
  I come at once to the situation in the industry itself, as did the hon. Member for Normanton (Mr. Roberts), whose contribution I appreciated. But I was surprised that the Secretary of State, when opening the debate, did not touch at all on the accounts of the NCB. I should have thought those were the only touchstone by which to judge the financial position of the Board and, indeed, possibly of its future prospects.
  As we are being asked to debate the Bill it is surprising that we only have the 1975/76 accounts in front of us. We all know that the NCB's financial year ends next month. It is a pity that the debate could not have been deferred a little so that we could have seen exactly how the Board has fared in the current financial year. However, I do not blame the Government for that.
  Doing the best that we can with the accounts in front of us, we must inevitably ask some questions of the Government Front Bench. We read that manpower, capital employed and costs are all up, yet output is down. In the time available to me I want to deal briefly with the financial aspects of the NCB. I want to put one or two specific questions to the Under-Secretary which I hope he will be able to deal with.
  It will have become apparent to all hon. Members that during 1974 the NCB borrowed very heavily from abroad—about £183 million. I know that there is a Treasury guarantee in respect of some

  537
  of these loans, particularly foreign exchange loans, but are we to understand that, with the prevailing state of the pound, the taxpayer in one way or another will meet the increased liabilities resulting from the decline in our financial position?
  My second point does not arise so much from the accounts as from the Bill itself. I must confess that I was entirely dissatisfied with the answer that the Secretary of State gave me on the extraordinary provision which permits the Government to make grants to support the promotion of sales to a range of other nationalised undertakings. The Secretary of State brushed this aside and said it did not mean sales promotion in the crudest sense. In what sense is promotion used?
  Are we to understand—I put this to the Under-Secretary of State—that sales promotion includes sales at subsidised prices to the CEGB, for example? The House needs a clearer explanation about this provision.
  I now come to the fundamental financial question. Assuming that costs go up, either because wages go up or because of early retirement—I fully recognise the need for that—this has to be reflected somewhere. Are those increases to be passed on immediately to the consumer or will they be taken up, either directly or indirectly, through the provisions in the Bill?
  I come now to the question of productivity and costs. Again, of course, the pattern is plain for all to see if they will take the trouble to read the accounts of the NCB. I am particularly interested in the explanation that is offered on page 5. It says:
  "Overall productivity declined marginally on the previous year. This resulted from an increase in manshifts per day underground away from the coal face, on development, transport and engineering services. Mechanised face productivity and surface productivity were both at new record levels."
  I was interested in that because I listened to the contribution of the hon. Member for Bolsover (Mr. Skinner) and was interested to note that he is sometimes pervious to market forces. But that seems to demonstrate that there is scope for increased productivity through mechanisation. I may have drawn the wrong conclusion. I hope that the Under-Secretary will deal with the matter.
  538
  I am not persuaded that further recruitment is the answer to this problem. I read in the East Kent newspaper that they are advertising for 100 extra jobs in the East Kent coalfield. At one jobcentre recently I was told that most of the people who have left the industry in East Kent have now returned, and that it is even drawing in people without pit experience. But I am wondering whether it is just a question of manpower, and whether it is a question of more imaginative mechanisation.
  I was impressed by the contributions from the Opposition side of the House. We may not have the same experience as some Labour Members of working at the pitface, but we are entitled to have a view and to apply our minds, because we represent producers and consumers. I was impressed by the theme of my hon. Friend the Member for Exeter (Mr. Hannam). Perhaps we now have to think of new means of extracting power from our coal reserves, which may not be just a question of cutting coal in the same way.
  It was particularly interested by the speech of the hon. Member for Bolsover. He and I have often clashed on many other issues. I know his direct experience. I wonder, again, whether it is a simple question of increasing wages. Of course, one recognises that the miner must feel that, compared with people in comparable occupations, he is reasonable adequately and properly remunerated, and that he is concerned about his standard of living, self-respect and all the various factors that any working man takes into account in any profession or job. But if it is still a question of forcing wages up and up, the logic of the hon. Gentleman's position, or the position to which he will ultimately be driven, is that more and more marginal pits will be driven out of production and ultimately production will be concentrated in the big fields, such as Selby.
  I would be worried about the East Kent coalfield if that were the crude approach of the NUM to the problem. It makes a special contribution because it produces a special kind of coking coal. On another occasion—there is no time tonight—I should like to ask the Under-Secretary whether he feels that the pricing policy has been right for that kind of

  539
  coal, because over the past 10 years the East Kent coalfield has been in a profitable position in only one year. I am not blaming that on the men, but I wonder whether the pricing policy is right.
  Ultimately we must come back to looking at productivity schemes. I was particularly impressed by the Chairman's statement in this respect. He says:
  "We regret that the national production bonus scheme agreed in March 1975 must be judged to have failed and we consider that the poor results achieved with a scheme based on total national output indicate that an effective incentive scheme needs to be based on standards of performance close to the point of production."
  That seems to be the key point. I see the Under-Secretary smiling. I hope that he will have something important and helpful to give us on that matter. Beyond that, on another occasion, when we have more time, I want to hear the Government's views on the structure of the industry itself.
  Regretfully, I must draw my remarks to a close by saying that of course we have coal, and of course we have skilled workers, but I wish that more tributes had been paid to the management and more thought given to its differentials. Management carries considerable responsibility, and at the moment it is not adequately recompensed.
  I wonder whether we, as taxpayers, will get good results from pouring capital into the industry. Can we truthfully tell the young men going into the industry that they have an assured career on the present basis? I suspect that at the end of the day the Secretary of State will have to show a little more flexibility and imagination—both qualities he possesses— and a good deal more realism. Therefore, my welcome for the Bill must be a guarded one.
  12.2 a.m.
  Dr. Colin Phipps: The whole essence of the Bill will depend for its success on the price that coal manages to obtain in the overall energy market in the United Kingdom in the next 25 years. It is all very well to say that coal should be the principal fuel that we use, but that determination will be very hard to maintain in the face of oil prices or gas prices that are very much lower.
  540
  The Secretary of State pointed out that the various industries involved in energy had certain matters that affected one or the other. That is particularly true with pricing. We are in danger of having an artificial price structure which will harm coal. Natural gas is way under-priced, especially when compared with any other form of energy.
  The hon. Member for Bedford (Mr. Skeet) said that natural gas was a competitor of coal in the domestic and commercial markets. It is even more so in the petro-chemical market, where coal is in competition with naphtha and North Sea gas at an effective price of 32 cents a cubic foot. There is no possible comparison.
  Not only can a low price cause damage to the overall energy and pricing policy, it is actually disadvantageous to the development of natural gas itself. We are now finding natural gas in deeper waters of the North Sea, and we cannot exploit it at a price of 32 cents a cubic foot. The international price is now about $1 to $1·20 cents in certain areas, and where PRT legislation will operate for new gas discoveries at this price, it means that many gas discoveries that could be exploited in the North Sea will not be exploited.
  We are facing a two-edged disadvantage because we arc precluding the development of some gas discoveries and harming the overall price structure on which the whole of the Bill depends. Without a competitive price for coal in relation to other forms of energy the Bill cannot succeed. We have held gas prices artificially low. I know that it would give no joy to any Secretary of State to lift the price of this prime source of energy in order to increase the overall energy economy, but if we do not face up to this we shall see severe damage done to the economy.
  Clauses 9, 10 and 11 of the Bill please me very much. I was a member of the Labour Party study group that proposed what is now the BNOC, and we made the point that it should be allowed to operate internationally. This is a welcome conversion of my own Front Bench, and the Conservative Front Bench. I am also delighted that the National Coal Board is diversifying. I would be happier if I thought that all the nationalised industries would be allowed

  541
  to diversify where this was logically possible.
  I see no reason why the NCB should not mine potash if potash is required for the greater good of the community. I believe that we restrict our nationalised industries much too much. We take the view that the nationalised industries are supposed to operate in one industry, and in that industry alone. On the other hand, we ask them to operate commercially, whereas any commercial company would be expected to diversify and we would applaud it for doing so.
  I welcome that aspect of the Bill, and I hope that it will be extended to other nationalised industries. On the question of operating overseas, why cannot the NCB operate in America, Australia and Europe? We are always likely to have relatively high-cost coal, and there are areas in which the Board could operate as part of the international energy spectrum where there is a great need for coal.
  I remember many years ago working in Venezuela and drilling in an area near Maracaibo. The coal formation in which we were interested was several hundred feet thick and there were 30 or 50 coal seams, some as thick as 70 feet. It was high-grade lignite rather than first-class coal, but it represented an enormous supply of energy. There is no reason why in future years the NCB should not branch out into such countries. I see no reason why it should not enter into such activities.
  Since the logic of the situation is leading every major international company to examine reserves of coal which they will subsequently exploit. I see no reason why the world's largest and best developed coal industry should not do precisely the same thing. I welcome that aspect of the Bill.
  12.07 a.m.
  Mr. Jim Lester: It is a measure of the interest in the coal industry that so many hon. Members have tried to speak in this debate—and, unfortunately, not all potential contributors will be able to take part. I appreciate the fact that the 5,500 miners in my constituency want me to contribute to this debate and generally welcome the Bill because it deals with essential matters of importance to the coal industry.
  542
  I wish to welcome Clause 11. It seems to me to be nonsense that one should not make it possible for the NCB to sell and develop overseas. The Board has considerable expertise in deep mining which only Poland can match in terms of technology. Export opportunities are opening up throughout the world, and particularly in the United States. There are great opportunities for us to export technology—and, indeed, we already export much of our technology. A great deal of the equipment manufactured in the mining industry is British. It is very satisfying when one visits mines throughout the world and notes that so much of the equipment is British manufactured. I hope to see the export of deep-mining equipment spread still further throughout the world.
  I know that the hon. Member for Derbyshire, South-East (Mr. Rost) knows a great deal about the fluidised-bed combustion process. I should like to see us adopting a more positive approach to the export of deep-mining equipment, particularly in terms of fluidised-bed combustion. It was interesting to hear the representative of the SNP, the hon. Member for Dundee, East (Mr. Wilson), speak of the great technological lead that we possess in fluidised-bed combustion and the way in which it can be developed. We must also think of the European dimension in this context. It is difficult for any of us to say what will develop in this respect in European terms, there must be a real commitment to work together so as to benefit industry in this country as well as in Europe.
  The second, and most important point that I want to make is about men and manpower. Much has been said in the debate about productivity, and much needs to be said. I am lucky. The pit in my constituency produces double the national average—not merely output of 40 cwt. per man-shift but output of 80 cwt. and more. It does that year after year. But when one visits the pit one has real reason for concern because the mood is far from happy. One accepts this as part of the general malaise throughout the whole work force of the country because of the reduction in standards that people have suffered over the last two years—and that goes from management all the way down. But it is even deeper than that, and here I take issue with

  543
  the hon. Member for Bolsover (Mr. Skinner).
  Anyone who is familiar with mining knows that miners prefer to extract coal. Mines are designed for that, and that is the easiest work in a pit if it is on seam. One of the reasons for the productivity drop is the present national scheme that does not give any incentive to men in the times of difficulty that every pit goes through—when one runs into geological faults or seam dropping. There is far less satisfaction for a miner and far harder work when there are problems, such as going into geological fault, than when the mine is running steadily and miners are extracting coal full-time with high productivity. The down times are an important factor in productivity.
  I am convinced that we need a productivity scheme based on the human dimension. Nobody can visualise a scheme involving the whole industry. It would not be thought of in any other industry. One could not say that all the car factories in the United Kingdom should have a productivity scheme based on production at all factories. It is impossible. I accept what was said by my hon. Friend the Member for Bridgwater (Mr. King), that the scheme has an absolute regard for safety. No one is remotely interested in any attempt to reintroduce the face-against-face, man-against-man system of the past. We need a new scheme. The area for it can be open to negotiation whether it is a pit system based on an agreed level of production, taking into account the pit faces and seams, agreed by the NUM and management, or whether it should be an area dimension. But it must be a scheme that people can recognise and work to. That is the only way that we can restore productivity to its previous level.
  If a regional scheme, as opposed to the national scheme, had gone through, miners today would clearly have a higher established real income, and this might help to alleviate some of the current feeling of discontent.
  It is the impact of inflation, taxes and pension contributions that concerns men at the coal-face. It is the wide disparity between gross earnings and take-home pay that is destroying morale and causing, even in Nottingham—most moderate of
  544
  areas—the destruction of the social contract.
  I agree with the hon. Member for Bolsover that we shall not succeed unless we have a radical look at the basis of Government policies in the mining industry and the basis for recruitment. We need to look ahead at the age structure, particularly when one considers the present age structure. The introduction of early retirement is essential, but it will quickly eat into the existing work force. Essentially, we need to be able to offer an attractive and well-paid career. New techniques have been mentioned and they are vitally important, but no technique can be developed that will not require the detailed knowledge and skill of the miner below ground.
  Manpower will be the most critical factor in the 1980s. There will be mechanised muscle, surely, but more men will be required. We must look critically at the rate of wastage, that there is from existing recruitment. For some areas recruitment is good, but after basic training too many young men are leaving the pits. It is the prospect of 40 or 42 years stretching ahead underground that leads them, as soon as they are trained, to go into another industry. We should consider mining in the same sense as the Armed Forces and the police. We should look at the period of recruitment and consider the possibility of a man "signing on" for, say, 10 or 12 years with certain pension rights at the end of that time. If he wished, he could re-sign for a second or third term. This would be better than recruits having to face 40 years in the pits stretching before them.
  We must get right the investment, which we can look at and control, the marketing, which we can control to some extent in the development of new coal burning power stations and, above all, the manpower. Without enough men, the two other elements are not likely to work. Fair words and good intentions in this place cannot do it.
  Mr. Michael McGuire Mr. Michael McGuire (Ince)rose—
  Mr. Foreman rose—
  Mr. Deputy Speaker: Order. If the two hon. Gentlemen who still wish to speak will take only two or three minutes each, we shall be able to squeeze them

  545
  in, and then everybody who wished to speak will have done so.
  12.16 a.m.
  Mr. Michael McGuire: I shall try to obey your injunction, Mr. Deputy Speaker, though I am not sure that I shall be able to finish my speech in two minutes.
  I wish to develop only one theme, but it is critical. My hon. Friend the Member for Bolsover (Mr. Skinner) argued passionately that we should not place our faith in productivity agreements as a means of producing a prosperous coal industry. I want to argue the opposite.
  I do not see how the National Coal Board can survive as a prosperous industry unless it meets the challenge of productivity schemes. I know what is in the mind of my hon. Friend the Member for Bolsover. He is thinking back to the time when he and I were in the pits. Some people got all the disadvantages of the old piecework system while a select group, of which I was one, reaped the fruits of our labour—but we needed the fruits of other people's labour.
  No one wants to go back to that system. My hon. Friend mentioned the Nottingham coalfield. I can tell the House that the third resolution that the Notts miners would put to the NUM annual conference would be a call for a productivity scheme. The NUM leaders, including Joe Gormley and Lawrence Daly, have met the challenge and admit that they will be driven to such schemes anyway, and it is, therefore, far better to embrace them and have as much time as possible to prepare them.
  I have sent details of a scheme to the union. It was suggested by a friend who worked in the pits with me and at the face. I believe that it is practicable and could provide the foundation for a scheme.
  No one should suggest that we could have the electricity generating industry made the captive of a high-price coal industry. No Government would take that. The public would not stand for it and it would not be sound economics.
  Whether we have a productivity scheme or not, I want to see miners become better paid. They are not given enough. They are going elsewhere because they
  546
  can get paid more for wrapping Mars bars. They need more money. We shall have such a gap in our manpower requirements that we shall have to give miners more.
  Anomalies can be removed from past schemes to give more incentive and provide a sound and prosperous industry whose fruits can be shared by all.
  12.20 a.m.
  Mr. Nigel Forman: I should like to make two or three brief points in the short time that is available. I am only a layman in these matters but I should like to ask the Minister whether there is some way in the future, when dealing with these important Bills on energy, in which the House can look at an overall energy Bill so that it may consider energy in its totality. I have just served on a Bill dealing with the nuclear industry. When these individual Bills come forward it is difficult for hon Members to consider them adequately and to fit them into the overall energy picture. We need to look at this Bill in the context of a wider energy policy.
  I suggest that our overall energy policy needs to fulfil several criteria. First, there must be security of supply. There is no doubt that coal has a great future from that point of view with 45 million tons of coal at our disposal lasting us for 300 years. Second, there must be competitively priced sources of supply. Our coal industry must strive to achieve that by increased productivity and new technology as that becomes proven. Third, there must be diversity of supply without excessive reliance upon any single source. That is important whether it is based partly on coal or partly on nuclear energy, but preferably it should be based on a combination of a number of sources of supply.
  Fourth, there should be a favourable impact on the balance of payments. Our coal can certainly achieve that and perhaps do even better if the high target of 170 million tons by the year 2000 can be reached and we can exploit export opportunities within the EEC.
  Fifth, there must be environmental acceptability. Coal should be able to satisfy that criterion especially with the new technologies of underground gasification and fluidised bed combustion.

  547
  Sixth, there should be public acceptability by both workers and energy consumers in general. There must be a question mark here over the future of recruitment into the mining industry.
  Seventh, there must be an energy policy which is wholly related to the best estimates of future demand that we can make and which seeks to match future supplies to future demand. We must achieve a more rational use of supply.
  If the Bill can be fitted into that framework I shall be happy to support it.
  12.24 a.m.
  Mr. Hamish Gray: Despite our having reached such a late hour and having started so late, there have been 22 contributions to the debate. That shows the interest and enthusiasm that the coal industry commands in the House. I join my hon. Friend the Member for Bridgwater (Mr. King) in giving the Bill a welcome in principle. There is no doubt that if most of the Government's other legislation was as uncontroversial as this there would be little cause for long debates. Nevertheless, even in this Bill there are many points that we shall wish to probe in Committee.
  This is the first occasion on which I have had the privilege of winding up a coal debate. I have listened with interest to the contributions that have been made from both sides of the House. Hon. Members on this side respect the practical experience of the industry that has been revealed in many of the speeches from the Government side. But the objective attitude of my hon. Friends who have gained their business experience in other industries is equally constructive in a Second Reading debate of this type.
  Ultimately, our aim is to improve the achievements of the coal industry and the prospects of those who work in it, and to this end I am sure that we have much in common. The main purpose of the Bill is to give the National Coal Board sufficient borrowing powers to implement its long-term strategy. It is heartening for those employed in the industry to know that, once again, coal is in demand as a major source of energy. I am sure that no one would be more delighted with that statement than the hon. Member for Blaydon (Mr. Woof), who, as he so often does in these coal
  548
  debates, gave us a very great insight into his knowledge of the subject.
  Gone are the sad days of the mid and late 1960s, when the Coal Industry Act 1965 set out provisions for the closing of many areas of coal mining. The target at that time was 200 million tons per annum. By 1973 this had been reduced to 120 million tons. By 1975 the actual output from deep mines had dropped to little more than 114 million tons, while last year the deep-mine production was down to 112·4 million tons. There was, however, 10·2 million tons more from opencast works, which showed an increase of more than 1 million tons on the previous year.
  Nevertheless, the production from our pits is a continual worry and challenge to those connected with the industry, and it is in this area that an improvement is imperative. Productivity, however, is already 24 per cent higher at the pits where investment is taking place, and, indeed, it is estimated by the Board that, with further investment, this improvement could be as high as 60 per cent. Nevertheless, productivity agreements on a pit-by-pit or area-by-area basis must surely merit further consideration.
  The speech by the hon. Member for Bolsover (Mr. Skinner) has been referred to by several of my hon. Friends. I found myself in much greater sympathy with what he had to say than I usually do. I wish that we could more often hear him in the frame of mind in which he spoke tonight, and in the constructive approach in which we found him.
  My hon. Friend the Member for the New Forest (Mr. McNair-Wilson) sounded a warning for the industry. It is one that we cannot ignore. There is a very real danger that if we do not pay particular attention to the whole question of productivity the industry will not only suffer but will lose that public sympathy from which it benefits at present. No matter what part of the country one visits, or from which part of the country one is sent here, there is a basic sympathy for the miners. Even at times when criticisms may be made, there is little doubt that the miners enjoy that kind of sympathy.
  Clauses 1 and 2 of the Bill provide for the increase in the borrowing powers and for grants for the promotion of sales to the electricity boards. In the former

  549
  case, the estimate is raised by £400 million stages to £2,600 million, and some of my hon. Friends have raised the point that there could be doubt whether this sort of investment is justified. My hon. Friend the Member for Melton (Mr. Latham) questioned the necessity for such investment and also spoke of the environmental problems, while my hon. Friend the Member for Exeter (Mr. Hannam), who made a highly informed contribution, also expressed public concern about this kind of investment. My hon. and learned Friend the Member for Dover and Deal (Mr. Rees) raised the question of the Board's accounts and, quite fairly, mentioned that this was one aspect with which the Secretary of State did not deal.
  It would be possible to use Clauses 2, 3, 4 and 8 to iron out short-term fluctuations which could damage the industry Indeed, these clauses could be of use in Scotland and Wales, where the NCB's costs are particularly high.
  I hope that in his reply the Minister will take up the points made by the hon. Member for Dundee, East (Mr. Wilson) about future investment in Scotland with particular reference to Musselburgh.
  Clauses 3 and 4 deal with stocks of coke and coal and supplies of coke in blast furnaces where aid is designed to enable production levels to be maintained. We shall be more involved with those clauses in Committee.
  Pit closure grants and payments to redundant mineworkers, together with grants for assisted areas, are contained in Clauses 6 to 8. We shall look more closely at those in Committee.
  My hon. Friend the Member for Barkston Ash (Mr. Alison) raised the important questions of the environment and of recruiting. Other hon. Members also mentioned the question of recruiting. That is a serious problem. Obviously, with a development such as Selby, where there is a lack of suitable labour in the area, people will have to be brought in. Therefore, it is important that housing and the necessary infrastructure are provided before they arrive. Those of us who represent seats in Scotland, particularly in oil-production areas, are well aware of the problems which sudden development in an area can create. We had
  550
  considerably less time for preparation than those who are to work at Selby will have.
  Clause 9 is probably the most controversial clause in the Bill. We shall wish to examine its implications in detail. The NCB has been engaged in chemicals for a long time through the NCB (Coal Products) Ltd. and NCB (Ancillaries) Ltd., which are involved in subsidiaries with both the British Steel Corporation and Conoco. These subsidiaries are self-financing and have recourse to the market for capital. The 1946 Act was sufficiently loosely worded to enable the NCB to engage in these activities. Therefore, why is Clause 9 necessary? If the NCB has power to engage in these activities, why is it necessary specifically to spell it all out again in Clause 9?
  The NCB, through its subsidiary NCB (Exploration) Ltd., has access to 4 million tonnes of oil per year to be disposed of by NCB (Hydrocarbons) Ltd. The NCB already has a close connection with Conoco, which has interests in coal and owns mines in the United States of America. We understand from the National Coal Board that refining would be undertaken only in partnership with that company or with one of equivalent experience. If the NCB is to venture down that path, it will not take risks on its own as it will have the experience of a company such as Conoco to guide it.
  We have to decide whether this opportunity to enter the sphere of refining and marketing is necessary for the NCB at this time and what its relationship with the British National Oil Corporation is likely to be. As drafted, the clause would enable the NCB to become involved in oil-based activities in a significant way—possibly even as an integrated oil and petroleum company—and that leads to a number of questions. I do not expect answers to all of them tonight, but they will be on the record and we shall want to pursue them further in Committee.
  Are there any effective limitations on the NCB's powers in this regard? We should like some more explanation of the wide drafting of lines 20 to 25. Will the NCB be encouraged to engage in the conventional downstream activities of the oil industry? Have any discussions taken place between the NCB and the BNOC on the subject? The Chairman of the latter, Lord Kearton, has said that it has

  551
  no intention of moving downstream. It seems strange that the NCB should try to outgun it in this respect.
  The BNOC effectively requires the approval of the Secretary of State to engage to any substantial extent in any new activity. That is contained in Section 3(2) of the Petroleum and Submarine Pipe-lines Act. Why will not the BNOC be similarly constrained?
  Are the National Coal Board's financial resources for activities under Clause 9 limited by Clause 1? In view of the great demands to be placed on the NCB under "Plan for Coal", particularly in regard to managerial, technical and financial resources, is it possible or, indeed, desirable to divert more of this capacity to oil refining and petrochemicals, bearing in mind the capital investment necessary for a modern refinery or petrochemical plant?
  What estimate has been made of the likely cost of such a venture? The £2,600 million provided in the Bill is for a variety of purposes. If the NCB decides to become heavily involved in a refinery or a petro-chemical plant, it could use up a great deal of that money. Will that prevent the basic function of the NCB from possibly developing in other ways?
  There has been much talk tonight of productivity. As one of my hon. Friends said, it is very difficult to explain to people in an old pit which is being gradually run down that if they increase their productivity they will probably work themselves out of a job. The same problem has arisen in the oil industry. Troubles have occurred in platform yards when men have seen the result of their efforts about to be floated out but no orders following. It is difficult to convince people that by producing on time they are doing the best for the future of their yard. That should not be passed over lightly, and I hope that the Minister will consider it.
  My hon. Friend the Member for Bedford (Mr. Skeet) made a number of useful points about Clause 10. He stated his intention of dealing with the matter at greater depth in Committee. At present the NCB may exploit those minerals which are produced in conjunction with the mining of coal, but the clause extends those powers to minerals discovered in the search for coal, even if no coal
  552
  is subsequently produced. The hon. Member for Dudley, West (Dr. Phipps) reckoned that that would be justified.
  Quite by chance recently I was talking to a former mine owner. I said that some of us had reservations about some of these provisions. His reaction was "If I were still in the mining business I should want to do exactly what the National Coal Board is doing. I should want to be able to diversify" That, among other things, is why we do not rule the Bill out completely, why we have decided not to vote again it, but why we want to pursue certain points in Committee, perhaps at some length. There is a great deal of material for discussion, and we shall want to discuss it in detail.
  There were some other points that I wanted to make, but the Minister kindly agreed to give some of his time so that our hon. Friends could take part in the debate. Therefore, I conclude by saying that I look forward to a constructive Committee stage.
  12.41 a.m.
  The Under-Secretary of State for Energy (Mr. Alex Eadie): I appreciate the way in which the hon. Member for Ross and Cromarty (Mr. Gray) wound up, and the understanding way in which he approached the subject, realising that in the time available I could not reply to all the points he raised.
  This has probably been one of the best debates on the coal industry for a number of years. The House has been well attended and speeches have been based on experience and ideas as well as prejudices. I missed only one speech, and I regret missing it, because I understand that it was very good, but my right hon. Friend the Secretary of State gave me some notes on it. There was only one sour note in the whole debate. Every speaker but the hon. Member who introduced that note was in favour of the coal industry, but that hon. Gentleman had great doubts about it.
  A number of useful points have been made, but there have also been a number of red herrings, probably the biggest being the shortsighted tendency to judge the Bill and what it tries to do by reference to some of the difficulties faced by the industry. Many of those difficulties stem from the fact that much of our present coal industry is old, a fact that

  553
  is illustrated by the average age of our pits. Over half the pits in this country are over 70 years old. Many of them are still good pits, with good coal in them, but almost all of them need a face-lift.
  When people attack the coal industry for its low productivity they should remember that coal is an extractive industry. As a pit extends its workings, the further the miners have to travel underground. This acts inexorably against the improvement of productivity, just as increasing difficulties of working—such as narrower seams and geological faulting—do.
  When people attack the coal industry for its price increases, they must remember the many years when coal prices were squeezed by cheap oil, and appreciate that coal prices now must bear some of the cost of re-equipping the industry. I have said before and I think that the Opposition Front Bench have endorsed it, that we have been trying to do in 10 years what should have been done in 25.
  There is another red herring that is probably in line with the argument about the energy gap. Various views have been expressed about whether and when indigenous supplies of energy may decline to the point where expensive fuel imports have a drastic effect on our balance of payments. The question has been raised in various debates in this House, before Select Committee, and, on a wider stage, at the Energy Conference last June. I shall not enter into this argument now. There may be an energy gap, and there may not. Whether there is or not depends on what we do in the meantime. Because of our great resources in coal under the ground, and oil and gas under the North Sea, we have more time to make our financial dispositions to develop a total answer. To some extent that is an answer to the hon. Member for Melton (Mr. Latham).
  But we cannot just stop and think. We cannot let any of our fuel industries run down while we make up our minds. That would be a mad approach. We have to keep our options open while we develop our fuel policy for the future.
  The National Coal Board has estimates that possible annual demand for coal in the year 2000 may range between 135
  554
  million tons and 200 million tons. That allows for an enormous range of decisions. The point that we are concerned about today is that we shall have nothing like that 135 million tons' capacity unless we follow through with "Plan for Coal".
  Let me repeat; coal is an extractive industry. The "Plan for Coal" target is 135 million tons' capacity by 1985. If there is no further investment, losses by exhaustion could reduce that capacity to about 100 million tons a year by the end of the century. If we do not proceed with "Plan for Coal", capacity will be very much less.
  As we see it now, the "Plan for Coal" target that this Bill underwrites is a modest one when set against our energy needs at the end of the century. It certainly does not pre-empt further decisions on the fuel mix that we wish for the end of the century. I hope that that disposes of what I have called the two main red herrings that we should avoid in considering the Bill.
  I want now to spend a few moments discussing other points that have arisen, before coming to the points to which I wish to give closer attention.
  My hon. Friend the Member for West Stirlingshire (Mr. Canavan) raised a very important point, which I shall couple with others concerning Scotland. I shall come then to the question of the Park project.
  If I have time I want to deal with the question of manpower in the industry. I can understand the anxiety of my hon. Friend. He said that the Bill is pertinent to the future prospects of the coal mines. I assure him that I appreciate that fact. The up-to-date opinion I have is that the Board's proposal to close the Polmaise colliery has been considered in the usual way, that the NUM has presented its case against closure, backed by a report from its technical adviser. I know that my hon. Friend is aware of this. This was considered at a meeting held on 25th February, when it was agreed that the pit should not close immediately, although it was proposed that there should be some reduction in manpower. A further meeting between the Board and the union has been arranged for today. My hon. Friend can take some heart from the fact that he has played a role for which he cannot criticise himself in any way. I know that he has played a

  555
  substantial rôle in the efforts that have been made to ensure that the pit remains open.
  I visit pits throughout Britain. I am now on my second time round the whole of Britain. My hon. Friend has said that the miners in his area are determined that the pit will not close. Perhaps he can take heart from what I was told during my visit to Bentley colliery in Yorkshire some two or three weeks ago. The men told me that the undertakers were at the pits a year or two ago and that it was said that it had to close. This is the very nature of mining. This is why my hon. Friends and I resent the impetuous and sometimes uninformed calls for closure from Conservative Members. This is why we resent their ill-informed criticism. The nature of the industry is such that pits can go through bad times because of geological problems.
  The men at Bentley colliery told me that the undertakers were in but that the pit was reorganised and new investment was introduced. They told me that this year the pit will probably make a profit of about El. million. My hon. Friend can take heart from the fact that the situation can change. He is correct when he says that the men in conjunction with their union have made an effort and that productivity has improved. I hope that, with the co-operation of the men, the union and the NCB, he will be successful in ensuring the continued working of the pit.
  Some scepticism has been expressed about the future of Selby. Flooding has been mentioned. I have endeavoured to answer these matters by writing to hon. Members who have written me. I believe that the situation has been exaggerated. Since work started at Selby there has been some problem with water. There have been examples of flooding after the initial drainage but they have not been serious. Questions have been asked recently about flooding at Naburn and Stillingfleet to the north of Selby but they are areas that are regularly subject to flooding. Those occurrences do not indicate that the public inquiry was inadequate in this respect. I can give the House the assurance that this is not a serious matter.
  Mr. Skeet rose—
  Mr. Eadie: No, I shall not give way.
  My hon. Friend the Member for Can-nock (Mr. Roberts) referred to the Park project. He led a deputation to my right hon. Friend on the matter. We had a useful meeting. A joint working party has been set up and the matter is receiving a great deal of consideration. In the Park area it is estimated that there is probably 100 million tons of coal. It might well be described as a miniature North Sea oil find. It is a find of considerable value and, therefore, the whole problem is being examined. [Interruption.] There may be laughs and giggles from Conservative Members but we are talking about work and wages. I know that there is a serious problem in my hon. Friend's area. It is not something to giggle about. Job prospects are at stake. We certainly attached a great deal of importance to seeing the deputation. We are trying to do all that we can to assist in the matter.
  The question of Musselburgh was raised by the hon. Member for Dundee, East (Mr. Wilson) and my hon. Friend the Member for West Stirlingshire. The project is going ahead to the extent that consultant engineers have been brought in. As for new sinkings, both Mussel-burgh and Solsgirth are being considered, and other new projects are on line. Investment since the Government took office in 1974 is running at an all-time high. Apart from Musselburgh, where the reserves are about 50 million tons, investment is running at £27 million.
  My hon. Friend and the hon. Gentleman raised two important and all-embracing points. They asked about the prospects of coal-burn for electricity generation. We expect very shortly to announce that a decision has been taken on coal-burn by the South of Scotland Electricity Board. We expect a decision to be announced also about Aberthaw and the burning of coal from South Wales. I can go no further on that point tonight.
  Research and development is an important part of the Bill. We said in the first coal industry examination report that three subjects needed clarification. These were coal liquefaction, pyrolysis and fluidised-bed combustion. We attach much importance to research and development, particularly with fluidised-bed combustion, but it is far better to try to

  557
  get international collaboration in carrying out these expensive schemes. The report said that it would be wrong to go ahead alone on these matters. I refer particularly to the fluidised-bed combustion scheme at Grimethorpe and the scheme at Babcock and Wilcox. The chief scientist of the NCB said that we had a lead in this respect.
  I regret that I do not have time to go on. I give the House an assurance that I shall write to hon. Members who have raised other very important points with me. I hope that during the course of the Committee stage we shall be able to get down to some of these details.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills.)

  COAL INDUSTRY [MONEY]
  Queen's Recommendation having been signified—
  Motion made, and Question proposed,
  That, for the purposes of any Act of the present Session to increase the limit on the borrowing powers of the National Coal Board and to provide for grants by the Secretary of State to the Board and other persons it is expedient to authorise—
  Increase of borrowing limit
  1. Payments out of public funds due to increasing the limit on borrowing by the Board to £1,800 million, and to enabling that amount to be increased by order by two further amounts each of £400 million.
  Sale, stocking and supply of fuel
  2. Grants out of money provided by Parliament—

  (a) for promoting the sale of coal to electricity bodies,

  (b) for the cost of building up and maintaining stocks of coal and coke, or

  (c) towards measures for securing supplies of coke for use by the iron and steel industry,

  being grants to the Board and to any other person carrying on in Great Britain a business which consists of or includes the production of coal or coke—

  (i) for or by reference to the years of the Board ending in March 1977, 1978, 1979, 1980, 1981 and 1982, and

  (ii) subject in the aggregate to a limit of £100 million capable of being increased by order to not more than £175 million.

  Pit closures
  3. Grants out of money provided by Parliament to assist in the re-deployment of the manpower resources of the Board and the elimination of uneconomic colliery capacity, being grants—

  (a) towards expenditure for the years of the Board ending in March 1979, 1980 and 1981 subject to a limit of £60 million, or

  (b) if so provided by order, towards expenditure for the years of the Board ending in March 1979, 1980, 1981 and 1982 subject to a limit of £80 million.

  Redundant workers
  4.—(1) Payments out of money provided by Parliament to or in respect of persons who, at any time between 17th July 1967 and the final date—

  (a) are employed at a coal mine, or at any place used for providing services or facilities ancillary to the working of one or more coal mines, and

  (b) become redundant.

  The final date is 29th March 1981 or if so provided by order 28th March 1982.
  (2) The payments shall be subject to the following limits:

  Payments in the period below

  Limit

  1. Years ending in March 1974, 1975, 1976, 1977 and 1978

  £100 million.

  2. Years ending in March 1979, 1980 and 1981

  £90 million

  3. Years ending in March 1979, 1980, 1981 and 1982

  £120 million

  The payments covered by the first limit include payments in the specified period under section 3 of the Coal Industry Act 1967, the second limit applies if the final date is in 1981 and the third limit applies if it is 1982.
  Regional grants
  5.—(1) Grants out of money provided by Parliament to assist or enable the Board to pay due regard to the needs of the assisted areas as defined in the Industry Act 1972 when planning and carrying out colliery activities, being grants in the years of the Board ending in March 1977, 1978, 1979, 1980, 1981 and 1982.
  (2) The grants shall not exceed £75 million, but that limit may be increased by order, but not to a sum exceeding £100 million.
  Administrative expenses and receipts
  6. Defrayment of administrative expenses out of money provided by Parliament.
  7. Any payment into the Consolidated Fund or the National Loans Fund.
  In this resolution order' means an order by the Secretary of State approved by resolution of the Commons House of Parliament.—[Mr. Harper.]
  1.1 a.m.
  Mr. Peter Rees: Warm though my personal regard is for the Under-Secretary of State, and compelling though his charm is, he never chooses to exercise that charm on the Opposition Benches during the course of debate. A number of very direct questions were put to the hon. Gentleman during the course of the debate. I fully appreciate that with enough time at his disposal—
  Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. We are now on the Money Resolution.
  Mr. Rees: I am coming to the points that I wish to make arising out of the Money Resolution. If permitted, I wish to make some points touching on the financial provisions of the Bill. With his habitual courtesy, the Under-Secretary of State said that he would write to hon. Members, but that was not a very satisfactory way of dealing with a very important Bill involving considerable sums of public money.
  I now come to the Money Resolution. It will not have escaped the attention of hon. Members that the National Coal Board is to be permitted to increase its borrowing to about £1,800 million. By any stretch of the imagination that cannot be regarded as a small sum. If we are to authorise this sum of money, I hope that I shall be within the rules of Order if I direct one or two sharp and pointed questions to the Under-Secretary or the Financial Secretary. I am not sure who is dealing with this Money Resolution. Perhaps the Secretary of State will wish to catch your eye, Mr. Deputy Speaker.
  The first question I should like to ask concerns paragraph 1 of the Money Resolution, which ties in with Clause 1 of the Bill. Clause 1 increases the borrowing of the NCB by Statutory Instrument while subsequent financial provisions are to be made by affirmative resolution.
  Mr. Tom King: On a point of order, Mr. Deputy Speaker. This is a Treasury matter. Is there a Treasury Minister present to reply to the debate?
  Mr. Deputy Speaker: The hon. Gentleman is well aware that that is not a matter for the Chair.
  Mr. Rees: None the less, Mr. Deputy Speaker, it always assists an experienced
  560
  debater like myself to know exactly who will reply to the points that I am endeavouring to raise so maladroitly. The considerable increases in the NCB's borrowing powers are to be made by Statutory Instrument rather than affirmative resolution.
  The next point I wish to raise concerns the grant that may be made for promoting the sale of coal to the CEGB, the South of Scotland Electricity Board and the Northern Ireland Electricity Service. I addressed certain questions to the Under-Secretary earlier in my brief intervention which, Mr. Deputy Speaker, in an attempt to adhere to your predecessor's injunction, I compressed into eight minutes.
  On that occasion I asked what promotion the NCB had in mind. Does it mean that we are being asked to authorise considerable sums of money so that the coal may be sold at subsidised rates? "Promotion" is obviously a word of wide import, and before these considerable sums of public money are made available, we should know a little more about this.
  I asked a question—I am sure that you will agree that this is well within the rules of order, Mr. Deputy Speaker—about sums of money, amounting to about £183 million, borrowed abroad during 1974 by the NCB. I wanted to know what the consequences of that borrowing would be, because we all appreciate that the pound has dropped heavily, from about $2·40 to about $1·70. I did not look at the closing figures today. Who will be picking up the check? Will it be the Treasury, or are the sums to be voted under the Money Resolution to be absorbed to meet these considerable sums that will have to be repaid over the next decade or so?
  Beyond that, as I have said, considerable sums of money are at stake. We should like to know a little more from the Under-Secretary as to his views about the accounts. This was one of the central points that I made in my Second Reading speech. Instead of devoting himself to question about the future of Mussel-burgh and Polmaise—constituency matters which I know agitate the hon. Member for Dundee, East (Mr. Wilson) and the hon. Member for West Stirlingshire (Mr. Canavan), who is not now in the Chamber—the hon. Gentleman should

  561
  have addressed himself to the question which should agitate the whole House, which is how any future increases in the costs of extracting coal are to be met.
  Let us assume that Mr. Scargill presses a claim that face workers should be paid £135 a week. I am not expressing any views on the merits of such a claim, but it must be within the knowledge of the House that that is the kind of figure that is being bandied about. [Interruption.] The hon. Member for Luton, West (Mr. Sedgemore), who represents that constituency a little inelegantly and who has great knowledge of financial affairs and contributes very directly, we understand, to Private Eye—whether he still does so in his present honorific position I do not know—should not intervene from a sedentary position, because he may expose his flanks to the maladroit remarks that Opposition Members can throw at him. I hope that he will catch your eye, Mr. Deputy Speaker, and make one of his notable contributions on his feet.
  I want to know, as I expect other hon. Members will want to know, whether, if the costs of extracting coal increase over the next year or two, those increases will be passed directly to the consumer by way of price increases, or whether the sums that we are being asked to vote tonight are to be absorbed for that purpose. These are matters on which neither the Secretary of State nor the Under-Secretary condescended to enlighten the House.
  If we are to have a meaningful debate on very important matters—and the one point on which the House was united was that this was a very important debate on a very important subject and a very important industry—we ought not to be fobbed off. I hate to say this, because I have a great personal regard for the Under-Secretary—although he is not, apparently taking in anything that I am saying at present. He does not condescend to address himself to this very important subject but is more concerned to turn his left shoulder towards the Chair to curry favour with his hon. Friends. We know that the favours of the hon. Member for Liverpool, West Derby (Mr. Ogden) are well worth currying. However, if we are to have a meaningful debate, the Under-Secretary should take some account of the views of Opposition Members. After all, some of us have
  562
  the privileges of representing mining constituencies, and all of us have the privilege of representing consumers and taxpayers.
  From some of the remarks of Labour Members it seems that the interests of taxpayers are apparently very rarely in their minds. I know that the hon. Member for Luton, West is deeply concerned about these matters. I have had the privilege of debating with him on Finance Bills, including such matters as the inquiry branch special offices, rates of tax, and so on. They are always in his mind.
  The Under-Secretary has signally failed to reassure me, or the taxpayers I represent, that he has really applied his mind to these important financial considerations. I hope that he will now attempt to catch your eye, Mr. Speaker, and deal with these matters.
  1.11 a.m.
  The Secretary of State for Energy (Mr. Anthony Wedgwood Benn): Each of the payments under the Act is subject to the approval of the Treasury. The foreign borrowing is authorised by existing practice. Any Statutory Instrument increasing the amount will be laid in draft before the House.
  Mr. Tom King: Will the Secretary of State answer the question about foreign borrowings? Who actually pays the loss incurred by foreign borrowings resulting from the depreciation of the pound? Is it the National Coal Board or the Treasury?
  Mr. Benn: There is no change in practice occasioned by the Bill.
  1.13 a.m.
  Mr. Tom King: The Secretary of State may think that these are frivolous questions, but they are perfectly serious. If he does not know the answers, it would be courteous of him to say so. The sums of money involved could be of the order of £70 million. It is a measure of the inflation that we have in the Bill and of the scale of the activities that nobody on the Treasury Bench has the slightest idea what has happened to £70 million and that we get these facile answers.
  The reason why my hon. and learned Friend the Member for Dover and Deal (Mr. Rees) felt provoked to speak on the Money Resolution after an otherwise perfectly good-humoured debate was the

  563
  total inadequacy of the Government reply. The Government think that they can get up and make extremely facile and abrupt replies and treat my hon. and learned Friend's remarks with contempt. But in his earlier contribution my hon. and learned Friend pointed out that the Secretary of State had introduced this Bill asking for a further £1,200 million without making a single comment on the current financial situation or performance of the National Coal Board.
  That is an incredible situation, and it is hardly surprising that my hon. and learned Friend feels that some slight element of financial discipline might have crept into the debate when such substantial sums were involved. He is entitled to ask a few pertinent questions, and even at this late hour he is entitled to a reply. The late hour is the Government's choosing, not ours, for the Government are in charge of the business. We are entitled to answers to our questions and the Government should provide them.
  Mr. Benn: I made no complaint about the questions and I answered each of them. I said that every order would be laid in draft and that the Bill does not alter the provisions for foreign borrowings. If the hon. and learned Member for Dover and Deal (Mr. Rees) is asking about existing practice that is not affected by the Bill, I shall see that he gets a proper answer. But it would be out of order for me to deal with past practice under existing legislation on this Money Resolution.
  Question put and agreed to.

  RETURNING OFFICERS (SCOTLAND) BILL
  As amended (in the Standing Committee), considered.
New Clause 1

  RETURNING OFFICERS
  For subsection (2) of section 17 of the Representation of the People Act 1949 (returning officers in Scotland) there shall be substituted the following subsection—
  "(2) In Scotland, the returning officer for a parliamentary election shall be—

  (a) in the case of a constituency wholly situated in one region or islands area, the person who, under section 6 of the Local Government (Scotland) Act 1973 is, or may discharge the functions of, the returning officer at elections of councillors for the regional or islands council; and

  (b) in the case of a constituency situated in more than one region or islands area. such person as aforesaid as the Secretary of State may by order direct.".'—[Mr. Harry Ewing.]

  Brought up, and read the First time.
  1.15 a.m.
  The Under-Secretary of State for Scotland (Mr. Harry Ewing): I beg to move, That the clause be read a Second time.
  While Scottish Members are familiar with the existing electoral machinery in Scotland, it may be helpful to the House if I briefly outline these arrangements and the reasons for the changes now proposed, including that provided for in this clause. In Scotland the duties of returning officer have for long been vested by statute in the sheriff. In setting up the administrative machinery for organising and running parliamentary elections the sheriff has traditionally looked to the sheriff court staff—essentially the sheriff clerk and his deputies—to assume the practical administrative responsibility. This they have readily and loyally done over many years—though latterly under increasing difficulty—on a voluntary basis. Election work has never formed part of their statutory duties, which relate essentially to the organisation and running of court business, which is necessarily geared to predetermined timetables.
  It is right that I should pay tribute to the efficiency with which the sheriff clerk service has carried out election duties over the years, latterly under

  565
  steadily increasing strain—strain not merely on individuals, but strain setting the sheriff court machinery at risk.
  The sheriff clerk service is still numerically a relatively small service. The practical problem is not one of recruitment of volunteers to man the polling stations and to assist in the count. It is a question of where the key administrative responsibility for organising, setting up and supervising the machinery lies. Hitherto, this has necessarily rested in the quite small number of key officers—the sheriff clerks and their deputies. With a small service of this nature, the normal exigencies of the service—illness, retirements, staff transfers and promotions—have led to serious difficulties in certain constituencies during parliamentary elections in recent years.
  The factors mentioned have led to temporary postings having to be made at short notice in order to ensure that officers with the requisite experience were available to assume the electoral responsibilities—thus denuding other areas of senior court staff and adding substantially to the burden of maintaining the smooth running of court business. As a result, the service has been stretched to well-nigh intolerable limits, and in one or two constituencies very real difficulty in providing suitable manning at senior level has been experienced. Plainly, it has to be recognised that the heavy responsibilities involved in running parliamentary elections—necessarily at short notice are in modern circumstances incompatible with the basic duties of the sheriff clerk service, which—small in number—is necessarily geared to the expeditious functioning of the sheriff courts to fixed time-tables.
  For these reasons, the Bill provides for the vesting of the administrative responsibility for the conduct of parliamentary elections in Scotland in local authority staffs, which have the requisite experience derived from their conduct of local government elections. Indeed, for the reason I have already indicated, in 1974, local government staffs were made statutorily responsible for the conduct of the EEC referendum in Scotland. The decision to transfer the responsibility in relation to parliamentary elections was reached after consultation with the sheriffs, the sheriff clerk service, and the Convention of Scot-
  566
  tish Local Authorities—all of whom endorse the proposed change.
  The clause, which formed part of the Bill as introduced, goes beyond that by transferring the statutory duties of returning officers from the sheriff to a senior local government officer, who will in practice be the chief executive of the regional council, or the director of administration. Just as hitherto the sheriffs principal as returning officers have appointed a number of deputies, so will it be open to the new returning officers to appoint deputies from their own senior staff, or the senior officers of district councils.
  The proposed transfer of the returning officer responsibility reflects the views of the various parties directly affected, as expressed in the earlier consultations, and since the Committee stage reiterated in particular by the Convention of Scottish Local Authorities, which regards the present provision as essential to the smooth working of the overall change. Both the convention and the sheriffs have indicated that they would regard an arrangement, under which the sheriff continued to be returning officer, but looked to local authority staffs for the necessary support and assistance, as quite unsatisfactory and unworkable in practice.
  While at present, the sheriffs look to the sheriff clerk service for support in election work, they do so in relation to a body of staff that is responsible to them in all their normal duties and with which they are in day-to-day contact, usually within the same building. Clearly, this close working relationship could not readily be established in relation to local government staffs, who are responsible over the range of their normal duties to their chief executives, and in turn to the local authorities that employ them.
  The chief executives, who carry at the highest level a very wide range of very important responsibilities, have already been entrusted with the returning officer responsibility for local government elections—a responsibility that they have for some time discharged very efficiently and to the general satisfaction of all concerned. We have every confidence in their ability to conduct parliamentary elections with the same expertise and ability as has been shown in the past by the sheriffs and I hope that the House will, therefore, agree to the new clause.
  Mr. Gordon Wilson: At this late hour I shall be brief. Like many other hon. Members, I do not really like the change from the sheriff clerk service to the officials of the local authority but the inevitable must be accepted in view of the evidence that the sheriff clerk service is unable to carry out the job that it has done so well for so long.
  I know from my own experience—which is now beginning to fade into the recesses of time—that three years ago the sheriff courts were extremely busy bodies. The growth in civil litigation, not to mention the explosion in criminal work, has led to great pressure on the courts and on the staff, particularly on the senior members of staff, for whom there has been the problem of training a lot of newer people coming into the service.
  If the sheriff clerk service will not accept the duties placed upon it, we have to accept that. I agree with the Minister that the expertise that has been acquired is considerable. It is not just a matter of taking junior members of the sheriff court service and putting them into positions of responsibility where they may have to exercise judgment, at times in delicate circumstances. We must look for officers with the necessary judgment, for, particularly when elections take place every three to three and a half years, some difficulties arise. In these circumstances I support the new clause.
  Mr. Dennis Canavan (West Sterling-shire): I used to have a great deal of sympathy for those who preferred the returning officer to be the sheriff rather than the chief executive of any local authority because of the so-called lack of bias of the justiciary. But I noticed two articles last week that helped to dissuade me from that view. One was in the Stirling Observer, which said that one of my constituents had been fined £150 at Stirling Sheriff Court for shoving his son's headmaster after being provoked. The other was an article in the Falkirk Herald stating that a farmer had been fined £10 for failing to put a safety guard on a piece of farm machinery whereby someone had been killed. That dissuaded me from any previous thoughts about lack of bias among sheriffs.
  Paragraph (b) of the new clause says:
  "in the case of a constituency situated in more than one region or islands area, such
  568
  person as aforesaid as the Secretary of State may by order direct."
  How many such parliamentary constituencies are there in Scotland? I know that both my constituency and the Argyll constituency straddle two regional authorities. Who is likely to be my returning officer and have the honour of returning me as the hon. Member for West Stirlingshire at the next General Election? Will it be Dr. Boyle, the chief executive of the Strathclyde Regional Council, or that good friend of the Under-Secretary and myself, Mr. Geddes, the chief executive of the Central Region?
  Mr. William Ross: The current feeling of the House, as I comprehend it, is very different from that in Committee. It was suggested then that the officers of district and regional councils could do the work and that the sheriffs could be brought in to take responsibility for the election.
  That was rather silly and so, too, was the suggestion that we should use the sheriffs because they are non-political. I have probably known more sheriffs at more elections than any other hon. Member, and I have never found them non-political. They may have been able to transcend their political feelings at the time of an election, but I always felt that the argument of the hon. Member for Ayr (Mr. Younger), that chief executives could not subordinate their personal politics to the job in hand was unworthy of him. If we are to have council officers doing these jobs, the person who is in contact with them all the time and who is usually the head of staff is clearly the person to conduct the election.
  Practical difficulties have arisen from the inability or unwillingness of the sheriffs clerk service to work on elections. That was discovered in elections as long ago as 1963. The Tory Government of the time were concerned and steps were to be taken. On other occasions we have had to shift civil servants from Edinburgh to run elections elsewhere. There was no trouble in the last municipal elections and the local authorities carried out the EEC referendum quite well.
  As I understand the Bill, the question of European elections does not arise, because the Bill deals only with parliamentary elections. We may have prolonged and animated discussions if we ever get the Bill to provide for direct elections

  569
  to the European Parliament, and I hope that those who resisted the recent guillotine will also join me in resisting any attempt to guillotine that Bill—we shall be looking for consistency. I am amazed at how few English Members are here and how few of those hon. Members who voted to keep Scottish business at Westminster are here.
  However, I leave that for the moment and commend the Minister on his insistence on having good sense in the Bill.
  If we are to use the district and regional council staffs, we should have the chief executives, who are in contact with the staff and who are their responsible heads, in charge of elections.
  1.30 a.m.
  Mr. George Younger: This is an unsatisfactory hour at which to discuss this matter. I am disappointed that the Under-Secretary of State has brought back Clause 1, as it was when we went into Committee. The situation arises because the Scottish Grand Committee decided that the Government were wrong in their original drafting of the Bill. The Government were defeated in Committee on the issue. The Under-Secretary of State should have thought more logically and deeply about the matter before coming back and asking the House to reverse a decision taken in Committee. He has not thought about this logically, nor has his right hon. Friend the Member for Kilmarnock (Mr. Ross), who knows more about this issue than any other hon. Member.
  We are all agreed that it has been a welcome duty of the sheriff to conduct our elections. Everyone has expressed sadness that difficulties over staff, for instance, have made it necessary for the Government to make a change. We are all more or less agreed that it is good for the sheriff to be in charge of elections. We are also agreed that we cannot expect the sheriff clerk service to carry on with the entire burden of administration for parliamentary elections. We accept that there have been difficulties about this in the last two or three years. The Government are right to make new provisions for the staff who undertake the administration of elections.
  However, that is not incompatible with still having the sheriff as the senior
  570
  returning officer. The logic of that is shown by the way in which elections have been run up to now. The sheriff does not do the administration himself. He does not have a direct day-to-day administrative task. He is generally attending to duties elsewhere and appoints some of his sheriff substitutes as deputy returning officers. It is they who bear the brunt of giving instructions to the sheriff's clerk and he and his staff do the administrative work.
  By removing Clause 1 all that has been done is to change the provision for appointing the principal returning officer. There is no great difference because the sheriff, as principal returning officer, is able to appoint not sheriff substitutes but officials from the local authority as deputy returning officers. In practice we know that such officials have done the administration and given instructions to their staffs.
  It seems to me, therefore, that the arrangement that the Standing Committee made was a very good one. It would maintain the position of the sheriff, with all the prestige that that office holds. All of us feel confidence in the impartiality of the sheriffs, and I think that the right hon. Member for Kilmarnock may feel a little regretful about his suggestion that there was some question of the sheriffs being non-political. I think that it was an unfortunate remark.
  Mr. William Ross: The hon. Gentleman will remember that the remark arose out of his own remark in Committee, when he preferred sheriffs to chief executives because he felt that the sheriffs were more non-political than chief executives. That was unworthy of him.
  Mr. Younger: I do not want to pick an argument about this. But the right hon. Gentleman misrepresents what I said about chief executives. I have never said and would never say that chief executives would be liable to express political opinions. I do not know the political opinions of any chief executive, and do not want to. I said that chief executives are that much closer to the political process. They work for and with politicians daily. I made the point on Second Reading, which the right hon. Gentleman may accept even if he does not agree, that it is difficult to ask a chief executive to make a decision which may

  571
  be unpalatable to a local politician with whom he may have to work for the next 25 years. I want it understood that I have never suggested, nor do I suggest, that any local authority officers would express their own political views. I am sure that they would not, and it would be quite wrong if they did.
  It is sad that the Government have not taken the opportunity of an admirable arrangement for keeping the sheriff as the chief returning officer and giving him power to appoint senior local authority officials as deputy returning officers with the benefit of local authority staff to do the work and thus getting the best of both worlds. This is not a major issue, but I regret the passing of the sheriffs as chief returning officers. It will not be the same without them. They have done a splendid job, as the Minister has said, for a long time.
  I have not been able to canvass all the sheriffs, and it would not have been correct to do so, but I have asked a lot of people who have been involved in running elections at various levels. None has any doubt that it would work smoothly if local authority officials were deputy returning officers.
  I am sad that the Government are asking the House to reverse a decision taken in good faith in the Standing Committee. I think that that Committee showed considerably more common sense that we have had from the Government. I regret that the Government are insisting on this change back, and I wish that I could see some way of persuading them to change their minds. Perhaps we can do so in another place.
  I hope that even now the hon. Gentleman will think again about it, for he is making an unfortunate mistake. We have put our case constructively and without political content. I hope that the Government will reconsider.
  Mr. Harry Ewing: I assure the hon. Member for Ayr (Mr. Younger) that I think that the debate has been entirely constructive, but the hon. Member for Dundee, East (Mr. Wilson) hit the nail on the head when he said that the inevitable must be accepted. With his legal background he knows the problems of the increasing work load on sheriff courts and their staffs. That is one of the
  572
  reasons why we have to make this change.
  My own Member, the hon. Member for Fife, East (Sir J. Gilmour), said in Committee that he would be grateful if I could tell him anything about the European Parliament elections. I am grateful that I cannot tell him anything about them. The hon. Gentleman also asked who does the work when the elections with which we are concerned are being held. We have had consultations with the Convention of Scottish Local Authorities, and its members have discussed the matter with their own chief executives. We are assured that there will be no difficulties at election time in as much as the administrative work of the regions would continue as smoothly as usual. The House can have that assurance.
  My hon. Friend the Member for West Stirlingshire (Mr. Canavan) asked how many constituencies straddled more than one region. There are eight parliamentary constituencies in Scotland whose boundaries straddle more than one region. They are Berwick and East Lothian, Midlothian, West Stirlingshire, Kinross and West Perthshire, West Lothian, Moray and Nairn, North Angus and Mearns and Argyll.
  My hon. Friend also asked who would return him at the next election. I can picture the scene now of Dr. Boyle of Strathclyde and Mr. Geddes putting their names in a hat. I am not sure which one my hon. Friend hopes will come out, but I am sure that one of them will have the great pleasure of returning him with a much larger majority at the next election.
  My right hon. Friend the Member for Kilmarnock (Mr. Ross) brought his long experience to the debate. I was certainly reassured, because he said that he saw the new system working well. My right hon. Friend's experience of elections amounts to more than the collective experience of many of us here. I should have thought that that in itself would reassure the House.
  Finally, I turn to the remarks of the hon. Member for Ayr. I always find that those who seek to bring logic to an argument miss the simple point. The reality is that the sheriffs no longer want to do

  573
  the job that they have been doing wonderfully well for many years. They are under a terrible strain and have asked us to relieve them of this work as soon as possible. That is central to the argument.
  Mr. Younger: Is the hon. Gentleman certain that the sheriffs were not referring to the burden of administrative work, which I agree they do not want? However, I doubt whether all the sheriffs—to whom he has access and I have not—want to get rid of the actual job of being the senior returning officers and the limited and small amount of work that that involves.
  Mr. Ewing: I should make it clear, in case there is any misunderstanding about the hon. Gentleman's remarks, that the only time that I appear before a sheriff is when I am paying my deposit as a candidate at a parliamentary election. I have not appeared before a sheriff in other circumstances.
  There are difficulties about liaison between the sheriffs and local authority staffs. They are under separate organisations and roofs. All the difficulties are apparent. However logical the hon. Gentleman's conclusions, the simple point is that the sheriffs want to be relieved of the work. We are respecting their wishes, and we are confident that the new arrangements will work well.
  Question put and agreed to.
  Clause read a Second time and added to the Bill.
  1.42 a.m.
  Mr. Harry Ewing: I beg to move, That the Bill be now read the Third time.
  The Bill has been debated extensively in Committee and we have debated the main part of it on the new clause.
  1.43 a.m.
  Mr. Younger: I have only one question to ask in this brief Third Reading debate. What will happen in the three months before the legislation comes into effect? The Bill still has to go through another place. That could take about a month or two months. Therefore, it may be four, five or even six months before the Bill becomes effective.
  Bearing in mind the events of recent weeks, it seems likely that at any moment
  574
  there will be a General Election. What chances are there of the existing administration being able to cope with a General Election, which we confidently expect to take place in the next few months? The Under-Secretary will find that the changeover will not be effected before the Government are put out of office? Will he tell us what arrangements have been made?
  Mr. Harry Ewing: The most worried person is the hon. Member for Ayr (Mr. Younger). I can reassure him. There will not be a General Election before November 1979. That is the latest that the Prime Minister could call an election. We shall have ample time to implement the Bill. On that score the House may may be completely reassured.
  Question put and agreed to.
  Bill accordingly read the Third time and passed.

  MARRIAGE (SCOTLAND) BILL [LORDS]
  Order for Second Reading read.
  Motion made, and Question put forthwith pursuant to Standing Order No. 67 (Public Bill relating exclusively to Scotland),
  That the Bill be committed to a Scottish Standing Committee.—[Mr. Harry Ewing.]
  Question agreed to.

  RENT ACTS (SERVICE MEN)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Bates.]
  1.45 a.m.
  Mr. Cranley Onslow: I am glad of this opportunity of raising a subject which has interested me for some months. In response to a Question about the effect of the Rent Acts on Service men who own their own homes, I was told by one of the Minister's colleagues:
  "If people are in ignorance of the workings of the Rent Act, things can go wrong, but let me make it clear again that a home owner—a Service man or anyone else—who lets his home has an absolute right to repossession when he or a member of his family needs to occupy it, provided he has warned the tenant in the due form set out in the Act before the

  575
  letting began."—[Official Report, 16th February 1977; Vol. 926, c. 474.]
  It is because I cannot accept that statement that I am raising this matter. I am surprised that that is the Department's view.
  The consultation paper on the review of the Rent Acts said in para. 13:
  "The Department have received many complaints about the delays and costs incurred in recovering possession. These complaints come particularly from resident landlords and returning owner-occupiers in cases where there will normally be no defence in an action for possession. It appears to be common for substantial arrears of rent or mesne profits to accumulate before possession is obtained and for it often in practice to be difficult or impossible to enforce money judgements for arrears and costs."
  Many of these returning occupiers are Service men.
  For example, the latest issue of a publication called Forces Financial News relates a case that took place in 1975.
  A naval commander wrote:
  "I was appointed abroad (to a NATO post in Turkey) in October 1974, and let my house. Having had some trouble previously, I took all the precautions I could. I hired good (and very expensive) agents, got my solicitor to go over the agreement with a toothcomb, etc. After two months or so, the tenant failed to pay (a cheque bounced). I got some more money out of him after my solicitor wrote a nasty letter, but then no more. I was faced, in Turkey, with trying to get him to court for re-possession. I was delayed for a while, purely because I was in fact abroad; the court required my solicitor to guarantee that, if the case went against me, there would be money forthcoming. My solicitor had to give a personal undertaking to that effect.
  Things plodded, and it was July 1975 when the tenant finally came to court. The case was brief, and I was granted re-possession. But it was 6 weeks before he actually left."
  This unfortunate officer goes on:
  "All in all, I am some £900 out of pocket, and am left with a resolve not to let my house again. One of the particularly irritating things was a letter I got from Mr. Ernest Armstrong of the Department of the Environment, where he assumed I was some sort of property wizard, grinding my tenants down. His talk was all of ' profit from rented property '! I told him (through my MP) that (a) I vacated my house only because I was appointed abroad (b) I had tenants in only because I could not afford to leave the house empty (c) this house was NOT just ' rented property '—it was and is our only family house, and the idea of anyone else being in it was repugnant to us, but we had no alternative."
  576
  Another more recent case concerned an officer returning from a posting to Washington in August last year. He wrote that, even with accelerated procedures, his family were effectively homeless for 17 days:
  "…it is extremely demoralising for a family to return to England from service abroad only to find that although the law says one may have one's house back, it does not say when."
  I think that the worst case of which I have heard is that of the wife of an officer who was posted away from home, whereupon the couple decided to let their house. The wife writes:
  "Our tenant was a Canadian citizen with two teenaged children separated from her Australian husband. Soon after renting our house, she applied for and received financial assistance from the social services who paid her rent and gave her £17 per week. She also received legal aid and advice from Shelter. Because of this, our solicitor and the Army Legal Service felt that the magistrate would find in her favour against a serving officer who was receiving a regular salary and would always be found quarters by the Army. Had we won our case, we would still have incurred solicitors' fees of approximately £350 and possibly further fees when having her physically evicted.
  We gave her notice to quit in March, in accordance with our contract, and, assuming we were 'safe' under the Rent Act, began negotiations to buy this house near my husband's present unit. She ignored the notice and we could no longer accept the rent she offered as this would constitute a new tenancy agreement. By July we were in dire financial straits as we were still paying £60 per month mortgage on the rented house and had begun to pay £130 per month mortgage on this house, so we offered her the fare to Australia for herself and children. This she grudgingly accepted, finally leaving in mid-August. Our legal advisers pointed out that, had the fact that we had bought a second house come to light in court, we would certainly never have evicted our tenant.
  It would appear that Case 10A of the 1974 Rent Act, designed to enable servicemen to regain possession of their houses, only applies when they retire and need the house to live in and does not apply should a serviceman wish to sell his house to buy another in which to live."
  That is a point with which the Minister is probably familiar. Summing up the case, the unfortunate officer's wife writes that she and her husband estimate their total financial loss, covering payment to the tenant to quit, loss of five months' rent, estimated solicitors' fees, excess payment of five months' mortgage, and incidental expenses, to approach £1,500. I do not think that that state of affairs is

  577
  untypical. In fact, I know that the Ministry of Defence, with which I have corresponded directly about a number of cases, would regard it as perhaps fairly typical of what can happen in the worst of circumstances.
  It is also true that that sort of case can affect Service home-owners, whatever rank they may have. I have had instances of officers, NCOs and ratings who have all been caught in the same way. There is slight encouragement to be derived from the fact that the Ministry of Defence is to submit evidence to the Minister's Department on the working of the Rent Act. I very much hope that that evidence will be published.
  When may we expect some action rather than the endless collection of facts? Failing action, suspicion is bound to be felt by the Service men that this is nothing more than a whitewash exercise. I hope that the hon. Gentleman can at least assure us that that is not so, because word gets round the Services in such cases. There do not have to be many for their effect to be considerable. Word gets round in the mess, the station and even round the Fleet, and the effects are undoubtedly very damaging.
  One effect is that Service men posted overseas leave their homes empty. There are plenty of well-documented examples. I heard only this week of a naval rating in Hong Kong who has left his home in this country empty and continues to pay the mortgage on it out of his living allowance in Hong Kong, although that is supposed to cover his general living expenses there and those of his family.
  A second and equally undesirable course is for Service men to leave their families at home. Separation is undeniably on the increase because of the effect of the Rent Act.
  Other Service men decide to get out of the home-ownership business altogether, to sell their homes when they are posted. Whether they do that or decide never to buy a home, the effect in discouraging home ownership must be very undesirable. It is bound to create problems in the longer run, problems of retirement, when it is very difficult for Service men to be sure of finding somewhere to live. There are problems for the local authority in the area of their
  578
  choice in finding them a house when they may be unable to take on a mortgage for one reason or another.
  In that context it is particularly unfortunate that there is this threat to renege on the gratuity agreement, which affects large numbers of short-service officers in the Navy and Air Force in particular. If Service men are to be convinced that the Government care about this, something must be done.
  In the meantime, I believe that the only solution is to reform the Rent Acts to do something to restore the balance of equity between landlord and tenant, particularly when we know to our cost that a really determined and unscrupulous tenant can manipulate the law wholly to his advantage and to the disadvantage of the landlord and the community. The Rent Acts undoubtedly have the effect of encouraging tenants to enter into contracts that they have no intention of keeping. In far too many cases they constitute a short cut round the council housing list. That is grossly unfair, and Service house owners regard themselves as sitting targets in this respect.
  In the longer run there must be some change in the law to give an automatic right to repossession at the end of the tenancy when the lease runs out, or even when arrears build up over a certain amount. There must not be a situation in which Service men who have every reason to sell their houses because they want to buy houses in other parts of the country find themselves locked into a situation in which they cannot sell.
  In the short term there is one thing that must be done to put Service men on a par with civil servants in the Foreign and Commonwealth Office, the Home Civil Service and the Property Services Agency, whose staff serving overseas are allowed cover from public funds not merely against the cost of drawing up legal tenancies—a facility that extends to Service men already—but against the danger that they will have to find themselves temporary accommodation because they cannot get possession of their own homes when they return to this country, even if they have gone through the due process.
  It is extremely ironical, but I have it on the authority of two separate Departments—the Defence Department and the

  579
  Department of Employment—from correspondence that I have had with them that the reason why this cannot be done is the pay policy. The pay policy appears to make it impossible for this very sensible cover to be extended to cover the Armed Forces, for reasons that I find it extremely difficult to understand but that I am obliged to accept, but that I hope will not remain valid when the next round in the pay policy is considered.
  I hope that the Minister will be able to say that he will be sympathetic to the pressure that must be exerted to extend this temporary cover from public funds for the very substantial costs that can be incurred, and are all too often incurred. I am not putting this idea forward because I have a desire to benefit from the copyright, but if the suggestion is adopted no one will be more grateful than I. I say to the Minister and his colleagues that this is a situation in which there is great injustice, and that something must be done about it.
  1.59 a.m.
  The Under-Secretary of State for the Environment (Mr. Ernest Armstrong): The hon. Member has raised an important issue. He need not apologise, even at this late hour, because this is a serious human problem, and I understand from my postbag how seriously it is taken by various folk, and certainly those in the Services. We know that the effect of the Rent Acts on Service householders is a matter of genuine concern.
  The hon. Member has been very diligent in drawing the attention of the Ministry of Defence and my Department to individual cases where problems have arisen. He has raised some special cases tonight and has referred to the difference in treatment of some people in the Civil Service and others in the Armed Forces. I assure him that what he said will be taken careful note of. I shall discuss this matter with my colleagues in the Ministry of Defence.
  In considering the effects of the Rent Act legislation it is important to recognise from the outset that the position of Service men who let their homes cannot be looked at in isolation from other owner-occupiers who become landlords during a temporary absence. I do not deny that hardship can arise for such landlords and that the matter of repos-
  580
  session on their return can give rise to very real difficulties. But it is also evident that landlords are often unaware of or misunderstand the rights which the Rent Acts give to them.
  For instance, if I might make a technical point, in one of the cases to which the hon. Gentleman referred the owner-occupier said that he had refused rent after service of a notice to quit lest it be thought that he had granted a new tenancy. I am advised that he need not have done so. If a landlord accepts rent after the termination of a Rent Act protected tenancy, no new contractual tenancy is created. It is true that landlords become worried, but that is because in some instances they are unaware of or misunderstand their rights. This lack of awareness can mean that the right steps are not taken at the start of the tenancy, and the owner-occupier's situation may then be made more difficult than it need have been if he later has to go to court for possession.
  We all recognise the complexity and obscurity of the Rent Acts and we have made it clear that one of the major objectives of the review of the legislation is to consider how rent law might be simplified. I assure the House that it is no whitewashing exercise. It is because of the anxiety created that we are determined to carry out a proper review.
  In fact, the Rent Acts have always respected the position of the temporarily absent owner-occupier who lets his home and who wishes to resume living there on his return. They are protected by the absolute ground for a possession order provided in clause 10 in Schedule 3 to the Rent Act 1968. Where the owner-occupier complies with the procedural requirements of this case, he can let his house on a protected tenancy and be certain of recovering possession when he or a member of his family wants to live in it again. In these circumstances, it is no more difficult to recover possession from a protected tenant than from a tenant under a tenancy outside the Rent Acts.
  We continue to hear a great deal about the Rent Act 1974 in this context. Suggestions are made that the extension of protection to furnished tenants has made the position of the owner-occupier

  581
  who lets even more difficult. But it is simply not the case that the Rent Act 1974 has prejudiced the legal position of the temporarily absent owner-occupier.
  Before the 1974 Act an owner-occupier had to serve a notice under case 10 if he let his house unfurnished, or a notice under Section 79 of the Rent Act 1968 if he let it furnished. Only if he did this could he be certain of recovering possession when the tenant's contractual rights to remain in occupation had expired. The effect of the 1974 Act was that a case 10 notice would serve for either a furnished or an unfurnished letting, thus preserving the owner-occupier's absolute right to a possession order if he has to take his tenant to court.
  Also, by removing the distinction between furnished and unfurnished in deciding whether the letting is a protected tenancy the Rent Act 1974 has cleared away an area of doubt which was itself a matter of concern for the owner-occupier. He can now let without having to worry whether the value of the furniture is a substantial part of the rent, and the uncertainty about the status of the tenant and his own position should no longer remain.
  The Rent Act 1974 also gave the courts a new discretionary power enabling them to grant possession to a returning owner-occupier even if he has failed to comply with the procedural formalities of serving a case 10 notice where they consider it just and equitable to do so. An important point that emerges from cases drawn to our attention is the need for the owner-occupier to seek competent legal advice when he first contemplates letting, and, having let, if it later becomes evident that difficulties may arise on his return.
  In this connection, the hon. Gentleman will know that the Ministry of Defence has issued a comprehensive instruction to all Service personnel drawing their attention to the requirements of the Acts and urging them to take proper advice before letting their homes to ensure that they would get possession when required.
  Mr. Onslow: I am well aware of that, but one of the reasons that I pressed this subject is that in the three cases I have mentioned, and in many others, such steps have been taken. Advice in draw
  582
  ing up a tenancy agreement has been taken from Army sources, yet these difficulties have still arisen.
  Mr. Armstrong: I understand the hon. Gentleman's anxieties.
  Arrangements have also been made for the reasonable legal expenses incurred in drawing up a tenancy agreement to comply with the Act to be refunded to Service house owners who since 21st April 1975 have let their houses because of an accompanied overseas posting. I understand that my hon. Friend has explained to the hon. Gentleman the problems of reimbursing expenses necessarily incurred by Service personnel in regaining possession on return from an overseas posting. I know that my hon. Friend is anxious to pursue this point with those concerned at the earliest opportunity. I shall draw his attention to the points the hon. Member has made in this respect during this debate.
  The hon. Member also raised the rather different point about the returning Service man who does not wish to resume living in his home because, for instance, of a posting elsewhere. As he has pointed out, the Rent Acts prevent a landlord from evicting his tenant simply to sell the property with the benefit of vacant possession, or because it suits him to obtain possession for his own convenience. This is, of course, central to Rent Act protection, which is intended to ensure that the tenant is free from the risk of arbitrary eviction.
  I understand that Service men have been warned of this aspect of the Acts. But the Ministry of Defence has indicated that this is not something which has been a cause of general concern. I would therefore need to consider very carefully any suggestion that there should be a new ground for possession to meet the problem.
  While we have said in the consultation paper on the review of the Rent Acts that we are willing to consider new cases for possession to cover special categories, there would be great practical difficulties in framing a ground of this sort which would not be open to abuse and which would not lead to an undermining of the principle of security of tenure. Clearly, a new ground for possession of this kind for Service men would have wider implications.

  583
  I would seriously suggest to the hon. Member that it is not so much the provisions of the Rent Acts that lie behind the cases which have led him to bring this matter before the House tonight. Even if Rent Act security of tenure did not exist, the returning owner-occupier would still need to terminate the tenant's contractual rights and give him reasonable notice to quit. If the tenant did not leave, he would still have to apply to the court for an order.
  I recognise that the need for court proceedings may appear to cause unnecessary hardship to those who consider that the facts are clearly on their side. I also accept that Service men and other owner-occupiers who let would regard themselves as firmly in this category. But there is nothing anomalous or unreasonable in this requirement for a court order. As a general rule, if someone defaults on a debt, or fails to comply with a contract, the creditor, or the other party to the contract, cannot take the law into his own hands. He has to go through the courts. So must he here.
  The nub of the matter is that a tenant who is unable to find alternative accommodation is likely to stick on his right not to be evicted without a court order. It is here that the role of the local authority may be crucial. I know that there have been difficulties in the past where some authorities have insisted on possession orders being obtained before considering the tenants for assistance as homeless. I regard such an insistence as unduly legalistic when it is clear that the returning owner-occupier has an absolute right to repossess his property.
  I hope that the situation will be clarified when the Housing (Homeless Persons) Bill becomes law. The Bill not only defines the tenant as eligible for help if he is likely to become homeless within 28 days, but also classifies the owner of the property as homeless if he is unable to secure entry to his property. The housing authority may therefore find itself, if it refuses to help the tenant, having a duty to secure that accommodation is available to the owner, until his own accommodation is vacant. I would therefore expect authorities to take a more enlightened view of their respon-
  584
  sibilities towards the tenant and, if necessary, to accept responsibility for him in advance of being required to do so by law. We propose to make this obvious and common sense point in the guidance that we shall issue after the Act comes into force.
  I said earlier that we recognise that Service men and other owner-occupiers who let their homes can be faced with considerable difficulty when tenants refuse to leave on their return. We fully understand all the human problems that can arise, especially for families, from homelessness, however temporary, and from family separation if the individual genuinely feels that he cannot let his property. We have undertaken to consider the position of such landlords when we come to look at the question of recovery of possession during the review of the Rent Acts.
  The hon. Member will know that the Ministry of Defence intends to contribute to the review and we look forward to receiving its evidence on the position of Service personnel. I know that it will be covering such issues as the effect on service morale in its emphasis on the special needs and circumstances of Service men.
  I must repeat that we attach great importance to maintaining a civilised procedure for recovering possession. It would therefore be wrong for me to hold out any hope of any fundamental charges in this direction. But I accept that we need to consider whether the balance between the interest of landlords and tenants is right at the moment.
  What the review must examine is in what ways the process of regaining possession might be simplified and speeded up in order to mitigate the particular difficulties that can arise for Service men and to which the hon. Gentleman has drawn attention. In this connection the hon. Gentleman's speech tonight has been timely and I assure him that the matters he has raised will be carefully considered and taken fully into account by those concerned.
  Question put and agreed to.
  Adjourned accordingly at ten minutes past Two o'clock.

PRICES AND CONSUMER PROTECTION
  Diazo Copying Materials
  Diazo Copying Materials
  "Consumer Information Bulletin"
  "Consumer Information Bulletin"
  Food Prices
  Food Prices
NORTHERN IRELAND
  Irish National Liberation Army
  Irish National Liberation Army
  Londonderry Harbour
  Londonderry Harbour
  Shipbuilding
  Shipbuilding
  PAROCHIAL REGISTERS (SEARCH FEES)
  PAROCHIAL REGISTERS (SEARCH FEES)
  CLERICAL STIPENDS
  CLERICAL STIPENDS
  TRIALS SECURITY FOR COSTS)
  TRIALS SECURITY FOR COSTS)
TRADE
  Clothing Federation (Anti-Dumping Application)
  Clothing Federation (Anti-Dumping Application)
  Motor Vehicles (Imports)
  Motor Vehicles (Imports)
  Hotels
  Hotels
  Self-employed Persons (Certificates of Experience)
  Self-employed Persons (Certificates of Experience)
ENVIRONMENT
  Rotherham (Councillors' Allowances)
  Rotherham (Councillors' Allowances)
  Noise
  Noise
  Waste Material
  Waste Material
  Property Services Agency
  Property Services Agency
  Planning Appeals (Cornwall)
  Planning Appeals (Cornwall)
  Departmental Questionnaires
  Departmental Questionnaires
  St. Enoch Square, Glasgow
  St. Enoch Square, Glasgow
AGRICULTURE, FISHERIES AND FOOD
  Cheese
  Cheese
CIVIL SERVICE
  Disabled Persons
  Disabled Persons
  Government Car Service
  Government Car Service
  Dispersal
  Dispersal
HOME DEPARTMENT
  Rape
  Rape
  Imprisonment Remission
  Imprisonment Remission
  Electro-convulsive Therapy (Prison Hospitals)
  Electro-convulsive Therapy (Prison Hospitals)
WALES
  Public Authorities (Costs)
  Public Authorities (Costs)
  Caernarvon (Inner Relief Road)
  Caernarvon (Inner Relief Road)
INDUSTRY
  Planning Agreements
  Planning Agreements
  Co-operatives
  Co-operatives
  British Leyland
  British Leyland
  Computer-Aided Design Centre
  Computer-Aided Design Centre
  "Trade and Industry"
  "Trade and Industry"
  Departmental Staff
  Departmental Staff
SCOTLAND
  Science Degrees (Students and Grants)
  Science Degrees (Students and Grants)
DEFENCE
  Industrial Democracy
  Industrial Democracy
  Ulster Defence Regiment
  Ulster Defence Regiment
  Army Vehicles
  Army Vehicles
ENERGY
  Fuel Prices
  Fuel Prices
  Radioactive Waste
  Radioactive Waste
  Methanol and Ethylene
  Methanol and Ethylene
  North Sea Oil (Gas flaring)
  North Sea Oil (Gas flaring)
  British National Oil Corporation
  British National Oil Corporation
  Oil Rig (Government Order)
  Oil Rig (Government Order)
  Teacher-Pupil Ratios
  Teacher-Pupil Ratios
  London
  London
EDUCATION AND SCIENCE
  School Examination Passes
  School Examination Passes
  Literacy
  Literacy
  Teachers
  Teachers
  Higher and Further Education
  Higher and Further Education
OVERSEAS DEVELOPMENT
  Crown Agents
  Crown Agents
  Nursery Education
  Nursery Education
  Malawi
  Malawi
FOREIGN AND COMMONWEALTH AFFAIRS
  Zambia (Rhodesian Children)
  Zambia (Rhodesian Children)
  Hong Kong
  Hong Kong
  Anguilla
  Anguilla
  Cambodia
  Cambodia
  New Hebrides
  New Hebrides
  Gilbert Islands
  Gilbert Islands
  Iraq
  Iraq
  Falkland Islands
  Falkland Islands
  Turkish Ambassador
  Turkish Ambassador
  Uganda
  Uganda
  Nuclear Explosions
  Nuclear Explosions
  Rhodesia
  Rhodesia
  Helsinki Agreement (Review)
  Helsinki Agreement (Review)
  East African Airways Corporation
  East African Airways Corporation
EUROPEAN COMMUNITY
  Ministerial Meetings
  Ministerial Meetings
  Security and Co-operation
  Security and Co-operation
  Fisheries
  Fisheries
  Direct Elections
  Direct Elections
EMPLOYMENT
  Fibre Glass (Research)
  Fibre Glass (Research)
  Construction Industry
  Construction Industry
  School Leavers
  School Leavers
  Remploy
  Remploy
  Job Creation Programme
  Job Creation Programme
  Merseyside
  Merseyside
  Construction Industry
  Construction Industry
  Pottery (Lead Poisoning Risk)
  Pottery (Lead Poisoning Risk)
  Working Days Lost
  Working Days Lost
  Overtime
  Overtime
NATIONAL FINANCE
  Income Tax
  Income Tax
  Tax Assessment (Assumptions)
  Tax Assessment (Assumptions)
  Cars (Business Perquisites)
  Cars (Business Perquisites)
  Self-employed Persons
  Self-employed Persons
  Personal Incomes
  Personal Incomes
SOCIAL SERVICES
  Departmental Staff
  Departmental Staff
  Whitley Councils (McCarthy Report)
  Whitley Councils (McCarthy Report)
  Hospitals (Greenwich)
  Hospitals (Greenwich)
  Hospital Waiting Lists
  Hospital Waiting Lists
  Brook General Hospital
  Brook General Hospital
  Hospitals (Expenditure)
  Hospitals (Expenditure)
  South-East Thames Regional Health Authority
  South-East Thames Regional Health Authority
  Greenwich and Bexley Area Health Authority
  Greenwich and Bexley Area Health Authority
  Queen Elizabeth Military Hospital
  Queen Elizabeth Military Hospital
  Deafness and German Measles
  Deafness and German Measles
  Family Allowances
  Family Allowances
  Mobility Allowance
  Mobility Allowance
  One-parent Families
  One-parent Families
  Vaccination and Vaccine Damage
  Vaccination and Vaccine Damage
TRANSPORT
  Electric Car Batteries
  Electric Car Batteries
  M1 (Accidents)
  M1 (Accidents)
  Noise Insulation
  Noise Insulation
  Disabled Persons (Travel Concessions)
  Disabled Persons (Travel Concessions)
  Railway Subsidies (European Community)
  Railway Subsidies (European Community)
  Motorways (Traffic Density)
  Motorways (Traffic Density)
  Lorries
  Lorries
  Lorry Routes
  Lorry Routes
  Roads (North-East England)
  Roads (North-East England)
  Roads (Taxation and Costs)
  Roads (Taxation and Costs)
  Railways (Fare Payments)
  Railways (Fare Payments)
  Road Construction Programme
  Road Construction Programme
  Rural Services
  Rural Services
  A30 (Cornwall)
  A30 (Cornwall)
  Local Authorities (Expenditure)
  Local Authorities (Expenditure)
  Bedford-Moorgate Railway
  Bedford-Moorgate Railway

Preamble
The House met at half-past two of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Derby.):
The LORD CHANCELLOR on the Woolsack.

STATUTORY INSTRUMENTS: DATE OF ISSUE
Lord JACQUES: 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 why Statutory Instruments are not available to the public in advance of the date on which they come into operation, and in particular, why Statutory Instrument No. 2/1977 relating to the maximum retail price of paraffin, which was operative from 8th January 1977, was not received by trade associations until 11th January 1977 so that it was about a week after the operative date when their members received the advice.
Lord STRABOLGI: My Lords, most general Statutory Instruments are brought into operation after, and normally some weeks after, they have been printed and put on sale. The need to ensure the orderly marketing of paraffin means that only two or three days can be allowed between the laying and bringing into operation of paraffin orders. Full details of paraffin price increases are given on the day that the order is laid in a departmental Press notice circulated to the media to ensure wide publicity.
Lord JACQUES: My Lords, I thank my noble friend for that reply. Is he aware that traders cannot take their instructions from the media? They take their instructions from trade associations. Is my noble friend further aware that Statutory Instruments should be received by trade associations at least 14 days in advance of the operative date? This is to allow them time to study the Instrument and to advise their members. Their members have afterwards to instruct their branches as to the effect of the order.
618
I should be glad if my noble friend could follow this up.
Lord STRABOLGI: Yes, my Lords, I have a lot of sympathy with what my noble friend has said. The Department of Energy wrote to the trade associations on 6th January before the order came into operation, and the major oil companies also immediately passed the details on to their retailers. A lengthy delay in bringing these particular orders into operation would lead to a run on stocks.
Baroness VICKERS: My Lords, may I ask the noble Lord whether he would agree to support more fully what the noble Lord, Lord Jacques, has said? I happen to be a member of the Statutory Instruments Committee, and all too recently we have had a number of orders brought in without the 21 days' notice. We actually complained about this. This paraffin order is one of those we took up with the Department concerned.
Lord STRABOLGI: My Lords, there are difficulties, but, as I say, it is necessary for these particular orders to be issued within a shorter period than the normal ones. But the Department is entering into talks with the trade associations, and I hope that these are some of the difficulties that can be explored.
Lord CAMPBELL of CROY: My Lords, the noble Lord has said that letters were issued on 6th January, but that gave only two days for the recipients of the letters then to pass the information on. Two days is much too short a time for all the action to be taken. Will the noble Lord treat this as a serious matter, because the price control system is difficult enough for retailers to follow without the problems of hearing of the event only after it has occurred, or being expected to learn of it through the media?
Lord STRABOLGI: Yes, my Lords, I will certainly take note of what the noble Lord has said and pass it on to my right honourable friend.
Lord JACQUES: My Lords, is my noble friend aware that by not passing the information to the media the Department could prevent a run on stocks, but they could nevertheless advise trade associations who have to do the work?
Lord STRABOLGI: My Lords, I do not think that the information is passed to the media sufficiently early for there to be a run on stocks, but I will certainly note the point that my noble friend has made.
Lord MACKIE of BENSHIE: My Lords, is the Front Bench aware of the enormous value of gamekeepers turning into poachers?
Lord STRABOLGI: My Lords, I certainly know what it is like to be on the receiving end of my noble friend.

ISRAEL: ARAB BOYCOTT AND BRITISH TRADE
2.36 p.m.
Lord SHINWELL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what protection is given to British industrial firms and finance houses who engage in business with the State of Israel and are affected by the boycott by Arab countries.
Lord WINTERBOTTOM: My Lords, Her Majesty's Government are opposed to all trade boycotts which lack international support and authority. But it is for individual firms to decide their own attitude to the Arab boycott in the light of their commercial judgment. The advice and assistance of officials at the Department of Trade is available to any British firm which wishes to consult them and any such discussions are always undertaken in strict confidence.
Lord SHINWELL: My Lords, is my noble friend aware that I regard that Answer as a completely unsatisfactory one? The Government have a responsibility—I affirm this without fear of challenge—to protect British firms against any subversive tactics on behalf of anybody outside this country or within this country. Although I am not blaming my noble friend, because I have no doubt it is a Civil Service reply—certainly it would not be endorsed by a sensible Cabinet—may I ask whether he is aware that the Government must accept the responsibility?
620
They cannot leave it to the judgment of firms which have no power to deal with the matter. This is a matter in which the Government must accept responsibility and act accordingly; the sooner they do so the better. Otherwise they ought to say, "We abandon British firms. They can go where they like. We are not concerned". Do not forget that they pay taxes and are entitled to some representation.
Lord WINTERBOTTOM: My Lords, the responsibility of the British Government is to the British people. Our trade figures are such that in the last accounting period we exported to Israel £249 million worth of goods and £2,000 million to the Arab world. We have to balance these factors against any emotional view of the rights and wrongs of the Arab boycott.
Lord BYERS: My Lords, is it not a fact that this is not an emotional view but is a matter of a moral principle which is at stake? Is it not true that in the past Her Majesty's Government have said that they could not take any action in this country until the United States had legislated against the boycott? Now that the United States has legislated against the boycott by means of the Tax Reform Act, and is contemplating stronger measures, is it not time that Her Majesty's Government took really tough action on this matter?
Lord WINTERBOTTOM: My Lords, Her Majesty's Government are aware of the United States legislation and will watch its operation in practice.
Lord BYERS: My Lords, how long have we to wait for action?
Lord JANNER: My Lords, is the noble Lord aware that, where other countries have taken a firm stand against the very serious blackmail of those who are imposing that evil boycott, the firms who were threatened with boycott have had that threat removed? Is it not time that we realised that there is such a thing as facing blackmailers in a properand firm manner, which is the only way in which blackmailers can be stopped from continuing with their blackmail?
Lord WINTERBOTTOM: My Lords, it is the attitude of Her Majesty's Government that these factors must be left to the judgment of the individual firms. We do not have the facilities to form judgments for every firm which deals with both the Arab world and Israel; but the fact is that the firms seem to be judging fairly effectively. Our exports to both Israel and to the Arab world are rising.
Lord COLERAINE: My Lords, would not Her Majesty's Government agree that, in the long run, surrender to blackmail never pays?
Lord WINTERBOTTOM: Certainly, my Lords; it never pays, particularly when commercial judgment is used.
Lord SEGAL: My Lords, in giving guidance to any British firms which seek their advice, may I ask my noble friend to say why Her Majesty's Government cannot quote the successful action of the United States Government in breaking this Arab boycott and remind these firms that Arab customers invariably make a bee-line for the Marble Arch branch of Marks and Spencer, a firm which has taken a leading part in breaking this anti-Israel boycott?
Lord SHINWELL: Does my noble friend intend to answer that supplementary question asked by my noble friend Lord Segal?
Lord WINTERBOTTOM: My Lords, it is a little early to judge whether the United States legislation is successful. We must watch what happens.
Lord SHINWELL: My Lord——
Lord JANNER: My Lords, I should like to know——
Several noble Lords: Order!
Lord JANNER: My Lords, with great respect to the House, this is a very important matter which affects the moral standards of our trading.
Lord HAILSHAM of SAINT MARY-LEBONE: My Lords, perhaps the noble Lord, Lord Janner, did not see that another noble Lord was trying to address the House when he rose; the noble Lord,
622
Lord Shinwell, who asked the original Question, had risen before he did.
Lord HALE: My Lords, would the Leader of the House permit me——
Several noble Lords: Order!
Lord SHINWELL: My Lords, I am not asking for any special privilege, nor am I asking about any particular section of people, nor because I am biased in any way. The British people to whom my noble friend referred expect the Government to protect them, to secure them against subversive tactics, to secure them against terrorism and to secure them against blackmail. What do the Government intend to do? Do they intend to do nothing but merely remain an interested spectator? If so, why ask these British firms to pay tax? Answer that question, and no nonsense about it!
Lord WINTERBOTTOM: My Lords, the British Government are available to give advice and assistance, and that advice and assistance seems to be successful.
Lord JANNER: My Lords, may I ask one more question? My noble friend said that trade with the Arab countries now exceeds the trade with Israel. What moral standard are we adopting when we know that for many years the balance of trade with Israel, so far as we are concerned, has exceeded by far the balance of the whole of the trade with all the Arab States? When are we going to stop utilising subterfuges for expediency instead of concerning ourselves with morality?

PERSONAL STATEMENT
Lord HALE: My Lords, I beg leave of the House very briefly to apologise, as in duty bound, for my failure to be here to put Question No. 2. I had been in the Library for an hour. I did not know that Question No. 1 would not be asked and, what is more—it was entirely my fault—I overlooked the fact that Prayers were not being read this afternoon, so my arrival at 2.31 precisely was too late.
The LORD PRIVY SEAL (Lord Peart): My Lords, I thank my noble friend for those remarks.

AIRCRAFT AND SHIPBUILDING INDUSTRIES BILL
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, with the leave of the House, at a convenient moment after 3.30 p.m. my noble friend the Leader of the House will make a Statement on the Aircraft and Shipbuilding Industries Bill.

HOUSE OF LORDS LIBRARY
2.43 p.m.
Lord PEART: My Lords, I beg to move the Motion standing in my name on the Order Paper. The Working Group on the House of Lords' Library was set up last March by my noble friend Lord Shepherd when he was Leader of the House. This Working Group, under the chairmanship of the noble Viscount, Lord Eccles, has now produced a detailed and extremely worthwhile report on the future of the Library, and I think it would be in the interests of your Lordships for this report to be made as widely available as possible. I therefore ask the House to agree that it be printed.
I wish to take this opportunity of expressing my warm thanks to the noble Viscount and all the members of the Working Group for the time and hard work they have devoted to this subject. When your Lordships have had an opportunity to read the report I look forward to hearing reactions to it, and there will of course be widespread consultation. If Members of the House feel that it would be a subject suitable for debate, that is a point which can certainly be discussed through the usual channels.
Moved, That the report to the Leader of the House from the Working Group on the House of Lords' Library be printed.—(Lord Peart.)
Lord HAILSHAM of SAINT MARY-LEBONE: My Lords, I rise simply to add the thanks of noble Lords on this side of the House to my noble friend Lord Eccles, and to agree with the Leader of the House that the report should be printed in order that it may be studied by us all.
On Question, Motion agreed to.

RESEARCH AND DEVELOPMENT
2.45 p.m.
Lord KENNET Lord KENNET rose to call attention to the organisation of research and development since the Rothschild Report (Cmnd. 4814); and to move for Papers. The noble Lord said: My Lords, the Motion speaks of the organisation of research and development since the Rothschild Report. That is simply for the sake of convenience because of course that organisation develops organically over the decades and the appearance of one or other report—the Haldane Report, the Rothschild Report and so on—merely punctuates this organic development. However, it seemed to many people that, the Rothschild Report having been published and debated in this House four years ago, and its broad outlines having been adopted and put into operation three years ago, this might be a convenient moment for what I should like to think of as a mid-term discussion.
I shall conclude my remarks today by asking the Government whether they will, about three years from now, have some further inquiry of a wide-ranging nature into the whole matter. If they were to agree that about six years is the right time to allow a new principle to run before examining its effect on the economy and on the world of science, then we could look on today's debate as a half-term discussion, not in depth. The House is fortunate in being about to hear two distinguished maiden speakers this afternoon, the noble Lord, Lord Baker, and the noble Viscount, Lord Sidmouth. Lord Baker's past experience will be of particular and obvious appositeness to the matter in hand.
If one pots the Haldane principle as I have heard it potted, it is easy to trace the history of what has happened since. The Haldane principle one could say was that, since in 1916, at the time of its formulation, scientists were poor, vulnerable little creatures, few in number and liable to instant suppression when their results were inconvenient to the policies of their masters, it was expedient that for self-protection they should be gathered together in huddles, where they could defend one another and grow strong while feeding on their own scientific values, and that after a time they should then be strong enough to sally forth and take up a

625
more independent position in the world and act as prime movers instead of vulnerable centres of wisdom in their burrows.
That is, I think, more or less what has happened. During a great part of the history of the Haldane era, the principal huddle was of course in the Department of Scientific and Industrial Research; and then the scientists were allowed to break out of that into the Ministries and Departments, though it is not so long ago—in fact, in my days as a junior Minister; only six years ago—that the chief scientists in Departments were commonly not allowed to see the Minister unless they took with them and had beside them an administrator as a nanny. If one looks at it in that way one can see that the Rothschild Report and the customer-contractor principle were not a negation of everything that had gone before, but a natural development. It was time by then, so held Lord Rothschild in his report, to allow the scientists to stand entirely on their own feet and to be placed at the very top of every Ministry in the form of a chief scientist, and to allow those chief scientists, under the Minister alone, to act as direct customers with the contractors who had actually been doing the research around the place for the Government.
It came at the right moment. We must of course remember that all the fuss at the time of the Rothschild Report was about a very small proportion of the money concerned; it was about research council money. We must remember that Government research and development money, including all military research, is only half that spent in the country; we must remember that only 12 per cent. of that half at that time went to the research councils, and we must remember that only one quarter of that 12 per cent., 1½ per cent., of all the money spent in the country, was to be "customerised" according to the Rothschild principle.
I should now like to ask the Government whether this has happened. Has it been done? Has what Lord Rothschild recommended taken place?—namely, that a quarter of 12 per cent. of Government expenditure should be switched from the Department of Education and Science to the executive Ministers. Are they satisfied with the way it has happened
626
where it has happened in the case of the three research councils? I shall finish with the research councils soon. We only talk about them so much because the Rothschild Report itself and the Dainton Report gave so much space (to them, and because they are so very visible and so glamorous in a way. Of course, the great bulk of things, both in the Rothschild Report and in life, have been continuing to develop without criticism and without bumps.
There is a common opinion that within the "Rothschilded" sector, as it were, things have worked best with the Agricultural Research Council and least well with the Natural Environment Research Council. I should like to ask the Government whether that is correct. If so, I feel that the reason is obvious: the Agricultural Research Council has only one customer in Whitehall—the Ministry of Agriculture—whereas the Natural Environment Research Council has, I believe, six Ministries as customers. This causes an inevitable increase in paper work, in committee work and in general bureaucracy. As an example; I have heard of a small ten-man research unit with one computer at a provincial university that suffers from no fewer than five Government customers, four Ministries and one research council. No doubt that is an extreme case, but am I right in sensing that it may have been the experience of the Government that the success of "Rothschildisation" has depended on the presence of a single customer or a small number of customers, and that it has been less than a success with a large number of customers?
I should like to leave this part of my discourse with one thought. It is that the industry of Britain which tends to be regarded as a failure story, is not a failure story in general. Only one sector does badly, and that is the engineering-based industry. For instance, the food and drink industry and the petrochemical industry do rather well. Why is it that our old friends the automobile, shipbuilding and aircraft industries, the engineering-based industries generally, do badly? Is there any connection between their relatively poor performance and the way R and D is organised and, if so, I wonder what it is? Perhaps the Government can help us to form thoughts on this.
Still on the research council question, one hears it said that there are staff difficulties and that, with the shifting round of the source of funds and the inevitable imposition of cuts due to the end of the age of rapid economic expansion, there has been a certain amount of difficulty in keeping staff. That is natural enough, but the new customers, and especially the advisory board on the research councils, are accused in some quarters of a simplistic approach to the art of cutting. It is alleged that they simply say, "Well, a cut is a cut", without realising that to impose a cut on a going concern automatically redistributes all the overheads, and that it is not as simple as it looks simply to lop a few million off a flow of money.
Would it be possible to overcome the difficulties that some of the research councils and their dependent institutions are suffering by allowing the research councils to maintain a bank account so that, if they make a saving they can keep it in the bank and if they overdraw they may be allowed to do so without being shot? Is it true that some research councils are allowed to do this and others are not and, if so, why? Would it not also be a help to them in the era of the sharply falling or, to use a euphemism, the sharply fluctuating pound? They send some of their money abroad, for instance, to CERN. The value of what they send abroad and of what it will buy varies. They get money from abroad; the value of what can be bought with the foreign currency in this country in the way of research rises sharply. If they were allowed to bank in an ordinary way, and with moderate freedom, would not this make their life altogether easier? Lastly, would the Government agree with the judgment of one research council boss who said to me that, "Though the present set-up of research councils is not perfect, it is a damned sight better than we had any reason to hope when we saw the Rothschild Report"?
It is said on all sides that everything depends on the merit of the Chief Scientists in the Ministries and on the fact that they must be respected outside the Ministries in the major world of science. One hears it said that the best are excellent, but that a more sensitive definition of
628
need is the principal requisite for an improvement in the whole system at the moment. The examples are given of MITI—the Ministry of Trade and Industry—in Japan, and ENA—the École Nationale d' Administration—in France, as the kind of place that can produce even better Chief Scientists than we have now. I endorse the idea that MITI is a good model. I have had the opportunity of looking at it in recent years and it appears to be a miracle of common sense and success.
I am not so sure about ENA. I believe that we should copy the enthusiasm and wholeheartedness of the French in their approach to these matters, but one needs a very thorough knowledge of another country before deciding to translate, word for word, any of its institutions on to our own soil. I agree that we should do something that fits the fabric of our life as well as ENA fits the fabric of French life. But it is very easy—and I would caution the Government against any temptation in this direction—to think that simply because a country is one's nearest neighbour, as France is ours, one can understand it more easily than more distant countries. France is an opaque country, and I myself do not believe that its economy is in for a spectacularly good time in the near future.
Is it true that some Ministries still allow their Chief Scientist to be the executive head of some of their in-house laboratories? If so, does this not annul the whole contractor/customer principle and should it be allowed to continue? Another thing that Lord Rothschild and everybody else have always recommended is the "aeration" of personnel by change, the transfer of people. I believe that this is very good and that we should do more of it. We often think of bringing people from industry and from labs into Whitehall, but I understand that British Oxygen took six officials from the Ministry of Agriculture and Fisheries temporarily and that two of them stayed for life. This is very good, too. People should flow both ways quite uninhibitedly. There should be more of it. However, what I think is wrong and should be distinguished from this is the possibly excessive movement within the Civil Service, especially among administrators. It sometimes seems to me that as soon as an administrator has found out about his new job

629
he is instantly moved on in the interests of a "rounded personality" and "broad career experience". That can be catastrophic—for instance, when the man in charge of the fisheries negotiations is appointed on the day when the negotiations with the Community begin. Such accidents should be avoided.
This debate is of particular interest to this House, I believe, because my noble friend the Leader of the House has among the many hats that he wears two of particular interest. One is that he is the chairman of the Advisory Committee on Applied Research and Development—ACARD—which I shall come to in a moment, and the other is that he is the Minister responsible for the co-ordination of all maritime policy, which is heavily dependent on research.
That brings me to another general point which is a little hard to make and, indeed, I am not sure that I shall succeed in making it. However, I should like to ask whether he is thereby also the chief customer for maritime research. Was it, for instance, any concern of his that accidentally the Government nearly decapitated the hydrographer a few months ago? He was reprieved at the last moment, but because he was no longer of such service to the Ministry of Defence as he had been and because nobody else came to his rescue, he was nearly lost. Is it the duty of my noble friend to see that there are no gaps in research as such, and no gaps in maritime research in particular? If so, could he tell us how he fulfils this function?
I should like to dwell on ACARD for a moment. I believe that it is an intensely useful addition to the battery of committees in the structure. It could indeed be a great white national hope. I hope that my noble friend will tell us his aims with this Committee, of which he is the Sunday go-to-meeting chairman, while the week-day chairman is Sir James Menter of Queen Elizabeth College in London. It is a remarkable body. The chairman of the advisory board on research councils is a member; so is absolutely everybody who ought to be. It is a correctly formed body, though large. Its job is precisely what it says: it brings us closer to the grass-roots of industry in the dissemination of applied research results and the getting done of really practical research.
630
There are various questions about it. How is it going to fit with the National Economic Development Organisation and its 40 Working Parties on this and that? How is it going to fit with the National Research and Development Corporation? How is it going to fit with the Central Policy Review Staff? All these frontier questions are interesting. Perhaps we could be told something about them. But it certainly has the potentiality of bringing this country more into line with Japanese and German industrial performance. If it is able to do that, it is worthy of all possible cheers.
It has been put to me—and I quote:
"That the concentration of a good deal of scientific and technological effort on the use of existing plants and assets would be a useful thing."
This ACARD can help to do. "Rather curiously, science can perhaps play a bigger part in this than in total innovation, which is sometimes almost an artistic activity. The big science based companies devote well over half of their technical effort to this matter of constructive improvement. Quite commonly it can raise the output of a given plant to three times its rated level and can have a major effect on the acceptability of products, and indeed this kind of activity has been the main spring of much of the Japanese success." This is the reason for which I wish ACARD such success. Why not give it a journalistic title—call it "Operation Boot Strap", the "Boot Strap Committee"?
Could one go even further? We have a National Physical Laboratory and a National Engineering Laboratory, which everybody knows about. Is that detailed enough? Why do we not get really down close to the coal face at that level also and have a National Car Laboratory, a National Camera Laboratory, a National Watch Laboratory and, of course, a National Ship Laboratory. We could have the other two if we decided that we wanted to go into new fields and beat the Japanese and the Swiss at their own games. I do not see why it should not be done.
My Lords, the national interest in general is sometimes itself a customer, and it may not always be possible to arrive at a true statement of the national interest by listing the many ad hoc

631
departmental requirements and needs for research. Whose job it is to scrutinise the entire shopping list of the chief scientific officers and their requirements boards in every Ministry, to make sure that the national interest is truly served by the distribution of demands there, and that the important things are not being left out? There is in the world now an increasing interest in instruments of future oriented research which can serve two purposes. I avoid the word "forecasting" because people too often think that it means extrapolation; of course it means nothing of the kind. As I say, this future oriented research can serve two purposes. First, there is precisely this of research requirement definition. They could help the community of requirements boards of departments in this job, and they could help the corresponding community of requirement boards within industry to do their side of the job.
The second need that such bodies can fulfil is that of what has been called anticipatory democracy, to distinguish it from participatory democracy which we all understand and hope that we have; everybody has a say in what is to be done tomorrow. Anticipatory democracy means that everybody has a say in what is to be done in 30 years' time. In order to give everybody that say, there must be laid before them a spread of possibilities of what might be done in 30 years' time. The technical, scientific and intellectual activity needed to provide the raw materials both for improved requirement choices for research and for improved anticipatory democracy is very often precisely the same. This was what the organs of the European Community had in mind when they asked me three years ago to produce a report called Europe plus Thirty. I was very glad that my late right honourable friend Mr. Crosland in his first and, sadly last, speech to the European Parliament as Chairman of the Council of Ministers, called for immediate action from the Commission on the putting into effect of precisely this type of activity.
There are various projects going on at the moment in this country which one might put under the headline "Britain plus Thirty"; sometimes they are called the "British Brookings Institute"; though I am not sure that Brookings is an exactly
632
appropriate model for this country. There are others going forward, consisting of various networks of future oriented studies which might be mounted among interested people and financed by industry, both private and public, but not by the Government, the results of which would be available for political discussion, thereby making for the kind of anticipatory democracy which only research can produce.
I turn now to the international scene. First, let us look at the European Commission because that is the first thing that we see when we look abroad these days, I suppose. Its research programme, pitifully small, is 2 per cent. of all the public civilian money spent on research in the nine countries. If we look at it we see that it consists of JET—the Joint European Torus—we hope, if we get it. Then there is a whole mass of rather small, £10,000 projects, the criteria for the choice of which are not clear.
I have been told the following story about one of the sectoral sub-committees of CREST, the Committee on European Science and Technology Research, which is the inter-Governmental body that agrees on joint programmes.
A form was sent out to member Governments, saying:
"Will you kindly set out in order of preference your priorities for joint research to be conducted under or by the European Commission?"
Of course the British Government official concerned did so, and he expected his reply to be collated with those of other countries, and to be weighted, and some work to be done upon it. He expected to receive the weighted collation of everybody's wishes, and then for there to be a meeting and negotiation based on that worked-out paper. On the contrary, there was no such thing; no paper was received. He went to the meeting, and he found the delegation of another member country—I need not say which—going round saying to everybody: "If you will back our first choice, I will promise to back your second choice. So everybody asked: "What is your first choice?" They said: "We couldn't possibly tell you that until you have given us the undertaking for which we ask."
This is the way that things are too often done. The operations of CREST, the relevant Committee of the European

633
Community, are intelligent in theory, distinguishing between the three degrees of Community control over research projects, but they are defective in practice. There is a gap problem. There are many things that are uncovered. There is a duplication problem. It is said that the same type of steel is sometimes tested five times in five different countries They are unable to prevent this. The operations of Directorate General 13, whose job it is not to get the research done but to disseminate the results of the research around the industries of member countries, leave much to be desired. The operations of the advisory committees on programme management of each of the joint research projects are very much hampered by nationalism and by defects in structure.
I wonder whether the Government, instead of yielding to the temptation which I fear they sometimes do—of sitting back and saying, "Oh well, the Commission is hopeless. Let's get on with our own, or let's do it bilaterally. Let's approach some other advanced country, such as Germany or France, and do it separately"—could not help the Commission more in this. Could they not adopt an attitude of offering help in advance so as to prevent the production of policies based on insufficient research, and to prevent, indeed, research proposals based on insufficient preparation? I have in mind, obviously, the recent Common Fisheries Policy, the first drafts of which were beyond belief impracticable. This was based on lack of research, and I think also partly because the member countries, including this one—because we are in a very powerful position on fishing—approached the matter with all our powerful cards close to our chests, hoping to gain advantage thereby only by degrees, rather than helping the Commission immediately to put out a sensible proposal which could be adopted.
May I ask the Government another question. There are many questions, and of course I do not expect answers here and now, but perhaps letters or discussions later. If there is a piece of research which we in this country want to do internationally and it is too big for us to do alone—and there are plenty of such things these days—how do we choose with whom to do it? How do we choose whether to do it with
634
the Community in due form and order; or to do it with Germany and France, perhaps opening up through one of the three-times-yearly meetings which the chairman of the Advisory Board on Research Councils has with his French and German (and French and German only) opposite numbers; or to do it with the Americans; or to do it with the Americans and the Russians jointly at the International Institute for Advanced Systems Analysis at Laxenburg, in Austria? Are there criteria for judging this? If so, are the criteria classified? If not, can we hear them? If there are no criteria, ought there not to be criteria? Again, what about the European Science Foundation? Are its laments justified, that it has been set up by all the Governments but not used by them? Do we intend to use it? Does it face the prospect of increased use, or not? There are indeed many questions on the international front. I imagine that the field is moving pretty fast here, and I hope that many noble Lords present will address themselves to the international aspect of these matters.
My Lords, that is all I have to say. I hope that the Government will institute a formal review—I have no suggestions as to its form—in about three years from now. This will be the right moment because by then the transitional fathers, as it were—those who have set up the post-Rothschild system in Whitehall and in the research councils—will have retired, a new generation will be in, and this will be the moment to inquire how things are going. In the meantime, I am sure that the whole House will join me in wishing our Leader good luck with ACARD, the Advisory Committee on Applied Research and Development, which could indeed turn out to be A trump CARD. My Lords, I beg to move for Papers.
3.12 p.m.
Lord STRATHCONA and MOUNT ROYAL: My Lords, when I started to do the research necessary to address myself to this problem I began to realise what Lord Rothschild meant about customers and contractors, and I found myself in the unhappy position of being a customer with no obvious contractor to do the necessary research through the amount of paper that I felt I ought to read. The

635
noble Lord, Lord Kennet, has asked a number of questions. He has asked, I suppose, about a tenth of the number of questions which one might legitimately raise on this whole subject and on the Rothschild Report in particular. The noble Lord the Leader of the House will be very relieved that he has not asked them all, and he will be even more relieved to know that I do not intend to ask a great many others, simply because once you begin you do not know where to stop.
My Lords, this seems to be a good moment to initiate a debate of this kind, for two reasons. First, it particularly behoves us in times of financial stringency to make certain that we really are making the best use of those slender resources that we have available to us for matters like research and development. It is also true, of course, that the Rothschild Report suggests that it would take something like four years for the proposals that he advocated to become effective, and he also suggested that, in any case, very many projects take something like seven years to reach maturity. Therefore, the noble Lord, Lord Kennet, was quite right in saying that we are at the point whereat we can have a look to see to what extent the proposals have indeed been implemented.
I think it is worth reminding ourselves that for 200 years this country has thrived on the skill and the technical ingenuity of our people. This is really what the Industrial Revolution was about. I believe that, as a nation, we still have a belief—and it may be rather a naive belief—that we have a certain special native ability to produce ideas and to develop them through some intuitive inspiration which we are fortunate enough to possess, and that we do this more effectively, or at any rate more economically, on a more cost-effective basis, than some of our competitors. I suspect that this belief does not really make adequate allowance for the enormous, added complexity which is inherent in any contemporary development of a new idea; and I think that if we have learned one thing in recent years it is that we have a lamentable weakness at developing and applying the ideas that we seem to be very good at producing. Indeed, later on this afternoon we shall possibly address ourselves to quite a good example of that.
636
My Lords, the matter of Government research and development is a big enough subject itself. But, of course, it is only a part of the whole picture, and I think I am right in saying that it represents only a half of the country's effort. We ought at some time to consider whether the arrangements are adequate for assisting industry and individuals themselves to develop and to market their own ideas. But if we go back to the dreaded word "science", I believe one of our fundamental problems throughout all of this is the difficulty of communications between scientists and those whose main experience may be confined to what is very often called "the school of hard knocks". Partly because of this difficulty of communications it is sometimes rather easier to pinpoint the symptoms of malaise in our efforts than it is to define the fundamental nature of the illness and to suggest a cure.
I should like to give one example of the kind of thing that can so easily happen. What I am going to say is over-simplified and possibly biased, and I hope it will merely illustrate a point. This is a story of our attitude to hovercraft and hydrofoils. The Government, or a quasi-Government organisation, the NRDC, were asked to evaluate and support the hovercraft concept. On the advice of a Government laboratory they took the decision that the hovercraft had great attractions for vessels in rough water, and as a result some kind of a tacit understanding grew up whereby we in this country would concentrate on hovercraft development and would leave hydrofoil development mainly to other nations. The Russians, the Italians and the Germans had already been doing it for some time, and the Americans concentrated on this particular side of this type of development.
There then appeared on the scene a different type of hydrofoil, known as a hydrofin, which claimed that it had particularly useful applications for high-speed vessels in rough water, which was obviously of special interest to this country. Strathclyde University reported favourably on this concept, and the Government, or their agencies, were again asked to support it. They then referred for an assessment back to the same laboratory as had already reported on the hovercraft. This is where the difficulty arises and where politics—not in the sense of Houses

637
of Parliament type politics—unfortunately creep in to what ought to be a scientific assessment; because those who were supporting the hydrofin concept are persuaded that the laboratory in question was very unlikely to give a fair trial to this hydrofin concept because they were already wedded to the notion of the hovercraft as being the right route for this country to follow. I do not know whether this is so, but it clearly is undesirable and an unhappy situation that an inventor can get into a kind of "Catch 22" situation where all the references go back to the same group of assessors, or the same individual assessor, already committed to an alternative technology.
I am not trying here to advocate a particular concept at all; I am merely trying to illustrate a danger which is with us. We can see where it could happen again. We are now putting a great deal of our research effort in the renewable sources of energy field into what are commonly known as Salter's Ducks, which is the wave power concept being developed at the University of Edinburgh and mooring a great line of rafts off the West coast of Scotland which would generate large quantities of power. But the difficulty is that once you commit yourself to something like this, there is the temptation to say that no other form of technology is worthy of investigation because this is the line you have decided to pursue.
The noble Lord, Lord Kennet, mentioned the JET project—the Joint European Taurus. Here you are in very large figures on an international basis, but there is also the possibility that you could arrive at fusion power by, I understand, some concentration of lasers, and I should have thought there was a possibility here again that the same assessor might be asked to pass comment on this as had already committed us to the other technology. It is very embarrasing if this person has to make this kind of choice.
Lord WYNNE-JONES: My Lords, the noble Lord has raised an interesting point. I should like to ask him this. If the Government do not refer the two different alternative methods to one laboratory to test, how do they resolve the different reports from two laboratories?
Lord STRATHCONA and MOUNT ROYAL: My Lords, I could not agree more with the noble Lord; and, as I said at the beginning, I wish I could suggest some solution to this. It seems to me that the noble Lord is postulating the endless difficulty that all politicians have experienced where two experts give conflicting advice. Therefore you try to refer to one who will arbitrate between the two. We are arguing in a complete circle. What I suppose is conceivably possible is that one might set up some kind of scientific assessment committee which possibly would have a better chance of not feeling itself too wedded or committed to one piece of technology so that it could not give fair consideration to an alternative or competing one. I do not know, but I believe that is a difficulty to which we should address ourselves, and be aware of. The other day a scientist put it to me very well. When you are trying to make these choices, he said, you are faced with the choice of having an assessor who is dispassionate, and therefore almost certainly not competent, or having one who is competent and therefore committed and probably in an entrenched position, which somewhat vitiates his independence of view.
Having said that, I must say also that I am apprehensive about what the noble Lord, Lord Kennet, suggested: that we should proliferate all sorts of specialist laboratories all over this country. I should have preferred not to make our lives more difficult. Let us try to subcontract that kind of work to the universities and other institutions which already exist.
If we look at the Rothschild Report and the results from it, the feed-back that I get is that it is like the curate's egg, good in parts. Lest we should say that it is all good, let me quote from the 10th Report of the Expenditure Committee and their interview of Sir William Pile. He said:
"I have to say, of course, that the great thing about research is that a part of it is rubbish and another part—and I will not be specific about the proportions—leads nowhere and is really rather indifferent. It is, I am afraid, exceptional to find a piece of research that hits the nail on the head and tells you pretty clearly what is wrong or what is happening or what should be done."
From that particular source, this is a discouraging statement. In this large

639
tome there are all sorts of little nuggets. The Committee then went on to say:
"We would not want to suggest that there should be any direct interference in the academic freedom of individual research workers"—
and here the words are in heavy type—
"We do believe that more positive information from the Department of Education and Science about potentially important areas of research and useful types of project would be welcomed by the research workers".
This merely indicates that there is a great disparity of view. The noble Lord has already said that a great deal of the Rothschild Report is, in fact, addressed to a rather small part of the total research effort—about one quarter of one half. This has led many other scientists to suggest that the whole exercise has been a waste of time. I do not believe that this is right. I believe, from the happy position of not having had my operations interfered with by having to address myself to the problems raised by the Rothschild Report, that it is right to have had a mind of that kind focussed on these problems and asking us the questions, even if we find ourselves still asking very much the same questions four years later.
It would be fatal also, following a report like this, to fall into the trap of seeking change for the sake of change. This is a very dangerous exercise. If one can be more specific about experience since the report, the feedback I have is that the Agricultural Research Council has been working better than the Medical Research Council area. It is legitimate to ask why this should be so. I suppose one possibility is that the Agricultural Research Council has only one customer in the shape of the Department of Agriculture and Fisheries. On the other hand, the Medical Research Council has very many clients spread over a number of the Ministries. I also wonder whether Lord Rothschild was misled by the very high quality of the people he found in these posts at the time when he was writing his report, who were, in fact, perhaps triumphing over a very great and difficult administrative situation, and whether he undervalued, in spite of what he said about individuals, the contributions that these individuals were making.
640
It is very clear to me that scientific research must be directed by scientists. If you are going to select a project, you must have a concept of what is likely to be possible. I do not believe this is the proper job for someone of a generalised education, the kind of education received by a civil servant. Furthermore, as the noble Lord, Lord Kennet, has already said, it is fatal that somebody in one of these positions should be shifting his job every two or three years, for it takes a couple of years to learn how the machine works and what your department is doing. Just as you are beginning to get a grasp of the work, you are moved on to another field. I hope that the noble Lord will be able to tell us how he feels that the Chief Scientist and the Controller R and D relationship has worked oat in practice.
Throughout the Rothschild Report there is one conspicuous lack, which is accountability. The noble Lord, Lord Rothschild, was trained in industry and it might be that he assumed that accountability was something that could be accepted as axiomatic. If one is talking about applied research, it implies that there is a product or a definable objective, and it must therefore be possible to monitor the performance against the objective. My understanding is that this is known in the Ministries as Programme Analysis Review, but that they decline to publish the results of their PARs on the grounds of confidentiality.
This leads me to ask the noble Lord whether he agrees that there is perhaps a case for having a chief scientific adviser to the Government—or indeed I might call him the chief scientific auditor—which is advocated in the White Paper. He would advise the Government on whether the inter-departmental balance was right, whether the relationship between one department and another was working out correctly; and he could also monitor the reports received from the individual departments, the PARs which are confidential and cannot be published. He might also publish a report as to the commercial success in developing the results of the R and D which come out of these various departments. A comparison between the commercial success of the Government research establishments and of their industrial counterparts would

641
surely be an excellent discipline for the Government. My Lords, this leads me back and feeds the noble Lord, I hope, with a reply in the sense that if we are not going to have a chief scientific adviser, it may well be that this will be the work of his advisory council, ACARD. We shall look forward to hearing whether he thinks that this can meet the case.

AIRCRAFT AND SHIPBUILDING INDUSTRIES BILL
3.32 p.m.
Lord PEART: My Lords, I am sorry to interrupt an extremely interesting debate, but we shall return to it later. With the leave of the House, I will now make a Statement on the Aircraft and Shipbuilding Industries Bill. The Statement is as follows:
"In the light of the findings of the Examiners that the Aircraft and Shipbuilding Industries Bill is hybrid, the Government have considered what action should be taken.
"The Government have decided that, in view of the grave industrial consequences of further delay to the Bill, they intend to deal with the situation created by the Examiners' findings on hybridity by proposing Amendments for the deletion of the 12 ship repairing companies listed in Schedule 2 to the Bill.
"Consultations have taken place with the Opposition Parties through the usual channels and the Opposition have agreed that the Bill should now proceed to Royal Assent as a Public Bill in its present form, apart from the deletion of the 12 listed ship repairing companies. It has been agreed that the Bill will receive its Second Reading in this House on Tuesday 8th March, with Committee and remaining stages on 10th March; the Bill will then return to another place for agreement to the necessary Amendments. It has been further agreed that the Bill should proceed to Royal Assent forthwith. I hope that the House will be content to proceed on this basis.
"Ship repairing will remain one of the duties of British shipbuilders. Several of the listed shipbuilding companies have ship repairing operations, and three of the 12 ship repairing companies now
642
listed in Schedule 2 are already publicly owned and will be transferred to the Corporation. The Government understand that other privately owned ship repairing companies would wish to be acquired by the Corporation, which will be free and willing to negotiate their acquisition.
"The Government intend that vesting of the aircraft companies will be next month, if this can be achieved, and of shipbuilding companies in the late spring. A Statement on this will be made as soon as possible."
My Lords, that ends the Statement.
3.35 p.m.
Lord STRATHCONA and MOUNT ROYAL: My Lords, we on this side of the House welcome this Statement. I should like to congratulate the noble Lord the Leader of the House on finding a way out of an impasse—which I have to say was of the Government's own making—and on ending the uncertainty which has existed for so many months in the industries concerned. This is not the outcome that we would have wished for; we still think that the whole Bill is misconceived. But this course at least represents a belated triumph for what has been called the art of the possible.
The question of hybridity in Schedule 2 was first raised in this House on 28th September, over five months ago. We should not forget that hybridity is not a mere procedural device, but a constitutional means by which Parliament is able, as the Examiners have put it in their report, to protect the individual from the majority, from the power of the State or, if you prefer it, from the power of the Government. So I feel that this decision is something of a triumph for those ship repairers who have taken on the might of the State and won. But they have won through the process of Parliament.
For the future this should be a salutary reminder that Parliament's job is to protect the citizen from his rulers and to safeguard his rights, liberties and livelihood. This should also be a reminder to our critics that this House does have a function. We need a Second Chamber and we have exercised our function well. If there had been no House of Lords it is frightening to think that the hybridity

643
in this Bill could never have been examined, let alone proved. Let us remember that.
3.37 p.m.
Lord BYERS: My Lords, although we on these Benches are vigorously opposed to the nationalisation of these two industries, we recognise that in everybody's interest the present uncertainty must be terminated. The course now proposed by the Government is one—and I cannot help saying it—which we have been advocating from these Benches since towards the end of the last Session. We have made this point on numerous occasions; I am only sorry that the Government did not take our advice when we first gave it. As I have already written to the noble Lord the Leader of the House indicating that we would certainly favour this course, we shall of course facilitate the stages of the Bill as proposed by the Government.
Lord PEART: My Lords, I should like to thank both noble Lords for their remarks. We shall have the Second Reading debate of course, and no doubt some of the matters which have been raised now will be discussed then. I am grateful for the approach that both noble Lords have taken.
Lord SHINWELL: My Lords, may I ask my noble friend to recognise that those of us who have taken part in this controversy do not regard this as a triumph for anybody; it is a victory for common sense. We have to accept some reorganisation of the shipbuilding industry. If it is to be nationalised, we offer our good will. It is going to be highly speculative. We know that there are a great variety of problems. Let us face them and get on with the matter for the sake of British shipbuilding. If we revive the controversy, it will do nobody any good. As a matter of common sense, let us get on with it.
Lord PEART: I am grateful for the remarks of my noble friend. I agree with him that we must now think of the future of our industries.
Lord HARMAR-NICHOLLS: My Lords, is the noble Lord aware that it is rather pleasant to find this meeting of minds in trying to deal with what is a
644
Parliamentary problem? Am I to understand that the arrangements that have been made by the three Front Benches mean that at this minute the Bill is a hybrid Bill, and that under the Bill the aircraft industry and shipbuilding industry may have rights if the hybridity was carried through its proper channels? Am I to understand that any rights of the shipbuilding and aircraft industries will be taken away from them by this arrangement? Have we been assured that they have no questions they would want to raise under the procedures of the hybrid Bill, if the arrangement now agreed was not being entered into?
Lord PEART: My Lords, a Motion will be moved tomorrow and there will be Amendments to the Bill; but we shall discuss that later.
Lord HANKEY: My Lords, in view of the devastating report of the National Economic Development organisation on the tremendous delays, administrative interference and political interventions which have made the development of our present nationalised industries so very difficult, will the Government take this opportunity to see whether they can arrange a better form of control of the industries now being nationalised so that they may develop in a more rational way?
Lord PEART: My Lords, the noble Lord has raised an interesting question, which has been raised on many other occasions. I shall take note, and discuss it with him.

RESEARCH AND DEVELOPMENT
3.41 p.m.
Debate resumed.
Viscount THURSO: My Lords, we now return to the rather more rarefied atmosphere of the laboratory. The Rothschild Report was indeed a major report on research and development and your Lordships' House must be grateful to the noble Lord, Lord Rennet, for reminding us that this is a good moment to take a look at how this report is affecting our research and development and also the progress of our science and science-based industries.

645
I certainly welcome this opportunity to review research and development, as it is working in the country at this moment. Like the noble Lords, Lord Kennet and Lord Strathcona, I feel that I must ask a number of questions. In fact, I may very well confine myself to asking questions, because I feel that we need to look at the operation of the new system under the Rothschild Report. There is so much to find out about how it is working and how we should organise things from now on. Perhaps we might even ask whether it is working as it was intended to work.
Not even the most optimistic jingoist in this country would pretend that all is well with our industry, with our balance of payments, or with the strength of our currency and so on. We must therefore ask ourselves whether our research and development is helping our industry as it should, and whether it is helping our position in the commercial and competitive world. Indeed, there are many similarities between now, in 1977, and then, in 1964, when this whole concept was reviewed. But in those days there was a feeling of disillusionment which perhaps could be summed up by the word "frustration". Nowadays I think that the feeling of disillusionment has reached the stage when it could be described by the word "resentment", because there is indeed a difficulty in motivating people to do anything for the community. There is a very real difficulty in motivating people to take risks and in motivating industry to take advantage of the opportunities which are coming out of our laboratories.
Research and development is the hope for the future in industry: it is on that hope that we must place a great deal of reliance in this country, and it must be given the highest priority and the best of opportunities in the revitalising of our industry and our position in the industrial world. If we cannot motivate industry to accept and use new ideas, we are bound to be falling behind our competitors in the rest of the world, and we are losing a position which we should be able to maintain.
The whole nub of the Rothschild Report was how to get the best out of research and development. The recommendation of the report was that research and development should be placed upon
646
a contractual basis. I think that is now accepted by most people to have been a good idea, in spite of the cries of woe and dismay which appeared in letters to The Times from the medical world at the time of the publication of the report. In other words, what is really being asked is that people who are involved in research and development should come down from any ivory towers in which they may be hiding themselves and justify their research so that we cut back waste, duplication, and so on, and economise on the effort we are putting into research by focusing all our efforts upon right objectives.
However, as the noble Lord, Lord Kennet, has said, we must look at the situation now in midterm and ask ourselves whether we are in fact achieving this through the new contractor basis. For example, let us take the Agricultural Research Council. The Council should be approached, say, by the Department of Agriculture, Fisheries and Food, and suggestions should be made to the Council as to where the money available for research should go. At the moment I am not at all sure that that is happening, and I am not at all sure that we have evidence that the right questions are being asked at the right levels, or, indeed, that the system is being monitored as it should be.
The position of our research and development people seems to be that they are still having to search for objectives. I am slightly worried, because I have a feeling that the effort which is going into "shopping around" for objectives could be better spent in carrying out research. There is a danger that too much effort could be put by laboratories and research councils into looking for objectives and into finding sponsors for schemes which they feel should be investigated. In the end, they may take on too many small schemes and not enough big ones. I believe it was the noble Lord, Lord Kennet, who reminded us that there is less success with many customers than with a few large customers. I think we should carefully examine this aspect of the working of the new scheme, and on this side we should like to have assurances that in fact we are not proliferating small schemes at the expense of good big ones.
It seems to me that one of the most important things to do, if we are to be

647
satisfied that the new way of controlling research and development is going to work well, is to monitor its working. Rothschild suggested there should be a chief scientist and a controller of research and development, and I wonder how far this principle has penetrated Government Departments. Is it, indeed, working in every Government Department where research and development should be used, and is being used? Are we, in fact, applying the principle as it was meant to be applied?
At the time, this dual leadership produced in the minds of many the prospect that there might be an impasse owing to disagreement between the two heads of the scientific Departments of the Government, or of a Government Department, and that there might be a need for an arbitrator. My own view is that there is probably more need for a monitor, to see whether they are getting on with the job, than there is to see whether they are frustrating each other in getting on with the schemes which each of them is sponsoring. Perhaps this monitoring of the success of the new approach to research and development could be done through the little "Neddys", giving them perhaps more powers.
There was an article in the Financial Times of 24th November 1975, which suggested that the successful EDCs are those which have identified and diagnosed a specific industrial problem, and have mobilised the necessary resources and enthusiasm inside and outside industry to do something about it. Perhaps if these little "Neddys" were given a more precise role, if they were given clearer responsibilities in this field, they could provide the kind of monitoring which would be helpful. They might even be asked for monthly statements on what they are doing here, and could provide us with the kind of information which we might want to have on how things are going.
Nevertheless, although this country invests just over 2 per cent. of the gross national product in research and development—and in this proportion of investment we are exceeded only by the United States of America—why is it that we are seemingly getting such a low return for our effort? Japan, which has already been referred to in this debate, invests
648
half of the equivalent percentage of GNP in research and development and, apparently, her industry gets a more effective return than we do. Perhaps the real question here is one of motivation——
Lord KENNET: My Lords, would the noble Viscount not agree that this is connected with the fact that Japan has a very low defence research budget, and we have a very high one? And if you take the civilian research budget alone, we are behind Germany and France.
Viscount THURSO: My Lords, that may be true. I merely ask the question because these are the figures which I have. I do not have the answer to this one, and I have not been able to split up our investment in research and development precisely enough to be able to see whether the answer which the noble Lord suggests is, in fact, true. I feel, however, that it is worth asking the question and if that is the answer perhaps——
Lord KENNET: My Lords, it is in Tables 314 and 315 of the General Digest of Statistics 1976.
Viscount THURSO: My Lords, the noble Lord has at his fingertips information which I do not possess. There was a report which came out in 1976 by Arthur D. Little, The New Technology-based Firms in the United Kingdom and the Federal Republic of Germany: A Comparison. This revealed a possible reason why our return from research and development in this country is lower than that in Germany. If an inventor or an entrepreneur decides to market an invention or a new system, after doing some research and development on it, he has to contend with these figures. If he was operating in Germany, given that his total gross income was £236,450, his total income after tax would be £157,683. If he was operating in the United Kingdom, given that his total gross income was the same, he would receive £78,710; in other words, just less than £80,000 difference in return. It is that kind of taxation system on ventures which are dependent upon risk expenditure, which are dependent upon research and development, which are dependent upon casting your bread upon the waters, which not only affects the pocket of an entrepreneur but affects his whole attitude as to whether or not he is willing to take on the

649
struggle. Why should he pour money into something and take a risk, no matter how laudable the project, if when he markets it at the end he finds that all return for his effort is disappearing in tax?
The prime concern when we deal with research and development is: how do we motivate good ideas into marketable and successful products which will be of benefit to our society? The end of this report to which I have referred states:
"A tax system which motivates investors and entrepreneurs will mobilise much more technological entrepreneurship than any programme of direct Government assistance."
This is certainly one of the kernels of the problem, one of the problems of how we use the research and development which we get out of our various research councils and research bodies. But I would add to that that we must make certain that we are not losing too much in the effort in which research councils are involved, in looking for sponsors. We must also be careful of not drawing too sharp a line between pure and applied research, because in certain areas the presence of pure research alongside applied research must have value in the fact that the pure scientists and the applied scientists are sharing the same facilities and are exchanging ideas, and there is a contact between the pure side of their sciences and the applied side.
So at this stage I thank the noble Lord, Lord Kennet, for the opportunity which he has given us all to join in examining the working of our research and development since the Rothschild Report, and, like him, I shall await with interest the answers to various questions.
3.58 p.m.
Lord BAKER: My Lords, I rise to address your Lordships' House for the first time, with true diffidence. I ask for your indulgence and not only for today. I have realised with something of a shock, and only in the last fortnight since being introduced into your Lordships' House, that I have absolutely no experience in debate, and this in spite of many years of my working life spent in speaking. Many of them, of course, have been in a lecture theatre with a piece of chalk in my hand and a comforting blackboard behind me on which I could draw if words failed me, but there have also been
650
numberless committees and, very often, appearances before the Cambridge Senate House discussion, perhaps the most intimidating and unresponsive audience that one could have. But none of this has been real debate. My fear is that your Lordships' patience will be strained, because I may not be young enough to acquire the new technique quickly.
I have an additional anxiety today. It arises from studying the guide to procedure, which advises that a maiden speech should be short and unprovocative. Brevity is no difficulty, but I have always found it difficult to be constructive and unprovocative, particularly when discussing a subject which has been so much a part of my life: the important subject of the organisation of research and development which the noble Lord, Lord Kennet, has introduced. I am grateful to him, even if he has tempted me to address your Lordships' House at almost an indecently early stage in my apprenticeship.
The safest contribution that I feel I can make to the debate is the very simple one of going to what may be thought of as the lower regions of this problem to find out what research workers feel about the present state of research and development. I have taken the opportunity in recent weeks to consult friends and research workers in universities of various ages and kinds. Perhaps this is the only contribution that I can make, because I must confess that I retired from my university post years before the Rothschild Report appeared. However, I have to declare another interest. I am fortunate enough to be an active member of a research and development team in industry.
When I inquired about the position in Cambridge the first impression was that the introduction of the Rothschild arrangement had made very little change to the physical sciences, and I will confine my remarks to them—mainly to engineering and physics. The new arrangement in no way distorted the overall programme. Physics has remained entirely untouched. The bulk of the contracts coming to Cambridge from Government Departments are in engineering, metallurgy and materials science, and this may not be surprising. They represent about 10 per cent. of the university's outside

651
support for research and there has probably been a marginal improvement in the availability of funds.
When I discussed the problem with the individual research workers I found that the position was perhaps not so rosy. There was a distinct feeling that work arising from the Rothschild arrangement meant much unnecessary, irksome bureaucratic interference. The British civil servant appears to demand that the academic should adopt the Civil Service house rules. This may seem trivial, but there were real complaints about what seemed to be unnecessary delays in publication. In fact, the impression I gathered was that the university laboratories felt that they were looked upon as somewhat inferior auxiliaries of the Government Department labs. and that the share of the work that they had been given was almost window-dressing. It was distressing to me to find that these workers preferred to serve American agencies because these minor irritations did not exist there.
Another complaint in engineering was not so much of the Rothschild arrangement but of the effect that it had on the Science Research Council grants, or the procedure for obtaining the grants. There was a strong feeling that since Rothschild a dual standard had arisen as between physics projects and engineering projects. The physics projects were judged solely on their scientific quality. The engineering projects additionally had to satisfy the test: will it be useful? In my opinion, no research should be done in a university engineering department, or any other department for that matter, which is not going to lead to useful results. However, to decide whether a piece of work is going to be useful in industry, particularly if any long-term development is involved, requires a particular skill and an acute judgment which the research workers felt was not always available to the research committee. To me, this seems to be a question of customer quality and judgment, something that I will possibly refer to later.
The engineering department of the University of Warwick was, I found, enthusiastic about what are called CASE awards—Co-operative Awards Science and Engineering. The engineering department
652
thought they were so satisfying that they should supersede all others. But of course there were other science departments which did not agree. These awards are given for collaborative work between an industrial firm and a university. Again, success clearly depends upon getting a good marriage, and certainly upon customer quality.
Another interesting contribution from Warwick shows the handicap of success. This was on the computing side. Computing science is a very prospering, growing branch of science and, as we all know, it has been taken up very vigorously in the outside world. The result is that the salaries to the young available in industry are high. This is delightful to hear. On the other hand, it makes it virtually impossible for the universities to recruit research workers in computing science. The grant-giving bodies might take note of this, otherwise the excellent work which the universities have done may not continue so rapidly.
Durham was troubled mainly about research expenditure and the difficulty of obtaining money. I mention this point because it introduces an optimistic note. The economies that Durham have had to apply in the last four or five years have meant that the number of posts they have been able to offer has been smaller than usual. However, the quality of appointments has been extremely high. In the end, therefore, the amount of quality research may not drop. Universities with a more engineering bias, including Salford, were all in a very cheerful mood, and I must admit that from what I was told I gathered that in the last nine years there had been remarkable developments in the liaison between the universities and industry.
My short survey, if one can call it that, has emphasised quality. Your Lordships may think that I did not need to carry out such a survey to emphasise the fact that in the engineering field at least it is quality that we need. The customer/contractor relationship seems to me to be a satisfactory one. It is a natural one for engineers. It must be wonderful to have a wise, sympathetic customer. Looking back on my own past, in both war and peace, I find that many of my customers were fairly unimaginative, to say the least. I hope I am not being provocative

653
in making that statement. We need now a body of outstanding customers, leading engineers and industrialists who are sufficiently detached to take a broad, long view so that they can advise the Science Research Council and other Government Departments about what needs to be done, how to build up teams in universities and industry and how to link them together. If we are to have real innovation, research and development cannot be parted.
4.10 p.m.
Lord RITCHIE-CALDER: My Lords, it is a great pleasure and privilege to follow the noble Lord, Lord Baker, in his maiden speech. I have known of him for many years and we have a definite acquisition in his Lordship. I hope we shall hear from him on many occasions and that he will assist in bailing out those of us who are struggling to get the attention that science and engineering deserve.
I shall take the opportunity on this occasion to go rather beneath, above and beyond the actual terms of the Motion. As my noble friend Lord Kennet said, this is a pretext rather than an attempt to survey or scrutinise, or analyse in detail what has happened since the Rothschild Report. I believe what we are looking at now, as at the time of the Rothschild Report, is the crisis—or apparent crisis, because I do not accept it as a crisis—of the British situation, in the sense that we seem—and I repeat "seem"—to be losing out in many fields in which we once had precedence and priority. To me this is not true. I agree that the situation looks very serious, but we are in fact subject to comparison—and these comparisons, if I may say so to the noble Viscount, Lord Thurso, are always invidious. I can take your Lordships right through any number of scientific policy statements by any countries, or analyses of the equivalents of research and development, and always we find we can use them in whatever way we like.
The fact is that we know there is a malaise. It is not a crisis, it is a malaise. Something is wrong in the present British situation, and I think we all acknowledge that if is wrong. I am going to look hard at the nature of this malaise more basically than simply by reference to the Rothschild Report. Alfred North Whitehead said that
654
the greatest invention of the 19th century was the invention of the method of invention. I suppose we should now call that R and D—science-based technology. He was saying that the age of the lone inventor was over and that was true even of that archetype of inventors, Thomas Edison, with over 1,000 patents to his name, because he had the hunches, but he also had behind him the mathematicians, physicists and technologists at Menlo Park to make those hunches real. This was the flowering of the age of group research.
Innovation—which we are desperately needing to exploit—depends on the man, the method and the moment. The man may have the intuition, the insight and the shrewd observation; to turn that to practical account he must also have the scientific method to test his hunches and his observations. But the moment is just as important: the coincidence of events, of other discoveries, of new materials and of a felt need. The history of success is that those who seize these opportunities with sound scientific backing and the technical capacity to make them real, steal a march on their competitors and have commercial advantages until the imitators catch up. But basically it depends upon science. That is why I always react—and I am glad that the noble Viscount, Lord Thurso, also reacts—to the insistence (if it is an insistence) on the separation (if it is a separation) of science from technology. There is a spectrum: pure or academic science; basic science, which the French call oriented science and the industrialists call speculative science; applied science which is programmed science, and technology which is the transfer of laboratory discoveries to the factory floor. The pure and basic scientists are (if I may use the definition) the "makers-possible"; the applied scientists are the "makers to happen", and the technologists are the "makers to work". But it is a two-way traffic; it is a spectrum from and towards each end.
New possibilities come out of pure research like nuclear energy from the academic pursuit of knowledge of the nature of the atom, or out of basic research. I recall a simple but spectacular example, namely polythene, which was not being sought as a product but which happened as a result of the study of

655
organic reactions at high pressure—purely basic research and an exercise in curiosity. Or it can come back from commerce or industry, as specific demands for a new process or a new product. Where they meet is what, in this context, we are calling today R and D, and if the traffic lines are blocked through the failure of the scientists to communicate new possibilities, or the failure of industry to recognise the essential role of the scientist, or the failure of the qualified scientists and engineers—the QSE which is continually referred to in various publications—then profitable opportunities are missed and are lost to competitors who know how to read scientific papers and have the capacity to date that knowledge and to conduct the R and D. That is not true of a great many people in industry, certainly in British industry. We have our ideas—and I am not speaking about patented ideas; we have the intrinsic ideas being developed elsewhere because we ourselves have not had the insight or the foresight to take advantage of them.
We can contrive all kinds of ways of trying to institutionalise those possibilities, whether it is Rothschild or Dainton or the Advisory Council on Applied Research and Development of my noble friend the Leader of the House. We can have all these, and we can think of any number of them; and the more we think of them the more complicated our lives become. My noble friend Lord Kennet, who is conducting the study of Europe plus Thirty, would agree with me when I said, when I was working on global science policy, that it is demonstrably true that in terms of something called science policy the world becomes worse off the more complicated and the more diversified it becomes. In fact we are not talking about science policy in the sense that we are looking to what is possibly ahead; we are reorganising or indemnifying or rejigging what already exists.
I do not want to start another Rothschild, but I think that here we have a situation in which, from the Government standpoint we can sometimes succeed in looking through these various institutions to something which is an artefact of a system which is trying to do the job; but, I say very firmly, we shall be
656
driven back all the time to the question of education, the mainspring of it all.
I do not believe that the British have lost that originality which made us preeminent in science when Rutherford could produce 14 Nobel Prize winners from the Cavendish Laboratory; nor the scientific insight which made Fleming, a superb laboratory scientist, recognise the significance of the spore of penicillium on his laboratory culture plate; nor indeed the persistence of Frank Whittle in giving us jet power; nor the initiative we took in disentangling the genetic code in DNA and the molecular biology which accompanied it.
I go about among world scientists who now, as always, recognise our scientific work. We are underestimating it, not they. I certainly do not believe that we lack ingenious and innovative technologists who are conspicuous in areas where they are fully appreciated. That is demonstrable in this country in the chemical industry. No one in the chemical industry gripes about the low standards of their technology. But we hear with a persistence which we cannot ignore that there is by and large an unleavened mass of scientists and engineers in the industrial world, the grey men of science and engineering. Still we know of the unclaimed places in science and engineering faculties of our institutions of higher education. We are told that the reason is lack of financial incentive, that industry does not pay or cannot pay or is not in a position to pay attractive salaries. My Lords, I must say—and I think many of my contemporaries will sympathise—that I find this profoundly ironical because most of my life I have heard how Government research could not compete with the high salaries and glittering prizes offered by industry. I accept the fact that it is so at the moment, but it is a freakish situation. We always looked with envy, when we were looking for the social implications of science, at the industrial laboratories which could buy people who could not be afforded by Governments or indeed the academic world.
I want to ask where is the yeast that is needed for this unleavened mass, this grey world we hear about among these dredged-up people. The people I meet when I go around seem to be relatively intelligent, and yet every report we hear,

657
every criticism and complaint from industry is about these inferior scientific products. How are we going to leaven that mass? Where is the inspiration which triggers off originality? There are two factors we are looking for. One is the essential of science, which is curiosity, and the other is the essential of technology and of science, which is originality.
Where are the job satisfactions which once compensated for the not too generous treatment of qualified scientists and engineers? Where did they derive their satisfaction from? First, they stood much higher in the opinion of the people around them than scientists do today. Maybe they had an exaggerated respect, but at least they had a respect and a regard and a justification for self-pride which I do not think at this moment we are according. In the old days, when I had a lot to do with the Association of Scientific Workers, of course there was a gripe about inadequate pay, and we had progressive success in improving salaries. But research people in those days, even if they felt themselves almost Dickensian in terms of their incomes and their treatment, got a tremendous satisfaction out of what they were doing. It was the fun of finding out. Chesterton said something very profound:
"The world will never be short of wonders, but it may be bereft of wonder".
The moment we lose that sense of wonder, the sense of the fun of finding out what it is all about, we have lost a great deal of the inbuilt compensation of science.
Lord DAVIES of LEEK: My Lords, if my noble friend will allow me to intervene for one moment, I am fascinated by and interested in his point about keeping alive this sense of wonder. Those of us who have spent much of our lives in all branches of teaching know that that is one of the things of which some of us today feel bereft. We are surrounded by such wonderful artefacts—television, lasers, et cetera—and we take it all for granted. We need to recapture in our basic education this sense of wonder which the noble Lord has emphasised.
Lord RITCHIE-CALDER: My Lords, I am always grateful to my noble friend for underscoring something I am saying and which I shall go on to develop. One point I did notice—and I am sure this is
658
the experience of all my friends in the scientific world—was that the great scientists such as Rutherford and Gowland Hopkins were boyish in their enthusiasms even in their seventies. They got all the kick they wanted out of what they were doing. The reason was probably that they did not have to attend committees in those days. Indeed when I hear of all the committees and all the organisations we are setting up, including my noble friend's advisory Committee, I think "Who on earth is staying at home and minding the store? Who on earth is doing the research?" We are demanding so much of the creative people that we are now getting to this point.
I think we must go deeper. All great scientists I have known have acknowledged some teacher, some inspirational factor somewhere in their lives, who had applied the flint to the tinder of the young imagination and fired them with enthusiasm, stirred their natural curiosity and encouraged them—not drafted them, like a careers master—to go into science. This seems to me critical, and it is obviously more critical when you get this lack of inspiration in the schools themselves, because that is where it starts. You do not have to tell people where they are going; you fire their imagination, so that they find their own way there and they will be the more secure when they go their own way.
Something which depresses me, and has done so for a number of years, is the fact that in the old days the professors, the famous, eminent scientists, who were the big names on the academic marquee, always made their first charge, their first responsibility, their first-year students. There was the tinder to which they could apply the flint. That was where scientific curiosity was formed. I shall risk a generality, but from considerable observation I would say that nowadays the more eminent the professor of science is, the more time he gives to his final-year and his post-graduate students and the less time he gives to the firing of that imagination which a man of his authority and experience can give to the younger people. At that stage, by the time he gets to them in their final year and post-graduate years, the students have already been single-tracked into over-specialisation, about which we now hear endless complaints.

659
By and large we thought that we were producing the specialists which industry was looking for, custom-made for their requirements.
The explanation of the shortfall of qualified scientists and engineers is less a question of prospective earnings, people looking beyond their university to their careers, much less the question of future earnings, than the disenchantment of the young with science and technology itself. It is a sad and desperate situation we are in. They say that science—that is the Bomb to them—has produced the unacceptable risks of our society, and technology is destroying the environment. In the debate on the Rothschild Report itself some of us pointed out that it did not help when it placarded that customer/contractor concept which confirmed the feeling among students drifting away from science that science and technology was just big business, whether it was in Government or elsewhere. The true vocation of science, the fun of finding out, became tarnished.
I deplore, and I hope we all do, the retreat from or the denial of science. As I have told student bodies over and over again, if we think that science and technology are being misused, we must be educated in it in order to do something about it. We cannot form judgments about things that we cannot understand. I do not want to glamorise science. I am simply trying to redeem the whole debate on this issue from its structuralisation, and give it some sense of depth. To glamorise science can be counter-productive, even when students, however original and brilliant, find that a great deal of research is drudgery and that the findings are often trivial. My son, when at Cambridge University, said that he discovered that it was no good going on with nuclear physics when he could not date a girl by saying that he was at the Cavendish Laboratory. We have these vogues, but the fact is that a great deal of the work is drudgery.
None of us can or should suggest that the world owes the scientist a living. I spent a great deal of time trying to bring scientists out of their ivory towers—and I do not want to build ivory towers with moats again. They must earn their keep and contribute to the general well-being and prosperity of the community.
660
If scientists are to fulfil any of the hopes as expressed in the Rothschild Report or any other report and if we are to obtain the quality that we so badly need, we must regenerate a sense of purpose which is more than an exhortation about our present economic paralysis—because that one has to spell out quite differently. We must regenerate a sense of purpose which is more than the pay packet, however essential that may be, and put inspiration back into the schools and universities where the students are taught. I shall not deal with any aspects of the report, but I assure my noble friend the Leader of the House that, if the Government want any ideas about what to do with the advisory committee in future most of us could offer them a shopping list which would keep them very busy indeed.
4.32 p.m.
Viscount SIDMOUTH: My Lords, on the first occasion I venture to address this House I stand in need of the customary indulgence, all the more so because I also have to apologise for not having been in my place when the debate started as my car broke down on a particularly busy part of the Embankment. I have been a member of the Agricultural Research Council and am actively engaged in horticulture. Therefore, my remarks will refer specifically to agricultural research as such, although perhaps they may also have some relevance to other types of research. The effect of the Rothschild Report and of the subsequent White Paper has been to direct more attention and more resources towards the applied end of the spectrum. Certainly a high proportion of work commissioned by the sponsoring bodies has come into this area and I believe that that is a good thing. It is possible to be confused by semantics about "basic", "strategic", "applied" and so on, but the real point is that research today, is a continuous and integrated process.
I should like to cite one successful example from my own sphere of interest. Twenty years ago the target of anyone growing tomatoes in heated glass houses was to produce 50 tons to the acre. This was not an easy target to attain even if one had an excellent nursery and first-rate staff. Today the corresponding figure

661
is 100 tons to the acre and it is still increasing. That has been brought about by successfully drawing together—this was done mostly at Ministry experimental stations—the work of a number of different disciplines. For example, plant geneticists contributed hybrids which were capable of setting fruit under low light conditions and which also had two or even three-gene resistance to a number of very damaging diseases. On the other hand, we have the biologists, chemists and physiologists who have greatly refined our knowledge of the optimum environment needed by plants in order to produce the best results. Finally, we have some very helpful engineers who have produced controls which enable us to monitor and apply in a very precise and effective manner the various ingedients needed. I am talking of water, heat, nutrients, CO2 and a number of other things. I could cite another example by Agricultural Research Council scientists where there has been a very successful development of biological control of glass-house pests, again by an integrated programme.
I believe that research of the kind in which I am interested is not so much Fleming and penicillin but is more of a Manhattan project. I cited this example deliberately, although it is grossly out of proportion, because it is generally conceded that the United States of America is rather ahead of us in development work. It is true that it needs a rather different approach—more the approach of the entrepreneur—and therefore the kind of development I have in mind lies more on the side of industry than the laboratory. However, the hard fact is that it needs very great resources, often far more resources than that needed by the original basic research.
In our present condition our resources are extremely limited. For that reason I welcome greater concentration on development work, even if it means in the last resort some reduction in the resources devoted to basic research. Great effort should be made to enlist the co-operation of the industry itself—and here I refer to farmers and growers—particularly in extending the excellent work of the experimental stations. Some countries—and in this context Holland and Israel come to mind—have not been at all inhibited in augmenting their own research by reference to that which is
662
taking place elsewhere. At top level, science is already a highly international affair and I often feel that eminent scientists are much more truly members of the jet set than those who are referred to in the Press as belonging to that body. I am not sure that this extends as far as it should.
I have in mind in particular workers engaged in development and advisory work. For them the Ministry's Vote seems to be particularly meagre. I urge that it might be increased with great advantage, bearing in mind that at a practical level the process of cross-fertilisation, as it is sometimes referred to, can be particularly fruitful. We have been rather insular in this respect in the past but we should not allow this to inhibit us in the future. I recall visiting Israel some years ago and being impressed by the number of countries that had been visited by the many excellent advisory officers one met in the field. Many had been to Britain because, they said, the British were particularly generous in passing on information.
On the administrative side, I believe that the effect of the Rothschild recommendations has been beneficial, particularly in putting the relationship between the Ministry and the Research Council on a much better footing. A considerable contributory cause of this has been the creation of the Chief Scientist's Department of the Ministry, and what I and many people in the industry feel has been the excellent appointment of the first holder of that post.
In addition, there has been set up a rather elaborate structure known as the Joint Consultative Organisation; and many able people have been involved, and much good work has been done in this context. But I believe it is fair to say that on the whole the net result has been up to now disappointingly meagre. Perhaps one of the reasons for this is that we have been concerned—I speak as a member of one of the boards—up to now with what had been called identifying problems, but at this level (I am talking of the practical level) I believe that problems have an uncomfortable way of identifying themselves. There is great difficulty in deciding priorities as between one project and another, and I do not think that this organisation, as such, is really in any

663
position to carry out that function. I think that this is the crux of the whole matter. The resolving of priorities is not really even now on a proper basis.
Sometimes reference is made in a rather crude manner to the value at the farm gate of the product of a particular sector of the industry, but this is, after all, an historical comparison and not one which relates to the future. It also needs refining in that what we are really after is a contribution to the net national product, and therefore the farm gate value of, say, the livestock industry, great though it is, really needs to be adjusted by deducting the very substantial inputs of imported foodstuffs that go to produce that result.
Many scientists, and indeed farmers and growers, tend to fight shy of the dismal science—and I am probably among them—but I believe that in this case there is a pressing need for the setting up of an economic unit which will have the task of assessing the potential of the various projects as they come forward. I am not suggesting at all that it should be the body that decides these questions—as was rightly said earlier on by a noble Lord, this is ultimately decided on the scientific side—but I believe that their advice would be of value to those people who have to decide. This is a difficult subject, but it has been done in other countries and I believe that it can be done here.
4.45 p.m.
Lord WYNNE-JONES: My Lords, we have been extremely fortunate this afternoon in having two maiden speeches which have revealed to us what excellent new recruits we have to your Lordships' House. I was particularly interested in listening to the noble Viscount, Lord Sidmouth. I know nothing about agriculture. Unfortunately, I am not a horticulturist—my garden is always neglected. But listening to him was fascinating, because he gave us exactly the information which those of us who were critical of the Rothschild recommendations required. I personally much favoured the Dainton recommendations rather than the Rothschild recommendations. We were worried because, taking the Agricultural Research Council, I believe I am right in saying that the recommendation
664
of Rothschild was that whereas they had previously been spending a sum of the order of £17 million a year, they were only to be allowed to spend £4 million, and the rest of it was to be spent by the Ministry on the basis of this wonderful principle laid down involving a contractor on the one hand and the consumer on the other. But the noble Lord has at least given me a considerable degree of reassurance. He has not made a provocative speech at all. He has made a reassuring speech, and given us valuable information.
The noble Lord, Lord Baker, who fascinated me, as he always does, was extremely provocative, not because he was putting out ideas which demanded an immediate reply, but because they nearly made me break the Rules of the House by getting to my feet and interrupting him to ask a question. The noble Lord has this great facility, which I am sure he will continue to use in your Lordships' House, of stimulating, without at the same time being in the least degree abrasive. We look forward to speeches from both noble Lords in the future.
The subject matter, "Research and development since the Rothschild Report" is a fascinating one, but I could not help feeling, as I listened to the debate, that there are still many people who imagine that research and development are a magic cure for the ills of industry. No one who has taken any part in research and development would for a moment make such a rash and bold claim. That is not the purpose of research and development. In fact, the matter was summed up rather well in the report of the Select Committee on Science and Technology in another place, where they said that research and development cannot be regarded as the engine driving industry. Indeed, research and development are not always necessary to industry. It is perfectly possible to carry on an industry with a minimum of research and development.
I remember years ago I was asked by the old DSIR to be a visitor to the Coal Tar Research Association which had just been set up. The director of that Association told me that when he was appointed he went round to have a look at the various places in the country where coal tar was being distilled. He found

665
a little coal tar distillery, I think in County Durham, and it did every conceivable thing wrong. It had no by-product recovery; its distillation was atrocious. Every single thing that it did seemed to be wrong. He came back and thought: "Now I shall be able to write a really good report explaining how they ought to do the job, and make this little firm realise that they will gain enormously through the Research Association". When he looked into it he found that the distillery sold nothing except the pitch residue, which they sold to the county council for the roads. They were such a short distance from the main road that the county council liked to pick it up because they got it for next to nothing. That little distillery made a large profit without any scientific research, and one can be almost certain that scientific research would have ruined it.
It is wrong to imagine that the future our our industry as a whole is linked with research and development; there is no one-to-one correspondence between national prosperity and the percentage of income spent on research and development, and it is stupid to look for one. However, that does not mean that research and development are not highly significant for the development of industry. Nor does it mean that there are not whole industries which could not survive without it. One cannot imagine a pharmaceutical industry which based itself merely on selling Beecham's pills. One cannot imagine running a successful chemical industry without doing research into all the polymers and various products which are used. But when it comes to something like fabricating a boat, one may use modern materials and bonded plastics without having to set up a research laboratory; one can benefit from the research of others and concentrate on building boats. It would be foolish to do otherwise.
Sometimes firms have been forced into research activity. Just after the war, the CBI wrote to firms advising them to do research, and I remember being told by the appointments secretary at the University of Newcastle that there came to him one day a little man—little in the sense that he ran a small business—saying that he wanted a physicist. The secretary of the appointments board asked him why and he replied, "I am told that the physicist is
666
the best scientist". Being a physicist himself, the secretary said that he would accept that and asked, "But why do you want him?", to which the little man replied, "I am not sure what we want him to do, but the CBI has written to say that we should take on research people and I want to employ a physicist".
That sort of thing is idiocy in terms of research. It has no sense at all. What makes sense is when one is doing research into fields which are new and where, without research, one will not get anywhere; we would not get nuclear energy or modern aircraft if we refused to spend money on research and development. We could continue to build what Wilbur Wright built, but we could not build a modern aeroplane without doing the necessary research. Nor will we get new fuels without doing the necessary research.
The whole question we are discussing after Rothschild is bound up with considering what we are doing right, what we are doing wrong and what we should be doing better. I do not claim to have the answers, but I would say, as my noble friend Lord Ritchie-Calder said, that we must spend money on education. We will get nowhere unless we do that first. I was therefore glad to find several of the 20-odd recommendations in the Report of the Select Committee from another place on Science and Technology approaching matters in this way. For example, one says:
"The training of engineers and applied scientists suitable for employment in productive industry should be given much higher priority in the Government's educational policy."
Another says:
"The proposals of the Science Research Council for improvements in the training of post-graduates should be pursued with vigour and sufficient earmarked funds should be allocated at the expense, if necessary, of less pressing demands on the higher education sector."
Yet another says:
"Serious consideration should now be given to the introduction of higher maintenance grants for undergraduate and post-graduate students in the applied sciences and engineering."
Those are all important, but I suggest that it is perhaps even more important for the Government not to take the step which they have said they intend to take; that is, to more than treble, I think quadruple, the fees of post-graduate

667
students. If we wish to encourage post-graduate work and training, the worst thing we could do is to multiply by four the fees of post-graduate students. It may be said that they will get them back from somewhere, but they will not get them through the ordinary grants system; they will get them only if they are specifically given a grant for research, otherwise they have to pay the fees themselves.
If I were still capable of running a university department, and if I were running one and I got a research grant from, say, industry, and I employed on that grant post-graduate students, I should have to find out of that research grant this quadrupled fee for those students. That is absolutely counter-productive, and for the Government to raise the fees of postgraduate students in such a way is an outrage. If we are discussing what to do in the post-Rothschild period, I would say that for goodness sake let us realise that while research is not a magic cure—it will not do anything in the way of producing overnight a successful industry where one does not exist at present—without putting effort into research the future of this country is bleak.
I hope, therefore, that my noble friend will carry the message to the Cabinet that we in this House consider research to be important; that we consider the Rothschild proposals on the whole to have worked well—I did not think they would but I think that, generally speaking, they have worked well—but that we are alarmed when the Government do not pay enough attention to those factors which make possible the recruitment and proper training of post-graduates.
Baroness GAITSKELL: My Lords, while I sympathise with my noble friend's plea on behalf of students, may I ask him to be more specific about the kind of research we need at this time of economic stringency?
Lord WYNNE-JONES: My Lords, the kind of research we always need is well-conceived research; research that is thought out properly and carried through effectively. That is all I can say. I cannot say what we should research into; if I knew that I would not even have to do the research
5 p.m.
The Earl of SELBORNE: My Lords, I join with others today in congratulating our two maiden speakers. When, after many years of distinguished service, the noble Viscount, Lord Sidmouth, retired from the Agricultural Research Council, I was fortunate enough to be appointed in his place. As a horticulturist—albeit from a different branch of horticulture from the noble Viscount's—I listened with very great interest and sympathy to every word he had to say. We look forward to both noble Lords participating frequently in our debates.
In 1972, when Rothschild was debated and was the subject of considerable correspondence in The Times, as has already been mentioned, the great recurring fear of research workers was that the advent of the customer/contractor principle would lead to a disruption of research programmes. This was particularly so in agriculture, where a very large part of the national research projects was being conducted within the agricultural research service; that is, under the Agricultural Research Council. Probably it was to take the heat out of the situation and to assure the institutes that there was no danger of lack of continuity that a promise was made that, for three years, the transferred funds—that is, funds that would previously have been voted to the Department of Education and Science and which were now to be handed over to the Ministry of Agriculture as the customer in the contractor/customer relationship—would in turn be committed back to the ARC. This certainly helped to take the heat out of the situation. I might add that the second very important measure that was taken very quickly was a particularly wise appointment of a Chief Scientist.
Therefore, it is probably very right, as the noble Lord, Lord Kennet, said, to look now in mid-term or even early on in the Rothschild era at what exactly have been the effects. The three-year period is over so far as the transfer of funds is concerned and the contractor now pays for work done in the Agricultural Research Council. Some 55 per cent. of the work is now sponsored by the Ministry of Agriculture. This is indeed a very much higher percentage than is the case in other research councils. Potentially this change from working on funds voted as a grant-in-aid to

669
working on a commission and being paid on work done should, and no doubt will, have far-reaching effects. I imagine that it concentrates the mind wonderfully at the research bench to know that one will have to put in a bill at the end and that one will have to show what one has done in order to be paid.
In practice, looking at it from the other end of the spectrum—that is, from the point of view of myself as a farmer or perhaps a food manufacturer who is, after all, the ultimate customer—the farmer will not see, after three years, very many signs of the post-Rothschild era. He will, it is true, have an opportunity, through the Joint Consultative Organisation, at least to influence the choice of priorities. I believe that the noble Viscount, Lord Sidmouth, was correctly rather disparaging about some of the abilities of the decision-making process of the Joint Consultative Organisation. Nevertheless, I should say that this has been an opportunity that has been very much welcomed by industry as a whole—and by that I really mean the farmers and growers—to make its points of view known about what it feels are research priorities, and to know that the various committees will in turn be able to give advice to the sponsors—that is, the two departments of Agriculture and the Agricultural Research Council—is certainly something that has been much appreciated.
To give an example, I belong to the West Sussex Fruit Group and we meet once a year and make quite sure that we tot up a list of things that we think we particularly need on our farms in West Sussex and Hampshire. Although there are many committees through which this information and advice will go, one feels gratified to know that a machinery is available, post-Rothschild, for this to be considered by the sponsors.
The Joint Consultative Organisation has a plethora of expertise within its ranks—farmers, research workers, advisory staff, economists, food manufacturers and administrators. It was given the initial task of reviewing work in progress—national research in agriculture Of course, this was an enormous task and it is not surprising that from these very long deliberations some rather
670
disjointed recommendations came forward. After all, it seems only reasonable to say that the more boards and committees are appointed, the more recommendations are likely to be received. I think that this can fairly be said to have happened with the Joint Consultative Organisation. However, the value, which I think should not be underestimated, is that we have now had—I believe for the first time—a thorough review of the work-in-progress, not just in research institutes but also in the Development Service. This is certainly very useful—indeed, I believe one could fairly describe it as a fundamental use to the sponsors when they come to determine priorities in the future.
I imagine that the Joint Consultative Organisation will now pedal back a bit and will be asked by the sponsors to look at the specific areas in which they feel that a change of events, such as, for instance, a fuel crisis or increased progress in mechanisation, requires different priorities. Certainly, I cannot imagine that we on the Joint Consultative Organisation will be asked periodically to review the entire gamut of research.
I feel that there is one irony in the Joint Consultative Organisation and the committees to which one must draw attention. It is that there are so many of them—and very time-consuming they have been for administrative purposes, though this appears to be exactly what Lord Rothschild was seeking to avoid. I believe that in paragraph 24 of the report he refers critically and in his normal strident terms to the committees, groups and boards which the Agricultural Research Council and the other research councils spawn.
The second aspect which the farmer/grower will have noticed and will have welcomed and found most exciting is the increasing use of the multi-disciplinary approach to solving a problem. After all, if a contractor is told, "This is the problem and this is the research project. You put your people in to solve this problem or to work on it", he will have a very clear idea of exactly what he is asked to do. Whereas in the past, one might have had somebody working away in the ivory tower which has been referred to and not having the key to unlock the problem in question, if he is put together with someone from a different discipline

671
or, indeed, someone from the Development Service, most exciting things may happen as idea after idea comes out.
To give an example in a rather wider field in agriculture, very remarkable progress has been made in the last two or three years in the application of minimal cultivations and, likewise, in the use of forage maize. It is probably apparent to your Lordships that the face of southern England is changing rapidly as a result of the use of forage maize. The noble Viscount, Lord Sidmouth, referred to integrated biological control.
All these are projects that have benefited very much from having a project team given a specific brief and having a number of people working round it from different angles. I stress that the development service, as so often, has a very important role to play in this and it is very closely tied up with the research content of the work. So, to sum up on the credit side of the work which has emerged since Rothschild, I feel sure that there has been, or there can be now, a coherent national research programme emerging. We now have the information available as to what is in hand and it is being fed into the same computer. Admittedly, like all computers, it does not appear to lend itself very easily to both research and development and I gather that there are still problems in getting all the required information on to the one computer, but it seems to me to be an advantage to have this national research programme available in this form.
Expertise also is now available to research and development. Whether it will be able to help I believe now depends very much on the role that the sponsors allot to the Joint Consultative Organisation. I also think that an important bonus of the post-Rothschild era is that the research worker has an opportunity to feel justified in believing that his work is relevant. After all, if he has been asked and given a brief under the customer/contractor principle for the work, he can be quite sure in his own mind that his work is of relevance to industry. I think that one should also add that those people who find that they have not been commissioned should in no way feel that their work is less important. It simply
672
means that their work is less appropriate for sponsorship from the funds transferred to the Ministry of Agriculture.
Perhaps I may now refer to the disadvantages, as I see them, from the farmer's point of view. I think that one must, however, go into the paper work. I do not think that it is so much the research worker on the bench who is aggrieved and aggravated by the amount of work, although I accept that he must have more administrative work than previously; I am quite sure that it is the director of the institute who finds himself getting more and more submerged by administrative burdens. It is not just the customer/contractor relationship which has loaded the administrative content of his work recently; legislation has helped. But no doubt the preparation of commissions, sub-commissions, and now the reviews that are taking place is very time consuming indeed.
It must also be recognised as a disadvantage that this customer/contractor relationship does not easily fit the development service in agriculture. It may fit well to the research, but, as so often, development finds itself coming along behind research and being required to conform to a role that better suits research. After all, in agriculture development is almost always conducted by the Agricultural Development and Advisory Service, and, as that name suggests, the same officer is responsible for statutory controls, development work and advisory work. He comes on to a farm, and he could not tell one at the end of the day necessarily whether he had been giving one advice or helping with the development if, after all, one has a demonstration plot or a trial going on on one's farm.
There are no sharp boundaries here and sometimes the artificial restraint of trying to feed this development work into a project number for the sake of conformity with research is totally artificial and can possibly be most frustrating. But the test for the customer/contractor relationship will be in the future. We obviously do not expect a growth, as we had in the 1950s, in the research service again, but many years, one will assume, of a no growth situation. With regard to implementing the recommendations that are coming forward, I would say to the noble Viscount, Lord Thurso, that I certainly

673
cannot agree that they are scratching around for advice on what is to be commissioned because I think that the danger is that there are far too many recommendations, which are far too expensive to implement.
Nevertheless, if one is to have an opportunity to switch into new research priorities, this must be done as other research priorities terminate. With fewer new people coming into research because of the lack of growth, it means retraining. Bearing in mind that the agricultural research service, which expanded so greatly during the 1950s, has a heavy imbalance in the 40 and 50 year old age group, this is going to be a very great problem in agriculture. I suspect, although J do not know, it might well be a problem in other research councils. To retrain somebody in his 40s and 50s into possibly a different discipline, and certainly a different aspect of his discipline, will be a very serious problem.
The further problem which faces the agricultural industry is not so much of development, but more of promotion. The agricultural industry—it is a sad fact—is simply not exploiting effectively existing research and development findings. In horticulture the experimental stations run by the Ministry of Agriculture consistently show that they can in many cases get potential yields which are double the national average, and this covers quite a wide range of crops. The National Institute for Research in Dairying would say that if the work on mastitis control, which they have pretty well completed, were to be implemented effectively on the national farm it would go a very long way to paying for the entire research and development budget for agriculture.
So there is a problem here not so much of development but of promotion. How does one get this across? What is stopping farmers from using this very great expertise which is available? It may be lack of capital; it may be lack of confidence; it probably is both. But there are very many other reasons, and it must now be a high priority to identity just what are these restraints and to see how this matter can be dealt with. I hope that it will not be thought that the heavy work that has devolved on boards and committees as a result of Rothschild, to which I have drawn attention, in any way detracts from
674
the value that people are putting in to helping the sponsors identify research. I feel very strongly, as indeed I feel is the concensus today, that the customer/contractor relationship has worked, but if, in the words of the noble Lord, Lord Kennet, this is half time, I think there will be a really hard fought second half.
5.15 p.m.
Lord TEDDER: My Lords, in congratulating the noble Lord, Lord Baker, I should add that I, too, miss my blackboard and chalk behind me. I should like particularly to confirm or re-echo all that he had to say about the impact of the Green Paper on physical science at university. I should also like to assure the noble Lord, Lord Ritchie-Calder, that in Scotland anyway I still think it is the general tradition that the professor gives the first year lectures. I also wish to support all that the noble Lord, Lord Wynne-Jones, had to say about fees for post-graduates.
In thanking the noble Lord, Lord Kennet, for the opportunity to look back over the five years since those two long afternoons that we spent in this Chamber, I should say that it seems a long time ago. But how interesting it is to read the report of that debate again. However, looking through the vast number of papers that I collected for that debate I find nothing that I said on that occasion which I would wish to retract now. I remain convinced that the customer/contract principle should be applied only to very precise and narrow short-term projects. I also remain convinced that our greatest need is to encourage what Dainton called "strategic" research. I do not however think it is worthwhile to argue again the pros and cons of the Green Paper. A great deal has happened since then, and so many new problems now beset the scientific community that we must not waste our energy on semantics of what is "applied research" and what is "strategic research".
We all realise that the research councils cannot hope completely to escape the cuts in Government spending which the present Government, or indeed any Government, will find necessary to make. We therefore have to make sure that the more limited resources available to support scientific research are spent in the best way possible. It is little more than two

675
weeks ago since we were debating in your Lordships' House a Motion put down by the noble Lord, Lord Rochester, concerning the low esteem in which industry was held by many of our students graduating from university. In that debate I made a plea for increased participation by members of industry in the teaching and research carried out at universities. I argued then that it would help to improve the students' view of industry. I argue now that the same course of action would also help to promote good strategic research.
To a large extent research workers develop their ideas through discussion with their colleagues. If the academic world remains divorced from the world of industry, it is hardly surprising that some research products should become rather esoteric and divorced from any immediate practical application. In the debate five years ago I was at pains to emphasise how seldom any of the major advances in applied science originally grew out of any specific pieces of research of the customer/contract type. The big advances so often come from one research worker hearing of the problems of another in a quite different field and realising that the work he is doing may find application in, or possibly even provide a solution to, the problems of his colleagues.
With your Lordships' permission I should like to tell a story told me by my father. During the war the Ministry of Health sent out to North Africa a professor of anatomy—I think that he was only a reader in anatomy at the time—to study the casualties caused by bombing. The professor of anatomy was of course medically qualified, but he had earned his scientific distinction by studying the social behaviour of primates. This biological study had involved him in the extensive use of statistical methods. In order to tackle his problem he sought proper statistical data on the effects of bombing. However he found that the Air Ministry experts on bombing were not in fact using the most appropriate statistical techniques. The studies that my noble friend Lord Zuckerman was able to carry out on the bombing of Pantellerea, and subsequently on the bombing of the transportation system in Italy, had an enormous, and one could perhaps say a decisive effect on the way
676
that Allied airpower was used prior to the Normandy landings in 1944.
Now the point of this parable is to emphasise that the really gifted scientist does not have to be an expert in a particular field to make a vital contribution, and even a quite unexceptional scientist can often throw new light on the problems of his colleagues. I want to emphasise again how much can be gained by encouraging better contacts between scientists from industry and scientists from the universities. I am sure that the way to do this is by having industrial scientists as part-time teachers and research workers in universities, and university teachers seconded for short periods into industry. Thus, my first point is that if we are to use the more limited funds now available for research to the maximum profit, we should do all we can to encourage the maximum possible collaboration between university laboratories and industry. The so-called case awards, already referred to by the noble Lord, Lord Baker, developed by the Science Research Council, are one way of developing such collaboration. I am sure we must do all we can to find other ways.
The second point I wish to make, my Lords, is the great danger of laying down principles like the customer contract principle. It is inevitable that the civil servants—who, as noble Lords have already commented, are usually not scientists—who have to administer will regard these principles as fundamental truths which are to be applied across the board. If I may tell a current but cautionary tale which I hope will not be regarded as telling tales out of school, though I shall probably get into trouble for it none the less, just over a year ago the Science Research Council published a report by a Working Party which discussed the future policy of the SRC. The working party made a number of proposals, one of which was that there should be a greater amount of taught course work included in the normal Ph.D course. Indeed, the Working Party went so far as to suggest that the whole of the first year of a three-year research degree should be given over to course work.
At the Royal Institute of Chemistry, a meeting of all the heads of university chemistry departments in the United

677
Kingdom discussed this report and, as requested, sent to the SRC their comments on the working party's proposals. The heads of chemistry departments welcomed many of the working party's proposals, but they did not view the introduction of extensive amounts of taught course work as suitable for research students in chemistry. All research students in chemistry get some course work, and indeed a Royal Society report of eight years ago showed that heads of chemistry departments felt that some course work was essential. However, except in certain circumstances where specialist training is required in order to carry out the research, the heads of chemistry departments were unanimous in opposing extensive further introduction of taught class work. Your Lordships can imagine our surprise when, a couple of weeks ago, we received from the secretariat of the chemistry committee of the SRC a letter informing us that, as well as depending on the research productivity of the department, the allocation of quota research awards—and may I explain to noble Lords that that is what we depend on to keep our research going—would also depend on the extent to which the department included taught course work in its Ph.D training.
We subsequently heard that the Science Research Council itself have endorsed the Working Party's proposals, but I am quite sure that such a responsible body would not attempt to dictate to universities a uniform type of training which, though suitable for some branches of science, is totally unsuitable to others. In fact, investigation showed that the chemistry committee, who are primarily responsible for the allocation of research awards in chemistry, have not yet even discussed the matter. In other words, a major change in policy, contrary to the most authoritative advice available, was being implemented, not as the result of decisions made by the appropriate committee but by deductions made by the administrative officials based on principles enunciated by the council itself. I do not wish to appear critical of the officials concerned: what I want to do is to point out the dangers of enunciating principles or of laying down hard and fast guidelines. Different branches of science require different treatment, and at every stage flexibility should be our aim.
I think that many of us scientists reacted adversely, and perhaps over-reacted, to the
678
report of the noble Lord, Lord Rothschild, partly because the then Government had announced in advance that they endorsed the customer/contract principle and we were afraid that we would see its blind application in areas of research where it was totally inappropriate. I think events have proved that, though to some extent our fears were justified, certainly our worst fears were unfounded. We talk about scientific research as though it was one complete whole which could be treated in the same manner in all its fields. In practice, what we need is flexibility, and what is suitable for research in astronomy may be quite inappropriate for research in biochemistry. If I may paraphrase my noble friend and monitor, the noble Lord, Lord Todd, speaking in that debate five years ago: What we all want to see and what we all should be trying to get is a real partnership between Government Departments and research councils—a partnership that would be extended to the universities and to industry. My Lords, let us have no more fundamental principles, but let us realise that each branch of science needs to be treated in its own way; and let us have as little direction but as much collaboration as possible—collaboration among the Government, the Departments and the research councils, and, above all, between industry and the universities.
5.26 p.m.
The Earl of SHANNON: My Lords, it is exactly five years, almost to the day, since we last debated this subject. As your Lordships have been reminded, we spent two days on the debate then, and the fact that we are spending only one day today does not mean, I am sure, any diminution in the importance of this subject. We are today indebted to Lord Kennet for this opportunity, and for the opportunity to listen to the two excellent maiden speeches which his Motion has produced. Like the noble Lord who has just sat down, I looked back at that debate and I found that on that occasion I said most of what I would wish to say today. I therefore wish to make only an extremely short intervention this afternoon, and that will be concerned, I admit, with only one narrow and industrially related field.
The principles popularly attributed to Lord Rothschild are not new. For instance, the reasearch associations with

679
which I am connected, and which are, if I may point out, the specialist laboratories called for by Lord Kennet (although I must admit to a certain personal grief, as a member of the British Horological Institute, that there is not a watch research association), have operated on what we now popularly call the Rothschild principle for many decades—I think even before the noble Lord, Lord Rothschild, had evinced any interest in science at all. But these principles were eagerly adopted by the then Conservative Government, and fortunately this support was continued by their successors in office. Many of us expressed concern at the time that arrangements in line with these newly-adopted principles were being pushed through with quite undue and unseemly haste. In fact, the House of Commons Select Committee on Science and Technology was at the time constrained to observe
"…the excessive reliance which seems to be being placed on the so far totally untried requirements boards".
These requirements boards, of course, were the means by which it was intended to give implementation to the customer/contractor principle in industrial development.
At the time, Departments, under questioning, admitted that their hope was that each requirements board would gradually evolve its own character. I am afraid that at the time I regarded this as a polite way of saying that nobody as yet had defined in detail the objects of the boards, their terms of reference or their mode of operation. Whether or not this may have been an inauspicious start, there is absolutely no doubt that the result has been a roaring success, certainly in so far as the Department of Industry is concerned. Having said that, I must now embarrassingly declare an interest as being a member of one of those boards.
Particularly appropriate to our present economic situation is the transfer of technology into industry; and it is highly sensible that those bodies which apportion public funds for this purpose should, at least, be partially manned by representatives of the receiving end in order to define the most potentially beneficial areas where the public interest exists and where and how the public contribution, if any, should be made. I should like at this point, quite unreservedly, to pay tribute to
680
those civil servants who organise, service and participate in these boards. Not only, poor chaps, have they to overcome their horror at what must for them be the most heinous of crimes, the spending of public money by outsiders—and from their own Department's budget to boot!—but they have done everything to ensure that the whole concept is the success that it is. If the roaring of this success is muted—and it is—it is due to the dampening effect of the comparatively pitiful sums allocated for the purpose. Of course, at the present time of financial stringency the last thing one should do is to plead for more. That is why I have been very careful to use the word "comparable". I will not bore your Lordships with long lists of statistics, but would invite you to consider in general the relative merits of such an area of direct wealth-producing potential against many other areas of interesting, perhaps in some cases satisfying, but all too often non-productive areas of public spending.
The noble Lord, Lord Kennet, in his speech moving this debate mentioned the importance of international implications. In this respect it is interesting to note the outcome of a symposium held in Milan last May which was called at the instigation of Directorate-General XII of the Commission of the European Communities. The outcome was to the effect that the Commission should involve itself very much more closely with innovation in industry throughout the countries of the Nine. The result of this has been the recent decision (and one of the first decisions) of the new Commissioners, Mr. Commissioner Guido Brunner should be what one might call the supremo in this area which had previously been fragmented among Directorates-General III, V, XII and Directorate-General XIII which the noble Lord, Lord Kennet, especially mentioned. I think that Lord Kennet will be very pleased to find that Directorate-General XIII in all probability will be spearheading this activity most effectively.
My Lords, if I might now attempt to offer a small answer to the question of the noble Viscount, Lord Thurso, and, in a large way, agreeing with what the noble Lord, Lord Wynne-Jones, has said, it is very interesting to note that those countries which have shown the greatest economic growth in the past few decades

681
have been those who did not indulge in large programmes of pure, basic or speculative research—call it what you like—at great expense, but have put their resources into the development and intelligent application of known results into their industries. And the only way in which this can be effectively carried out is to make absolutely certain that there will be a reasonable and worthwhile return not only to the inventor but also to the industrialist who carries out that innovation.
At this point I should like to make reference to, and, I think, applaud, the work of the Science Research Council in that they have recently had far more of an eye to the industrial relevance of the work which they fund. I know that this has not received universal approbation, but it certainly does so from me. One only hopes that this attitude will continue and, if possible, involve industry even more closely in the assessment and the use of the work which the Science Research Council funds. I am not suggesting that pure research should be put into a strait-jacket but only into perspective. I have recently heard it said that pure research must be like a variable wind, pursuing an indefinite course which cannot be predetermined or directed. What can and should be done, however, is to monitor this variable progress and observe into what profitable directions it may be leading.
My Lords, if I may conclude with a recommendation or two for the future, may I suggest that a close link be formed between the research and development community—and, most especially, the development community and the National Economic Development Office. Industrial strategy is the latter's business and they ought to be informed of what is already, or what is imminently, technologically possible. Likewise, if the development community is aware of the direction in which industry is desiring to go, it can bend its efforts most appropriately towards that end.
5.37 p.m.
Lord BOWDEN: My Lords, may I begin by thanking the noble Lord, Lord Kennet, for making it possible for us to discuss this subject this afternoon, and may I with all due diffidence add mine to
682
the many congratulations extended to our two maiden speakers. I have sat at the feet of the noble Lord, Lord Baker, these 25 or 30 years and I find it extraordinary that I should on this occasion be congratulating him on his making the kind of speech that I have heard him make so often before. I hope he will often attend this House and give us from time to time a steer in the right direction. I am sure that his counsel will be extraordinarily valuable to us.
My Lords, so much has been said this afternoon that it is difficult for me to know where best to begin. I vividly remember the passions aroused by the original proposals of the Rothschild reforms, and when I was preparing for this debate I went around to talk to several people much concerned with the organisation of research in and out of universities and in and out of industry, and I asked what in their opinion was the effect that the Rothschild proposals had had. To my astonishment, I found that nobody could think of anything significant. Many people asked, "What were the reforms?" They all went on to make the same points: that the real problems of research today are produced by the inflation of money, by the shortage of resources and by the financial difficulties in which universities and industry find themselves.
These are dominating people's thoughts, and I doubt very much whether the Rothschild proposals have had any effect commensurate with the anxiety that they provoked at the time. I am sure that the fears that I myself voiced have not been realised; nor, do I think, have the achievements so confidently hoped for by the proponents of the reforms. I think that Rothschild has had far less effect than was hoped for or feared. Rothschild was trying to devise a technique which would improve the way in which this country applied and used its research; and it is to the ideas which were current at the time that we should return.
The reforms which have taken place in the Science Research Council had already been initiated before the Rothschild Report. We have established an Engineering Research Council. This had been proposed before Rothschild. Furthermore, they had already introduced civil servants into the various committees of the Science Research Council in order

683
to provide for that body the kind of advice which Rothschild in due course proposed. The system was already working very well. For that reason, the Science Research Council hardly noticed the effect of Rothschild.
The NERC, which has been fairly dramatically affected by Rothschild, has been affected not because of the short-comings of the Committee, but because there has never been anywhere in Government any body capable of giving it reasonable advice or of demanding from it particular solutions to particular problems. The NERC has been embarrassed—and "embarrassed" is the only word to use—by the fact that half a dozen Government Departments, each independently, have made requests of it and between them they are unable to produce any reasonable priority list.
We are still struggling, as we have always struggled, with the problem of making sure that industry progresses and develops along the way which will make the country more prosperous. We still have the same problems that we have always had. Research for production should be done in industrial firms if it is at all possible. It is wrong to expect either a university or a Government research institution of any kind to undertake research work which is going to result in a vendable product on a substantial scale. They cannot do it. Enormous organisations such as ICI have found that it pays to split down research work among relatively small groups and to associate a particular group of research workers with a particular factory where the product is being made. They do this in order to make certain that the work is done efficiently. Our national policy has, in large measure, destroyed the efforts that might otherwise have been made to carry out industrial research on a substantial scale.
I should like to refer to what I regard as the palmier days of academic industrial research, in Manchester in my institution some 40 or 50 years ago. The most distinguished engineer, a designer of rotating machinery in England, was Miles Walker. He was a professor in my institution and at the same time was chief designer for Metropolitan Vickers who made and sold the machines. The research work he did involved his students
684
who learned what research was like, in the same way as the medical student, once qualified, learns what medicine is like, by practising it. There is no other way a person can turn himself from a college graduate into a professional. Miles Walker dominated the design of electrical machinery for years. The consequence was that his department was by far the best and most productive in this country. Unfortunately, after he died the tradition could not be sustained. Even more unfortunately, the research department in Metropolitan Vickers, which had 900 people in it at one time, now has only 45, and most of them are curators of a museum of antiquities, a museum of what was once a great research establishment.
It is impossible to describe in detail the financial crises which have befallen what was once the proudest factory in Europe; but it is true to say that the number of employees has dropped from 27,000 to 7,000 in the past 10 years and the whole of its research programme has effectively been scrapped. Opportunities for collaboration between the university and what was at Trafford Park have totally disappeared. This contains a far more serious lesson for us than anything we can learn by contemplating the minor changes in the direction of academic research in so far as it is funded by the various research councils.
We have to make sure that what one can almost call the seamless robe which extends all the way from the original ideas in the minds of the scientist to the development of a product, is never destroyed. The research which led to the invention of Terylene by Doctor Whinfield, cost a few pounds. On the other hand, before ICI were able to make it and sell it, they probably had to spend £20 million on developing it. That is probably an extreme case, but it at least indicates that the development processes are enormously more complicated than research and most of the work must be done in industry.
Our great weakness has been that, by building up the great national research laboratories, we have deprived industry of the opportunity of doing work for itself which it could do much more efficiently and productively. Furthermore, we have never implemented what to me is a much more important document than the

685
Rothschild Report. May I remind your Lordships that in 1965 Sir Gordon Sutherland studied the interaction between the universities and the Government research establishments. He recommended that we in England should associate the teaching process with the actual operations of Government research on the largest possible scale, as they have long done in America.
As a result of that report, we were able to appoint the Astronomer Royal in Hurstmonceux, a professor in the University of Sussex. There has been collaboration between Southampton and Farnborough; there has also been collaboration on a small scale between Malvern and Birmingham. In no single case has the collaboration been as intensive as it should be, nor has it been followed through into the industrial world where vendable commodities have to be produced and sold.
We must not allow ourselves to be dominated by the niceties, the almost theological niceties, of the effects of the Rothschild Report. We must concern ourselves far more with the basic problem that British industry is often unable to fund the research that it should carry out. It is often obliged therefore to get research done in a Government establishment. There, in my opinion, except in rare circumstances, it is never done as efficiently or with the same urgent regard to time, which is so important, as it could have been done in industry.
If we can take a particular case, the difference between our atomic energy programme and that of the Canadians is very striking. The Canadians have a small group of people who have produced far more efficient nuclear power stations than we have done. The enormous installation at Pickering near Toronto is still the largest in the world. It is the only example of a nuclear power station which came on stream on schedule, within estimates, and which has worked reliably since it was first switched on.
The reason is basically that the same people who started the research went right through the manufacture and installation, and they have been associated with the project throughout. We in England separate totally the original research, carried out perhaps at Harwell,
686
the development, carried out at Risley, and the manufacture which might be carried out anywhere in the country. The failure of the process of handover has been largely responsible for the relative inefficiency, the delays, the extravagance and the growing disappointment in our atomic energy programme.
This is a far more fundamental example of what we might call the customer/contractor principle. If a man knows when he starts on his research that, ten years later, he is going to be responsible for a power station that does not work, this gives him a far greater incentive to efficiency, a far greater idea of the importance of his work, than he would ever get merely by being given a contract to undertake a piece of work on schedule for somebody else who cannot precisely specify it.
For many years we have been carrying out some fundamental research of great significance, but we have never realised that the great wealth of America came before the war to a country which boasted that it relied on Europe for its pure research, bought it from Europe and applied it. It was only after Vannevar Bush wrote a report for President Roosevelt pointing out that in his opinion Europe could never again undertake pure research because it had been devastated by war, that America started to undertake pure research on a large scale. There is no doubt, in my opinion, that the achievements of America in developing ideas should be a lesson to us, and should make us realise that we cannot hope to become wealthy by spending, as we are doing, more research on military operations and on defence, as we have been doing for 20 years or more, than any other country in Europe, and, at the same time, spending less on commercial research than most of them—less on roads, on telephones, on hospitals or on houses. Research into military hardware is no way to make us prosperous. There is no possibility that the Rothschild Report, or any other report, can change the nature of the organisation which produces this devastating and inefficient result.
5.51 p.m.
The Earl of HALSBURY: My Lords, before I come to the subject of the Motion,

687
I should like to join with other noble Lords in thanking the noble Lord, Lord Kennet, for giving us the opportunity to debate this matter this afternoon, and to add my congratulations to my noble friends Lord Sidmouth and Lord Baker. I, like the noble Lord, Lord Bowden, have also sat at their feet in years gone by, and I am sure that we all look forward to seeing them on many occasions in the future and listening to their wise counsel and advice.
The last time I addressed your Lordships' House on this subject, my views were rather like those which have been expressed this afternoon by the noble Lord, Lord Strathcona. I felt that the Rothschild concepts had ceased from mental strife, his sword had gone to sleep in his hand and he was going home to hang it up on the wall with four-fifths of the job unfinished, and with a non-novel concept launched at the Science Research Councils. That does not mean that I disagree in any way with my noble friend Lord Shannon. I am so glad it has been a success in the context of the Industrial Research Associations. It is exactly what I should have expected.
I also noted with some little nostalgia that this was my swan song on the subject, as I should have completed 20 years' service with the Department of Scientific and Industrial Research as a member of its Council and later the Science Research Council; and that I should be put out to grass at the end of the academic year. However, man proposes but God disposes, and when I found myself a free man the Medical Research Council, in the words of the Godfather, "made me an offer I could not refuse". So in the post-Rothschild era I found myself once more swept up into research council affairs.
I do not know what happened to other branches of Government science when the curse of Rothschild descended on them, but in the words of Thomas Ingoldsby, so far as the MRC is concerned:
"Never was heard such a terrible curse!!
But what gave rise
To no little surprise,
Nobody seemed one penny the worse!"
or a penny the better, either, my Lords! The main sufferers were those senior civil servants who got the equivalent of honourable ulcers in shifting the furniture around at the top level. Here I must
688
say a word about the effect on our loyal civil servants of asking them to dismantle their bicycle into its component parts and then reassemble it after exchanging the back and front wheels. It is not a useful use of their time to ask them to be the architects of something which represents a distinction without a difference.
The reason why it made so little difference was that part of our quondam residues were handed over to the DHSS by the Treasury, who handed them back to us and said: "Carry on, sergeant-major. You have always done what we wanted: just go on doing it." That was not because the DHSS had no ideas for research, but because the ideas they had were already being implemented. Before the change-over, relations between the Medical Research Council and the DHSS or its predecessors were friendly, informal and elastic. They are still friendly, but are now more formalised and have therefore lost a little of their elasticity. The DHSS are now beginning to generate policies of their own, and that may be a good thing. But the rigidity introduced into the system is simply the price paid for that good thing, if you think it good. All design is a compromise: if you want more of something you have to pay for it with less of something else.
Let me explain what I mean by the element of rigidity and how one manages the finances of a research council. It is rather like banking. Today at 2 o'clock, yesterday's call money was repaid, together with last week's seven-day money, last month's 30-day money and last quarter's 90-day money; and the bank has become more liquid to that extent. It can now re-lend that money, though not necessarily in the pattern which prevailed at the time of its original lendings, and by varying that pattern in terms of its liquidity, the bank helps to manipulate and manage the money market. On the terminal anniversary of any given grant, whether it be a grant of one, two, three, four or five years, the sum of money belonging to this year's vote falls free for redeployment, and the task of the research councils is to manage that situation rather as a bank manages its liquidity, so that it is not cut short at a time when the Government, like the solar sun-spot cycle, is going through one of their periodic phases of economy and retrenchment.

689
You do not want to get caught short of redeployable money at that stage. If you do, then you become subject to a device beloved of economists called "the multiplier". The effect is that with a very large amount of fixed expenditure and the modern habit of giving tenure to comparatively young people, it makes them almost unredeployable. I am not at all sure that it is a wise thing to do, but the Government have agreed to do it and that represents a very large fixed charge for our own internal employed people on the Medical Research Council. In fact, only about 35 per cent. of our annual revenues are available for grant, and the effect of that is that if we have, say, a 10 per cent. cut imposed on our overall expenditure, it will be a 30 per cent. cut (with the three-fold multiplier) on the freely redeployable money to keep new projects going. Of course, it is always the new and the exciting that gets nipped in the bud whenever there is a Government economy wave.
"The hungry sheep look up, and are not fed ",
to quote Milton. The hungry sheep are the professoriate, who rely on the research councils for the selected component of their research budgets.
Under the old dispensation, we went primarily for a balanced research programme with a high degree of elasticity, so that on a request from a body like the DHSS to change course somewhat, you could do that by a supplementary grant here and a bit of attention to something else there, and the work got done without any very major commitments. But now that we are beginning to get a certain amount of research policy coming through from the DHSS, some of the elasticity goes out of it because they want to be able to see what we are doing for them and, in particular, they come under different pressures from the Department of Education and Science. For example, the current expenditure cut applied by the DES on the Medical Research Council is 0.1 per cent., but on the proportion which comes through the DHSS, it is a cut of 10 per cent.; and that is quite a serious factor. That is because the pressures in the DHSS are different from those in the DES, and ministerial zeal can, of course, have its embarrassments. For instance, we may be asked to put up a permanent establishment to research into something or other that happens
690
to be the temporary enthusiasm of somebody or other, and then we are stranded with a fixed commitment for a long time to come.
"You pays your penny and you takes your choice", and we are masters of our own affairs; and, as I have said, all design is a compromise. But if I were asked to sum up the four years' experience of the post-Rothschild era on the Medical Research Council, I think I would say: "The mountain groaned and gave birth to a mouse". In the Latin original, it groaned and gave birth to a "ridiculous mouse ", but I am not going to take things quite that far. I do not think the present situation is ridiculous. It was not one which I particularly wanted to achieve, but we have learned to live with it.
All I can say is that if I had a free choice between the system as it was and the system as it now is, I think I should have preferred to stick with the system as it was, because in relation to the system man can occupy three statuses. He can be its master, its slave or its saboteur. I shall not now deal with the saboteurs, and I shall not deal with the slaves. But if you really know the system, and if you can master it as a skilled rider masters his horse, you can ride it where you want in any direction that you want it to go, because you are the master and the horse is your servant. It is a great mistake to think that if something is not working ideally you have got to shove the furniture around and reorganise everything at the top. The point is to get the people to master the system, and make it go where you want it to go.
6.1 p.m.
Lord PEART: My Lords, may I say to the noble Earl, Lord Halsbury, that I listened attentively not only to his humour, but to his wise words. After all, he said, it is not really so bad as it seems. I know that he spoke about a mountain producing a mouse, but I think he exhibited a realistic attitude to what we are debating today. After all, we are debating policy in relation to Rothschild, and we must concentrate our minds on that. This has been a fascinating and, for me, at least, an educative experience. It has been an example of the House of Lords at its best, bringing its all too often unacknowledged expertise to bear on a subject which,

691
although vital to this country's future prosperity, is far too infrequently discussed. I know that we have previously had two days of debate, but I am glad that my noble friend Lord Kennet took the initiative here and I think he made a stimulating speech. He asked me a rather long list of questions, which I could not possibly answer in a debate of this kind. I will answer only one. He asked me about my responsibilities in relation to maritime research, and wanted to know whether my new position enabled me to fill the gaps. I would say, Yes, and I hope that in time we shall see the fruits of that. But that is another matter.
We have had excellent contributions from noble Lords with a vast range of experience; from esteemed academic scientists and professors—and, my goodness! I feel very humble, as a former young undergraduate, when I see the array of talent behind me and in front of me; I really shudder—and also, which is more important, from industrialists with a knack for achieving practical results. I am glad that we had contributions from those connected with that great and most efficient industry of ours—agriculture—and there were also two maiden speeches to which I will refer. I was very proud to hear some of the remarks made about agricultural research and the part that it plays in that industry. That is not to forget the speeches from those who may not be specialists. I think of the noble Lord, Lord Ritchie-Calder, and I remember years ago—if he will forgive my saying that it was years ago—his great series of articles, and how he tried to educate the British public to the importance of science and its application; and not only the public, but politicians and others, and sometimes even scientists who can get too wrapped up in their own little cocoon, or their ivory tower, pursuing academic interests. So we have had a tremendous debate.
I could go on picking out speeches, but I am happy to add my congratulations to those already given to the noble Viscount, Lord Sidmouth, and the noble Lord, Lord Baker, on their most interesting maiden speeches. As we all know, the noble Lord, Lord Baker, was a distinguished professor in mechanical sciences and head of the department of engineering at Cambridge University. What a delight
692
his maiden speech was!—he need not apologise for it—and we shall look forward to hearing him in other debates in this House, not just those on science. I was also glad to hear the noble Viscount, Lord Sidmouth, who succeeded his father. I pay tribute to him. He is interested in science, in agricultural research, but he is also a practical farmer. I am glad that he served on the Agricultural Research Council. It is the best organisation that came out of the Ministry of Agriculture, and I am glad to say that I was the Minister responsible. But I am being rather modest! So I am happy to congratulate both of them on excellent maiden speeches, and I am sure that I echo the views of the whole House.
A number of criticisms have been made of the arrangements for research and development policies, so may I say straight away that the Government remain committed to the customer/contractor principle. Perhaps it would be helpful if I explained the reasoning which led the Government to take this decision, following the Rothschild Report in 1972. The Rothschild Report is sometimes construed—and, indeed, was so construed by many in the debate in this House five years ago—as representing a conflict between the Haldane principle and the customer/contractor principle. I think that this was unfortunate and is, in any case, misconceived.
At the time of the Haldane Committee's Report—and we are now going back a long time—some 50 years ago, scientists were relatively few in number. The Government machine was not well adapted to handle the kinds of advice which scientists and technologists can give; nor was it well equipped to influence the direction of their work. The need to which Haldane addressed himself was the need to get science mobilised and to give it adequate resources so that it might, at some time in the future, play a full part in national affairs. The Haldane principle achieved that aim splendidly. We now have a scientific capability of which we can be proud, and which is, indeed, the envy of many other countries. Let us not be too pessimistic in our comparisons with other countries, in Europe and elsewhere. We have great achievements, although of course we need to improve.

693
The need, to which Lord Rothschild addressed himself, is the need to ensure that this scientific capability is deployed in a way and on a timescale such that the nation can derive maximum benefit. That may seem trite. The customer/contractor principle is a device for ensuring, on the one hand, that the science community knows what the Government want to be done, and, on the other hand, that the scientists can tell the Government what is technically possible. What Lord Rothschild wanted to do was to encourage a dialogue between governmental customers and scientific contractors to the mutual benefit of both Government and science. The Government considered this aim both timely and ambitious, and consequently announced that they would adopt the customer/contractor principle. However, the Government stressed that they did not necessarily endorse all of Lord Rothschild's recommendations concerning implementation of the customer/contractor principle.
There has been, in fact, a considerable degree of flexibility in the way specific Departments have responded. Some Departments (such as the Ministry of Defence) were operating the customer/contractor principle well before 1971; others have had more difficulty in establishing appropriate mechanisms. It is perhaps too early to judge how effective some of these are. In debates on this topic, I think we should distinguish clearly between the principle—to which the Government remain firmly committed—and the implementation of that principle where we still have much to learn. I think it would be unfortunate to stimulate a major re-examination or reorganisation of R and D at the moment. Pulling up a plant to have a look at its roots at frequent intervals is not the best way of monitoring its health. A period of stability was promised, and that period should extend for a few years yet.
If I may turn to the research councils, in 1972 much concern was expressed over the consequences of reorganisation on the research councils and their staffs and, in particular, over the result of transferring part of their funds to Departments. In practice, the good judgment and good sense of the customers (departmental chief scientists) and the contractors (the research councils) has meant that the reorganisation has gone relatively smoothly. Where, as in the case of the Agricultural Research
694
Council and the Ministry of Agriculture, Fisheries and Food there has been a 1:1 relationship, things have been easiest. Perhaps that is why they have been successful; I do not know. There has been a suggestion that the problem has been quite different from that of other research councils. Elsewhere, however, when a number of Departments are involved as customers, things have been much more difficult.
It is certainly true that there has been an increase in the number of committees, research liaison groups, research requirements boards and so on, and an increase in the amount of paper work. In so far as this has led to a greater understanding on the part of both the customer and contractor of each other's needs and problems, then the benefit has outweighed the cost. Nevertheless, the research councils are concerned at the cost, estimated at about £500,000 a year, which is an unwelcome addition to their commitment at a time of severe pressure on the science budget. Efforts need therefore to be made to keep the cost to a minimum. There is also a loss of scientific activity because scientists have to devote considerable time to justifying their programmes, arranging commissions and holding discussions with the customer Departments. This is necessary work but it can be reduced if progress can be made towards fewer, larger and more long-term commissions.
At the level of the research institute, sudden cuts in spending impose stresses which are sharply increased by the restrictions set by commissioned projects. These seriously reduce the ability of directors to adjust and to manage reduced programmes. Where these involve both departmental and Science Vote funds—for example, the Department of Education and Science—there is a danger that the only available field for economies is in the longer-term, and more basic, work which is not the subject of specific commissions. All research councils have been affected in this way in the past year and there is a continuing need, which the Government accept, to ensure that we do not, in the short term, make cuts which affect the long-term viability of the support for basic, curiosity-orientated science provided by the research councils.
The planning machinery set up by the Advisory Board for the research councils,

695
although placed under great strain in this past year, has coped very well with this situation and I should like to pay tribute to their skill and understanding. Lord Rothschild, in his report, laid great stress on the need for discussion and on the fact that creative ideas are at least as likely to originate within the contractor's organisation as among the customers. The debates were given an added edge by the unfortunate necessity to cut public expenditure. I know that several noble Lords have referred to that point—among them the noble Lord, Lord Wynne-Jones, who thought how wrong it was to cut back public expenditure. I am glad, though, that the noble Lord stressed the importance of education, a point which was also taken up by other noble Lords.
We should not forget that during the past four years successive cuts in expenditure have influenced the conduct of research and development more than the administrative changes adopted as a result of Cmnd. 5046, and it would be a grave mistake to ascribe all the difficulties of these years to Lord Rothschild and his principle. Indeed, without these organisational changes things might well have been worse.
It is interesting that a recent French study of the effects of the Rothschild reorganisation, which was by no means uncritical, concluded:
"The customer-contractor principle works"
and
"the co-operation between the scientific bodies, in particular between Ministries and Research Councils, has been improved".
The report also points out that biomedical research in particular has benefited from the greater degree of planning and from the switch, in the distribution of the Science Vote, from big science (which means high energy physics and astronomy) to little science (which seems to refer to everything else).
We should also remember that, in any case, the real test of Government intervention in this area, as was pointed out by the noble Lord, Lord Zuckerman, in the House of Lords' debate in 1972, is not,
"the way our Government scientists are managed"
but
696
"the choice of the major projects on which they are engaged".
Scientists should become, as Lord Zuckerman suggested,
"an effective part of the policy-making machinery".
I know that there are strong criticisms of the customer/contractor concept but, judged against this latter criterion, I think the establishment of effective Chief Scientists, and their staffs, in Departments represents a significant advance. It could be argued, however, that this by itself is hardly sufficient to meet Lord Zuckerman's point. Indeed one criticism of the way in which Cmnd. 5046 implemented the Rothschild proposals was that it left a "gap in the centre".
Experience has shown that there is some force in this criticism. In a memorandum to the Science Sub-Committee of the Select Committee on Science and Technology my predecessor, my noble friend Lord Shepherd, announced further organisational changes designed, in part, to meet the criticism. One important development was the establishment of a new committee, comprising Departmental Chief Scientists and Permanent Secretaries, under the chairmanship of the Secretary to the Cabinet, Sir John Hunt. The net effect of this is to make the Chief Scientists an even more effective part of the policy-making machinery. In addition, the creation of a Chief Scientist's post in the Central Policy Review Staff has been a further attempt to reinforce the centre. I refer to the appointment of Professor Ashworth.
A second major criticism of the Rothschild proposals has been that they were too much concerned with research and did not take sufficient account of development. Although Government support for basic science is, of course, qualitatively all-important in quantitative terms, it represents only some 15 to 20 per cent, of the total support given by Government to science and technology. It will probably never be possible, in view of the many other factors involved, to tell whether the adoption of the customer/contractor principle has helped in the Government's reaction to this state of affairs.
Since 1972 we have become more conscious of the complexity of the innovation process, which involves far more

697
than research and development. We are also more aware of the manifold ways in which Government actions affect it. Most importantly, we are very conscious of the over-riding need to harness the work of Government research establishments to industrial innovation. The operation of the Research Requirements Boards of the Department of Industry and the increase in the commercial use of the facilities, not only at Harwell but also at the National Engineering Laboratory and other Government establishments, represent part of the Government's response to this overriding need.
More recently—and this is a further part of the organisational changes announced by my predecessor—we have set up, under my chairmanship, the new Advisory Council for Applied Research and Development. A number of distinguished and knowledgeable industrialists and others, from outside the Government service, have agreed to serve on this council. I am confident that they will enable us to derive greater benefit from the wealth of scientific and technological expertise which resides not only in the industrial and other research establishments of Government but also in the universities and research associations. Of course, if this expertise is to be fully effective it must be concentrated and selective. The work of the new council must form part of the developing industrial strategy of the country as a whole. Consequently, the work of ACARD, if I may call it that, will be linked closely with the parallel studies being undertaken by the sector Working Parties of the National Economic Development Council. I look forward to a close and fruitful collaboration between these two organisations, the one working, as it were, horizontally, looking at the R and D effort across the whole industrial scene, the other vertically at all aspects of particular sectors.
There is, I think, general agreement that the advisory board for the research councils has played a valuable and helpful role in co-ordinating the efforts of Government Departments, universities and the research councils in support of fundamental science. I hope that ACARD will play a similar role in support of the applied sciences and technology. I know that my noble friend Lord Kennet mentioned the European Economic Community. ACARD will also consider the
698
question of our increasing involvement in the EEC. At present, as he probably will know, there is a unit, the Europe Industry and Technology Division in the Department of Trade which co-ordinates the interests of Government Departments in Brussels. The research councils, have, of course, their own channels to Brussels in addition to those provided by Government. I refer, for example, to the European Science Foundation, the Royal Society and other professional bodies such as the Federation of European Biochemical Societies. At official level this all works very well, but, as with anything new, it takes some time for all to get used to the arrangements.
I would not accept the criticism that we do not get our fair share of the EEC R and D budget but, equally, I would accept that we might do more to assist some sections in the United Kingdom community to be more aware of what is going on in Brussels. As I have said, this is one of those broad matters which falls within the terms of reference of ACARD.
It is thus clear that the Government are aware of the continuing need to keep the workings of the Rothschild proposals under review and of the necessity of ensuring that their implementation does not lead to excessive and unnecessary bureaucratic delays and expense. But I think it is also necessary to point out that research and development is inevitably subjected to many stresses and strains. We must resist the temptation to use the customer/contractor principle as a scapegoat.
My Lords, it is already clear that the benefits of the adoption of the principle already outweigh the costs in most areas. As the system becomes better known, and as the dialogue that Rothschild was anxious to foster becomes more established, these benefits will grow and the costs diminish. Even now there is a lot of good work that has happened that would not have happened had it not been for these changes. I will just quote one beneficial example of the working of the customer/contractor principle, namely, the geological work on the United Kingdom Continental Shelf undertaken by the National Environment Research Council.

699
Here the current programme undertaken by the Research Council's Institute of Geological Sciences is largely funded by the Department of Energy and it is running at an annual amount of over £2 million. The Department supplements this, when necessary, to enable extra surveys and boreholes to be undertaken and data to be purchased. This year the additional injection of money has been over £1 million. The work has been directed so that it has a close relevance to the problems of hydro-carbon exploration and exploitation, and particularly to the requirements of Government in this field.
This has led to increasingly close collaboration with Government and also with industry which provides valuable raw data, as well as a commercial approach, to the research work to the benefit of all parties. An additional benefit is that the expertise within the Institute of Geological Sciences is, as a consequence, being continually built up in, for example, the fields of seismic interpretation and micro-paleantology; and the other research activities of the Institute have benefited greatly from this aspect of the commissioned programme.
So, to conclude, I will not get myself involved in any controversy over what has been argued about today. I should like just to reiterate what my predecessor said to the Select Committee on Science and Technology last July. He spoke about the need for the Government to keep the working of these arrangements under close review. But we should remember that, although it is nearly five years since the White Paper was published, it is much less than that since the arrangements have been operating. I believe we have had an extremely constructive and stimulating debate. If I have missed the contributions of any noble Lords I shall certainly, where necessary, write to them on any particular point. In my view this has been a very good debate.
6.25 p.m.
Lord KENNET: My Lords, I am sure the House will be extremely grateful to my noble friend the Leader of the House for winding up the debate in so full and helpful a manner. He was right to remind us of the appointment of Professor Ash-worth to the Central Policy Review Staff,
700
who in a sense fills the hole in the middle of the doughnut, consisting of a ring of scientific advisers in all Ministries standing in a circle but with a gap in the middle. I hope that between them they will fill it.
As to the French article which came, unlike this House and unlike my noble friend, to the conclusion after only three years that the customer contractor principle works, this was, I believe, an article in the House organ of the DGRST—the Délégation Générale de la Recherche Scientifique et Technologique. Ever since the days when I myself used to follow courses at the Ecole Polytechnique in a borrowed uniform, I have been aware of the oscillation between what Arthur Koestler called "French 'flu" or the Anglo-French love affair, and the opposite—the Anglo-French hatred affair—and it seems to me that at the moment we are heading swiftly towards the phase of the Anglo-French love affair, at least as regards the administration of research and development. I should like just once again to warn against it.
I hardly need to add my own voice to those which have been raised in praise and thanks to the maiden speakers, both practical and both bringing to this House experience from the field we are discussing, than which no sort of speech can be more valuable. This is not the kind of debate where the introducer has to say anything particular in winding up. Therefore, I should like to thank all noble Lords who have taken part in the debate, and I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

CONCORDE: KENNEDY AIRPORT LANDING RIGHTS
6.27 p.m.
The Earl of KIMBERLEY The Earl of KIMBERLEY rose to ask Her Majesty's Government, in view of President Carter's refusal to intervene with the New York Port Authority about Concorde's landing rights at Kennedy Airport, what action the British and French Governments propose to take. The noble Earl said: My Lords, on 20th January of last year I asked a Question in the following terms, that should the decision go against Concorde landing in New York, would Her Majesty's Government be in complete harmony

701
with the French Government as to what they will do? I said that it would be no good shutting the door after the horse had gone. In his reply the noble Lord, Lord Melchett, said:
"My Lords, what happens in the event of what the noble Earl is envisaging is a hypothetical question, and Her Majesty's Government would need very carefully to consider the terms of any refusal which might come from the United States. There has been complete collaboration with the French Government over the presentation of the case for Concorde in the United States, and I certainly expect that very close and complete collaboration to continue."—[Official Report, 20/1/76; col. 350.]
My Lords, it is no longer hypothetical; it is a reality. I understand that M. Cavaille went to Washington last Monday and, in view of—as I like to call it—the "entente Concordiale" that we have between our two countries, one imagines that Her Majesty's Government know why he went, what has happened and what action the French propose to take, and when the noble Lord, Lord Winterbottom, winds up the debate he may be able to give us some news. I also remember saying in your Lordships' Chamber not all that long ago, when President Carter was only President-elect Carter, that he did not like Concorde then, and he does not seem to have changed his mind very much, alas! So we have the situation, to my humble way of thinking, that in the United States the New York Port Authority are playing a waiting game because they know that the longer they can hold things up the better it will be for them. It may be, with hindsight, that we should have gone to court long ago, but that is cold comfort and does not help us. We have the situation as it is now and that is the one that has to be resolved.
My Lords, what will happen if we fail? We shall have a great many redundancies to start with in BAC at the end of the year, because we cannot sell the remaining five aeroplanes and we cannot possibly lay any more down until we have disposed of those. I should like to quote a paragraph from what the noble Lord, Lord Beswick, said to the Royal Aeronautical Society a few weeks ago. I have asked the noble Lord if I may quote him, and he said he would be happy for me to do so. He was talking about redundancies when another aeroplane was cancelled. The noble Lord said:
702
"For example, the argument of certain prominent critics that men made redundant by the TSR 2 cancellation and by the Rolls-Royce rundown were quickly and fully utilised in other manufacturing industries just is not proven. The evidence collected by the Department of Employment and by Professor Wedderburn showed that a substantial proportion of that redundant workforce were lost to the country by emigration, lost to industry altogether, or were employed in less skilled occupations."
My Lords, that may well be the sad tale at BAC.
We have throughout the world people who knock Concorde for environmental reasons, noise, pollution and exhaust. It is of interest to note, as regards noise, that on 28th February the Minister in another place was asked a Question about the 13 noisiest aeroplanes, one each month for the last thirteen months recorded at London Airport. I will tell your Lordships what they were: there were nine Boeing 707s, three Tridents, and two 747s. Concorde was not the noisiest in any month.
Lord BEAUMONT of WHITLEY: My Lords, if the noble Earl will allow me, is it not true that the Question was in fact about infringements? Concorde is excluded from it and Concorde could not have been in the list.
The Earl of KIMBERLEY: My Lords, I have the Hansard here. If your Lord-ships will permit me, I will read the Question:
"Mr. Cope asked the Secretary of State for Trade if he will state, for each month since Concorde entered commercial service, which aircraft types recorded the highest noise level at the Civil Aviation Authority fixed monitoring stations around Heathrow?"—[Official Report, (Commons Written Answer), 28/2/77; col. 89.]
Exhaust smoke today is negligible, and, anyway, if proper noise abatement techniques are used by the air crews, the noise is not that bad. As I live seven miles from Fairford and I see Concorde on average 25 times a week doing circuits and bumps, I think I am in a position to know a little about it.
My Lords, if President Carter wished to, he could exert potent pressure on New York City, whose financial straits I believe make it very dependent on Washington. The Port Authority's excuse for more time to evaluate data is purely a time-wasting thing; in my humble opinion they are playing a waiting game. I should like to ask the noble Lord whether I am

703
right in saying that the Port Authority have no right to violate an international treaty obligation of the United States. I should also like to ask him whether or not the Port Authority's action is unconstitutional in interfering with the authority of the Federal Government to conduct foreign relations of the United States.
My Lords, if we have a court case as a result of the decision being postponed yet again on 10th March, or it going against us, or even if we win it, no doubt the loser will appeal to the Supreme Court, and it is possible, I suppose, that during this time Concorde will be completely banned. If we were the loser, we might eventually win. But that again is cold comfort. From what I gather, there are one or two slightly encouraging facts. There is a lobby growing in New York among industrialists, labour leaders, and even local residents, who want Concorde because they are beginning to lose business.
My Lords, the reason for my Question is because New York is the key to the commerical success of Concorde. I will, before I finish, slightly deviate, because there is a possible alternative to which I should like to refer later, but without New York, or the alternative, we will not sell and we will not lease the other five aircraft. I would also ask the noble Lord whether he has any news of any agreement between Her Majesty's Government and the French Government about leasing the remaining five aircraft. If the worst happens, we shall not build any more and the existing aircraft will, therefore, never be improved; it will never be upgraded. Therefore, we will not get an improved range; we will not get an improved payload, and the aircraft will not become any quieter. As a result, we shall have thrown £650 million-odd down the drain in this country, and even worse, at the end of this year, 1,500 more BAC workers will probably be made redundant.
May I ask the noble Lord, Lord Winterbottom, whether he has any further news of what I believe was referred to as the "back stairs deal" which was a deal supposedly of the United States Department of Transportation funding an expensive new highway on New York's West Side if Governor Carey instructed the Port
704
Authority to go ahead and admit Concorde. Do they know through the grapevine whether Governor Carey is accepting this?
So, my Lords, what can we do? There appear to me three possibilities: one, litigation; two, the Bermuda Agreement; three, trade. Litigation, as I have already mentioned, I am sure we would win, but it would take a very long time, and perhaps one or two other United States airports would jump on the bandwaggon. Some want it; some do not. The longer it goes on, the longer the Port Authority of New York will be pleased. With regard to the Bermuda Agreement, in renegotiating this agreement no doubt pressure could be brought to bear, but it would be protracted, and it could well complicate other important matters and issues.
So I come to trade. There is a long shot here, as they say in racing parlance. Although, as I think noble Lords know, I am a very keen supporter of British aviation in all its forms, and I would welcome the fact that the Nimrod should be the early warning aeroplane chosen, I would put this idea to the noble Lord. If by chance the Nimrod was not to be gone ahead with, and as a result NATO agree to buy Boeing AWACs, I believe that our share of this is not inconsiderable; it will be about 18 per cent. of a very large total, and I believe the figure quoted is round about £260 million. If AWACs Boeings were bought for NATO, there is a vast amount of work and employment in refurbishing these aircraft. I was going to humbly suggest that possibly this work could go to Hawker Siddeley instead of BAC; and BAC could then build another 10 or 15 Concordes.
My Lords, you may look at me as if I have gone mad. My idea would be that if NATO wants Boeings we pay for the Boeings with Concordes instead of money. Let us go back to the days of barter. Let the United States Government have the equivalent value in Concorde and let them sort out the New York Port Authority. Let them lease the Concordes to Pan American, TWA, Braniff, National, and let President Carter have one for his shuttle diplomacy. I mentioned this the other day to the Secretary of State for Defence. He was not very keen on it, but I give it to your Lordships for consideration, to mull over.

705
I come to the trade figures again. In 1976, I believe that we exported £2,448.8 million worth of goods to the United States and in turn we received £3,044.3 million. Therefore, I reckon that this figure is very nearly £600 million in our favour. Alas! I have not been able to ascertain the exact figures from France, but I gather that they are very much in the same proportion and therefore favourable to France. May I suggest that perhaps we lessen our mutual trade with the United States and buy whatever remaining items we need elsewhere in the world.
It may be of interest to noble Lords who have not seen the tape that about an hour ago the British Parliamentary Concorde Group wrote to the Secretary of State for Trade asking him to withdraw air traffic rights between Britain and New York. They are also urging their French counterparts to do the same. My original Question on 20th January 1976 was:
"To ask Her Majesty's Government whether, in the event of Concorde being refused landing rights in New York and Washington as a result of the current Federal Government inquiry, they will, in concert with the French Government, take steps to restrict in a similar manner the operations of Pan Am and TWA at Paris and London Airports."
The noble Lord, Lord Melchett, said:
"My Lords, we had a fair hearing in Washington and put forward a strong case. I do not therefore expect the decision to go against Concorde's entry into the United States."—[Official Report, 20/1/76; cols. 349–350.]
That is the present situation.
I turn to my alternative to New York. Let British Airways open up the routes through the Pacific to Japan and Australia. In the next few weeks British Airways will have five Concordes and nowhere for most of them to go. Let the rest of the world see Concorde. If British Airways says that there are range problems, let BAC carry out the modifications which will improve the range and payload, because they are not that expensive. Noble Lords may well find that in a short while if New York did not have Concorde it would be begging us to come. If the decision goes against us on 10th March, will the Government please consider my worldwide suggestion? I look forward to hearing from the noble Lord, Lord Winterbottom, what counter-proposals Her Majesty's Government have, because otherwise I fear that we shall be back to square one when I asked the same Question in
706
your Lordships' House in January last year. Once before I said:
"Let us use the mailed fist in the velvet glove."
I suggest that we take the gloves off and use the mailed fist.
6.44 p.m.
Lord BOYD-CARPENTER: My Lords, as my release from the inhibitions which the shade of the first Viscount Addison imposed on the holders of public appointments is less than 48 hours old, I have an embarrassing feeling almost of quasi-virginity on rising to address your Lord-ships' House. However, during my own period of enforced silence on this subject I have greatly admired the determination and pertinacity with which the noble Earl has pursued, in this House and elsewhere, the important cause of the proper exploitation of this supreme example of Anglo-French technology. I share his enthusiasm. Perhaps I am bound to do so because in one way or another I have been very closely connected with this aircraft since its inception.
I was, indeed, a member of the Cabinet which in 1962 approved the original proposal and I think, with the possible exception of the noble Viscount, Lord Amory, I am the only person in this House today who shares that responsibility. As I am a rule-abiding person, I cannot tell your Lordships the cost of that development, but I have had the experience of being chairman of the Public Accounts Committee in another place for six years and have dealt with the costs of this aircraft. More recently I have been associated with its coming into service, and 15 months ago I had the great privilege of handing its certificate of airworthiness to that very great man, Sir George Edwards, to whom this country owes such an enormous debt.
The important point in this issue is that the route, London to New York—or, of course, Paris to New York—is the route for which this aircraft was designed. It is the route for which this aircraft is, if I may use the expression, "a natural". It is the right stage length and it is a route that has sufficient traffics of the high-powered, high-calibre type of passenger whom this aircraft is designed to carry. It is not too much to say that many of us hold the view that its ultimate success or failure depends on its being able to

707
operate on this route. However, I hope that we shall not allow the strong feelings which I have, and which many noble Lords and others outside have, on this issue to push us into either of two mistakes.
It would be a mistake to make this a cause of anti-Americanism. I happen to share the great doctrine which Sir Winston Churchill put forward to the effect that it was upon Anglo-American friendship that the survival of the civilised world depends. Our friendship with the United States is too deep and too important to be affected by this. Nor would it be right to criticise the aviation authorities of the United States. On the contrary, the FAA has gone, as the Americans might themselves phrase it, beyond the line of duty in being helpful over the introduction of Concorde. It has helped enormously on the technical side, in the provision of proper air traffic controlled routes and has, indeed, made available the only international airport that it owns and operates, that of Dulles outside Washington. It certainly is not to blame.
The responsibility rests firmly on the political Luddites of the State of New York, with those of the State of New Jersey trotting along behind them, as they apparently so often do. The indefensible nature of the attitude which those two States, which control the New York Port Authority, have adopted can be demonstrated by the massive and fair decision which the former American Secretary of Transportation, Mr. Secretary Coleman, published a year ago. Your Lordships will recall that Mr. Secretary Coleman held a long public inquiry into Concorde. At the end of the day he delivered an intellectually impressive, fair and well-reasoned statement—such as one would expect from a lawyer and statesman of his calibre. I want to quote two extracts. On pages 13 and 19 he fairly states that he accepts the judgment of the administrator of the FAA that Concorde is fully up to United States safety standards. On page 58 on the noise issue he says that it would only make a marginally incremental impact at JFK, which are the initials used in the United States for Kennedy Airport. There, the highest responsible authority at the time in the United States has come out quite plainly that, both on safety and on noise, Concorde is acceptable.
708
What then should Her Majesty's Government do? This, of course, is a matter for them and I can only make a suggestion. As the noble Lord, Lord Winterbottom, knows, discussions are taking place at present with the American aviation authorities on the renewal of the Bermuda Agreement—the air service agreement operating between the two countries. It would seem reasonable in those discussions to suggest to the Americans that if they are unable or unwilling—whichever it may be—to implement the existing agreement, it would be a waste of time to negotiate a further one with them. If they say that they are unable to do so, then they are unable to discharge the international obligations of the United States, which is an absurdity. If my dog bites the noble Lord, Lord Winterbottom, it would not be a sufficient defence on my part that I could not control or manage the dog. It is for the United States authorities to exert their authority as the body responsible for the international relations of the United States. In these same negotiations they are seeking the continuation of privileges very valuable to United States' aviation. I need only refer to the so-called fifth freedom rights through London—and they exercise them also through Paris—which are of great value to United States' aviation.
I hope that these discussions will come to a fruitful conclusion, but I suggest to Her Majesty's Government that it would be artificial and foolish to exclude from discussion during these negotiations an issue which involves the implementation by the United States of her current international obligations. I cannot help but think that, given the basic fair-mindedness of the American people and public, given the facts on the vital issues of safety and of noise, and that their own former Secretary for Transportation has come down in Concorde's favour, a firm line by Her Majesty's Government in standing on the rights of the United Kingdom might well be fruitful.
I share the noble Earl's doubts about plunging into litigation in the United States. The possibilities of delay in the United States legal system are absolutely unlimited. I cannot help but feel that if we leave it to that, the aircraft will probably be obsolete before the proceedings have reached their final determination on the seventh or eighth appeal to the final court.

709
This is an international obligation. This is a matter of great importance to ourselves and our French friends. I beg the noble Lord, Lord Winterbottom, to take heed of these considerations. I do not ask him to say much tonight. I know enough of international negotiations to know that it is sometimes unwise to disclose the line one is going to take in advance and in public. However, I hope that Her Majesty's Government will be firm to the point of obstinacy in pursuing the exercise of our rights to develop an aircraft which is a great triumph of our technology and in which, as the noble Earl reminded us, many hundreds of millions of pounds of British taxpayers' money have been sunk and on whose continued construction and success the work of many skilled men absolutely depends.
6.53 p.m.
Lord BEAUMONT of WHITLEY: My Lords, I know that I deprecate as much as any of your Lordships the tendency to turn Unstarred Questions into a mini-debate. My excuse for speaking tonight is that I was so provoked by, I think, the noble Earl, Lord Kinnoull—if it was not him, I beg his pardon—who said the other day, "I am sure that all noble Lords in this House feel the same way on this subject." Well, my Lords, they do not. There are quite a number of us who feel in a very different way, and since, by our silence, it is apparently being accepted that we do not exist, I think it is right that the other point of view should be put.
I hope that the answer that the Government will give is that they are going to do absolutely nothing about this. It is doubtful indeed—in fact, I think it is more than doubtful—whether there are any treaty rights to enforce. Noble Lords will be well aware that the whole matter depends on the question as to whether at a given time supersonic aircraft produce the same amount of noise and the same amount of trouble, the same aggravation, as subsonic aircraft. Mr. Kaufman obviously thought when he gave evidence to that effect in Washington, that "at that time" referred to 1962, when the agreement was made. It has now been conclusively proved by reference to the IATA bulletin that it did not; it referred to the time when supersonic aircraft were brought in. Therefore it is very doubtful whether we can rely on that agreement.
710
It is quite certain that we are debarred from doing so, because Mr. Kaufman said on the same occasion:
"No international agreement will be violated if our case was turned down."
I think what he said then with reference to the Secretary for Transport must also be true for any action taken by the Port of New York Authority.
Even if they were in a position to do anything legally or morally, which I do not think they are, I do not believe that they should. Concorde is a very noisy brute. However much you juggle with it, the noise is intolerable. We obviously differ as to the reliability, if I may put it that way—and I mean no aspersion by that—of the figures which the noble Earl gave in his speech. I have it on good authority that the figures and quotations were compiled from a list which did not include the Concorde figures, and therefore they are misleading. Maybe the Minister will be in a position to answer that point later. If not, I suggest that we put down a Question for Written Answer and get the facts, because obviously this is important.
Concorde is a noisy brute. It so happened that I was being interviewed just before the beginning of this debate by a young lady in the Peers' guest room about something completely different—the honesty of politicians. I said that I had to speak in this debate. She said, "What about?" I said, "Concorde". She said, "What are you going to say?" I said, "I think I am going to be the only person against it". She said, "Thank God! I live at Hampton Court, and we have it". I said, "Well, tell me what it is really like". She is not a member of any pressure group, she just lives there; but she said, "It is terrible. You cannot do anything when it passes. The baby wakes up. You cannot hear yourself on the telephone, even if your telephone is in the middle of the house". I said, "Is it really worse than other aeroplanes?" She said, "Much worse. It is terrible".
We can juggle the evidence, I suppose; we can produce evidence against each other for as long as we like. I think it is unarguable that it is a very noisy brute. What is more, it eats fuel and it burns money. It can never fly at a profit, and it should be scrapped. Actually it is a beautiful machine, so maybe we ought to

711
put it in public parks as good modern sculpture, but it is no use for anything else. We are told that the Americans may be merely waiting until Concorde collapses to build their own supersonic aircraft. It may be true. If they are fools enough to do so—I hope that they are not—then let them do so, and let us stop them landing their supersonic planes here until they have decent and controllable noise levels; and the expense of course in that case is theirs and not ours.
We are told that the spin-off from technology is very valuable. Well, for £1,200 million you can get a great many pounds worth of spin-off. It is £650 million, is it not? £1,300 million altogether for Europe. I am a good European, so I think in European terms. We are told that we must help it and keep it because of employment. No one can rightly contemplate great unemployment or causing it. But for how long must we go on before we learn that you do not in the long run improve employment or the economy, or get anything right, if you pay people a lot of money to dig a hole in the ground and fill it up again, particularly if while they are doing it they are kept warm by burning £5 notes in valuable petrol, which is what this all boils down to.
What we have to do is to get the economy and the employment in this country at the right level, making things that people want and need, instead of making what they do not want and then propose to swap them for weapons and systems which I suspect we do not want ourselves.
We are told that Mark II may be better because Mark IIs are always better than Mark Is, and we cannot have Mark II until we have had Mark I. That may be so. But this is a crazy world. We land men on the moon and build supersonic aircraft, but we cannot even house the homeless in our own country, let alone deal with such matters as the slums of Calcutta and India. Technology has become our master rather than our servant. Indeed, I am glad to say that through the inexorable nature of the progress that we are making in our expenditure of fuel and resources on these useless objects, the time has come to call a halt. Captain Ludd was a very much misunderstood man. I hope the Minister
712
will do absolutely nothing to see that Concorde goes where it is not wanted, and, if he does, I hope the Americans take not a bit of notice.
7 p.m.
Lord ORR-EWING: My Lords, I should be delighted to deal with every point made by the noble Lord, Lord Beaumont of Whitley, but if I did I should be venturing far beyond the patience of noble Lords in a short debate on a Starred Question. My only regret is that while the noble Lord may not have many allies in this House, he has many in the media and I strongly suspect that tomorrow morning any publicity given to this debate will be about almost exactly what he said with nothing about the constructive points which so many others have contributed.
Lord BEAUMONT of WHITLEY: I hope so, my Lords.
Lord ORR-EWING: Very well, my Lords; but there is another view. In any event, one always gets more publicity if one kicks the ball into one's own goal than if one kicks it into the opponent's; perhaps we could put a star against the noble Lord's speech to signify just that.
I wish to deal with two points tonight. First, I think there is now ground for much stronger coercion on the United States Government to help to honour the international treaty obligations which they have undertaken, as my noble friend Lord Boyd-Carpenter pointed out. He speaks with tremendous authority on this subject and I endorse everything he said, and I have a few other suggestions to make. As a secondary point, I wish to draw attention to the feeling I have that some people in British Airways are not out to make a real financial success of Concorde; they do not seem to have the same dedication shown by Air France and the French Government.
At present the United Kingdom and the United States are renegotiating the Bermuda Agreement, and this is not a simple matter. The basic treaty as it stands is that there should be two United States airlines on the North Atlantic route, Pan-Am and TWA, and two British airlines, which were originally British Airways and British Caledonian; then the

713
licence was withdrawn and British Caledonian fell out, and a great deal of negotiation is going on. Of course the equation is further complicated in view of the judgment about Laker Airways, as to whether they will come in and take the second one.
Bermuda does not concern itself with the types of aircraft; the treaty does not say whether they are supersonic or non-supersonic. That is a matter for other people and not for the Bermuda Agreement. At the moment the Bermuda Agreement is so complicated with so many different factors that it has not proved to be totally effective, as Lord Boyd-Carpenter pointed out. What is the point in tying up the time of a great many people in negotiation when a Port Authority can nullify anything signed in an international agreement? I urge that these negotiations be put on one side until the matter of Concorde and of traffic in and out of New York is clarified.
The United States Federal Aviation Authority draws up regulations. Under Part 36 of its regulations it lays down noise regulations that currently apply to aircraft which were first certificated after a certain date. They do not apply therefore to Concorde, to the VC10s or to the noisy 707s. Thus, it is not on a question of environmental noise that that was cleared by Secretary of Transport Coleman in his report. Experience from the noise point of view at Dulles suggests—and it is endorsed also from London Airport—that the noise is nothing like as great as the public were led to expect and that it really is not objectionable. I have travelled in Concorde, I have been underneath Concorde and I have had a transatlantic trip in the aircraft, and I can say nothing but good about the passenger appeal of the aircraft.
Let us be honest. I suspect that the New York Port Authority's pressure comes from a whole host of lobbies. Of course there are the environmentalists, but I have a feeling that at least two fingers in the pie are Pan-Am and TWA, and a third could well be that the United States aircraft constructors are vitally interested in the matter. One has only to look at recent history to see how they have been able to press their case in all parts of the world and the methods they have used to realise their extremely commercial and competitive spirit. It
714
is only when they are going to be hurt in competition for sales and traffic that they become most difficult and most voracious. Here there are certainly pressure groups operating and it seems surprising that these pressure groups, through the New York Port Authority, can actually cause the United States to break an international treaty which was drawn up in good faith between our two countries.
If an announcement on 10th March is favourable and Concorde is allowed to go into New York, then many thousands, perhaps millions, of people in this country and France will be thankful. Honour will have prevailed because an international treaty will have been complied with. I urge the Government to take two steps. First, as I suggested earlier, they should suspend the Bermuda negotiations until the matter is clear—until it is shown that international agreements can be honoured by the United States and not frustrated by a Port Authority. Secondly, should we perhaps not consider the landing rights in this country for Pan-Am and TWA?
Consider the pressure on London Airport. I was there this evening and I am pleased to say that I arrived on time, but as one watches the stream of aircraft coming in and leaving one realises now that we do not have a third London Airport and the degree of traffic intensity which is building up there. I suggest that it would make sense, at least for a while, if those two airlines used Gatwick. There are those who would go further and suggest that they use Prestwick. I would not go as far as that; the Scot. Nats. would no doubt benefit from such a suggestion. At any rate, I suggest that perhaps those two airlines should use Gatwick, especially during the summer, when there is such a great pressure of traffic. It is one of our accredited international London airports and there would be no hardship for them to use Gatwick; many of us have used it on many occasions. I suggest that a diversion of that sort would be quicker and far more effective than a long-drawn-out legal battle, which could be spun out until the cows come home and Concorde is totally redundant and out of date. Incidentally, it might be rather cheaper, too.
Are British Airways poised to take advantage if we obtain the honourable and right solution? In addition to the London—Washington route and the

715
London—New York route there may be opened up very soon—if, as I hope, the Government are pressing this matter—the London—Australia route. I believe it would be of tremendous benefit to all of us who have to go to the Far East and Australia on business. My fear is that, if this comes about, British Airways will not be poised to take advantage of it.
For two decades there has been a strong lobby in what was then BOAC and what is now British Airways, which has championed the purchase of United States rather than British aircraft. Perhaps the classic case was the VC.10, when the Government of the day—they were a Conservative Government—were urged to cancel the VC.l0s, break them up and allow them to buy 707s. In the end of course the airline were shown to have got the equation wrong. It turned out that the VC.10 was far more attractive to the travelling public and many of my American friends chose, and still do when they have an opportunity, to travel by super VC.10 rather than by other aircraft across the Atlantic. The load factor was so great—I think it was 84 per cent. in one year against the low 60's per cent. for the American equivalent—that the costing estimates were totally incorrect and vast profits, not losses, were made by British Airways from the operation of the VC.10. I believe that when the true story of that aircraft comes to be written, and the various pressures which led to the sawing up of four aircraft which were partially built at a cost to the taxpayers indirectly of about £2 million, it will make rather sad reading.
I seem to detect these pro- and anti-Concorde lobbies in different groups within British Airways. At the end of 1973 BOAC were pressing the then Minister, who was Mr. Michael Heseltine, for a subsidy to operate Concorde; and, I think rightly, he resisted. When Mr. Wedgwood Benn took over that responsibility within a few weeks he circulated a memorandum, which I think was not very fully thought out at ministerial level, forecasting from his advisers that there would be a substantial operating loss on Concorde. British Airways immediately "upped" the figure and suggested that the loss would be even greater.
I believe that British Airways are due to publish their results in three months' time
716
in June 1977 and that they may be tempted again to show that the operating loss on Concorde is very serious, and therefore not only justify those who have been against Concorde but all those who asked for a subsidy earlier on. But, if that happens, it will not be a true judgment of Concorde, because at present British Airways are operating Concorde for something like 1½ hours a day. It is not conceivably possible for any aircraft, let alone a sophisticated supersonic aircraft, to be economically viably operated for 1½ hours a day. I would comment, though I know there are other reasons, that Air France manage to operate their Concordes at many times that figure each day.
So I hope that when British Airways publish their figures they will not be another group to knock Concorde, because I believe that it is not a true representation of how good and how commercially advantageous that aircraft can be when we clear operations for some more routes. I know that British Airways have had difficulties in training their crews, and I am told that, if we are cleared to Australia tomorrow, it may be many months and perhaps even years before British Airways can take advantage of opening that route. It would be very sad, after we have been so patient, after we have negotiated and after we have been as friendly and co-operative as possible with the U.S.A., if we were not able to grasp the opportunities that this fine aircraft can give and the potential for further development of this aircraft which I believe would be of tremendous benefit to all those associated with and working in the aerospace industry.
7.12 p.m.
Earl GREY: My Lords, there have been continual arguments and disagreements over the introduction of Concorde. Many of the arguments are concerned with the environment. This problem has affected us for many years and, unfortunately, will do so for many more, especially in other fields such as pollution and the dumping of highly dangerous chemicals in the sea. However, the fact is that Concorde has been built and is now in service. Over £700 million has been spent on its development and Concorde looks as though it is here to stay. Britain has often led the world in the air industry in both commercial and military uses—an

717
achievement we should be proud of. Concorde is proving its success in design and service on the routes which it is at present operating. Technically, it has given excellent reliability and has been integrated into existing traffic without any hitches. British Airways set a number of objectives in order to make Concorde a reliable proposition. Among those objectives is a quest for the right route pattern, maximum punctuality and reliability, and the right departure and arrival times for the target business market.
The Concorde enterprise is running at a loss but that is due to the fact that the aircraft is doing about one hour's work a day when, to break even, it must do at least 7½ hours a day—about the same as the 747 or any other large passenger jet in operation. New York is the business centre of the Western world and time is money. I believe that New York will need Concorde as London does, and that once it is in operation the advantages will be greatly appreciated. The Washington run has been a big success. British Airways have already sold 90 per cent. of the available seats. Passengers using this route prefer Concorde despite the fact that they may have to transfer at both ends of the journey. The London/Bahrein route is also doing better than British Airways expected, and Philippine Airlines and others are interested if they are able to operate in and out of London. If the London/Australia route is opened up, the time will be cut from 24 to 13 hours.
With reference to the noise factor, British Airways are continually looking into this problem and the noise measured in Washington has been within the levels predicted by the Coleman decision. If the load factor can be above 60 per cent., British Airways and Air France are confident that Concorde can make money. Since World War II, British Airways have had some notable firsts. Britain led with the Comet in 1952, and in 1957 was first with the long-range jet/prop airliner, the Britannia. Now Britain, with France, will, if Concorde is sold to the major airlines, lead the world in the supersonic field.
7.16 p.m.
The Earl of KINNOULL: My Lords, I rise, as others have done, to support the noble Earl, Lord Kimberley. I am sure that the House owes the noble Earl
718
a great debt for the persistent, well-informed and enthusiastic questions that he always asks on Concorde. The noble Lord, Lord Beaumont, flattered me in saying that I was the reason for his interruption. I must say that I have never before heard such a moving and eloquent speech by the noble Lord based on such uninformed information. If someone were rude enough to say to me that the noble Lord had been talking rubbish, I should find it very difficult to disagree with that person. The noble Lord desscribed Concorde as a noisy brute, thirsty and useless. What a tribute to the thousands of French and British people who have worked for something like 15 years on the development and production of Concorde so that now we see it flying! What a tribute to what many of us regard as a national pride and what we consider to be the envy of the world!
Despite the noble Lord, Lord Beaumont, and his merry band of pollutionists; despite their concentration of wrath upon Concorde—without a bleep against the 200 flights a day by supersonic military aircraft across America—some might say that they should concentrate much more on the safeguarding of the sea from the all too frequent oil tanker collisions. I am sure that would receive far greater support than the argument that the pollutionists always put forward against Concorde.
Most of us feel that Concorde stands for a supreme achievement, for national pride and, above all, for the inventiveness and skill of the aircraft industries of Britain and France. It also stands for a massive cost of taxpayers' money. On the very threshold of success, are we to stand by and, as the noble Earl, Lord Kimberley, has said, allow this great achievement to wither away? Are we to allow the possibility of the American industry picking up the pieces in a few years' time? I believe that it would be national madness not to support those who strive to see the Concorde service straddling the world.
Undoubtedly, New York is a vital step in the Concorde route. We have now seen eight months for the New York Port Authority to study the evidence, which, I understand, has been gained entirely from the Washington experience. I believe that it would be helfpul if the noble Lord, Lord Winterbottom, could tell us tonight what he knows about the Washington

719
experience. Does it point to a massive disruption beyond the reasonable sufferings that any person who works or lives close to an airport must expect? Will the two to four Concorde flights a day that are due to enter Kennedy Airport, if they are allowed, wreck the delicate peacefulness that now surrounds Kennedy Airport? Of course they will not. This delay and procrastination by the New York Port Authority has a distinctly hollow ring and I am not sure that the noble Lord, Lord Beaumont, for all his genuine size, did not rattle a bit tonight as well.
I hope, and I am sure that our Government and the French Government hope, that on 10th March reason will prevail. It will be a very unhappy case indeed if British Airways and Air France have to resort to the courts. But whatever happens, I hope that the noble Lord, Lord Winterbottom, will emphasise tonight the Government's total determination to support Concorde and its entry on to the world airline routes.
My Lords, the noble Lord, Lord Winterbottom, always comes briefed to the eyebrows on any subject for which he has to answer, and I hope that he will not mind my stepping a little outside the threshold of the Kennedy Airport runways to ask a few questions on Concorde. What alternative, for instance, have British Airways been pursuing in the other East coast airports of America? Are British Airways pursuing actively enough and urgently enough the question of landing rights in Canada?
Perhaps the most important point that I should like to put to the noble Lord, Lord Winterbottom, is the very important question about improving the operational characteristics of Concorde. I understand that in one or two areas the limitations are of a marginal character and could be overcome by relatively inexpensive modifications. Can the noble Lord say tonight what is being done to increase, for instance, the thrust of the present engines? Is it not true that for a quite limited expenditure improvements could be made to the trailing edges of the wing, and a modification to the leading edge of the fin? There could also be, I understand, important improvements by detailed changes of the air intake. One estimate is that on a critical sector to Austrialia over 2,000 lbs. extra
720
payload can be gained by this comparatively inexpensive work on the intake. This will mean some extra funding of course, and I should like to ask the noble Lord whether this funding is available.
There is also the possibility of improving the contingency rating on take-off, which would make the aircraft even more attractive in hot temperatures. The funding needed here, I understand, is no more than half a million pounds for retrofit, and even smaller sums for new aircraft. Can we be given an assurance that the aircraft will not be limited in this important operational characteristic which entails such a small funding expenditure?
Lastly, my Lords, I understand that a very considerable improvement could be obtained in both noise and range by a modified wing. If the lift-drag ratio could be improved, then not inconsiderable gains could be made, I understand, on both the noise and the range. I understand that in the region of £60 million is required, and for some reason the French Exchequer would be responsible for the greater part of this sum, if it were agreed to. Can we be given a guarantee that this money will be forthcoming?
All these questions on the modification of Concorde are of particular significance when one realises that the production line at Filton is almost at an end. The modification work to the existing aircraft is now perhaps the only alternative left for the Government to keep the Concorde division together, waiting over this critical period while Concorde goes more fully into service and the potential buyers see the importance of buying Concorde.
7.24 p.m.
Lord STRATHCONA and MOUNT ROYAL: My Lords, having unfortunately missed the opportunity to put my Question earlier this afternoon, for which I owe the noble Lord, Lord Strabolgi, an apology, I feel that I must intervene briefly to support my noble friend Lord Boyd-Carpenter and welcome him back from his enforced vow of silence, which he has fulfilled in such a distinguished and authoritative manner. He has put forward some suggested negotiating counters for the current Bermuda Agreement renegotiation, without having to resort to some of the more extravagant stratagems so robustly advocated by the noble Earl,

721
Lord Kimberley. Of course I cannot resist saying how the Liberals have demonstrated this evening what a wide divergence of opinion is covered by the mantle of their Party label, but I would not want anyone to be under any misapprehension as to on which side we from these Benches will wish to place our support. I can only say to the noble Lord, Lord Beaumont of Whitley, in, I hope, the kindest possible way, that he reminds me rather of the old cartoon of the wife and husband arguing, and the wife is saying, "My mind is made up. For goodness sake! don't confuse me with facts."
I admit that if we were about to embark on this project knowing what in fact it has cost, I daresay we would not do it. But the important point is that we have done it; we have spent the money. We have bitten on the bullet that we will probably not recover the investment we have made, and now we have to get on and live with that situation and try to make the best of it. Nothing we can say here will alter that. That is a straight statement of fact.
The noble Earl, Lord Grey, pointed out the fact that we have already spent the money, and a number of noble Lords have said that we need to give the aeroplane an opportunity and a fair test to demonstrate what it can do when it is allowed to do what it was designed to do. A number of noble Lords have also pointed out the effect of the route negotiations on the accounting so far as British Airways are concerned.
So it seems to me that we find ourselves in the rather remarkable position that on the North Atlantic routes British Airways are making the running at both ends of the market. On the one hand, we have the supersonic service; on the other, we have the Laker Skytrain for which we are now, I hope, committed to fight. So I hope that the noble Lord will be able to tell us, without being carried away by any misplaced jingoism over extravagance, that the Government will pull no punches in supporting the negotiations for the proper and the appropriate rights for both Concorde and the Laker Skytrain.
7.28 p.m.
Lord WINTERBOTTOM: My Lords, like other noble Lords, I am most grateful to the noble Earl, Lord Kimberley, and
722
to other noble Lords who have spoken, for the concern they have expressed about the delay to Concorde serving New York. I should like to join the noble Lord, Lord Strathcona and Mount Royal, in expressing my pleasure upon hearing the noble Lord, Lord Boyd-Carpenter, speaking as a free man. I am looking forward both to agreeing with him and disagreeing with him in the future.
I and Her Majesty's Government fully share the concern expressed by noble Lords tonight. First, I should like to explain the position about President Carter's statement. He has stated clearly that he supports the proposal for the 16-month trial of Concorde on the terms originally proposed by former Secretary Coleman. The President has also said that he sees this as a continuing process involving his Government and the Governments of the United Kingdom and France, which should be allowed to proceed. That is a firm and positive statement. I believe that the authorities in New York will want to give all due weight to such a statement from their President. But the President's statement has also pointed out that he cannot direct the Port of New York Authority or the Governor of the State of New York to reach a particular decision on Concorde. This is clearly one of the rights of a federal system.
The essential difficulty with which we are faced is that the United States Government have said one thing but the New York authorities have still to allow that decision to be put into effect. I wish to make it absolutely clear that the Government regard this as a matter of the greatest possible concern. The Government are now carefully considering President Carter's statement, and are in close touch with the French Government on this matter. But the immediate issue is when the Port of New York Authority will take their decision, and what that decision will be. The House can be assured that we are taking all the steps open to us—"all" is a big word—to persuade the Port Authority to take the right decision.
I understand that the Port of New York Authority are due to consider Concorde at their next meeting on the 10th March. They have announced that they intend to do so, and I believe that we

723
and the French have every right to expect a decision to be taken at long last at that meeting on the 10th March. But the House will be aware that the Prime Minister will be in Washington on that day holding his first meeting with President Carter. I have no doubt that he will be considering whether to speak to the President about Concorde if the Port Authority's decision that day is not fully satisfactory, or if it is postponed yet again. I am sure that we can leave it to him to take whatever action seems appropriate at the time.
I must emphasise that, in the Government's view, the Port Authority can only take a decision to allow Concorde in. The main reasons for this are as follows. First, as I have said, President Carter himself has made it clear that he considers the Concorde trial at Kennedy should be allowed to start. Second, the New York authorities have all the information they need; and I shall return to this point in a moment. Third, as I shall also explain, it is being demonstrated by measurements of Concorde during its operations to Washington that our predictions on Concorde noise are correct. Fourth, New York has a lot to gain from Concorde services to Europe, and I shall be referring to some of the many organisations in New York who have announced their support for Concorde. Fifth, in addition, there would be strong resentment in this country and in France if New York was to continue to deny access to Concorde. It would be difficult to explain to the many thousands who have contributed their skill and labour to this aircraft, and to all those who want to see this product of British and French technology succeed, how even a limited trial period could not be tried. The unfairness of such an action is not what we expect from our friends in the United States.
It has often been pointed out that New York is the key to the success of the Concorde project. Noble Lords do not need to be reminded that this is so. Not only is it the most important route on which British Airways and Air France want to operate Concorde; it is also the key to the future exploitation of Concorde by other airlines. Although I hope that Concordes will be used by airlines that do not operate to New York, it must be remembered that some of the airlines
724
interested in the aircraft will want to use it on the New York route. Since noble Lords have asked about the position on sales, I can say that the manufacturers, in conjunction with the two Governments, are continuing their efforts to find customers for the five unsold Concordes. Proposals, mainly for lease, have been put to a number of interested airlines, and arrangements for further discussions with them are in hand, but the House will obviously not expect me to discuss the position reached in these negotiations. I have referred to leasing. I should explain that the policy issues involved in various forms of leasing are currently being examined by the British and French Governments.
To return to New York, the House may not be aware of the volume of support for Concorde that has already been expressed in New York. Many important organisations representing labour, the business world and many other interests have come out in favour of the aircraft. I wish to mention in particular the New York Labor Council, representing more than 1 million members. Other bodies are the Association for a Better New York and the New York Chamber of Commerce and Industry. I must also mention the Long Island Association for Commerce and Industry, a very significant body to have on our side in view of the situation of Kennedy Airport in Long Island and the feelings of communities there about aircraft noise. The common theme expressed by these organisations is that New York needs the Concorde services to Europe and will benefit from them, and that the aircraft should be given a trial.
Let me now turn to the British Government's position. I want to make clear three points, and they are: first, whatever noble Lords may say, we have treaty rights that entitle British Airways to operate Concorde to New York; second, the air service agreements between the United States and Britain and France, which lay down what requirements airlines and aircraft must fulfil before they are allowed to operate, have been complied with completely; and, third, the Port of New York Authority do not have the powers to prevent British Airways Concordes being operated into New York under our treaty rights.
It is worth recalling the exceptional efforts that we and the French have put

725
into demonstrating to the United States, both to the Government and to the people, that Concorde will really not cause damage, and that it should be allowed in. We have gone to considerable lengths to make sure that all those in the United States concerned about their environment, and in particular those living close to Kennedy and to the Washington airport, understand that Concorde will really have a negligible effect on them. The major step in this direction was to secure the decision from the then Secretary for Transportation, Mr. Coleman, that Concorde services to both New York and Washington should be allowed for 16-month trial periods. This was the outcome of one of the most extensive investigations of the possible effect on the environment of a federal decision that has ever been carried out in the United States. The Governments of Britain and France, the Concorde manufacturers and the airlines, complied fully with the requirements of United States law in this regard, although they made it clear at the outset that their co-operation was without prejudice to their treaty rights. Since the 24th May 1976, Concorde has been operating to Washington; it has been flying full on most occasions and the noise it has produced has been demonstrated by the United States authorities themselves to be within the predictions that we made. These predictions, on which Mr. Coleman based his decision, have now been confirmed by nine months' actual experience. I hope that that meets the point made by the noble Earl, Lord Kinnoull.
I should in passing mention the Press articles referred to in the debate that have appeared in New York and London and are based on a report by our own Civil Aviation Authority on the first eight months of Concorde operations at Heathrow. When I say "in the debate", of course the debate is going on outside this House as well as within it. These articles were highly misleading, and I am glad to say that the New York Post has already published another report to put the record straight. In fact, as the Civil Aviation Authority report itself shows, there have been fewer than four complaints each time Concorde has taken off or landed at Heathrow, and the reaction to Concorde there has been well below the forecasts made by its critics. It is quite untrue to allege that Concorde is by far the noisiest
726
aircraft at Heathrow. There have been many occasions, as noble Lords have pointed out, when other aircraft have been noisier.
Since Mr. Coleman's decision, we have taken care that the Port of New York Authority have been given all the information that they want. We have co-operated in all the investigations carried out in the United States. Here and in France the New York authorities have been given all the data and facilities for which they have asked. We have waited patiently for several months following the end of this six-month period over which they announced last March that they wanted to assess Concorde before taking their decision. We have also designed and demonstrated a take-off procedure to ensure that Concorde will comply with the Kennedy noise limits. This procedure was fully tested at Casablanca in December 1974, and satisfied the safety authorities in the United States as well as in Britain and France. A full report was presented to New York. They had been invited to take part in these trials themselves, but did not do so.
My conclusion, with which I am sure the House will agree, is that the validity of our data on Concorde, and hence the environmental predictions for New York on which the trial period was recommended, have been fully confirmed. The Government are confident that Concorde will comply with the Kennedy noise limits as they are currently applied to other aircraft. For these reasons, I am convinced that the only fair decision for New York to take is to let Concorde start its trial there and thus demonstrate that it will have little impact on local people.
We therefore look to the port authority to take this decision on 10th March so that the airlines can get down to their arrangements for an early start of commercial services. But if the decision on 10th March is negative, or if it is postponed yet again, I must make it clear that we will regard it as quite unjustifiable and as a serious step. The airlines will have to press ahead with their action in the courts to challenge the port authority's powers to take such a decision. The court hearing of this suit has already been postponed three times so that the port authority would have the further time that they had asked to complete their assessment of all the data. We have gone along with yet

727
another postponement so that the decision can be taken on 10th March. It was right to agree to another postponement in view of the firm statement by President Carter that New York should allow Concorde in. But we cannot be patient indefinitely and we have decided, in agreement with our French friends, that the court hearing cannot be postponed any longer. I understand that it has now been fixed for mid-March.
But, my Lords, the legal path is not the best way in which to resolve this question. That is the view of noble Lords who have spoken tonight. We have done everything reasonable—perhaps more—to enable New York to reach their own decision without having to provoke an argument in the courts or between Governments. This is a matter which should be decided on its merits and I hope I have demonstrated that the merits of the case are all in favour of allowing Concorde to operate. If, nevertheless, New York turns Concorde down, we should have to consider very carefully all the implications for us. Clearly, the delay is costing the airlines a good deal of money. I have already pointed out that it is also seriously damaging to Concorde sales and future prospects. The Government hope very strongly that such unnecessary damage to our interest and to Anglo/American relations can be avoided. That is the view of Her Majesty's Government on the subject. I hope that it is clear cut and not fudged.
May I make one final point in answer to the noble Earl, Lord Kinnoull? I cannot answer all his questions, but if he will look up an Answer that I gave to a Starred Question about a month ago, he will find that money has been approved for the improvement of the operational characteristics of Concorde both in service and in production, and that these improvements are going ahead.
Lord ORR-EWING: My Lords, before the noble Lord sits down, could he specially report to higher authority the point made by my noble friend Lord Boyd-Carpenter, with all his knowledge, about suspending the Bermuda negotiations until this matter has been clarified? There is no merit in going on with it until this particular point is resolved.
Lord WINTERBOTTOM: My Lords, my right honourable friend will obviously pay attention to informed opinion such as that expressed by the noble Lord, with his years of responsibility in this matter.

  NINE ELMS LANE ROADWORKS
  NINE ELMS LANE ROADWORKS