Sitting of 24 March 1977

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS

  GREATER LONDON COUNCIL (GENERAL POWERS) BILL (By Order)
  Order for Second Reading read.
  To be read a second time upon Thursday next.

  ST. PAUL'S PLAYING FIELD (TRUST) BILL (By order)
  Order for Second Reading read.
  To be read a Second time upon Thursday next at Seven o'clock.

ORAL ANSWERS TO QUESTIONS
  NATIONAL FINANCE

    Retirement Age (Men)
    Mr. Greville Jannerasked the Chancellor of the Exchequer whether he will introduce tax incentives to induce men to retire at 60 years of age if they wish.
    The Financial Secretary to the Treasury (Mr. Robert Sheldon): My right hon. Friend has no plans to introduce into the tax system such general incentives.
    Mr. Janner: In spite of that unsatisfactory answer, I congratulate the Minister and his right hon. Friends on being present in the House not only to present the Budget but to implement it with support from both sides of the House. When the Government consider their Budget, either alone or in conjunction with anybody else, will they consider whether, at this time of high unemployment among young people, a way could be found of helping men aged over 60 who are ailing and desperate to retire to be able to do so? Will the Government
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    bear in mind that my hon. Friend the Member for Preston, North (Mr. Atkins) and I have now collected a million signatures on our petition asking for voluntary retirement for men at the age of 60?
    Mr. Sheldon: I thank my hon. and learned Friend for his support. I hope that it is as widespread as he claims. On the need for old people to make way for younger ones, I remind my hon. Friend that the job release scheme goes some way in that direction.
    Sir John Hall: In view of the forecast that there will be an increasing number of retired persons, and more young people undergoing full-time education, thereby increasing the burden that will fall on a diminishing number of workers, will the Minister exercise caution before encouraging people to retire too early?
    Mr. Sheldon: The House fully understands the general point that in normal times we need all the active work from all sections of the community that we can obtain. This would be diminished if we promoted schemes for early retirement more generally, and that is a consideration that the Government must always bear in mind.
    Mr. Hoyle: Does my right hon. Friend agree that in considering such matters his Department and the Chancellor would be better served if they consulted people such as myself who have an alternative economic strategy to present, rather than consulting the hon. Member for Cornwall, North (Mr. Pardoe), which could lead only to disaster? Will the Minister meet with us more, because I am sure that a better policy would result from such meetings?
    Mr. Sheldon: I can assure my hon. Friend that I should be more than delighted to consult him and that there is an open door into my office on any day of the week. I have always held the view that the greatest possible amount of consultation is the most effective way to good legislation, and that remains my view.
    Mr. Paul Dean: Does the Minister agree that flexible retirement arrangements—which do not always mean early retirement—should be encouraged where-ever possible? Will he ensure that no

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    obstacle is put in the way of an employer who wishes to introduce arrangements similar to those now being introduced for the mineworkers?
    Mr. Sheldon: I am sure that the flexible retirement schemes that so many firms undertake are in the interests of both employers and employees, and it is for them to come to their own arrangements about what best suits the particular industry in which they both have a part to play.
    Sir G. Howe: Is the Minister aware that the Chancellor is due to celebrate his sixtieth birthday on 30th August this year? While I am sure that the whole House will join me in wishing the Chancellor a long and happy life, is the Minister aware that we intend so to arrange things that the Chancellor will need no fiscal inducement to lay down his heavy burden well before that date?
    Mr. Sheldon: I can assure the House that when the Chancellor's sixtieth birthday arrives he will be in harness, working for the good of the Government and of the people.
    Mr. Speaker: Order. I ought to have declared an interest in this Question.

    "Accountancy Age"
    Mrs. Wiseasked the Chancellor of the Exchequer how many copies of "Accountancy Age" are taken by his Department.
    Mr. Rookerasked the Chancellor of the Exchequer how many copies of "Accountancy Age" are taken by his Department.
    Mr. Andrew F. Bennettasked the Chancellor of the Exchequer how many copies of "Accountancy Age" are taken by his Department.
    Dr. McDonaldasked the Chancellor of the Exchequer how many copies of "Accountancy Age" are taken by his Department.
    The Chief Secretary to the Treasury (Mr. Joel Barnett): One.
    Mrs. Wise: Has my right hon. Friend read that one copy, and has he observed the account of the incredibly complex
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    price-fixing agreement between the sugar refiners and the equally complex price equalisation scheme operated by the Government? While no blame apparently attaches to Tate and Lyle, is my right hon. Friend satisfied that, with all these complexities, the taxpayer's interest is being adequately safeguarded in assessing taxes and subsidies for the sugar refiners?
    Mr. Barnett: I read the article about Tate and Lyle, and the Comptroller and Auditor General has reported on the case. If the Public Accounts Committee decides to report upon it to the House, I am sure that hon. Members will want to take that opportunity to discuss the matter further.
    Mr. Rooker: Is it not significant that this large private enterprise company, one of the most virulent anti-nationalisation companies in the country with its Mr. Cube campaign, is only too happy to take great handouts from the State when the occasion arises so that shareholders' funds can benefit, in this case to the tune of £600 million?
    Mr. Barnett: I not only read the edition of "Accountancy Age" to which my hon. Friends have referred but the following week's edition, which withdrew everything that had been said the previous week. I appreciate the point made by my hon. Friend, and it is right that the taxpayer's interest should be carefully taken into account. I am sure that the Comptroller and Auditor General has done that in his report. If the PAC decides to submit the matter to the House, we shall have an opportunity to study it further.
    Mr. Bennett: Will my right hon. Friend consider trying to persuade Tate and Lyle to put a simple statement of the firm's financial position on its bags of sugar so that consumers can see what is going on?
    Mr. Barnett: That is an interesting suggestion. I am sure that the board of Tate and Lyle will have noted it, and I hope that it will take account of it.
    Dr. McDonald: Can my right hon. Friend explain to the House who bore the cost of restocking the nation's stockpile of sugar following the loans to the sugar companies, particularly Tate and Lyle? Does he agree that there are still

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    grounds for disquiet owing to the complexity of Tate and Lyle's accounting procedures and the complexity of the issues involved? Will he ensure that, in future, Tate and Lyle presents its accounts in a simple, straightforward way in order to make clear to everyone the extent to which the firm relies on Government support?
    Mr. Barnett: The presentation of public companies' accounts fascinates me every bit as much as it does my hon. Friends. I should like to see such accounts presented more simply, but at the moment there is much consideration of presenting them in, if anything, a more complex way. However, I am sure that they will be crystal clear to my hon. Friend however they are presented. On the question of who benefits, I should remind the House that some of the major beneficiaries were the developing countries, for which we ensured very generous prices.
    Mr. Ridley: I declare an interest. Is it not appalling that Labour Members should indulge in accusations of guilt by association when the PAC has dismissed all the charges mentioned in this publication and The Times has categorically denied its own misleading report on the subject? Will the right hon. Gentleman deny the sort of implications that his hon. Friends are making?
    Mr. Barnett: I do not propose to deny or support anything until I see the report of the PAC. That is the sensible way for the House to deal with this matter. I note the hon. Gentleman's views about guilt by association.
    Mr. Pardoe: Would the right hon. Gentleman care to take this opportunity to advise companies such as Tate and Lyle which may fear nationalisation that, as long as this Parliament lasts and the agreement between the Government and the Liberal Party continues, there is no fear of any nationalisation?
    Mr. Russell Kerr: Well spoken, comrade.
    Mr. Barnett: I note the hon. Gentleman's views, and I am always happy to consult him on this and other matters.
    Mr. Adley: On a point of order, Mr. Speaker. Is it your intention in future,
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    despite the Questions on the Order Paper, to call five Government supporters and only one supporter of this side of the House?
    Mr. Speaker: The hon. Gentleman has a short memory. Last week the same thing happened in reverse. I try to be as fair as I can, and I called two hon. Members from the Opposition Benches to put supplementary questions.

    Commuter Rail Fares
    Mr. Channonasked the Chancellor of the Exchequer if, in framing his forthcoming Budget, he will take into consideration the increasing cost of rail fares and the need to give some assistance to rail commuters; if he will study the tax relief that is provided in other countries; and if he will make a statement.
    Mr. Robert Sheldon: I am aware of the considerations to which the hon. Member draws attention, but I do not think that it would be right to single out this particular form of personal expenditure for tax relief.
    Mr. Channon: Is the right hon. Gentleman aware that fares have risen much faster than earnings or the cost of living generally and that this has caused considerable hardship for hundreds of thousands of people? Is he further aware that there is now ample evidence that the railways are losing a great deal of revenue as a result of this? There are schemes of this sort in many other European countries. Therefore, should not the Government at least make a proper examination of this proposal so that its full costs can be ascertained, bearing in mind that if they do not do so the railways will continue to lose revenue from this source and the hardship for many people will continue?
    Mr. Sheldon: I am aware of the hon. Gentleman's general point. It has been put to the Government from time to time. However, where a person lives is largely a question of personal choice and it would be wrong to expect one taxpayer to subsidise another for living in a particular area. These are matters for election by the person concerned. That is the way that all Governments have so considered they should remain.
    Mr. Arthur Lewis: Is my right hon. Friend aware that there are people, with

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    other incomes, who are getting a tax-free allowance equivalent to as much as £100 per day gross and also receiving tax-free travel allowances—which even hon. Members do not receive? Why should their Lordships be so favourably treated? Why are they allowed to get away with it while other workers by hand and brain are not? There are peers drawing an allowance which is equivalent to £100 a day gross as well as getting tax-free travel allowances.
    Mr. Sheldon: I am aware of the point that my hon. Friend makes. The allowances for Members of the House of Lords are designed to cover their expenses. Those who hold directorships or who work in industry will be covered by the general tax laws, and recent legislation on benefits in kind will apply equally to them.
    Mr. McCrindle: Will the right hon. Gentleman consider allowing employers who wish to do so to issue vouchers to assist their employees to travel to and from work and to allow the total cost to be offset against corporation tax, as can be done to a limited extent with luncheon vouchers?
    Mr. Sheldon: Luncheon vouchers have always been in an anomalous position, and it is not intended to extend that sort of anomaly. This is a large element of discretionary expenditure and it would be wrong to complicate the tax laws to allow for it.
    Mr. Noble: While it may be true that where a person lives is a matter of personal choice, is my right hon. Friend aware that it is no longer a matter of personal choice for many people where they work and that they are having to travel increasing distances because of factory closures? While there is a need to look at fares, does my right hon. Friend agree that subsidising rail but not bus fares through tax cuts or any other means would be grossly unfair to many people living in areas outside the big conurbations? Will he look at the possibility of increasing subsidies to bus undertakings?
    Mr. Sheldon: My hon. Friend has rightly drawn attention to the problem of public transport. He will be aware of the considerable subsidies that are paid towards public transport. Any further elements of public expenditure must be
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    considered in the light of our survey of public expenditure as a whole and will form part of the further investigation that is necessary before next year.
    Mr. Stanbrook: Does the Minister agree that he is entirely wrong to attribute the expense of transport to work to the discretionary side of a person's activities? Is he aware that there are many other allowable expenses that are wholly, necessarily and exclusively incurred in the process of earning an income? Does not this fall within that discretion?
    Mr. Sheldon: It has always been held to be difficult to assess how much of this type of expenditure is incurred on the basis of a person's own personal choice. If one made certain parts of this type of travel allowable for tax reductions, one would disturb decisions to which a person rightly comes when choosing where he wishes to reside.
    Mr. Ovenden: Does my right hon. Friend detect an element of hypocrisy in the attitude of the Opposition, since they are continually calling for cuts in subsidies, including rail subsidies, while at the same time weeping crocodile tears over the fate of commuters and continuously trying to make political capital out of their suffering?
    Mr. Sheldon: I am grateful to my hon. Friend for drawing attention to the chasm that exists between the Opposition's obsession with cuts in public expenditure in general and increases in certain types of public expenditure.
    Mr. Burden: Although the Minister has said that this is a difficult matter, does he agree that in the last few days the Government have shown that if they put their mind to do things that at first appear difficult they are able to resolve the difficulty? Is he aware that many people in commuting areas suffer extreme hardship because of increased fares and increases in other costs such as housing? Does he agree that it is time that something was done for these deserving people, who are in the present situation principally because of the enormous cost of living imposed upon them by the Government?
    Mr. Sheldon: I am grateful to the hon. Member for reminding the House that the Government have been able to

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    resolve a number of difficulties facing the country as a whole. I look forward to the Government resolving with equal effect other economic problems that we hope to overcome as a result of certain measures.
    Mrs. Bain: As regards personal choice, is the Minister aware that many people have to live in places where houses are available, particularly in view of the Government's policy of dispersing people from the inner cities to the suburbs and new towns? Will he put pressure on the Secretary of State for Transport to encourage the freezing or reduction of fares in the public transport sector in order to encourage the further use of public transport and to cut costs for commuters?
    Mr. Sheldon: I take note of what the hon. Lady has said, and I hope that as a result she will be more sympathetic to the Government's problems on public expenditure than she has been during recent debates. These are problems that the Government must resolve. The general type of resolution that we have seen is an indication of our determination to fit the problem within the framework of our overall economic strategy.
    Mr. Channon: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek an early opportunity to raise the matter on the Adjournment.

    Tax Codings (Widows)
    Mrs. Chalkerasked the Chancellor of the Exchequer if he will instruct the Inland Revenue to check the 1977–78 tax codings for widows with children.
    Mr. Robert Sheldon: I assume that the hon. Lady is concerned about the adjustments relating to child benefits. All inspectors in charge of tax offices were reminded on 4th March of the need to see that the existing instructions have been correctly carried out.
    Mrs. Chalker: I am grateful for that reply, but is the Financial Secretary aware that there is still a chaotic muddle in the minds of many people whose tax advice was sent out before 4th March and where errors have been made over the reduction of child tax allowance at the
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    time of the introduction of child benefits? Will he ensure that when the second reduction is made—if it is made—in child tax allowance next autumn, the tax codings that go out, particularly to widows, are unequivocal and tell them exactly what their financial situation will be for the following year?
    Mr. Sheldon: About 5½ million code changes were involved and reminders have been sent by the Inland Revenue. It has ensured that all reasonable steps have been taken to ensure that widows receive their correct code numbers before 6th April. The instructions have been sent and there will be little difficulty. The operation has been complex. By the time we come to the next change, we shall have had experience and that should remove the problems that arose on the first occasion.
    Mr. R. C. Mitchell: Is my right hon. Friend aware that a widow, or a family, with a child over 19 years of age who is still at school does not qualify for the child benefit allowance but has the child tax allowance reduced anyway? Does he agree that they are net losers? What is he going to do about it? He said that only a few people are involved, but there are 3,500 such people in the country. What is he going to do about them?
    Mr. Sheldon: There have been some changes in the educational grants. We must understand that in the change-over from child allowances to child benefits there are a number of transitional problems with which we have had to deal. In the main, we have dealt with them satisfactorily.
    Mr. Beith: Is the right hon. Gentleman aware that it is deeply distressing to the widows involved to receive £1 child benefit for their child and then to find that that sum is taken away from their pension? Is he aware that they then have to haggle with the Inland Revenue to ensure that they are not taxed on the money that they have never received, and that that causes deep personal distress?
    Mr. Sheldon: I must remind the hon. Member—[HON. MEMBERS: "Your hon. Friend."] The House will know that all of us, irrespective of party, have friends situated in all sections of the House. I remind hon. Members that the new child

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    benefit scheme comes into operation on 6th April. No one is out of pocket at the moment and no one can be out of pocket until the scheme starts its operation. I hope to try to ensure that nobody will be under any misunderstanding about the Government's intention, and instructions have been sent out to that effect.
    Mr. David Howell: Is not the whole story of the child benefit scheme a dismal tale of incompetence, of which this is just one more aspect? Does not the Minister recognise that to those with children over the age of 19 in full-time education it is not good enough to say that something will be done later, because they will have to pay a revised scale in the new academic year? Does he agree that this is yet another area where a higher standard of competence and efficiency is required?
    Mr. Sheldon: I understand that the hon. Member is not opposed to the change from tax allowances to cash support for mothers. We have not had notable support for this important change, which has immense social consequences. The change has been valuable and it will be seen to be valuable. During the transitional stage I hope that we shall be able to carry the House with us until the final stages, when support to a mother for her child will be regarded as a normal arrangement.

    Taxation and Benefits
    Mr. George Cunninghamasked the Chancellor of the Exchequer if he will set in hand an examination of the proposal on tax and short-term social security benefit set out in the article by the hon. Member for Islington, South and Finsbury in The Guardian of 8th March.
    Mr. Joel Barnett: I am having this scheme examined and I will write to my hon. Friend shortly.
    Mr. Cunningham: Does the Chief Secretary agree that we would not be justified in taxing short-term benefits because it would probably cost about £50 million a year to administer that change, but will he also agree that we cannot go on with a system that pays very large tax rebates to some people becoming unemployed but nothing at all to others, dependent entirely upon the moment at which they become unemployed? Will Treasury Ministers try to draft the Ways and Means Resolutions
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    on the Budget in such a way that we stand a chance of having a good going over of this idea this year with a view to possible implementation next year?
    Mr. Barnett: As my hon. Friend knows, we always draft the Ways and Means Resolutions in as helpful a way as possible. I take my hon. Friend's point. There are serious administrative problems in this field, although in principle two incomes, one in work and one out of work, of equal amounts should be taxed equally. There is nothing wrong in principle with the taxing of short-term benefits. It is right, in my view, that they should be taxed. However, on the other hand, there are very serious administrative problems, to which my hon. Friend referred in his article, and I promise him that we shall be considering them.
    Sir G. Howe: Is the Chief Secretary aware that there may be some room for doubt as to quite whom he is intending to help in the drafting of the Ways and Means Resolutions, but that this is a matter on which there is equal concern on both sides of the House? Will he confirm the figure quoted by his hon. Friend that the total sums now paid out in tax refunds to people in receipt of short-term benefits amount to some £400 million? Will he also consider very seriously the suggestion put forward by his hon. Friend that, at least while people are drawing benefit and are not paying tax, they should be included in the tax code system and, therefore, not entitled to refunds for those relevant weeks?
    Will the Chief Secretary accept our assurance that any move to follow the suggestions made by his hon. Friend to bring back some justice in this area would be much supported by the Opposition?
    Mr. Barnett: I very much support bringing justice into this area and many others. I want to examine very carefully what was said by my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham). There are very great administrative problems in dealing with this question through the PAYE system. We are talking about the equivalent of about 10 million additional jobs, because about half of short-term benefits are subject to claims and are for up to about two weeks, on average. That means

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    an enormous administrative task. I assure the right hon. and learned Gentleman that these are very serious administrative problems and that we are looking at them.
    Sir G. Howe: Does not the right hon. Gentleman understand? Of course, one can say that it is an administrative task to repay tax or to tax those who are drawing benefits of this kind, but is it not the case that every one of these people involves an administrative operation simply to secure the payment of a refund already? Would it not make sense, therefore, to take the same administration to see that they get no refund? What is the difference?
    Mr. Barnett: The difference is that the reasons for refunds are much more complex than the right hon. and learned Gentleman suggests. There are many other reasons for refunds. If the matter were as simple as that, I am sure that the Government of which he was a member would have looked into it and dealt with it. It is a much more complex matter than he cares to suggest.

    Public Expenditure
    Mr. Frank Allaunasked the Chancellor of the Exchequer if he will state the approximate cost in 1977–78 of restoring the cuts since February 1976 in housing, education, health and overseas aid, respectively; what estimate he makes of the effect of such restoration on the total number unemployed; and if he will consider giving priority to this in his Budget.
    The Chancellor of the Exchequer (Mr. Denis Healey): The programme tables in Part 2 of Cmnd. 6721 show changes from Cmnd. 6393. The aggregate saving was about £375 million. To restore this sum would mean increasing the basic rate of income tax by ¾p or increasing indirect taxes sufficiently to raise the RPI about ½per cent. The possible employment effects of any increases in individual programmes from the levels announced in Cmnd. 6721 would depend on how such increases were spent within the programmes concerned. My hon. Friend will have to await my Budget Statement for an answer to the last part of his Question.
    Mr. Allaun: Will the Chancellor give more attention to the letter from the
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    National Executive Committee of the Labour Party on this matter—
    Mr. Pardoe: Hear, hear.
    Mr. Allaun:—than to any views that may come from a certain Liberal gentleman? Secondly, while I welcome tax reliefs for the lower paid, if, as now suddenly and astonishingly appears to be the case, the Chancellor is in a position to give away large sums, is it not only fair that a good part of this should go to helping those who need homes, home helps and nursery schools, and who are being so seriously hit by the recent cuts?
    Mr. Healey: I shall give immensely careful attention to any communication that I receive from the NEC of the Labour Party—quite as close attention as I would give to representations made to me by the hon. Member for Cornwall, North (Mr. Pardoe).
    On the question of a possible improvement in the prospect for the public sector borrowing requirement, my hon. Friend will recognise that, if such an improvement proves to eventuate, it will be due to an improvement in the exchange rate and a fall in interest rates, which is consequential on the steps I took to cut public expenditure last year.
    Mr. Emery: As the rate of personal income tax arises on this Question, will the Chancellor—if not today, in his Budget Statement next week—state categorically by what date the present Government will reduce the level of personal tax to that which existed in 1973–74?
    Mr. Healey: I shall bear in mind the point made by the hon. Gentleman, as I shall all the 2,379 other points that have been made to me for inclusion in my Budget Statement.

    Miners (Early Retirement Scheme)
    Mr. Ridleyasked the Chancellor of the Exchequer whether the lump sum payments to early-retired mineworkers which the National Coal Board has contracted to pay are chargeable to income tax.
    Mr. Joel Barnett: Under the Finance Act 1970, superannuation schemes require the approval of the Board of Inland Revenue in order to qualify for the tax treatment which it provides. The

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    Act provides for the payment within limits of lump sum benefits which will be exempt from tax, but questions relating to a particular scheme are a matter between the administrators of the scheme and the Board of Inland Revenue.
    Mr. Ridley: Is the Chief Secretary aware, however, that the Financial Secretary told me, in answer to a Question, that where the employee had a contractual right to the payment it would be taxable? Is he saying that the miners do not have a contractual right to this payment? If that is the case, I would accept that it is not taxable. Does he not feel that there would be a strike if there was a failure to make this payment—in which case it is clearly taxable? Does the social contract therefore provide that trade unionists should be treated differently for taxation purposes from the rest of us?
    Mr. Barnett: No, it does not. If Opposition Members take that kind of tone in relation to lump sum benefits for miners who have worked underground for a very long time, it is very fortunate that they are not in Government at present.
    Mr. Skinner: Does my right hon. Friend appreciate that there are those in the mining industry who believe that the lump sum payment that is made under the early retirement scheme is not large enough and that it should be equal to that which is paid under the miners' redundancy payment scheme? Does it not make a significant contrast with the note issue made by GEC, in which Sir Arnold Weinstock himself pocketed £600,000 and avoided paying tax at the highest rate and might pay it at 35 per cent.? As compared with this small lump sum payment for miners who have worked underground for 40 or 50 years, does not my hon. Friend think that it is that which needs examining and not this payment for miners?
    Mr. Barnett: I certainly agree with my hon. Friend that there are double standards on the Opposition Benches. I would not necessarily agree with him about the early retirement scheme. It is a good scheme and I think that it has been accepted as such by the NUM.
    Mr. David Howell: No one questions the hard work of miners, but the Minister
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    has a very serious question to answer from my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley)—namely, whether he can reassure us that treatment for tax for payments of this kind is the same for all workers.
    Mr. Barnett: I can reassure the hon. Gentleman. I told him in my original answer that the schemes have to be approved by the Inland Revenue, and if they are approved the payments will he tax-free.
    Mr. Ridley: On a point of order, Mr. Speaker. In view of the thoroughly unsatisfactory and evasive nature of the reply, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest possible opportunity.

    Building Contractors (Tax Exemption Certificates)
    Mr. Copeasked the Chancellor of the Exchequer if he will postpone the start of the requirement for a new 714 certificate at least until the Inland Revenue has dealt with the applications.
    Mr. Robert Sheldon: No, Sir. The great majority of applications have been dealt with, and I have made special transitional arrangements to deal with the rest.
    Mr. Cope: Will the right hon. Gentleman acknowledge that the shambles that exists over the issue of 714 certificates goes much wider than the labour-only sub-contractors to whom they were originally intended to apply? Will he admit that there are local authorities that are refusing the right to tender to contractors who do not hold such a certificate? Does that attitude have the right hon. Gentleman's support?
    Mr. Sheldon: I must take issue with the hon. Gentleman in his description of the introduction of the scheme. The scheme replaces the Conservative-introduced scheme, which had the same objectives. We have introduced a scheme that will work. It is necessary to understand that the 714 certificates are a means of ensuring that those who are required to pay tax in fact pay tax on the earnings they make.
    Mr. Terry Walker: Does my right hon. Friend understand that there seems to be

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    some local difficulty at the Bristol (6) tax office? Will he look into the difficulty as a matter of urgency?
    Mr. Sheldon: I shall be happy to look into any case that my hon. Friend may wish to put to me.
    Mr. Tebbit: Does the right hon. Gentleman recognise that, while we all support the aim of ending tax dodging in this respect, a key part of the proposal was the issue of plastic cards, including the photograph of the sub-contractor concerned, to ensure that there was no possibility of fiddling? However, because of the muddle in the right hon. Gentleman's Department, he has now instructed contractors that they may accept a letter without any photograph or any proof of identity. What was all the fuss about in the first place?
    Mr. Sheldon: The hon. Gentleman may know that the letter is to deal only with applications that come at the tail end of 18 months' preparation. It is designed to cover only the period up to 5th July. This has been made crystal clear. I am glad to have the hon. Gentleman's support for the photographs, which a number of his hon. Friends opposed when they were first announced.
    Sir G. Howe: Does the right hon. Gentleman understand that there is no doubt about the need to have some effective method of collecting tax from people wherever and however they work but that the scheme is causing administrative chaos throughout the industry? Is he aware that it is causing many sub-contractors to lose their livelihoods altogether? It is causing many main contractors to lose those who would otherwise be working for them. Does the right hon. Gentleman appreciate that these difficulties stem from the detailed and restrictive conditions attached to the scheme? Will he give the House the assurance that the Government will reconsider the entire operation of the scheme before they bring the Finance Bill before the House?
    Mr. Sheldon: This is a matter that has been before the House for the past two years. The legislation was passed by the House 18 months ago. Certificate application forms were put in at that time. There has been plenty of time for the introduction and understanding of
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    the scheme. We are now dealing with the 5,000 applications awaiting the Inland Revenue. It may be that some more will come into the tax offices at the last minute. The arrangements that I have announced are designed to meet only the late applications.

    Widows (Taxation)
    Mr. Ovendenasked the Chancellor of the Exchequer what recent representations he has received concerning the taxation of widows; and what replies he has given.
    Mr. Robert Sheldon: Many representations have been received about the taxation of widows, from hon. Members, from widow's organisations and from others. Naturally, my right hon. Friend has given them careful consideration in preparing his Budget. The Government's view remains that increases in widows' pensions are a more effective way of helping all widows than providing special tax reliefs.
    Mr. Ovenden: Has my right hon. Friend seen Early-Day Motion No. 245, signed by 83 hon. Members from all parts of the House, which demonstrates the concern that is felt about widows' taxation? Will he ask my right hon. Friend the Chancellor, when drawing up the Budget, to bear in mind the deep and justified sense of grievance that national insurance widows feel about the tax burden that they bear compared with married women and war widows?
    Mr. Sheldon: I understand the sense of concern that everyone feels for those whose lives have been shattered by widowhood. This is a matter that must always be present in the minds of all of us, but there is the problem of widows' pensions. If we were to produce tax allowances to assist them, more money would be made available to those who have most. That is the way the tax system works. We believe that the right way to approach the matter is through the social security scheme, which is expressly designed to give most to those who have the greatest need. That is the way in which we should make moneys available to those in the greatest need as described by my hon. Friend.
    Mr. Ralph Howell: I realise that the Minister cannot divulge any of the Budget

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    proposals, but I remind him of the letter that I have sent from my constituency concerning a widow with total earnings of £28 a week who has been taxed at £5 a week, leaving her with less spending power than if she were on social security. Will the Chancellor bear in mind the urgent necessity of raising all tax thresholds well above the social security level?
    Mr. Sheldon: I understand the hon. Gentleman's point about levels of tax thresholds. This is obviously a matter that my right hon. Friend will have at the forefront of his mind in the Budget Statement that he will be making next week.

  GRAVESEND
  Mr. Ovendenasked the Prime Minister if he will pay an official visit to Gravesend.
  The Prime Minister (Mr. James Callaghan): I have at present no plans to do so.
  Mr. Ovenden: If my right hon. Friend is unable to visit my constituency, will he consider suggesting to the Leader of the Opposition that she pays yet another visit? Is he aware that in Gravesend we have a large immigrant population and a successful community relations council which is supported by all parties? Is my right hon. Friend aware that Conservative supporters in my constituency are concerned that they are now led by a person who has refused to dissociate herself from the racialist campaign being conducted by the Conservative candidate in the Stechford by-election?
  The Prime Minister: I am glad that it is an all-party campaign in Gravesend. I have noted that the Conservative Party, perhaps even more especially when in Government, has taken a responsible attitude to matters of immigration and race relations. I was glad that the Home Secretary appointed David Lane as the chairman of one of these bodies. It was drawn to my attention that the Conservative candidate at Stechford had certainly gone beyond what is Conservative Party policy, and I hope that a dissociation from that may be made.
  Mrs. Thatcher: Is the Prime Minister aware that, as this matter was raised last
  1458
  Tuesday and I was not aware of the basic leaflet to which it referred—a leaflet published some seven months ago—I naturally did not rise? I have seen it, and our policy remains—I am in some difficulty because in theory I am not allowed to quote from documents in asking a question but perhaps I may refresh my memory plentifully—that
  "We believe that we will only succeed in maintaining and securing tolerance for all minority groups in this country by holding out the clear prospect of an end to immigration."
  That is official policy. Is the right hon. Gentleman aware that the leaflet referred to
  "the interests of good race relations in the future"
  and finished by stating
  "What do Labour say?
  We know what the former Chief Whip of the Labour Party, the right hon. Member for Bermondsey (Mr. Mellish), says about immigration, but what does the Prime Minister say?
  Mr. Faulds: Do you disavow it? Answer a simple question.
  The Prime Minister: I was endeavouring to make it possible for the right hon. Lady to make a positive statement on immigration and race relations. The policy of ending all immigration would clearly be inhuman and has not been Conservative policy. The ending of all immigration would mean that no dependants and no wives could join those who are in this country. I hope that the right hon. Lady will reflect on the matter, because that is not the policy enunciated in her own document.

  UNITED STATES AND CANADA (PRIME MINISTER'S VISIT)
  Mr. Dykesasked the Prime Minister if he discussed EEC matters during his recent visit to President Carter.
  The Prime Minister: I refer the hon. Member to the statement which I made to the House on 15th March.
  Mr. Dykes: There may have been more to it than that. Did the President of the United States express any interest in the British political scene—for example, the nature of the Liberal Party and its ideas on the EEC, or was that

  1459
  whole subject too squalid for the President, with his religious upbringing, to deal with? So far as the President may have discussed the EEC with the right hon. Gentleman, did he think that it would be possible for the Prime Minister to introduce with sufficient courage a Bill on direct elections at the earliest possible opportunity, on which the Prime Minister might just be able to secure a majority of more than 24?
  The Prime Minister: Yes, the President evinced a lively interest in the British political scene. He was extremely well informed about it, and I did my best to add to his knowledge. The Bill on direct elections will be introduced in due course, as I announced yesterday.
  Mr. Gould: Has my right hon. Friend seen reports that the Tory Group in the European Assembly has recommended a 25 per cent. devaluation of the green pound, which would add 8 per cent. to food prices? Does he not agree that that would be very damaging to our interests? Does it not confirm that the Conservative Party is now clearly the party of Common Market-imposed high and rising food prices?
  The Prime Minister: It is, of course, true that a substantial devaluation of the green pound would add heavily to our price increases in this country. I am not aware of the figures that my hon. Friend gave, but certainly there has been an official statement that the Conservative Party spokesman is in favour of a substantial devaluation of the green pound. That is bound to put up prices: it cannot be denied that it will do so. That is why we have so far resisted giving away the green pound. I would only want to see a devaluation there if we got value for money in another direction.
  Mr. David Steel: On any future visit to the United States, will the right hon. Gentleman make any attempt to explain how it is that, in the Conservative Party's view, any talks between them and ourselves with a view to sustaining a Conservative Government so as to provide a stable programme is the height of patriotism while similar talks to support a Labour Government in a stable programme are a "squalid deal"?
  The Prime Minister: We know that patriotism always exudes from the Conservative
  1460
  Party when it is in office but sometimes fades rather when its members go abroad when in Opposition.
  Mr. Emery: When the Prime Minister is considering the subject of the green pound, will he bear in mind the necessity for a successful British agriculture, which rests very much on some devaluation of the green pound?
  The Prime Minister: The question of a devaluation of the green pound should not become a matter of theology: it is a question of practicality. The Government would not want to see a situation in which there was total inflexibility on this matter if we got something worth while elsewhere. The whole of the CAP is based on certain national interests. I think that our national interests have been very much pushed into second place since we are such a large consuming, and not so much of a producing, country. We want to see a very healthy agriculture, and will do so, but I want to see us get value somewhere else if there is to be any change in the value of the green pound.
  Mr. Wrigglesworth: Has my right hon. Friend noticed that a Conservative Member in the European Parliament yesterday attacked the Commission for stopping or attempting to stop the sale of cheap butter to Russia? Does he not agree that to take that attitude is to go against the interests of both the consumer and the taxpayer in this country?
  The Prime Minister: The agricultural policy of the Community was devised before Britain became a member and is not in Britain's interests as it stands. We have, by our entry, thrown a considerable influence on the side of European consumers as a whole, and we shall continue to do so.
  Mr. Maxwell-HyslopDid the right hon. Gentleman let President Carter into the secret that he has never shared with the House of Commons—namely, if he will not devalue the green pound, how he will put into agriculture the capital it needs to carry out the Government's own policy, as declared in "Food From Our Own Resources"?
  The Prime Minister: I am grateful to the hon. Gentleman for reminding me what the original Question was about, because it enables me to say that I did

  1461
  not discuss the green pound with President Carter. However, since the House is interested in the matter today, I assure the hon. Member that the success of British agriculture is very important and that the resources which are being put into it and have been put into it are sufficient to encourage growth—and that growth is coming. But what Conservative Members who support the CAP should ask themselves is whether they want to support a policy based on a social phenomenon in some of the Continental European countries but which does not meet the needs of the market or of the consumers in this country.
  Mr. Prior: If the right hon. Gentleman thinks that the resources available to go into British agriculture are sufficient to increase food production, why is the present food production from British agriculture lower than it was even in 1970?
  The Prime Minister: I am not sure whether the right hon. Gentleman visits the countryside, but when he does he will find that the production of milk, on certain farms at least, suffered heavily last year from a drought, which might also have escaped his notice.

  PRESS (ROYAL COMMISSION'S REPORT)
  Mr. Moonmanasked the Prime Minister if he will make a statement on the proposed date of publication for the Royal Commission on the Press.
  The Prime Minister: The Royal Commission hopes to present its final report by the middle of this year.
  Mr. Moonman: I am sure my right hon. Friend will be aware that it is almost three years since the Royal Commission was set up. Since he now says that its report will be published quite soon, will he not also anticipate that any recommendations which could be implemented arising from the Annan Report should await that publication, since there are many relevant matters in both reports?
  The Prime Minister: I shall want to give the report full consideration when it comes. I regret very much that a number of the recommendations in the interim report have not been implemented, and I hope that the industry
  1462
  will get on with those. I shall also consider any inter-reaction between the Annan Report and the Royal Commission's Report.
  Mr. Gow: In view of the partial report on yesterday's Cabinet meeting which appears in The Times today, in which it is reported that four Cabinet Ministers threatened to resign over the deal with the Liberals, should not the right hon. Gentleman place in the Library a record of what took place yesterday so that the House and the country can judge the extent to which the Liberal Party has betrayed its erstwhile supporters?
  The Prime Minister: As the hon. Gentleman knows, there is no ministerial responsibility, thank God, for what appears in the Press. I would certainly advise the hon. Gentleman not to believe everything that he reads even in august newspapers like The Times.
  Mr. Aitken: Would the right hon. Gentleman care to propose to the Royal Commission on the Press that there should be a merger between Labour Weekly and Liberal News? Is he aware that without one of those skilled deals Liberal News, like the Liberal Party, is likely soon to go broke from lack of support?
  The Prime Minister: I hope that that is not so. I should not want to think that that was the first result of the understandings that we have reached. I am certainly willing to advise everybody to read Labour Weekly, which today contains an exclusive article by me.
  Sir G. Howe: When considering that helpful suggestion by my hon. Friend the Member for Thanet, East (Mr. Aitken), would the Prime Minister like to consider taking on a more ambitious task and including Tribune in the merger?
  The Prime Minister: I am a long and faithful reader of Tribune. That is more than I can say of my dealings with the Conservative newspapers, but if they would like to put me on their free circulation lists I shall even undertake to look at those week by week.
  Mr. Molloy: Does the Prime Minister agree that these mergers might provide an opportunity for decent-minded people to see a united front against the racialist element of the Conservative Party which

  1463
  was condoned this afternoon by its Leader?
  The Prime Minister: I am very anxious that there should be no unnecessary disagreements or lack of understanding about policy on this important social issue which can raise so much tension. I understand that the Conservatives' policy is that they do not want to stop immigration of dependants joining relatives already here. I trust that that is still the position.

  MR. SPEAKER (CALLING OF MEMBERS)
  Mr. Rost: On a point of order, Mr. Speaker. It will not have escaped your observant eye that as from last night there has been a realignment of hon. Members of this House, between those supporting the Government and those supporting the Opposition. It is a well-established practice of the House that Mr. Speaker should maintain a fair balance, particularly at Question Time, between official supporters of the Government and opponents of the Government when calling on Members to speak.
  I am not suggesting that there has been any imbalance in your choice since the realignment, but I am seeking your guidance on whether you have accepted in practice for the future that when Members from the Liberal Party are called, even though they prefer to sit on the Opposition Benches rather than join their new marriage partners, you take account of this fact—[Interruption.]
  Mr. Speaker: Order. Another time, some of the hon. Members who are now shouting will be trying to make a point of order.
  Mr. Rost: All I am seeking guidance about is that we should have clarification that in future, Mr. Speaker, you will take account of the time occupied by Liberal Members and realise that, even though they sit on the Opposition Benches, their time should not come out of that allocated to Members of the official Opposition.
  Mr. Speaker: The hon. Member for Rutland and Stamford (Mr. Lewis) will not mind my telling the House that last night he gave me notice that he would raise exactly this point of order that has
  1464
  now been raised by the hon. Member for Derbyshire, South-East (Mr. Rost). I am grateful when hon. Members give me notice in advance that they are raising a point of order. I know that that is not always possible, but it is helpful.
  The answer is quite straightforward. For centuries this House has vested in its Speaker complete discretion about who captures his eye and when. Certainly this goes back to Speaker Onslow's time in the eighteenth century, and possibly before that. I propose that until or unless the House takes that discretion away from the Speaker I shall exercise it as fairly as I can.

BUSINESS OF THE HOUSE
Mrs. Thatcher: May I ask the Lord President to state the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): The business for next week will be as follows:
MONDAY 28TH MARCH—Conclusion of the debate on the Statement on the Defence Estimates.
Remaining stages of the General Rate (Public Utilities) Bill [Lords], and of the Marriage (Scotland) Bill [Lords].
Motion on ECC Dcuments Com.(76)660, S/102/77, R/616/77, S/232/77 and R/388/77 on fishery resources.
TUESDAY 29TH MARCH—My right hon. Friend the Chancellor of the Exchequer will open his Budget.
EEC Documents R/566/77 and R/567/77 on economic policy guidelines will be relevant.
At 7 o'clock the Chairman of Ways and Means has named opposed Private Business for consideration.
Proceedings on the Agricultural Holdings (Notices to Quit) Bill [Lords], and on the British Airways Board Bill [Lords], which are consolidation measures.
WEDNESDAY 30TH MARCH and THURSDAY 31ST MARCH—Continuation of the Budget debate.
At the end of Wednesday, debate on the Chairman of Ways and Means' ruling of 10th February.

1465
FRIDAY 1ST APRIL—Private Members' motions.
MONDAY 4TH APRIL—Conclusion of the Debate on the Budget Statement.
Mrs. Thatcher: Will the Leader of the House tell us when the White Paper on direct elections will be published? As he knows, there is a debate on this subject tomorrow, and it would be helpful if we could have it by then. Is the White Paper already in print, and will it come through unchanged?
Mr. Foot: I am glad to assure the right hon. Lady on the second point—no alterations are required to the White Paper. It will be published next week, and I am sorry that it cannot be published in time for tomorrow's debate.
Mr. Spriggs: Has my right hon. Friend seen Early-Day Motion No. 257 headed "St. Helen's Trades Council"? Will he give the House an opportunity to debate that council's resolutions about a policy for ending rising unemployment, by introducing selective import controls, strict price controls and associated measures?
[That this House welcomes the St. Helens Trades Council resolution in which it is stated that the people of St. Helens, in order to stop rising unemployment, urge the Labour Government to implement the following policy, namely, the introduction of selective import controls; strict control over the prices of essential items in working class family budgets; lowering of interest rates and the control of export capital; raising of consumption by increasing pensions, social insurance benefits and Social public expenditure; a shorter working week; extension of statutory and annual holidays; the reduction and elimination of overtime and a fair basic wage for all; and which urges that the Labour Government honour its last election manifesto by implementing 'Clause 4' of the Labour Party constitution.]
Mr. Foot: I have seen the motion in the name of my hon. Friend the Member for St. Helens (Mr. Spriggs) and some of his hon. Friends. All the issues that he has mentioned will be relevant in the Budget debates which begin next week.
Mr. Peter Walker: Does the Leader of the House expect the statement from the Secretary of State for the Environment on the Government's inner city policies to be given to the House next week?
Mr. Foot: I do not know. I shall let the right hon. Gentleman know when I find out.
Mr. Arthur Lewis: Now that we have got over the immediate difficulty of last night, may I urge the Leader of the House seriously to have discussions next week with both political parties in order to stop this stupidity of having to drag in sick Members to vote? As every elector in the country has the right to a proxy vote if he or she is indisposed or sick, is it not possible to introduce the same system and to give sick hon. Members a vote by proxy? If the Prime Minister can make a deal with the Liberal Party, surely all parties can get together and announce next week that no sick Member will have to come into the House to vote if he does not want to and that the House will facilitate his voting by proxy?
Mr. Foot: I recognise that there is strong sympathy for this proposal in many parts of the House. The same question was raised some months ago when we had similar problems and anxieties. We did have some discussions between the usual channels then, but no real agreement was reached.
Mr. Arthur Lewis: Why not?
Mr. Foot: Although I have great sympathy with what my hon. Friend says, there are more problems associated with proxy voting than his question suggests.
Mr. Grylls: Will the Leader of the House make a statement next week or arrange for a debate on the new joint consultative committee of the Labour and Liberal Parties? What is the constitution of this committee, who are the members and will its minutes be published? We want to know what it is all about.
Mr. Foot: The matter was before the House for general debate yesterday and the House gave a substantial majority to the proposals presented to it. I am sure the hon. Member has taken that into account. All those who are concerned will be able to see what is happening, and I am glad that the hon. Member is hoping to see this experiment develop fruitfully.
Mr. Greville Janner: In view of tit:, fact that the Leicester city housing committee, along with other Tory-dominated housing committees throughout the country, is cutting council housing by 50 per cent., in spite of the fact that Leicester is a housing stress area, could we have

1467
a debate on how we could have some control over local authorities' ability to destroy the rights of ordinary people to get homes?
Mr. Foot: I fully acknowledge the importance of that matter. I cannot promise a debate next week, but these questions will arise when we have a more general discussion of housing matters.
Mr. Michael Morris: As the orders relating to direct labour lapse on 31st March, will the right hon. Gentleman say what the Government intend to do about those orders and the proposed legislation on local authority work forces?
Mr. Foot: No doubt the hon. Gentleman heard the Prime Minister's statement yesterday. The Government propose to proceed with a Bill to assist in dealing with that problem. I cannot say exactly when that Bill will be introduced, but I hope that it will be fairly soon.
Mr. Watt: Will the Leader of the House say when the devolution Bill relating to Scotland is to be reintroduced—or should I ask somebody in the Liberal Party for an answer?
Mr. Foot: We shall be having discussions, as I indicated to the hon. Gentleman and representatives of his party, about how we proceed in dealing with this subject. The Government are determined to ensure that a Bill in some form or other is brought again before the House. Fortunately, because of the fact that the hon. Member for Banff (Mr. Watt) and his party were defeated in the Lobbies last night, the House will now have every opportunity to proceed on these lines.
Mr. Wrigglesworth: Is my right hon. Friend aware that some of us are appalled at the apparent ambivalence among the Opposition in their immigration policy as demonstrated this afternoon? Therefore, will he arrange an early debate on this subject so that we can discover whether the policies enunciated by the right hon. Member for Penrith and The Border (Mr. Whitelaw) and by his right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) are the official Opposition policies, or whether the policies of the right hon. Lady the Leader of the Opposition are the official policies of the Opposition?
Mr. Foot: My hon. Friend has put the point in his remarks even more effectively than I could have put it in my reply. I am sure that the House will wait to hear the answer.
Mr. Marten: When the right hon. Gentleman replied to last night's debate he said that the agreement with the Liberals was not a Lib-Lab pact. Will he make a statement next week describing the difference between the two?
Mr. Foot: I would refer the hon. Gentleman to the whole of my speech. He will see there set out what I believe the agreement means. The words are perfectly simple. I am sure that the hon. Gentleman is as capable as anybody else of understanding that passage in my speech.
Mr. Michael Stewart: In view of the pleasure given to everybody by yesterday's proceedings and the desire among the Opposition for further information, may we have another censure debate soon, please?
Mr. Tebbit: May I thank the Lord President for his remarks a few moments ago underlining the perils of proxy voting in this House? May I also ask him to consider whether something more should be said on the subject of the expiry of orders under the Local Government Act 1972 which gives certain powers to 25 local authorities to use direct labour forces? May we have a statement next week making plain what will happen between the expiry of those orders and the enactment of whatever new measures the Government propose to bring forward?
Mr. Foot: I shall examine the most appropriate way to give that information to the hon. Gentleman and to the House. In reply to what was said by my right hon. Friend the Member for Fulham (Mr. Stewart) about motions of no confidence, that remedy does not lie in my hands. I shall exert all my influence on the right hon. Lady the Leader of the Opposition to ensure that that happens.
Mr. Robert Hughes: Is my right hon. Friend aware of the great concern in Aberdeen at the proposals to limit the number of fishing vessels in the Faröes fishing grounds? Will he undertake to

1469
make a statement next week and to debate the whole issue of fishing?
Mr. Foot: I understand my hon. Friend's anxieties. These matters might be in order in Monday's debate, although I cannot be sure. I am sure that my hon. Friend will make inquiries on that point.
Mr. Carlisle: As long ago as 20th January the Lord President said that he hoped to have an early debate on broadcasting the proceedings of the House. When is that "early debate" likely to take place?
Mr. Foot: I cannot promise a debate next week, but I shall see that we have an opportunity to proceed on that matter. The Government wish to ensure that we move nearer to broadcasting the proceedings of the House.
Mr. Canavan: If I may revert to the remarks made by my right hon. Friend the Member for Fulham (Mr. Stewart), may we have an early debate on Early-Day Motion No. 259, which is a motion of no confidence in the Leader of the Opposition, bearing in mind the excessive sum in public expenditure, amounting to more than £13,500 per year, received by the right hon. Lady in salary for a job that she is clearly incapable of doing, as was amply demonstrated by her pathetic performance yesterday, resulting in the resounding defeat of her equally pathetic motion?
[That this House has no confidence in the Leader of Her Majesty's Opposition.]
Mr. Foot: It would be most ungallant of me to reply to that comment.
Mr. Spearing: Has my right hon. Friend noticed the notes on the Order Paper relating to the Joint Committee on Statutory Instruments relating to European Community documents? Is he aware that evidence given to the Joint Committee last Tuesday by the Foreign and Commonwealth Office is not available because it is not yet printed? In view of the circumstances, will he agree to postpone the matter to another occasion?
Mr. Foot: There is some difficulty involved in a postponement but I shall examine the point.
Several Hon. Members rose—
Mr. Speaker: I wish to indicate that I propose from now on to call only those hon. Gentlemen who have tried to catch my eye so far during business questions.
Mr. Brocklebank-Fowler: Has the Lord President noted the continued progress of Early-Day Motion No. 222 which stands in my name and which has now received the support of 335 right hon. and hon. Gentlemen in all parts of the House? In those circumstances, noting the considerable support for a debate on the establishment of a Select Committee for Foreign Affairs, will the right hon. Gentleman now reverse his decision of a few weeks ago and give the House an early opportunity to debate this subject?
[That this House, dissatisfied with the infrequency and nature of debates on Foreign Affairs, urges the Government to set up a Standing Foreign Affairs Select Committee whose Reports should be debated in the House within 30 days of publication.]
Mr. Foot: I cannot promise a debate in the near future, because up to Easter the time of the House is pretty full. I cannot see any chance before Easter of having such a debate. I cannot promise that it will be debated at an early stage afterwards because we have some important business at that time, too. However, I do not rule out such a debate altogether. This proposal has been put forward on a number of occasions over many years. The Opposition might wish to raise the subject at some time. However, I know that they also would have some difficulty in fitting in this matter before Easter.
Mr. Molloy: Is my right hon. Friend aware that there is grave consternation among education authorities at all levels and on the part of those who are interested in education at the vulgar, cruel and appallingly biased film shown on BBC television this week? Because of the concern aroused by that film and the appalling lapse in standards on the part of the BBC, does not this matter merit a debate in the House?
Mr. Foot: I make no comment on the form of the film itself because I have not seen it. No doubt my hon. Friend's judgment is likely to be correct. However, it would be wrong for the Government to embark on any process of censorship of the BBC or any other channel.
Mr. Henderson: Will the right hon. Gentleman be in a position next week to make a statement on the pact or agreement with the unionist Labour wing of his own party, 40 of whom destroyed the progress on the devolution Bill on 22nd February since, without such a pact or agreement, that Bill has not a snowball's chance in hell of getting through the House?
Mr. Foot: It is perfectly true that we experienced some difficulties with some of my hon. Friends with regard to the guillotine, but we had very much more difficulty from the official Opposition, with whom the hon. Gentleman was associated so closely in the Division last night. I am sure that on reflection, in the sober morning, if I may put it that way, the hon. Gentleman is highly gratified that he lost last night, because we can live to have this Bill another day.
Mr. Rathbone: Will the Leader of the House, as the Leader of the whole House, state whether he is prepared to refer to Mr. Speaker the question of representation for the whole of the country at some time or is he prepared to refer only representation of Northern Ireland? Will the right hon. Gentleman say whether he will be prepared to make a statement?
Mr. Foot: I do not think there is any purpose in having such a general reference, but the Prime Minister and I announced last night that we would agree to the reference about Northern Ireland. We are certainly preparing a statement to be made on that subject.
Mrs. Thatcher: Are these both contained in the same rule or are the Government proposing to refer only a part of the rule to a Speaker's Conference?
Mr. Foot: Since the right hon. Lady has raised the matter in that form I shall certainly have another look at what I said, but my understanding is that it is perfectly possible for the question of representation of Northern Ireland to be referred to the Speaker's Conference. As indicated in the debates that we had on this matter a few weeks ago, the Government have taken the view that they do not believe that this is the moment to refer the whole general question to the Speaker's Conference.
Mr. Urwin: Can my right hon. Friend indicate how soon the Prime Minister
1472
expects to receive the report, which he commissioned from the NEB two or three weeks ago, about the proposal for Plessey to shed 4,000 jobs in the telecommunications industry in areas of high unemployment such as Wearside and Merseyside? Can my right hon. Friend further guarantee that there will be a debate on the Floor of the House when the report is received, not only on this issue but also on the whole future of developments in the telecommunications industry?
Mr. Foot: I certainly accept that the matter is one of great importance. That is why the Prime Minister took action on the very day of the announcement. I am not sure how soon the report will be available but I shall see whether I can indicate to my hon. Friend when it will be available. When it is available I believe that there will have to be some discussion, or at any rate some means by which the matter is examined in the House.
Mr. Michael Latham: Is it not rather urgent for the Liberal Party to get on and redraft the direct labour Bill because after 31st March the orders will lapse and the local authorities engaging in that direct labour will be liable to surcharge?
Mr. Foot: I have already promised the hon. Member for Chingford (Mr. Tebbit) that I shall look at this and see whether it is desirable for a statement to be made on this subject. I do not think that the hon. Gentleman's question has added anything to what was said before.
Mr. Wiggin: May I draw the right hon. Gentleman's attention to Early-Day Motion No. 208 which stands in my name and the names of 129 hon. Members from all sides of the House concerning the reintroduction of the Seat Belts Bill?
[That this House, recognising the prospect of Government time being available in the near future, requests the reintroduction of the Road Traffic (Seat Belts) Bill, which received, in the last session of this Parliament, a second reading by a majority of one hundred and ten on a free vote, completed its committee stage, and which should prevent a thousand deaths and ten thousand injuries from road accidents each year.]
This is an urgent measure which has already received a Second Reading in this Parliament, and I believe the Government should now find time for it.
Mr. Foot: I fully understand that there are many hon. Members who attach great importance to that Bill, and it is true that the Bill received a Second Reading. That is known to the House, but it is also known that a number of hon. Members who strongly opposed the Bill were exercising their rights as well, and that fact has also to be taken into account.
Mr. Michael Marshall: Leaving aside the squalid deal which received a great deal of criticism on all sides of the House yesterday, may I ask the Leader of the House to regard as serious the question when the consultative committee's proceedings will be made known to the House? Does he agree that this is a pre-legislative scrutiny committee? Is not this an important question in the context of the study which is supposed to be in hand on how the House, through the Procedure Committee, will look at these matters in future? Have we not preempted this kind of development and will the Leader of the House give a serious answer to this important question?
Mr. Foot: I would be more encouraged to give the hon. Gentleman serious answers if he put his question in a
1474
courteous manner. I do not expect to answer any hon. Gentleman who starts off in the manner in which the hon. Gentleman started. I do not think that there is any requirement on the Government to make a fresh statement on the matter but, of course, the discussions that take place are bound to have their influence on the way in which the House does its business. We are not doing anything that is outside the normal method of discussion on these matters, and I believe that it could be of benefit to the House as a whole in these circumstances.
Mr. Speaker: Mr. Stanbrook, last question.
Mr. Stanbrook: In view of the interest in the size of the queue of immigrant dependants waiting to enter this country, and the need to avoid the making of one-sided party political points on this delicate subject, will the Leader of the House please provide facilities for an early debate on the Franks Report on a register of dependants?
Mr. Foot: I cannot promise any early debate on the matter but certainly the House should have a chance of considering this matter. I think it is right that this question should be discussed in as calm a manner as possible. That is the way in which the Prime Minister replied to this question.

ORDERS OF THE DAY
  SOCIAL SECURITY (MISCELLANEOUS PROVISIONS) BILL
  Lords amendments considered.
New Clause A

  AMENDMENT OF REGULATIONS FOR CREDITING CONTRIBUTIONS
  Lords amendment: No. 1, in page 3, line 23, at end insert new Clause A—
  "A. The power to amend regulations made before the passing of this Act under section 13(4) of the principal Act (crediting of contributions for the purpose of enabling contribution conditions to be satisfied) may be so exercised as to restrict the circumstances in which and the purposes for which a person is entitled to credits in respect of weeks before the coming into force of the amending regulations; but not so as to affect any benefit for a period before the coming into force of the amending regulations if it was claimed before 18th March 1977."
  3.56 p.m.
  The Minister for Social Security (Mr. Stanley Orme): I beg to move, That this House doth agree with the Lords in the said amendment.
  Mr. Speaker: With this amendment we are to discuss Lords Amendments Nos. 14, 15 and 17.
  Mr. Orme: These amendments are a very late addition to the Bill, but a very necessary one. As Baroness Young said in another place—I shall acknowledge the point that the right hon. Member for Wanstead and Woodford (Mr. Jenkin) will probably make to me—it would have been much better had the problem they are designed to solve been spotted much earlier, or indeed, never allowed to arise. As she also acknowledged, once the problem had been recognised for what it was, it would have been quite impossible to ignore it.
  The purpose of the amendments is to avoid the unintended and very expensive effect of changes to the national insurance scheme since 1975 which would have enabled people to acquire contributory benefit rights although they have not paid contributions or received contributory benefit for many years. The problem
  1476
  lies mainly in the credits regulations. The new clause will extend the existing power to make regulations on credits, so that we can restrict the use of credits given for 1975–76 and 1976–77 in establishing future benefit rights. We already have statutory powers to deal with credits awarded for later tax years.
  I can set out the basic points fairly simply, although a great deal of complication lies behind the simple facts. Under the Social Security Act 1975, there are provisions enabling people not in work, because of sickness or unemployment, to be credited with contributions to maintain their contribution record for entitlement to contributory benefits. It was not realised at the time just how much further this went than the corresponding provisions before 1975. Nor was it realised that there would be a cumulative effect when the credits provisions operated together with other new or changing provisions—notably the new non-contributory incapacity benefits and the arrangements for phasing out the married woman's contribution option.
  In brief, if a person had at some time—however remote—paid some contributions, incapacity or unemployment years later could lead to credits and thence to contributory benefit, without any intervening work record or continuing receipt of contributory benefit. As hon. Members will appreciate, it is hardly consistent with the principles of a contributory scheme to provide benefits where there is only a connection with contributions so tenuous that the beneficiary himself would be most unlikely to be aware of it. Arguments have been put for a scheme without contributions as such and therefore without contribution conditions. The right hon. Member for Wanstead and Woodford has put forward such a scheme at certain times.
  Mr. Patrick Jenkin: I must correct the record. I have never put forward such a scheme. Indeed, when such a scheme was examined when I was at the Treasury the net cost was thought to be about £500 million if we were to transfer the test of entitlement to benefit from contributions to residence. Can the right hon. Gentleman tell us what the current cost would be? It must be double that, and probably more.
  Mr. Orme: I am sorry if I misinterpreted something which I had read of what the right hon. Gentleman had said. I withdraw that if I am wrong. I do not have the figures for which the right hon. Gentleman asked, but I could obtain them for him. Certainly such a scheme would be very expensive indeed, but it can at least be rationally argued. What cannot be rationally argued is that when we have a contributory scheme we should incur additional expenditure, amounting to perhaps £100 million, in paying uncovenanted benefits to people it was never intended should qualify for contributory benefits. That would be totally irresponsible and would make it impossible to pay for priorities which have been deliberately chosen and agreed by Parliament. I hope that the House recognises that we are dealing in large sums of public expenditure which could go to much more deserving causes.
  The remedy is to make regulations limiting the circumstances in which credits given under the new contribution system can count for benefit entitlement. The details as to the circumstances and the benefits involved are a matter for the regulations and are not dealt with in the new clause, which, as I have explained, is necessary to enable the regulations to restrict future benefit rights where these depend on credits given between 1975 and a current date, and so avoid letting in a large number of unwanted claims this May, when the post-1975 rules come fully into effect. But the House will wish to know that, using this clause and our existing powers under the main Act, our aim is to achieve a restriction consonant with our original intentions and with the contributory nature of the scheme, and more in line with the pre-1975 arrangements.
  As the clause makes clear, we shall not be seeking to touch benefit claimed before 18th March for any period before the regulations bite. That sets the outer limit of the new provisions. Within that outer limit, we have it in mind to be rather more generous—both to avoid anything that looks like retrospection and to match as far as possible the pre-1975 arrangements. For example, credits given to someone getting contributory benefit will not be affected, nor will credits given in a year in which there is also a not
  1478
  insignificant record of contributions actually paid.
  In very few cases will the regulations or this clause disappoint expectations that have already been raised. As with any unintended loophole, some people have already used it or are on their way to using it, and we shall, within reason, recognise this fact. But the prime consideration must be, in fairness to contributors, as well as in the interests of responsible administration of the scheme, to close the loophole.
  The related amendments flow naturally from the introduction of the new clause. Lords Amendment No. 14 provides that the regulations we shall be making under our powers as extended by the new clause need not be referred beforehand to the National Insurance Advisory Committee. Time is, I am afraid, too short for this. Lords Amendments Nos. 15 and 17 enable us to give effect to the new clause and to the exemption of the regulations from reference to the NIAC immediately the Bill receives Royal Assent. We shall be making the regulations as soon as we can after Royal Assent, and bringing them into effect at the earliest possible date.
  Mr. Patrick Jenkin: We recognise, Mr. Speaker, that the three amendments which you have been kind enough to say should be taken with Amendment No.1 flow from it. They are consequential upon it, and it is certainly convenient to the Opposition that we should discuss them at the same time.
  I am very glad that the Secretary of State has joined us at this stage, because some of the things I shall say will be somewhat critical of the way in which the matter has been handled, and it is right that he should listen. I must tell the Minister for Social Security that this is a very unsatisfactory business. In the light of that, it is not only the right but the duty of the Opposition to probe more deeply what lies behind what the right hon. Gentleman said.
  We do not intend to oppose the Government in trying to put matters right. The right hon. Gentleman referred to the potential public expenditure consequence of the errors that have come to light and mentioned a figure of £100 million. I suspect that that is very much an outside estimate, but even if it were £10 million

  1479
  it would probably be right to take steps to close an unintended loophole, if "loophole" is the right word for what we find here.
  However, I am very unhappy about the way in which the matter has been dealt with and the way in which it is proposed to put it right. I shall explain why in a few minutes, but first I wish to say that I accept that under a contributory scheme contributions must be the basis of entitlement to benefits.
  The right hon. Gentleman may have misread, misheard or conceivably even misunderstood something which he attributed to me. There is a case for abandoning the contributory principle and making the test of entitlement to benefit solely that of residence. The consequences would be considerable. I suggested that there might be a cost of about £1,000 million. I am glad to have the Under-Secretary of State's nod of assent that that is the right order of magnitude.
  The attraction of such a scheme is the abandonment of the whole of the administration connected with the collection of contributions, their separate identification and the maintenance of contribution records and all that goes with it. But the cost would be considerable, and there would be considerable opposition from large numbers of the population who believe that entitlement to benefit could not be relied upon in the same way if it rested solely upon statutory entitlement as opposed to the contractual entitlement that goes with contributions.
  When we examined the matter when we were in office as one way of achieving simplification the point was made that the trade union movement, for example, had always set great store by the contributory principle, believing—I suspect rightly—that where benefits are secured by contributions there is a much greater reluctance on the part of this House to interfere with entitlement than where they would rest solely upon statutory entitlement. After all, we took out from the Bill a clause to disentitle certain categories of occupational pensioner from receiving unemployment benefit mainly because we believed that it was a breach of the contributory principle and would have introduced a means test in the entitlement as of right flowing from the National Insurance Scheme. So I accept
  1480
  that contributions must be a very important entitlement to benefits in a contributory scheme.
  Secondly, the Opposition say that, where there are benefits of a comparable nature some of which are based on a contributions record and some of which are non-contributory, it is right and inevitable that the contributory benefits should be higher. Sometimes it is argued that, with the progressive introduction of noncontributory benefits such as the NCIP, the attendance allowance, the invalid care allowance, the mobility allowance and a whole range of other benefits, the contributory principle has been so undermined that it could be done away with. It is a point, though it is not one with which I agree. Where there are overlapping benefits, as with the invalidity pension and the NCIP, it is right that the contributory benefits should be higher than the non-contributory ones.
  The third point which I accept, because it is an intergral part of the system, is that, when there is a brief interruption of contributions and a person is entitled to contributory benefits, it is sensible to operate a system of credits for the contributions during that period of interruption. The alternative would seem to be to pay a higher benefit but to require the beneficiary to pay back part of it in a continuing contribution. That might seem a logical paper transaction, but I can understand that, for people off sick or unemployed, the machinery necessary to collect contributions could be unduly cumbersome. It is more simple for the amounts to be held as automatic credits when a person is sick or unemployed.
  Fourthly, I accept that there must be a limit upon the system of granting credits in these circumstances. There must be some point at which a person ceases to be regarded as a contributor to the National Insurance Scheme and becomes a dependant. If this were not so, it would blow a gaping hole in the system and in the entire contributory principle.
  What the Minister told us and what his noble Friend in another place said was that the legislation as it now existed placed no such limitation on the extent of the credits for contributions paid while enjoying benefits and, perhaps more significantly in relation to this amendment, that there was no power now to make regulations to provide such a limitation.
  The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins)indicated assent.
  Mr. Jenkin: I am glad to have the Under-Secretary's assent to that. What the Minister is now proposing is a new regulation giving him power to close this loophole.
  I have indicated the extent to which the Opposition agree with the Government and accept what they say. It is at this point that our anxieties arise. Perhaps I may refer to what Lord Wells-Pestell said on 22nd March in another place when he spelt out clearly what the Government were doing. He said:
  "The extension of existing powers is needed if we are to avoid letting in a large number of unwanted claims from this coming May, when the post-1975 rules come fully into effect. But, as the clause itself makes clear, we shall not be seeking to touch benefit claimed"—
  pausing there, I emphasise the word "claimed"—
  "before the 18th March for any period before the regulations bite. That sets the outer limit of the new provisions. Within that outer limit, we in fact have it in mind to be rather more generous, both to avoid anything that looks like retrospection and to match so far as possible the pre-1975 arrangements. For example, credits given while in receipt of contributory benefit will not be affected."—[Official Report, House of Lords, 22nd March 1977; Vol. 381, c. 395.]
  4.15 p.m.
  What the Government are doing here is, first, to amend legislation by regulation. That in itself has always been regarded as undesirable. It was the subject of an important recommendation of the Donoughmore Committee in 1932, and I am sure that the Secretary of State will recall our debates on the Health Services Bill when it was proposed to amend legislation by regulation. So critical were we on that occasion that the right hon. Gentleman decided to put down amendments on Report to make unnecessary the amendment of legislation by regulation.
  There is no possibility of doing that here. There is not time. We are dealing with a provision introduced in another place, and this is the last opportunity that we have to bite at this cherry.
  The second factor which is apparent is that, whatever may be said, this legislation is retrospective. That in itself is always highly undesirable.
  1482
  The third and perhaps the most important factor is that we are being asked to do this without the Government being able to tell the House at all, let alone precisely, what it is they intend to do with the regulation-making power which they ask us to confer upon them. Perhaps I may digress for a moment and remind the House how this comes before us. The Minister was quite frank about it. It comes before us at the last possible moment in the passage of the Bill through Parliament.
  The amendment was tabled in another place six days ago, on Friday of last week. It appeared on the Order Paper in another place on Monday. It was debated on Tuesday. The Bill got a Third Reading in another place yesterday, Wednesday. The amendment appeared on our Order Paper this morning, Thursday, and we are now debating it this Thursday afternoon.
  Mr. Orme: I do not dispute any of the facts. However, as we appear in this Parliament to be in a new period of consultation, I hope that the right hon. Gentleman will acknowledge that he has been fully informed of the Government's proposals and that he has seen both our proposals and the draft. We only proceeded as we did because of the tight time scale of the Bill.
  Mr. Jenkin: The right hon. Gentleman boasts about the amount of consultation. I said that this amendment was tabled in another place on Friday of last week. Does he challenge me when I say that his consultation involved sending me a letter the day before, on the Thursday—
  Mr. Orme: I spoke to the right hon. Gentleman personally.
  Mr. Jenkin: I agree. The right hon. Gentleman happened to bump into me in the corridor. As a matter of fact, I do not know whether it was a Freudian slip, but the letter which was sent to me was undated. I have not been able to check the date.
  Mr. Orme: We are getting clever.
  Mr. Jenkin: Furthermore, will the right hon. Gentleman deny that the letter purporting to send me a copy of the amendment did not include the amendment and that it only reached me later—[Interruption.] The right hon. Gentleman

  1483
  may find that amusing, but it is shoddy administration and it is not the first time that we have had occasion to complain about mistakes of this kind by his Department. It does not help him get through contentious legislation when his Department treat right hon. and hon. Members like that. But then the right hon. Gentleman has the effrontery to boast about prior consultation. One day before the amendment went down he sent me a letter explaining what it was about. This is no way to treat Parliament, and we are entitled to express some indignation.
  The right hon. Gentleman is entitled to some sympathy, of course. He has been put in an unenviable position arising out of events which occurred when he was occupied elsewhere. But the least that he can do now is try to make amends by explaining a great deal more fully than he has so far what the amendment is about and try to allay the Opposition's anxieties.
  The first question to which we need to know the answer is what are the categories of people who will be affected by this retrospective legislation. All we have been told so far—and here again I rely on Lord Wells-Pestell's speech—is that there are certain people with noncontributory incapacity benefits and that there are certain people affected by the phasing-out of the married women's contribution option.
  But will it not apply to very much wider categories of people, including many who have simply broken contribution records, people who have earned some years ago and paid contributions, had a long period off work when no contributions were paid—the biggest category here is married women—and have then returned to work and become entitled to claim benefits on the basis of the credited contributions? We need to be told more precisely the ranges of people affected. We must be given some indication of the number and of the circumstances in which they are likely to be affected.
  The second question concerns the retrospective effect. I believe that we need to have this very much more clearly defined. The House is always jealous about retrospective legislation—legislation which seeks to change the law retrospectively, or deny entitlement to benefit, or, as in this case, entitlement to credits
  1484
  after the event, thus defeating expectations. The right hon. Gentleman said that this will not affect benefits claimed before 18th March, the date on which this new clause was tabled in the House of Lords. Today is 24th March, only six days later, but I shall be glad if he will confirm that, despite what is said in the clause, it is intended to disallow benefit entitlement where that entitlement arose before the date, even if no formal claim was made.
  How will the regulations define the making of a claim? If the entitlement is there, will the simple approach to a benefits clerk behind the counter amount to a claim, or will the claim form particulars need to have been filled out in full before a claim can be allowed if it was made before 18th March? It is clear that, whatever may be said by Ministers, this is a retrospective amendment. I agree that they are seeking to limit the retrospectivity, but they have not succeeded, and part of the purpose of the clause is to effect the savings which would flow if it were not retrospective.
  But we need to know the precise point at which it is retrospective. There will be claims that will be defeated on the basis of the retrospective operation of the clause, and we need to know what they will be.
  My third point is the most important of all. The Minister must tell us how the limitation that it is intended to include is to be framed. How will it be defined? Will it be defined by the length in the gap between two periods of contribution? If so, what length of gap has the Minister in mind? He has told us that it is the intention to make regulations as soon as may be after the Royal Assent, and I will not accept that he has no idea at present of how he is to achieve this. If it is not the gap between successive contributions, will it depend upon a minimum total level of past contributions? If so, what level? How many contributions will the person need to have made before he avoids the mischief of this clause and the regulations to be made under it?
  Perhaps at this point I should draw attention to an interesting exchange in another place. My noble Friend Lord Hawke said:
  "I think the noble Lord is mistaken. A considerable number of these people will be elderly ladies who work part-time."

  1485
  Lord Wells-Pestell replied:
  "If that is so, then it may well be that they have a substantial contributory record behind them, so that if and when they are sick they would be entitled to benefits."
  We are entitled to know what amounts to a "substantial contributory record" so that they will be entitled to benefits, including, presumably, the benefit of a credit for contributions. If it is not the gap between successive contribution periods, or the level of past contributions, what other test has the Minister in mind to apply as to whether the credits will be available?
  The phrase used by the Minister for Social Security himself today was "a not insignificant record of contributions". He implied that it referred to the particular year. Is that the case? Is it the case that there must be a record of contributions in a particular year—the 12 or 24 months, or whatever it may be—before the benefit is claimed? We cannot pass from this clause until we have a clearer idea of how the Government propose to implement their intention of blocking this loophole. With the Bill having progressed so far and being within a few days or a week or two of the Royal Assent, the Government must have some idea of what they are to do.
  The right hon. Gentleman did not refer today to it, but could he explain the cryptic statement by Lord Wells-Pestell towards the end of the debate in the other place on 22nd March? The noble Lord said:
  "It is very difficult to introduce a scheme which would produce a great deal more complexity than the existing schemes are producing at the present moment."
  I think that there must be a misprint there. I know that the Labour Party has a pronounced penchant for producing complex schemes, but I do not think that it is its objective in life to do so. I suspect that in that passage a "not" has been omitted and that the sentence should read, "which would not produce a great deal more complexity than the existing schemes are producing at the present moment."
  Mr. Deakins indicated dissent.
  Mr. Jenkin: The Under-Secretary of State shakes his head. Perhaps he thinks that I am misinterpreting what Lord Wells-Pestell said.
  Mr. Deakins: I think that the right hon. Gentleman is in fact misinterpreting the remarks by Lord Wells-Pestell. Surely what my noble Friend is saying is that the existing social security legislation is so complex that it would be very difficult to devise a new scheme or add to a scheme in a way which would make it even more complex. What we are trying to do is to simplify.
  Mr. Jenkin: If that be the case, it lends point to the next sentence in Lord Wells-Pestell's speech. I said that it was cryptic. He went on:
  "We need to have a deep and close look at the whole benefits system with which we are faced at present."—[Official Report, House of Lords, 22nd March 1977 Vol. 381, c. 397–400.]
  Is Lord Wells-Pestell saying there that the Government are now proposing a new review of contributory benefits? That is what it seems to imply. If so, the House is entitled to be told rather more about it. Who is to undertake the review? What is meant by a "deep and close look" at the whole benefits system?
  We know that an important review is going on, which I have warmly welcomed, arising out of the first annual review of the Supplementary Benefits Commission, produced by Professor Donnison a year ago and published as Command Paper 6615.
  4.30 p.m.
  Mr. Orme: Will the right hon. Gentleman allow me to clear up this point? It is not the Government's intention to have a wide-scale review of contributory benefits at the moment. I am sure that my hon. Friend the noble Lord did not mean to imply that.
  Mr. Jenkin: I think that any of us might be forgiven for thinking that that is what the noble Lord was saying. It may have been one of those sentences that slip out at the end of a speech when one is trying to justify legislation that is difficult to justify, but there it is. We now learn that the Government are not proposing to have a deep and close look at the whole benefits system, notwithstanding the fact that a member of the Government said in another place that they were.
  This is part of the pattern of legislation. It will become a great deal more difficult in future. We shall have the

  1487
  right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) saying that there needs to be a great review of some aspect of Government policy, and we shall have the Minister standing up and saying that it is not the Government's intention to have a review. We can expect a great deal of that sort of confusion to come. Perhaps I am being a little lighthearted.
  I have asked a number of serious questions about the amendment and we are entitled to answers, if only for the reason that it was only this morning that any hon. Member could have seen the amendment, unless he had got hold of papers prepared for another place.
  Mr. Robert Boscawen: I shall make only a brief intervention. I apologise if my voice is not very good today. I feel in need of a non-contributory invalidity benefit myself. I intervene only to say that I find it very worrying when a Government seek regulatory powers regarding the contributory system.
  The contributory system is so important that we need to have careful explanations of exactly what the Government are doing and what the implications are. I am as guilty as anyone in the House of having sought to have the contributory system modified in certain cases of individual hardship. We have always done so in cases of hardship involving our constituents but the argument has always gone against us, for the very sound reason that one cannot give way on one or two cases only. If we gave way on one case, we should have to give way on many others.
  The contributory principle in the social security system has been sacrosanct. I accept the established benefit system. I therefore feel very strongly that if a Government come to the House to seek regulatory powers, especially retrospective regulatory powers to alter the contributory system, they must explain themselves very carefully. This is an important matter. There are not many hon. Members in the House at present, and perhaps not many hon. Members appreciate the importance of what the Government are doing. No doubt the Minister knows very well that he is interfering, or could be accused of interfering, in a system which has affected people in the past as much as it will do so in the future. Hard
  1488
  decisions have had to be taken in the past, possibly affecting people who are no longer alive. They were decisions which perhaps seemed particularly harsh on some cases at the time.
  There is the example of the contributory principle affecting the death grant. Certain groups of people cannot obtain a death grant at all because they are not in the contributory system. I am sure that there is no difference between the two sides of the House on this matter. A clause such as the one we are considering needs a great deal of consideration and explanation. I am considerably worried about it and am uneasy that Ministers could alter the contributory system by regulation in a number of individual cases, which could be most unfair to people who were affected by decisions taken a long time ago.
  I know that the Minister will appreciate this. I feel it is right to say this. To affect the contributory principle in any way, particularly by regulations, is a very serious matter.
  Mr. Peter Bottomley: I feel slightly worried about intervening in the debate, because we are dealing with a complicated matter, and, having gone through the report of the debates in another place, I am almost as confused as I was when I first read the amendment and before I had read the explanations that were given. I shall read one sentence from a speech made by Lord Wells-Pestell:
  "And, finally, there is the need to correct omissions and mistakes in legislation, and to provide firm statutory backing where at present the law appears open to doubt."—[Official Report, House of Lords, 3rd March 1977; Vol. 380, c. 809.]
  I do not think that the noble Lord was referring specifically to the new clause that we are examining, but the assumption is that they had not found the mistake. Perhaps the Minister will confirm this.
  The question of what the Government would have done if the Bill had already passed through this Chamber is one to which the Government should turn their mind. Just because there is an opportunity of tagging this matter on to the Social Security (Miscellaneous Provisions) Bill, it does not mean that the House should, without protest, allow the Government to give power to the Secretary

  1489
  of State which normally he would not be allowed to have. The Government must have turned their mind to the way in which they would deal with this problem. They are lucky to have found time in the other place to put at least some of the debate on record so that we have had a decent opportunity of understanding the problem, even though we have not been able fully to take it up.
  I do not know whether Standing Orders allow us to amend the new clause in order that it will take effect for a limited period only, so that the Government can consider the effect of the regulations and decide whether these powers should effectively reside with the Secretary of State for ever under this Bill and give him, as far as I can see, an unlimited amount of power to affect the benefits and contributions with which people may be credited. That is a very serious matter, especially when we do not know what the regulations are. I do not know whether the Department has had time to work out precisely what the regulations would aim to achieve, but it should have done.
  If we are to give the Secretary of State this power, it is important to let the House know how the regulations are to work so that we can test their effectiveness. If the problem has been getting legislation through, or amending the 1975 Act quickly so that more claims do not become established—which seems to be the Secretary of State's intention—one presumes that the regulations will be subject to the approval of the House either by negative or affirmative resolution procedure. Or will the regulations go through without the House being able to consider them? If they are not subject to the approval of the House, how can we check that the new clause by itself will not achieve the purpose that the Department is quite rightly trying to achieve.
  It is important to know how much the mistake cost. As the noble Lord said, and as many Labour Members have said, if we rush through legislation—as we unfortunately did last year, and as we appear to be doing this year with this clause—we shall let through things that the Government, the Department and the Opposition would not want to see go through.
  The cost or the possible cost of the mistake should be put on the record. The
  1490
  Government should also spell out the categories and classifications of those who are at present entitled to what the Government did not intend them to be entitled. This would be a good reminder to all of us of how important it is to get legislation right, especially when dealing with social security provisions and national insurance contributions and benefit provisions which affect virtually every working person, every retired person, and which will affect many people who have not yet started work.
  The question of retrospection is important in this case. We have seen enacted retrospective legislation which has affected people's jobs. I do not want to go into the ramifications of the closed shop legislation which is taking away people's livelihoods. Retrospection in circumstances such as these will have a similar effect on people's income, or at least it could, unless we hear from the Minister that that is not so.
  Publicity is another issue which must be dealt with. If those who might want to put in claims do not hear clearly how they should put the claims in or in what way they would be accepted a large number of people who may be their advisers or claimants themselves will want to know whether they qualify. This may be a slightly academic point. It might be rather like the case of people getting unemployment pay while on holiday in Spain. While it is a significant political issue is might not affect many people—and in the case I have cited the Government woke up in time.
  Mr. Patrick Jenkin: Thanks to the Daily Mail.
  Mr. Bottomley: Yes, sometimes the capitalist Press comes to the aid of the Government, and in that case it stopped the Government providing holidays abroad for those who were receiving benefit.
  I should warn the Government that I feel so strongly about this mistake being brought to the attention of the public that I intend to divide the House, if only as a symbolic gesture of what one person can do. The only way to avoid this happening again is to be on the look out for it. I congratulate the person who discovered that the 1975 Act had a loophole,

  1491
  and I feel that a Division might help in driving the point home for the House.
  Mr. Orme: I am terrified at the hon. Gentleman's threat to divide the House. I shall have to make sure that the Liberals are aware of his intention—
  Mr. Patrick Jenkin: Ought not the Minister of State quickly to summon the joint consultative committee under the chairmanship of the Lord President in order to tell it what is to happen?
  Mr. Orme: I shall not comment further on that point.
  The hon. Member for Woolwich, West (Mr. Bottomley) asked about the cost. I can assure him that not to do what we are proposing would cost far more than doing it. The two Front Benches agree that perhaps tens of millions of pounds could go to people who should not be entitled to the money.
  I freely acknowledge to the right hon. Member for Wanstead and Woodford (Mr. Jenkin) that a mistake was made. The Government have made no attempt to flannel their way out of that, or to hide the fact. Ministers have to take responsibility for it, and I accept that responsibility on behalf of the Government. We are now trying speedily but democratically to rectify the mistake.
  Let me assure the hon. Member for Wells (Mr. Boscawen) that the whole point of the regulations provided for under the clause is to reinforce the contributory principle, not to remove it. We had a slight altercation with the right hon. Member for Wanstead and Woodford and he made his position quite clear. We are not out to undermine that principle.
  It is not possible at this stage to give the details of the regulations, and that ties in with the point made by the hon. Member for Woolwich, West. The regulations will be introduced under the negative resolution procedure. The hon. Gentleman will be entitled to pray against them and, if necessary, to force a Division.
  The details are still to be settled. I can confirm, however, that they will aim to achieve a restriction on the use to which credits may be put, but that this restriction will be consonant with our original intentions and with the contributory
  1492
  basis of the scheme. For example, credits traditionally awarded with sickness and unemployment will not be limited by the regulations. People with a not insignificant contribution record for a year for which they have been awarded credits will be able to use those credits without restriction.
  Mr. Patrick Jenkin: The phrase "not insignificant" is most vague. Does it mean one, three or six months' contributions? We must have some indication of that.
  4.45 p.m.
  Mr. Orme: The intention is to place a limitation on the use of credits which will be appropriate to the nature of the contributory National Insurance Scheme and which will be somewhat closer to the pre-1975 arrangements. Credits already awarded will be allowed to stand for benefit if in the year in which they were awarded a claimant had received a contributory benefit or had paid contributions of a specific amount. The amount to be specified will be contributions on earnings amounting to 13 times the lower earnings limit.
  Mr. Patrick Jenkin: Does that mean three months?
  Mr. Orme: Yes.
  Mr. Patrick Jenkin: This is difficult to follow. I realise that the right hon. Gentleman is doing his best to be helpful in difficult circumstances. He said that in the year in question—and it was implied that benefit had been received in that year—part of the contributions would go towards an entitlement to a long-term benefit. Will the contributions to be credited in the circumstances that the right hon. Gentleman has described count towards the entitlement to the appropriate level of long-term benefit when the person reaches an appropriate age?
  Mr. Orme: I shall come to the question of sickness, unemployment and retirement in a moment. These are complicated and difficult matters, which I could not pretend to answer without looking at them in greater detail. If my reply does not satisfy the right hon. Gentleman completely I can assure him that in good time and before the regulations are laid I shall set out as clearly as possible what the Government intend

  1493
  to do. He will then be able to raise matters with me before the regulations are brought before the House. I hope that this goes some way towards meeting his point. I think that he has recognised that I am not in any way trying to avoid this matter or deal with it in a slipshod manner. He recognises, however, as I do, that this is a very difficult and complicated matter.
  Let me press on with my explanation. Anyone who has worked is likely to have satisfied the first contribution condition, which is a certain number of contributions actually paid in any one year. The second contribution condition is a record of credits or contributions in the last tax year or in a certain number of tax years. This condition can be satisfied on credits alone. Six-months' unemployment or sickness would be enough to give sufficient credits to satisfy the second contribution condition. I hope that that goes some way towards meeting the specific point raised by the right hon. Gentleman.
  The total of those affected comprises people who satisfy the first condition and satisfy the second condition on credits alone, but do not have any more orthodox or traditional entitlement to benefit. In particular, there will be many thousands of married women who have not taken employment for a long period. I cannot, therefore, be precise about the numbers involved, because of the difficulties and because we have to look at these matters in some detail when the regulations are presented to the House.
  I now want to say something about retrospective credits. Strictly speaking, the provision in the Bill and in the regulations will not restrict entitlement to credits. The intention is to place a limitation in the regulations on the use to which these credits may be put for benefit entitlement. The normal provisions in the claims and payments regulations will apply. I have endeavoured to answer this complex and detailed debate and the important points raised by hon. Members. I hope that we can now accept this amendment.
  Mr. Peter Bottomley: By leave of the House. I think that the Minister has missed out one or two important points. How would the Secretary of State have dealt with the problem if the Bill had
  1494
  already gone through? I suspect that the answer is that he does not know. Does he need the powers running on or would the new clause be amended in such a way that he would have the powers to deal with this problem without having permanent regulatory powers which were not in the Social Security (Miscellaneous Provisions) Bill?
  Mr. Orme: The Government would have had to find other legislative time to bring in these proposals. The fact is that we had the Bill at the time, and that is why we took the first occasion to raise this matter. But we would have had to come before the House at some time.
  Mr. Patrick Jenkin: I think that the right hon. Gentleman has fairly recognised the complexity of these matters. I say at once, that to use his own words, he has endeavoured to answer our questions. For that we are grateful. But he has left us not much wiser than we were beforehand. He said that there could be large numbers of women who will have worked for a few years before marriage or a year or two after and who then have a long gap while bringing up their families. They then register for work, have a period of sickness and unemployment, and the credits automatically give them entitlement to benefits. We are talking about not just tens of thousands of people but millions.
  The Minister of State looks quizzical at that comment. If this provision includes any married woman who has had a break in her contribution record, we are talking about 10 million or 15 million people. This is a wide-ranging clause, which makes it all the more unsatisfactory that it is just six days since it appeared in Parliament. I do not know what time the Vote Office opened this morning, but I collected my copy at 8.30 a.m. That was the first time anyone in the House had the chance to see the clause.
  We are entitled to be critical of the Government's legislation. I appreciate their difficulties. The right hon. Gentleman implied—my hon. Friend the Member for Woolwich, West (Mr. Bottomley) made it clear—that if the matter was not dealt with in this Bill it would have been dealt with in some other Bill—perhaps the direct labour legislation

  1495
  or the Scotland and Wales Bill, or some other piece of legislation that will be introduced by the leave and licence of the Liberal Party.
  The right hon. Gentleman said that we would not be disentitling anyone from credit but that that person would not get any benefits as a result of the credit. I do not know what value a credit is if it does not entitle a person to benefit. Are we to assume that this is a matter of semantics—that a person will be disentitled to the credit even though it will be put up in a computer somewhere in Newcastle?
  Mr. Orme: Credits are most important for the retirement pension.
  Mr. Jenkin: This is interesting, because that was exactly the question I asked earlier. The right hon. Gentleman said that he would deal with pensions. I did not hear him say anything about them, but he now mentions them. Are we to understand, therefore, that the purpose of these regulations is to disentitle the claimant to short-term benefits but to allow the credit to stand for the purpose of claiming long-term benefits, retirement benefits or long-term invalidity benefits? We need to know more about this.
  There is one group of people for whom credits are more important than for others. They are the people who stay at home to look after elderly relatives. My noble Friend Lord Drumalbyn had two attempts at raising this problem. I shall not quote the first, because it was rather long, but in the second attempt he said:
  "My Lords, could I put it in another way? I am wholly in favour of the contributory system. I think that it ought to be safeguarded. There are in certain circumstances occasions when a person could be treated as having made a notional contribution because of the saving he—or more often she—is making to the State in other ways. There are considerable savings to the State from people looking after parents or relatives at home."
  Lords Wells-Pestell replied:
  "My Lords, this is so."
  Then he changed the subject. He said:
  "Later we will deal with the question of the allowances to foster parents in the matter of handicapped children."
  He went on to say:
  "they are saving the State a considerable amount".—[Official Report, House of Lords, 22nd March 1977; Vol. 381, c. 400.]
  1496
  My noble Friend Lord Drumalbyn got absolutely no answer to his question.
  We all know of—because we have all met representatives of that wholly admirable organisation—the National Council for the Single Woman and her Dependants. I was privileged to address its annual meeting about a year ago, in the Grand Committee Room in this House. I have been a great admirer of the Rev. Mary Webster, now deceased, and her successors, who established that important and powerful organisation.
  There is a category of people who could well be prejudiced by this clause unless the regulations are drawn much tighter so as to disallow only those whom Parliament could not have had in mind as being entitled to the benefits of the credit contributions when the 1975 Act went through Parliament. This merely reinforces the totally unsatisfactory way in which we are having to deal with this legislation, at such desperately short notice.
  I read my noble Friend's question and the inadequate answer. I now have a representation which reached my hon. Friend the Member for Wallasey (Mrs. Chalker) in an urgent letter from the secretary of the All-Party Group for the Disabled, who read the Lords' Report this morning. It was only on Tuesday that these matters were debated in another place. The Secretary of the group is an extremely active young man, and many of us know him. He recognised the importance of this point and made sure that we were entitled to raise it in the debate. We cannot do anything about it. We cannot amend the clause because the Question has already been put.
  We cannot even do what my hon. Friend suggested—give the Government a limited power to look at it and return to the House later. We can do none of these things. I accept that there is a great deal of money at stake which Parliament, if attention had been directed to the matter by the Government, would never have dreamed of allowing to slip through the net. For that reason we have to give the Government their new clause. That is a desperately unsatisfactory way of legislating. I hope that the right hon. Gentleman will bring it home to those responsible that Parliament regards this as a disgrace and quite the wrong way to treat important matters of legislation.
  Mr. Orme: The right hon. Gentleman has asked some specific and searching questions, but his anger is a little synthetic. He is trying to elicit information to which the House is entitled. I shall deal with the points he made about the single person looking after their parents, aged people and so forth.
  5.0 p.m.
  Credits are awarded to people in receipt of invalid care allowance. The regulations will not affect the use to which those credits can be put. If invalid
  care allowance has been provided that will be covered. It is intended that the additional powers given by this Bill should be used to restrict the use of credits for the purpose of sickness benefit, invalidity pension, unemployment benefit and maternity allowance. Retirement and widows' pensions based on the 1975–76 and 1976–77 credits will not be affected.
  Question put:—
  The House divided: Ayes 229, Noes 47.

  Division No. 95.]

  AYES

  [5.00 p.m.

  Abse, Leo

  Forrester, John

  McDonald, Dr Oonagh

  Allaun, Frank

  Fowler, Gerald (The Wrekin)

  McElhone, Frank

  Archer, Peter

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

  MacFarquhar, Roderick

  Armstrong, Ernest

  Freeson, Reginald

  MacKenzie, Gregor

  Atkins, Ronald (Preston N)

  Freud, Clement

  Maclennan, Robert

  Bagier, Gordon A. T.

  Garrett, John (Norwich S)

  Madden, Max

  Bain, Mrs Margaret

  Garrett, W. E. (Wallsend)

  Magee, Bryan

  Barnett, Guy (Greenwich)

  George, Bruce

  Marks, Kenneth

  Barnett, Rt Hon Joel (Heywood)

  Gilbert, Dr John

  Marshall, Jim (Leicester S)

  Bates, Alf

  Ginsburg, David

  Mason, Rt Hon Roy

  Bean, R. E.

  Golding, John

  Maynard, Miss Joan

  Beith, A. J.

  Gould, Bryan

  Meacher, Michael

  Benn, Rt Hon Anthony Wedgwood

  Graham, Ted

  Mendelson, John

  Bennett, Andrew (Stockport N)

  Grant, George (Morpeth)

  Mikardo, Ian

  Bidwell, Sydney

  Grimond, Rt Hon J.

  Millan, Rt Hon Bruce

  Bishop, E. S.

  Grocott, Bruce

  Miller, Dr M. S. (E Kilbride)

  Blenkinsop, Arthur

  Hamilton, James (Bothwell)

  Mitchell, R. C. (Soton, Itchen)

  Booth, Rt Hon Albert

  Hamilton, W. W. (Central Fife)

  Molloy, William

  Bottomley, Rt Hon Arthur

  Hardy, Peter

  Moonman, Eric

  Boyden, James (Bish Auck)

  Harper, Joseph

  Morris, Charles R. (Openshaw)

  Bray, Dr Jeremy

  Harrison, Walter (Wakefield)

  Morris, Rt Hon J. (Aberavon)

  Brown, Hugh D. (Provan)

  Hart, Rt Hon Judith

  Moyle, Roland

  Brown, Robert C. (Newcastle W)

  Hatton, Frank

  Murray, Rt Hon Ronald King

  Brown, Ronald (Hackney S)

  Hayman, Mrs Helene

  Newens, Stanley

  Buchan, Norman

  Healey, Rt Hon Denis

  Ogden, Eric

  Butler, Mrs Joyce (Wood Green)

  Heffer, Eric S.

  Orbach, Maurice

  Callaghan, Jim (Middleton & P)

  Henderson, Douglas

  Orme, Rt Hon Stanley

  Campbell, Ian

  Hooley, Frank

  Ovenden, John

  Canavan, Dennis

  Horam, John

  Owen, Rt Hon Dr David

  Carmichael, Neil

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

  Palmer, Arthur

  Cartwright, John

  Huckfield, Les

  Pardoe, John

  Castle, Rt Hon Barbara

  Hughes, Rt Hon C. (Anglesey)

  Park, George

  Clemitson, Ivor

  Hughes, Mark (Durham)

  Parker, John

  Cocks, Rt Hon Michael

  Hughes, Robert (Aberdeen N)

  Parry, Robert

  Cohen, Stanley

  Hughes, Roy (Newport)

  Pavitt, Laurie

  Coleman, Donald

  Hunter, Adam

  Perry, Ernest

  Cook, Robin F. (Edin C)

  Irvine, Rt Hon Sir A. (Edge Hill)

  Phipps, Dr Colin

  Cowans, Harry

  Irving, Rt Hon S. (Dartford)

  Prentice, Rt Hon Reg

  Cox, Thomas (Tooting)

  Jackson, Colin (Brighouse)

  Prescott, John

  Crawshaw, Richard

  Jackson, Miss Margaret (Lincoln)

  Price, C. (Lewisham W)

  Crowther, Stan (Rotherham)

  Janner, Greville

  Price, William (Rugby)

  Cryer, Bob

  Jay, Rt Hon Douglas

  Radice, Giles

  Cunningham, G. (Islington S)

  Jeger, Mrs Lena

  Rees, Rt Hon Merlyn (Leeds S)

  Davies, Bryan (Enfield N)

  Jenkins, Hugh (Putney)

  Richardson, Miss Jo

  Davies, Denzil (Llanelli)

  John, Brynmor

  Roderick, Caerwyn

  Davis, Clinton (Hackney C)

  Johnson, Walter (Derby S)

  Rodgers, George (Chorley)

  Deakins, Eric

  Jones, Alec (Rhondda)

  Rooker, J. W.

  Dean, Joseph (Leeds West)

  Jones, Barry (East Flint)

  Rose, Paul B.

  Dell, Rt Hon Edmund

  Judd, Frank

  Ross, Stephen (Isle of Wight)

  Douglas-Mann, Bruce

  Kaufman, Gerald

  Rowlands, Ted

  Duffy, A. E. P.

  Kelley, Richard

  Ryman, John

  Dunwoody, Mrs Gwyneth

  Kerr, Russell

  Sedgemore, Brian

  Eadie, Alex

  Kilroy-Silk, Robert

  Shaw, Arnold (Ilford South)

  Edwards, Robert (Wolv SE)

  Kinnock, Neil

  Sheldon, Rt Hon Robert

  Ellis, John (Brigg & Scun)

  Lambie, David

  Shore, Rt Hon Peter

  English, Michael

  Lamborn, Harry

  Silkin, Rt Hon John (Deptford)

  Ennals, David

  Lamond, James

  Silkin, Rt Hon S. C. (Dulwich)

  Evans, Ioan (Aberdare)

  Latham, Arthur (Paddington)

  Silverman, Julius

  Ewing, Harry (Stirling)

  Lestor, Miss Joan (Eton & Slough)

  Skinner, Dennis

  Ewing, Mrs Winifred (Moray)

  Lipton, Marcus

  Small, William

  Fitch, Alan (Wigan)

  Luard, Evan

  Smith, John (N Lanarkshire)

  Foot, Rt Hon Michael

  Lyon, Alexander (York)

  Snape, Peter

  Ford, Ben

  McCartney, Hugh

  Spearing, Nigel

  Spriggs, Leslie

  Urwin, T. W.

  Willey, Rt Hon Frederick

  Stallard, A. W.

  Varley, Rt Hon Eric G.

  Williams, Rt Hon Alan (Swansea W)

  Steel, Rt Hon David

  Wainwright, Edwin (Dearne V)

  Williams, Alan Lee (Hornch'ch)

  Stewart, Rt Hon Donald

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

  Williams, Rt Hon Shirley (Hertford)

  Stoddart, David

  Walker, Harold (Doncaster)

  Wilson, Rt Hon Sir Harold (Huyton)

  Strang, Gavin

  Walker, Terry (Kingswood)

  Wilson, William (Coventry SE)

  Strauss, Rt Hon G. R.

  Ward, Michael

  Wise, Mrs Audrey

  Swain, Thomas

  Watkins, David

  Woodall, Alec

  Taylor, Mrs Ann (Bolton W)

  Watkinson, John

  Wrigglesworth, Ian

  Thomas, Jeffrey (Abertillery)

  Watt, Hamish

  Young, David (Bolton E)

  Thomas, Ron (Bristol NW)

  Weetch, Ken

  Thorpe, Rt Hon Jeremy (N Devon)

  Wellbeloved, James

  TELLERS FOR THE AYES:

  Tomlinson, John

  White, James (Pollok)

  Mr. Joseph Ashton and

  Torney, Tom

  Whitehead, Phillip

  Mr. James Tinn.

  Tuck, Raphael

  Whitlock, William

  NOES

  Arnold, Tom

  Hordern, Peter

  Osborn, John

  Bennett, Sir Frederic (Torbay)

  Hutchison, Michael Clark

  Page, Rt Hon R. Graham (Crosby)

  Bennett, Dr Reginald (Fareham)

  James, David

  Rees, Peter (Dover & Deal)

  Body, Richard

  Jessel, Toby

  Rees-Davies, W. R.

  Brittan, Leon

  Jones, Arthur (Daventry)

  Rodgers, Sir John (Sevenoaks)

  Buck, Antony

  Lawrence, Ivan

  Scott-Hopkins, James

  Clarke, Kenneth (Rushcliffe)

  McNair-Wilson, M. (Newbury)

  Sinclair, Sir George

  Cooke, Robert (Bristol W)

  Marshall, Michael (Arundel)

  Smith, Dudley (Warwick)

  Cormack, Patrick

  Mates, Michael

  Tebbit, Norman

  Durant. Tony

  Maxwell-Hyslop, Robin

  Viggers, Peter

  Eden, Rt Hon Sir John

  Mayhew, Patrick

  Walker, Rt Hon P. (Worcester)

  Eyre, Reginald

  Miller, Hal (Bromsgrove)

  Warren, Kenneth

  Fairbairn, Nicholas

  Mills, Peter

  Winterton, Nicholas

  Farr, John

  Montgomery, Fergus

  Fookes, Miss Janet

  Morris, Michael (Northampton S)

  TELLERS FOR THE NOES:

  Fry, Peter

  Newton, Tony

  Mr. Peter Bottemley and

  Harvie Anderson, Rt Hon Miss

  Onslow, Cranley

  Mr. Anthony Steen.

  Question accordingly agreed to.
  Lords amendment agreed to.
  Mr. Patrick Jenkin: On a point of order, Mr. Deputy Speaker. I apologise for raising this matter now but no notice has yet been given to the House about how the Government have suggested, or how the Chair has agreed, that the amendments should be grouped. When Amendment No. 1 was moved the Chair indicated that certain amendments would be debated together. I understand that there will be further grouping, and it would be helpful if we could have some indication about this.
  More generally, is it not usual, even with Lords amendments, that where a selection is made that involves some grouping, the information should be made available so that we know how the amendments will be taken? Otherwise it is inconvenient for those of us who are trying to grapple with the legislation.
  Mr. Deputy Speaker (Sir Myer Galpern): I accept the point. The grouping has not been presented. However, I am willing, if hon. Members do not have these details, to give them to the House now.
  Amendment No. 2 will be taken alone, as will Amendment No. 3. Amendment
  1500
  No. 4 will be taken with Amendments Nos. 5, 6, 7 and 16.
  Mr. Deakins: On a point of order, Mr. Deputy Speaker. It was the Government's intention that Amendment 16 should be debated separately and only Amendments Nos. 4, 5, 6 and 7 taken together.
  Mr. Deputy Speaker: I have not received any intimation of that, so perhaps even the Chair is being hoodwinked to some extent.
  In that case, Amendment No. 5 will be put formally as will Amendments Nos. 6 and 7. Amendment No. 8 will be called on its own and Amendment No. 9 will be called with Amendments Nos. 11 and 12. Amendment No. 10 will be called separately. Amendments 11 and 12 will then be put formally. Amendment 13 will be called separately, Amendments Nos. 14, 15 and 17 will be put formally, and Amendment No. 16 will be taken alone.
  Mr. Patrick Jenkin: I am grateful to you, Mr. Deputy Speaker. That was extremely helpful, and fits logically with the way in which the amendments hang together. I am not clear why the Government are suggesting that Amendment No. 16 should be taken separately, but

  1501
  we are perfectly happy if that is the way the Government want it.

New Clause B

  REVIEW OF EARNINGS RULE OPERATION
  Lords amendment: No. 2, in page 6, line 19, at end insert new Clause B—
  "B. The Secretary of State shall review the operation of the earnings rule for retirement pensioners and the wives of retirement and invalidity pensioners and the cost of its abolition, including the extent to which it acts as a disincentive to work and shall lay a report of his review before Parliament by 31st October 1978."
  Mr. Deakins: I beg to move, That this House doth agree with the Lords in the said amendment.
  We welcomed to our last debate the hon. Member for Liverpoool, Wavertree (Mr. Steen), who was acting as a Teller. I was glad to see him awake and active—though he appears not to be present now.
  The purpose of the new clause is to put a formal duty on the Secretary of State to report to Parliament on the operation of the earnings rule and the cost of its abolition. This report would have to be made by the end of October 1978, and would presumably be published.
  The clause is similar to that introduced by the right hon. Member far Wanstead and Woodford (Mr. Jenkin) on Report, on 14th February, save that it does not require a review of the operation of the therapeutic earnings rule for invalidity pensioners. The Government opposed these clauses in the Commons and in the Lords on the grounds that the review would cause additional work for the Department of Health and Social Security; that it would not make funds available for abolishing the earnings rule, and would not bring forward the date on which abolition could be afforded. The new clause was negatived in the Commons but carried on a Division in the Lords.
  5.15 p.m.
  It remains the Government's view that such a review is not necessary on its merits. However, in the Commons, I undertook to consider the suggestions of the right hon. Member for Wanstead and Woodford for obtaining more detailed information about the effect of the earnings rule and I assured the House that
  1502
  the Government would always seek to have available for the House accurate and up-to-date costings. Points were also made in the Lords about the need for a working document giving the current situation in 18 months' time and taking account of the changes in relevant factors that might well have taken place by then. In view of this, and the fact that the proposed review no longer encompasses the therapeutic earnings rule, the Government propose to accept this Lords' amendment.
  We envisage that the report will set out the cost of abolishing the earnings rule in the same amount of detail as in the note produced for hon. Members at the Committee stage of the Bill. I note, incidentally, that despite the doubts that the Opposition tried to raise about the figures in that note, the right hon. Member for Wanstead and Woodford, during the debate on public expenditure on 17th March, accepted that those figures were convincing.
  The Lords amendment also requires the Secretary of State to assess to what extent, if any, the earnings rule acts as a disincentive to work. In covering this issue in the report we shall make the maximum use of the results of the full-scale survey into the reasons for retirement that is currently being carried out by the Office of Population Censuses and Surveys for the Department of Health and Social Security and the Department of Employment. This should enable us to assess, among other matters affecting the older working population, the impact of the earnings rule.
  We shall also consider what other sources of information are available, so that the fullest possible information is available to Parliament in October next year. However, I feel bound to say that I do not expect that the review will enable us to depart from our conclusion that abolition of the earnings rule would be an expensive proposition and, if that is so, that the prospects of finding the resources to dispense with it in the near future are extremely slim.
  Mr. Patrick Jenkin: We are pleased that the Government have allowed wiser counsels to prevail and have decided to accept the obligation to review and to report on the earnings rule. I am at a loss to understand why the Government

  1503
  resisted this so fiercely when the matter was debated earlier in the Commons.
  The right hon. Gentleman says from a sedentary position that it is unnecessary. That is perhaps a little inconsistent with what his hon. Friend has just said—that because of the change of policy in the operation of the therapeutic earnings rule and a number of other steps the Government were now prepared to accept this.
  Of course the Government will conduct this review. They will be under constant pressure from all parts of the House to ensure that we are provided with up-to-date figures, but the clause will concentrate their mind on the need for a fresh look at this in time to report to Parliament by the autumn of next year, when we shall have another opportunity to examine it.
  For two years the House was fed with figures about the effect of raising the earnings limit or abolishing the earnings rule that the Government have admitted were wrong. The word used in Committee by the Under-Secretary to describe some of the earlier figures that he and his colleagues had given us was "hilarious", in the light of the later studies that they had made.
  On Report, the hon. Gentleman said:
  "I am prepared to accept that the figures may be wrong. The important question is by how much they are wrong."
  Here we come to an absolute gem:
  "I am confident that they cannot and will not be as wrong as previous estimates have been in the past."
  I suppose it is something to claim that Government statistics will not be as wrong as earlier figures, but it is not saying much. The House will recollect that the cost of abolishing the earnings rule turns primarily on the change in the number of people who defer retirements, and the Government figure for deferments in March 1976 was 120,000. They subsequently corrected that to 180,000. This error made a difference of £70 million or £75 million in the cost of abolishing the rule, and represents more than all the savings hoped for as a result of the Bill—and that was only one of a number of errors.
  We need the review for other reasons. The Under-Secretary also said, on Report:
  "I am prepared to accept from him"
  1504
  —that is, from me—
  "that if they are wrong they are more likely to be wrong in the direction which he suggested than in the other".—[Official Report, 14th February 1976; Vol. 926, c. 107–108.]
  The Minister was right. I suggested that the forecast of retirements, even now that the Government figures are clearly more reliable than those that we were given before, could still be substantially in error because the Government failed to take account of the extent to which people would earn more money and they also overestimated the number of people who would defer retirement. I expect the number who have deferred retirement to be substantially more than the Government have estimated. The savings achieved by not raising the earnings limit from £35 to £50 a week will be a good deal less than the £45 million net that the Government hope to save as a result of the Bill. Perhaps the Minister can give us some more information on that point.
  In another place, my noble Friends raised doubts about the figures in the Government's paper relating to the cost of invalidity pensions. I concede that they may have overstated the argument. In the light of comparisons that we have made since then between the DHSS paper and the survey carried out by the OPCS, it is clear that they accord more closely than was allowed in another place. However, that does not alter the fact that the Government do not know, to use the words in their paper, the number of:
  "invalidity pensioners not receiving an allowance for an adult dependant because their wives' earnings exceed the limit under the earnings rule."
  The Government are guessing about the number of wives living away from their husbands and hence unaffected by the rule, and they do not know whether all the 52,000 are actually in work in the first place.
  There are still many uncertainties. I am glad to see the Under-Secretary nodding his assent to that proposition. The hon. Gentleman has conceded that the figure is likely to be less than the figures on which the Government had based their thoughts. In these circumstances, it is surprising that they resisted for so long the review and report for which we pressed earlier.
  Reference has been made to my intervention in the public expenditure debate.

  1505
  In a sense, I was intervening in someone else's debate. My right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) and my hon. Friend the Member for Guildford (Mr. Howell) were speaking for the Opposition, but the Chief Secretary allowed himself some unpardonable liberties in his references to the proceedings on this Bill.
  The Opposition have taken a highly responsible attitude on the earnings rule. We have forced increases from £13 to £15 to £20 to £35 to £50, with the support of a number of hon. Members opposite, including the hon. Member for Islington, South and Finsbury (Mr. Cunningham), in successive debates. However, we are prepared to swallow part of our achievements and accept the overriding need of the Government to reduce the borrowing requirement and curb public expenditure. We therefore accept the postponement of the increase in the earnings limit from £35, dynamised to £50, and that is a measure of our responsibility. I was more than a little piqued to get no credit for that from the Chief Secretary who, on the contrary, tried to suggest that we had acted with gross irresponsibility on the Bill. We have done nothing of the sort.
  We said some time ago that we would not swallow the clause that introduced means-testing for a contributory national insurance benefit—unemployment benefit for pensioners. Apart from Ministers, no hon. Member has supported that clause. I make no excuse for the fact that we took it out in Committee and I congratulated the Government for not trying to put it back on Report.
  I received a letter from the Under-Secretary of State on 22nd March in which he referred to three suggestions that I had made on 14th February for obtaining more detailed information. I am grateful for what the hon. Gentleman said and I think that I should read the letter in order to get it into the record, so that everyone knows what has been agreed.
  5.30 p.m.
  The Under-Secretary said:
  "More recently the proposal which you were then advocating that a requirement should be placed on the Secretary of State to report to Parliament on the operation of the rule has been taken up by the House of Lords and carried in the form of an amendment to
  1506
  the Bill. The Government's view, in the Lords as in the Commons, is that such a review is not necessary on its merits and will not be particularly helpful in bringing forward the date when the rule can be done away with. Nevertheless, as you may know from Lord Wells-Pestell's letter of 16 March to Baroness Young, we do not wish to re-open the argument on this issue, and work will be put in hand to enable the Secretary of State to carry out this duty. We shall make the maximum use of survey information which is already available or which can be expected to come to hand in the course of the next year: this will include the full scale survey of the Reasons for Retirement which is now being carried out by the Office of Population Census and Surveys. The first results of this are expected to be available by the end of 1977, with further analyses in the first half of 1978."
  I hope that the Government will feel it right to approach the bodies outside, particularly Age Concern and Help the Aged, who might have information that will be helpful.
  The letter continued:
  "It will certainly be the Government's intention to see that the fullest possible information is available to Parliament as a result of the report which we have to make in the Autumn of next year, although I do not myself expect that it will enable us to depart from the conclusion that to phase out the earnings rule, although desirable, is and remains an expensive proposition."
  I do not know how the Minister can say that with certainty, because the survey may show that the cost is substantially less than the Government believe it to be now.
  My hon. Friend the Member for Wirral (Mr. Hunt) asked the Minister to specify the nature and purpose of the 20 surveys and statistical returns referred by his Department to the Survey Control Unit of the Central Statistical Office. The Minister said:
  "Earning capacity of invalidity pensioners: a survey by the Department to examine the effects of the earnings rule on invalidity pensioners and to investigate the availability and conditions of such employment".—[Official Report, 16th December 1976; Vol. 922, c. 822.]
  Can the Minister tell us anything more about that? It is now more than three months since that question was answered. When will the survey be completed? Can the Minister confirm that the results will form part of the review and report that will be made to the House under the new clause?
  The review is not only desirable but necessary. All parts of the House are committed to ending the earnings rule as

  1507
  soon as conditions permit. If we are to do that and to do our duty properly it is essential that Parliament has accurate up-to-date information, so that any Government that are in power—our Government will be in power by the autumn of next year—will be held to that commitment by Parliament in order that we may abolish the earnings rule as soon as we can afford to do so.
  Mr. George Cunningham: I regard the proposition in the new clause as a well-intentioned blunder that we shall live to regret. It is suggested by the right hon. Member for Wanstead and Woodford (Mr. Jenkin) that it will be possible for the report to contain figures that will somehow he divinely accurate and that everyone will see as being divinely accurate. Although some figures may be more reliably accurate than figures that we have had in the past—and some of them are the more important figures—some figures are those that one can never be sure of because one cannot know what people would have done if one had not changed the conditions. As Bernard Shaw once said, one does not know what would have happened to the patient if one had not cut off his leg. That is an assessment that one has to make when attempting to abolish the earnings rule.
  Although I entirely agree with the content of the Conservative Political Centre pamphlet written by the hon. Member for Rushcliffe (Mr. Clarke), it must be said that the figures are subject to great dispute.
  Mrs. Lynda Chalker: The hon. Member will remember that that pamphlet was published in July last year. That was a long time before we had the late-night paper that has served to set us right. If the hon. Member is in full agreement with the direction of that pamphlet we shall have the new figures that will come forward in the survey and we shall find that they come to the same conclusions as he did on that occasion.
  Mr. Cunningham: I wonder. What about the last two years? What has helped us to get through the change in the earnings rule? It has been bad, unreliable figures, which can be ridiculed in the House. Now we are to have a Blue Book, or something, that will have a great
  1508
  deal more respectability than the rotten figures that we have had so far.
  Mr. Patrick Jenkin: Is the hon. Member seriously arguing that responsible hon. Members should make policy decisions on the basis of figures that they know to be inaccurate and at which they can therefore scoff.
  Mr. Cunningham: Certainly. If one is intent on securing some reform any weapon may be used for that purpose. Mistakes on the part of opponents are the best weapons that one has. That is how we got it done two years ago. The road to hell is paved with good intentions and those in this House and in the Lords who thought that it might help, might have another think coming towards the end of 1978.
  I hope that we are not to spend a lot of money on the report. Let us have a fairly modest operation. The more expensive it is the more we shall feel obliged to pay attention to its policy content. The report is to be brought to us only by 31st October 1978. We all know the chances of getting a change in policy pending the production of a report; there is no chance at all. That rules out any change in April 1978 and November 1978—the two occasions on which a change could possibly be secured.
  The next relaxation of the earnings rule is now put off by this draft amendment until the spring of 1979, and it is more likely to be November 1979 at the earliest. I accept that the changes to the threshold in the Bill will come into effect. I am talking about further changes to the rule. The object of the report is to form a basis for further changes to the rule, additional to those in the Bill. There will be no further changes to the rule, additional to what is in the Bill, until at least April 1979 and, more likely, November 1979. That is because any move to change the rule will be met with the story that the report is in preparation and therefore we must wait for it.
  Finally, since we have to have this wretched report, the Government should ensure that the report addresses itself not only to the phasing of the rule or its sudden abolition by means of changes in the threshold figure but also to the possibility of a reduction in the age limit.

  1509
  That is a time when people are sensitive on the score of costs, and the easiest, and possibly the best way, in substance, of making a further change in the rule.
  As I said in Committee, I do not think that we should exclude the possibility of lowering the upper age for men to 69 or to 68 while not necessarily lowering the upper age for women below the age of 65, where it rests now. A change down to 68 for men would involve a cost, as far as I recollect, of about £15 million to £20 million on the Government's present figuring. That is a change which I should have thought would be bearable at some stage during the coming two years.
  I hope that the report will at least address itself to that possibility as well as to the more traditional ways of phasing out the rule.
  Mr. Tony Newton: I rise to make only a brief contribution. In that, I am not provoked but rather encouraged by the remarks of the hon. Member for Islington, South and Finsbury (Mr. Cunningham), because I think that it ought to be clear that there is some measure of agreement across the Back Benches of the House, at any rate. I should like, therefore, to endorse much of what the hon. Gentleman said. I hope that my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) will not take it amiss if I even say that I have a good deal of sympathy with what the hon. Gentleman has just said about the danger of politicians placing too much emphasis on statistics. I hope that I am not misreading what the hon. Gentle-can said. I acept his point that bad figures are a good argument against Governments anyway and that any argument that comes to hand can be useful in a good cause.
  However, I also think that there is here a broader danger into which politicians are all too apt to fall—that an argument that has a value content can be settled conclusively by a set of statistics. Over the last few years one of the greatest problems met by people on both sides of our political system, and not least by those responsible for affairs in the Treasury, has been the belief that if the glorious little statistics show something, that in itself is a conclusive and an effective political argument.
  1510
  I do not want to press the argument too far. However, if any one of us said to most retired people in our constituencies in the age bracket about which we are talking, men between 65 and 70 who object to the earnings rule, "We shall have a great report and then we shall see what the statistics show, and I shall return and tell you what I think in the light of the statistics", and then if the statistics showed that there would be this and that cost on this and that assumption, most of them would say "That is all very well. Your statistics may be right or wrong, but I simply think that the earnings rule is unfair."
  That is the judgment that we are paid to make as politicians—whether something is right or wrong.
  Mr. Patrick Jenkin: Does my hon. Friend not agree that there are a great many points on which our constituents can and do come to us saying that things are unfair, but that if we were to give in to them all we would only have the bailiffs of the IMF back knocking on the Treasury's door? Surely it is the responsibility of serious politicians to have regard to all competing claims and to do their best to weigh up costs and say that this or that has the higher priority. But we must live within our means. We are talking not just about statistics but about costs. The fact that it is I who have come to the rescue of the hon. Gentleman on this matter should reinforce the case that we must take this unpalatable step because we cannot afford the cost. I think that that is a measure of how responsible the Opposition are being in this respect.
  5.45 p.m.
  Mr. Newton: I entirely accept both my right hon. Friend's implied rebuke and the fact that on this matter I am, perhaps, rather more softhearted—to use one phrase that could be applied—than those on both Front Benches. I accept the responsibilities that the Front Benches must take. I would not want to press my argument too far.
  However, I hope that in the search for truth in statistics and on costs we shall not lose sight of what we are discussing—a rule the operation of which is held to be very unfair. It is held so both by many of those to whom it applies and by almost anyone who looks at the situation.

  1511
  We talk about the earnings rule, but let us consider what it means. In its own way, it is a term of art. We tend to forget what it means. It means a situation in which a man can work until he is 65, paying national insurance contributions which, he is told, entitle him to a pension at the age of 65. When he reaches the age of 65 he decides that he would like to go on working—which, on the face of it, is a splendid thing for the community, considering that the man could retire and live on the contributions that the rest of us are paying but chooses to go on working and putting something into the community—instead of seizing him by the arm and saying "splendid fellow, you are a great asset to the nation", we say "If you do this we shall not only tax you on what you earn but reduce the pension for which you have already paid, and you will be entitled to get the full benefit of the contributions that you have paid only if you cease working".
  I accept that there are problems about costs, especially at present. However, let no one run away with the idea that this is just a rather academic little argument. Whether the statistics go one way or the other, there is a very important point of principle here, to me at any rate. I want to see this rule go as soon as we can get rid of it.
  That brings me to the last point that want to make in supporting what the hon. Member for Islington, South and Finsbury said. We shall have this report. I hope that the figures will be as right as they can be. I hope—indeed, I strongly suspect—that they will give additional support to the case of those of us who would like to see the rule go rather earlier.
  However, I should like to urge that the Government should not, in concentrating on the report and trying to get it out, fail to spend a little time thinking about not just arguments for not doing anything, arguments for slowing down or reversing what the House has already done, but about the constructive side of the hon. Gentleman's remarks, which is other ways of getting rid of the rule, in smoother and simpler ways, and perhaps keeping costs down below present costs. The Government should not be providing just further ammunition for opposing the argument for getting rid of the rule. They should appreciate the
  1512
  arguments for positively removing the rule as soon as possible.
  I know that everyone says that this is his aim, but I gain an increasing impression that, at least on the official side and in the official machine, the main thought at present is to find reasons for not getting rid of the rule, whereas I want to see us getting rid of it once and for all.
  Mr. Deakins: The right hon. Member for Wanstead and Woodford (Mr. Jenkin) raised three major points. As to the first, we have no later information since the Committee stage. Secondly, I regret to say that the right hon. Gentleman's reference to Survey 15, referred to in the answer last December, has nothing to do with the amendment. It is an entirely separate survey. As I understand the position, there will be no information in that one which will be of benefit to us.
  However, the right hon. Gentleman has quoted extensively from the letter that I wrote to him. To the extent that the OPCS survey about which we have been talking does not provide the requisite information, particularly about working wives, we shall have to see what other means we have of getting it. The reason for mentioning that is that since Survey 15 does not assist us, we shall have to find some other means of getting the required information.
  Mr. Patrick Jenkin: How can the survey set out in the reply to the Question, having said "Earning capacity of invalidity pensioners: a survey by the Department to examine the effects of the earnings rule on invalidity pensioners", not be relevant to the question about which we are talking?
  Mr. Deakins: To satisfy the right hon. Gentleman I shall get information about Survey 15 and the details and I shall see that the right hon. Gentleman and the hon. Member for Wallasey (Mrs. Chalker) are satisfied about it. It would be quite pointless for the Government to go through another exercise if an existing survey already produces information that would be appropriate.
  The right hon. Gentleman's third point was about the uncertainties. I think that all of us agree, after our debates in Committee, that this is an area of great uncertainty. We are trying to narrow it down but, as has been pointed out, we

  1513
  shall never be able to get complete finality on this matter. I welcome the right hon. Gentleman's recognition that it will be this Government that will be presenting the report in October 1978.
  Mr. Patrick Jenkin: No.
  Mr. Deakins: Perhaps I misunderstand the right hon. Gentleman.
  This was the one amendment on which the Government were defeated in another place on this complex and partly controversial Bill. I must pay tribute to all the parties there, which have assisted the Government in getting the Bill through speedily with only one amendment that the Government did not want. I thank them for their co-operation in returning the Bill to us so quickly. I have in mind the timescale from a public expenditure point of view.
  My hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) talked about the possible reduction of the top age limit. The figures that will be supplied in the report will enable us to give him the same information that we supplied in Committee. I cannot guarantee that the report will contain a paragraph on this matter but we shall be able immediately to make the updated information available to my hon. Friend and the House on this method of getting rid of the earnings rule.
  I take the point made by the hon. Member for Braintree (Mr. Newton), but agree with the right hon. Member for Wanstead and Woodford that at present public expenditure considerations are paramount. The advantage of the report—I am making the best of something that the Government are having to accept—is that if public expenditure considerations are not as paramount in October 1978 as they are today and if the figures are more up to date and enable a much better estimate of the cost, it may be that the difference between the amount of public expenditure that we can afford to allocate to abolish the rule and the amount that is necessary will be so small that it will be easier for the House to see its way forward—I make no promises—to an immediate or eventual abolition along the lines put forward by my hon. Friend the Member for Islington, South and Finsbury.
  Question put and agreed to.

Clause 11

  MOBILITY ALLOWANCES FOR CERTAIN PERSONS ELIGIBLE FOR INVALID CARRIAGES
  Lords amendment: No. 3, in page 11, line 42, at end insert"; or
  (d) would have been, by virtue of any of the preceding paragraphs, a person to whom this section applies but for some error or delay for which in the opinion of the Secretary of State the person is not responsible and which is brought to the attention of the Secretary of State within the period of one year beginning with the date of the passing of this Act."
  Mr. Deakins: I beg to move, That this House doth agree with the Lords in the said amendment.
  This amendment was introduced by the Government to meet a commitment given here on Report by the Minister responsible for the disabled.
  Paragraphs (a), (b) and (c) of subsection (3) of Clause 11 define those beneficiaries who have reserved rights under the health service vehicle scheme and who may be allowed under the clause to switch, if they choose, to the new mobility allowance.
  The Government believe that Clause 11, even without the amendment, covers all those beneficiaries who have reserved rights and who consequently are entitled to exercise the option to change over to the mobility allowance. Nevertheless, in view of the concern expressed during the earlier passage of the Bill and by the Joint Committee on Mobility for the Disabled that there may be deserving cases who would have met the condition, but for some error or delay for which they were not responsible, the Government agreed to put down the amendment giving the Secretary of State a safety net to catch cases which are brought to his attention within a reasonable time limit.
  The amendment is wide enough to achieve this effect. It is purely beneficial and I ask the House to accept it.
  Mrs. Chalker: I am grateful to the Under-Secretary of State for explaining the outcome of the little discussion that we had in Committee. However, before we welcome the amendment it is right to put on record the answer that I received from the hon. Gentleman's colleague the Under-Secretary of State who deals with

  1515
  the problems of the disabled, on 21st March 1976.
  I asked the hon. Gentleman how many people were likely to become disenfranchised by the change in mobility between 1975 and 1976. I had previously received the answer that 2,000 people annually might have become new beneficiaries under the pre-1976 vehicle scheme had the old scheme continued in operation. I felt that that was a rather small number and decided to ask the Question again a little later. However, before I had the opportunity to do so the hon. Gentleman said that he felt that 3,500 might be a better estimate. In fact, that is a better estimate of the number of people who might have had a vehicle but who did not because of the change in the rules.
  The very purpose of the Question and answer and the subsequent answer underlines the necessity to have the safety clause in the Bill, although it has been resisted by the Government in the past. I am delighted that the Government should be introducing it on this occasion as a result of further discussions in another place.
  This is a dramatic change, as it alters the way of life for many disabled people, giving them a chance to move around when otherwise they would be unable to do so. I hope that we shall always consider putting this sort of clause into our legislation, as it will save many of the appeals and difficulties with which we shall be faced if such a clause is not to be found in initiating legislation.
  We welcome the clause.
  Question put and agreed to.

Clause 12

  AMENDMENTS OF SUPPLEMENTARY BENEFITS ACT 1976
  Lords amendment: No. 4, in page 12, line 21, at end insert
  "(2A) Subject to subsection (7A) below, regulations under the preceding provisions of this section may be so made as to take effect from the commencement of the Supplementary Benefits Act 1976."
  Mr. Deakins: I beg to move, That this House doth agree with the Lords in the said amendment.
  Mr. Deputy Speaker: With this, we are to discuss also Lords Amendments Nos. 5, 6 and 7.
  Mr. Deakins: These amendments became necessary as a result of the judgment of the Court of Appeal in the case of Atkinson v. the Barnsley Supplementary Benefits Appeal Tribunal, which was delivered after the Bill had left us for another place. The aim of the amendments is, in brief, to provide statutory backing for the Commission's use of its discretionary power in the past—not just in its application to students—and to provide a firm statutory base for the continuation of its policies in the future.
  The judgment of the Court of Appeal was to the effect that the Supplementary Benefits Commission has been in error in law in its past handling of claims from students and that it cannot rely on its existing discretionary powers to implement its long-standing policies towards students. The House agreed on Report that the Commission should continue to implement its traditional policies towards students, and inserted Clause 12(1) and (2), which will, after Royal Assent, give the necessary statutory backing. The present amendments introducing a new subsection 2(A) to Clause 12 contain a power to ensure that regulations made under Clause 12(1) and (2) may be made so as to cover past cases. This is to avoid having to look again at cases that have been settled since the Supplementary Benefit Scheme began 10 years ago, which would bring the Commission's current work on meeting urgent need to a halt. I should make clear the purpose of the new sub-section (7A), which is to ensure that the legislation does not have the effect of nullifying the judgment of the Court of Appeal in relation to the particular case which was before it.
  The amendments also seek to deal with a general issue which arose in the judgment of the Court of Appeal to which I have referred. The court also ruled that the wording of the Supplementary Benefits Act was not such as to enable the Commission to use its discretionary powers in relation to classes of cases as distinct from individuals, and this has left the Commission in the position of having an extremely shaky statutory basis for a wide range of its policies and the payments it makes.
  Paragraph 4(1) of the First Schedule to the Supplementary Benefits Act 1976, which consolidates a similar paragraph

  1517
  in the 1966 Act, gives the Supplementary Benefits Commission power to increase or, in the case only of a supplementary allowance, reduce the benefit entitlement which would otherwise be arrived at, in order to take account of any exceptional circumstances. The Commission uses this power not only in relation to exceptional circumstances of an individual case but also in relation to categories of cases. Indeed, it is inevitable that discretion should be exercised in this way in such a scheme as supplementary benefit which deals with millions of claims a year. It would clearly be impracticable to consider each case individually.
  Ever since 1966 the power has been used in many circumstances to increase benefit. I shall give two examples. The Commission awards substantial heating additions at standard rates and special diet addition of set amounts to fairly wide categories of claimants meeting specified criteria, such as illness or infirmity, or with accommodation that is difficult to heat. At the moment, over 1 million heating additions are in payment and there are about 300,000 additions for special diets. On the other hand, it has also been used on a much smaller scale to reduce or deny benefit to some categories of claimants whom it would be anomalous to support from public funds.
  6.0 p.m.
  As I have indicated, the Court of Appeal's judgment would lead to additional expenditure in some areas, possible hardship in others and a breakdown of confidence in the Supplementary Benefits Scheme. Urgent action has to be taken to restore the position to what the Commission had hitherto thought it was, and this is the purpose of our proposed subsection (6A).
  It has been found necessary, as with the provisions relating to students, to ensure that this amendment has effect in relation to past cases, otherwise there is a real risk of old cases being reopened and so disrupting the work of local offices in trying to help people currently in need. This simply restores the situation to that which successive Governments have for many years thought existed. No claimant will suffer any detriment.
  1518
  Consequential amendments to Clause 21 of the Bill ensure that the provisions embodied in these amendments shall come into force on the passing of the Act.
  Mr. Patrick Jenkin: We come now to the latest chapter in what has been the very chequered history of the Government's intention to make sense of the provision for students during vacations. The process started on 23rd February with a Written Answer from the former Secretary of State for Education and Science, when he announced that, from the start of the new academic year which began last September, students would be treated as having part of their grants attributable to the Christmas and Easter vacations and that that would be switched from the summer vacation.
  The Government tried to give legislative backing to that announcement when they published the Social Security (Miscellaneous Provisions) Bill before Christmas. It was in a form which aroused hostility from all parts of the House, for the simple reason that it proposed to disentitle students from supplementary benefit at all and to replace that entitlement with a hardship scheme to take care of the minority of students in special circumstances—those who were householders, had dependants or had to maintain flats during the vacation.
  On Second Reading, however, we found that "There ain't no hardship scheme." It did not exist. There was no money, no administration and no provision for financing it. Furthermore a number of hon. Members, notably the hon. Member for Coventry, South-West (Mrs. Wise), asked forcibly what a hardship scheme would achieve that the Supplementary Benefit Scheme could not. After one of the most hard-pressed speeches that he can have made in his political career—I shall never forget the way in which he was hammered from all sides—the Minister for Social Security undertook to take the Bill away and look at it again.
  As a result, a new clause in Committee reinstated the entitlement to supplementary benefit but provided that the parental contribution, even if not paid, should be treated as paid. That aroused some hostility. First, it was obvious that the Government were forgoing the savings that they had undertaken by introducing the clause in the

  1519
  first place. Second, it appeared that the Department of Education and Science, none of whose Ministers was on the Committee, had played no part in the matter at all, apart from the former Secretary of State's original announcement. Altogether, the position appeared to be one of considerable confusion and conflict. Therefore the Committee rightly threw out the relevant subsection and the Bill was reported with that clause headless, as it were—lacking its main operative part.
  On Report the Government sought to put the clause back, saying that it was essential if they were to give statutory backing to the SBC's practice of treating a parental contribution as though it were paid even if it were not. Some Government supporters still felt in difficulties, but the Opposition felt that that was the responsible thing to do.
  We have all along accepted the view of the SBC, as expressed in paragraph 5.11 of its 1975 Annual Report, that it is not a proper function of the Supplementary Benefit Scheme to see to student support. We accept that and we hope that it is still the Department's long-term aim.
  Then the Government lost yet another case before the courts. They have been very unlucky in their litigation—Laker Airways and Tameside, for instance. In this case, a 22-year-old law student took them to the Court of Appeal and single-handedly defeated the entire might of the Department of Health and Social Security. He established his entitlement to supplementary benefit on the footing that the Commission was not entitled—I must say this very carefully, because Mr. Atkinson wrote a letter to The Guardian setting out his case exactly—to take account of the parental contribution, and that it did not form part of the resources to which the Commission had to have regard in fixing a student's entitlement to benefit.
  The Minister just now thanked all parties in another place for the speed with which they had dealt with this matter. I cannot reciprocate, because the Government have dealt with it in an astonishingly lackadaisical way. I shall not quote all the passages from Committee, but the Government made it clear that they had to get the Bill out of Committee by 1st February so that it could
  1520
  become law in time for the new rule to operate from the start of the Easter vacation. We did not then know the outcome of the Atkinson case, but the Government wanted the statutory authority to start at that time.
  We gave them the Bill out of Committee on 1st February, but it was not until 14th February—a whole week later than necessary—that it was considered on Report. After Report and Third Reading in this House, the House of Lords did not have its Second Reading debate until 3rd March—more than another fortnight—and the Committee stage there did not begin until 14th March, nearly another fortnight later.
  From the time that the Bill left Standing Committee here until it went into Committee in the Lords, nearly six weeks was wasted when perhaps no more than two or two and a half weeks would have been necessary. As a result, students are lining up before the counters in supplementary benefit offices and doing what the Government did not intend them to do—claiming supplementary benefit. Moreover, they are claiming it on the basis of the Atkinson case, on the footing that the parental contribution cannot be treated as part of the resources if it is not paid.
  We also know from what was said in The Guardian before Christmas that the Government had already sent out circulars to their supplementary benefit offices instructing them to deal with students on the basis of the existing practice—that the parental contribution should be treated as paid.
  Therefore, we now have a yet further application, again involving retrospective legislation, to try to clear up the muddle the Government have got themselves into. The Government have got themselves tied to this problem because of their disaster before the Court of Appeal. A further factor, as the Minister made clear, is that the practice on which the SBC has been operating—of making rulings for whole classes of people—turns out to have no statutory backing. The Government must therefore put that right. Goodness knows how much money could be at risk if that were not done.
  With our customary responsibility, our interest in the welfare of the public purse and our intention that everything is done which should be done, we will not oppose

  1521
  the amendments. Once again, however, I cannot congratulate the Government on the way in which they and their Departments have handled this matter.
  The handling of this matter has been shameful There has been total confusion from beginning to end because there has been real conflict between the interests of the Department of Education and Science, with its concern for students, and the Department of Health and Social Security, with its interest in the proper administration of the Supplementary Benefit Scheme. That is the real reason for the trouble, whatever might have been said by the Minister of State for Education and Science in a truly astonishing speech on Report. The Minister cannot look back on that speech with any pride.
  The people who have been the losers are the normal clients of the Supplementary Benefits Commission—people who look to that Commission for their livelihood because they have no other means at their disposal. But they have had to queue up with students who should not be there, and their claims have been made more difficult as a result.
  The Commission's staff had hoped that they would not be grappling with payments of supplementary benefits to students. We know that 73 per cent. of students in respect of whom the parental contribution is assessed do not get the whole or part of that parental contribution. That is a high proportion of students, and as a result of the Atkinson case these people are now entitled to go to the Supplementary Benefits Commission and draw benefits on the basis that the notional contribution cannot be treated as part of their resources. This is not the happiest chapter in the affairs of either the Department of Health and Social Security or the Department of Education and Science.
  I urge the Minister to give us two clear, categorical pledges. The first is that he will go back to the Department of Education and Science and tell his right hon. and hon. Friends there that he will not put up with this sort of thing again. The Department must now produce a proper scheme to make sure that students do not suffer hardship in
  1522
  the vacation, but it is no part of the functions of the Supplementary Benefits Commission to do this. The Department of Health and Social Security must make that clear to the Department of Education and Science.
  The second pledge is much more immediate. The Government have given an indication that they want the Bill finished before 7 p.m., when we are to consider opposed private business. The Bill will then return to the Lords and the matter will be finally disposed of, and Royal Assent will be given later tonight or tomorrow. We will see that this is done. Is it the intention of the Government, the minute Royal Assent is through, to make sure that from that moment their intentions are implemented? The great generality of students should not be entitled to clog up the counters of the Supplementary Benefits Commission.
  We are already half way through the Easter vacation, and it is up to the Government to salvage something from the wreckage. Public money should cease to be paid out in this way. If the Government can give those undertakings on both those fronts, we could perhaps allow this Lords amendment to go through.
  6.15 p.m.
  Mr. Deakins: I think that the right hon. Gentleman has given, even for him, a rather biased summary of the progress of the Bill and of this particular provision. He has mixed up what happened in Committee on the clause relating to supplementary benefits—Clause 13(1)—with Amendment No. 63, which was voted down by the Opposition. Amendment No. 63 had nothing at all to do with withdrawing supplementary benefit from students. It was the guts of the proposal that we brought back at Report stage and which went back into the Bill as Clause 12(1) and (2).
  The right hon. Gentleman knows that I am not responsible for what goes on in another place. I know that their rules of procedure are rather different from ours because of the number of days that have to elapse between the various stages of Bills.
  I hope that we will be able to tidy this up once and for all. The Court of Appeal has helped to get us into this position. We

  1523
  had no idea when the Bill was drafted that this particular judgment would come up at this particular time. It is just as well it did, because it has enabled us to take cognisance of that decision and to put the law back to the state in which we thought it was. In this matter I speak for all Governments—we all thought that the law was different from what it actually was.
  There was a certain amount of confusion in Committee and we did our best to put it right. Talking about the contributions of specialists in education to this debate, a prime example was the very long speech in Committee from the hon. Member for Ripon (Dr. Hampson) who joined in our deliberations.
  Certainly we shall be, and are, in touch with the Department of Education and Science. We are in close contact with that Department over the student grants system and the amendments that will be needed because of the provisions of the Bill.
  The second provision is more urgent. Claims determined before the Bill becomes law, and the regulations made under it, will be dealt with in accordance with the law as defined by the Court of Appeal—£4 disregard will be given, and no account will be taken of parental contribution when satisfactory evidence is produced that that has not been made. All claims determined after the Bill becomes law and the regulations have been made will be dealt with as it is then—normally no disregard, and parental contribution will be taken into account. Exceptions will be made in the case of severely disabled students and lone parents, who will get a disregard of £2 on their grant and the assessed parental contribution will not be taken into account unless it is made in cash or kind.
  The regulations will be made immediately after Royal Assent. The right hon. Gentleman is in possession of information that I do not have. I have no idea when Royal Assent will be given, but I assure him that the regulations will be made as quockly as possible after Royal Assent.
  Question put and agreed to.
  Lords Amendments Nos. 5, 6 and 7 agreed to.

New Clause D

  CALCULATION OF GUARANTEED MIMIMUM PENSIONS PRESERVED UNDER APPROVED ARRANGEMENTS
  Lords amendment: No. 8, in page 17, line 24, at end insert new Clause D:
  "D.—(1) Where an occupational pension scheme ceases to be contracted-out and guaranteed minimum pension rights or accrued rights to guaranteed minimum pensions under the scheme are subject to approved arrangements (as defined in section 44 of the Pensions Act for the purposes of subsection (2) of that section) for their preservation, then, except in such circumstances as may be prescribed, section 35(5) of that Act shall have effect, unless the prescribed person otherwise elects in the prescribed manner, as if the following words were added at the end thereof: "except such an order made in any of the tax years comprised in the period of five years ending with the tax year in which the scheme ceases to be contracted-out and as increased by 12 per cent. for each of those five tax years except any in which an order under section 21 of this Act was made which did not relate to the factor and any in which such an order was not made and would not have related to the factor if it had been made".
  (2) Regulations may provide that subsection (1) above shall have effect with prescribed modifications in relation to a scheme which, immediately before it ceased to be contracted-out, contained provisions authorised by section 35(7) of the Pensions Act.
  (3) In this section expressions used in Part III of the Pensions Act have the same meanings as in that Part."
  Mr. Deakins: I beg to move, That this House doth agree with the Lords in the said amendment.
  The effect of this amendment is that, where a scheme ceases to be contracted out, the earnings factor from which guaranteed minimum pensions will be calculated may be revalued, subject to prescribed exceptions, at 12 per cent. a year for the five-year period immediately preceding the cessation, as an alternative to revaluation by reference to the rise in earnings generally. This concession in no way diminishes a contributor's combined pension rights from the State and occupational pension schemes.
  The concession already exists for employers who, on cessation of contracting out, would decide to discharge their liabilities for guaranteed minimum pensions by paying premiums into the National Insurance Fund in order to buy back into the State scheme. Section 44(6) of

  1525
  the Pensions Act permits the premiums to be calculated on the assumption that the pension rights so bought were to be revalued on this basis.
  This amendment will make the concession similarly available where, instead of buying back into the State scheme, the guaranteed minimum pensions will be preserved under arrangements approved by the Occupational Pensions Board, other than by transfer of rights to another contracted-out scheme. The regulation-making powers in the amendment are intended to be used principally to ensure that a similar concession may be available in respect of employees who had left the employment with preserved pensions before the scheme ceased to be contracted-out.
  Earlier this year, in Committee in this House, we resisted Opposition amendments which were designed to grant this concession and in doing so referred to the extra cost which would fall on the National Insurance Fund. I refer to the Official Report for Standing Committee A on 27th January 1977, at cols. 511–524. In the light of further advice and the new points raised by the pensions interests, we now accept that the net long-term cost would, so far as one can reasonably foresee, be unlikely to amount to a serious and substantial additional commitment except in the sort of very severe inflationary situation which would probably call for exceptional measures in any event. The potential cost is still a very relevant consideration, but we feel that the overall balance of considerations justifies this further concession.
  This concession, in effect, closes the last remaining open-ended commitment for employers and underlines the partnership between State and occupational pension schemes. It has, of course, been welcomed by the pensions organisations.
  There is one additional point I wish to make. There must be a limit to the extent to which the financial balances between State and occupational burdens are adjusted against each other. The amendment must be regarded as reaching that limit.
  Mr. Patrick Jenkin: Once again we are happy to acknowledge that the Government have yielded to wisdom and
  1526
  accepted the amendment that we moved in Committee. The Minister was kind enough to say that I had argued the matter powerfully. However, I was given a dusty answer in Committee, but obviously that power continued to work and the Government have been persuaded that it is right. I should like to thank the Minister for what he has done.
  The importance of the amendment is that it underlines the concept of the partnership between the public and private sectors and the fact that a large number of schemes will involve contracting out. That was always envisaged. The schemes will cover 8 million workers, but time is marching on. We have debated the effect of pay policy on pension scheme improvements. We have now had an indication from a number of the pensions interests that the method by which they are expected to apply for contracting out is now obscure. I have tabled a Question on this subject, but I do not know whether the Minister has seen it.
  There is now criticism that people do not know what the Occupational Pensions Board will require. That is one reason why so few applications have been made. But I repeat that time is running out. There is to be a long consultation period, application must be made to the Occupational Pensions Board, and there must be time for the matter to be considered and also time after the certificate is given for the necessary changes to be made and for the new scheme to come in. It must all be done by the end of the year.
  I am glad that the Secretary of State for Social Services has now come into the Chamber. He always comes in at the important points. I must tell him that this matter involves the impact of pay policy and contracting out on pension schemes. I know that he and his Department are familiar with these matters—indeed, they are tearing out their hair in frustration. They know that their policy is in serious danger because of the effect of pay restrictions in phase 2, and the slowness of the negotiations in phase 3 has been such that firms have not taken advantage of this proposal. The Government have repeatedly said that they wish to back the partnership in pensions, yet it is clear that a large number of firms that would like to contract out still do

  1527
  not know whether they will be able to put such proposals in operation.
  I hope—perhaps this may be conveyed to the Chancellor of the Exchequer, whether through the joint consultative committee or otherwise—that even now the Chancellor will be able to say something about this subject in his Budget Statement. People must know where they stand. It may not be possible for the Government to give a categorical assurance on a quantified limit or anything of the sort, but we must know within a matter of weeks how far firms will be allowed to improve their schemes to make it worth while for them to go to the trouble of contracting out and of making a reality of the partnership so often underlined by the Government. I know that it is the wish of firms to make this a reality. A determination was shown during the proceedings on the 1975 legislation that a reality should be made of that partnership. We know that that is the right way to proceed. But the Government are currently frustrating that aim, and it is up to them to put matters right. I hope that in the Budget Statement there will be some indication of that attitude.
  This provision is immensely valuable. As the Minister said, it closes the last open-ended commitment. However, it will be as dust and ashes unless the Government can give the pensions movement in the private and public sectors—in nationalised industries and private companies—freedom to negotiate with the unions improvements in schemes which can operate from April 1978.
  Question put and agreed to

Clause 18

  OTHER MISCELLANEOUS AMENDMENTS
  Lords amendment: No. 9, in page 18, line 30, after "Act" insert:
  "(which relate to a person whose service is contracted-out employment ceases before he attains the relevant scheme's normal pension age)"
  Mr. Deakins: I beg to move, That this House doth agree with the Lords in the said amendment.
  Mr. Deputy Speaker (Mr. Bryant Godman Irvine): With this we may take Lords Amendments Nos. 11 and 12.
  Mr. Deakins: These are purely consequential drafting amendments necessitated by subsection (7) of Clause 18, which was incorporated in the Bill on Report in this House. When the Government accepted that amendment, we did so on the understanding that it might be necessary to make further consequential amendments. These amendments are required.
  Question put and agreed to.
  Lords amendment: No. 10, in page 18, line 32, at end insert—
  "(7A) In section 40(3) of the Pensions Act, after the words "the rule has taken effect" there shall be inserted the words "except that the rule may also accord priority, on a winding up occurring after an earner has attained normal pension age, to liabilities of the scheme in respect of pensions and other benefits to which he will be entitled on ceasing to be in employment or to which the earner's widow or widower or any dependant of the earner's will be entitled on the earner's death"."
  Mr. Deakins: I beg to move, That this House doth agree with the Lords in the said amendment.
  Section 40(3) of the Social Security Pensions Act 1975 provides that for an occupational pension scheme to be contracted out it must contain a rule whereby any liabilities of the scheme in respect of certain items are accorded priority on a winding-up. These liabilities include guaranteed minimum pensions, equivalent pension benefits under former legislation, State scheme premiums, and pensions and other benefits in respect of which entitlement to payment has already arisen. The effect of this amendment is to add optional extra categories of pension to the existing categories.
  It has to be admitted that some confusion has arisen over what is meant to be covered by Section 40(3)(c) of the Act. It seems to have been originally intended that the priority liabilities should among other things, include postponed pensions and other benefits which would have been in payment but for the fact that the beneficiary had remained in employment after reaching normal pension age. Legal advice strongly suggests, however, that such pensions to the extent that they exceed the guaranteed minimum pension are not in fact included in the priority categories in Section 40(3). Moreover, it appears that certain schemes have been under the belief that prospective widows'

  1529
  pensions where the earner has qualified for his own pension would also be in the priority categories, and have altered their rules accordingly. Certainly the Government would not want to disturb any rule giving priority to such a widow's pension.
  At this stage, it is clearly undesirable that schemes which have brought their rules into conformity with Section 40(3) as it now stands should be required to amend their rules yet again. It is equally undesirable that schemes which have, in all good faith, extended their priorities to conform with what they understood were the Act's priority requirements should be required to amend their rules yet again so as to reduce their priority categories. This amendment therefore gives schemes the option of including the extra categories as priority ones, so that all schemes which have priority rules either conforming with Section 40(3) as it now stands or including any or all of the extra categories specified in the amendment will satisfy the priority requirements for contracting out.
  The Government are indebted to the pensions organisations, and particularly to the Life Offices Association, for their help in bringing the difficulties to notice and in helping to identify the sort of corrective action which would be most likely to meet the general needs of the situation. I accordingly commend the amendment to the House.
  6.30 p.m
  Mr. Patrick Jenkin: Once again the Government have been wise in dealing with this matter in a sensible manner. It may seem strange for one to say that, but obviously it is a highly complicated matter. The fact is, however, that the amendment removes the need for much further complication by the private pensions interests outside. I welcome that.
  Unlike the Minister's noble Friend, Baroness Phillips, in another place, I do not propose to use this amendment as an occasion for asking a question about the cohabitation rule. That may be an interesting subject but it does not seem to be wholly relevant, and I shall save the Minister the embarrassment of having to reply to such a question.
  Question put and agreed to.
  Lords Amendments Nos. 11 and 12 agreed to.

Clause 18

  OTHER MISCELLANEOUS AMENDMENTS
  Lords amendment: No. 13, in page 20, line 14, at end insert—
  "(12A) In section 47 of the Pensions Act, in subsections (1)(b) and (8)(b), for the words "state scheme premium" there shall be substituted the words "contributions equivalent premium"."
  Mr. Deakins: I beg to move, That this House doth agree with the Lords in the said amendment.
  The Government introduced this amendment so as to make more precise the intended scope of Section 47 of the Pensions Act. At present, this section would enable an employer to recover part of the cost of paying a State scheme premium from any refund of occupational scheme contributions an employee may receive.
  Normally the contributions equivalent premium would be the only type of State scheme premium on which the question of refund of employees' occupational scheme contributions would arise. It is recognised, however, that in some cases such refunds can arise in connection with other types of State scheme premium. It had been suggested that, under the terms of the section, the employer would have a similar right of recovery when he paid premiums such as a limited revaluation premium or an accrued rights premium. This was never intended, and in fact would result in some very anomalous situations.
  The intention of this amendment is thus to make it clear that the employer's right of recovery under Section 47 of the Act relates solely to contributions equivalent premiums.
  Question put and agreed to.
  Lords Amendments Nos. 14 and 15 agreed to.

Clause 21

  CITATION, COMMENCEMENT AND EXTENT
  Lords amendment: No. 16, in page 22, line 25, after "7" insert
  "12(1) to (2A), (6A) and (7A), (Retrospective amendment of Supplementary Benefit Act 1966), 13".
  Mr. Deakins: I beg to move, That this House doth agree with the Lords in the said amendment.
  The effect of the amendment is to add subsections (1), (2), (2A), (6A) and (7A) of Clause 12, and also Clauses 12A and 13 to those provisions which come into force on the passing of the Act.
  In moving the amendments to Clause 12 and the new clause which follows it, I explained why the provisions relating to students and to the Supplementary Benefits Commission's discretionary powers are wanted on Royal Assent. The House will not, I am sure, wish me to go over that ground again.
  This amendment also, as I have said, brings Clause 13 into force on Royal Assent. That clause provides part of the powers under which regulations for the recoupment of benefit from industrial tribunal awards are to be made by the Secretary of State for Employment. Since it is intended that the regulations should operate from May 1977, it is desirable that Clause 13 should be brought into force on the passing of the Act so that there shall be adequate time for their making, laying and bringing into operation.
  Mr. Patrick Jenkin: The House should recognise that this again is a retrospective clause in the sense that it makes an Act apply right back to 1966 and to the subsequently renamed Supplementary Benefit Act 1966. I shall not go over the ground that I covered earlier, but I must say that it is not satisfactory that we should be confronted with this kind of retrospective legislation, necessary though it may be.
  I have spent much of my time in the House dealing with fiscal legislation such as Inland Revenue and Income Tax Acts and annual Finance Acts. In the last 15 months I have been dealing with social security legislation, and over the last four months I have been dealing with this Bill in particular. I am very struck by the similarities and by the contrasts. I hope that Labour Members will not take it amiss if I say that I think there are a great many fewer slips 'twixt cup and lip in the Inland Revenue than we have found even in the limited sphere of this legislation. The Inland Revenue has for years been dealing with a substantial professional body outside which has made
  1532
  it its business to examine with a fine-tooth comb, Finance Bills and Finance Acts, and the regulations and orders which come under them, in order to make sure that in advising clients it takes full account of all the provisions that it is able to use for the clients' benefit.
  As a result, what one might describe as a creative tension has existed for many years between the experts in the Inland Revenue and the experts in the professions outside. They have made sure that the causes for major mistakes are kept to very few indeed.
  Mr. Orme: There is an annual Finance Act.
  Mr. Jenkin: That is true, but the point I was making is that there is no such comparable tension between those who are concerned with the receipt of social security benefits and those who are concerned with the legislation within the Department. It seems to me that this is of some importance, because the result has been, first, that we have had, if anything, more complexity and more obscurity in this legislation than exists in the Income Tax Acts. It also means that there is no other person outside looking at the legislation, or even at the draft legislation, who is able to pinpoint the difficulties and bring them to our attention.
  Of course, if there were such a person it might well be that one would have to have an annual Bill. But is that not perhaps better than finding ourselves passing legislation retrospectively, going back for more than 10 years, in order to cover up mistakes that have been unearthed and to close loopholes that have been discovered?
  I am in no way criticising those who are dealing with an immensely complex branch of the law. I have had that complexity impressed on me in no uncertain way over the last four months, as, I suspect, has the Minister. We have had to grapple with this legislation, and I have been both impressed and depressed by its complexity. I wonder whether there is not a rôle for some of the bodies outside similar to the rôle in which the accountancy profession sees itself with regard to the Inland Revenue. If so, we might have ended up with better legislation, because loopholes of this kind would not have been allowed to occur.

  1533
  There is now a very happy relationship between the accountancy profession and the Inland Revenue. Discussions take place regularly, and there are many occasions when the profession has saved the Revenue from mistakes which it would otherwise make. I say no more than that there is something here which needs to be examined. We want to try to make sure that we can secure some of the creative tension existing between those outside the Government and those in the Department so that we can avoid some of the difficulties in which we have found ourselves.
  This is the last amendment with which we have to deal. It covers the clauses that have been inserted to reverse the judgment in the Atkinson case. I read in The Times today that judgment has been reserved in the Metzger case. I also read:
  "The Budget is not now expected to contain an announcement about the next increase in pensions, although the Chancellor of the Exchequer is likely to refer to the Government's legal obligation to raise them in November."
  The Metzger case concerns the question of whether the Government broke the law last year when they failed to uprate pensions by the full amount of the rise in prices between April 1975 and April 1976. That is to be tested in the courts, and we are told that judgment has been reserved until Budget Day.
  In those circumstances, I can well understand that the Government are a little hesitant about making a new announcement on Budget Day when a High Court judge may be giving judgment that what the Chancellor announced last year was illegal. I suspect that this year the announcement will be based on prices over the 12 months from November to November, but Pat Healy said in The Times today:
  "Although the Chancellor is not expected to announce the new rates on Tuesday it is
  1534
  understood that the Government has decided to forecast ahead again this year unless judgment is given against it. That would mean measuring the way earnings and prices have risen since last November, and forecasting how much they would move by November this year.
  Because the Government hopes to use the forecasting method again, it has decided to leave work on the review of the level of benefits until the last possible moment so that the latest figures can be included."
  I do not object to that. It would seem to me to be sensible. If the Government have managed to speed up the process between the announcement of the increases and the date when they can become payable, that is a good thing, which we welcome. If they are to forecast ahead, the shorter the period ahead the better, because the greater will be the certainty that can be achieved and the greater the accuracy that can be applied to the increases.
  I merely mention that as yet another example of how we may find in an annual Finance Bill that the Government have to say "Once again we have boobed. We have been overruled by the court, and there must be retrospective legislation"—such as the new clause. I must not comment, because judgment has been reserved, but as a matter of politics I hope that that will not be so. The mistake was not in the increase but in giving a pledge and then allowing inflation to run away so that it became totally impracticable to honour that pledge. However, that is a matter that we shall be able to examine on another day.
  I should like to take this opportunity to thank Ministers for their very courteous replies on all the amendments. We accept this amendment, with its retrospectivity, although reluctantly, for the reasons I have given.
  Question put and agreed to.
  Lords Amendment No. 17 agreed to.

  SOCIAL SECURITY
  6.44 p.m.
  The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins): I beg to move,
  That the Family Income Supplements (Computation) Regulations 1977, a draft of which was laid before this House on 3rd March, be approved.
  I understand that it will be for the convenience of the House, and particularly hon. Members who take an interest in these matters, if we discuss in the same debate all the other motions relating to social security, as follows:
  That an humble Address be presented to Her Majesty, praying that the Social Security (Child Benefit Consequential) Regulations 1977 (S.I., 1977, No. 342), dated 1st March 1977, a copy of which was laid before this House on 11th March, be annulled.
  That an humble Address be presented to Her Majesty, praying that the Social Security (Child Benefit Consequential) Amendment Regulations 1977 (S.I., 1977, No. 417), dated 7th March 1977, a copy of which was laid before this House on 11th March, be annulled.
  That an humble Address be presented to Her Majesty, praying that the Pneumoconiosis, Byssionosis and Miscellaneous Diseases Benefit (Amendment) Scheme 1977 (S.I., 1977, No. 380), dated 4th March 1977fi, a copy of which was laid before this House on 11th March, be annulled.
  That an humble Address be presented to Her Majesty, praying that the Social Security Benefit (Dependency) Regulations 1977 (S.I., 1977, No. 343), dated 1st March 1977, a copy of which was laid before this House on 11th March, be annulled.
  That an humble Address be presented to Her Majesty, praying that the Family Income Supplements (General) Amendment Regulations 1977 (S.I., 1977, No. 324), dated 1st March 1977, a copy of which was laid before this House on 7th March, be annulled.
  That an humble Address be presented to Her Majesty, praying that the Social Security (Industrial Injuries) (Benefit) Amendment Regulations 1977 (S.I., 1977, No. 341), dated 1st March 1977, a copy of which was laid before this House on 11th March, be annulled.
  Mr. Graham Page: On a point of order, Mr. Deputy Speaker. When the Lord President announced the business on Monday he mentioned these regulations but did not mention any of the Prayers now on the Order Paper. Therefore, Back Benchers had no warning that the Prayers were to be taken today until they picked up their Order Papers this morning. It is a little unfair on those who take an interest in these matters not to have more warning.
  1536
  There is a more serious point arising from this. Because the Prayers have been rushed on to the Order Paper there is not the usual rubric saying that the Statutory Instruments have not been dealt with completely by the Joint Committee on Statutory Instruments. There is no Standing Order that the rubrics should appear, but we see on the Order Papjer in relation to the EEC orders that the position of the Joint Committee is duly noted.
  The Joint Committee has not completed its consideration of Statutory Instrument 1977 No. 342 and Statutory Instrument 1977 No. 417. According to convention, that should have been noted on the Order Paper. The Select Committee has asked for evidence from officials of the Department on those two Statutory Instruments. It is very inconvenient if we are to debate them without knowing that evidence and without the House having any report from the Joint Committee on those two Statutory Instruments. The question to the Department is whether those Statutory Instruments may be ultra vires in certain respects.
  The Joint Committee has not completed its consideration of Statutory Instrument 1977 No. 380, but the Department is not concerned there; it is merely a matter of further advice from Mr. Speaker's Counsel. However, these matters should have been noted on the Order Paper, according to convention. I wish to call attention to the omission from the Order Paper of what we have become accustomed to calling "the rubrics".
  Mr. Deputy Speaker (Mr. Bryant God-man Irvine): I am sure that the Minister and the House have noted what the right hon. Gentleman has said.
  Mr. Deakins: I apologise to the right hon. Gentleman for the omission of the rubric. I do not know the reason. I do not deal with these matters, which are not a direct responsibility of my Department.
  With regard to the ultra vires point raised by the right hon. Gentleman, I shall need to refer to those who know about these matters to satisfy myself whether the Statutory Instruments in question are in order.
  Mr. Patrick Jenkin: Further to the point of order,

  1537
  Mr. Deputy Speaker. I hope that it will be possible for the question of the announcement on Monday to be drawn to the attention of the Leader of the House. It was known—it had been made known through the usual channels—that it was the Opposition's wish to take all the prayers together, because the whole lot are related to child benefit, when the FIS regulations were taken. We indicated that we wanted the debate on the Floor of the House, and not upstairs.
  I hope that note will be taken that what has happened is very unhelpful for hon. Members. I was not in the House for the statement on Monday, but I assumed that all this would have been said. I and my colleagues who are principally concerned knew about the matter because we had made the request, but it is inconvenient for hon. Members not to know when many prayers are to be taken with the affirmative motion, so that they have time to prepare themselves to take part in the debate. It is important that this should not happen again.
  Mr. Graham Page: Further to the point of order, Mr. Deputy Speaker. The Joint Committee meets on Tuesday, and if the announcement had been made on Monday I am sure that the Department would have put itself out to send officials to give evidence then, so that the House might know by today the answers to the points that the Committee wanted to put to the officials. The problems could have been solved if that announcement had been made on Monday.
  Mr. Deakins: I shall draw the attention of my right hon. Friend the Leader of the House to the remarks of the right hon. Member for Crosby (Mr. Page) and the right hon. Member for Wanstead and Woodford (Mr. Jenkin).
  In order that we may have a reasonable discussion—we are considering seven regulations altogether—it may be helpful to indicate how I intend to proceed.
  The central issue of this debate must be the draft Family Income Supplements (Computation) Regulations, together with the Family Income Supplement (General) Amendment Regulations 1977, which are needed to complete the modifications to the FIS scheme in time for the beginning of the child benefit scheme on
  1538
  4th April. The remaining five sets of regulations I will come to later, and will attempt to deal with them all together. Before mentioning some of the details of the computation regulations, there are two preliminary points that I ought to make.
  The first is that FIS was conceived by the last Conservative Government as a simple scheme, and we propose to keep it so. Nevertheless, the introduction of a universal benefit such as child benefit, coupled with a gradual withdrawal of child tax allowances, is bound to have an effect on the formula for the calculation of FIS, and I know that this has led to confusion in some quarters. I have therefore prepared a brief explanation of the FIS rules and how we propose to apply them in the child benefit era. Some hon. Members may already have copies of this note; further copies can be obtained from the Whips' Offices. I hope that hon. Members who wish to follow the proposed changes as I describe them will find it easier to do so by reference to this note.
  The second preliminary point is that at present the prescribed amounts and maximum payments are specified in Sections 2 and 3 of the Family Income Supplements Act 1970, as amended by computation regulations at each FIS uprating. Schedule 4 to the Child Benefit Act 1975 amends the Family Income Supplements Act so that, following the introduction of the child benefit scheme, the prescribed amounts and maximum payments are to be specified in regulations, subject to two conditions. The only one that I need mention is that the prescribed amounts, which will apply from 5th April, must not be less than the basic prescribed amount immediately before the commencement of the child benefit scheme. In other words, any changes in the FIS formula needed to take account of the introduction of child benefit could not include a reduction in the basic prescribed amount of £39.
  Mrs. Lynda Chalker: Will it be possible in some way to publish the note—which the hon. Gentleman kindly let a number of us have before the debate—on the effect of FIS on child benefit? I feel that it will not be clear to other hon. Members who are trying to answer the inquiries of their constituents about

  1539
  exactly what is happening unless we can have that statement, which is five or six pages long and has three detailed tables at the back, made fully available to hon. Members and not just left in the Whips' Offices, where, with respect, papers tend to get lost. There are also many people outside the House who need to make these calculations in order to advise their clients. They do not have access to our Whips' Offices. Can the hon. Gentleman make some arrangement for publishing the paper in full?
  Mr. Deakins: I take the point. I am not sure about publication as a pamphlet or booklet, and I am not certain that that would necessarily be desirable in any case. But I undertake to do what one perhaps should already have done—to place copies in The Library as well as in the Whips' Offices. This has come at rather short notice, and we prepared the document only fairly recently.
  As the House knows, I am not adverse to sending things to all hon. Members. I have just sent something about the married women's option personally to all 635 Members, and I must forbear from undertaking a similar task again at least until my arm has recovered from the experience. But I take seriously the point made by the hon. Lady and, with my officials, I shall examine what further publicity can be given. I cannot promise to publish a pamphlet, but I hope that putting copies in the Library, or making more copies available, will be sufficient.
  The hon. Lady mentioned outside bodies. This is not a secret document. I would have thought that either the major outside bodies could ask for it or, if the hon. Lady likes, we could send it to those most interested. I think that that would meet the point that she has made.
  Mrs. Chalker: I am thinking of bodies such as Gingerbread and the Child Poverty Action Group, which have expressed considerable concern about what is happening over upratings. If they could be sent the paper forthwith, it would save a lot of correspondence that the hon. Gentleman will have to answer.
  Mr. Deakins: I take the point. If we can confine the circulation of the document
  1540
  to the major organisations which we know have queries, I think that that will be helpful.
  These draft computation regulations specify the prescribed amounts and maximum payments that will apply from 5th April. Regulation 2 specifies that the basic prescribed amount will be £39, the same as it is now, and that the step will be reduced by £1, from £4·50 to £3·50. I shall explain later why we are proposing this reduction, but suffice it to say now that it is bound up with the disregard of child benefit as income for FIS, which is effected by Regulation 2(1) of the Family Income Supplements (General) Amendment Regulations 1977. Regulation 3 of the computation regulations provides for the maximum payment for a family with one child to continue to be £8·50, with an addition of 50p for each child after the first.
  Hon. Members will have noted that Regulation 4 of these regulations also provides for an increase of £2·50 in the basic prescribed amount from 19th July; I shall come to the July proposals in a moment. But first let me deal with the changes we propose to make in April.
  The first change is that, as explained in paragraph 10 of the note, child benefit and child benefit increase will not count as part of the family's gross income. The second change is that the step in the prescribed amount will be reduced by £1—from £4·50 to £3·50. Examples of the two calculations, one as it is now, the other as it will be from April, are given in the note—examples A and B, respectively. The effect of these changes on FIS awards current in April is set out in tables 1, 2 and 3 of the note. Hon. Members will see that there will be some small increases in the levels of these awards.
  The overall effect of the FIS, child benefit and child tax allowances changes in April for tax-paying families is set out in tables 4, 5, and 6. I hope that these tables in particular will have demonstrated to the right hon. Member for Wanstead and Woodford how the figures that he mentioned in the child benefit debate on 9th February are derived.
  Ideally, families on means-tested benefits should break even when child benefits are introduced, since we do not wish to

  1541
  reduce the overall level of support that these selective benefits give to the poorest families. But, in reviewing FIS—and this applies throughout the whole complex of means-tested benefits—our aim has been to ensure as far as practicable that the improvement in universal benefit does not leave those already dependent on means-tested benefits actually worse off at the changeover point.
  I know that this aim is fully shared by Opposition Members—certainly they have made much of it at various times. For example, in the debate on child benefit regulations on 30th July 1976 the right hon. Member for Wanstead and Woodford was very concerned about the position of people who might be worse off, and in the same debate the hon. Member for Rushcliffe (Mr. Clarke) said:
  "There will have to be amendments to the regulations and a change in the basis upon which FIS, rate rebates and rent allowances are assessed. I hope, therefore, that the Minister of State will confirm that the Secretary of State is not just saying that he will look at these things, but that action will actually be taken by the Government to make sure that no one is worse off next year. If we cannot have that, and if the Minister of State is unable to tell the House that no one will be worse off next year if he is in the FIS bracket, the Government scheme is a disgrace, remains a disgrace and will be a disgrace
  1542
  when it is introduced."—[Official Report, 30th July 1976; Vol. 916, c. 1145.]
  But the right hon. Gentleman has also pressed upon us the importance of preserving the principle that improvements in universal benefit should reduce dependence on means testing.
  The Government share this view—indeed it is embodied in the very concept of the child benefit scheme. But the right hon. Gentleman appears to think that the two aims can be achieved simultaneously and in full. Given the complex structure of the various means-tested benefits that we have inherited, this cannot be done, but our proposals do secure this result as far as is practicable.
  FIS is at the heart of this complex, partly because it is a passport to certain other means-tested benefits, such as free school meals, free milk and vitamins. The solution that we have adopted here is to disregard child benefit and make the necessary offset by reducing the step in the prescribed amount. That deals with the core of the problem—
  It being Seven o'clock, and there being Private Business set down by The CHAIRMAN OF WAYS AND MEANS, under Standing Order No. 7 (Time for taking Private Business), further Proceeding stood postponed.

  MERSEYSIDE PASSENGER TRANSPORT BILL (By Order)
  Order for Second Reading read.
  7.0 p.m.
  Mr. Eric Ogden: I beg to move, That the Bill be now read a Second time.
  The purpose of the Bill is to enable urgent and difficult decisions about public transport on Merseyside to be made by the people of Merseyside, for the people of Merseyside, in and on Merseyside, not 200 miles away in Westminster or Whitehall.
  The Merseyside County Council and the Merseyside Passenger Transport Executive have the responsibility for operating public transport services on Merseyside. These include bus services, the ferries, rail links, the loop line and liaison with British Rail and the airport authority. These are no easy responsibilities at any time, and they are particularly difficult at times of severe restrictions on local and national expenditure.
  It is estimated that the operation of the river ferries costs the Merseyside PTE about £1 million more per year than the income from the ferries. The loss of income to the transport authority caused by the 15 per cent. or so of bus passengers who deliberately do not pay the full authorised fares for bus journeys is estimated to be a further £2 million per annum. The Bill proposes—not disposes—means to enable the Merseyside PTE and the Merseyside County Council to attempt to deal with these losses of at least £3 million a year. That is no small sum.
  The Mersey river ferries have a long honourable and lively history, and the rights of ferry across the Mersey, particularly between Liverpool and Birkenhead, have origins that are centuries old. The Woodside ferry originated under a Royal Charter granted to the monks of Birkenhead. I do not know whether any monks still live in Birkenhead—
  Mr. Robert Parry: They are still there.
  Mr. Ogden: I am grateful to my hon. Friend for his intervention. Those foundations are worth preserving. The charter
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  was granted to the monks of Birkenhead Priority in 1330. The charter referred to
  "the right to ferry over the arm of the sea for men, horses and goods with leave to charge reasonable tolls."
  The Woodside ferry franchise passed through many different hands until invested in the commissioners for the township of Birkenhead in 1842. It was passed by the Birkenhead Corporation to the Merseyside PTE in 1969.
  The Wallasey ferry has been in existence at least since 1541 and possibly longer. The Wallasey Improvement Act 1842 authorised the Wallasey Corporation to acquire the franchise, which it did in 1862. It took 20 years because the people like to make a proper job of it on that side of the river, as we do on ours. Those rights were passed to the Merseyside PTE in 1969.
  The ferry services prospered and grew to meet the social and economic needs of the time. Over the years, eight ferries have been operated from various points on the Mersey. From the most seaward point, there was the New Brighton to Pierhead ferry, which was closed in 1971, with the consent of the Secretary of State, under the Wallasey Corporation Act, 1852. The Egremont ferry was closed in 1941. The Seacombe ferry is still operating, but no vehicle transport has been carried since 1947 and there has been no night service since 1962. The Woodside ferry is still operating but there has been no vehicular traffic since 1941 and no night service since 1956.
  The Rock ferry was abandoned in 1939, the New ferry was abandoned in 1922 and the Eastham ferry was closed at the turn of the century. There was another ferry which I think would be of particular interest to my hon. Friend the Member for Liverpool, Garston (Mr. Loyden), and this was Job's ferry, a rowing boat service between Garston, my hon. Friend's constituency, and a point on the other side of the river close to the present Bromborough power station.
  The ferries prospered with the growth of the ports and cities of the Mersey Estuary. Their heyday was between 1880 and 1910. Even in 1955–56 10½ million passengers used the Seacombe ferry, which made a profit of only £2,000. By 1975–76 there were fewer than 2 million passengers using the service and the loss

  1545
  was £477,000. The Woodside ferry carried 8 million passengers in 1955–56 but lost £60,000, and in 1975–76 it carried only 1½ million passengers, at a loss to the executive and the authority of £418,000.
  The reduction in demand for ferry services was caused not by any dislike of the ferries but by alternatives becoming available. These included the Mersey Railway, opened in 1885, the Queensway road tunnel, opened in 1934, the Kings-way road tunnel, opened in 1971, and the almost-ready new Merseyside loop line and the rail link that will have an even greater effect on demand for ferry services. The new loop link will provide the largest underground rail link outside London and the most modern in Europe.
  I have always been fascinated by the ferry boats. The names of the ferry boats have been a roll call of honour, the pride of many generations. Perhaps my earliest memories—which probably go back to a time before my hon. Friend the Member for Liverpool, Scotland Exchange (Mr. Parry) and the hon. Member for Wallasey (Mrs. Chalker) were about—are of going from Pierhead to New Brighton and seeing that most dangerous of men, the one-legged diver of New Brighton, who used to collect halfpennies and pennies. This is part of our heritage and of all our traditions.
  In recent years the "Leasowe", the "Egremont" and the "Royal Daffodil" have all been decommissioned and sold. Today the Woodside and Seacombe ferries are operated by the gallant ladies the "Mountwood", the "Overchurch" and "Woodchurch". The "Royal Iris" is still in commission.
  I confess that my admiration is for the blunt, busy, no-nonsense working boats rather than that faster, painted little hussy the "Royal Iris", but that is only a personal preference. I give place to no one in my determination that the working boats must remain part of the Mersey scene. The River Mersey without the ferries would not be the Mersey to me.
  The question is how we are to keep them. On the information that I have been given, there is no way in which they can remain part of the transport services on Merseyside. There are other ways
  1546
  in which they ought to be and can be made available, but from the information given to me by the Merseyside PIE, which has been made available to every other Merseyside Member, one sees that the estimated loss on the two ferries for 1976–77 is £959,000, of which the loss on the Seacombe ferry is £487,000 and that on the Woodside £481,000. That does not include items of major capital expenditure which are due shortly, including the maintenance, repair and renewal of landing stages. It is estimated that the Woodside stage would cost another £1¼ million. The fare at the moment is 10p and the loss per passenger is 22p.
  Mrs. Lynda Chalker: Perhaps I may bring the hon. Gentleman up to date. I have travelled more recently on the ferry than he has. The last time I crossed—the weekend before last—it cost 12p for a single crossing. The question, therefore, is whether the subsidy has kept pace with the increase in the actual fare paid.
  Mr. Ogden: I am delighted that the hon. Lady should come to my side of the river more often than I go to her side. The loss is still 20p, and that is no way to run a ferry. The losses have to be borne by the other users, the ratepayers and the taxpayers. In the next two years the transport subsidies which may be made available on Merseyside will be halved so that the authority will have to find another £5 million one way or another.
  The transport authority has gone a long way to meet the determined requests of my right hon. Friend the Member for Birkenhead (Mr. Dell) and my hon. Friend the Member for Bebington and Ellesmere Port (Mr. Bates)—who I am glad to see here this evening but who, because of his position as a Whip cannot speak in the debate. That, however, has not prevented him from putting his case strongly to the transport authority.
  The Merseyside Members are all united that an alternative service has to be provided for those in the areas which would be affected by any future ferry closures. I am assured that full alternative services will be available if ferries have to close. These services will operate from the Mersey Tunnel and they will be a much improved version

  1547
  of the services that were operated in 1976 when the Liverpool landing stage sank and alternative services had to be operated.
  I am glad that my hon. Friend the Under-Secretary has the task of putting the Government's case on the Bill. He must be aware that all Merseyside Members are united in maintaining that the Mersey Tunnel tolls must be ended and that the tunnel should be financed in the same way as any other part of the motorway network.
  With the alternative transport services ready to be made available, the transport authority asks Parliament in Part 1 of the Bill
  "to authorise the discontinuance of ferry services now operated across the river Mersey between Birkenhead and Liverpool (the Woodside Ferry) and Wallasey and Liverpool (the Seacombe Ferry) should the County Council decide that the operation of either or both the ferries can no longer be justified".
  We are not deciding the fate of the ferries tonight. That should be decided on Merseyside.
  Let me now turn to the documents. The immediate, united, clear and uncompromising reaction to them of Merseyside Members of Parliament on both sides of the House was to tell the Merseyside PTE that there could be no Bill without a public inquiry on Merseyside. That would give everyone on Merseyside the chance to have his say before any decisions were taken. After presentation, the Bill was blocked by two Labour and two Conservative Members, acting with the knowledge and support of the rest of us. That block is still on.
  We have made our first priorities clear. The officers of the PTE and the Merseyside County Council were not too happy at first with what was being done. I think that over the past few months frequent meetings between the Members of Parliament, Councillor Sefton, who is the leader of the county council, Mr. Duffy and his colleagues on the PTE, and their parliamentary agent have produced a better understanding of what we may achieve between us rather than what was put forward last November.
  The transport authority has given a clear and specific undertaking that there will be a public inquiry on Merseyside. It will be open to all, and it will be held before any decisions are taken about
  1548
  possible ferry closures. Having put this firmly in the annexe that has been provided to every Merseyside Member, it has put on record its commitment to public consultation. Accordingly, a public inquiry will be held on Merseyside—
  Mr. Eric S. Heffer: How far will the inquiry be independent? Will it be a county council public inquiry?
  Mr. Ogden: I am advised that it will have to be held under the authority of the Merseyside County Council. The conditions are set out in the annexe. It might be an excellent idea if my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) were invited to take the chair, but that is not a matter for me.
  A public inquiry has to be called by someone, and in this instance it will be called by the PTE, which happens to be the Merseyside County Council. Under the proposals for public consultation, the chairman of the inquiry will be selected by the six Merseyside local authorities, any one of which will presumably have a veto on a candidate it does not like. That means that there would have to be an agreed chairman.
  Any person or organisation will be entitled to make verbal or written representations to the inquiry, and before a final decision as to possible ferry closure is taken all the Merseyside district councils—we have an infinite variety on Merseyside—will be asked to make recommendations. All local Members of Parliament will be specifically requested to submit their comments to the county council and the inquiry. If called for, public meetings will be held on both sides of the river. Those clear and categorical assurances by the county council are written into the annexe.
  I know that the hon. Member for Wallasey has been very determined in trying to get from the county council an undertaking that a final decision on ferry closure should be carried by a two-thirds majority of the council. So far, talks have been continuing between the county council and the Wirral authority.
  The system of local government on Merseyside was created only two or three years ago by the then Conservative Government. At the time the proposals were

  1549
  going through the House, it was never suggested that decisions by local authorities should have to be carried on a two-thirds majority. The reorganisation legislation included no entrenched clauses.
  Some hon. Members might now suggest that lottery Bills should need a two-thirds majority. Others might say that street lighting proposals should be carried only on a two-thirds majority. But there is no provision in any local government legislation for a two-thirds majority on any subject.
  Mrs. Chalker: It is important for me to place on the record my concern that we should have a full public inquiry. I hope to catch your eye during the debate, Mr. Deputy Speaker, in order to develop this point. The concern of the Wirral Borough Council is that the areas of three of the borough councils within the Merseyside county do not use the ferries very much and, therefore, are not as concerned about their future as are the hon. Member for Liverpool, West Derby (Mr. Ogden) and his colleagues and my hon. Friend the Member for Wirral (Mr. Hunt) and myself.
  The Wirral authority feared that a decision might be made by members of the county council who are not concerned about the ferries. That explains the opposition to proposals going through on a simple majority. We have therefore sought to continue discussions with the Merseyside County Council and with the borough council. We hope that these matters will be resolved in the course of tonight's debate and during the Committee debates on the Bill.
  Mr. Ogden: The hon. Lady is a most determined protagonist of her point of view and has certainly represented the views of her constituents. Perhaps my constituents use the ferries less than her constituents do. Possibly the constituents of my hon. Friends the Members for Bebington and Ellesmere Port and for the Scotland Exchange Division of Liverpool use it slightly more. That, however, is no measure of the concern felt by the district or county councils. After all, these are the Mersey ferries, and they strike a note in our hearts. That is why there is still a lively debate on the matter. I must stress to the hon.
  1550
  Lady, however, that there is no provision in any local authority legislation for two-thirds majorities, and it would be unfortunate if there were.
  I am certain that hon. Members will take an interest in the progress of the Bill. I am sure that Mr. Gordon Lindsay, of 25 Howbeck Road, Oxton, Birkenhead, will be interested. He wrote to Members of Parliament on 4th March to ask us to a meeting between him and the Birkenhead History Society at the Liverpool Playhouse, at which an organisation called the Friends of the Ferries was inaugurated. That organisation will want to have its say.
  My hon. Friend the Member for Walton passed me a letter from a young man in my constituency, close to his, who wrote:
  "I am the Liverpool schoolboy who has been collecting signatures for a petition to save the Mersey ferries. As you are my representative in Parliament I hope that you will do all in your power to press for a public inquiry when the Bill is discussed in the next week."
  A further meeting of the Friends of the Ferries will be held at Birkenhead Town Hall on 30th March at 7.30 p.m. Young people will be taking an interest in the future of the ferries. I know well that while this is not a party political matter in the normal sense—and not of the kind we had last night—the Wirral and Walton Labour Parties have made their opinions known clearly to their Members of Parliament by letter, by telegram and by personal meetings.
  Early in March Miss Hilary Hodge, the prospective Labour parliamentary candidate for Wallasey, wrote a clear and cogent letter to Merseyside Labour Members in which she said:
  "As you are aware, the Merseyside Transport Executive are promoting a Bill to give them powers to close the Ferries crossing the Mersey from Liverpool to Wallasey and Birkenhead.
  There is strong feeling about this, especially in Wallasey. More than 3 million trips are being made on those Ferries each year. The Wallasey Labour Party has set up a small Committee … to examine this whole matter and present a case for retention of the Ferries at the Public Inquiry when the MPTE sets it up—with of course an independent Chairman and the proceedings public.
  We are writing to ask that you do all in your power in Parliament to prevent this Bill's passage until after we have had the Public Inquiry and it has made its findings public.

  1551
  If, after we have presented our evidence and cross-examined the MPTE with regard to the figures adduced to support their case to close the Ferries, and other matters connected with the Ferries, we lose our case—well, that will be that. At least the Labour Party will have shown that it has done all it can to preserve the Ferries."
  That contact has been continued. My hon. Friend the Member for Garston and I met Miss Hodge together with the leader of the Merseyside County Council at Blackpool last Saturday, and we went over the details provided by the council. The council seemed to make a good case that at the public inquiry it will be one of the groups which will be putting forward strong arguments about means by which viable financial arrangements can be made for saving at least one of the ferries, if not both. But that is something for the public inquiry.
  I cannot say that I yield to anyone in my determination that the ferries should remain part of the Mersey scene. I cannot see, from the information available to me, that they can remain part of the transport scene. That will be a matter for the Merseyside County Council after a full and open public inquiry.
  The second part of the Bill is no less contentious than the first. In some cases it is even more so. It proposes ways to meet and to reduce the estimated loss of £2 million a year which arises because 15 per cent. of bus passengers avoid paying the proper fares. This has nothing to do with concessionary fares, school passes or pensioners' passes. It is simply the minority of 15 people in 100 who deliberately pay for a shorter journey than they know they intend to travel. That is a common problem in almost any transport authority, but it is greater in Merseyside because we have a higher percentage of one-man buses—about 94 per cent.
  My hon. Friends have received the detailed proposals put forward in its statement by the passenger transport executive. It proposed that if a person was found on a public transport bus who had deliberately paid less than he knew ought to be paid, he would be given a choice of paying a £1 fine at the time or of going to court. Because of objections to that, it is proposed to revise Clause 7 of the Bill. Instead of having fines on the bus, it is proposed to ask the traffic commissioners to allow the penalty
  1552
  to be the difference between what the person had paid and the maximum standard fare at any given time. For example, if I pay 20p and I deliberately travel a 40p journey, there is at present no penalty and I merely expect to pay the extra 20p if I were caught. I have nothing to lose by bilking my fellow passengers. Instead of that, it is proposed that if someone is found in those circumstances with no reasonable excuse he would pay the standard fare, which would be linked with the maximum authorised fare at any given time. At the moment it is 56p.
  I know that some of my hon. Friends are extremely worried about whether the police will become involved if some foolish person tries to implement this idea at 11 o'clock on a Saturday night at Lime Street. What is the attitude of the unions who will have to operate this'? I am advised that there has been the fullest possible consultation between all those responsible in the executive and those who will have the duty to operate the policy.
  There are two groups. In one case there is complete agreement, and in the second case there is almost complete agreement. I have received no objections to these proposals from any of the unions involved. As my hon. Friend the Member for Garston knows, in West Derby we have one of the largest passenger transport depots on Merseyside—the Gillmoss bus depot.
  Mr. Parry: I raised this matter today with the regional organisers of the Transport and General Workers' Union, which represents the bus staffs. They told me that their union is not happy with this clause.
  Mr. Ogden: The union is rightly concerned. It is equally concerned that the authority is losing £2 million a year. If it continues to lose that revenue, it will mean a loss of jobs and the union will be even more concerned. This proposal will not be introduced in a dictatorial manner. There will be ample time for consultations.
  My hon. Friend will confirm that we have not had any complaints direct. He has had a clear assurance that:
  "The traffic Trade Unions comprising platform staff (i.e. drivers and the very few conductors we now employ) have been informed

  1553
  of our proposals and are generally in favour of them. Negotiations with the Executive's inspectorate staff, who will have the initial duties of enforcement on the bus, were opened in October 1976 and are continuing. We are confident that they will be successful not only because road inspectors know the true extent of the losses being incurred (and their implications for future bus operations) but also because control fares really represent an extension of the excess fares system."
  I understand that the police have expressed some concern, but those fears have been to a large degree allayed. The police have raised no objections to the proposals.
  My hon. Friends are absolutely right to be concerned about the operations and the difficulties. They know that there are ways in which they can directly consult members of the executive. We know that officially they are not here, but if one looks around one might receive help. If any hon. Members have doubts about the issue, it is possible for consultations to take place with the executive before we get round to the later stages of the Bill.
  Mr. Eddie Loyden: We are touching on an important point. This matter was raised by my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) during the discussions we had with the agents acting on behalf of the metropolitan county for the Bill. There was no evidence at that meeting that consultations had taken place with the trade unions. The point made by a number of hon. Members, and my hon. Friend has underlined it, is that the main cause of overriding was the move from two-man operations to one-man operations. It is tragic that the executive should be looking for solutions to a problem for which it has been largely responsible.
  Our concern is that the other options open to Merseyside, such as the zoning of fares, have not been examined. The county seems to be looking for the easiest way out of the problem.
  Mr. Ogden: That is a difficult problem. We do not say that what is proposed in the Bill is the only way. There would be time in Committee to argue those things in detail.
  1554
  We cannot suddenly change the buses over to two-man operation. The one-man system was brought in with the agreement of the unions involved. We cannot put the clock back. My hon. Friends have strong objections to this part of the Bill. It is understandable and right that they should be expressed. There is time to sort out those objections if the Bill is allowed to go into Committee. There is ample time during the remainder of this debate from my hon. Friends to take up their worries and fears direct with representatives of the Merseyside Passenger Transport Executive. I cannot say that members of the executive are here, but there is ample time for further consultations. I hope that my hon. Friends will avail themselves of the opportunity.
  To sum up, the Bill proposes to deal with the annual loss of up to £1 million on the ferries and £2 million on bus fares. This is not something we can lightly forget. We cannot say that we are not bothered if someone bilks and robs other passengers. The money has to come from the ratepayers, the taxpayers or the bus routes. We should not connive at such robbery. This is £3 million which ought to be provided to maintain the services or else to bring about a reduction in rates.
  I ask the House to give the Bill a Second Reading, not a Third Reading. I do not ask for an Act of Parlament. I ask for the chance to put the Bill to a Committee of the House, on which none of us will be able to serve. It has to be comprised of independent Members, who will go through the Bill line by line and clause by clause, no doubt amending it even more than it has been amended. Ultimately, I want the Bill to make it possible for decisions about Merseyside Transport to be taken by the people of Merseyside on Merseyside for the people of Merseyside. I do not want Parliament to have a veto over what the people of Merseyside decide. I do not want the Transport Department to be deciding matters.
  If we give the Bill an unopposed Second Reading, despite the doubts and fears which have been expressed, we can find the time for consultation and consideration. Real objections can be made decisive on Third Reading. Until that

  1555
  happens, I ask hon. Members to permit the Bill to go into a Committee.
  7.32 p.m.
  Mr. Graham Page: The hon. Member for Liverpool, West Derby (Mr. Ogden) has put the case for this Bill in a persuasive and informative way. Perhaps he was more persuasive as regards the discontinuance of the ferries than he was when dealing with the controlled fares, or what I prefer to call "fines on the spot". When he was talking about the ferries he was asking the House to use its head rather than its heart, but at the same time he found a little difficulty in hiding his own emotions.
  We are all very emotional and over-sentimental about Merseyside transport. We shed a tear in the old days over the demise of the trams, although heaven knows what chaos the traffic would have been in if we had retained them. We wept when the overhead railway was demolished. I still retain a ticket for the last trip from Seaforth to Dingle. I treasure that ticket. We fought for and succeeded in retaining in my area the Exchange to Southport line against the then Dr. Beeching and Mr. Marples.
  Now we are faced with the discontinuance of the ferries which have been made famous outside Merseyside by a pop group. We treasure the ferries more than that on Merseyside. I am sure that you, Mr. Deputy Speaker, know the song we have about our Liverpool home in which we admit that we speak with an "accent exceedingly rurr" and we regret the fact that we have a statue "exceedingly burr". The last line of the song is:
  "If you want a cathedral, we've got one to spurr."
  That has now been changed to:
  "If you want a few ferries, we've got some to spurr."
  That is very regrettable.
  The hon. Member for Liverpool, West Derby has put forward the financial case, that there is a loss on the ferries and that, therefore, we must have a Bill of this sort which seeks to prevent that loss by discontinuing the feries. The Bill does not do that immediately, but gives the county council the power to hold an inquiry and decide whether the ferries shall cease to run. Clauses 4, 5 and 6 deal with the discontinuance of the ferries.
  1556
  I refer to the statement of the county council on its intentions with regard to these ferries. I notice that paragraph 4 of that statement says:
  "It is intended that, if a decision is taken to close the Seacombe Ferry, existing cross-river bus services through the Kingsway Tunnel would be augmented and bus services in Wallasey restructured to provide feeder services to stations on the Liverpool to New Brighton Line of the Mersey Railway."
  I warn those who use the Liverpool to New Brighton line that if they have to rely on the kind of feeder services which have already been put into operation in my constituency they will suffer greatly. The buses from my constituency to Liverpool have almost ceased to run. They dump their passengers at a windy roundabout in Waterloo, where old ladies and schoolchildren and the rest of us have to cross a busy road and go down some very steep steps. The Merseyside Passenger Transport Executive ought to consider the public more than that. If it is suggesting that it will introduce that type of feeder service to replace the ferries I shall be disappointed.
  That is why I am glad that it has put forward the proposition that there should be a public inquiry before any decision is reached. I am grateful for the undertaking that, although the Bill does not include any provision for a public inquiry at present, it is the intention of the promoters to move amendments in Committee to give effect to assurances which have been given about the public inquiry. I hope that whatever assurances are accepted by the Committee they will be spelled out in the Bill rather than there being any kind of side undertaking.
  As I understand it, the assurances are in the annexe to the statement. They say:
  "1. A Public Inquiry will be held on Merseyside. 2. The Chairman of the Inquiry will be selected by the six Merseyside local authorities."
  The hon. Member for Liverpool, Walton (Mr. Heffer) intervened earlier to ask that it should be an independent inquiry. The hon. Member for West Derby suggested that the hon. Member for Walton should be the chairman of the inquiry. I made some such aside as "heaven forbid". I was not really joking, because it should be an independent inquiry. The chairman should not be appointed by the Merseyside County Council or by the

  1557
  Merseyside districts. He should be appointed by the Secretary of State for Transport, from the panels of inspectors, or else by the Lord Chancellor.
  The assurances continue:
  "4. Before a final decision as to possible closure of the ferries is taken, all the Merseyside District Councils will be asked to make recommendations to the County Council."
  It will be seen—I am sorry but I have a bad cough. According to paragraph 4 the district councils will make recommendations to the county council and not to the inquiry, while the representations of Members of Parliament will be made to the county council and to the inquiry. Why cannot the district councils make recommendations to the inquiry?
  I now turn to Clause 6. According to subsection (1)(b) the owners will be put under a liability to carry out certain directions, but I am not sure whether those are directions from Trinity House or the Secretary of State and if the owners disobeyed those directions—
  Mr. Ogden: On a point of order, Mr. Deputy Speaker. I have no wish to interrupt, and it would be foolish to try to stop the right hon. Member for Crosby (Mr. Page) but he has a nasty cough. I do not know whether he is for or against the Bill, but would it be possible to have a commercial break so that the right hon. Gentleman could take a rest for a little while? This is an occasion that does not often arise. This is not just another Bill or committee that we are discussing. If the right hon. Gentleman were willing to stop—by leave of the Chair—and then come back to continue his remarks later, I think that would have the support of the House.
  The Under-Secretary of State for Transport (Mr. John Horam): Perhaps I could intervene to state the Government's position. I have no desire to delay the House, but that would give the right hon. Member for Crosby (Mr. Page) an opportunity to finish his speech in a proper manner. As this is merely an intervention I shall be brief in stating the Government's attitude to the proposals in the Bill that has been introducd by my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden).
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  My hon. Friend has stated the proposals clearly, and we have no objection to them in principle. The ferries issue is a matter for the passenger transport executive. It has to decide where its priorities for economies should lie. Nevertheless, I welcome the proposal to provide for a local inquiry into the ferry closures. That will allow an opportunity for all aspects of what is essentially a local matter to be fully considered before a decision is made. It has been suggested that the Secretary of State for Transport should have some say in this matter. I wholly disagree, and I want no say. My hon. Friend the Member for West Derby is right to stress that this is a local issue and that it should be decided as such.
  As for the overriding on buses, we have considerable sympathy for the promoters' wish to prevent non-payment of fares. The problem is widespread and has been referred to before during such debates. However, the way in which the promoters propose to achieve their objective raises some difficult questions of principle, which are of particular interest to the Home Secretary. These matters are under discussion with the promoters, and although the proposals, as they stand, involve a substantial departure from the principles that have always governed the provision of financial penalties, I hope that these questions will be resolved before the Bill reaches Committee.
  I suggest that the House should follow the convention on Private Bills and give the Bill a Second Reading so that it can go to Committee and the proposals can be examined with the benefit of expert evidence.
  Perhaps we may now return to the speech of the right hon. Member for Crosby, who is certainly an expert in these matters.
  Mr. Leslie Spriggs: Before the right hon. Member for Crosby (Mr. Page) continues his speech may I intervene to point out to him that St. Helens, which is one of the new districts of the metropolitan county council area, is interested in the ferry service? Many of my constituents would not like to see the service go—at least not without full and proper inquiry being made and without some kind of justice being shown to both taxpayers and ratepayers. We feel that the Bill should have a Second Reading,

  1559
  and my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) who moved the Second Reading, certainly made a case for that. I should like the right hon. Member for Crosby to bear in mind that the surrounding districts have an interest in this matter because of the many problems that would be involved in the withdrawal of such a service. We should like the Bill to be given a Second Reading and to be sent to a Committee of independent hon. Members who could examine all the proposals that have been made during the Second Reading debate tonight.
  Mr. Graham Page: With the leave of the House I should like to express my apologies, and my gratitude to those who have interrupted in order that I may continue.
  I am not speaking against the Bill in order to defeat the Second Reading. The Bill does not contain the provisions that are needed to satisfy the public. It is all very well for us to discuss the Bill on the basis of the raw phrases that it contains and a statement from the promoters, but there is a lot more that the public want to know—not only about why the Bill is necessary, but the details of the provisions that will be made for those who now use the ferries frequently.
  Earlier in my speech I began with this rather extraordinary Clause 6 which makes it an offence for the owners not to obey directions. I think that the Bill means only directions from Trinity House, but there is some doubt as to whether it might mean directions from the Secretary of State as well. It is unusual to make a public body responsible for an offence if it does not obey a direction. Normally, if a public body does not carry out the terms of an Act of Parliament one relies upon prerogative writs of mandamus to make it do so. It seems strange to impose such a penalty on the executive—and the end of Clause 6 makes clear that the executive is the owner.
  I now turn to Clause 7, which refers to the overriding on bus service vehicles. The hon. Member for West Derby put forward a convincing and persuasive case for the first part of the Bill, but he was not so persuasive or convincing on the second part. I have read the promoters' statement, but I am not clear about their
  1560
  intentions, Subsection (3)(a) is not acceptable. It says:
  "Where an authorised officer has reason to believe that on any occasion a person is committing or has committed an offence under this section, he may demand from that person payment of a fixed charge of fl under this subsection."
  The promoters tell us in their statement that they realise that this sort of provision is not acceptable and that they propose to replace it with a provision for charging standard fares for overriding, with those fares being subject to the determination of the traffic commissioners.
  I understand that they intend to retain the collection of money on the spot by an authorised officer. This is an entirely new principle in our law. Only the Customs and Excise has such a right at present. It has never been included in our traffic laws. I am sure that traffic wardens would be only too happy to collect money on the spot, but we have never given them that right. I know that there are strong arguments of convenience, and savings in administrative expense, in favour of the collection of fines on the spot, and I know that they may have worked well in other countries, but there is a great danger to the public in allowing such a provision to creep into a Private Bill. It is a matter of principle in our law that we do not allow even the police, let alone other authorised officers to collect fines on the spot. Because such a proposal gets into a Private Bill it will be regarded as a precedent for Bill after Bill, and eventually will be introduced into our general law, on the ground that it has been included in a number of Private Acts.
  Mr. Ogden: An almost identical system is in operation in Cardiff. That is not necessarily an argument for suggesting that it should be introduced on Merseyside, but it is operated not only in Europe, but in the United Kingdom. It is one way of dealing with the problem. We could discuss others in Committee. That would certainly be better than doing nothing about it and condoning these people who deliberately withhold their fares. They are robbing their fellow passengers. The objections voiced by the right hon. Member for Crosby (Mr. Page) could be explored in Committee.
  Mr. Page: I appreciate that those who escape payment are merely putting a greater burden on the ordinary passengers. This is a difficult problem. I have no doubt that it involves considerable losses, but the proposed system should be debated in the House on a Public Bill and not on a Private Bill. We should not introduce this new concept of law into a Private Bill. Once it gets there it can be a precedent for other Private Bills and eventually it will creep into our general law, and without proper debate.
  If money is demanded from a passenger who appears to be overriding, he will be extremely embarrassed. There are defences provided under the Bill, including reasonable excuse, and a fare not being tendered for that person by someone else—say, a relative at the other end of the bus; but the normal person, if accused of overriding, will not argue with an authorised officer, but will pay up even though a considerable injustice may be done.
  I have no objection to the system of paying parking fines by post if a person does not wish to go to court, but I have strong objections to the idea of payment on the spot. I understand that the police also have objections, and it was rather remiss of the council not to have consulted the police at an early stage. Indeed, I understand that the police have still not been formally consulted and that they have serious objections to the collection of fines by authorised officers. Even if the police had to collect the money themselves they would object to having a new concept in law introduced in a private Bill without proper debate. I hope that the Committee will remove that part of the Bill, leaving a provision to pay fines by post, but taking out the provision for on the spot fines.
  Mr. Spriggs: Before the right hon. Gentleman leaves this important point, is he aware that there is a precedent, if not for this sort of charge, at least for taking the names and addresses of people who commit an offence, particularly if they have done so on several occasions? If an officer or employee of British Rail has reason to believe that a person regularly evades payment of the proper fare, that person's name and address is taken and the authority takes whatever steps it believes necessary against that person.
  Mr. Page: I have always understood that if one is unfortunate enough not to have the money to pay one's fare, it is possible to give one's name and address and to pay afterwards. I do not object to that system, but I think that demanding money on the spot will cause great ill feeling between the travelling public and Merseyside Passenger Transport Executive.
  There are difficulties in the Bill, and I realise that something will be done about the collection of fares. I shall give the Bill fair wind till it comes back from Committee. If the things to which I object are still there, I shall not vote for it.
  7.58 p.m.
  Mr. Eric S. Heffer: I shall make a brief speech because the right hon. Member for Crosby (Mr. Page) has said many of the things that I would have said.
  I agree with my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) that we all have a great affection for the ferries and do not wish to see them disappear. I hope that we shall find some way of allowing them to continue, perhaps as an amenity for the people of the area. For example, many pensioners use the ferries for trips across the river. It is sad that the ferries no longer go to New Brighton, because that used to be a marvellous trip. Sometimes the old folk did not even bother to go ashore. When I was convalescing after a nasty illness I took that trip every day for three weeks. It was refreshing and delightful. In those days the river was filled with ships and was a wonderful sight.
  Under an existing Act, the Wallasey ferry can be removed anyway, whatever is done to this Bill. The Bill must get through in order to remove the Birkenhead ferry.
  I should like to see an independent inquiry. It must be a local and not a national inquiry. It should be conducted independently, not by someone from the county council or the local authority. An independent judgment should be reached by someone who is in no way responsible to the county council. I know that even if such a person were appointed people would argue that he was not independent, but I hope that my suggestion will be

  1563
  taken on board when the matter comes up. There is deep feeling in the area. My hon. Friend the Member for West Derby said that the Labour Parties of Wallasey and Wirral want an independent public inquiry. The members of those parties say that we should vote against the Bill until that promise is made. I shall not go that far, but I want my hon. Friend, who is in touch with the sponsors, to ensure that that is done so that when the Bill comes back to us we may support it.
  Nobody wants overriding. I do not want my rates to sustain people who do not pay their bus fares. I used to object to such people when I travelled regularly on the Liverpool buses. However, it is not as simple as that. My hon. Friend said that at the moment the maximum fare is only 56p.
  I was interested to note that the statement issued by the promoters of the Bill says that the practice of overriding on buses is a serious problem for bus operators and that it has become regrettably prevalent on Merseyside, particularly since the introduction of one-man operated buses. There is a high level of unemployment on Merseyside. If the unemployed believe that they can go further than they should without paying their fare they probably feel that they have some justification. I am not saying that all the unemployed do that.
  When one-man bus operations were discussed in the House I spoke strongly against my right hon. Friend the Member for Blackburn (Mrs. Castle). I was in a delegation to the House. My hon. Friend suggested that the unions accepted one-man buses. It was not quite that way. They accepted them only after 16 weeks' strike and after the members of the union had marched up and down the streets of Liverpool. I received very few letters about the matter, but I had a few telephone calls. Eventually an agreement was reached, but it was not a happy one. I have never believed in one-man buses, because they are a step back. They should be reconsidered. They cost £2 million or more. Whatever the figure is, it is a large sum of money, which could be used to employ conductors. That would mean that more people would be employed. That possibility must be examined.
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  My hon. Friend the Member for Liverpool, Toxteth (Mr. Crawshaw) said that we should follow the example of the Paris Metro, where there is a standard fare. There is also a standard fare on the New York buses, which applies whether one travels half a mile or 15 miles. That could be the answer. Machines are installed and passengers are seen to put money into them. I should prefer to employ more work people by operating two-man buses. That would be more civilised, and it might also speed up the routes. The one-man operated bus trips that took 20 minutes when I lived there now take half an hour.
  Mr. Richard Crawshaw: One could eat one's lunch while one was travelling.
  Mr. Heffer: My hon. Friend is correct. Services have not improved. I do not blame the passenger transport authority, because it has done as much as it can. There is a vicious circle, because higher fares lead more people to look for other means of transport.
  I ask the Government to consider my suggestions, because if they do not and if the clause remains as it is I shall not support the Bill. I feel like voting against it tonight, but if I am given an assurance that that matter will be examined I shall support the Bill on that basis.
  I now turn to the Merseyside ferries. Hon. Members may remember the Liverpool Echo record called "Sounds of the Mersey". I remember one of the lads singing "Bring back a parrot"and another replying" I shall try, but I am only going to Birkenhead". That sums up the attitude of the people towards ferries. They are an institution in Liverpool. We love them. We have discarded too many institutions. The guts have been torn out of our city. It has been ruined. It is not the city that I went to as a young fellow. Its guts have been torn out.
  We cannot let everything go. We cannot let things such as the dockers' umbrella go. Many things have gone. We must not allow the ferries to go like that. I hope that something will be done to ensure that some ferries at least will be left to provide an amenity for the people.
  8.9 p.m.
  Mr. David Hunt: I shudder to say that the hon. Member for Liverpool, Walton (Mr. Heffer) brought tears to my eyes. I confess that I, like him, have Liverpool in my blood, and that has conditioned my attitude towards the ferries. I come from a family that has been involved for generations in shipping in Liverpool. As a young kid at school I constantly used the ferries and I know many others who did the same.
  I shall explain to the House why so many of my constituents, those living on the Wirral Peninsula and on the Liverpool side, are angry about the way in which the Bill has been brought forward. It was an astute move of the sponsors to appoint such an amiable, friendly and wise person as my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) to move the Second Reading of the Bill. The words that I wish to use are difficult to use when faced with such an impressive countenance, but that will not stop me, because my constituents are very angry.
  I have a document that was passed to me by Peter Saunders, the local correspondent of the Liverpool Daily Post. I refer to the publication by the Merseyside County Council, called
  "MPTE—Keeping Merseyside on the move."
  It has a beautiful picture of the ferries on the front. That document was published in May 1975. It is an authoritative document. It states quite clearly:
  "No, despite rumours to the contrary there will always be a ferry 'cross the Mersey."
  It goes into great detail about how the ferries are part of our transportation heritage on the Mersey. Yet we have had a shabby Bill brought before the House called the Merseyside Passenger Transport Bill, with inadequate consultations and virtually no discussions before it was brought forward.
  Had this Bill slipped through, as it might well have done but for the vigilance of my hon. Friend the Member for Wallasey (Mrs. Chalker) and other hon. Members, it would have entitled Merseyside County Council to close down the ferries without any public inquiry on giving one month's notice. The hon. Member for Walton said that the council could have closed down the Wallasey ferry without coming to Parliament, but
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  there would have had to be a public inquiry. If the Bill had slipped through before my hon. Friend had spotted this, the council would have been able to close the Wallasey ferry without any public inquiry. The council said to her, to myself and to other hon. Members that it was much easier to put the Wallasey ferry in with the Woodside ferry, but it did not convince us and it has not persuaded us since that it was not seeking to close this wonderful Merseyside institution without any public inquiry or proper consultation in which my constituents and those of other hon. Members could have participated.
  Therefore, today we have this debate, thanks to the blockage of the Bill by my hon. Friend the Member for Wallasey and other hon. Members. I do not want to labour the point, but my hon. Friend is fast becoming known as the Britannia of the Mersey—
  Mr. Ogden: The hon. Gentleman knows what happened to Britannia.
  Mr. Hunt:—over whom no waves will sweep the ferry aside. I give her every credit for having made quite certain now that the people of Wallasey will have a say. However, I am afraid that my hon. Friend the Member for West Derby may well become known to the 3½ million passengers who use the ferries every year as the man who sank the ferries.
  It is not just a historical accident that the Merseyside County Council and the MPTE have to ask the House for permission even to think about closing the ferry. It is really a measure of where history has put the ferry. My hon. Friend has mentioned the 14th century, but it is quite clear that the ferry service across the Mersey goes back to 1130, and probably further, when the right to charge a fee for crossing the Mersey was granted by royalty.
  However, in reference to history and the analogy, perhaps I may explain why my constituents in Merseyside and Wirral and constituents of other hon. Members are so angry about the whole procedure that has taken place. The reason is that the Merseyside County Council is now clearly seen as the body that is trying to close the ferry without any real public participation. My right hon. Friend the Member for Crosby (Mr. Page) mentioned an independent inquiry, as other

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  speakers have. My constituents will never see an independent inquiry as one in which the Merseyside County Council takes the decision.
  Let us now see what will happen if the Bill goes through. There will be a local inquiry, whether or not it is chaired by the hon. Member for Walton. I would regard him as being independent, because he almost brought tears to my eyes during his speech. He would be independent, he would let all the arguments generate, and make a fair report.
  Whoever is the independent chairman, we have a local inquiry. The Merseyside County Council then gets the report from the local inquiry. There is nothing in the Bill that would in any way inhibit Merseyside County Council from receiving a report that says quite clearly that the ferries must not be closed and lays down a whole series of statistics and arguments why they should not be closed, and then saying "It is a very interesting document, and we have read it, but we shall close the ferries." That is why the Metropolitan Borough of Wirral and many other people say "We are not happy about Merseyside County Council taking this decision by a simple majority."
  My hon. Friend and I have suggested that a compromise solution would be to say that if the chairman said "No, you must not close the ferry. We have had a five-week inquiry and all the evidence shows that it must not be closed", there should be a two-thirds majority of Merseyside County Council in order to upset the inspector's decision. That was a very fair suggestion. But no; it seems that Merseyside County Council still wishes to take the decision by a simple majority.
  I warn the sponsors of the Bill that although we may not oppose the Second Reading tonight, if there is no way in which fears such as these can be met—either by a two-thirds majority, under whatever circumstances, or by Wirral council, which provides from within its boundaries the vast majority of the people who use the ferry consistently and daily—the Wirral council should have an opportunity of making a decision of equal validity to that taken by Merseyside County Council, either before or afterwards, to ratify the county council's decision.
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  I suggest all these things because there are real fears that if we in the House of Commons release the control that we have over this situation, the ferries will sink and pass into history. This is not just a matter of a dockers' umbrella; it has been an umbrella for many Liverpool citizens, and it has gone and people now regret it. Perhaps the saddest thing about the ferries is that if they go—as Merseyside County Council originally wanted, at just one month's notice, published in a document to be fixed at the pierhead—they will not return. There is no chance of a return.
  I should now like to mention some of the arguments that have been put forward very impressively by a whole host of my constituents. I do not know about other Members' postbags on this issue, but I have had many hundreds of people contacting me, by letter and in person and with petitions, saying that they do not want the ferries closed. It may be useful to the House if I read just one or two extracts to indicate exactly what is in the minds of those who do not wish us in the House of Commons to release its present control of the ferries.
  As hon. Members may know, my constituency is rather large, and encompasses part of Cheshire as well as Merseyside. One gentleman wrote to me from Willasston. Living there, he is many miles away from the ferry, but he says,
  "Every day I use either the Birkenhead or the Wallasey ferry in order to commute to and from Liverpool. I travel by bicycle and use the ferries in company with a small but growing number of cyclists for whom the withdrawal of these services would cause much inconvenience. There are many hundreds of other users too at rush-hour times who apparently prefer, for reasons of convenience, or price, or both, to use the boats"
  —rather than to go underground. He continues,
  "More importantly for myself and for many others, the stopping of these ferries would cause hardship and inconvenience."
  Another constituent also cycles—the cyclists are very important in this matter—and points out that there are no real alternative facilities for cyclists to get across from my constituency and those of the right hon. Member for Birkenhead (Mr. Dell)—the Secretary of State for Trade—the hon. Member for Bebington and Ellesmere Port (Mr. Bates) and my hon. Friend the Member for Wallasey.

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  He says that those who wish to cycle cannot really do so at present unless they go by ferry.
  There are no real facilities through the road tunnel. One of the tunnels is banned to cyclists and the other allows them through only for limited periods. One of my constituents who lives in the Irby area tells me that when he tries to cycle through the tunnel it is rather like dicing with death. It is a narrow lane. Certain suggestions have been made, but they are not real alternatives.
  If the ferries are closed, it is proposed that cyclists should try to use the escalators to go down into the depths of the underground and use an auxiliary truck that will be put on the back of the underground train. On reaching the other side they would have to haul themselves up the steps of the escalator. I understand that that would be possible only at great additional expense, at a price far above what cyclists now pay to travel on the ferries. I hope that the sponsors will take very much into account the feeling of cyclists.
  Mr. Ogden: I was expecting an intervention from the hon. Member for Liverpool, Wavertree (Mr. Steen)—Liverpool's own sleeping beauty. I know of the hon. Gentleman's interest in cycling. I am advised that there have been the very greatest consultations between the MPTE and the cycling organisations. There is a proposal for extending the time during which cycling is permitted through the Mersey Tunnel. I confess that I have never seen a cyclist going through the tunnel. It has never happened in my experience. However, there has been some agreement about alternatives and I understand that national and local cycling organisations are reasonably confident. They have made exactly the same points as those made by the hon. Gentleman on behalf of his constituents. I hope that they will continue to do so until they get real guarantees of an improved and alternative service.
  Mr. Hunt: I hope that those endearing comments mean that by the time the Bill returns we shall have had some clear assurances of what will happen to the poor cyclists.
  A number of associations have contacted me, including the Wirral Federation
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  of Townswomen's Guilds. Mrs. Olerenshaw wrote:
  "on behalf of all the guilds of the Wirral Federation … we wholeheartedly support all your efforts in the fight against the closure of the Mersey ferries."
  Another constituent in Birkenhead—my constituency goes right into Birkenhead, and many of my Birkenhead constituents use the ferries daily—writes that the ferry
  "is something that must not be valued in money but by its intrinsic value as an amenity today and also as a right of way."
  Another constituent, who lives in Preston, writes:
  "I am writing to you with an impassioned plea against the proposed closure of the Merseyside ferries, which first came into existence in 1122 when the monks from Birkenhead Priory made crossings across the River Mersey. This is 854 momentous years of Birkenhead, Merseyside and British history and tradition".
  The next letter that I quote is from a very well-known gentleman from Birkenhead, namely, Mr. Allison, who is President of the Birkenhead History Society. Mr. Allison was Chairman of the Society for 31 years. He is Chairman of the Geographical Association. He writes:
  "The ferry is much more than a means of transport: it performs an important social purpose (or purposes) and its closure would be a blow to the folk from Merseyside's poorer streets."
  There are many other examples that I could read to the House but I leave it at that, except to say that my hon. Friend the Member for West Derby mentioned the Ferry Forum or the Friends of the Ferries. I welcome very much the initiative of those who have set up the organisation, who include some of those I have spoken of already, including Gordon Lindsay. I hope that the Friends of the Ferries will receive the support that they deserve.
  The amount of mail that I have received demonstrates that there is real concern that there will be a closure of the ferries if the House suddenly releases its hold over them. That is a real concern, which has not been met completely by the words of my hon. Friend the Member for West Derby. Before we can support the Bill when it returns from Committee we shall need more positive assurances about the type of inquiry that is to be held and about the way in which it will be conducted.
  Many people may ask whether there has been a proper survey of the cross-river facilities in Merseyside. I have not

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  heard my hon. Friend the Member for West Derby mention an enormous report, which was made at great expense and which has been shelved by the Merseyside Passenger Transport Executive. The Cranfield Institute of Technology produced a study in 1974, after a lengthy process of consultation and deliberation. The study is entitled "A Study Of The Future Need For Service And Transport Facilities Across The River Mersey". This great work examined the ferry service. It examined the cost and the number of people using the service and put forward a series of major conclusions most of which have not been considered properly and in detal.
  The first major conclusion was that although the closure of the ferry would minimise the financial burden there was significant scope for cutting the operating losses of the ferry services without major degradation in the level of service offered. We have not really seen any serious attempt made by the MPTE—I have heard all the arguments—to minimise the losses of the ferry. My constituents and others in Merseyside have the impression that it has already decided to close the ferry. Already the paint is peeling. The people are starting to lose heart. The ferry services are beginning, slowly but surely, to increase the arguments for closing them altogether. Where have the real investigations taken place into the scope for cutting the ferry services? What did the great Cranfield Institute mean?
  First, it said that new and smaller ferries could operate satisfactorily from existing landing stages. It said that three new 500-place vessels would offer the cheapest solution to continued operation of both the Woodside and Wallasey routes, in spite of outstanding depreciation and interest payments on current vessels. It then stated that
  "The introduction of more automatic ticketing would offer substantial economies for the ferry operation."
  It concluded:
  "To many users, the ferries are an attractive means of travel, and factors such as the river view, fresh air and the ride itself play a significant part in many choices to use the ferry mode."
  This massive report—I am not doing it justice, because other hon. Members wish to speak—summarised the position as follows:
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  "There are several other factors which should play a part in the taking of a decision on the future of the Mersey ferries which this study has not been able to consider, e.g., employment effects, educational cruises. This must be borne in mind by those who may use this study to aid in the taking of decisions."
  That is a pious hope. Who has seriously used this study to aid the taking of decisions?
  My constituents do not believe that real research has been done on ways in which the ferries could be kept as part of the transportation system. It was shrugged aside by my hon. Friend the Member for West Derby. He said that there was a future for the ferries but not as part of our transportation system. I say to him "Yes, as part of the transportation system."
  Mr. Ogden: If we have to have Conservative Members on Merseyside, let me say that I admire the hon. Gentleman, but will he stop calling me his hon. Friend, especially after what the Tories tried to do to us last night? He should not let the others know that occasionally we speak to each other.
  Mr. Hunt: I shall not stop calling my hon. Friend a friend. I am one of those who believe that on Merseyside we should have an all-party approach to Merseyside problems.
  Mr. Ogden: We are working towards it.
  Mr. Hunt: Unfortunately, there is still some slippage on the Government but not on the Opposition side. The sooner we get an all-party approach the sooner we shall start tackling the fundamental problems. I am sorry that I have upset my hon. Friend by calling him a friend, but I shall certainly not call him an enemy.
  The concessions by the sponsors of the Bill are insufficient for my constituents. First, it is said that there will be a local inquiry. But that will be an inquiry similar to inquiries held into the closing of a minor road. It is not good enough for such a decision to be taken following such an inquiry. It must be a much wider and longer inquiry, with more authority.
  Mr. Parry: I understand that there is a panel of chairmen connected with the Department of the Environment. Would the hon. Gentleman agree to one of those

  1573
  independent chairmen chairing the public inquiry?
  Mr. Hunt: Yes, I would. That would be a very satisfactory way to deal with the matter. I am not committing anyone else. It may be that someone else who is just as independent but not on a panel of chairmen would be suitable, but once we had such a chairman we should have to have a good independent inquiry. I should like to be assured by the hon. Member for West Derby, when he returns to the Chamber, that the inquiry will not be concerned with economic questions in isolation. I should like to be assured that it will be able to consider social, economic, historical, cultural and other factors as well. If the only consideration in these matters were money, we should close down libraries and all sorts of recreational centres. All these other issues should be taken into account.
  I should also like an assurance that anyone who feels strongly about the closure of the ferries will have an equal opportunity to put his views. There should be no limit because of the rules of evidence on written representations, petitions or oral evidence. The chairman should have full discretion and should be encouraged to make the inquiry as wide as possible.
  The question of the Wallasey ferry is separate from the question of the Woodside ferry. They should not be dealt with in the same inquiry. As my hon. Friend the Member for Wallasey will no doubt stress, there are many factors to be considered. One is that there is no alternative facility for those who live near the Wallasey ferry.
  I am quite willing to admit that if my constituents walk up the road they can get on a rail link that will speed them across the river. But the situation is very different in Wallasey. Therefore, we should have two separate local inquiries, one for Woodside and one for Wallasey, just as we had a separate one for New Brighton. The two ferries simply cannot be lumped together.
  My constituents want an assurance that before the final decision to close the ferries is taken there will be a chance for the loop line and alternative facilities to be examined to see whether they can
  1574
  work and take the alternative flow. Before the Merseyside County Council reach a decision there must be an equal opportunity for the Wirral Council, Members of Parliament and anyone else to put forward their arguments. Some people may ask why there should be the enormous rigmarole of consultation. The answer is simple. If it had not been for the fact that an attempt is being made to force this shabby Bill through the House my constituents would have had far more trust and faith in the Merseyside County Council. But because of the history of this episode they want this sort of undertaking before a final decision is made.
  What are the alternatives to the Woodside ferry? We have not yet considered properly the question of triangular services. This has some possibilities. There is also the question of the use of hovercraft. The Cranfield survey pointed out that there was a possibility of using hovercraft on the river in place of ferry boats. If one looks at the figures one sees that the reason for the very high cost of the ferry boats—£900,000—is that they must be manned for 24 hours. Because of the tidal estuary waters on the River Mersey there must be a full crew on each ferry boat for 24 hours a day. The boat does not leave the river, but stays around on it, and therefore must be manned full-time. There are other reasons why a smaller boat or surface craft would be a better and cheaper way of keeping the Mesey ferries going.
  Clause 7 refers to the offences of overriding. The police have a right always to be consulted about a Bill that seeks to create a situation in which their services may be called upon far more frequently than at pesent. I can think of many instances in which an angry Liverpool man might be absolutely outraged at being asked to pay an on-the-spot fine for overriding. It is no use the Merseyside Passenger Transport Executive saying to the police that this does not mean extra work for them, because the police know that at any time they may have to face a situation in which they have to soothe people.
  This is another reason why the whole thing is so inadequate. The police were not consulted before Clause 7 was put in the Bill. I have been privy to a letter written by the Chief Constable to

  1575
  the Merseyside Passenger Transport Executive which says:
  "It is unfortunate when considering the enforcement connotations that the police were not consulted at the drafting stage of the Bill. In fact, it might even be considered discourteous in view of the implications."
  How can my constituents have any faith in a party that seeks to put through this Bill in such a way? It all adds up to a general feeling of serious disquiet on Merseyside.
  My hon. Friend the Member for West Derby said that this decision should be taken on Merseyside by Merseyside people. I could not agree more, but I feel that I am a Merseyside person and that I have been elected to this place to represent the part of Merseyside that comprises my constituency.
  I look round me in the House and see a number of Merseyside people. We have have every right, because of historical considerations, to impose a veto on the closure of these ferries. It is wrong to say that we should give up all control and influence and to pass it on to the Merseyside County Council. The Merseyside County Council has no more right to say that it alone represents Merseyside people than do we as Members of Parliament. If the council has a right to make a decision, so do we, as the House of Commons. I do not accept the argument that we should not seek to impose any control on the Merseyside County Council in reaching its decision.
  The chairman of the county council has said that so far as he is concerned there is no other decision that requires a two-thirds majority in the council, and he wonders why there should have to be such a majority on this issue. I challenge him and say that there is every right for the House of Commons to say that there should be a two-thirds majority in return for the fact that we are to give up our veto on the closure of the ferry service. That is a logical argument. I hope that when the sponsors consider this Bill after this debate they will decide to accept the reasonable approach of the Wirral Metropolitan Borough Council and authorise, just on this issue, a two-thirds majority in the county council if the ferries are to be closed.
  My constituents, and no doubt many others on Merseyside, have a clear impression that Merseyside County Council has
  1576
  decided to close both ferries. Indeed, that decision was advertised.
  Mr. Heffer: I am sorry to intervene in the hon. Gentleman's speech, because he has been speaking at some length and there are other Members who would like to take part. This is an important matter. I have expressed my feelings strongly, but there is a nagging doubt about the deficit of nearly £1 million. That deficit must be dealt with. Since the hon. Gentleman belongs to a party that does not believe in public expenditure and wants to cut it, will he tell us how we are to get rid of that deficit? That is an important consideration in this discussion.
  Mr. Hunt: In reply to the first point put by the hon. Gentleman I would point out that there is a great deal of time left for this debate. I should not be speaking at such length if I felt that I were taking away the right of other hon. Members to express their views.
  On the second point, I must tell the hon. Gentleman that the large deficit is worrying, but I have explained that there are ways in which it could be got rid of. That is not my opinion; it is the opinion of an institute that has studied the matter in detail and over a great length of time.
  We must also examine the deficit in the context of Merseyside passenger transport generally. The subsidy being paid for a ferry passenger is not that much more than the subsidy for a rail passenger. What I argue, and have argued on several occasions, is that someone should now follow up the institute survey and report by doing a survey into all Merseyside passenger transport in order to see whether savings can be made in other areas. Why pick on the ferries? It seems to my constituents that everyone is picking on the ferries as scapegoats for the enormous losses—this is just a small proportion—of the MPTE. My constituents ask "Why pick on the ferries?"
  Before we take an irreversible decision to close what everyone accepts in Merseyside as an institution, should there not be more thought and research into ways in which savings could be accomplished over the whole wide range of Merseyside passenger transport? Many of my constituents have already pointed out to me

  1577
  where £1 million could be saved here or £500,000 there, whether or not it is in some part of the MPTE. They unanimously say "Do not close our ferry until someone has taken a closer look into the workings of the MPTE".
  My major concern in the debate has been to point out that although we may allow a Second Reading we are not satisfied with the concessions so far made. It is a bad and inadequately discussed Bill, and insufficient consultation has taken place. I hope that after this debate those who have anything to do with the Bill will take it away and bring back a very changed Bill on Report. It should be a Bill that gives the people of Merseyside a right to have a say in the destiny of the ferries. For historical, cultural, economic and social reasons the "Ferry 'Cross the Mersey" is a way of Merseyside life. If that disappears, part of our heritage will have gone.
  The people of Merseyside have had so much stuffing taken out of them with the high rate of unemployment and the very serious inner city deprivation that if we taken the ferries away a lot of them will take the ferries away a lot of them will to the sponsors "Take this Bill away and bring us another one that will give real democracy in Merseyside".
  8.45 p.m.
  Mr. Robert Parry: My hon. Friend the Member for Liverpool, West Derby (Mr. Ogden), who sponsored the Bill, has covered the historical background and the reasons for the MPTE promoting the Bill. I disagree with some of the points that my hon. Friend made in his opening remarks. My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) has covered many of the points that I would have raised, and my speech will therefore be rather brief. We have had from hon. Members on both sides of the House a bit of nostalgia and a trip down memory lane. My hon. Friends talked about the one-legged diver and the old cartoons. They were both a bit before my time.
  I was born practically in the shadow of the overhead railway. The right hon. Member for Crosby (Mr. Page) quoted one or two lines from a song made famous by the Spinners, "In My Liverpool Home". I think that the only Members
  1578
  who were born in Liverpool dockland are myself and my hon. Friend the Member for Liverpool, Garston (Mr. Loyden). The opening words of the song are
  "I was born in Liverpool, down by the docks."
  The third verse tells of the bombing of Liverpool dockland during the last war and says:
  "When the smoke and the dust had cleared from the air, 'Thank God', said the old man 'The pierhead's still there.'"
  If we close the ferries, if we close the landing stage, the promoters will have achieved, in finishing the pierhead, a feat that even Hitler could not manage.
  I have strong reservations about any closure of the ferry. The issue was discussed at a meeting of the general management committee of my constituency Labour Party. Although very few of my constituents use the Birkenhead ferry or the Wallasey ferry, it was the overwhelming wish of those present that we should support the retention of the ferries. They are part of our heritage, our culture, our way of life. They should be kept, even if it means subsidies from the local authority, from the Merseyside County Council.
  Another issue that concerns a number of my constituents and hon. Members is the future of the "Royal Iris". We believe that we should still have leisure trips for aged people and educational trips for the schoolchildren. It is imperative that there be some form of transport on the Mersey.
  No one needs to be reminded of the sad decline of the port of Liverpool. We remember how, years ago, the great passenger liners were to be seen in the river, the great ships of Cunard, White Star and Canadian Pacific. They have all gone. As recently as Tuesday of this week, my right hon. Friend the Prime Minister said that when he visited Liverpool in 1948 as a young junior Minister the port was a bustle of activity. On his visit as Prime Minister last September he found it very quiet. It would be tragic if we closed the ferries and stopped leisure trips.
  My hon. Friend the Member for West Derby said that the Wallasey Labour Party was opposed to the withdrawal of the ferries. I have received a letter

  1579
  from the prospective Labour candidate, Miss Hilary Hodge, saying:
  "The MPTE requires no Parliamentary permission to close the Wallasey Ferry but only the Birkenhead Ferry which is under Royal Charter. All local Labour Parties support the retention of the ferries and on 21st March Councillor Sefton met and discussed the matter with influential representatives of both the Wirral and Wallasey Labour Parties. He promised a public inquiry—but not before the Bill goes through. The local representatives of the Labour parties are not happy with this and still want the Bill deferred until after an indelendent inquiry has been held."
  I fully support hon. Members' pleas that there should be a full, independent, public inquiry on Merseyside before any decision is made on the withdrawal of the ferries. I would warmly welcome such an inquiry, under an independent chairman, to look into all the points raised by hon. Members in this debate.
  The question of overriding on buses concerns me very much. It was also discussed at my party meeting, when members expressed their concern about the effects that this proposition could have. I am pleased that my hon. Friend the Member for West Derby said that the promoters have decided to withdraw the question of fines on the spot and further fines if those concerned have not the correct money with them at the time. My objection is not so much to the fining of a person £1 on the spot, or £2 at a later stage. It is with the great possibility that more disorder, more chaos and more trouble would be caused on the Liverpool buses, particularly at weekends, and especially after young people had been into Liverpool and enjoyed themselves and were then approached by a bus inspector and told "You have gone past your stop. We will now charge you a minimum of 56p."
  The hon. Member for Wirral (Mr. Hunt) is right—the police have not been consulted, at least not in any great depth. This afternoon I spoke to the Deputy Chief Constable of Merseyside and asked for the views of the force on the question of on-the-spot fines and the obvious involvement of the police if any trouble were to break out. I made a note of the points he raised.
  The deputy chief constable's view was that this would not be progressive legislation and would lead to all forms of trouble for the bus crews and to additional
  1580
  work for the police. As far as he was aware—and as far I am aware—there is no such legislation covering any other form of public transport in this country. When representatives of the MPTE discussed the Bill with Labour Members of Parliament I asked whether any other authority had these powers, and the answer was "No".
  I understand that some years ago London Transport tried to introduce a Bill with a similar proposition but withdrew it in face of great opposition. I think, therefore, that it would be wrong for Merseyside now to try to give a lead to other parts of England and Wales in this respect. The deputy chief constable said to me today that although we on Merseyside are proud of the progressive legislation, particularly the social legislation, which Liverpool and Merseyside have pioneered, he does not think that this proposition should be supported, and he believes that Clause 7 would cause more trouble than it is worth.
  Mr. Heffer: Does not my hon. Friend agree that unless we get an assurance that Clause 7, even as it stands, will be withdrawn, we should vote down the Bill?
  Mr. Parry: I fully agree with my hon. Friend. It was my firm intention, before coming into the Chamber, to divide the House and vote against the Bill. But it appears that the consensus on both sides of the House is that we should give it a Second Reading and that these matters can be thrashed out and clarified in Committee. However, I fully support the view that if Clause 7 is not completely withdrawn we should vote against the Third Reading of the Bill.
  Finally, I shall deal with the trade union point of view. This afternoon I telephoned the regional organiser of the Transport and General Workers' Union, Mr. George Hodgson, who is responsible for bus crews—the drivers and conductors—and inspectors. I asked him whether he was satisfied with Clause 7. He said that as far as he and his members were concerned it was a non-starter and would lead to all sorts of difficulties for bus crews. It would cause more aggravation and more punch-ups. The crews already have enough problems dealing with drunks and difficult passengers at weekends without having these extra worries and responsibilities placed on their shoulders.

  1581
  I am prepared to allow the Bill to receive a Second Reading, but, in view of the obvious concern shown by hon. Members on both sides, a number of issues will have to receive very close examination in Committee.
  9.1 p.m.
  Mrs. Lynda Chalker: This evening's debate has been interesting. I apologise to the hon. Member for Liverpool, Walton (Mr. Heffer) for not being able to hear his speech. I had to slip out of the Chamber, having been here for a rather long time.
  It seems that in looking at the Bill, there has been a real Merseyside spirit, which is very welcome. I echo the words of my hon. Friend the Member for Wirral (Mr. Hunt), who said that if we could manage to put our heads together more often to discuss some of Merseyside's problems we might even do more for Merseyside than we do individually. Last year we had a joint meeting with Merseyside County Council. It did not do anyone any harm, and I think it did us a lot of good, to know more of what the county council officers thought and also what Labour Members from Merseyside thought about the issues that arose.
  I make an earnest request to Labour Members that we should put our heads together on more occasions. It usually seems to have a productive outcome. I am not prepared to enter into a coalition, except on Merseyside issues, but this is essentially a Merseyside issue and, therefore, I am prepared to go into the subject at perhaps slightly shorter length than is my hon. Friend the Member for Wirral.
  It is important that we understand the Bill. The first intimation that I received in writing of the onset of the Merseyside Passenger Transport Bill was a letter on 10th November last. I immediately wrote at the top "Please get very full briefing for me from all quarters". I knew even at that stage that some hard decisions would be put before us.
  After that, information started to trickle through, although not at that time from the Merseyside PTE. We eventually had a meeting on 25th January last which came at the same time as or perhaps a couple of days in advance of the Bill becoming available in the House.
  1582
  From that day forward my hon. Friend the Member for Wirral and my right hon. Friend the Member for Crosby (Mr. Page) and Labour Members have been resolved to make sure that the Bill should not proceed one step further unless there was a full and adequate procedure for a proper public inquiry on each of the two ferries, taken individually because the needs of the communities served by the ferries are slightly different.
  The fight which started in January, after the preparation of two months before, also led me to look at who else had been consulted. If it serves as a warning to any other county council or body seeking to promote a Private Bill in the House, the experience that we have had in the last four months will have been useful.
  When I met the Chief Constable of Merseyside two months ago and casually mentioned to him the coming of the Bill, he said "What are you talking about? What do you mean about on-the-spot fines?" I began to feel that there had been a slight lack of consultation. I immediately put in his hands all the information I could which affected Clause 7. I also discussed with him the other implications of the Bill, because any change in transportation across the Mersey which called for increased bus traffic within Wirral obviously must have implications for the police. Thank goodness I did all these things, because the contact between the Chief Constable of Merseyside and myself, I am reliably informed, was the first he had had on the issues in the Bill which affected the Merseyside police force.
  In the course of my other inquiries about the feelings of people towards the proposals, I discovered that the trades council members were apprised through the Press and by individual Members of Parliament. They were relatively uninformed and had certainly not been consulted during the drafting of the Bill.
  There is an important lesson here for government, be it local or national. It must be realised that gone are the days when anybody could or should rule from on high. People, irrespective of their position, expect to be consulted. They wish to participate. I hope that the efforts that have been put in by hon. Members and others will now ensure that they are fully consulted on future occasions

  1583
  when their views will be of immense value.
  We had a battle for the public inquiry. I say that because, although I have had nothing but help from the officials, there were times when I thought I was more likely to be called a battle-axe than a Britannia over this issue. In all our requests for the public inquiry, our principal concern has been that it should be open. I have been at variance with some of my party colleagues on the Wirral Borough Council on whether a decision on the outcome of the inquiry should be taken at local or national level. I believe that this is a Merseyside issue and that it should be decided on Merseyside.
  I shall come in a moment to some comments by the borough council concerning a proposed alternative should we fail in Committee in putting forward the interests of Wirral and Liverpool.
  I was a little taken aback by the surprise of people at our request for a public inquiry. The statements made about the Bill, copies of which hon. Members received through the post yesterday, give us some grounds now, however, for reasonable contentment. Two months ago I would never have believed that we would see such a thing as the annexe and the statement and that there would be every intention of introducing them in Committee.
  The annexe is headed
  "Public consultation before a decision is taken for closure of either of the Mersey ferries."
  It states:
  "A Public Inquiry will be held on Merseyside".
  There is to be one public inquiry, but I am assured that the future of the two ferries will be decided separately and that if decisions are made to close them they will be embodied in separate orders.
  The annexe continues:
  "The Chairman of the Inquiry will be selected by the six Merseyside local authorities."
  That, I believe, is very fair. If there should be any difficulty in appointing the chairman, I would readily agree with the hon. Member for Liverpool, Scotland Exchange (Mr. Parry) that he should come from the panel of chairmen and be someone who is used to such procedures.
  1584
  At one stage during our deliberations with the promoters' parliamentary agents we suggested that there should be a limitation, as in normal planning inquiries, on the time that any one local authority could hold up the appointment of a chairman. If this matter goes to a public inquiry, the time should be spent on the inquiry and not in arguing about who is or is not acceptable. I am sure that we can overcome those problems provided that we eventually have a full public inquiry.
  The third item of the annexe reads:
  "Any person or organisation will be entitled to make verbal or written representations to the Inquiry."
  This is important, because there was a time when the promoters suggested that the "person or organisation" should be more or less at the discretion of the county council. That would not have been right, and I am glad that in putting forward this statement they have withdrawn their limitation on who could give verbal or written evidence.
  The fourth item reads:
  "Before a final decision as to possible closure of the Ferries is taken, all the Merseyside District Councils will be asked to make recommendations to the County Council."
  That is one on which the chairman of the county council, Councillor Sefton, is hoping to persuade the Wirral District Council to drop one of its requests.
  The fifth item reads:
  "All local Members of Parliament will be specifically requested to submit their comments to both the County Council and the Inquiry."
  If they thought that they were going to get away without our submitting our comments to the public inquiry and the county council, they have another think coming.
  The sixth and final item reads:
  "If called for, public meetings will be held on both sides of the river."
  If public meetings are called for, they should be held in both Birkenhead and Wallasey. As I have already said, the situation is different and there should be three different meetings, in Liverpool, Birkenhead and Wallasey. I have requested these meetings, in addition to the public inquiry, because there will be many people who will be utterly intimidated by the proceedings at a public inquiry. I cannot say that I am not one

  1585
  of them. People would be quite prepared to go along to a public meeting whether it was organised by the Friends of the Ferries, now being set up, or by some other local body. Whatever happens, full consultations will take place.
  I am delighted that there has been a constructive attitude from all parties concerned. I was particularly happy that the leader of the Labour group on the Wirral Borough Council, Councillor Bill Wells, after a full council meeting on 26th February, announced:
  "I have come in recent weeks, personally, from a position where I felt that because of the enormous losses on the ferries, they would have to go. I'm becoming more and more concerned that because of the public reaction second thoughts must be had by the Merseyside County Council on the closure of the ferries."
  Anyone who knows Merseyside and Bill Wells, will know that his shift in opinion is important in this fight over the future of the Mersey ferries.
  I cite Bill Wells because he has long been associated with the needs of Wallasey and Wirral and he is a doughty partner, to put it mildly. Sometimes we find ourselves on the same side, just as the hon. Member for Liverpool, West Derby (Mr. Ogden) and I find ourselves on the same side occasionally.
  Mr. Heffer: The hon. Lady says that we should all join together and work together. I do not disagree with that, up to a point. I must ask her an important question. The Labour Party has always believe that there must be subsidies. The hon. Lady's party is constantly talking about getting rid of them. I do not want a hypocritical answer from the hon. Lady. Does she believe in subsidies? It is important to have an answer, otherwise all our arguments are simply sentimental nonsense. If the ferries are to continue, either as amenities or as a regular service, we must recognise that there will be either sky-high fares or subsidies on a quite substantial scale. The hon. Lady must give me an answer on that.
  Mrs. Chalker: The hon. Gentleman has beaten me to the little paragraph I was going to put in on that subject. I noticed the excess expenditure by Merseyside County Council on passenger transport. It spent £23·8 million in excess of income for 1975–76. For the ferries, we
  1586
  are talking about a figure of £1 million. I know that we are talking, in terms of the overriding loss, of around £2 million. It all adds up. I have been looking through the many reports that have been written about Merseyside transport and at the number of ways that have been examined with a view to reducing the overall deficit which arises because of the cost limits imposed on the county council and the subsequent reduction in the money available to implement the transport policy.
  There is always the argument—fairly and rightly used for historic buildings—that a case exists for some subsidy. It cannot be as great as the subsidy currently applying on the ferries. We have heard that the subsidy on a 12p crossing fare is about 20p. Perhaps we should move a little more towards asking for a greater contribution from the user, as has happened on the railways crossing the Mersey.
  There are a number of ways in which the overall cost of the ferries could be reduced. The inquiries and discussions which will come about, partly as a result of this debate and partly because of these proposals, can do nothing but good in making the Merseyside Passenger Transport Executive examine possible ways of cutting expenditure. I am sure that that will be done.
  I return to the decision taken by the Wirral Borough Council. We have heard from the hon. Member for West Derby that it wanted a two-thirds majority should the county council wish to take a vote against the decision of the chairman of the inquiry. That was a compromise position. The original request of the borough council was that there should be a two-thirds majority in any event. I am told that at a meeting yesterday with Councillor Sefton, the leader of the Merseyside County Council, there was an instruction from the Wirral Borough Council to be tabled to the MPTE which read:
  "That it be an Instruction to the Committee on the BPTE Bill to require the consent of the Secretary of State to the discontinuance of any of the ferry services referred to in Clause 4 of the Bill."
  I do not know whether that will be a clause which will be accepted in Committee. That is the resolve of the committee, made up of all political parties on the Wirral Borough Council.

  1587
  Negotiations were taking place yesterday morning with Councillor Sefton in the hope that further assurances could be obtained from him on behalf of the county council and to see what more could be clone to bring the two sides together. Those consultations will continue, and the Wirral Borough Council will continue to send its view to members of the Committee which examines the Bill.
  Throughout the discussion leading to the Second Reading—on which we have had to insist—we have had a number of suggestions about alternative transport. Even before the Bill was produced there was, in the MALTS Report on the needs of Merseyside and local transport, a paragraph about a Wallasey alternative. It is important to realise that there has been concern over at least a 10-year period about the needs of the Wallasey community as opposed to the Birkenhead community.
  For those who do not know the area of the Wirral, of which I am speaking, let me explain that a little way up a slight incline from the Woodside, the Birkenhead ferry, is the Hamilton Square Station which links to the Loop and Link Line now being built at a cost of £40 million by the passenger transport executive on behalf of British Rail. There is a walk of slightly over three minutes from the Woodside pierhead. The traveller can be in the station and boarding a train which will take him under the Mersey—not so pleasant, but very often convenient—
  Mr. Heffer: It takes four and a half minutes. I walked it every day for years.
  Mrs. Chalker: Perhaps the hon. Member for Walton walks slowly, or perhaps the road barriers have changed during the last few years since he did that walk regularly.
  To Wallasey the railway line goes via Hamilton Square and then through my constituency. It curves round the northern part of the Wirral peninsula and ceases at New Brighton. Between there and the landing stage of Seacombe Ferry, which is on the Mersey side of the Wirral, there are only bus routes and no train routes. There is a delightful promenade but there is no means—except for occasional buses, and believe me, they are occasional, or so it seems when one has to wait for
  1588
  them—to get to New Brighton rail terminus from the Seacombe area.
  There are many people who live in that part of the Wallasey constituency who are on lower incomes and who walk to the ferry daily. Some of them, as my hon. Friend the Member for Wirral said, go by bicycle. A tremendous number of people from that area have never thought of going to Liverpool by any other means than the ferry. They are the people who live in the Egremont and Liscard districts of Wallasey. They and people who live in Seacombe and Poulton have always found that that way of crossing the Mersey is not only pleasant but useful. People from this area have been crossing the Mersey by ferry for many years. We know that people come from other parts to join the Seacombe ferry, and it can be argued that the buses they use could be sent elsewhere. Some people arrive by car, but they are few compared with those who walk or who come by bus.
  As an alternative to the Seacombe to Liverpool ferry, we have had shown to us by the MPTE maps of bus routes that could be put in its place. These bus routes look fine now, but we note the experience of my right hon. Friend the Member for Crosby in his area. We have seen details of the routes given in the Liverpool Press, but we wonder how they would work and whether they would be as easy as they seem on the planners' piece of paper when it comes to reality for the people of Egremont, Poulton, Liscard and Seacombe in using that means of transport through the tunnel.
  But that is not a part of the Bill. The Bill gives the power to remove the existing service. I looked at the costings that have been given to us by the MPTE and others and I wondered how many of the ferries and how much of our heritage could be protected by a limited subsidy. I know that other ferries in the country, such as the Humber ferry, receive subsidy. When the Humber Bridge is finished, that ferry will go, but the Humber Bridge is a different and direct form of replacement compared with the alternatives for crossing the Mersey.
  There are other problems in the Bill that must be faced. I received a request tonight from a constituent who was waiting outside but whom I unfortunately could not see because of business in the

  1589
  Chamber. My constituent had come to London from Wallasey on behalf of a group of people who live in the New Brighton area. They say in a letter that they believe that the Wallasey ferry is a vital means of transport to Liverpool. I have had many letters saying that the new rail link is not the way in which people wish to cross the Mersey. They take the ferry for a variety of reasons. If the ferries were to remain, I believe that people would be prepared to pay a little more on their daily fares than at present.
  Hon. Members have received many such letters on this subject, and so have my colleagues in the constituency. They also ask that the Bill should not receive a Second Reading and that a public inquiry should be held first. It would be possible to deal with the Wallasey ferry under the old Wallasey Corporation Act, but that would not give protection for the Birkenhead ferry and, because of the need for that ferry, I am not sure that this would be the best way to proceed.
  Since the beginning of the argument, we have made a great deal of progress with the MPTE leading up to the annexe to the statement that I read earlier. There is information in the MALTS Report, and paragraph 338 deals with the potential demand through the Wallasey Tunnel and similar demand on the railway. Information has been quoted from other reports on transportation in the Merseyside Region and many transportation reports have been prepared by the county council. A lot more information must be given at the public inquiry before an order is made to do away with either of the ferries.
  I am assured that the proposals in the statement from the promoters will be put into the Bill in Committee. If that happens, and if we have a satisfactory Committee manned by hon. Members from regions other than Merseyside, I do not believe that the Bill should be held back. We can block it if we wish at a later stage. If the assurances that we have been given are not fully carried out, I shall have no hesitation in seeking to persuade my hon. Friends and hon. Members opposite to block the Bill.
  I do not often stand around in Liverpool late at night. It is not a sensible
  1590
  thing to do. However, on occasions I drive through Liverpool late at night, and I should be reluctant to put on bus inspectors at any time of the day the responsibility for collecting control fares.
  One has only to see how a normally calm person deals with a traffic warden putting a ticket on his car to see how tempers can be unreasonably raised when someone is caught doing something that he should not be doing. If we multiply the vexatious driver in London's temperature by the heat of the moment that sometimes occurs on Merseyside, with all the passion of Scouseland, I should be unwilling to see inspectors putting their heads in a noose by being forced to collect control fares.
  I recognise the problem faced by the executive in trying to stop people using buses illegally. I sympathise with the view of the hon. Member for Garston that this did not happen when we had conductors as well as drivers. We must consider zoning fares or some other way of getting round the £2 million loss that, we are told, results from people travelling with inadequate tickets.
  I hope that the Committee which considers the Bill will bring together the views of the trade unions and police on this issue and of the police and all those involved in the transportation changes and in assessing alternative transport systems. I hope that my constituents, the people of Wirral and Birkenhead and the other users of the ferries will see that they have the chance and voice to fight the county council over the closure of the ferries, thanks to the pressure of hon. Members.
  If the inquiry decides that the ferries should remain as they are, that will be a challenge to the MPTE to find the resources. If the inquiry decides to close either one or both of the ferries, I want to see in the coming weeks how we can resolve the current anxiety of the Wirral Borough Council against the Merseyside County Council about the way in which the final decision should be taken. It is important that we should resolve that at a time when we can amend the legislation, and not afterwards.
  On an earlier Bill tonight the Government literally came to us at the eleventh hour and tabled an important amendment. It was an amendment that we saw only this morning. That ability is vital. The

  1591
  Government tabled the amendment during the passage of the Bill. If they had not done so, they would have had to come back to the House with yet another piece of legislation. That is a good lesson for the promoters of this Bill. We should look at it while we have the chance and ensure that whatever emerges at the end is right. We must also ensure that the public inquiry provides a proper hearing for the people of Wallasey, Wirral and Liverpool.
  9.32 p.m.
  Mr. Ogden: With the leave of the House, I shall reply to the debate. The hon. Member for Wallasey (Mrs. Chalker) made an impressive contribution to the debate. She has fulfilled the promise that she made when she first came to the House. If we must have Conservative hon. Members representing Merseyside constituencies, let them be of the quality of the hon. Member.
  Our agreements in the debate have been greater than our disagreements. Hon. Members on both sides have correctly voiced their particular anxieties and concern about the proposed Bill. No hon. Member is actively seeking to sink the ferries. No hon. Member is happy that people do not pay the right fare for travelling on Liverpool buses. I have accepted responsibilities that I have no reason to accept, but someone had to do it. There is no reward or glory attached to promoting a Bill. I did what had to he done. I am drawing heavily on the regard, affection and trust of my hon. Friends and Opposition Members.
  I have given assurances, but I must tell hon. Members that the interest that I have taken in the Bill is no more than that taken by anyone else. I have given assurances on behalf of the MPTE. My good name is at stake if those assurances are not carried through. If they are not there will be no sponsor of the Bill.
  Mr. David Hunt: Are there any assurances for which I asked in my speech that the hon. Member is not prepared to give?
  Mr. Ogden: I cannot remember everything that the hon. Member said but I shall carefully read all that was said in the debate and so will members of the MPTE. There will be replies and a continuation of the discussion. This is not
  1592
  my Bill. It is not the Government's Bill and it is not the MPTE's Bill. It is the Bill of the hon. Members who represent Merseyside constituencies. I shall carry the matter through, and there will be a special report.
  The only thing that I am asking is that the House should give the Bill a Second Reading. As my hon. Friend the Minister has said, let the convention apply and let the Bill go to Committee.
  Our interest is constant and continuing. All of us, I hope, want the same kind of thing, on the basis that if the promises that I and others have made are not carried through on Report and Third Reading there will be united opposition in the House and the Bill will get no further. With those assurances I ask the House to give the Bill an unopposed Second Reading.
  Question put and agreed to.
  Bill accordingly read a Second time and committed.

  SOCIAL SECURITY
  Postponed Proceeding on Motion, That the Family Income Supplements (Computation) Regulations 1977, a draft of which was laid before this House on 3rd March, be approved, resumed.
  9.36 p.m.
  The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins): I think that it would be for the convenience of the House if I went back to the start of the sentence in which I was interrupted at 7 o'clock.
  This deals with the core of the problem: taking the overall situation for families receiving FIS, together with housing benefits, free school meals and free milk and vitamins, we have got as near as practicable to the break-even point by arrangements that actually give some small gains at the changeover point, in many cases, to lone parent families and larger families in particular.
  There are, in fact, only two small groups who could lose, and then only a few pence a week. The first group comprises about 5,000 families receiving rent and rate rebates, who could lose about 3p a week. The other group is a very small number of one-parent families

  1593
  receiving a rate rebate only, who could lose, at most, 7p a week. This second group is so small that we cannot make a reliable estimate of the number involved. So much for the April proposals.
  Mr. Patrick Jerkin: One begins to see how meticulous all this has to be if the Government are to do both of the things to which the Minister referred in the earlier part of his speech. How far is this due to the fact that child benefit is being phased in and that the first stage involves only an extra 30p for the average family? Perhaps I may put the matter more clearly. If child benefit had been done at one blow, with a much bigger reduction in tax and a much bigger child benefit, how far would the same complications have arisen for FIS, rent rebate, school milk, and all the rest?
  Mr. Deakins: I would be prepared to say that the complications would still have arisen—perhaps not to the same extent—with a larger child benefit for as long as we went on with a means-tested benefit such as FIS. This is the essential point. In an earlier debate the right hon. Gentleman talked about the time when perhaps, we could get over to a full child benefit scheme and, perhaps, even do away with FIS. As a step in the direction of tax credits, this problem would not arise, but in the various steps towards that, we shall have this sort of difficulty.
  I come now to the second part of my remarks. As I said earlier, the computation regulations also propose an increase of £2·50 in the basic prescribed amount from 19th July. For the past three years, FIS has been uprated in July, whereas the main social security uprating has been in November. It would be sensible to achieve a common uprating date. We propose to do just that by making the uprating for which these regulations provide an interim one, pending the main uprating in November. However, to protect familities from losing FIS simply because they may have received a pay increase in line with the pay guidelines it is necessary to increase the prescribed amount within a year of the last up-rating.
  1594
  An essential feature of this year's proposals, therefore, is that the July uprating is designed to preserve the status quo for those receiving FIS at that time. The increase of £2·50 in the basic prescribed amount, from £39 to £41·50, is therefore sufficient to protect any family from losing FIS if it has had a pay rise since last August. This is the effect of Regulation 4 of these computation regulations, and an illustration is given in paragraph 14 of the note.
  I turn now to the cost of these proposals. What I think the House will wish to be informed of here, where we are dealing with the lower paid, is the extent of the beneficial change. I believe it will be most helpful if I give three figures. Present expenditure on FIS is £18 million a year. The cost of the April changes to November 1977 will be £2 million, and of the July uprating to November 1977 £1 million.
  I have given the costs to November because, as I have explained, the second stage of the FIS uprating will be in November.
  As far as numbers of FIS beneficiaries are concerned, our latest estimate of take-up is about three-quarters. On this basis, we estimate that immediately prior to 5th April the number of beneficiaries will be about 80,000, rising to 82,000 between April and 19th July, and thereafter rising to a peak load of about 84,000. These marginal Increases are not part of a deliberate policy of increasing the numbers on a means-tested benefit. That must be clear to the House after all that I have said on the subject. They arise solely as a result of our aim to ensure that no one loses, either because of the introduction of child benefit or because of a pay increase under the pay guidelines.
  As in previous years the changeover to new rates will be effected with the minimum inconvenience to beneficiaries. As hon. Members will know from the replies to Questions from my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) on 28th January and 15th February, order books have been recalled so that the necessary adjustments—for April and July—could be made simultaneously, subject to Parliament approving our proposals. The

  1595
  Department's staff at Blackpool have done a splendid job in this respect.
  I hope that what I have said here and in the note will have been sufficient to convince the House that these are fair and reasonable proposals on which we can all agree. With such a wide range of means-tested benefits to contend with, the inevitable price of fairness is solutions that seem complex at first sight. But from the family's point of view, there is no reason why the changes I have described should not all work quite smoothly.
  I turn to the other five regulations. The child benefit consequential regulations, as amended by the child benefit consequential amendment regulations, provide for the changes that are necessary because of the introduction of child benefit and its effects on dependency additions for children, which are payable, under the Social Security Act 1975, as an increase of one of the main national insurance or industrial injuries benefits and for certain orphaned children. Qualification for a dependency addition has until now depended on the beneficiary having a family within the meaning of the Family Allowances Act. In future it will depend on the beneficiary—or his wife, if she is residing with him—being entitled to child benefit. The Pneumoconiosis, Byssinosis and Miscellaneous Diseases Benefit (Amendment) Scheme makes comparable changes required to cater for the very small number of beneficiaries under the scheme who have children.
  The aim in all this has been to replace existing provisions by broadly comparable provisions, but inevitably, there have been some structural changes. With 29 years' experience of operating the family allowances rules for dependency additions behind us, we have taken the opportunity, offered by the change to child benefit as the basis on which dependency additions will in future be paid, to evolve a set of rules which should allow simpler and easier administration. The regulations may, at first sight, look somewhat complex and forbidding. In part this is due to the need for drafting them in certain ways, but mostly it is due to the need to provide a comprehensive code for all foreseeable eventualities, including circumstances which may affect only a few individuals, or—it may be—even none at the present time.
  1596
  There are at present no regulations dealing specifically with dependents, and a number of sets of regulations have had to be amended. We have therefore also taken the opportunity, after making certain paving amendments in the Industrial Injuries Benefit (Amendment) Regulations, to consolidate the main dependency provisions of the national insurance and industrial injuries schemes, brought up-to-date by the consequential regulations, into one set of Dependency Regulations. These introduce no additional changes.
  9.45 p.m.
  Mrs. Lynda Chalker: I welcome the draft regulations and the opportunity to discuss the amendments consequential upon the Child Benefit Act 1975. When I started to read the range of consequential amendments, I wondered whether I was in the right job. It would take hours to pull together the details of the regulations. There are no fewer than 22 separate provisions in the Child Benefit Consequential Regulations, and only slightly fewer—16—in the Dependency Regulations. The others are all interrelated.
  I welcome the fact that the Minister hoped that with these regulations we shall have achieved a simpler set of rules for judging the interrelationship of benefits now that the Child Benefit Scheme is to come into operation at long last this April. When these regulations have settled down and we know how the autumn upratings are likely to go, perhaps a comprehensive document can be produced to pull matters together and make it easily understood.
  Many people—not only Members of Parliament like myself—find it difficult to pull together the different ways in which the calculations of benefits affect one another.
  Mr. Deakins: These are complex regulations. Like the hon. Lady, I got a shock when I read them for the first time—and, I must admit, the only time. I have some very good background notes on the details of the two major sets of regulations, and I should be very happy to place copies in the Library and to provide the hon. Lady with a copy. I do not think that they need to be given wider circulation, but if it would assist her or other hon. Members I shall make

  1597
  them available. There is nothing secret about them.
  Mrs. Chalker: I am grateful to the Under-Secretary for that offer, which I gladly accept. In view of our discussions before 7 o'clock, and since these explanations are not secret, I suggest that they might be sent to the CPAG and the one-parent family groups if that would help them to understand the exact effects.
  However, we may have to ask the Minister to produce a simplified version, not just so that the various pressure groups can understand what is going on and can avoid wasting the time of Ministers, nor just so that hon. Members can understand them, but so that people who are entitled to these benefits can understand what is available. This is still a very hazy area for beneficiaries.
  Another group who have been bothered by the introduction of child benefit, some of whom are beneficiaries under the family income supplement, are the widows, often represented by the National Association of Widows. Two of the groups whom we mentioned before the break should also receive this information.
  The Minister has moved the adoption of the regulations and I do not need to move their annulment in this case, but I want to contrast the situation now with that of 10 months ago. When we debated the FIS uprating last year, my hon. Friend the Member for Rushcliffe (Mr. Clarke) said that it was difficult to find out what was happening and that we had been questioning but getting no information. He said:
  "It has been difficult to get any information from the Government in recent weeks about their policy intentions on family poverty and family support."—[Official Report, 20th May 1976; Vol. 911, c. 1885.]
  The situation is very different now. We have had a mass of Parliamentary Questions on FIS and child benefit and how they will work together with passport and other means-tested benefits. We had discussions, even in Questions to the Chancellor of the Exchequer today, on the interrelationship between child tax allowance and child benefit. The fact is that some people have been sent erroneous codings because it is not clear how the tax allowance and the child benefit will work together.
  1598
  Everyone is aware that things are happening, but people are not aware of the exact effect that these things will have on them. The Opposition believe that there should be a proper system of family support in this country. When we discussed the FIS uprating last year, we were doing so in the dark. That discussion occurred on 20th May. Five days later we had the bombshell of the part scheme of child benefit rather than the full scheme.
  We have seen something else happening. We have seen the number of people dependent on benefits actually growing in the last few years, and the fact is that we still have to place reliance on the FIS scheme, as shown in a parliamentary answer given to me on 17th May:
  "The Family Income Supplement scheme will continue after the introduction of child benefits."—[Official Report, 17th May 1976; Vol. 911, c. 422.]
  We find an increasing dependency on FIS among low income families.
  I do not think that we should allow the evening to pass without a few words about this problem and the fact that the number of low-paid families is growing and not diminishing. On 8th February this year the Secretary of State for Social Services said that 60,000 families were subject to a 75 per cent. marginal rate of taxation with an increase of pay of only £1, at December 1974. By December 1975 this number had risen to 90,000. I accept that the sampling error involved in calculating this from the Family Expenditure Survey is large, but from other statistical information we can see that the trend is upwards. More families actually need FIS because of the influence of low tax thresholds, and dependency on FIS and means-tested benefits is bringing more families into the poverty trap.
  I cannot read the crystal ball of the Chancellor of the Exchequer. But there is no doubt that we have a strategically worsening situation. In the last three years the lot of low-paid families has worsened, and it is time that the Chancellor sought out his friends in the DHSS and released the burden put around their necks in trying to cope with the problem that is worrying Members on all sides of the House.
  This year we are having a different debate. The Government have tried exceedingly hard to ensure that no one ends up worse off than before. But it

  1599
  is a big problem because FIS is a benefit with a 50 per cent. taper. Other means-tested benefits offer dependency on FIS, such as free school meals through the passport, or rent and rate rebates which may come separately or not.
  With a low level of tax threshold and with increases in rents and subsequent decreases in rebates, many people, even if they earn only a pound or two more, are well below the FIS entitlement level and find themselves worse off for working a little longer in trying to obtain a little more money. That situation cannot continue. It arises because of the basic failure of the Government to bring together a cohesive family income policy.
  We all know that the Government's only scheme this Session was an emasculated Child Benefit Scheme. They jeered at the Family Income Supplement Scheme in 1970–71, but only a year ago they cheered when they discovered that that was the only way out of their difficulties.
  In all our debates and discussions, we have arrived at the stage when there is no clear Government policy in respect of family income support. Many of us are surprised at that, and we hope to see a change, with the help of the Chancellor of the Exchequer backing those in the Labour Party who want to see a proper system of family support.
  Even sadder is the fact that the Government have had to abandon the tax credit scheme that we left when we came out of Government early in 1974. It is all very well to throw out the baby with the bathwater in a change of Government, but it is not wise to refuse to examine at matter which the poverty lobby in general, and many eminent economists and sociologists, felt would be the answer to the problem posed by low-earning families. That was one of the saddest happenings in the story when the right hon. Member for Blackburn (Mrs. Castle) was Secretary of State for Social Services.
  On top of all this we have seen the continuing failure of the Government to curb inflation, which has made the situation much worse. Despite my hostility to the Government for failing to bring forward a proper family support system, we welcome the FIS regulations but voice a strong note of caution. The fact is that there can be only a further stopgap. We
  1600
  cannot go on raising family income supplement, changing tax thresholds and making more and more families dependent on means-tested benefits. The Minister has said so, yet there is now no way out of it, unless the family policy is thought through. That is what we wait to see from the Government.
  The Conservatives' instruction of FIS for low-paid families was—we admitted it and we still do—a stopgap, but we were working towards our tax credit proposals and were seeking to bring them into operation gradually—I emphasised that the process was to be gradual—a first part to the child credit scheme, and then a fuller scheme. We thought that in the middle or late 1970 we would see the end of the FIS and would have moved to a full Child Benefits Scheme, not just to the present half-hearted situation.
  The Minister will know that there is considerable pressure in the country to implement the Labour Government's first intention—namely that child tax allowances, which often go to the husband and straight into his pocket, should become the income of the wife for the children.
  It was interesting to see the results of a survey conducted by a women's magazine. It was probably not carried out with absolute accuracy, but at least it gives us a guide to thinking among its readers. It revealed some disquieting facts. It concluded that one in five of the wives questioned about their housekeeping situation had been given no increase in housekeeping money, even though in the year in question prices had risen by 26 per cent. Of the poorest wives trying to keep house on £10 a week or less, one-third had had no increase at all. However, 58 per cent. of the husbands who had not given their wives any extra money, even though they were the sole providers of housekeeping money, had had a pay rise during the previous year. It was that situation—of the men who had the pay rises but did not pass some of it on to their wives—that child benefit sought to avoid.
  At present it is not avoiding that situation because it means an effective 30p or 62½p in the hands of the housewife and does not make a scrap of difference when one considers the size of increases in household prices, particularly children's clothing prices, with which families are trying to cope.

  1601
  Having voiced our caution over the extension of FIS, because of its widening of the poverty trap, we should make sure that we carry on the review, which has been going on already, into the way in which FIS works. I gather from the public expenditure estimates for last year that some 60,000 families were expected to receive FIS. According to the figures released at the end of 1975, about 67,500 families were receiving FIS, of whom 32,300 were one-parent families.
  One of the things with which we have to cope is the increase in one-parent families. In 1971, 32 per cent. of the recipients of FIS were one-parent families. By 1974 the proportion had risen to 50 per cent. I do not have the figures for 1975 or 1976, and I should be glad to know from the Minister what they are. I know, however, that the number of one-parent families is increasing at a very fast rate and that those on low incomes will have a much greater dependency on FIS.
  We have heard from the Minister the actual number of recipients. In July it will be about 82,000, and perhaps by November it will settle at about 84,000. That is quite an increase on the public expenditure figures, which in the coming year reveal that only about 70,000 families are expected to be recipients of FIS. Obviously the public expenditure estimates and the actual costs in the financial year 1977–78 must be adjusted because of these new figures.
  But if we are to see a worsening situation in terms of the number of families supported by one person and an increased dependency on this benefit, we must, as the Minister rightly said, keep in mind the whole question of the level of FIS for as long as it remains. What we really have to cope with is the Government's failure to produce a system of taxation and benefit together—in other words, a tax credit system.
  If the Minister did one good thing tonight, it would be to tell us that someone in the Government is actually looking at the movement of taxation and benefits through a simplified scheme. Tax credits are the only way we can get out of the situation in which the standard of living not only of low-income families but of many other families and retired people is going down and down. The longer the Government delay having a
  1602
  good look at what can be done, the harsher we shall make it for families, particularly families with children and single parents, who are trying to cope.
  I want to go on to the actual improvements contained in the draft regulations. They seem to be fairly limited in the way in which FIS and child benefit work together. We find that the FIS entitlement of a one-child, two parent family earning £30 a week is £4·50. After the introduction of the Child Benefit Scheme they will be 30p a week better off because of the £1 benefit for the first child, the benefit for the second child being cancelled out by loss of the former family allowance. Then they lose the child tax allowance to a value of 70p. From July, because of the adjustments in FIS, there will be an extra 75p a week for such a family, as far as I can judge.
  Looking through a number of different family circumstances, I have become very depressed. I have found that, because they do not pay tax, a two-parent, one-child family with earnings of only £22 a week will be no better off after the July upratings. That is my conclusion on the calculations I carried out before the Minister's document came before us, and I do not think that it alters them. It will be receiving the same amount of family income supplement and simply an adjustment of 30p for child benefit in July. They will be £9·30 a week better off instead of £9 a week better off. A basic worry that we shall face over and over again is that up to certain levels of income without adjustments, where tax is not paid, they will be dependent on the ceiling of FIS, which must continue.
  The Minister explained that the prescribed amounts would be changed from July and that there would be further changes in November. Does he envisage a change in the maximum amount of benefit in November? That is the only thing that can save the low-earning family with children, who at present will gain no real benefit, other than the 30p, from the child benefit in April, accompanied by the uprating of FIS in July. We should be turning more attention to the very poorest families when we consider some of those upratings. Going through different sizes of family earning slightly different amounts, we find it easy to see that the increase in FIS resulting from

  1603
  these regulations, plus the increase in child benefit, is minimal compared with the increased expenditure that these families, like all families, face in a time of continuing high inflation.
  Therefore, although we welcome the small help that can be given by the Government, we are in no way satisfied with the Government proposals for family support. We understand the difficulty in reducing dependence on means-tested benefits. I was relieved to read a letter of 9th March from the Minister for Social Security to my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin), in which he said:
  "We fully accept the proposal that the improvement of universal benefits should reduce dependence on means-tested benefits."
  We all agree, but the Government are in charge and they are not really doing anything about it. In fact, things are getting worse. Although we understand their problem, it is up to them to act. There is little that any Opposition can do to make them act, except what we hope to do before too long.
  The other aspect of the work that we are considering tonight is the whole question whether the benefits that accompany FIS will still be received in full. There has been a whole series of questions and answers on this. I should like to quote an answer given to the hon. Member for Islington, South and Finsbury (Mr. Cunningham) on 28th January concerning the outcome of all the passport benefits in the light of the introduction of child benefits in April. The Minister for Social Security said:
  "Existing discretionary powers will be used to protect from net income loss all families receiving free welfare milk and vitamins by direct claim on grounds of low income."—[Official Report, 28th January 1977; Vol. 924, c. 790.]
  I hops that it is correct to say that that is still the situation. I question it, because we have continually had answers that say that some people might be a little worse off, that some people might lose out just a little—a very small number—but we have on record contradictory statements about the way in which some of the benefits come forward and what will be received.
  In an answer to me on 14th March, the Minister for Social Security said that the arrangements for means-tested benefits
  1604
  not obtained through a passport are necessary rather different from those through supplementary benefit, where none of the child benefit is disregarded. He hoped that a common objective would be that people should break even in receipt of benefits, and make minimal gains and exceptionally minimal losses. We, too, hope that it will be a case of exceptionally minimal losses, but I have to tell the Minster that information is already coming in from various local authorities indicating that school meals are going to be a grave problem.
  The regulations that we were promised in another parliamentary answer on 4th March, dealing with revisions in school meals, are urgent. I am aware that they are the responsibility of the Department of Education and Science. We seem to be having less co-operation by the Department of Education and Science with the Department of Health and Social Security than we would wish. That applied to an earlier measure, as it does now.
  The regulations that we are discussing and the Child Benefit Scheme are to begin operation in April. When are we to get regulations from the Department of Education and Science that will deal with the amount of child benefit to be disregarded in assessing eligibility for free school meals for families in receipt of FIS? If it is not done quickly the increase in school meal costs and other difficulties that local authorities are facing will complicate the matter still further.
  It would be easy to continue commenting about the whole way in which the system of family support is not working, despite the many and different efforts. I do not think that one can ever blame one Minister, but one can blame one Administration for this system, which is getting not better but worse. When I looked at the complexity of these regulations—a complexity that the Minister has clarified a little tonight, and that he says he will clarify further—it seemed to me that they had been designed for lawyers by lawyers and not for hon. Members.
  But what concerns me is that when one regulation is made on 1st March about child benefit consequential needs, it is followed up only six days later by another to sort out the situation that exists

  1605
  in the Social Security Attendance Allowance (No. 2) Regulations 1975 (SI 1975/598). I looked at it and thought "This must cover what has happened this week." Then I realised "No, we are to have another soon", because this week, after a battle lasting three years, we had good sense accepted in another place and announced by the Under-Secretary of State responsible for the disabled, in that we are to allow payment of attendance allowance for severely handicapped children who are being fostered.
  We welcome that, but it means our having yet another piece of paper and another set of regulations to deal with attendance allowances. Therefore, I hope that that will be the last one affecting the situation and that the change in the 1975 regulations on attendance allowances will work together with what we already have in these regulations on child benefits. If it does not, there will be yet another set of regulations to come at the end. I hope that we can do it once and for all in the final set that will come.
  On Statutory Instrument No. 380, dealing with other diseases, we feel it quite right that all these things should be brought together and that an adequate child benefit will go to the mother. Therefore, there can be no dispute between the Opposition and the Government on this score.
  On the dependency regulations, we should make clear that these do not affect overseas dependants. I say that because there is a great deal of concern in the House from Back Benchers on both sides and among others outside the House about how the eventual outcome of the Chancellor's decision on overseas dependants will be enacted in the change from child tax allowances concerning those who will be ineligible for child benefit. I realise that this must come through a Finance Bill, but it is worth saying that these dependency regulations have nothing to do with that. That question has already been asked of me in the House and it is right that it should be on the record.
  We have other indications from the final two sets of regulations out of the six on how we shall compute and bring into operation the different time periods before we reach a stage where all upratings
  1606
  will happen at the same time, from November to November. All these things, taken together, perhaps means a clarification of the system under which we try to work.
  There are, of course, still problems. I do not know whether the Minister can tell us tonight how many of the one-child families who will be eligible for child benefit for the first time have so far applied. On the 8th of this month, 2·2 million out of 2·8 million had actually applied. There were still 600,000 one-child families who had not put in their claims, less than one month before the enactment of the child benefit.
  I hope that the number of people who have applied has gone up dramatically. I have done my best throughout the country to tell one-child families to put in their claims over the past few weeks, and I hope that the efforts of other hon. Members and publicity in the Press have also helped.
  I hope that the Minister can also clarify a matter on which there is misunderstanding. As I understand the Bill, and from discussions that have taken place, it appears that child benefit cannot be claimed in retrospect. I believe that this is a provision of the earlier principal Act with which we are dealing.
  Will the Minister confirm whether it will be possible to claim child benefit in retrospect if—through what one feels is a failure of publicity and the absolute chaos of the CH(1)T, CH(1)TA, CH(1) TB, P3(CB) income tax leaflets of last autumn—the muddle which ensued was the result of Government or lack of Government administration. Will the Government take responsibility for that, even if there are 200,000 late claims from one-child families? Will the Government entertain the possibility of paying those families back to the date of 6th April?
  If that is not possible, there should be enormous hue and cry in the remaining days before the date of entitlement to child benefit. This is not a clear or satisfactory situation. I have already asked for clear and precise leaflets. Above all, we need guidance for the staff who have to deal with these questions from day to day on the interaction of our benefits system on family support. I have as much sympathy for the staff as

  1607
  I do for the parents who are struggling to work out how much they are entitled to.
  We hope that after the Budget next Tuesday, when the Chancellor has had an opportunity to lift the tax thresholds substantially, there will be proposals for family support to do a great deal more to help the young people whose income is so low that they have to go to the State for additional help. We do not believe that any real progress can come until taxation and benefits are not only discussed together but are enacted together through our system—and that means tax credits.
  We have to work towards a reduction in means-tested benefits. I see no sign
  1608
  of it coming. The saddest thing is when children ask why, when they have had free school meals, they subsequently cannot have them, and why they get them again some months later. This is all the result of not having the right family support system.
  We have put many Questions to the Government over many months and we are grateful for the answers we have received. We still await, however, the answers to many problems. If the Government mean what they say about family support, they must not just go on saying it but must actually bring in the only system that will alleviate family poverty—a tax credit system.
  10.22 p.m.
  Mr. Tony Newton: I rise to support my hon. Friend the Member for Wallasey (Mrs. Chalker), and in doing so I should like formally to move the Prayer which is—
  Mr. Speaker: Order. The hon. Gentleman cannot move the Prayer at this stage. We are already discussing a motion which has been moved. He will have the opportunity to move the Prayer at a later stage.
  Mr. Newton: Thank you for your guidance, Mr. Speaker. Perhaps I may simply indicate at this stage that I shall be referring to one of the Prayers with a view to moving it later. One of my hon. Friends had indicated to me that he wanted me to refer to it, and that I propose to do.
  I should like to support some of the remarks of my hon. Friend the Member for Wallasey and some of the points that were raised before the debate was interrupted at 7 o'clock by the Mersey ferry conservationists, concerning the provision of sufficient information about precisely what the regulations mean and about precisely what is the situation on family income supplement and other aspects of the Child Benefit Scheme.
  Until last evening I had not realised that the Prayers were to be discussed tonight. The Vote Office, apparently, had not realised it either. It took the Vote Office some moments to get me the regulations, and I can understand this since it did not know that they were to be debated. When I saw the regulations I was, frankly, appalled. Hon. Members can see this vast wodge of bumf which is littered around me on the Bench and which clearly no sane man would try to understand or could understand in the time between 10 o'clock one evening and 3 or 4 o'clock next afternoon.
  We are faced with an almost unbelievable situation. I do not intend to parade myself before the House as having read every word of the regulations or to pretend to understand everything they contain. I understand that the Minister has read them all, but only once. That is not sufficient to enable him to grasp every fine point in them.
  Mr. Deakins: The hon. Gentleman is right. One could not possibly hope to
  1610
  grasp these detailed regulations merely by reading them once. As a Minister I have the inestimable advantage of having civil servants who are expert in these matters and who provide explanatory notes which go into great detail. I can ask questions at meetings. Having read the regulations once, I do not need to refer to them again.
  Mr. Newton: Although I have been a Member of the House for only just over three years, I am under no illusion about the advantages of having the backing of the Civil Service in finding one's way through such matters. I do not accuse the Minister of not having done his homework of or failing to understand what he is doing. All of us who have had anything to do with him, either on the Social Security (Miscellaneous Provisions) Bill or on any other matter, have formed the highest respect for his ability to master his brief and the technicalities of the subject.
  For us ordinary mortals, it is something of a problem to be confronted with a considerable collection of regulations at relatively short notice. It underlines the point made about the need to try to get some coherent information made more widely available. Such information should be made available not only to Members of Parliament but to that large body of people outside who become involved in advising others on such matters as social security benefits.
  With the increasing complexity of our system, there are many people who are asked for advice by those who wish to claim benefits and who do not understand the system. In the interest of the smooth working of the system, and in the interest of keeping down the work load upon Members of Parliament and Departments, we should explain what we are doing and what the regulations mean to the intelligent laymen who provide advice, formal and informal, throughout the country.
  I note that the background paper which the Minister has courteously circulated to those of us whom he knew to be interested in the subject—and which he has said he will try to make available

  1611
  in the Library if not more widely available—specifically says at paragraph 2:
  "Paragraphs 6 to 13 spell out in detail the effect of the FIS, child benefit and child tax allowances changes in April on FIS awards which are then current, with a series of tables providing 'ready reckoners' which could be used, for example, by Members of Parliament who wished to look up the position of an individual constituent."
  That is an admirable aim. I pay tribute to the Minister for having done such a thing.
  If ready reckoners are to be provided, they must be put into the hands of those who are likely to use them and thus be permanent references. They must not be left in the Library of the House. They must be readily available to those who are likely to need them. It is not only Members of Parliament who are called upon for advice on these subjects.
  In his earlier remarks the Minister referred to other explanatory notes which were available to him. I hope he will take up the suggestion that these should be made more widely available. There is an enormous amount of confusion and there is inadequate information about child benefit as a result of the process that has been gone through in the past year or so. That makes it important that there should be one relatively simple descriptive document that is both up-to-date and widely available, so that ordinary people involved in the system will have the chance of understanding it. At the moment, I do not think that they do.
  Yesterday evening I picked up from the Library its useful background paper on child benefit. It began by saying:
  "This paper attempts to summarise the changes there have been in the child benefit scheme".
  I like that. In the ordinary course of events the House of Commons Library, whose staff are highly competent and do an extremely good job, would never have used the phrase "attempts to summarise". They would not usually say that they were attempting to summarise the changes but would say that they had summarised them. The matter is now so mind-boggling in its complexity that no one can be sure that he has got it all right.
  In trying to summarise the changes and doing it very well—the Library staff have produced 14 pages of closely-typed
  1612
  script with photocopies of 12 to 15 answers to Parliamentary Questions which have come out in dribs and drabs weekly and monthly, each one amending the previous reply or giving another little piece of information that must be read in conjunction with previous statements. This background paper is the only comprehensive document now available which describes the situation. It would take any hon. Member some time to digest all this and to form a full, coherent view of what is now proposed for the Child Benefit Scheme and associated changes.
  The ordinary member of the public would need a full-time research assistant to learn what he is entitled to. That is ridiculous. It is difficult not only for the ordinary member of the public. I saw some old and close friends at the weekend. The wife is an Oxford graduate, the daughter of a former Labour MP. Her husband is a civil servant another Oxford graduate. Both are well paid. Their joint income is so high that they disclaimed the old family allowances, but they have found it impossible to discover either by themselves or through the post office in Highgate—the great home of Socialist intellectuals—
  Mr. Patrick Jenkin: My hon. Friend have gravely insulted me and my neighbours. Highgate is a hotbed of Conservatism.
  Mr. Newton: I apologise. I forgot that my right hon. Friend also lives in Highgate, and it is only a few roads away from him that the people about whom I am speaking live. They are, perhaps, more to the left than my right hon. Friend.
  My friends have had the greatest difficulty in working out their entitlement. Perhaps the Minister will comment on this—although I do not pretend that my friends are in other than a minority group. Their income is high, and their tax position is such that it is best for them to have disclaimed family allowances, otherwise they would be worse off. That means that they have no family allowance book. This couple have three children and, therefore, they should have two books.
  Hon. Members can imagine the difficulty of their going into the average post office—in all this confusion and without

  1613
  the Post Office Staff having the foggiest notion of what is going on—and saying that one has three children but no family allowance books because one does not claim, and asking for child benefit. The post office clerk will then ask for the books in order that child benefit may be given. One will have to say again that one has no books.
  I read to my friends, with amusement, some extracts from last week's debate on child benefits. They nearly had hysterics at some of the statements that were made by the Minister of State. They found the post office staff totally blank on this matter; they did not have a clue and were unable to give any sensible guidance. Post Office employees have been put in an impossible situation.
  This is illustrative of the muddle and confusion that has arisen and of the need—this is a serious and desperate matter—for a coherent and relatively understandable piece of literary advice to be distributed throughout the country so that people who are being subjected to these difficult and complicated changes may have a chance of understanding what is happening.
  I wish to reinforce what my hon. Friend the Member for Wallasey said about the complexities relating to school meals. My hon. Friend referred to a Written Answer in reply to the hon. Member for Sowerby (Mr. Madden), and I should like to read it to put on the record the sort of problem to which we are referring. The hon. Gentleman asked the Secretary of State for Education and Science to elucidate her statement of 28th January—in fact, it was a statement of the Minister for Social Security—with regard to
  "the treatment of child benefit for the purposes of calculating entitlement to free school meals; and, in particular, what will be the appropriate part of child benefit to be disregarded."
  The Under-Secretary replied:
  "From April until the next revision of the remission scales, the amount of child benefit which will be disregarded in assessing eligibility for free school meals for families not in receipt of supplementary benefit or family income supplement will be the amount by which parental income exceeds the income which would have been received if child benefit had not been paid and family allowances or child interim benefit had been paid. My right hon. Friend the Secretary of State for Education
  1614
  and Science and my right hon. and learned Friend the Secretary of State for Wales will shortly be laying before the House the necessary regulations to bring this into effect. My Department will be issuing guidance to local education authorities as soon as possible about the appropriate amounts to be disregarded, but I am not yet able to announce the details."—[Official Report, 4th March 1977; Vol. 927, cc. 328–329.]
  That was a month before the scheme was due to come into effect. I have not checked it, but my hon. Friend the Member for Wallasey has told us that we have not yet seen the regulations. Presumably, no appropriate guidance has yet been issued to local authorities.
  We are now less than a fortnight away from the date on which the scheme is due to come into effect and less than three or four weeks from the start of the next school term. Yet we have no regulations, no guidance to local authorities—virtually nothing about this important aspect of a scheme that is important to large numbers of the least-well-off people in our community.
  Mr. Patrick Jenkin: Is my hon. Friend also aware that we have heard nothing from anyone about grants for students, which is astonishing since the new term will start quite soon?
  The Minister for Social Security (Mr. Stanley Orme): Wait and see.
  Mr. Patrick Jenkin: It starts in a fortnight.
  Mr. Newton: I am grateful to my right hon. Friend. I had said all I wanted to say on school meals, and my next note reads simply "Students".
  I do not wish to stray from the subject of the regulations, but the whole history of the Government's treatment of students and their parents in the past three or four months has been a scandal. Students and parents have been mucked about in the Social Security (Miscellaneous Provisions) Bill, which we completed earlier this evening, and they have been left in a vacuum over the changeover to the Child Benefit Scheme. According to answers from Treasury Ministers today, that vacuum shows no signs of being filled.
  I understand that there is no question of the changes in relation to students' grants coming into effect before the start of the next academic year in September.

  1615
  This will be to the disadvantage of parents, who will be losing part of their tax allowances when the Child Benefit Scheme starts in a fortnight's time. What about the five or six months in between? We are told that we must wait and see, but these are families that are often in great financial difficulty.
  Some parents who are assessed for parental contributions often find that it is so hard to pay that they do not, and cannot, pay them at all. We are talking not about people who are rolling in money but about people who are under serious financial pressure, struggling to pay for part of their children's education. A fortnight before they are due to lose a substantial chunk of tax allowance and gain nothing in return, they have no knowledge of what is to happen or whether and how they are to receive compensation. If I went on too long on that subject I should be ruled out of order, but it is another aspect of the chaos and confusion that underlies the subject matter tonight.
  Later I shall seek to annul Statutory Instrument No. 417 because, as much as anything else we have before us, it demonstrates the mess that we are in. We have a fat, 24-page document, the Social Security (Child Benefit (Consequential)) Amendment Regulations 1977, which was laid before the House on 11th March. That was before anyone had even had a chance to read the first regulations. The ink had not dried on the original before we had an amendment to it.
  Mr. Deakins: We have heard that argument before.
  Mr. Newton: That does not mean that it is not a valid argument. It illustrates the chaos and confusion into which the Department, Ministers and hon. Members have been put because of the handling of the matter. Of course things get left out of regulations, but that puts the tin lid on the confused way in which this social reform has been put into effect.
  10.43 p.m.
  Sir George Young: I pay tribute to my hon. Friend the Member for Wallasey (Mrs. Chalker) who, without the aid of a battery of civil servants, not only understood the regulations but saw what was wrong with them. When the Child Benefit Bill was going through the
  1616
  House, I commented on how much would be left to regulations and how little was in the Bill. The mass of regulations in which we are now swimming shows that not enough attention was paid to such important subjects as the impact on dependants overseas and the impact on students. Now we have to pick up the pieces.
  We pressed the Government for a statement on their strategy for family support so that we would know where we were going. We have never had that statement. I welcome the explanatory note that the Minister sent to hon. Members who were interested. It is a pity that I received it only today, because it is complicated.
  Mr. Deakins: Bearing in mind what happened in Committee a couple of months ago, I checked to ensure that the explanatory memorandum was sent out on Tuesday night so that hon. Members would definitely have it in their postboxes by Wednesday.
  Sir G. Young: I accept what the Minister says, but I did not receive mine until this morning. My colleagues may have received their's yesterday, but even that does not provide adequate time in which to absorb such a complicated document.
  I can count with difficulty up to 278 and it takes some time to go through some of the tables at the back. The Minister said that hon. Members can use the tables as a ready reckoner, but does he believe that the majority of hon. Members will understand the tables sufficiently to enable them to interpret them on behalf of constituents? My view is that without a substantial amount of preparatory work and some background knowledge, the majority of Members of Parliament would not be able to make much use of the tables as ready reckoners in dealing with constituents in their surgeries.
  I pick out Column 6 of Table 5, concerning reduction in child tax allowance. What comes out of that table is that those families in receipt of FIS are also in the tax bracket. That shows some illogicality in the two systems—that people benefiting from an increase in FIS of some 75p are having their child tax allowance reduced by 70p. The interaction between the tax system and the social security

  1617
  system is failing us if one has a table showing, on the one hand, people on low incomes getting FIS and, on the other hand, being subjected to a tax burden at the same time.
  The whole jargon of some of the tables, with "CHIB", "FAM", "FIS" and "clawback", shows just how complicated the whole subject is getting. If there was some light at the end of the tunnel, one would be prepared to go along with this flood of regulations. This evening we have not got more light; we have got more tunnel. Each time there is an uprating, each time there is a new benefit, each time the disregards are altered and each time there is a new tax allowance, it seems that we shall have to amend the interactions of a whole lot of interrelated benefits.
  If the Minister could say that this was a step towards a logical and effective system of family support, one could go along with it. But he can give no such assurance. He cannot say that the next time something is uprated we shall not have to go through the same sort of exercise in trying to understand it as we are tonight.
  The difficulty arises from the interaction of child benefit and FIS, child benefit being a non-means-tested benefit and FIS being means-tested. Opposition Members saw child benefit as the first step in a new system of family support which would replace FIS. We saw FIS as being redundant once we had moved to a tax credit system. However, it is clear from these regulations that there is no such intention on the part of the Government and that they see some permanent relationship between the two. It is the absence of a goal, that infinitely depresses me.
  If one considers the amount of knowledge needed by someone at the bottom end of the income scale to understand the regulations and compares it with the amount of knowledge needed at the other end, one can appreciate that income tax, surtax, capital gains tax and so on are infinitely easier to understand than these benefits at the other end. People on higher incomes have the benefit of accountants and tax advisers to get through the complexities. Those on lower incomes must rely on Members of Parliament,
  1618
  or on officers of the Department of Health and Social Security, who are very helpful indeed. On the other hand, what is worrying is the amount of time that must be spent by staff behind counters explaining the increasingly complex social security system to claimants when, with the constraints on manpower in the Department, they could be doing something else.
  I should like to mention briefly something to which my hon. Friend the Member for Braintree (Mr Newton) referred. At present people are getting new tax codings. These show the removal of child tax allowance, to be replaced eventually by child benefit. However, those with children at university do not get the child benefit, and those whose children are leaving university or college this summer will not benefit from the grants that begin next year. Therefore, they will be permanently out of pocket for the six-month period that begins next April. As I understand it, they will receive no compensation. One or two people have telephoned me to find out what is going on. I shall have no hesitation in saying to them that the Secretary of State has told them to wait and see.
  I find the regulations somewhat depressing. As a House, we seem to be going deeper and deeper into the swamp, with no objective in sight and no logical steps towards a fairer, logical and comprehensible system of family support. At some stage the Government must outline a coherent strategy of family support. Without such a strategy it will become apparent that the Government do not have the slightest idea where they are going each time we get further regulations.
  10.50 p.m.
  Mr. Peter Bottomley: I am grateful for the chance to address the House on the regulations. Some of the mutterings that have come from the Treasury Bench indicate what a joint consultative committee with the Liberals will be like. I am sorry that the Liberals are not present.
  Mr. Orme: So am I.
  Mr. Bottomley: We are dealing with regulations that will affect 28 million people if we include all the parents and children who come within their terms. It

  1619
  is perhaps indicative of how politics have moved away from the interests of many of the people most of the time that the House is not exactly overcrowded although we are dealing with matters that figured in the election manifestos of all the major parties in the past two elections. It is most significant that those who are willing to be vociferous on behalf of people at work are not willing to become involved in the complications and ramifications of regulations that affect families at home.
  Ministers will not be surprised when I say that I do not think that we shall get anywhere near a way out of the terribly complex position in which we find ourselves until we pay substantial tax credits for children. I am talking of something in the region of 10 per cent. of average net take-home pay for each child, or about £5 a week per child. I do not think that anyone will claim that a child can be brought up for less than about £5 a week. If we take account of family circumstances and the money that people earn at work, it is up to the community to have tax credits.
  That will come as no surprise to the leading members of my party, who think that I am a bit way out, or to Labour Members, who think that the only sensible way of raising family income is by trade union negotiated payment at work. There are 40 million parents bringing up children, and they will not all get the right rewards through activists in the Labour movement.
  I shall read part of Statutory Instrument No. 417. It is an example of the sort of thing that those not now in the Chamber have missed. I think that they should be brought up to date. Regulation 2 states:
  "Regulation 15 of the principal regulations (which makes consequential amendments to the Social Security (Attendance Allowance) (No. 2) Regulations 1975(d)) shall be amended in accordance with the following provisions of this regulation—
  (a) in paragraph (2) before the words 'for Paragraph (2)' there shall be inserted the words '10A of the Family Allowances (Qualifications) Regulations 1969, as amended (certain persons exempt from United Kingdom income tax)' in sub-paragraph (f) of paragraph (1), there shall be substituted the words 9 of the Child Benefit (General) Regulations 1967(e), as amended(f) (persons exempt from tax) and';".
  1620
  Paragraph (b) states:
  "(b) in paragraph (3) before the words 'for sub-paragraph (ii)' there shall be inserted the words 'the words from "so however that" to the end of paragraph (1)(a) shall be omitted and'; and after the word 'payable' in sub-paragraph (ii) as so substituted there shall be inserted the words 'in respect of the child'."
  That makes a great deal of sense to those of us who have been following the whole saga, but it will not make much sense to others. Perhaps they will not have to face the regulations, because they will put in their claim and get the money.
  That brings me to my reason for hoping to divide the House on the motion. The value of the child benefit in the documents sent out by the Department is worth 30p for the extra child. Where does 30p go when the average manual wage in 1976 was £60 a week—£50 after deductions? Many married women work, and if, despite the Equal Pay Act, they earn only half what their husbands earn, that means an after-tax family income of £75. Yet after six years of the highest inflation that this country has seen for many years we can offer only 30p extra for the extra child. If the family receives FIS, that means an extra 25p—75p in all.
  That is why the Government are in even greater disgrace over this matter than we managed to put them in last night. That is why—as a symbol, but symbols count—I hope to divide the House against the consequential amendment regulations.
  10.56 p.m.
  Mr. Deakins: The hon. Member for Wallasey (Mrs. Chalker) mentioned specifically the effect of the poverty trap. I cannot altogether reassure her, but I can give some information in relation to FIS. The effects of the poverty trap for low income families and those on FIS can be very serious, but they are seldom felt because of the time lag between receipt of an earnings increase and the review of the benefit award and because of regular benefit upratings.
  With FIS, an award continues for 52 weeks, regardless of any subsequent increase of income after the date of claim. Since it is uprated every 12 months, at some time in the currency of an award the prescribed amounts will have been uprated so that for the next award higher earnings are set against higher prescribed

  1621
  amounts. Moreover, the high upratings in July 1975 and July 1976, coupled with the fact that the proposed July 1977 interim uprating is in line with the pay guidelines mean that no family can lose FIS and therefore the passport benefits which go with it solely because of an increase of pay within the guidelines.
  Figures of the numbers of families theoretically subject to high marginal tax rates are calculated from the Family Expenditure Survey. The latest figures which the hon. Lady quoted for families which would have a marginal tax rate of 75 per cent. or over are 90,000 at December 1975, as compared with 60,000 at December 1974. Those figures are subject to considerable sampling error. I am not a statistician, but I am assured that, although the increase is 50 per cent., in terms of the 6 ½ million families in the survey it is not statistically significant.
  Mrs. Chalker: I am aware that it is not statistically significant, but not only this figure but all the others which may be pointers, from slightly different bases than the Family Expenditure Survey, show a development of this trend. More and more families are becoming subject to high rates of marginal taxation as a result of the inability of tax thresholds and benefits to work co-operatively.
  Mr. Deakins: I do not think anyone could possibly disagree with that analysis. Put in the context of the total number of working families with children being 6,500,000, about 1½ per cent. are theoretically subject to very high marginal tax rates. Actual figures are not known but the absence of authenticated cases suggests that in practice the numbers affected by a net loss of income are very small.
  The hon. Lady made great play with tax credits. This is an argument that has gone back and forth across the Floor of the House on many occasions. Conservatives are very fond of talking about their tax credit scheme, and they seem to regard their 1972 scheme as a panacea for all ills—real and imaginary—affecting the entire tax and social security systems. Maybe they get a bit carried away when they talk about it—but that is certainly the impression they give. They tend to ignore the enormous cost of the scheme.
  Mr. Patrick Jenkin: The hon. Gentleman cannot be allowed to get away with that. He must realise that the progressive reduction in real terms of tax threshholds means that that very few families are below it. Therefore, the cost of changing from tax allowance to cash benefit has been drastically reduced because there are so few families for whom the cash benefit represented an increase over tax allowance. To go on extrapolating figures from the 1972 Green Paper is absolute rubbish. I am astonished that this is in his brief.
  Mr. Deakins: It is not in the brief.
  Mr. Jenkin: Then I exonerate the hon. Gentleman's advisers. The condemnation must fall more heavily on him.
  Mr. Deakins: I am grateful to the right hon. Member for putting forward Tory policies. To date there has been an absence of them. Certainly we did not hear any yesterday. I take it that the right hon. Gentleman's 1972 scheme will not now cost the £5 billion he originally thought it would, because he now talks of its being introduced in stages. That suggests that the Opposition are aware, albeit with the developments the right hon. Gentleman has mentioned, that it would still cost an enormous amount of money at a time when public expenditure is very much constrained. We have not had any concrete illustration of what the phasing in would mean. This is not the occasion to pursue that in detail, but I hope that on a future occasion we can have more light shed on what is involved.
  Mr. Patrick Jenkin: The hon. Member's Department answered a Question from my hon. Friend the Member for Haltemprice (Mr. Wall) saying that it did not subscribe to the Conservative Monthly Newsletter as a means of keeping in touch with Opposition thinking. In that case, the Minister cannot stand up at the Dispatch Box and say that he knows nothing about it. I made a major speech a year ago in which I envisaged the phasing in of tax credits and that speech was reprinted in the Conservative Monthly Newsletter. Had his Department subscribed to it, the hon. Member would know all about our thinking on this matter.
  Mr. Deakins: The hon. Lady asked specifically about one-parent families. I can give her more up-to-date information.

  1623
  I have figures for December 1976. Basically, there were 77,000 families receiving FIS; 35,000 were one-parent families, of which 34,000 were headed by females and 1,000 were headed by males. An interesting figure relates to the percentage of one-parent families receiving FIS as a percentage of all families. Whereas in 1974 and 1975 the figures were 54 and 53 per cent. respectively, in 1976 the figure totalled 45 per cent.
  The hon. Lady also asked about the maximum amount. I can give no undertaking, but it is one factor that needs to be reviewed in November when we examine the broad uprating of FIS.
  Let me turn to the hon. Lady's questions about the regulations made by the Department of Education and Science. The hon. Lady was temporarily absent from the Chamber during the remarks of the hon. Member for Braintree (Mr Newton), but he quoted an answer which gave her the information she requires. The Secretary of State for Education and Science will be introducing regulations shortly providing that in such cases net increases in income will be disregarded for the purposes of the scheme. A parliamentary Question was tabled on this matter on 4th March by my hon. Friend the Member for Sowerby (Mr. Madden) asking my right hon. Friend to elucidate the statement of 28th January with regard to the treatment of child benefit for the purpose of calculating entitlement to free school meals. The answer is on the record on that date at column 328 of Hansard and I shall not quote it. I cannot add anything to what was said by the Government on that occasion.
  Mr. Newton: My hon. Friend the Member for Wallasey (Mrs Chalker) and I were quoting the same answer. We were making the same point. All the answer said was that regulations would be introduced and guidance given. When shall we see those regulations and the guidance?
  Mr. Deakins: The Secretary of State for Education and Science said that that would happen shortly, and I cannot go beyond that.
  Let me turn to the position, with which the hon. Lady made some play, involving the payment of allowances in respect of
  1624
  children abroad and the phasing out of child tax allowances in that context. Child benefit is not normally available in those cases.
  I could go into great detail about the special provisions for people who are or have been abroad, but let me refer to one or two paragraphs. The establishment of child benefit as the criterion for entitlement to benefit or allowances in respect of dependent children would have the effect of severely limiting the periods and circumstances in which benefit or allowances could be paid in respect of children abroad. Special provisions therefore become necessary to preserve, but not enhance, the current position with regard to the payment of such benefits.
  In general, child dependency benefit is not payable for a child who is abroad, other than temporarily. Special exception is made for those absent for medical treatment or education. However, under the EEC regulations on social security and the terms of certain reciprocal agreements a child dependant who is in the other country is treated, for the purposes of the claim to a child dependency benefit, as if he were in this country. That was sufficient to enable the conditions for child dependency benefit to be satisfied under the old criterion but it will in future be necessary to treat such persons as though they satisfy the new criterion for entitlement, that is, as if they satisfied the conditions for child benefit. I could go into a great deal more detail if I had time to do so, but I shall not.
  The hon. Lady asked about claims outstanding. I have what I hope will be, if not good news, acceptable news. The number of claims from one-child families is 2,350,000. We are, so to speak, 450,000 claims short. I assure the hon. Lady that the awards can be backdated by one year. Therefore, the cases that come in within the next year are able to be backdated.
  The hon. Member for Braintree asked a number of specific questions.
  Mr. Patrick Jenkin: The Minister suggested that we would be aware of some reasons why some of those 450,000 might never make individual claims at all. I am not aware of any such reasons, but presumably the 2,300,000 include all those who would be entitled to claim.
  Mr. Deakins: I am delighted to answer that question. Among the missing claimants there are several distinct categories. First, there are children about to leave school. There is a bigger shortfall among older children than among younger ones. We think that parents whose children are going to leave school at Whitsun, now the normal summer leaving date, may simply never bother to claim because they do not think it worthwhile. If they do not, they will not be out of pocket. The CTA for this year would probably be withdrawn in any case because of the child's earnings once it left school. Our estimate is that there could be 300,000 in this category.
  Secondly, there are higher rate taxpayers. This group was affected by the change in plan from a taxable to a tax-free benefit, but the position was made plain in the Chief Secretary's statement of 16th November. The indications are that confusion still exists.
  Sir G. Young: The Minister implied that the CTA would be withdrawn when the child left school, but is it not the case that the CTA is payable for the whole year?
  Mr. Deakins: Yes, indeed, but it is a question of the tax year ending on 5th April. It depends on the child's earnings once the child starts work. I am not an expert on tax law but I am assured that that is the case.
  I come back to the high rate taxpayers. As they begin to get their coding notice and consult their accountants they will no doubt sort themselves out, but they may well not do this until after April. They will lose nothing thereby. Child benefit can be paid for up to 52 weeks in arrears. There are 500,000 higher rate taxpayers with dependent children and perhaps one-third might be one-child families. But there will be others who have claimed FAM, so there could be a substantial number here as well.
  I was asked about one-parent families. Present indications are that some one-parent families who have claimed the increase do not understand that they need to claim child benefit also. The numbers are expected to run into tens of thousands and not hundreds of thousands.
  The hon. Member for Braintree gave examples of confusion at the Post Office. It is easy in such a complex scheme to
  1626
  ask people for information and find that they refer to other sources that also seem not to have the information or be able to produce the proper form. I think that we hold the record among Government Departments for the number of leaflets produced. Of course, these leaflets often do not go into the sort of detail that we have been discussing this evening with regard to these detailed and complex regulations. That would be quite inappropriate either because people could not understand them or because of the cost of printing.
  Nevertheless, once people are encouraged to claim, even if they are not sure about to what they are entitled, our local or central offices will sort out the position for each individual. When we have a scheme like this I do not think that we can expect very much more. The individual claimant may not be absolutely certain at the time of filling in the form about what he is entitled to, but it is up to the experts in the local, regional or national offices to get the position sorted out.
  The hon. Member also mentioned students. I have already referred to the answer that he quoted. The hon. Gentleman specifically asked about the announcements with regard to student grants and child benefit allowances. These are expected shortly. I am sorry but I cannot add to that this evening. I know that there is only a short time to go, but the attention of my right hon. and hon. Friends in the Department of Education and Science will be drawn to the points made in this debate.
  The hon. Member for Ealing, Acton (Sir G. Young) referred to FIS families who were paying tax. This is a well-known matter. We all agree that the interaction of social security and tax thresholds and low incomes catches people in a trap from which it is very difficult to escape. I cannot anticipate the Budget of my right hon. Friend the Chancellor, but I know that there is a widespread expectation that some things will be done to try to alleviate the situation. I do not know whether they will be done.
  I do not think that there is any disagreement between the two sides of the House on the principle of moving to- wards a more easily understandable, simplified and unified system of family

  1627
  support. We regard child benefit, as I hope the Opposition do, as a major social advance, whatever one may think about the way in which it has been introduced and the amount. It is a step towards a proper system of family support for all children in all families. For any Government the key question will be its priority compared with competing claims, in other areas as well as social security, where there are questions of pension increases, disablement benefit and so on. Obviously, more resources will need to be devoted to child benefit if it is effectively to take families out of the poverty trap and enable us eventually to get rid of the means-tested benefits we have been talking about.
  I hope that I have dealt with the points that have been made. In the circumstances, in view of the very good and comprehensive debate that we have had, I ask the Opposition to be good enough to withdraw their Prayers.
  Mrs. Chalker: With the leave of the House, may I say that I should be happy to withdraw the Prayers, but as I did not move them, I was not sure that I had to withdraw them?
  Question put and agreed to.

  Division No. 96]

  AYES

  [11.19 p.m.

  NIL

  TELLLERS FOR THE AYES:

  Mr. Tony Newton and

  Mr. Peter Bottomley.

  NOES

  Bean, R. E.

  Graham, Ted

  Snape, Peter

  Bishop, E. S.

  Harper, Joseph

  Spearing, Nigel

  Blenkinsop, Arthur

  Hart, Rt Hon Judith

  Stewart, Rt Hon Donald

  Brown, Ronald (Hackney S)

  Henderson, Douglas

  Stewart, Rt Hon M. (Fulham)

  Campbell, Ian

  Hooley, Frank

  Stoddart, David

  Cocks, Rt Hon Michael

  Jackson, Miss Margaret (Lincoln)

  Taylor, Mrs Ann (Bolton W)

  Cohen, Stanley

  John, Brynmor

  Tinn, James

  Cox, Thomas (Tooting)

  Lestor, Miss Joan (Eton & Slough)

  Urwin, T. W.

  Cryer, Bob

  Luard, Evan

  Ward, Michael

  Cunningham, G. (Islington S)

  McDonald, Dr Oonagh

  Wellbeloved, James

  Davidson, Arthur

  McElhone, Frank

  Williams, Alan Lee (Hornch'ch)

  Deakins, Eric

  Maclennan, Robert

  Wise, Mrs Audrey

  Dormand, J. D.

  Marks, Kenneth

  Wrigglesworth, Ian

  Dunwoody, Mrs Gwyneth

  Maynard, Miss Joan

  English, Michael

  Mendelson, John

  TELLERS FOR THE NOES:

  Ewing, Harry (Stirling)

  Orme, Rt Hon Stanley

  Mr. Alf Bates and

  Fowler, Gerald (The Wrekin)

  Skinner, Dennis

  Mr. A. W. Stallard.

  Question accordingly negatived.
  Resolved,
  That the Family Income Supplement (Computation) Regulations 1977, a draft of which was laid before this House on 3rd March, be approved.
  Mr. Deputy Speaker (Mr. Oscar Murton): May I ask whether the hon. Member for Wallasey (Mrs. Chalker) wishes formally to move the Prayers?
  Mrs. Chalker: I shall remain in the position of neither having moved nor withdrawn the Prayers, Mr. Deputy Speaker.
  Mr. Newton: Perhaps it would help it I indicated that even if my hon. Friend the Member for Wallasey (Mrs. Chalker) wished to withdraw the Prayers, I should resist her wish to withdraw the Prayer relating to Statutory Instrument 1977, No. 417, which I should like formally to move.
  Motion made, and Question put:
  That an humble Address be presented to Her Majesty, praying that the Social Security (Child Benefit Consequential) Amendment Regulations 1977 (S.I., 1977, No. 417), dated 7th March 1977, a copy of which was laid before this House on 11th March, be annulled.—[Mr. Newton.]
  The House divided: Ayes 0, Noes 47.

  STATUTORY INSTRUMENTS, &c.
  Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &c.).

  COUNTY COURTS (No. 2)
  That the County Courts Jurisdiction Order 1977, a draft of which was laid before this
  1630
  House on 10th March, be approved.—[Mr. Harper.]
  Question agreed to.

  ADJOURNMENT
  Resolved, That this House do now adjourn—[Mr. Harper.]
  Adjourned accordingly at twenty-nine minutes to Twelve o'clock.

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

CONSULTANT ANAESTHETISTS AND RADIOLOGISTS
Lord WINSTANLEY: 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 is their estimate of the extent of under-use of NHS facilities for the diagnosis and treatment of cardiothoracic, renal, rheumatic and general surgical conditions brought about by the present shortage of consultant anaesthetists and radiologists; and what steps they intend to take to reduce the rate of emigration to EEC countries of doctors in these two specialties, or to induce those who have emigrated to return to the United Kingdom where they are so urgently needed.
Lord WELLS-PESTELL: My Lords, it is true that there are relative shortages of doctors in these specialties. These are due largely to rapid expansion in recent years, though any emigration of doctors in these specialties naturally aggravates the problem. It is not possible to estimate the extent of any under-use of facilities arising from these shortages, but it is believed to be minimal. It is too early to say what the effect of implementing the EEC Medical Directives on freedom of movement will be, but, so far, there is no indication of any large-scale migration to the Continent. There are arrangements for health authorities to pay certain of the expenses of British trained doctors returning to this country.
Lord WINSTANLEY: My Lords, I am much relieved to learn that the Government are seized of this problem. May I point out to the noble Lord, Lord Wells-Pestell—
Several noble Lords: No! Question!
Lord WINSTANLEY: May I ask the noble Lord, Lord Wells-Pestell, whether he realises that the problem is very urgent in some areas? For example, I understand that three advertisements for anaesthetists in Bolton and Rochdale have produced no applicants; that waiting time for appointments for rheumatic clinics is now in excess of seven months, not because of a shortage of rheumatologists but because of a shortage of radiologists to process and investigate the cases; and that the Regional Manpower Services Committee of the North-West Region has now decided not to establish any new surgical posts because the existing anaesthetic services cannot provide the full cover for the existing establishment. Does the noble Lord realise that these two specialties are unique in that they do not require linguistic ability? In other words, an anaesthetist—
Several noble Lords: No! Too long!
Lord WELLS-PESTELL: My Lords, I think I have the noble Lord's point. I was not trying to be facetious. He has raised an important matter and it is not one that we can afford to take lightly. On 30th September 1976 there were nine consultant posts in radiology and 19 in anaesthetics in England and Wales which were vacant for lack of a suitable candidate. I am aware, and so is my right honourable friend the Secretary of State, of the particular problems in the North-West Region. May I say that we have recognised these difficulties in the recent allocations both in finance and in the new consultant posts. In fact, I understand that the North-West Region is slightly better off than average as regards consultant posts in radiology and anaesthetics.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, will not the noble Lord realise that the real trouble about the emigration of doctors and scientists is the penal taxation policy of the Labour Government?
Lord WELLS-PESTELL: My Lords, there is not a shred of truth in that. The noble and learned Lord had better look up the reasons why they go abroad. They do not go abroad to any great extent—although I accept that one or two of them do—for more money. Often, there are better facilities there for research,

625
which we accept, and in certain fields they can get experience perhaps more adequately than they can here. But many of them go as a planned purpose to gain a wider experience, and return to this country in something like three years.
Lord LEATHERLAND: My Lords, in view of this wise and very valuable Question from the Liberal Benches, can my noble friend tell me what is the average salary earned by these consultants in this country today, both in the National Health Service and in private practice?
Lord WELLS-PESTELL: My Lords, I cannot give exact figures and I am not prepared to hazard a guess. There are full-time consultants in the National Health Service and part-time consultants. If my noble friend would put down a Question on this matter I should be delighted to reply, for the simple reason that I think your Lordships would be quite surprised at what the salaries are.
Lord DERWENT: My Lords, did not the noble Lord use the wrong word in reply to the original Question when he said "migration" instead of emigration? —because with migration they all return the following spring.
Lord WELLS-PESTELL: My Lords, if the noble Lord is speaking in a naturalist sense, it depends on the species.
Lord SEGAL: My Lords, could not Her Majesty's Government do a little more than hitherto to persuade the medical schools to urge medical graduates to take up these two specialties?
Lord WELLS-PESTELL: My Lords, my noble friend will know that there is a plan to increase the number of doctors in this country in the future. With regard to these two specialties, the real problem at the moment is not that there is a shortage of registrars in these two specialties; the difficulty at the moment is getting enough registrars with the adequate experience to become consultants.
Lord HAWKE: My Lords, if there is a shortage of anaesthetists, will Her Majesty's Government import some more acupuncturists from China?

TYNE AND WEAR TRANSPORT PROJECT
3.13 p.m.
The Earl of LAUDERDALE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how the Tyne and Wear metro rail-tram project is to be financed.
Baroness STEDMAN: My Lords, the Tyne and Wear county council is responsible for the project and for its financing. The Government contribute to the costs through the transport supplementary grant.
The Earl of LAUDERDALE: My Lords, while thanking the noble Baroness for that reply, may I ask her how much central Government are contributing by way of grant?
Baroness STEDMAN: About 70 per cent., my Lords.
The Earl of LAUDERDALE: My Lords, may I ask the noble Baroness to say, for our information, whether the Government ale satisfied as to the economic viability of this project?
Baroness STEDMAN: Yes, my Lords; we think this project is essential to the regeneration of the Tyneside area.
The Earl of LAUDERDALE: My Lords, may I ask the noble Baroness to answer this further question: if it is economically viable, cannot the Government go to the money market and raise money from private enterprise instead of burdening the public sector borrowing requirement? In looking at the finances from now on, will the Government perhaps be consulting Mr. John Pardoe?
Baroness STEDMAN: My Lords, the normal practice with projects such as this is that the Government pay a percentage by way of transport supplementary grant. This varies around 70 per cent. a year, but it is a fluctuating figure. In the same way, when the scheme is operating they will pay, if necessary, up to 70 per cent. of the deficit, again in the form of grant.
Lord WYNNE-JONES: My Lords, is my noble friend aware that the inhabitants of Tyneside regard this as a very admirable scheme and look forward to it operating very soon?
Baroness STEDMAN: Yes, my Lords, that is why we sponsor it and why we want it to continue. It is extremely important to the regeneration of the Tyneside area. We need more mobility of labour there and we need it in connection with the inner city development of the City of Newcastle.
Baroness WARD of NORTH TYNESIDE: My Lords, may I ask the noble Baroness to accept my view that the scheme is very necessary and that we are glad to have it? Will she bear in mind, and tell many other people, that the North-East does not always get all the money that it either requires or needs by comparison with other parts of the country? May I add that we are delighted with the scheme and feel that the sooner it comes into operation, though it is expensive, the more grateful we shall be?
Baroness STEDMAN: My Lords, I am delighted as a Minister to accept bouquets from the noble Baroness.
The Earl of LAUDERDALE: My Lords, may I ask the Minister to confirm that the balance of Government grant will fall on the public sector borrowing requirement?
Baroness STEDMAN: Yes, my Lords, it will be part of the transport supplementary grant.

ARTS COUNCIL GRANTS
3.15 p.m.
Lord NUGENT of GUILDFORD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government to state what contribution to the artistic and cultural life of the nation the Arts Council is securing by granting aid to the Institute of Contemporary Arts' latest presentation by the Joint Stock Company.
The MINISTER of STATE, DEPARTMENT of EDUCATION and SCIENCE (Lord Donaldson of Kingsbridge): My Lords, it is for the Arts Council to assess what benefits result from grants made by it. In making this assessment the Council has to take into account the achievements and standards hitherto attained by each client and the importance of protecting artistic activity from censorship.
Lord NUGENT of GUILDFORD: My Lords, while thanking the noble Lord for that emollient Answer, may I ask whether he is aware that he has some responsibility for the distribution of funds by the Arts Council? Is he aware that this show was castigated by the drama critics of the London newspapers for its extreme obscenity? Does he appreciate that most people expect Ministers in Government to protect the public against this sort of pollution? Is he aware that when the taxpayer is required to pay towards producing it, that is adding insult to injury? Will he please ask the Arts Council to use some restraint in its judgment before giving further grants to the ICA?
Lord DONALDSON of KINGS-BRIDGE: My Lords, this is a difficult side of near censorship which we in this House have discussed before. I do not think many noble Lords would think it suitable that the Minister for the Arts or the Secretary of State for Education and Science should exercise censorship in this way; indeed, I do not think that is what the noble Lord is asking me to do. The Arts Council is my agent. I give it a bulk sum of money which it distributes extremely carefully, and it gives, with my full approval—though it does not need to ask for it—a proportion, and a very small proportion, of that money to experimental and fringe activities. We must face perfectly seriously the fact that all through history there have been artists of extreme merit who have enjoyed nothing so much as shocking the Royal Academy. I do not think these people should be suppressed or chased.
Lord HAILSHAM of SAINT MARYLEBONE: Chased or chaste, my Lords?
Lord DONALDSON of KINGS-BRIDGE: We do the best we can to amuse the House, my Lords. I think the

629
best safeguard we have is the police. That is where the line should be drawn, and that is where the line is in fact drawn, and I do not propose to make any immediate alteration to that.
Lord GARDINER: My Lords, is my noble friend aware that one eminent critic said that this production was calculated to put everyone off pornography for life?
Lord DONALDSON of KINGS-BRIDGE: I am aware of that, my Lords; but another critic, I think in The Spectator—not a publication I normally read from cover to cover—described it as an absolutely first-class performance. However, I do not wish to be concerned in judging merit. That is not my business, nor should it be.
Lord GIBSON: My Lords, would the noble Lord agree that the vast bulk of the effort of the Arts Council goes to support work which commands fairly universal support and therefore attracts very little publicity? Secondly, would the noble Lord agree that we at the Arts Council are right to devote part of our funds to new work, some part of which is bound to be controversial and some tiny proportion of which is certain to be unacceptable? Lastly, would he agree—and this is the most important part of my question —that the Arts Council would be wrong to censor in advance, but right to take into account afterwards?
Lord DONALDSON of KINGS-BRIDGE: My Lords, my noble friend—if I may so call him—the chairman of the Arts Council has expressed the position exactly. I believe that we have to take risks but that we must learn from them. In so far as advantage is taken of the freedon given and it is abused, we have our remedy, which is, first, to limit and, secondly, to suppress the subsidy which is given. That is the right of the people who pay the money, but not until the people who are receiving the money have had a chance to justify themselves. I should like to add that the Joint Stock Company is a company that has done very good work indeed and is extremely well thought of wherever it has been. This is the first time that it has—if I may assume the verdict of the public—put a foot wrong.
Lord SANDFORD: My Lords, may I ask the noble Lord whether, in the present circumstances, he will watch very carefully the liberal tendencies at work in the ranks behind him? Would he agree that it is one thing in a free society to tolerate a certain amount of deviancy here and there, but it is quite another to support and encourage it with public funds? I think that that is what we are objecting to.
Lord DONALDSON of KINGS-BRIDGE: My Lords, this is certainly a point which I take. Obviously, nobody in this House, short of the line drawn by the police, will complain about what people do if they do not receive public funds. The problem before us is that there is a small element of public funds encouraging experimental work of this kind. I repeat and stand by the statement that experimental work of this kind ought to be supported by the Arts Council at a small level. The Council will occasionally find that the people it supports make mistakes and, when it does, like me, it will have to do the best it can to get through it.
Lord NUGENT of GUILDFORD: My Lords, is the noble Lord aware, as he put the suggestion to me that I might be asking for censorship, that I am not? Is he further aware that the comments made by the Daily Telegraph are typical? It reads,
"This show is as likely to give offence as anything I have ever seen in the theatre."
Is the noble Lord aware that this really was a shocking show and that my objection is soundly based? I dislike obscenity on the public stage but I strongly object to being required to pay towards promoting it. Will the noble Lord please use his influence in his grants to the Arts Council to ask it to take note of what has been said here today?
Lord DONALDSON of KINGS-BRIDGE: My Lords, it is quite unnecessary for me to use any particular influence on the Arts Council. It completely agrees with this point of view and it also thinks that it would be absolutely wrong for it to dictate to its clients what they did. This is a difficult line to ride and I believe that the Arts Council is doing it extremely well. I am very grateful to it for the way it has done it. In the past year we have had about three rather

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awkward slip-ups. We admit this and we shall try to have no more.
The Earl of LONGFORD: My Lords, is my noble friend aware that, for many of us, his answer is extremely confusing? Are we to understand that this was a slip-up and, if so, will he express regret for that slip-up?
Lord DONALDSON of KINGS-BRIDGE: My Lords, my position as Minister for the Arts is not one of critic or censor. I will express no regret except to say that it seems to me that, on some accounts of this play which I have not seen, though not on others, it would, if they are correct, have been better not done.
Viscount BARRINGTON: My Lords, is the noble Lord aware that a Minister for the Arts speaking for the Government —any Government of any complexion—is in a difficult position and is liable to be attacked on questions of this kind, either for prosecuting something he is told he ought to have subsidised, or for subsidising something that ought to have been prosecuted? Does the noble Lord think that this particular performance should have been subsidised, prosecuted or neither, as many people would think or—and one would have to consult a Treasury official about this—both?
Lord DONALDSON of KINGSBRIDGE: My Lords, I believe that the answers that I have given to various other questions this afternoon answer that.

POSTAL CHARGES
3.27 p.m.
The Earl of KINNOULL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in the public interest, they will instruct the Price Commission not to accept the Post Office's proposal to increase postal charges this summer as forecast.
Lord ORAM: My Lords, I cannot anticipate what findings the Price Commission will make on the proposals. When
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my right honourable friend receives a report on the proposals from the chairman of the Price Commission, it will be considered.
The Earl of KINNOULL: My Lords, I am grateful to the noble Lord for that reply. Is he aware that, on 14th March, Her Majesty's Government stated in another place that the Price Commission had considered the proposals and that they came within the Price Code, and that the Government did not wish to interfere?
Lord ORAM: Yes, my Lords, I am aware of that Statement by my honourable friend Mr. Maclennan. If the noble Earl consults yesterday's Hansard, he will find that Mr. Maclennan has answered a Question for Written Answer, admitting that that was wrong and that the Price Commission have not considered these proposals.
Lord JANNER: My Lords, will my noble friend take such steps as are within his power to try to prevent any further rise in postal charges? Does he realise that a large number of people are being badly affected by the prices being charged at present? Family connections are being very much disturbed; people who want to get into contact with their friends from time to time, particularly at festival times, find it extremely difficult because they cannot get in touch by way of transport because the cost is too heavy, and the only form of contact that they have is by means of the post. Will he please bring that to the notice of the Post Office so that, instead of increasing the charges at this stage, they decrease them?
Lord ORAM: My Lords, I am sure that all noble Lords will have sympathy with the sentiments expressed by my noble friend. However, I am sure that he will also be aware of the need of the Post Office to cover their costs and to break even in their operations.
Baroness YOUNG: My Lords, in his consideration of this, will the noble Lord also bear in mind not only that it is extremely inconvenient for individuals to have to pay increased postal charges, but that it has a deplorable effect on the finances of charities, and that this,

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coupled with the ending of the Sunday collections, means that it is a more expensive, but less good, service?
Lord ORAM: Yes, my Lords. These are important considerations which my right honourable friend will no doubt have in mind, but he cannot give consideration to this matter until the Price Commission have decided whether these increases are within the Price Code.
The Earl of KINNOULL: My Lords, would the noble Lord agree that the proposals of the Post Office to increase its charges within weeks of withdrawing the Sunday collection permanently will somewhat tarnish the Post Office in the eyes of the users and reduce their sympathy?
Lord ORAM: My Lords, the Post Office is, as I have said, making every effort to break even with its postal services and reductions in services and the proposed increases are made with this end in view. I would make the point that the proposed increases in the letter post are only 7 per cent.: the last rise was something like 18 months ago, so that, regrettable though any increases might be, they are modest by comparison with the rise in the retail price index.
Baroness EMMET of AMBERLEY: My Lords, in considering the question of increases in postal charges, can the noble Lord say why a letter from Kensington to me in Chelsea took from the 19th until the 23rd of this month to arrive?
Lord ORAM: My Lords, I am sure that that was an accidental affair.
Baroness BURTON of COVENTRY: My Lords, I wonder whether the Minister and the Government could impress on the Post Office that it is not only a question of an increase in postal rates? It is also the steadily deteriorating service in the delivery of mail. Is the Minister aware that living in central London, I find that second-class postage takes on average four to five days to arrive, and that first-class postage by no means arrives the next day? Can the Minister do anything to help the consumer—which is all of us—in bringing home this fact to the Post Office?
Lord ORAM: My Lords, there is little that I personally can do; but there is the users' committee, of which my noble friend Lord Peddie is chairman, and that committee has very much in mind the kind of consideration that my noble friend has just voiced.
Lord LEATHERLAND: My Lords, will my noble friend bear in mind that the telephone service makes a huge profit every year, and as the telephone and the letter are alternative methods of communication cannot a subsidy be paid from the telephone service profits to help the writers of letters?
Lord ORAM: My Lords, it has been the practice in the Post Office to treat the postal and the telecommunications businesses as entirely separate accounting units, and it is my view that it would be inappropriate to require those who use the telephone to subsidise those who use the post.
The LORD PRIVY SEAL (Lord Peart): My Lords, I sense that it is the feeling of noble Lords that we should now proceed to the next business. We have had a good innings on this Question.

SHORT DEBATES
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, I should like to say that the next ballot concerning short debates will be held on Tuesday next, 29th March, instead of the usual Wednesday. Any noble Lord who wishes to enter for the ballot, and who has not already put down his Motion, should do so before next Tuesday, and preferably today.

PEERS' EXPENSES
3.32 p.m.
Lord PEART: My Lords, I beg to move the Motion standing in my name on the Order Paper. This Motion is designed to give effect to the £3 a day increase in Peers' expenses allowance proposed in my Statement last Tuesday. Peers who have to incur overnight accommodation expenses in London away from their only, or main, residence in order to attend the House would be

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entitled to claim reimbursement up to a maximum of £16·50 a day instead of the present £13·50.
The current maximum of £13·50 will, however, continue to apply to Peers who live within normal daily travelling distance of Westminster, and who therefore do not have to pay for overnight accommodation in order to attend to Parliamentary business.
My Lords, I realise that this measure is a modest one that will not meet the full needs of the situation established by the Review Body. But as noble Lords opposite recognised last Tuesday, the Government must be bound by the requirements of their own pay policy. For reimbursement allowances, this means that increases must be limited to the extent that costs have actually risen; and for Peers' expenses allowance, this means the increase in costs since June 1975. recognise that the coverage of Peers' expenses allowance has never been clearly defined, and the Review Body sought to remedy this by breaking expenditure down into four elements.
Their recommendations must however be seen as an entity; and, until pay policy permits us to examine them in detail, they cannot be implemented on a piecemeal basis. In the meantime, the Government have proposed the maximum increase permissible under the policy, and I commend this Motion to your Lordships' House for approval. I should perhaps add that the Leave of Absence and Lords' Expenses Committee will be meeting later this afternoon, and I understand that they will be considering the implications of this resolution as it affects the administration of the Peers' expenses allowances.
Moved, That this House approves that, where the expenses incurred by a Member of this House for the purpose of attending on any day a sitting of this House or of any Committee of this House include expenses necessarily incurred in staying overnight away from his only or main residence, the limit on the daily allowance payable to him for that day should be raised from £13·50 to £16·50.—(Lord Peart.)
On Question, Motion agreed to.

CRIMINAL LAW BILL [H.L.]
3.35 p.m.
Further considered on Report.
Schedule 5 [Alteration of penalties on summary conviction of certain offences triable either way]:
Lord GIFFORD Lord GIFFORD moved Amendment No. 76A:
Page 51, line 33, leave out ("3 months or £500, or both") and insert ("in the case of offences relating to cannabis or cannabis resin, £500; in the case of offences relating to other Class B drugs, 3 months or £500, or both.").
The noble Lord said: My Lords, I beg to move this Amendment. It is in the same terms as an Amendment that I moved at the Committee stage of the Bill, and its purpose is to remove from magistrates' courts the power to impose sentences of imprisonment on summary conviction of possessing cannabis or cannabis resin, cases of simple possession. When I moved the Amendment in Committee it attracted a considerable volume of support from all quarters of the Committee, and on re-reading the speeches and contributions of noble Lords and noble Baronesses it is clear that the basis of the support for my Amendment was that it was not an Amendment to legalise "pot". The power to impose fines, indeed substantial fines, for this offence remained. The penalties for supplying and importing cannabis were untouched. But the penalties for simple possession, on conviction in magistrates' courts, were to be reduced under the Amendment (to be monetary only fines) so as to correspond with contemporary attitudes and the state of contemporary knowledge about this drug.
Since many noble Lords are here today, perhaps I can put the case for the Amendment a little more fully than I did in Committee. The case is this. As a matter of scientific opinion, the evidence as it stands today, the corpus of research —and there has been much of it—is that the use of cannabis in moderate quantities does little or no harm to the user. That indeed was the conclusion to which the committee chaired by my noble friend Lady Wootton of Abinger came when it reported many years ago. It is the conclusion which, though in

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slightly different terms, but to the same effect, nearly every authoritative commission which has been set up around the world to consider cannabis has come to. Secondly, as a matter of social policy it is not healthy to retain as an imprisonable offence an activity which, for better or for worse, many thousands of people commit every day and in committing it think that they are doing no wrong. That does not mean that one legalises the substance; but it does give us pause to consider whether in fact it is wise to imprison people for having it.
Finally, as a matter of public spending, I am sure that my noble friend Lord Harris of Greenwich will have to take on board the argument that any fair and reasonable means of cutting down the prison population today is to be welcomed. As a matter, finally, of humanity, the fact that persons can be sent to prison for the simple possession of cannabis—that is, possession without any intent to supply it to others—is something which leads to human tragedy.
In London, certainly in my experience as a practising lawyer, benches of magistrates and stipendiary magistrates do not, as a whole—in fact, never in my personal experience—impose an immediate custodial sentence for the possession of cannabis; but there are certainly benches around the country which do. I was talking only last weekend to a friend who is a magistrate in a Border country town, and the state of knowledge there is very different. There is blind ignorance on the bench about cannabis. It is equated to heroin, it is considered a heinous crime for any young person to possess it. Undoubtedly people are being sent to prison who never should be there, and even if they succeed in getting out on appeal it does not do that much to relieve the tragedy. The figures that I have show that some 514 people were sent to prison for the possession of cannabis alone. That figure includes some sent by the Crown Courts, who would not be affected by my Amendment, but I do not know what the proportion is.
In Committee the experience in the United States of America, where eight States have passed similar legislation, and in Holland, was cited, and on the day after the last proceedings on Report stage of this Bill we read in the newspaper
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that Dr. Peter Bourne, the director designate of the White House Office of Drug Abuse Policy, is going to propose a similar change in the federal law of the United States. He is quoted as saying:
"We will continue to discourage marijuana use, but we feel criminal penalties that brand otherwise law-abiding people for life are neither an effective nor an appropriate deterrent."
It is very much in the same spirit that I commend this Amendment to the House.
In reply on Committee stage, my noble friend Lord Harris did not seek very energetically, at any rate, to justify the imprisonment of people for the simple possession of cannabis. What he said was this:
"The Advisory Council"—
that is, the Advisory Council on the Misuse of Drugs—
"in its observations last year recognised the anxiety felt about the use of custodial sentences for offences of possession of cannabis".— [Official Report, 10/2/77; col. 1350.]
My noble friend did not say, and I hope he will say, what in fact is the advice of the Advisory Council about this matter. Later, he said:
"… I am not persuaded that the time is yet right to go wholly in the direction put forward by my noble friend";
that is to say, me. That was hardly a trenchant rebuttal by my noble friend of the case for this Amendment—indeed, it was virtually a concession of the justice of it—and I therefore hope that a still more acceptable reply will be forthcoming this afternoon.
About the only point that my noble friend made was that it was not a very tidy Amendment because it put cannabis, which is a Class B drug, into a separate class, in effect, for the purposes of this section. If it is not a tidy Amendment, I hope that in due course the Government can tidy it up. However, as I understand it, it achieves the purpose for which I put it forward; that is for this House to be able to say that it does not agree that people should be sent to terms of imprisonment on summary conviction for the simple possession of cannabis. My Lords, I beg to move.
3.42 p.m.
Lord AVEBURY: My Lords, perhaps I could make it clear that I personally much prefer the Amendment which is in

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the name of the noble Lord, Lord Gifford, to my Amendment which, just before the beginning of this debate, I decided not to move. When I put down my Amendment it was intended to be very much a second best alternative to the Amendment of the noble Lord, Lord Gifford, and I had not appreciated that it would come earlier on the Marshalled List, so that we could not take his first and mine afterwards. So what we have to do is to consider the proposition, which we have already had one look at in Committee, and then, if it does not commend itself to the House, we can return to the less effective and less satisfactory alternative at a subsequent stage of the Bill.
My Lords, if I can attempt to summarise the attitude of the Government when we debated this matter last time, we have the proposal in the Bill to reduce the penalties which are applicable under the Misuse of Drugs Act for the simple possession of cannabis (as well as, of course, of amphetamines) from six months to three months. The Government's opinion is that the existing penalties are too high and that they should be reduced, but they are not persuaded, as the noble Lord, Lord Harris, told the Committee last time, that the occasion is yet right to go the whole way and to abolish all custodial sentences because, as he explained, and as the noble Lord, Lord Gifford, has reminded us, the cannabis Working Group of the Advisory Council on the Misuse of Drugs is in the process of conducting a fresh review. It was not absolutely clear to me whether this review is a review of the evidence on the possible harm to health which might be done by cannabis, or a review of the effectiveness of the custodial penalties, which we are discussing on this Amendment, as a deterrent against the use of cannabis. The noble Lord promised some further information at the Report stage, though he could not undertake that the Government were likely to change their attitude, which is generally a circumlocution for a statement that the Government are not going to change their attitude. I hope I shall be proved wrong when we hear the Minister's reply later on.
The noble Lord, Lord Gifford, referred to experience elsewhere, and this is building up into an impressive body of evidence. The reduction in penalties which is already
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provided for in the Bill and which we are proposing should go a little further is part of a general process of decriminalisation which is taking place across the world and has been taking place steadily over the last 10 years. In a number of States of the United States, possession is no longer an offence; in Holland and Denmark, the police have not charged anyone with possession since, I believe, about 1973; while in Canada there is a Federal Decriminalisation Bill before Parliament. The noble Lord, Lord Gifford, also mentioned the latest developments in the United States, which I shall come back to in a minute.
First, could I say something about the attitude of the police and the magistrates' courts in this country? This change in the climate of opinion which has led to a progressive reduction or abolition of penalties has also been reflected in the sentencing policy of the courts, and one may reasonably suspect the assiduity with which the police pursue people who may later on be charged with possession. The number of convictions for offences involving cannabis, of which between 80 per cent. and 90 per cent. have been for simple possession, reached a peak in 1973 and has declined in the years since then. It does not seem likely, my Lords, that the actual use of cannabis has been declining, so that was how I deduced that the police must have been making less of an effort than they had been making to catch people who were simply using cannabis and doing nothing else. At the same time, the proportion of those found guilty who received custodial sentences has declined slightly from 12 per cent. in 1973 to 10 per cent. in 1975; and, as the noble Lord, Lord Harris, pointed out in Committee, only one first offender was sent to prison in 1974 and three in 1975.
There was reference to the attitude of JPs in a very interesting article in the Sunday Times recently. It mentioned a study which was undertaken within the Home Office and came up with some surprising answers about the opinion of magistrates. It showed that they believed, generally speaking, that simple possession was often no more serious than breaking a window worth less than £100. It was alleged by the author of this article, I am sure quite incorrectly, that the Home Office was alarmed by the liberality of the magistrates and had, therefore, suppressed

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this report. It would be interesting to know from the noble Lord, Lord Harris, whether such a report exists in the Home Office and whether there is any reason why we should not be informed about the attitude of the magistrates.
On the other hand, there is tremendous diversity of sentencing practice, as I am sure the noble Lord, Lord Harris, is aware. The report of the organisation "Release", entitled Diving off the Deep End, shows that some magistrates are still extremely old-fashioned in their attitudes, as the noble Lord, Lord Gifford, has said. We see that, as a result of maintaining these custodial penalties, the whole career and life of a young person may be ruined if he happens to live in one part of the country; whereas he will, fortunately, suffer only a fine if he lives in another part of the country where the attitude of the magistrates is more sensible.
The noble Lord, Lord Gifford, also mentioned the economic aspects of this matter. I would seriously suggest, with the seriously overcrowded state of our prisons and the burdens they impose on public spending, that the onus should always rest on those who advocate the retention of short prison sentences for any offence whatsoever to prove that they are effective, rather than on those who are asking for a reduction or abolition to prove that that will maintain as effective a deterrent as exists at the moment.
Lord DENHAM: My Lords, the onus is surely on those who seek to change the law to prove the need to change.
Lord AVEBURY: My Lords, that is precisely what I am saying is not the case. If the prisons are overcrowded and large numbers of persons are being sent to prison for short periods—and the noble Lord, Lord Gifford, gave the figure: over 500 in 1975—it is up to noble Lords who advocate retention of custodial penalties to prove that sending those 500 young persons to prison for periods of up to six months was effective as a deterrent, rather than for us who support this Amendment to prove that if the custodial penalties are abolished we shall still have an effective deterrent. That is what I am arguing. Unfortunately, as R. G. Smart has argued in his paper Effects of legal restraint on the use of drugs: review of empirical studies,
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virtually nothing is known of the effects of variations in legal penalties; so there is no objective scientific evidence that I can lay before your Lordships on this subject.
I can only say that if, as claimed, 3·8 million people in the United Kingdom have tried cannabis at least once—and that figure comes from a survey carried out by the BBC in 1973; while other authorities have put the figure higher, at over 4 million—then, clearly, on the arithmetic, the chance of any individual being caught for possession is less than about 1 in 300. It is possible to argue, and I dare say that it will be argued, that if it was not for the custodial penalties, an even larger number would use cannabis. But if it is of paramount importance to stop the habit from growing and we were convinced that these custodial sentences were effective, then obviously it would be wrong for us to contemplate reducing the maximum length of sentences from six months to three months. Yet no one has argued that we should restore the original penalties provided for under the Misuse of Drugs Act. Still less ought we to draw attention—as did the noble Lord, Lord Harris—to the fact that magistrates are not sending first offenders to prison; because that will encourage people to think that they can get away with it and that they are not likely to be given a custodial sentence for the first offence, if that is the consideration that looms uppermost in the mind of the average person who tries this particular drug.
What we can be certain of, under the present law and with the reduced penalties in this Bill, is that a very substantial number of people are going to be labelled as criminals with the possible additional consequences to them of expulsion from the college or university that they attend, or loss of job opportunities if it happens a little later in their lives. We undermine the credibility of drug education by classifying cannabis with the amphetamines and we encourage disrespect for the law, particularly among young people, the vast majority of whom, as the noble Lord, Lord Gifford, said, see nothing whatsoever wrong in taking cannabis.
The scarce resources of police are diverted from the formidable task of combating real crime and detecting the uses of hard drugs and the pushers of all

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kinds of drugs. The courts are choked with many thousands of cases which ought not to be there at all and public expenditure is inflated by jailing over 500 of these people in the course of a year.
On the other hand, there are plenty of spine-chilling stories appearing in newspapers, such as the one by Ronald Butt in The Times recently, which appears to have been a re-hash (if I may use that term in the present context) of another article earlier in the Daily Telegraph; and that, in turn, I believe, was based on some papers delivered at a conference at Savannah, Georgia, as long ago as 1974 and published by the National Institute of Drug Abuse under the title The Pharmacology of Marijuana. In the article in the Daily Telegraph, which analysed the papers, although it did not give the source, it was said that scientists at the Hebrew University in Jerusalem and the U.S. National Institute on Drug Abuse have found that large doses of cannabis weaken the immune response system, damage the lungs to a greater extent than cigarettes, reduce the production of testosterone so that a pregnant girl who smokes marijuana heavily might give birth to a boy with under-developed or even non-existent genitals.
One cannot enter into a detailed discussion of the research work on this occasion, but I must say one word about alarmist reports such as these which have appeared, not entirely coincidentally, I suggest, just at the moment when we are discussing the reduction of penalties, and which are calculated, perhaps, to influence those who have taken hitherto a rather cautious line on the matter. As to immune response, the U.S. Department of Education and Welfare report to Congress in 1975 reviewed the evidence and concluded:
"While a number of investigators have published findings that suggest that marijuana may interfere with cell-mediated immunity, other investigators have not found such evidence … the clinical significance of the positive findings remains in considerable doubt."
The evidence on lung damage is equally inconclusive, showing merely that all forms of smoke inhibited the action of lung cells against bacteria.
The NIDA Report that I mentioned contained one paper on the depression of plasma testosterone with high levels
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of marijuana administration. That concerned 13 males who were in-patients at the time—and there was no control group. The decrease in testosterone plasma levels was found not to be dose-related and it has been conceded since that the variations experienced in that study could have been within the normal limits found in the general population. There are no grounds whatsoever for the assertion in the Daily Telegraph that if a mother takes heavy doses of cannabis her male child could have underdeveloped or missing genitals. This is an example of irresponsible journalism which I was surprised to find in an otherwise reputable newspaper like the Daily Telegraph. The latest annual report of the NIDA, issued last month, concluded, generally speaking, that while the long-term health factors of marijuana are still unclear, the short-term effects do not appear to be as severe as was once feared. Dr. Peter G. Bourne—whom the noble Lord, Lord Gifford, has already mentioned —who is Director-Designate of the White House's Office of Drug Abuse Policy, says:
"While marijuana intoxication seems to carry with it the same hazards as alcohol with respect to the operation of automobiles, it is not physically addicting and in infrequent or moderate use probably does not pose an immediate substantial health hazard to the individual."
In the light of present knowledge, the White House has now decided that the federal law should not provide for imprisonment in cases of simple possession. Fines rather than gaol sentences have proved effective and appropriate approach in many States, says Dr. Bourne. That is equally true on this side of the Atlantic. I hope that your Lordships will follow the example which is being set in the United States and now abolish imprisonment for this offence.
4.2 p.m.
Baroness WOOTTON of ABINGER: My Lords, I should like to begin by making one or two observations. The Amendment moved by the noble Lord opposite stands in the names of noble Lords who are members of every principal political Party in this House. I assure your Lordships that this is not due to any secret pact of which you have not yet been informed. Those names were there long before there was any risk of that.
My second general observation is that the British never do anything by wholes,

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they always do it by halves. We appreciate that my noble friend the Minister has altered the present law on Report stage of this Bill, so as to reduce the maximum sentence that the magistrates' courts may impose for simple possession from six months to three months. He has taken one little tiny step, and we should like him to take one little tiny step more.
This is an extremely moderate Amendment. It proposes to deal only with summary convictions so that the more serious cases can still be dealt with on indictment. It proposes merely to add the next step which would clear the really important aspect—the prison stigma—about which the noble Lord, Lord Avebury, and my noble friend Lord Gifford have spoken so eloquently. That is a stigma which can be extremely serious whether one goes to prison for one month, six months or a year. It is the fact of imprisonment which is damaging to a person's future, even with the Rehabilitation of Offenders Act.
We are not objecting to the fine; we are not objecting to the fine being increased, and we are quite happy that if people want their indulgences, they should pay for them. For that reason, we are concentrating entirely on sending people—and they are mostly young people—to prison for possessing, not for trafficking, any quantity, be it only an ounce or two, of this particular article.
We are told that the numbers who go to prison are fairly large, but I think I am right in saying that the greater part are not affected by this Amendment; they are people who go to prison on indictment by judgment of the Crown Court. If it is a fact that only a small handful of magistrates are sending to prison a small number of people for this offence, why is it worth keeping the power to imprison at all? It has really become obsolete. As has been shown by my noble friend, it is obsolete nearly over the whole world now. Over the Western World movement has been very strong towards abolishing imprisonment for simple possession.
It is also said to be administratively untidy because if this Amendment is accepted cannabis will be in a class apart. Drugs are classified as follows: Class A, which are the most dangerous, and include heroin; Class B, which include
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cannabis; and Class C, which include many drugs that we do not talk about because most of us have never heard of them. They do not get into the popular drug mythology. If we were to accept this Amendment, it takes cannabis out of any one of the three classes and treats it as a separate article. If it is a separate article, my Lords, why should it not be so treated? If it is not as dangerous a drug as those listed in Class A, and not as innocuous as those listed in Class C—though Class C carries heavier penalties than those for which we are asking—and certainly quite as innocuous as its "mates" in Class B, why should it not be taken out and treated as an article by itself? In any case, is it right that an argument from administrative convenience should weigh against what may be the career possibilities, even for a small number of young people? Administrative problems can be solved: where there is a will, there is a way. For that reason, I hope we will not put administrative convenience in front of the importance of doing away altogether with the prison stigma for possessing this substance.
4.6 p.m.
Baroness MACLEOD of BORVE: My Lords, very briefly, I should like to tell your Lordships why I have added my name to this Amendment. There are two reasons. First, as an individual I deplore and would never condone the use of drugs. Secondly, as a magistrate I would never, either for the first offence or any other offence, send a user of cannabis to prison. If I felt that the user of cannabis required a greater penalty than I was able to impose, I would send that person to the Crown Court. I would not impose a prison sentence because I do not see what good it would do. I entirely agree with what the noble Baroness, Lady Wootton of Abinger, has told us.
Perhaps I may tell one small story which illustrated the situation to me. Last week, I saw a barrister in the street who had appeared before me many times. I asked him for his views on this Amendment. He said, "You remember Tom Brown whom you saw 18 months ago, the 16-year-old smoker of cannabis, do you not?" I pretended to remember. The barrister said, "I saw him in the street and I said 'Tom, are you back on

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the cannabis?' He said, 'What! After all that that old bag on the bench told me!'" My Lords, if people like me, who are old bags, can frighten the life out of youngsters regarding the use of cannabis or any other drug, I feel that it is better for the defendant and it is also cheaper for the Government. I urge the Government to let us have this Amendment. I do not think it is right to send people—they are usually young—to prison for this offence.
4.8 p.m.
Lord JANNER: My Lords, I have listened with considerable interest to the debates on this subject. I have come to the conclusion that an Amendment of this sort is something which ought to be supported. The general opinion which prevails, not only in this country but throughout other parts of the civilised world, is that the smoking of cannabis by youngsters—and sometimes by older people—is something after the nature of the smoking of a "fag" in the WC by a youngster who is trying to see what it tastes like. I have come to the conclusion that we ought not to have any prison sentences at all regarding this offence; but here is a modification which I hope the Government will accept.
The very idea that imprisonment can be inflicted on a person who has indulged in this practice places him in an extremely serious position. It has been said already that his character is affected, and can be affected, not only by the fact that he has been sent to prison, but by the fact that he has committed an offence for which he is imprisonable. For example, such a person who wishes to travel abroad may very well be prevented from obtaining a visa for one country or another. I do not know whether that would apply to America at the present time. The fact that a prison sentence can be imposed is in itself something which stands against an individual for the whole of his life. I know of a case of a student who, quite recently, although he was not sent to prison, was accused of this offence. His studies were such as would have taken him to the States. I was myself doubtful in that case whether a conviction would not prevent a visa being granted and I made an appeal to the bench, asking for a conditional discharge, because I felt—and I think many people would feel the
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same—that an offence of this description (where only a small amount of cannabis was involved, incidentally) could stand against a person for the rest of his career.
I believe that a person who smokes very heavily is in a very much worse position—but I shall not pursue that since my noble friend Lord Ritchie-Calder says that he smokes heavily! I am not at all sure, my Lords, that smoking does not do very much more damage than in cases where cannabis is used to a small extent. I have often said in this House that I think, in the main, that magistrates in this country exercise their duties in a very reasonable and proper way; but the stigma of a conviction exists, although the offence is not in itself serious or as serious as it might be if the prosecution wanted to take it elsewhere. I think the penalty of imprisonment for an offence of that description, as a possibility even though not a probability, is something which ought not to remain on the Statute Book.
There has been a very considerable change of opinion with regard to the effects of cannabis and, if nothing else, I hope the change of opinion, which now results in the fact that most people regard this offence—in its proper light, I think—as not being one which would justify anything in the nature of imprisonment, in the modified form in which the Amendment stands, will induce my noble friend to accept it and perhaps at a later stage persuade him to introduce a measure himself, whereby the whole thing can be resolved.
Lord BOYD-CARPENTER: My Lords, I hope that the speeches to which the House has listened have not convinced the Minister that there is unanimity of view over this Amendment. I, for one, am extremely unhappy about it, for one basic, simple reason. One of the noble Lords who supported the Amendment said with truth today that many young people did not regard the possession of this drug as a serious matter. That is undoubtedly true; but surely in such a situation this is the wrong moment for Parliament to enact this Amendment and for the State is to treat this as a less serious offence than hitherto. I do not think we can get away from the fact that if an offence which has been punishable by

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imprisonment has the custodial penalty taken away from it, society is indicating that it regards the offence as less serious than it used to do. I would suggest that is so. The noble Lord says that it does, and no doubt he feels that to be true. I very much doubt, with respect, whether he is any more competent than I or others of your Lordships to determine what society thinks generally. Whether he is right or wrong, the issue before us is whether this House wants to indicate to the public, and above all to the young people about whom we have heard, that this offence is now regarded by society as less serious than it used to be.
I agree with my noble friend Lady Macleod that it is not often necessary to impose imprisonment. Indeed, I might say that if, throughout the country, there were benches equipped with such formidable characters as herself, it might never be—because, as she has told us, her tongue proved a more than sufficient deterrent to a repetition of the offence. Alas, my Lords! not all the benches are so magnificently equipped! But it is surely important, as those who are concerned with the administration of justice, or, as in my own case, who were so concerned many years ago, must be aware, where one is handling the sort of case in regard to which one is not necessarily going to send offenders to prison, to be able to say with truth: "We have found you guilty of an offence which is punishable by imprisonment, but we are not going to send you to prison in this case, for the following reasons" and then deal with the prisoner more leniently. Take away the penalty of imprisonment, and you take away a great deal of the deterrent power behind the bench. I do not know how this House will decide the question but I suggest, with very great respect, that at this moment, with so many young people susceptible to the temptations of this drug and the blandishments of those who push it, if this House were to say, "Very well, this is not now a very serious offence; we will scrub 'the penalty of imprisonment", we should bear a very serious responsibility indeed. If there should be a vote, my vote will be given against the Amendment.
Lord GORDON-WALKER: My Lords, in view of what the noble Lord has said, it seems to me logical that he
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ought to be against the clause as it stands, because it reduces the custodial sentence from six months to three months; which indicates that this House and the Government regard the offence as less serious than they used to in the past.
Lord BOYD-CARPENTER: My Lords, would the noble Lord allow me? We are not debating that matter. At the moment we are debating this Amendment.
Lord GORDON-WALKER: Yes, my Lords, I quite agree; but I take it that the noble Lord is prepared to swallow the reduction from six months to three months, despite what he says about the danger of indicating that the House regards this offence as less serious than it was.
Lord BOYD-CARPENTER: Perhaps, my Lords, in the words of Lord Oxford and Asquith, the noble Lord will "wait and see."
Lord GORDON-WALKER: My Lords, I am always prepared to do that as regards the speeches of the noble Lord. I should like to ask my noble friend Lord Harris one question. If, as seems very probable, the proof of the damage done by smoking tobacco is greater than the proof of the damage done by smoking small amounts of cannabis, should we not in logic make it an imprisonable offence to be found in possession of tobacco? If he says, quite rightly, that you cannot do that because it is quite unenforceable, then I would ask: Is it not equally impossible to enforce the law as it stands? All the figures and all the experience show that masses of young people smoke this material and are never caught. Therefore, this is an unenforceable law against the people it is aimed at.
4.20 p.m.
Lord RITCHIE-CALDER: My Lords, I did not mean to intervene on this matter, but I have been induced to do so by the last intervention but one. I think this is one of those situations in which your Lordships will have either to condone or refuse to condone absolute legal hypocrisy—because this is hypocrisy. As my noble friend Lord Janner said, I am a heavy smoker. I am in possession of a dangerous drug. I drink a dangerous

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drug called alcohol. Why on earth should we go on pretending? The younger generation realise what cannabis really is. It is quite inoffensive, and I would defend it on chemical and pharmaceutical grounds, in the sense that it is much less offensive than what I indulge in. Why are the younger generation being forced into a situation where you are making illegal something which I maintain, pharmaceutically, is not maintainable as a dangerous drug? What you are doing is creating a false sense in younger people by making them potential criminals. I am very heavily fined as a drug addict. I pay very heavy taxation on my tobacco. We are in fact, using the fines as a taxation on cannabis.
I have more experience of the United States than I have of this country, but there you have a complete exposure of this. By making cannabis and these other drugs go under the counter, the youngsters have been driven into the hands of the drug pushers. Then, when they cannot find any kick in cannabis, they turn to harder drugs. We cannot go on pretending that this is something for which we are not responsible. We have to take a position on this. I think it is far better that we in this House should be frank. I am not trying to modify the present situation, except in supporting the theme of my noble friend Lord Gifford, but I say that we are creating an entirely false, hypocritical situation for "the old bags on the Bench".
Lord HUNT: My Lords—
Lord HAILSHAM of SAINT MARYLEBONE: Let us get on with it.
The MINISTER of STATE, HOME OFFICE (Lord Harris of Greenwich): My Lords, tempting though it is to get up at the urging of the noble and learned Lord, I did not wish to interrupt the noble Lord, Lord Hunt, if he wanted to speak. I was going to sum up my views on this matter, but if the noble Lord wishes to address the House I feel that he should be given the opportunity.
Lord HUNT: My Lords, I shall be extremely brief and I am most grateful to the Minister who has given way to me. Having listened with great interest to the whole of this discussion, and having had no intention at all of intervening, I should
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like to say to the noble Lord, Lord Boyd-Carpenter, that if other noble Lords were disposed to follow him into the Lobby against this Amendment, they would be in grave danger of imposing elderly value judgments on what the great majority of young people feel, and on what has not been proven to be a dangerous practice. I shall certainly vote for this Amendment.
Lord HARRIS of GREENWICH: My Lords, as has been made clear by those who have spoken in this debate, the central purpose of this Amendment is to remove the possibility of imprisonment being imposed by a court of summary jurisdiction on conviction of an offence of unlawful possession of cannabis or cannabis resin. The Amendment which my noble friend Lord Gifford has moved would remove that possibility entirely. The Amendment not moved by the noble Lord, Lord Ave-bury, would have removed it only for the first two offences.
There was, indeed, as my noble friend Lord Gifford rightly said at the beginning of his speech, a notable unanimity of view on this subject when we discussed it during the Committee stage. I was certainly impressed by the strength of feeling on this matter, and I undertook that we would look at it, without giving any guarantee that we would change our position. I also asked the Advisory Council on the Misuse of Drugs to discuss the position in the light of that debate, and arrangements were made for a special meeting of the Cannabis Working Group of the Advisory Council to be held, but there has not as yet been an opportunity for the Working Group to report to the full Advisory Council. We have approached the matter sympathetically, in view of the opinions expressed in the last debate. But I have, nevertheless, to say to the House that we oppose this Amendment for two unconnected reasons.
The first reason is technical but, none the less, I think it is decisive in itself. If one looks at the Misuse of Drugs Act 1971, on which our present system of controls rests, it is evident that the scheme of the Act is to establish three classes of drugs, A, B and C, into which all controlled drugs should fit.
Baroness WOOTTON of ABINGER: My Lords, will my noble friend give way? Is it the case that the Home Office cannot count to more than three?
Lord HARRIS of GREENWICH: My Lords, that is an interesting intervention by my noble friend. I would not say that I hope she will be persuaded by the argument which I am about to put to the House, but I think that she will be even better informed after I have finished this passage of my speech. As I have indicated, the Bill sets out, in a Schedule, a carefully devised system of penalties for all the various offences, the penalties being systematically graded from Class A drugs—the most serious—to Class C. If the penalties applying to a particular drug are thought to be too severe, the remedy is to transfer that drug to the next lower class and the Act makes provision for this to be done, as my noble friend is certainly aware, by Order in Council.
I am not saying, of course, that the penalties laid down for the various classes cannot be altered; indeed, the Bill provides, as my noble friend Lord Gordon-Walker has pointed out, for various alterations which have given rise to the Amendments which we are discussing today. But if the penalties in the Schedule are altered, the alterations should surely apply to all drugs in a particular class. That is the scheme of the 1971 Act—
Several noble Lords: My Lords—
Lord HARRIS of GREENWICH: My Lords, I urge the House to listen to the arguments. If people would like to intervene I will gladly give way. But it seems far more sensible to listen to the arguments, and then I will gladly give way to anybody who wishes to rise. As I was saying, that is the scheme of the 1971 Act and so the object sought to be achieved by this Amendment, if it is accepted in principle, should be achieved in a different way which would conform to the carefully devised framework of the 1971 Act.
The passage of this Amendment would have a quite remarkable effect. Possession of cannabis, which is a Class B drug, would not be an imprisonable offence in any circumstances whatever on summary conviction. But possession of a Class C drug, which is a less serious matter and is so recognised in the Act which is the central peice of legislation dealing with drug abuse, would continue to be an imprisonable offence on summary conviction. With great respect to those who
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have spoken in this debate, that seems to he a wholly anomalous and indefensible position. If it is argued that the less serious drugs should be taken away from the area of imprisonment, it seems to me that the least serious drugs are the ones to which there should clearly be amendments. Though this point was touched on in the last debate that we had on this matter, it is interesting that no one has seen fit to put down an Amendment to deal with that point.
The second objection to this Amendment is even more fundamental; that is, the extremely confused situation which has arisen since we last discussed this matter during the Committee stage, as a result of legal proceedings in the case of Regina v. Goodchild. This deals with the point which was put to me by noble friends Lord Gordon-Walker and Lord Ritchie-Calder, about the possession of tobacco. Whatever may be one's view of tobacco, the fact is that this judgment which we have had in the last few weeks deals with the general question of cannabis, and it seems to me, for reasons which I will outline, that this is a powerful argument in itself. I would ask for the indulgence of the House when I try to sketch out what has become an exceptionally complex matter.
As I have pointed out, the 1971 Act established cannabis and cannabis resin as Class B drugs and defined "cannabis" as,
"… the flowering or fruiting tops of any plant of the genus cannabis from which the resin has not been extracted."
The Act nowhere referred to cannabis leaf, and the position with regard to possession of leaf has hitherto been a matter of uncertainty. I must ask your Lordships to bear in mind that a substance known as cannabinol, which the layman might perhaps be allowed to describe as the essential ingredient of cannabis, is classed in the Misuse of Drugs Act as a Class A drug, together with its closely associated derivatives. The cannabis plant of course contains cannabinol and the Act makes it clear that cannabinol is a Class A drug only when it is not contained in the flowering or fruiting tops of the cannabis plant or in resin extracted from the plant. Cannabinol is also contained in the cannabis leaf and it follows logically that if the leaf is not

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within the Class B definition of cannabis and cannabis resin then it is not within the exemption attached to the definition of cannabinol as a Class A drug. A Class A drug would be untouched by the Amendment which we are discussing at the moment.
This background is necessary to an understanding of the position which arises from the Goodchild case. On 13th January 1977, the Court of Appeal set aside the Portsmouth Crown Court's convictions of Mr. Kevin Goodchild of possessing cannabis, and possessing cannabis with intent to supply it to another, on the grounds that the cannabis leaf material produced in evidence was not "cannabis" as defined in the Act. On 3rd March, the Portsmouth Crown Court, by leave of the Court of Appeal, dealt with two charges against Mr. Goodchild which had been left on the file at his previous appearance, for being in possession of a cannabinol derivative, and being in possession of a cannabinol derivative with intent to supply it to another. The prosecution case was that the cannabinol derivative was contained in the cannabis leaf material produced in evidence. The Crown Court convicted on both charges. The effect of these judgments is to rule that, although cannabis leaf itself is not a drug controlled under the Misuse of Drugs Act 1971, persons found with leaf material in their possession are, in fact, liable to prosecution for the more serious offence of possessing a Class A drug which is contained in the leaf.
Your Lordships will recognise that these developments have a substantial effect on the whole law relating to the control of cannabis. It will clearly be some time before the legal proceedings are concluded, since I understand that an appeal may eventually be made to your Lordships' House. I am not sure that we shall need to wait until that stage has passed before we can reach a conclusion on the matters raised in the Amendment which we are discussing, but certainly there has not been time for us to look into the implications of the Goodchild decision if it should be upheld on appeal, and we must necessarily advise against deciding one particular issue without clearly seeing how it relates to
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the other and larger questions which have now arisen in the courts. Clearly we shall wish to have the advice of the Advisory Council on the whole question of the control of the cannabis group of drugs before we decide how to proceed.
I can give your Lordships a specific assurance that the Government will give the most serious attention to the views that have been expressed, but I cannot give—and I must make this absolutely clear—any explicit commitment today, for the reasons I have indicated, to any particular course of action. I must make it clear that in our view my noble friend's Amendment in any event goes too far in proposing to remove the possibility of imprisonment not only for a first or second offence—that was the issue dealt with in the Amendment of the noble Lord, Lord Avebury, which has not been moved—but for any number of offences on summary conviction. However, the Government will seriously look into the possibility of meeting the point so far as first offenders are concerned.
Before I sit down, I should like to deal with one particular point which was touched on by a number of those who spoke—that is, the recently proclaimed position of the new Administration in the United States. I cannot claim to have any detailed knowledge of the drug situation in the United States, although on a previous occasion I spent some time discussing these matters with the drug administration and the various enforcement agencies in the United States. All I would say, with very great respect, to those concerned is that, although it is certainly important to take into account the position which has been adopted by the new Administration, it is only right for us to bear in mind that that position relates to a country with a totally different drug situation from the one which exists in this country.
4.35 p.m.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, I was not anxious to take part in the debate until after the Minister had spoken. One of my reasons was that I was very much concerned with what the noble Lord was going to say about the case of Goodchild. I agree about its important connotation in relation to this Amendment, and I am quite

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clear in my own mind that, if it is desirable to make a change in the law, the Government must make up their mind now. They cannot delay making up their mind in view of the decision.
What parts of the cannabis plant are going to be liable to prosecution for what? The combined effect of the decision of the Court of Appeal—that leaf does not count—and the decision, I think, of the Crown Court, or perhaps it was the Court of Appeal as well, that the derivative which is in leaves does count and counts more seriously, is something which cannot stand for a moment. That must be plain, I think, to everybody who has taken part in the debate. I am glad to know that the Government are going to do something about the problem, because it does not brook delay. I do not think that we can handle the problem until it is dealt with one way or the other.
The Minister was good enough to say that he would take into account what had been said. I hope, therefore, that what I say will also be taken into account because I take a very different view about the merits of this matter—though not about its technicalities with which I do not propose to deal to any great extent, now that I have dealt with Goodchild— from the view that the majority of the Members of this House have so far taken.
The noble Lord, Lord Gifford, said—and, as one would expect, it is factually correct—that this is not an Amendment to legalise cannabis. However, I must tell the noble Lord, Lord Gifford, and I must submit to the House, that although it is factually correct it is a wholly misleading statement. Hardly an argument was presented either by the noble Lord, Lord Gifford, or the noble Lord, Lord Avebury, or any of the subsequent speakers, especially the noble Baroness, Lady Wootton of Abinger, which was not an argument for legalising cannabis.
It is not tolerable to go tottering along step by step. Sooner or later, the country has got to make up its mind about cannabis. It is no good saying, "We are going to remove the penalty of imprisonment but we are going to allow a £500 fine". The noble Lord, Lord Ritchie-Calder says it is hypocrisy to keep the law as it is. Well, it is still greater hypocrisy to do that. The noble Lord, Lord
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Ritchie-Calder, says "Oh well, a fine is only in the nature of a tax". But it is not in the nature of a tax. The noble Lord, Lord Ritchie-Calder, pays his tax; but so does everybody else who smokes and so does everybody else who drinks. It does not depend upon the police finding the noble Lord in possession of a pipe with dottle inside it and the other disgusting ingredients of his horrible habit. The noble Lord pays the tax like everybody else, so there is no relation between the payment of a tax and the payment of a fine. This is, quite frankly, nonsense. I will give way in a moment to the noble Baroness, but I really must deal with one point at a time. I repeat that there is no relation between a tax and a fine for those who happen to get caught, so let us get that clearly out of our mind and let us call it hypocrisy—because that is what it is.
Baroness WOOTTON of ABINGER: My Lords, the noble and learned Lord is arguing that if the penalties for certain actions are reduced, inevitably it is a step on the road to legalising the action. The noble and learned Lord is also arguing, if I understand him rightly, that it is a nonsense if a fine is imposed without a corresponding alternative sentence of imprisonment. Is the noble and learned Lord unaware that there are a great many actions which are punishable only by a fine, and that all we are suggesting is that this should be another of them? Many motoring offences fall into that category.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, of course I am aware of that, but what the noble Baroness has not yet appreciated and what, if she had waited just a little longer, she would have heard me say is that every argument that has been adduced, including her own, for reducing the penalty of imprisonment is equally applicable to the abolition of the offence altogether.
Let us take them now, as I was proposing to do before I was interrupted. As a matter of scientific opinion, the use of cannabis in moderate quantities does little or no harm to the user. That was the first argument adduced by the noble Lord, Lord Gifford. Of course, if it does little or no harm to the user, then one does not want to fine people for doing to themselves what does to them

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no harm. As a matter of social policy—and this is his second argument—it is not desirable to retain as imprisonable an activity which some thousands of people do every day, and think they do no wrong. Of course it is also quite unpardonable, if in fact it does no harm, to punish them by a fine. But the idea that when they think they are doing no harm, and thousands of people do it every day and there is no harm in it, that you ought to go on fining them but not imprisoning them, is ludicrous, hypocritical nonsense. Therefore, when the noble Lord, Lord Avebury —and this is the third argument—refers to the decriminalisation of cannabis across the world, what he is proposing is not to decriminalise cannabis but to alter the penalties; to keep it criminal but to do something else about it. This is really not facing the issue and it is not intellectually honest.
Then the noble Baroness, Lady Wootton of Abinger, who interrupted me, said that the noble Lord has taken a little step on the way by reducing the penalty from six months to three months, and she just wants him to totter along the way another little step. But what is the end of the journey? That is the point. There is not an argument which has been presented in this case which has been used for the abolition of imprisonment which could not equally well be used for the abolition of the fine. What this country has to do is to make up its mind about cannabis, and you do not get any further on the way by making it more ridiculous even than it is, or continuing to keep it ridiculous, if it be ridiculous.
There is one thing that I would honestly say to the supporters of this Amendment. They have a certain intellectual arrogance, if they will forgive me for saying so, about their certainty that it does no harm. Indeed the noble Lord, Lord Gifford (will he forgive me?) was arrogant enough to speak about the blind ignorance of those who take an opposite point of view. There has not been, on the part of any one of the advocates of this Amendment, any recognition of the fact that cannabis has been known to civilisation for 2,500 years. It appears first in the works of Herodotus. It is true that former methods of inhalation were primitive; they did it in a tent
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without a pipe. But the results were what they are now. In large quantities it led to certain aberrations of human behaviour and this is what leads people to be interested in it. It may do them no harm, but it was not for nothing that the Assassins of the Middle Ages, the servants of Sheikh Aljebal—the Old Man of the Mountains—gave their name to assassination because they took hashish. That is where the word comes from.
Some of us served during the war in the Middle East. We saw the population of Egypt which used the drug habitually; we know of course that they took it as a pain-killer against the evils of bilharzia. But the idea that the results and the general effects of the drug are not known is about as silly as to say that we do not know the general effects of alcohol. Alcohol has been known for approximately the same time, since Dionysus introduced it into the Near East—whoever Dionysus may have been. People do know broadly what it does.
Lord AVEBURY: My Lords, may I—
Lord HAILSHAM of SAINT MARYLEBONE: In a moment, Yes. My Lords, at the moment we do not know anything like all we would like to know about the effects of alcohol, but certain preliminary conclusions are still possible; and they are also possible with regard to hashish.
Lord AVEBURY: My Lords, what the noble Lord, Lord Gifford, and I both said, if the noble and learned Lord had listened a little more closely, was that the short-term effects of smoking marijuana, or ingesting cannabis in some other form, are well-known; Dr. Peter Bourne and the other experts cited have produced a great many statements on the subject. What is not known, and what no one has ever claimed, is whether there are any long-term ill effects on human health as a result of the regular ingestion of cannabis.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, the noble Lord has just anticipated my next point. It is, of course, true that the short-term effects are well-known and they are not always altogether agreeable. They lead to various deviant forms of behaviour, of

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which the least serious is self-neglect. I quite agree with him that all the long-term effects are not known; that seems to me to be an argument against changing the law at this time in the direction of legislation, even if we are not reaching that point. That is where the argument seems to lead; not in the direction in which the noble Lord is seeking to make it.
The noble Lord, Lord Ritchie-Calder, whose other point I hope I have dealt with to the satisfaction of the House, says, "What about tobacco? What about alcohol?" What he does not seem to realise is that we have in very wide general use in this country two drugs of dependence —I am not allowed to say "addiction", because that word is now said to be inaccurate—namely, tobacco and alcohol. Why are we deliberately going to encourage the use of a third? Is it because alcohol and tobacco have proved such an enormous success in this country? When I was Minister for Science, 15 or 20 years ago, it only gradually began to dawn on smokers that they were running the risk of cancer of the lung. Before that it was not even suspected that this might be the case. We have at last discovered the long-term effects of smoking. Supposing we had lived in the reign of James I when the horrible substance was first brought into this country from America—which is the source of so many evils—do you suppose for an instance that James I would have been the only person to speak out against the disgusting habit of smoking? Of course he would not. It would have been made a hangable offence and the habit would never have spread into the West through England.
So I cannot see that the fact that, because we have two drugs of dependence, both of which are responsible for a great deal of crime or illness, or, in the case of alcohol, both—I must add as a pendant that, although I am not a smoker, I am a fairly consistent drinker, otherwise somebody else will point it out—it is therefore admissible to add a third, the results of which are not yet known, by the admission of those who advocate the change?
Baroness WOOTTON of ABINGER: My Lords, that is not what the Amendment proposes. It does not propose to add a third drug to those which it is permissible to hold.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, it proposes to "go soft" on it. But, if the noble Baroness will forgive me, at this particular moment I was not dealing with her arguments, from which I have passed, but with the argument of the noble Lord, Lord Ritchie-Calder. It was precisely his argument which I was demolishing—at least I hope so!—because that was precisely the argument that he was advancing; that is, that because he was a smoker and chose to pay the tax, other people should be allowed to smoke cannabis and pay what he was pleased to regard as a tax.
Lord RITCHIE-CALDER: My Lords, I would remind the noble and learned Lord, again historically, that tobacco was first introduced as a cure for syphillis, to which I am not prone.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, that may be so, but I do not think it succeeded in stamping it out. The noble Lord is becoming frivolous. I hope that my own frivolity will be divined as having a serious purpose. I shall vote against this Amendment and I shall invite anyone who has been persuaded by my arguments to do the same.
Lord BOOTHBY: My Lords, I would just say that I agree with every word the noble and learned Lord has said. This country must make up its mind about cannabis: whether or not to make its possession legal. I myself have smoked cannabis, and to my great disappointment I found that it had absolutely no effect whatsoever. I have also smoked cigarettes in large quantities and drunk alcohol in large quantities, and I am absolutely convinced that both of these have an extremely deleterious effect on everybody. I think there is a greater argument in favour of prohibiting alcohol and cigarette smoking than there is cannabis, but I shall continue to smoke heavily and to drink heavily.
4.52 p.m.
Lord GIFFORD: My Lords, the noble and learned Lord spent a great deal of time addressing himself to an argument which was not before the House; that is to say, whether cannabis should or should

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not be legalised. Among those who have spoken in favour of this Amendment, there are no doubt differing views as to exactly how seriously one should treat possession of this drug in the scale of morality or criminality. The noble Baroness, Lady Macleod, said in strong terms that she would not condone use of this drug at all. Lady Wootton's position is rather different, putting it in line with minor motoring offences which need to be curbed but not persecuted or visited with imprisonment.
My Lords, that is not the argument before this House. With great respect to the noble and learned Lord, there is every difference in the world, particularly if you are the person in the dock, between being sentenced to prison for the possession of cannabis and being fined. Whatever may be the verdict of this House on the question which it is not being asked to vote upon—that is to say, legalisation—I should have hoped that a great many noble Lords and noble Ladies who might have reservations about legalisation would appreciate that in today's conditions it is not right, at any rate for the ordinary case of possession of small quantities, for somebody to be put into gaol. If that appears to smack of compromise, then so be it. I certainly do not think that my own mind is sufficiently clear or informed to recommend or propose to the House an Amendment to legalise this drug. I certainly do not think so. It is not before the House, and I hope the House will address itself to the Amendment which is before it.
On the Amendment which is actually before the House, I listened with great care to the reply of my noble friend Lord Harris, and so far as I could detect he did not seek to put to this House any argument of principle at all against it. He put forward two arguments and they were not arguments of principle. The first was that the Amendment created an untidy situation, in that it took cannabis, a Class B drug, out of the categories of offences for which one could be sent to prison, and yet retained imprisonment for Class C drugs. How illogical, he said.
My Lords, the principle of this is clear, and I hope that noble Lords will not be swayed in their voting by my noble friend's and the Home Office's need to have tidy categories. If the categories of drugs as a result of this Amendment
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being carried appear untidy, then the Government have all sorts of opportunities here and in another place to tidy them up. If my noble friend had undertaken in clear terms to remove cannabis into Class C, and to take away the three months' imprisoment which is at present in the Bill for Class C, then I should have been happy to withdraw my Amendment. He specifically said that he gave no explicit commitment to take any amending action to take account of this Amendment except to consider it.
The second argument he used was this: we cannot pass this Amendment because we are all in a terribly tizzy over the case of Goodchild. We do not know where we stand and therefore this House should not pass this Amendment. My Lords, with respect, the issue before this House does not have anything to do with the confusion. It may be that if this House votes to put cannabis and cannabis resin into a class of offences which should not have prison visited upon them, then in due course, when the leaves and stalks and cannibinol arguments have all concluded, it may be necessary to put those objects and substances into the same category. That does not arise now. The issue before the House is clear, and if there is a vote in favour in due course, the Government can take tidying action if they choose.
There is only one other point, which I had not made in proposing this Amendment, but it is an important one and it was touched on by my noble friend Lady Wootton. It is this. There may be noble Lords—I am not one of them—who can conceive of circumstances where someone ought to be sent to prison for possession of this drug. My Lords, if you can conceive of no such circumstances, then it is easy; you support the Amendment. But some noble Lords may conceive of circumstances, if there is a large quantity or persistent offending or something of that kind. In this Bill a very useful procedure will come into being whereby the courts, according to Clause 20, will consider on "triable either way offences", which this is,
"whether the circumstances make the offence one of serious character; whether the punishment which a magistrates' court would have power of inflict for it would be adequate; and any other circumstances which appear to the court to make it more suitable for the offence to be tried in one way rather than the other."

665
For those who wish that for exceptionally serious cases of possession, or repeated or flagrant abuses of the law, there should be imprisonment threatened or imposed, then under this new procedure those cases can be sent by the bench up to the Crown Court. What the proposers of this Amendment are asking for is something quite simple and very modest, and we can see, if it is passed, how it works; that is to say, that benches of magistrates on
summary conviction, where the majority of young people come, should not have power to impose a sentence of imprisonment.
4.57 p.m.
On Question, Whether the said Amendment (No. 76A) shall be agreed to?
Their Lordships divided: Contents, 77; Not-Contents, 83.

CONTENTS

Aberdeen and Temair, M.

Douglass of Cleveland, L.

Monson, L.

Airedale, L.

Emmett of Amberley, B.

Murray of Gravesend, L.

Alexander of Tunis, E.

Fairfax of Cameron, L.

Noel-Buxton, L.

Amherst, E.

Fisher of Camden, L.

Pannell, L.

Ampthill, L.

Foot, L.

Phillips, B.

Amulree, L.

Gaitskell, B.

Platt, L.

Annan, L.

Gardiner, L.

Ponsonby of Shulbrede, L.

Arbuthnott, V.

Garner, L.

Rankeillour, L.

Avebury, L. [Teller.]

Gifford, L. [Teller.]

Ritchie-Calder, L.

Banks, L.

Gladwyn, L.

Roberthall, L.

Barrington, V.

Gordon-Walker, L.

Sainsbury, L.

Beaumont of Whitley, L.

Hale, L.

Seear, B.

Boyd of Handsworth, L.

Houghton of Sowerby, L.

Sempill, Ly.

Brimelow, L.

Hunt, L.

Shepherd, L.

Brockway, L.

Hylton-Foster, B.

Sligo, M.

Brougham and Vaux, L.

Ilchester, E.

Spens, L.

Bruce of Donington, L.

Janner, L.

Stewart of Alvechurch, B.

Byers, L.

Kagan, L.

Teviot, L.

Caithness, E.

Leatherland, L.

Thurlow, L.

Castle, L.

Lee of Asheridge, B.

Vivian, L.

Clancarty, E.

Listowel, E.

Wigg, L.

Clwyd, L.

Lloyd of Kilgerran, L.

Wigoder, L.

Collison, L.

Loudoun, C.

Willis, L.

Cooper of Stockton Heath, L.

Lovell-Davis, L.

Wootton of Abinger, B.

Craigavon, V.

Lyons of Brighton, L.

Wynne-Jones, L.

Delacourt-Smith of Alteryn, B.

Macleod of Borve, B.

NOT-CONTENTS

Alport, L.

Greene of Harrow Weald, L.

Penrhyn, L.

Amherst of Hackney, L.

Greenway, L.

Pitt of Hampstead, L.

Amory, V.

Haigh, E.

Porritt, L.

Auckland, L.

Hailsham of Saint Marylebone, L.

Reigate, L.

Aylestone, L.

Rochdale, V.

Balfour of Inchrye, L.

Hanworth, V.

Rochester, L.

Barnby, L.

Harris of Greenwich, L.

Sackville, L.

Belstead, L.

Hawke, L.

St. Aldwyn, E.

Berkeley, B.

Henley, L.

St. Davids, V.

Boothby, L.

Home of the Hirsel, L.

Saint Oswald, L.

Boyd-Carpenter, L.

Hornsby-Smith, B.

Sandys, L.

Campbell of Croy, L.

Killearn, L.

Segal, L.

Carr of Hadley, L.

Lauderdale, E.

Somers, L.

Clitheroe, L.

Long, V.

Stamp, L.

Colville of Culross, V.

Luke, L.

Strabolgi, L.

Cottesloe, L.

Lyell, L.

Strathclyde, L.

Cullen of Ashbourne, L.

McCluskey, L.

Swaythling, L.

Darling of Hillsborough, L.

Mancroft, L.

Trefgarne,L.

de Clifford, L.

Mansfield, E.

Vickers, B.

Denham, L.

Mar, C.

Wakefield of Kendal, L.

Drumalbyn, L.

Maybray-King, L.

Wallace of Coslany, L. [Teller.]

Ebbisham, L.

Monck, V.

Elliot of Harwood, B.

Morris, L.

Ward of North Tyneside, B.

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

Morris of Borth-y-Gest, L.

Ward of Witley, V.

Faithfull, B.

Mowbray and Stourton, L.

Wells-Pestell, L. [Teller.]

Falkland, V.

Northchurch, B.

Westbury, L.

Fraser of Kilmorack, L.

Nugent of Guildford, L.

Young, B.

George-Brown, L.

O'Hagan, L.

Glenkinglas, L.

Oram, L.

Resolved in the negative, and Amendment disagreed to accordingly.

5.7 p.m.
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendment No. 77B
Page 52, line 28, leave out ("and dangerous, driving generally)") and insert ("driving)").
The noble Lord said: My Lords, this Amendment is consequential on the acceptance of Amendment No. 39A
Page 53, line 5, at end insert—

("METROPOLITAN POLICE ACT 1839 (c. 47) Offences under section 54 (miscellaneous offences in thoroughfares, including, furious driving, obstructing a thoroughfare and discharging firearms).

Section 54 (as amended by Schedule 3 to the Criminal Justice Act 1967).

£20.

£50.")

The noble Baroness said: My Lords, with this Amendment I should like to speak to Amendments Nos. 78A and 78B. All three Amendments arise as a result of my work as a magistrate. The offences involved are dealt with only in a magistrates' court and occur only in densely populated areas. They are brought under Section 54, miscellaneous offences in thoroughfares, including furious driving, obstructing a thoroughfare and discharging firearms, of the Metropolitan Police Act 1839.
I want to ask the Government to increase the fines for obstructing a thoroughfare, although such legislation would have to include furious driving and discharging firearms. In densely populated areas, when clubs, cinemas, dance halls, ice rinks and the like close late at night, great numbers of young people spill over on to the roads, perhaps 100 or 150 at a time. When the police ask them to move on some will not, although some do. Those who stand their ground are brought to court under the Metropolitan Police Act 1839. That Act was amended by the Criminal Justice Act 1967, but the maximum penalty for such an offence is still only £20. The majority of those who cause this nuisance, not only to the police but to the surrounding neighbourhoods in populated areas, are young people who, on the whole, have a great deal of money and who go out of court laughing when they have to pay only £20. Indeed, some courts will not charge the maximum, which is £20. Probably that would be charged only on second or third conviction.
I am asking the Government to increase the maximum fine to £50. I can assure
Page 53, line 11, at end insert—

("LICENSING ACT 1872 (c. 94) Offences under the first paragraph of section 12 of the Licensing Act 1872 (drunkenness in a highway or other public place).

First paragraph of section 12 (as amended by section 1(2)(a) of the Penalties for Drunkenness Act 1962).

£5.

£20.")

abolishing offences of dangerous driving. I beg to move.
On Question, Amendment agreed to.
Schedule 6 [Increase of fines for certain summary offences]:
Baroness MACLEOD of BORVE Baroness MACLEOD of BORVE moved Amendment No. 78:
noble Lords that this Act is used a great deal by the police because of the nuisance that these young people cause in their own neighbourhood, and indeed to the police in general. Obstructing the thoroughfare so that other people cannot pass along it is one of the troubles. I think it was on Monday that I had 15 such cases, and not all of the accused were fined the maximum because not all of them had previous convictions. But for those who had two or three previous convictions the fine is still a maximum of £20. I now ask the Government to put it up to £50. I beg to move.
Lord HARRIS of GREENWICH: My Lords, the Government would suggest to the House that we accept this Amendment.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, before the noble Lord sits down, can he tell me the difference between furious driving and reckless driving?
Lord HARRIS of GREENWICH: My Lords, it is a question I would not dare to be frivolous about in the presence of the noble and learned Lord. It is a question which certainly would preoccupy the Legislature in 1839, when this matter was discussed. I shall look into that particular point with pleasure.
On Question, Amendment agreed to.
5.12 p.m.
Baroness MACLEOD of BORVE Baroness MACLEOD of BORVE moved Amendment No. 78A:
The noble Baroness said: My Lords, this is a similar Amendment but it deals with people who are drunk. In my area, and I am sure in other heavily populated areas, an increasing number of people seem to he able to afford to get drunk. I am worried at this time by the increasing number of young people who are getting drunk and coming before the benches. Of course we all know of the older person who comes up time after time, and very often the sentence then is a pound, or one day. But, by the amount of the fine, I want to be able to try to deter some of the young people from getting drunk very often indeed. Sometimes they come before the bench once or twice a month.
I hope that the Government will give me this increase in fine from £5 to £20. I do not think that that is really sufficient, but who is to know what will deter young people from doing this? It would certainly help the magistrates a great deal if we could have the maximum fine of £20. I beg to move.
Viscount COLVILLE of CULROSS: My Lords, this Amendment gives rise to a little more discussion about the legislative history. In 1872 Parliament provided for two offences. One was being drunk in a highway, a public place, and in licensed premises, and for that the maximum fine at that time was ten shillings. I do not know what a tot of gin or a pint of beer then cost, but I should think that the penalty was certainly commensurate with a very cheap drink in a pub. There was another offence then created or, for all I know, perpetuated, which was, when drunk, being riotous or disorderly in the highway or a public place, and for that the maximum fine was £2. Then, 90 years later, by an Act passed in 1962, the two penalties were increased respectively to £5 and to £10.
In the Criminal Justice Act 1967, by Section 91, at any rate the second one was proposed for an increase to £50—that is, when drunk, being riotous or disorderly in the highway. The trouble is that it has never been brought into force. The penalty is therefore still £10. The reason for this is the most laudable one that Parliament at the time thought that it also ought to pay attention to the other penalty that was provided, for being, when drunk,
670
riotous or disorderly in the highway; namely, a maximum term of one month's imprisonment.
The view was then taken, and indeed expressed in the Statute, that the provisions in this section should not be brought into force until provision had been made for an alternative form of treatment for those who would otherwise go to prison for one month. With that I have great sympathy because I am doubtful whether imprisonment for one month is likely to do any good at all for people who, when drunk, are riotous or disorderly in the highway.
This had the backing of the noble and learned Lord, Lord Parker, when he was Lord Chief Justice, because he said when a case of this sort came before him on 20th June 1968:
"The idea underlying these enactments was that there should no longer be imprisonment for drunks, but that suitable accommodation should be provided for their treatment. Needless to say, the provisions have not yet come into force because suitable accommodation has not been found".
It is not supposed to be any criticism of noble Lords opposite, but suitable accommodation has still not been found, and nine years have gone by and the penalty has still not been increased.
This Amendment does nothing, I regret, about the imprisonment or the suitable alternative accommodation, because no doubt that is still not available for reasons that the noble Lord, Lord Harris, hardly need describe to the House in view of some of the recent debates that we have had. However, the fine has not been increased either. As I understand it, the Amendment increases both these fines, notwithstanding that there is power in the Government, by Statutory Instrument if they want to, to increase the fine for the second offence to £50, but they are fettered in doing so until suitable accommodation alternative to prison is found.
I would suggest that nine years later Parliament might now say that both fines ought to be increased, and we will leave the Government to abolish the imprisonment when eventually, if ever, they find suitable alternative accommodation. To that extent, therefore, I would suggest that the powers given them in the 1967 Act should be superseded and we should now act to increase the penalties.
Baroness MACLEOD of BORVE: My Lords, with the leave of the House, may I make the point that possibly my noble friend was speaking to Amendment No. 78B? I was trying to move Amendment No. 78A, which concerns only drunks.
5.18 p.m.
Lord HARRIS of GREENWICH: My Lords, with the leave of the House, I was going to try to deal with both matters at the same time. I will deal with them both if I may, but I will gladly deal with the other Amendment separately if the noble Baroness wishes. Frankly, the argument is the same, as I think the noble Baroness will discover after I have produced the argument.
As the noble Viscount has just said, this Amendment and the one after it have to be considered in the light of the fact that we have already on the Statute Book but, as the noble Viscount rightly said, not yet in force, a provision, Section 91 of the Criminal Justice Act 1967, for increasing the fine for being drunk and disorderly to £50. This section also provided for the repeal of those provisions which allowed a penalty of imprisonment for this offence and similar offences in local legislation. Section 91 has not yet been brought into force because it has proved difficult to provide the alternative accommodation for the care and treatment of those found drunk and disorderly which the 1967 Act requires as a prerequisite. The provision of these facilities is the responsibility of my right honourable friend the Secretary of State for Social Services.
Although much has been done to provide facilities for alcoholics both within the National Health Service and by providing resources for voluntary organisations and local authorities, we are nevertheless a very long way from being able to say that adequate facilities exist throughout the country for dealing with habitual drunken offenders. For once it is not simply a question of the money although the money not having been available is an important point. There are in fact a number of other difficulties in the way of providing facilities for a group of people, many of whom are disruptive and reluctant to receive any help.
672
As the noble Viscount will be aware, there have been a number of hostels and, as he will also no doubt be aware, the first experimental detoxification centre was opened in Leeds in May of last year and another is soon to be opened in Manchester, and other proposals are being considered. But these are expensive facilities and would be quite ineffective without adequate back-up facilities to ensure that the inebriate offender can be kept out of trouble once his stay in the detoxification centre is over.
I agree entirely with what the noble Viscount has just said. I am quite sure that our long-term aim must be to keep drunks out of prison. That being so, we should have to consider very carefully any measure which might have the reverse effect and I fear that a simple raising of the fine level might be just such a measure. To take the figures for 1975, the number of people in prison for drunkenness offences in that year was quite small, but 2,333 male offenders and 86 female offenders were in prison for non-payment of fines for drunkenness offences, and these periods ranged from a few days up to six months, the most common period being between one and two weeks. As the noble Viscount who speaks with long experience of dealing with the Prison Service, said, littering up our prisons with offenders of this sort in the conditions which we now face in the prison system is in no way an appropriate method of dealing with them.
Any increase in the level of fines imposed would almost inevitably have the effect of increasing the risk that many of these offenders would be unable to pay their fines and, in consequence, there would be a greater use of imprisonment for habitual drunken offenders who defaulted on fines. This is a difficult problem when dealing with the category of socially inadequate alcoholics whom we want to keep out of prison wherever possible.
There is undoubtedly at the other end of the scale—this was touched on by the noble Baroness, Lady Macleod of Borve—the young offender who drinks with his friends and perhaps becomes drunk after a party or after a football match. The greatest incidence of findings of guilt for offences of drunkenness is in the 18 to 21 year old age group, where it is nearly

673
1,400 findings of guilt per 100,000 of the male population against an average figure for all ages, as far as males are concerned, of 523 per 100,000—virtually three times as high. One can appreciate that a fine of £10 for being drunk and disorderly might have little effect on offenders in this age group, who are often not short of money. There is therefore a problem here in that we are discussing two groups; the younger offender who in many cases has resources, and the older offender who in many cases does not have resources—and, unless one is very careful, that is the person who will start going to prison, quite possibly, for significantly longer periods if the level of fines was increased.
One way out of increasing the incidence of imprisonment for default might be to revise the existing scale, which was laid down in the Criminal Justice Act 1967 and which limits the term of imprisonment which may be given for default according to the amount of fine imposed. There are a number of complications about proceeding in this way and it is difficult to be sure what effect it would have but it would certainly have a bearing on the extent to which an increase in fine levels might lead to an increase in imprisonment for default.
To sum up, we would wish, before deciding on any change, to look more carefully at the whole question of the penalties for drunkenness, whether simple public drunkenness or being drunk and disorderly, in the light of the policy laid down by the 1967 Act, the possible need to strengthen deterrents against youthful drunkenness—and I agree with Lady Macloed that this is a very important point—while not thwarting the widespread desire to keep alcoholics out of prison and the possible effect of a change in the tariff which links the levels of fine with periods of imprisonment in default. It is by no means easy to work out the right package in view of the various factors I have mentioned. However, if Lady Macleod will agree to withdraw her Amendment, I assure her that the Government will look extremely carefully at this whole problem. We are entirely seized of it.
Page 53, line 11, at end insert—

("Offences under the second paragraph of section 12 of the Licensing Act 1872 (drunkenness and disorderly behaviour and drunkenness while in charge of vehicle or in possession of loaded firearm).

Second paragraph of section 12 (as amended by section 1(2)(b) of the Penalties for Drunkenness Act 1962).

£10.

£30.")

Viscount COLVILLE of CULROSS: My Lords, I may be in danger of having muddled the matter by having spoken to Amendments Nos. 78A and 78B together. I was in no way wishing to suggest that the noble Lord should answer both of them at once and, as only No. 78A is before the House, I hope that he will be prepared to look at that one separately, despite the fact that both of us spoke to the two together.
Lord AIREDALE: My Lords, has official blessing already been given to the expression "detoxification centre"? Cannot we think of a happier phrase? One does not become intoxificated, so why does one have to be detoxificated?
Lord HARRIS of GREENWICH: That is a shrewd question, to which I am wholly incapable of giving an answer, my Lords. I will however look into it. It is, I am happy to say, a matter for my right honourable friend the Secretary of State for Social Services, and I shall take great pleasure in drawing his attention to what the noble Lord has said.
Baroness MACLEOD of BORVE: My Lords, I spoke to Amendment No. 78A and I was anxious to speak to No. 78B separately because it deals with a completely different subject. It would be enormously helpful if the noble Lord would persuade his right honourable friend to examine this matter, because £5 is not sufficient in the estimation of the magistrates. I assure the House that if the fines were increased to £20, that would be the maximum and that maximum would not necessarily be imposed. When I say that it would be £1 or one day for older people unable to pay the fine, I am sure that I say that on behalf of all magistrates. However, with the assurance the noble Lord has given, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
5.28 p.m.
Baroness MACLEOD of BORVE Baroness MACLEOD of BORVE moved Amendment No. 78B:
The noble Baroness said: My Lords, although the noble Lord, Lord Harris of Greenwich, has in part replied to this Amendment, I was anxious to speak to it separately from No. 78A. I table it because we have the anomalous situation where the 1967 Act empowered the fine to go up to £50, but that increase was never implemented because it was said at that time that the Secretary of State did not think there were sufficient facilities to deal with those who were drunk and disorderly. I appreciate that Lord Harris has dealt with this point in considerable detail.
Magistrates do not often think of recommending that offenders should be dried out, so to speak, or be sent to Alcoholics Anonymous establishments. What I thought was in the mind of the Secretary of State was that there were not enough police cells to accommodate them overnight. However, since 1967 a great many new police stations have been built and one would presume—this is certainly the case in my area—that there would be many more rooms in which the drunk and disorderly could be accommodated overnight. I hope Lord Harris will still feel that he can refer this matter to the Secretary of State and, if he would say that he sees the 1967 provision being implemented in the foreseeable future, I would willingly withdraw the Amendment. In any event, would he care to give his view on the subject?
Viscount COLVILLE of CULROSS: My Lords, I listened with great interest to what the noble Lord, Lord Harris of Greenwich, said when replying to the last Amendment. Was he indicating to the
Page 53, line 22, at end insert—

("PROTECTION OF ANIMALS ACT 1934 (1934 c. 21) Offences under section 1(1) (permitting to take place any public performance involving suffering to horses and bulls).

section 2.

£100.

£500.")

Page 54, line 14, at end insert—

("CINEMATOGRAPH FILMS (ANIMALS) ACT 1937 (1937 c. 59) Offences under section 1(1) (scenes involving infliction of pain or terror on animals).

section 1(3).

£100.

£500.")

Page 56, line 9, at end insert—

("DOCKING AND NICKING OF HORSES ACT 1949 (1949 c. 70) Offences under section 1(1) (prohibition of docking or nicking of horses).

section 1(3).

£25.

£200.

Offences under section 2(3)(a) (importatBion of docked or nicked horses).

section 2(3).

£25.

£200.

Offences under section 2(4) (making false statement to obtain licence).

section 2(4).

£25.

£200.")

Page 56, line 36, at end insert—

("COCKFIGHTING Act 1952 (1952 c. 59) Offences under section 1(1) (possession of instrument or appliance in connection with fighting of any fowl).

section 1(1).

£25.

£200.")

House that he and his right honourable friend would be able to do something about this matter within the context of this Bill, since there is now some prospect of its coming before another place, or was he simply putting off the matter for indefinite consideration? I think that it would help us to know before we decide what to do about this whether we are likely to have a change in the legislation under this Bill.
Lord HARRIS of GREENWICH: My Lords, two issues arise. The first was raised by the noble Baroness when she moved the Amendment and I apologise to her for the fact that I telescoped into one speech the arguments regarding both Amendments. As the noble Baroness will recognise, there are a number of interrelated questions here in terms of the two Amendments. What I said was—and I repeat it—that certainly my right honourable friend is anxious to look at the matter carefully in the context of the Bill. That is our desire. But, as I have indicated, there are some quite complicated problems in getting this rather complicated tariff of periods of imprisonment as related to particular levels of monetary fines right. That is the point that we shall be considering during the passage of the Bill.
Baroness MACLEOD of BORVE: My Lords, in view of what the noble Lord has said—and I thank him for it—I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
5.33 p.m.
Lord DE CLIFFORD Lord DE CLIFFORD moved Amendments Nos. 79A, 79B, 79C, 79D, 79E, 79F and 79G:
Page 56, line 36, at end insert—

("DOGS(PROTECTION OF LIVESTOCK) ACT 1953 (1953 C. 28) Offences under section 1(1) (worrying of livestock on agricultural land).

section 1(6)(a.)

£10.

£50.

Offences under section 1(1) (worrying of livestock on agricultural land).

Section 1(6)(b).

£50.

£100.")

Page 57, line 10, at end insert—

("PESTS ACT 1954 (1954 c. 68) Offences under section 8 (using or permitting use, selling or offering for sale or possessing any unlawful spring trap).

Section 8(2).

£20 for a first offence, and £50 for a second or subsequent offence.

£100. £200.

Offences under section 9 (using a spring trap in an unlawful manner).

section 9(2).

£20 for a first offence, and £50 for a second or subsequent offence).

£100. £200.

Offences under section 12 (using or permitting use of a rabbit infected with myxomatosis).

section 12.

£20 for a first offence, and £50 for a second or subsequent offence.

£100. £200.")

Page 57, line 27, at end insert—

("ANIMALS (CRUEL POISONS) ACT 1962 (1962 c. 26) Offences under section 1 (use of a prohibited poison for destroying any animal).

section 1(b).

£50.

£500.")

The noble Lord said: My Lords, with the permission of the House I should like to move Amendments Nos. 79A to 79G en bloc and to speak at the same time to Amendment No. 88A. These eight Amendments all relate to animal welfare offences. It seemed to a number of us that it would be desirable to bring them more into the level of the offences in recent Statutes. None of these Statutes is less than six years old. There is one Amendment—Amendment No. 79E—which does not come up to this. This deals with the Dogs (Protection of Livestock) Act 1953, which makes it an offence to worry livestock. Under more recent legislation —the Animal Act, 1971—there are further penalties which can be applied for where the owner of the animals which have been worried or destroyed can sue the owner of the dog. In view of this, it was considered undesirable to raise the penalties under the 1953 Act to the level of the others. I beg to move.
Lord HARRIS of GREENWICH: My Lords, as he has pointed out, the noble Lord, Lord de Clifford, has put down these Amendments to increase the summary maximum fines for various offences of cruelty to animals. Like him, should I be permitted to do so, I should like to deal with all the Amendments at the same time. I should say, first, that I accept in principle the case for increases in the maximum fines for the various offences which he has identified. In the form in which the Amendments were originally put down, we should have been unable to accept them because they did not describe the nature of the offences that were being treated. However, at the end of last week, the noble Lord tabled a revised set of Amendments which goes some way towards meeting this drafting
678
objection, though I fear that they do not go quite far enough.
Perhaps I should say now, again in relation to all the Amendments which the noble Lord has put before the House, that, in addition to the general reservation about the way in which the Amendments are phrased, I should like some time to consider the extent of the proposed increases. This applies particularly to those where a higher penalty is proposed for second or subsequent conviction. This is a refinement of the penalty structure which we do not consider to be appropriate in most cases. It is generally preferable to provide an adequate maximum fine for any offence and to allow magistrates to use their discretion within that overall maximum to impose a fine of the right amount. When doing this, they will of course take into consideration any previous convictions for similar offences. If the noble Lord will accept my assurance that we are happy with his general approach but that we want to consider his proposals in more detail, perhaps he will agree to withdraw his Amendments for the moment. I shall then consider his proposals with my right honourable friend and arrange for appropriate Amendments to be tabled if at all possible at the next stage of the Bill's progress.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, may I, before my noble friend accedes—as I hope he will—to that request, say how glad I was to hear the Minister say that he does not like this business about a maximum for the first offence then other amounts for the second and subsequent offences. It leads to a nonsense. Take the offences in the present category:£20 is specified

679
for the first offence of using or permitting the use of an unlawful spring trap and £100 for the first offence of using a spring trap in an unlawful manner. If I use an unlawful spring trap and then use a spring trap in an unlawful manner, I shall have committed two first offences. If, on the other hand, I use an unlawful trap twice, I have committed a first and a second offence. Years ago, we had this sort of nonsense in driving offences but, happily, I was able to get rid of it about 15 years ago when my noble friend the present Lord Marples was Minister for Transport,
Page 58, line 23, at end insert—

("HOUSING (SCOTLAND) ACT 1966 (s. 49)
Offences under section 110(1)(a) and (b) failure to comply with notice requiring execution of works where committed in respect of a notice served under section 107 (provision of means of escape from fire).

section 110(1)(a)and(b).

£100.

£500.")

The noble Lord said: My Lords, during the Committee stage, the House accepted an Amendment to increase to £500 the maximum fine for offences involving the provision of fire escapes under the Housing Act 1964. This Amendment provides that the same increase shall apply
Page 58, line 23, at end insert—

("ROAD TRAFFIC REGULATION ACT 1967 (c. 76) Offences under section 13(4) (contravention of provisions as to use of special roads).

Section 13(4) (as amended by Part II of Schedule 5 to the Road Traffic Act 1974).

£100.

£500.")

The noble Lord said: My Lords, this Amendment fulfils my commitment to consider the Amendment put down at the Committee stage by the noble Earl, Lord Mansfield. It increases the maximum fine which may be imposed under Section 13(4) of the Road Traffic Regulation Act 1967 for breaches of motorway regulations from £100 to £500. I beg to move.
Page 60, line 34, at end insert—

("CONSERVATION OF WILD CREATURES AND WILD PLANTS ACT 1975 (c. 48) Any offence under the Act.

Section 11(1).

£100.

£500.")

The noble Lord said: My Lords, as you can see, this Amendment is designed to raise the maximum penalty for offences under the Conservation of Wild Creatures and Wild Plants Act from £100 to £500. This is not a very old Act, and even in the present situation inflation has not raised prices quite that high, but there may be a feeling that the original penalty was pitched too low. This is an extremely important Act and the offences under it are very serious. They may not always necessarily be seen so by the less thinking members of the public, but offences under
and I hope now to join forces with the noble Lord, Lord Harris, in the same endeavour.
Lord DE CLIFFORD: My Lords, in view of what the noble Lord, Lord Harris, and my noble and learned friend Lord Hailsham have said, I am very happy to accept the assurance of the noble Lord and to withdraw the Amendments.
Amendments, by leave, withdrawn.
5.38 p.m.
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendment No. 86A:
to the equivalent offence in Scotland. I beg to move.
On Question, Amendment agreed to.
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendment No. 87:
The Earl of MANSFIELD: My Lord, perhaps I should say that I am obliged to the noble Lord.
On Question, Amendment agreed to.
5.40 p.m.
Lord BEAUMONT of WHITLEY Lord BEAUMONT of WHITLEY moved Amendment No. 88B:
the Act can have real danger to the survival of rare species in this country.
I do not know whether the noble Lord, Lord Harris of Greenwich, has any figures about prosecutions brought under this Act. If he has I should very much like to hear them, but I have not been able to find any, and it is possible that there have not been any prosecutions. This Act is designed to deter as much as possible. The penalties are designed to deter as well as to punish, and these are very serious offences indeed. I am quite clear from

681
what the noble Lord, Lord Harris, said about the Amendments of the noble Lord, Lord de Clifford, that this Amendment is irregularly drafted, and it may be that the proposed new penalty is not appropriate. But I should be most grateful if the noble Lord, Lord Harris, would indicate whether there is a higher level than £100 which he world be prepared to accept as an Amendment, possibly at a later stage. I beg to move.
Lord HARRIS of GREENWICH: My Lords, the proposal to amend this maximum fine is in fact quite sweeping. It is not a simple increase from £100 to £500, since the fine which may be imposed upon conviction of an offence under the Act may be imposed in respect of each of the creatures or plants involved in the offence. I should like to take just one example here. If the Amendment were accepted a man who uprooted five ghost orchids would be liable to a maximum fine of £2,500. Of course I do not for a moment want to suggest that the offences in the Act are not very serious. The harm that may be done by an anti-social collector who, for his own ends, threatens the survival in this country of wild creatures and protected plants which are listed in
Page 60, line 34, at end insert—

("SALMON AND FRESHWATER FISHERIES ACT 1975 (c. 51) Offences against any provision of the Act not specified in the Table in Part I of Schedule 4.

Schedule 4.

£50 for a first offence and £100 for a second or subsequent offence.

£500.

Offences under section 1 (fishing with certain instruments for salmon, trout or freshwater fish and possessing certain instruments for fishing for such fish) if not acting with another.

Schedule 4.

£50 for a first offence and £100 for second or subsequent offence.

£500.

Offences under section 19(2) (fishing for salmon during the annual close season or weekly close time).

Schedule 4.

£100 for a first offence and £200 for a second or subsequent offence.

£500.

Offences under section 19(4) (fishing for trout during the annual close season or weekly close time).

Schedule 4.

£100 for a first offence and £200 for a second or subsequent offence.

£500.

Offences under section 19(6) (fishing for freshwater fish during the annual close season for freshwater fish and fishing for eels by means of a rod and line during that season).

Schedule 4.

£100 for a first offence and £200 for a second or subsequent offence.

£500.

Offences under section 19(7) (fishing for rainbow trout during the annual close season for rainbow trout and fishing for eels by means a rod and line during that season).

Schedule 4.

£100 for a first offence and £200 for a second or subsequent offence.

£500.

Offences under section 21 (prohibition on use of certain devices at certain times).

Schedule 4.

£100 for a first offence and £200 for a second or subsequent offence.

£500.

Offences under section 27 (fishing for fish otherwise than under the authority of a licence and possessing an un-licensed instrument with intent to use it for fishing) if not acting with another.

Schedule 4.

£50 for a first offence and £100 for a second or subsequent offence.

£500.')

The noble Earl said: My Lords, this Amendment has been tabled with three objectives in mind. First, and most importantly, it is intended to remove what will become an anomalous position in the law as a result of this Bill. We have to look at the Salmon and Freshwater Fisheries Act 1975. I must say that when I speak over this Box to various Home Office
the Schedules to the Act is certainly not to be taken lightly; that I concede at once.
However, I am anxious that the penalty increases that we are affecting in the Bill should not in general get out of proportion, and because of the effect of the particular penalty structure of this Act I am loathe to advise the House to accept the Amendment. However, I say to the noble Lord that if he will withdraw the Amendment I will gladly consider, in consultation with my colleagues who have responsibility for administering the Act, whether an increase to £200 would be fitting. Of course £200 is the intermediate point on the new structure of maxi mum summary fines which we are introducing in the Bill, and I think that that is probably more appropriate. I hope that this meets the noble Lord's point.
Lord BEAUMONT of WHITLEY: My Lords, I am extremely grateful to the noble Lord for what he has said, and following that assurance r gladly beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
The Earl of MANSFIELD The Earl of MANSFIELD moved Amendment No. 89:
Ministers and Lords-in-Waiting, I nearly always seem to be talking about field sports, in which I certainly do not indulge and I rather suspect that they do not, either. Nevertheless, we must consider the Salmon and Freshwater Fisheries Act 1975, and more particularly Sections 1 and 27 of it. We have the effect that if a person is acting alone when he commits various

683
offences under that Act he is liable to summary trial, but if he acts in concert with others he is liable at present to either summary trial or trial on indictment.
Let us take an example—I was going to say a homely example. If somebody takes from a river no less than 20 salmon with a gaff, at the moment he would be subject to a maximum fine of £50 if it was a first offence, and £100 if it was a subsequent offence; and it does not matter whether he takes one, or 20, or any other number of salmon. If, on the other hand, somebody was acting in concert with another and he took only one salmon, which might be considered a lesser offence, then under Clause 28(2) of this particular Bill he would now be liable to a maximum fine of no less than £1,000 because that is the effect of an offence which is to be triable each way.
So this might be considered to be an anomalous situation, and the Amendment has been drafted to try to rectify this. The second purpose of the Amendment is to bring the maximum fines into line with those for similar offences connected with the protection of animals and birds. An illustration might be the Protection of Animals Act, or the Protection of Birds Act, or indeed the Deer Act. Thirdly, bearing in mind what the Home Office like, the Amendment is aimed at removing a difference of approach in relation to first and subsequent offences. I beg to move.
Lord HARRIS of GREENWICH: My Lords, the noble Earl is so persuasive that I would recommend that the House accept the Amendment.
On Question, Amendment agreed to.
Schedule 7 [New section to be substituted for s. 20 of Coroners (Amendment) Act 1926]:
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendments Nos. 89A and 89B:
Page 63, line 23, leave out ("or dangerous")
Page 63, line 31, leave out ("or dangerous").
The noble Lord said: My Lords, these Amendments are consequential on the acceptance of the Amendment abolishing offences of dangerous driving. I beg to move these Amendments en bloc.
On Question, Amendments agreed to.
Schedule 8 [Amendments of Criminal Procedure (Scotland) Act 1975]:
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendments Nos. 90, 91 and 92:
Page 64, line 19, at end insert—
(".—(1) In section 284(b), for "£100" there shall be substituted "£200".
(2) In section 284(c), for "£100" there shall be substituted "£200".
.—(1) In section 289(a), for "£150" there shall be substituted "the prescribed sum (within the meaning of section 289B below)".
(2) In section 289(b) for "£150" there shall be substituted "the prescribed sum (within the meaning of section 289B below)".")
Page 67, line 44, leave out ("or").
line 49, at end insert—
("; or
(c) the maximum amount of caution which an accused may be ordained to find under section 284(c) above.")
The noble Lord said: My Lords, these Government Amendments were discussed with Amendment No. 62. I beg to move these Amendments en bloc.
On Question, Amendments agreed to.
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendment No. 93:
Page 68, line 6, leave out ("proviso (b) to section 46(7) of") and insert ("Schedule 11 to").
The noble Lord said: My Lords, I beg to move this Amendment. It relates to Scotland and is consequential upon the transitional provisions relating to the coming into force of the penalty provisions in the Bill, which are set out in Schedule 11.
On Question, Amendment agreed to.
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendment No. 94:
Page 68, line 8, leave out ("completed") and insert ("committed").
The noble Lord said: My Lords, I beg to move this Amendment. It is a drafting Amendment. It is the Scottish equivalent of the Amendments that I moved to Clauses 42 and 43.
On Question, Amendment agreed to.
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendment No. 95:
Page 68, leave out line 11 and insert—
("5. For section 394(b) there shall be substituted the following paragraph—
"(b) to substitute for imprisonment a fine which in the case of an offence triable

685
either summarily or on indictment shall not exceed the prescribed sum (within the meaning of section 289B above), and in the case of an offence triable only summarily shall not exceed £200 (in either case, with or without caution for good behaviour, not exceeding the amount and the period competent under this Part of this Act):".")
The noble Lord said: My Lords, I beg to move this Amendment. It is a consequential Amendment for Scotland to the Amendments made at Committee stage for England and Wales in Clause 32(2), relating to fines which can be imposed in substitution for a term of imprisonment.
On Question, Amendment agreed to.
Schedule 9 [Minor and consequential Amendments]:
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendment No. 96:
Page 71, leave out lines 4 and 5.
The noble Lord said: My Lords, this Amendment was discussed with Amendment No. 60. I beg to move.
On Question, Amendment agreed to.
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendment No. 96C:
Page 71, line 31, at end insert—
("PRISON ACT 1952 (c. 52)
1. In section 45, as amended by Schedule 4 to the Criminal Justice Act 1961 (release of persons sentenced to Borstal training), substitute "one year" for "two years"—

(a) in subsection (3) (where those words give the period of supervision after release);

(b) in the first place where they occur in subsection (4) (where they give the period of liability to recall); and

(c) wherever they occur in the proviso to subsection (4).

2. Paragraph 1 above shall not apply in relation to a person sentenced to Borstal training whose original release from a Borstal institution occurred before the coming into force of this paragraph.")
The noble Lord said: My Lords, these Amendments are those which I foreshadowed in the Committee stage of the Bill, when I explained that while, in our view, we must for the present retain the existing custodial system for young offenders, we would do our best to improve its performance. I said that we had been examining the provisions on supervision of young offenders on release with a view to concentrating the very limited resources
686
we have available. This was something which the Probation and After-Care Service had been advocating, and I promised that if our examination showed it to be desirable we would bring forward Amendments at a later stage of the Bill's progress. Accordingly, we have done so.
The first of these Amendments—I should like to speak to this group, all of which relate to the Prison Act—would reduce the period of supervision on release from borstal from two years to one. A borstal sentence, as your Lordships will know, is an indeterminate sentence of between six months and two years in custody, followed by supervision in the community. This supervision is seen as an integral part of the treatment provided for in the sentence of the court. The statutory period of post-borstal supervision has stood at two years since 1961, although the Secretary of State has power to terminate it in individual cases at any time.
My Lords, there are in our view a number of reasons why a shorter period is now appropriate. They are, first, that probation officers now concentrate their efforts on helping trainees in the first few months after release, which is in fact the period which evidence shows that such supervision is most necessary and also most effective. Then, too, the closer links between the Prison Service and the Probation Service, and the concept of "through care" which has been developed in recent years, mean that relationships with the supervising officer are established while the trainee is still in custody, thus reducing the time he needs to readjust to life under supervision in the community.
There is, of course, another side to this coin. There are certain conditions attached to borstal supervision, and those who fail to comply with them can be recalled to borstal by the Secretary of State and detained for a further period. This order is often made, in fact, in lieu of what might be another custodial sentence. However, the majority of such orders are made in the first 12 months after release, as are almost all recall orders, and the courts have available to them other appropriate sentences for those who have been out of borstal for more than 12 months.
The remaining Amendments in this group relate to those who are sentenced to imprisonment when aged at least 17 and

687
under 21. Instead of being released on remission after serving two-thirds of their sentence, those who are serving eighteen months or more and have not been granted parole are released on licence until the end of their sentence. This licence can be revoked at any time by the Secretary of State, or by a court on conviction for a further offence, and the person concerned is then returned to prison. Those in the same age group who are sentenced to imprisonment for less than 18 months are subject to 12 months' supevision on release.
In the case of these young prisoners, we are seeking not so much to shorten the period of supervision as to confine it to the younger age group for whom it was intended. Your Lordships will appreciate that if someone receives a sentence of some years at the age of 20 they will be very much an adult by the time they are released. Certainly, with the current pressure on accommodation in young prisoner centres, they will have been reclassified as adult prisoners and will have served the majority of their sentences in adult prisons without any of the benefits we seek to provide for younger offenders. There is therefore understandable resentment on their part when, having served their sentence as adults, they are subjected to young prisoners' licences on release. Moreover, I am advised by the Probation Service that compulsory supervision of this category of offender is rarely effective.
We therefore propose, by this Amendment, to release without licence those who are aged 22 on discharge, and to terminate the licences of those released earlier on their 22nd birthday if the licence has not previously expired. Similar arrangements will be made for those serving shorter sentences released to supervision. In choosing this particular age we are influenced by the desirability of providing a reasonable period of supervision for those who are still aged under 21 at the time of release. I have spoken about young prisoners who are released in the normal course without being granted parole. It is clearly right that those who are released on parole under Section 60(1) of the Criminal Justice Act 1967 should be treated no less favourably, and the Amendments provide that their licences
688
shall expire no later than if they had been released in the normal way.
My Lords, these Amendments do not apply to Scotland. Borstal supervision in Scotland is already limited to one year; and, as I have indicated, that is what we are now proposing should apply to England and Wales. The supervision arrangements for other young offenders in Scotland are under review, and it is not proposed to make any legislative changes regarding supervision in Scotland in this Bill. I therefore commend these Amendments to your Lordships. They are desired by the Probation Service, and are also favoured by governors. They should result in more concentrated attention being given to newly-released young offenders at a time when they need most help. My Lords, I beg to move Amendment No. 96C.
On Question, Amendment agreed to.
5.56 p.m.
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendment No. 97:
Page 75, line 23, at end insert—
("HOUSING ACT 1964 (c. 56)
In section 65, after subsection (1) (penalty for failure to comply with notice requiring execution of works under Part II of Housing Act 1961) insert—
"(1A) In the case of an offence under subsection (1) above committed in respect of a notice served under section 16 of the Act of 1961, that subsection shall have effect with the substitution of the words "£500" for the words "one hundred pounds" in paragraphs (a) and (b).".
HOUSING (SCOTLAND) ACT 1966 (c. 49)
In section 110, after subsection (1) (penalty for failure to comply with notice requiring execution of works) insert—
"(1A) In the case of an offence under subsection (1) above committed in respect of a notice served under section 107 of this Act, that subsection shall have effect with the substitution of the words "£500" for the words "one hundred pounds" in paragraphs (a) and (b).".")
The noble Lord said: My Lords, this is a drafting Amendment consequential on the increase in the maximum fine for failing to comply with a notice requiring execution of works under the Housing Act 1961, which was introduced in Schedule 6 during the Committee stage. I beg to move.
On Question, Amendment agreed to.
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendment No. 98:

689
Page 75, line 40, at end insert—
(". In section 78A (exceeding a speed limit imposed by or under certain enactments), in subsection (3)—

(a) in paragraph (a), after "Act" insert ", except section 13(4);" and

(b) in paragraph (c), after "1960" insert "(except section 13(4) of this Act).".")

The noble Lord said: My Lords, as I explained when moving the Amendment to Schedule 6 to increase the maximum fine for breaches of motorway regulations, this Amendment is moved to clarify the existing position on speeding on motorways. I beg to move.
On Question, Amendment agreed to.
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendment No. 99:
Page 77, line 3, at end insert—
("3. After section 44 insert as section 44A—
"Power of Magistrates' Courts to fix day for appearance of offender at means inquiry, etc.
44A.—(1) Where under section 63(1) of the Act 1952 a magistrates' court allows time for payment of a sum adjudged to be paid by a conviction of the court ("the adjudged sum"), the court may on that or any subsequent occasion fix a day on which, if any part of that sum remains unpaid on that day, the offender must appear in person before the court for either or both of the following purposes, namely—

(a) to enable an inquiry into his means to be made under section 44 of this Act;

(b) to enable a hearing required by subsection (6) of the said section 44 to be held.

(2) Except as provided in subsection (3) of this section, the power to fix a day under this section shall be exercisable only in the presence of the offender.
(3) Where a day has been fixed under this section, the court may fix a later day in substitution for the day previously fixed, and may do so—

(a) when composed of a single justice; and

(b) whether the offender is present or not.

(4) Subject to subsection (5) of this section, if on the day fixed under this section—

(a) any part of the adjudged sum remains unpaid; and

(b) the offender fails to appear in person before the court,

the court may issue a warrant to arrest him and bring him before the court; and subsections (4) and (5) of section 70 of the Magistrates' Courts Act 1952 (execution of warrant for
690
securing appearance of offender at means inquiry) shall apply in relation to a warrant issued under this section.
(5) Where under subsection (3) above a later day has in the absence of the offender been fixed in substitution for a day previously fixed under this section, the court shall not issue a warrant under this section unless it is proved to the satisfaction of the court, on oath or in such other manner as may be prescribed, that notice in writing of the substituted day was served on the offender not less than what appears to the court to be a reasonable time before that day.".")
The noble Lord said: My Lords, this Amendment which I should like to move is brought forward in accordance with an undertaking which I gave in Committee to the noble Earl, Lord Mansfield, when he moved an Amendment with broadly the same aim but in which we saw certain technical difficulties. The purpose of the Amendment is to enable a magistrates' court which has allowed a person time to pay a fine to fix, in advance, a date on which he must appear before the court if, by then, any part of the fine remains unpaid. At present, the procedure in these circumstances is that the court must wait until a default has actually occurred. It then has to issue a summons to bring the defaulter before the court for a means inquiry. This can obviously be time-consuming for the court and the police, and of course it involves extra work. If a summons is issued and the defaulter fails to appear, the court then has to issue a warrant and the police have to go and arrest him.
Under the alternative procedure which this Amendment is introducing, these steps can be cut out where the defendant is present in court when the fine is imposed. It empowers the court to tell the defendant that they are allowing him time to pay but that, if he defaults, he will have to come back to the court on a date which the court will then specify to explain why he has defaulted. If he fails both to pay up and also to attend the court, he will be liable to arrest. The Government believe that this will be a useful addition to the magistrates' existing enforcement powers and that, by cutting out some of the steps which have to be gone through at the moment, it will afford some small measure of relief to the courts. I commend it to your Lordships, and beg to move.
6 p.m.
The Earl of MANSFIELD: My Lords, I should like to thank the noble Lord, Lord Harris, and the Government, for tabling this Amendment in this form. I think it will provide no little gratification to the Magistrates' Association and to Benches up and down the country. A great deal of time and effort which could better be spent in other directions has to be spent in trying to get people who are fined to pay up, and a great deal of quite unnecessary expense is incurred in trying to relieve the citizen of what he ought to be prepared to pay without such pressure being exerted upon him.
People fail to take seriously what a magistrates' court says in relation to a fine, particularly if they do not know the form, if I may so put it. This will enable a court, if it is convinced that it is a proper way in which to go about its duty, in effect to say to a defendant: "Pay up or else!"—and this can be done at the time the fine is imposed. I think this is an excellent improvement to the armoury of the magistrates. Perhaps I may say, and not frivolously, that for some reason the noble and learned Lord, Lord McCluskey, is not in his place this afternoon; and I hope that the noble Lord, Harris, will tell him about this and that the Government eventually, if they see fit, will extend this sort of provision to Scotland.
On Question, Amendment agreed to.
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendment No. 99B:
Page 77, line 3, at end insert—
("3.—(1) Section 60 (release on licence of persons serving determinate sentences) shall be amended as follows.
(2) In subsection (3) (which by virtue of paragraph (b) provides for the release on licence of a person serving a sentence of imprisonment for a term of eighteen months or more who was under the age of twenty-one when the sentence was passed), at the end add—
"Provided that in England and Wales a person within paragraph (b) of this subsection shall not be released on licence by virtue of this subsection after he has attained the age of twenty-two.".
(3) After subsection (5) insert—
"(5A) A licence granted to any person under this section in England and Wales shall, unless previously revoked under section 62 of this Act, remain in force until a date specified in the licence, being—

(a) in the case of a licence granted to a person in respect of whom an extended sentence certificate was issued when
692
sentence was passed on him, the date of the expiration of the sentence;

(b) in the case of a licence granted under subsection (1) of this section to a person who was under the age of twenty-one when sentence was passed on him and is released on licence before attaining the age of twenty-two—

(i) if the date on which he attains the age of twenty-two is earlier than the remission date, the remission date;

(ii) if the date on which he attains the age of twenty-two is not earlier than the remission date, the date on which he attains the age of twenty-two or the date of the expiration of the sentence, whichever is the earlier;

(c) in the case of a licence granted by virtue of subsection (3)(b) of this section to a person who was under the age of twenty-one when sentence was passed on him, the date on which he attains the age of twenty-two or the date of the expiration of the sentence, whichever is the earlier;

(d) in a case not within any of the preceding paragraphs, the remission date.

In this subsection "the remission date", in relation to a person released on licence under this section, means the date on which he could have been discharged from prison on remission of part of his sentence under the prison rules, if, after the date of his release on licence, he had not forfeited remission of any part of the sentence under the rules.".
(4) In subsection (6) (duration of licence), after "this section" insert "in Scotland" and, in paragraph (a), omit the words from "to a person" where they first occur to "or".
(5) Omit subsection (8)(d).
(6) The preceding provisions of this paragraph shall not apply in relation to a licence granted before the coming into force of this paragraph.
4.—(1) Section 63 (supervision of young, short-term prisoners after release) shall be amended as follows.
(2) In subsection (1), for "shall be subject after his release from prison" substitute "shall, if released from prison before he has attained the age of twenty-two, be subject after his release".
(3) After subsection (1) insert—
"(1A) A person who is under supervision as aforesaid by virtue of subsection (1) above at the time when he attains the age of twenty-two shall cease to be under supervision at that time, and accordingly, in their application to a person by virtue of that subsection, the provisions of the said Schedule 1 shall apply with the further modification that references to the period of twelve months from the date of his release shall be read as references to that period or the period from the date of his release to the date on which he attains the age of twenty-two, whichever is the shorten".
(4) In subsection (2), for "the foregoing subsection" substitute "subsection (1) of this section".
(5) The preceding provisions of this paragraph shall not apply in relation to a person whose

693
period of supervision under Schedule 1 to the Criminal Justice Act 1961 began before the coming into force of this paragraph.")
The noble Lord said: My Lords, this Amendment is consequential. I beg to move.
On Question, Amendment agreed to.
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendment No. 100:
Page 82, line 18, at end insert—
("HEALTH AND SAFETY AT WORK ETC. ACT 1974 (c. 37)
In section 15(6)(d) (power to restrict punishments which can be imposed in respect of certain offences) after "punishments" insert "(other than the maximum fine on conviction on indictment)".")
The noble Lord said: My Lords, this is a consequential Amendment which I move as a result of Amendment No. 61 having been accepted by the House.
On Question, Amendment agreed to.
Schedule 10 [Repeals]:
Lord MORRIS of BORTH-Y-GEST Lord MORRIS of BORTH-Y-GEST moved Amendment No. 100C:
Page 84, line 56, column 3, leave out ("Section") and insert ("Sections 3 and")
The noble and learned Lord said: My Lords, this Amendment is consequential upon the acceptance by the House of the Amendment to repeal Section 3 of the Act of 1961. I beg to move.
On Question, Amendment agreed to.
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendment No. 100A:
Page 84, line 56, column 3, at end insert ("Section 11(2).")
The noble Lord said: My Lords, I beg to move Amendment No. 100A, which is consequential upon Amendment No. 99B.
On Question, Amendment agreed to.
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendment No. 100D:
Page 85, line 41, column 3, at end insert—
("In section 60, in subsection (6)(a), the word from "to a person" where they first occur to "or" and subsection (8)(d).")
The noble Lord said: My Lords, I beg to move this Amendment which is consequential upon Amendment No. 99B dealing with young prisoners' licences.
On Question, Amendment agreed to.
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendment No. 100B:
Page 86, line 42, column 3, leave out from beginning to third ("in") in line 43 and insert—
("In Part I of Schedule 4:—
in the entry relating to section 1, in column 2, the words "or dangerous"
in the entry relating to section 2, in column 2, the words "and dangerous" and "generally";
in the entry relating to section 17, in column 2, the words "and dangerous".
In Part IV of Schedule 4,")
The noble Lord said: My Lords, this Amendment is consequential upon Amendment No. 39A dealing with dangerous driving. I beg to move.
On Question, Amendment agreed to.
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendment No. 101:
Page 87, line 50, in column 3, at beginning insert—("In Part II of Schedule 5, the entry relating to section 13(4)")
The noble Lord said: My Lords, this Amendment is consequential upon the Amendment to insert in Schedule 6 an increased penalty for motorway offences. I beg to move.
On Question, Amendment agreed to.
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendment No. 101A:
Page 87, line 51, column 3, at end insert ("and, in the entry relating to section 17, in the second column, the words "and dangerous".")
The noble Lord said: My Lords, this Amendment is consequential upon the acceptance of an Amendment abolishing offences of dangerous driving. I beg to move.
On Question, Amendment agreed to.
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendment No. 102:
Page 87, line 56, at end insert—
("1975 c. 20. District Courts (Scotland) Act 1975. Section 3(3).").
The noble Lord said: My Lords, I beg to move Amendment No. 102, which was discussed earlier with Amendment No. 62.
On Question, Amendment agreed to.
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendment No. 103:
Page 88, line 5, column 3, at end insert ("and, in paragraph 38, the words "in paragraph (a)".")
The noble Lord said: My Lords, I beg to move Amendment No. 103. This Amendment makes a minor drafting correction to the Bail Act 1976. The short point is that the Bail Act altered a reference in paragraph (a) of Section 8(2) of the Criminal Appeal Act 1968 to correspond with the new terminology. The draftsman overlooked that a similar correction would be required elsewhere in Section 8 of the 1968 Act. This can be cured simply by the removal of the reference to paragraph (a); and that is what the Amendment does.
On Question, Amendment agreed to.
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendment No. 104:
After Schedule 10, insert the following new schedule:
Section 46
"SCHEDULE 11
TRANSITIONAL PROVISIONS
1. A provision contained in any of sections 14 to 26, 33 and 34 above or in Schedule 8 to this Act, and any related amendment or repeal provided for in Schedule 9 or 10 to this Act, shall not apply in relation to proceedings commenced before the coming into force of that provision.
2. In its application to an offence committed before the coming into force of section 23 above, section 29 above shall have effect as if, in paragraph (a), for "£500" there were substituted "£400".
3.—(1) This paragraph applies to any provision of this Act which relates to the punishment by way of fine or imprisonment which may be imposed on summary conviction of offences mentioned in Schedule 1 or 2 to this Act or in Schedule 7A to the Criminal Procedure (Scotland) Act 1975.
(2) A provision to which this paragraph applies shall have effect in relation to an offence for which proceedings are commenced after the material time even if that offence was committed before that time; but in the case of an offence committed before the material time, such a provision shall not render a person liable on summary conviction to any punishment greater than that to which he would have been liable on conviction on indictment if at the time of his conviction that provision had not yet come into force.
(3) In relation to a provision to which this paragraph applies "the material time", means the time when that provision conies into force.
4. Except as provided in paragraph 3 above a provision of this Act (other than section 29) which relates to the punishment by way of fine or imprisonment for any offence shall not affect the punishment for an offence committed before that provision conies into force."
The noble Lord said: My Lords, the purpose of this Schedule was described when the Amendment to Clause 46, which introduces this Schedule, was moved.
On Question, Amendment agreed to.
Lord HAILSHAM of SAINT MARYLEBONE Lord HAILSHAM of SAINT MARYLEBONE moved Amendment No. 105:
In the Title, line 16, after ("amend") insert "section 10 of the Sexual Offences Act 1956,").
The noble and learned Lord said: My Lords, I beg to move this Amendment. This was rendered necessary by an Amendment which was not accepted earlier but which was accepted in principle (but not yet drafted by the Government) as a result of my case of Whitehouse which I explained to the House.
Lord HARRIS of GREENWICH: My Lords, it may be to the convenience of the House if I deal with both of these matters at the next stage of the Bill, if that is convenient to the noble and learned Lord.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, if it is more convenient to the noble Lord and he will draft a suitable Amendment in the substance of the matter, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH moved Amendment No. 106:
Line 19, after ("about") insert ("road traffic").
The noble Lord said: My Lords, I beg to move this Amendment which extends the Long Title to cover the abolition of offences of dangerous driving.
On Question, Amendment agreed to.

INTERNATIONAL FINANCE: TRADE AND AID BILL
6.7 p.m.
The SOLICITOR-GENERAL for SCOTLAND (Lord McCluskey): My Lords, I beg to move that this Bill be now read a second time. This is a fairly, or perhaps very, technical Bill with a number of detailed provisions. The bulk of the changes proposed relate to increases in financial limits—changes which need to be made from time to time, given economic growth, growth in trade and in the size of payments in balances, and high rates of inflation. The institutions

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concerned are the International Monetary Fund, the Export Credits Guarantee Department, the Commonwealth Development Corporation and international and regional development institutions. But the measures proposed in this Bill are, in detail, technical and the House will wish me to give the Government view of the important problems and principles which can easily be hidden under the technicalities.
The theme which underlies this Bill is the promotion of international trade and international economic growth together with a more stable and balanced international economic order. Noble Lords will be aware, particularly, of the central role which the International Monetary Fund plays in this area. The IMF provisions of the Bill contain the legislative requirements in the United Kingdom of a number of changes which have been proposed to the IMF in order to enable the Fund to maintain its position at the centre of the international monetary system.
There are two main strands: first, the increase in IMF quotas; and, secondly, the amendments to the Articles of Agreement which have been the consequence of the intense discussions of international monetary reform that have taken place in recent years. The increase in our quota is the result of a general review of, and decision to increase, the Fund's resources. This review will increase the total of all member's quotas by one-third, taking the total to the staggering figure of 45 billion dollars. The background to the proposed increase was set out in Cmnd. 6704, which was published in January of this year. At the general level, the increase in quotas will enable the Fund to pursue more effectively its objective of promoting stable growth. Among the objectives of the Fund set out in the Articles is included the following:
"To give confidence to Members by making the general resources of the Fund temporarily available to them under adequate safeguards, thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity".
The years since the oil crisis have seen a greater risk of resort to just such measures than in any other period since the war. The huge increase in oil
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revenues, together with the low capacity of many oil producing countries to I increase their imports at a sufficiently rapid rate, has meant that most developed and developing countries have been compelled to run exceptional deficits in their balance of payments. During the past three years, this Government and the Governments of other countries have been concerned to avoid the worst consequences of this new situation; namely, deliberate excessive deflation and restrictions on trade.
The IMF, too, has played an effective part in pursuit of the objective I quoted. It has contributed partly by acting as an effective forum for international discussions and partly also in more tangible ways. In saying that, I refer particularly to the institution of the oil facility, which operated during 1974 and 1975. During this time a total of very nearly 8 billion dollars was borrowed under the facility, of which getting on for 3 billion dollars was drawn by the non-oil developing countries. I would remind the House that the United Kingdom also benefited to the extent of 1,100 million dollars.
But the central facility of the Fund is, and should continue to be, the finance which is offered through drawings in the credit tranches which are related to members' quotas. Use of the credit tranches requires Fund surveillance of a member's policies, and there is no doubt that in present circumstances Fund involvement is generally beneficial. For the problem of oil producers' surpluses is likely to be a continuing one, and the counterpart deficits must be accepted by countries able to bear them. The increase in quotas will make a worthwhile contribution towards the financing of deficits. Noble Lords will need no reminding of the contribution which the IMF has made towards our own adjustment problems in recent years.
The opportunity of this increase in quotas has also been taken to adjust the relative size of quotas to take account of members' ability to contribute to the Fund, as well as to reflect increased needs. For quotas, as noble Lords will understand, also determine potential contribution as well as drawings. While the average increase in quotas is some 34 per cent., the share of the industrial countries has fallen to allow a doubling in the share

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of the major oil exporters as a group in the enlarged Fund. The collective share of all other developing countries has been maintained at its present level.
Now, my Lords, the other strand of the IMF provisions, and I refer to Clause 2 of the Bill, is the revision to the Fund's Articles of agreement. The importance of the amendments is more difficult to grasp in some ways than the increase in quotas, but it is probably more important for the longer term. Noble Lords will forgive me if I do not go over these in detail—the main changes are discussed in a second White Paper published in January of this year, Cmnd. 6705. Briefly, there are two main changes. The first is the removal of gold from its central position in the Fund Articles, and the adoption of the objective of gradually reducing its role in the international monetary system.
This change is the rational and logical consequence of the break in the link between the U.S. dollar and gold and the move to flexible exchange rates. With a price determined in the free market, gold could not be a stable denominator for exchange rates, and it has little relevance where most currencies are floating against each other. The continued use of gold as a principal reserve asset is, moreover, highly expensive in terms of resources. Noble Lords will be aware that the IMF has begun a programme to reduce its holdings of gold by one-third, in part by restoring gold to members, and in part by auctions in aid of a trust fund which will provide concessional resources to the developing countries. The second major area of reform is on exchange rate arrangements. Members will no longer be required to declare par values under the amended articles, but the Fund is given an enhanced role in overseeing the operation of exchange systems. Having described these arrangements, I should say that the amendments are perhaps not the complete overhaul of the international monetary system which was foreseen by some when the Committee of Twenty was set up in 1972. None the less, they are a worthwhile and significant step forward.
Progress continues to be made. For example, the Basle agreement on sterling balances earlier this year, by reducing the reserve currency role of sterling, will contribute to a more rational system.
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But other problems remain to be tackled. In particular, there is the question of the unequal and asymmetrical way in which the adjustment process works, and which results in more pressure being put on deficit than on surplus countries. This is a problem which much concerned Maynard Keynes and Harry White, who are properly described as the parents of the IMF, but it is particularly urgent in the present economic situation. We greatly hope that the IMF will tackle this problem and the problem of better co-ordination of floating exchange rates as it developes its new role of surveillance over exchange rate arrangements.
I have emphasised in what I have said the role of the IMF in promoting the growth of international trade. That leads me into a look at another aspect of the Bill. Not all countries are able to compete on equal terms for the advantages of trade, and here of course I refer to the developing countries. The present Bill provides for an increase in the borrowing limits of the Commonwealth Development Corporation, an organisation which makes a significant contribution—and has done for many years—to the needs of the developing countries. There is an increasing recognition of the interdependence between the developed and developing countries, and a general desire to avoid mutually damaging confrontation. Noble Lords are aware of the United Kingdom's general aid policy—in fact, it was debated here in February of last year—for increasing emphasis on the poorest countries and on rural development which improves the lot of the poorest people within those countries.
The Commonwealth Development Corporation follows a policy which accords with this, and increasingly places emphasis on projects in poorer countries and for natural resources development. It contributes in a wide variety of ways, by finance, and by management for economically worthwhile projects. It is able, by drawing on its experience, to put together package schemes for rural development. The Bill shows this, although there were failures in the early years; but the record since then has been good. Just one example of their activities is their recent contribution to the Kenya Tea Development Authority where the project is estimated to achieve a rate of return of 38 per cent. and gives employment to some

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100,000 smallholders, supporting about 500,000 people.
My Lords, the Bill also provides for changes in the legislation relating to international and regional development institutions, and the range of contribution we might make to them. These are a major source of capital for developing countries. The World Bank group is perhaps the best known, but a very useful part is played in the regional development banks. The United Kingdom is well aware of the vital role which these institutions have had in helping the developing countries over the past few difficult years, and we shall do all we can to see that they can continue to play a full part. I should like to mention some of the steps that have recently been taken to ensure this, and then to look briefly to the future.
First, the World Bank itself, as your Lordships will know, the Bank lends at semi-commercial rates, recycling funds borrowed in the market. The scale of its lending has increased enormously over the past ten years, commitments rising from some 777 million dollars in 1967 to over 5 billion dollars in 1976. Along with this massive increase in scale has gone an increasing concentration on projects in the agricultural sector, reflecting the general recognition that this is indeed the crucial area. In order to back this rapid expansion, the Governments who stand behind the Bank have recently agreed in principle a Selective Capital Increase of 6·9 billion dollars. That has not involved the United Kingdom, because it was based on IMF quotas, and the United Kingdom's IMF quota has not been increased relative to the overall increase in quotas.
Secondly, I would refer to the International Development Association, which can be described as "the soft lending arm" of the World Bank. Your Lordships will have been pleased to see a recent report that negotiations were successfully concluded for the fifth replenishment of IDA, for a total of 7·6 billion dollars. This will more than maintain the real value of IDA's lending over the next three years; and we are pleased that some of the oil-rich countries have been able to contribute, although the vast bulk of the resources will come from the traditional donors. The United Kingdom's share, at 10·7 per cent. of the
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total, will be some 814 million dollars. We give IDA high priority in our limited aid resources because of its concentration on the poorest countries.
Thirdly, I would mention that an increase has been proposed in the capital of the international Finance Corporation —that is the part of the World Bank group which assists private sector projects in the developing countries—and we are considering the question of a contribution to that. So, looking into the future, we hope that agreement will soon be reached on a capital increase for the Asian Development Bank, more than doubling its capital and allowing a considerable increase in its lending. Apart from those particular matters, there is the question of a general capital increase for the World Bank. Discussions here are at a very early stage, but we shall play a full part in them.
Finally, I turn again within the context of the Bill to the subject of export credit. This Bill increases ECGD's sterling limit and sets up a separate limit against which ECGD's foreign currency liabilities will be counted. On export credit matters generally, it remains Government policy that the United Kingdom should play a full and active part in negotiations to rationalise and restrain competition over terms for export credit. We are continuing our efforts to avoid such competition escalating into any kind of mutually damaging and self-defeating export credit war. However, at the same time, we are determined that the whole package of facilities and support available from the ECGD should stand fair comparison with that available to exporters in our competitor countries. Any attempt by us unilaterally to restrict credit terms in one country or for our exports as a whole could only put our exporters at a competitive disadvantage and it is for this reason that we place so much importance on international discussion and agreement. This bore some fruit last week with the Government's decision to endorse international guidelines on export credit terms.
In the United Kingdom, Government support for export credit is provided through the Export Credit Guarantee Department. The Department will soon celebrate its sixtieth birthday and most exporters would agree that it plays and

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has played a vital role in our export effort. The figures speak for themselves, since ECGD now insures over 35 per cent. of British exports, and in the last financial year it covered exports valued at almost £8,500 million. Of this, about three-quarters was in the vital area of exports for cash and exports sold on short-credit terms which, of course, bring the greatest benefit to the balance-of-payments. Some of our exports, however, are sold on medium and long-term credit at fixed rates of interest. The Government re-finance a substantial amount of the credit advanced by the clearing banks on these terms.
Noble Lords will be aware that a number of changes to ECGD arrangements have been in preparation for some time. It was announced on 15th December last that it would be necessary to reduce expenditure on refinancing of export credit and that this will be partly achieved by the agreement by the clearing banks to provide more finance from their own resources. The Government would acknowledge that and say that we are most grateful to the clearing banks in this respect.
Savings on refinancing export credit will also be partly achieved by a switch to foreign currency financing for business, and that will be encouraged by a range of measures to be taken by ECGD, including the provision of improved support for contracts in foreign currency. Details of measures have been published both by Press Notice and by a Written Answer to a Parliamentary Question in the other place on 21st February 1977. For this reason, the Bill provides for a separate limit on foreign currency business undertaken by ECGD. Banks and exporters are already joining in active efforts to bring about the switch to foreign currency financing of long-term credit business. The Bill thus provides the Export Credit Guarantee Department with the means of providing a flexible and positive response to the changing needs of our exporters. I believe all noble Lords will welcome that.
In conclusion, may I say that the wide-ranging provisions of this Bill touch on principles and institutions which are important to the stable and equitable growth of the world economy as well as
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to more parochial interests and I commend it, on that basis to your Lordships.
Moved, That the Bill be now read 2ª.—(Lord McCluskey.)
6.27 p.m.
Lord BELSTEAD: My Lords, as the noble and learned Lord, Lord McCluskey, has said, this Bill is really divided into three parts—the Export Credit Guarantee Department, the IMF and the Commonwealth Development Corporation. I should like to say at once that I support the provisions in the Bill for increasing the ECGD's limit for fresh facilities for export contracts in foreign currencies.
It is remarkable how rapidly the Department has increased the volume of its business. I remember that two years ago there was a debate in this House on the Export Guarantees Bill 1975, which then increased the Department's limit. I remember that on that occasion the Government forecast that the ceiling which was fixed in that Bill would probably last for a minimum of five years. The Department's limit is to be raised again.
I see from the Explanatory and Financial Memorandum to the Bill that the introduction of foreign currency commitments is expected to lead to an increase of about 40 in the staff of the ECGD. Then the Memorandum goes on to say:
"The expected increase in the volume of other commitments is also likely to lead to some increase in staff."
I cannot help wondering whether the really enormous increase in the volume of ECGD's business alone will not lead to fairly substantial increases in staff. If that is necessary, I make no complaint whatsoever about it, because I think the Department has every reason to be proud of the growth of its operations in recent years.
However, rather more generally, I must confess to some uneasiness about the terms on which we offer credit abroad. The Russian deal offered by the former Prime Minister has been a worrying example, I think, just over two years ago, because on that occasion massive credit was offered to the Soviet Union at an undisclosed rate of interest which the Soviet Union would have been able to use while at the same time consistently arming itself to threaten our own

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existence. I have seen quoted—I believe it was in the Sunday Telegraph some six weeks ago—a figure of £18 billion of net indebtedness owed by the Soviet Union alone to countries of the West. Perhaps the noble and learned Lord could confirm whether that figure is in any way accurate. But for us to be offering credit on very favourable terms to the Soviet Union, and indeed to the Iron Curtain countries as a whole, cannot be desirable. I was very glad to hear the noble and learned Lord state in his speech the Government's determination to lend their weight to preventing a continuation of an international credit war or race. I was also glad to hear his reference to the EEC's international guidelines agreement, which was concluded only last week.
The Bill, as it relates to the IMF, is complicated and I should like to concentrate on the simple issue of our drawing rights from the Fund. We have, in recent months, seen a temporary increase in the percentage of our quota which we can borrow. As I understand it, this stood at 125 per cent., and we have now, in fact, borrowed 145 per cent. of our quota with the IMF. I shall not go into the rights and wrongs of this. From the Government Front Bench, the noble and learned Lord had every right to say that it has been a very important drawing right in keeping the finances of this country going, except that I am bound to observe that, apart from Italy, we are the only developed nation to have been incapable of dealing with the problems presented by the oil crisis of the last three years. I bear in mind that the noble and learned Lord made the point that countries have had to run very large deficits, but we are alone in our scale of borrowing.
What I find difficult to understand, and I should like the assistance of the noble and learned Lord, are two points. First, as I understand it, the new quota for us in 1978 will be raised. I suppose, therefore, that in the interim—and it is a very short interim, of course—as we begin to repay our loans (if indeed that is what we are going to do) we shall have 125 per cent. as our quota borrowing target, until this is adjusted a year from now. But I must confess that I do not understand how this will work. I gave the noble and earned Lord notice of the question
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which I have asked, and if he could give me a little illustration on this point I should be grateful.
It appears to me that the matter is further complicated by the fact that, although under the Bill the Government may by order increase the limit of our quota to the IMF—in other words, the Government must come to Parliament in order to do this—there is no corresponding duty laid on the Government to obtain Parliamentary approval to further massive borrowings from the International Monetary Fund. I am not making a political point about this, because this has been the case in the past. But it seems to me that these massive borrowings which we are making are a clear example of control of the Legislature by the Executive, and I must say that on that aspect I do not find the Bill as desirable as it otherwise might be.
Also, it is salutary to reflect that, side by side with these misgivings about the country borrowing from the IMF in order to support a way of life which, perhaps, we should not he supporting, there is the wholly admirable intention of Clause 5, which raises the limits for borrowing by, and advances to, the Commonwealth Development Corporation. The policy of the CDC has always seemed to me to be as soundly based as anyone could wish for. It is CDC policy not only that its operations should be economically beneficial to the countries in which it is operating, but also that CDC projects should bring a reasonable financial rate of return.
When Cmnd. 6544, entitled The British Aid Programme in 1975 was published, the Government at that time expressed their support for projects in poorer countries covering renewable natural resources; in other words, agriculture, forestry and fisheries. The noble and learned Lord referred in his speech to the Kenya Tea Development Authority and, indeed, only 18 months ago I had the good fortune to be able to see on the ground a little of the work which is going on under that Authority. These projects can, of course, be hazardous. Not only do they depend upon accurate assessments of geographical and weather conditions, but they also have to be acceptable to people living in countries where, very often, agricultural land is the prime source of wealth and therefore in great demand,

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and not always easily let out to people who like to start splendid projects which, perhaps, local people do not think are quite as splendid as other people might believe.
I have always taken the view—and I listened very carefully to what the noble and learned Lord said about the World Bank—that CDC supported projects are very much preferable to World Bank supported projects, because I think I am right in saying that the CDC usually acts as a principal in its projects. It has therefore built up over the years, and is continuing to build up, a tremendous measure of expertise and practical administrative ability. I may or may not be right in making that comparison, but, none the less, I think that the way in which the CDC operates is very desirable from that point of view.
I should be very interested to hear from the Government whether the new policy for the aid programme, which I understand is to be reviewed in 1977, is, so far as can be seen at the moment, a success. The noble and learned Lord gave us a wealth of detail, but what I am not quite certain about is whether this new emphasis on agricultural, forestry and fishery projects in the poorer countries is, so far as can be seen at the moment, a social, commercial and financial success. I support the main purpose of this Bill, and agree that it should now be read a second time.
6.36 p.m.
Lord THURLOW: My Lords, I do not propose to get involved in some of the more technical aspects of this Bill, but should like to make two points which I hope will be regarded by the noble and learned Lord as constructive. There seems to me, in the light of my own experience in relation to smaller dependent territories, to be a gap in the mechanisms by which we seek to help the development of the smallest of our dependent territories. As has been said, the CDC has not just a good, but an excellent record. It has built up a sensitive and effective administration to apply prudent and highly beneficial principles, and it has experienced and able staff who work very closely with the many foreign and Commonwealth Governments in different parts of the world. Similarly, the Department
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of Overseas Development has built up a remarkably effective apparatus to work with other Governments all over the world, on a very much wider spectrum of functions than the CDC.
But in spite of the quality of our agencies, there have for many years been great difficulties about helping to provide capital for some of the small-scale commercial development projects that some very small island territories require for their development. The sums of capital required are often tiny in relation to the general aid picture, but they do not meet the criterion of a reasonable commercial return, which the CDC has very properly drawn up, and as commercial ventures it is difficult to fit them into the framework of direct overseas aid.
Perhaps I may use the Turks and Caicos Islands as an illustration. I believe that the Minister herself has visited these lovely islands, and I strongly recommend your Lordships to take every possible opportunity to do the same. When I went there on one of my earliest visits as Governor, from the neighbouring territory for which I was responsible, I was able to say, to the surprise of the inhabitants, that I was probably the only Governor of those islands who could, according to reports, claim that his grandmother had been born on one of their beaches.
For 10 years and more, these territories have struggled with us to find ways of assisting their very modest development programmes. Together we have been able to make very little progress. They need, for instance, improved communications as a key to tourism and their own various construction industries in the different Islands. These industries cannot be expected, however, to yield an ordinary commercial profit, so the CDC has been unable to take up this kind of project. It is difficult to fit such projects into the normal rules of direct capital aid. As it is, we grant-aid this territory for their ordinary budget; but it is, I suggest, unacceptable to leave matters at that.
Can we not modify the framework to enable some capital aid for commercial ventures in very small territories to be made available on special terms? As I have suggested, the sums involved are too small to affect the general aid picture.

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The inability of the British people to help is quite incomprehensible to the inhabitants of these territories when they see the actual sums involved. Luckily, the Minister has available, I understand, a ready-made instrument to tackle such problems, in the form of a very effective joint working party of the CDC and the Department of Overseas Development.
May I therefore ask the noble and learned Lord to bring the issue to the attention of the Minister and suggest that the joint Working Party should be asked to work out proposals to enable help to be given as a special case to the commercial development projects in these smaller Island territories. For instance, a line could perhaps be drawn between territories on the basis of size of population, so that steps taken in this kind of context would not create embarrassing territory precedents in larger territories. Perhaps the Department of Overseas Development could establish a special fund for smaller territories and make grants from it to the CDC so that the latter could assume responsibility for the administration of the projects without prejudicing their own valid rules for a normal, reasonable, commercial return.
My second point relates to the education of public opinion on aid programmes and strategy. The noble and learned Lord has referred to the very great increase in general international aid. It is a truism that in the next five to 10 years the developed countries must do far more to help the less developed countries to help themselves, or else the scale of human suffering by famine, plague and otherwise is inevitably going to increase far beyond the scope of our present imagining. After all, the amount of food production in the world—as the noble and learned Lord said, this is the most crucial of all the areas—must more than double in the next 15 to 20 years. Apart from finance, this is an appalling challenge to all technical and administrative resources.
It is quite obvious that, as a matter of practical politics, Her Majesty's Government cannot be expected in the immediate future to increase the aid Vote by any spectacular amount, though I hope that some increase may be possible before too long. However, it is possible—indeed, in terms of the current price of North Sea
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oil and the world price of oil it is quite probable—that in the next three to five years this country will swing over to a very large balance of payments surplus. Some of the optimists have predicted a swing round, first to a balance in three to four years and then to a positive surplus as large, within 10 years, as our negative balance is now. There is going to be, in any case, a complete revolution in terms of our foreign exchange problems. Obviously there are many uncertainties and preconditions, including, as a first step, the need for us to improve our own productivity. However, we are undoubtedly going to have a very large external balance.
At present, all the emphasis in Government education of public opinion must be on the need to cut back. We are in a dark phase, but the sun is beginning to rise over the horizon. We can at least look forward to an era when we not only can but must find new means of dealing with a large external surplus. At this point we can, and should, greatly increase our own overseas aid and give a lead in the EEC, and internationally, to more ambitious aid strategies. However, the Government's hands will be tied unless public opinion has been educated to accept the change, and this will not be easy. It has taken years to get the public to realise that we are poor and must cut back, and in the process overseas aid is looked at rather grudgingly. After all, we have to borrow the money that we give away. How are we to expect the man in the street to respond quickly to proposals to allocate vastly greater sums to overseas aid?
Therefore I ask the noble and learned Lord to suggest to the Minister that as soon as possible she should embark on a long-term, carefully drawn up informaton campaign designed to induce the public to realise that in the not too distant future we shall be able to adopt an entirely new appoach to the scale of our contributions to international aid. I hope that the full resources of the Government's information machinery will be involved so that when the time comes, which will not be all that far off in terms of trends of public opinion, the Government of the day may not find themselves confronted by an inward-looking reluctance to support a possible big increase. I think that we could find ourselves in real difficulty in effecting this kind of change in public understanding. Therefore I hope that the

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Government will bring their mind to bear on the problem so that when the time comes we are not caught with our pants down.
6.49 p.m.
Lord RITCHIE-CALDER: My Lords, I did not intend to intervene and I apologise for not having put down my name. However, I want to follow the noble Lord, Lord Thurlow, and emphasise the last point which he made. The whole story of the last 25 to 30 years of so-called aid has been completely misunderstood. I am sorry to be arrogant, but I speak with a great deal of authority on this subject. The fact is that we have treated aid as though it were alms-giving. It is not alms-giving. It is not a question of just giving and helping out of charity. The point is that this is a real and a meaningful investment and that what we have failed to do over the last 30 years we must redress now.
We must make people in this country understand that what we are doing is not putting a penny in the blind man's tin, but actually and in definite reality investing in the future of this country. I am not speaking about tied aid, or anything like that, but we have no future as a country unless we realise the meaningfulness of the developing world in which we have to invest. We can call it anything we like—grants in aid, private investment; whatever we call it, it is something which is creating a meaningful and significant development for this country and also something which the world cannot do without.
6.51 p.m.
Lord McCLUSKEY: My Lords, I should like to respond first to the matters which have been raised by the noble Lord, Lord Thurlow, and supported by my noble friend Lord Ritchie-Calder. First, I am sure that the approach which they both supported is right; that we should not be going as alms givers, and indeed I am happy to see in one of the documents which was published in 1975—the report of the Development Assistance Committee—that the official reports are beginning to use language which recognises that one is not handing out alms but in fact engaging in technical co-operation with Governments and bodies in the developing countries.
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As to educating public opinion, the Department of Overseas Development has quite recently set aside a substantial fund, £150,000, to assist voluntary organisations to engage in development education—that is to say, education of public opinion in this country—and that was done with the very purpose that was so eloquently supported by the noble Lord, Lord Thurlow. So that when the time comes—and one prays that it may be soon—that resources are more readily available, then public opinion can indeed the more readily accept a Government move towards making these resources available in larger measure to the developing countries.
I will certainly bring to the attention of my right honourable friend the specific matters mentioned by the noble Lord, Lord Thurlow. Turning to the point with which he began, we are aware of his close concern for the little islands; he was formerly a Governor of the Bahamas, as your Lordships will no doubt know. The Government are wholly in sympathy with his approach. However, the Commonwealth Development Corporation has worked very successfully after a somewhat hesitant beginning some years ago and is expert in identifying projects which are viable, and these are the projects which the Commonwealth Development Corporation seeks out and then supports. Indeed, the Corporation in fact sent teams out to the area of which the noble Lord spoke. The problem there has been that the projects which are viable are extremely difficult to find and, unless there is a change in the framework within which CDC operates, it will not be easy to provide the kind of support of which the noble Lord spoke. However, what he has said will be taken into account in considering the whole matter.
I turn now to the points made by the noble Lord, Lord Belstead. As to staffing, it is thought that the Department in fact has sufficient staff, with relatively modest increases, to handle the increase in business. There have in fact been some increases, and there are currently increases in staff, but partly because the techniques which will be employed, for example, in relation to foreign currency financing are similar to the techniques which have been developed over the years by the Department, it is thought that not too many extra staff will be required, although

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this is a new departure. Also it is thought that other measures which are taking place, for example the installation and use of a computer at Cardiff, will tend to reduce the requirement for increases in staff, and that will help to keep down the numbers. So while we welcome the noble Lord's tributes to the efficiency of the Department we hope that the increase in numbers will he kept within quite modest limits.
The noble Lord did not surprise me when he spoke of the particular matter of the credit deal with the Soviet Union. As he said, it is now something over two years old. He asked me specifically about the figure which appeared in the Sunday Telegraph, saying that at the present time the net indebtedness of the Soviet Union was some 18 billion dollars. I do not know the exact basis for that figure but in a reply which the Financial Secretary gave to a Question in another place on 10th March, it was then said that it was believed that the total convertible currency indebtedness of the USSR at the end of 1976 was estimated to be in the region of 15 to 16 billion US dollars. So, given the passage of time, it is not too far away from the mark.
On the general matter of his concern about the arrangements with the Soviet Union and with the Eastern countries, further commitments with all Eastern countries are taken on after an assessment has been made of that country's ability to service its debts. In the case of the Eastern countries it is not considered that their present levels of borrowing from Western countries are likely to present insupportable repayment problems, and the Euro-currency market seems to share this view. Indeed, their past repayment record has been impeccable, so on strict commercial and underwriting grounds the extension of further credit is justified. But I should like to reiterate something I said when I made my first speech, that a careful watch has been kept, and will continue to be kept, on the developing situation, and that will include close consultation and co-operation with our Western colleagues in order to avoid any kind of cut-throat credit war. So the Government are well aware of the problem and consultations will proceed. There is also some evidence that the Eastern
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European countries themselves are taking steps to reduce the level of indebtedness in their plans for the next five years.
I was then asked—and indeed the noble Lord, Lord Belstead, gave me notice of—a question in relation to the IMF. I think he did that in the belief that it would help me to answer it. I hope that is correct and I hope the answer I give him will help him to understand the matter because it is indeed difficult. The position as I understand it is this: the first 25 per cent. —the first credit tranche on top of 100 per cent.—is granted without undue difficulty. A letter of application has to be signed. Extra tranches are granted on a letter of intent. We had examples of such letters in 1967, 1969 and December of 1976. In December 1975 we obtained agreement to draw the first 25 per cent. and we drew it in May of 1976. At about the same time we drew 1,000 million special drawing rights under the oil facility. In Jamaica in January 1976 it was agreed that all quotas would be increased by an average of 34 per cent., and ad interim all credit tranches were increased by 45 per cent.
In December we arranged that the three remaining credit tranches could be drawn, plus the allowed additional 45 per cent., plus the temporary 45 per cent. increase in the first credit tranche. That meant that the total which we could draw, leaving aside the oil facility, was 145 per cent. of our quota. Although in 1978 the new arrangements about which we spoke are to come into effect, in practice our rights in relation to that 145 per cent. are determined by the old quotas, by the arrangements I have referred to and by the Jamaica interim agreement. In other words, our rights are not going to be diminished by the implementation of the agreement.
The other point in relation to that which the noble Lord mentioned was that there was no duty to obtain Parliamentary approval. Of course, one agrees that that is so, but I think in substance there is very little in that point, because he would surely acknowledge that no Government could go to the International Monetary Fund or any other body to obtain any substantial loan without that matter falling under the scrutiny of Parliament. As we have seen quite recently, even if the matter does not come before Parliament on a formal

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Motion, ways and means can be found—for example, by refusing to adjourn the House—to put the matter to a vote.
The noble Lord mentioned that the Commonwealth Development Corporation is soundly based, and referred to it looking for a reasonable return. I think that is not quite accurate. The aim of the body is to break even, taking one year with another. He asked me specifically whether the new emphasis about which I spoke and which had been referred to before was a success. I think I can answer that. It is really too early to say whether new projects will be successful, but the CDC has considerable experience in assessing such projects and it applies the the same criteria to these projects as it has applied to others. The CDC is, therefore, confident of their success.
The noble Lord also mentioned the role of the World Bank and compared and contrasted that with the CDC. I will not follow him in that endeavour, because they are doing different things, and I think it would perhaps be unfortunate if I, on behalf of the Government, sought to draw invidious comparisons between the two. I would say that they are both doing an excellent service within the field that they have undertaken, and I would not want to detract from the success of either. My Lords, I think I have replied to the points, and I can conclude my speech on that note.
On Question, Bill read 2ª; Committee negatived.

NUCLEAR INDUSTRY (FINANCE) BILL
7.2 p.m.
Lord STRABOLGI: My Lords, I beg to move that this Bill be now read a second time. This Bill, which is an important one, deals with financial questions relating to British Nuclear Fuels Limited, The National Nuclear Corporation Limited, and the Radiochemical Centre Limited. The Bill allows the provision of more public capital for BNFL and TRCL by the Secretary of State and the United Kingdom Atomic Energy Authority, to which I shall refer from now on, if I may, as the AEA. It also empowers the Government to guarantee loans raised by either company. For BNFL only, it authorises the
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Government to guarantee, within financial limits, the company's ability to refund advance payments which customers may have made under contracts for the company's services. Finally, it authorises the Government to incur expenditure in acquiring shares in the NNC, whether from the AEA or from any other willing vendor. I should emphasise that this is not a nationalisation power or a power of compulsory acquisition.
BNFL was set up in 1971, and the Atomic Energy Authority Act of 1971 transferred to it the Atomic Energy Authority's nuclear fuel cycle business—that is, enrichment of uranium, manufacture of fuel and reprocessing of irradiated fuel. The company also procures uranium, but mainly for the generating boards; and it operates two Magnox power stations and sells electricity to the grid. Following the transfer of this fuel cycle business, the company issued some £18 million paid-up shares to the AEA, and assumed the outstanding liability for some £36 million of Exchequer loans related to the latter's nuclear fuel operations. The loans are repayable by instalments, and have now been reduced to £26 million.
Sections 11 and 12 of the 1971 Act allowed the Secretary of State and the AEA to provide further capital within an aggregate further sum of £50 million, which limit could be, and indeed recently has been, increased by order to £75 million. The company's profits before tax in the last financial year were some £9 million, compared with £3·4 million in its first year of operation. Profits have been ploughed back, and the company was substantially self-financing during the first five years of its life.
The company now needs substantial external finance, however, for its capital investment programme. In this connection, the Government have made £25 million available to the company under the 1971 Act. But it is clear that the limit of £75 million on capital payments will not cover capital needs in the next five years or so. Clause 2(1)(a) of the Bill, therefore, increases the payment limits to £300 million and provides that this limit may be raised to £500 million by order, the draft of which must be approved by Affirmative Resolution.

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The company's investment programme will involve a total expenditure during the next ten years of about £1,500 million at 1976 prices. This expenditure will cover such items as the refurbishing of the existing Magnox reprocessing plant, the development of the waste vitrification process, the development and extension of the company's uranium enrichment plant at Capenhurst, work to maintain the earning capacity of other facilities on the company's sites, and the construction of a new plant at Windscale for the reprocessing of oxide fuel for home and overseas customers. Part of this will be financed from internal resources, and part of the oxide plant in particular would be financed by advance payments from overseas customers. But taking account of this the additional requirements for external capital to the years 1982/3 will be some £230 million, a sum which far outruns the present statutory limit of £75 million on capital payments to the company. Taking account also of the higher costs which may arise, for example, from constantly improving environmental and safety requirements, leads to the new payments limits of £300 million and £500 million provided under Clause 2(1) that I have already mentioned.
My Lords, I would, if I may, emphasise two points. Construction of the proposd oxide reprocessing plant at Windscale depends on planning permission. As the House will know, my right honourable friend the Secretary of State for the Environment has announced his intention of calling in the application for his own decision following a public inquiry. The fact that the Government are ensuring that the company may have access to funds for its investment programme (including this plant if it is built), does not in any way prejudice that inquiry.
The Government also wish to see the company cover some of its investment by private borrowing so as to diversify its sources of finance. To facilitate this, Clause 1(1) of the Bill will empower them to guarantee such borrowings. Borrowing against Government guarantee is effectively an alternative to direct Government capital so, under Clause 2(2)(c) of the Bill, sums guaranteed would count against the new limits. The company has, in fact, already negotiated a private loan facility of £100 million from a banking consortium
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and the Government intend to guarantee it subject to the enactment of this legislation.
I have mentioned that the part of the new oxide plant provided for overseas customers will be financed by advance payments, The customer would normally get his money back, so to speak, to set off against charges made for services. But there could be circumstances in which they would be returnable in cash. Large sums are involved and overseas customers may require some external guarantee of the company's ability to repay in such circumstances. Clause 1(2) of the Bill therefore authorises such guarantees, within a separate limit of £400 million, which may be increased to £500 million by order under Clause 2(3). These sums reflect the possible cost of the plant capacity which might be involved.
The Radiochemical Centre Limited, which was also set up in 1971, took over the radio-isotope business then carried on by the Atomic Energy Authority. Section 13 of the 1971 Act envisages the provision of public capital for the company, but limits the amount of payments to it by the Secretary of State and the AEA to £5 million, which sum may be increased by order to £7 million. TRC's business is the manufacture and sale of radio-isotopes for use in medicine, research and industry. It is a vigorous company, which competes successfully in world markets. It made a group net profit—after interest but before taxation—in 1975–76 of £2·6 million and a return of 36 per cent. on assets employed. It has paid dividends to the Exchequer, through the AEA, in every year since its incorporation.
The company will require some £10 million external capital to cover its expansion plans, substantially for financing a new plant at Cardiff, and £5 million of this will be provided by means of the AEA taking up further shares. The remainder is to be raised privately. Although the statutory limits on the provision of capital have thus not ye; been exhausted, it seems prudent to make provision now to ensure that this expanding company will have access to further capital as the need raises. Clause 2(1)(b) of the Bill therefore increases the upper limit on payments to the company to £15 million—an adjustment of the original

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£7 million for inflation. It also seems prudent to put the company on the same footing as BNFL, and to provide for Government guarantees of loans. Clause 1(1) of the Bill does this. Again, under Clause 2(2)(c) sums guaranteed will count against the main financing limits.
Finally, Clause 3 of the Bill authorises the Secretary of State to incur expenditure on, or in connection with, the acquisition of shares in the National Nuclear Corporation Limited or its subsidiaries. I emphasise that this is not a power to nationalise. It simply puts on a more sensible basis the powers which the Government already have for managing their interests in the nuclear industry. NNC was set up in 1973 when it was decided to reorganise the then existing nuclear construction companies—namely, British Nuclear Design and Construction Limited and the Nuclear Power Group Limited—into a single unit, which comprised NNC and a wholly-owned subsidiary, the Nuclear Power Company Limited. The AEA took a 15 per cent. stake in the NNC; the GEC, 50 per cent. and British Nuclear Associates, a consortium of companies engaged in the nuclear engineering field, 35 per cent. The Secretary of State did not at that time have express financial authority to incur expenditure to take up the shares which were to represent the public stake. They were therefore taken up by the AEA, under the Atomic Energy Authority Act 1954. For the same reason, the Authority was the agency which acquired further shares in NNC in 1976 when it was decided, by agreement between all the parties, that the private stake should be reduced and the AEA's holding increased to 35 per cent.
This indirect management of the public holding in NNC is workable at the moment. The position is in many ways similar to that of BNFL and TRCL, in which the public shareholding is also held by the AEA. But in the future it may be found advantageous, and in the interests of the nuclear industry, for these holdings to be held and managed by the Government more directly. Existing legislation allows this for BNFL and TRCL but not for NNC. Clause 3 of the Bill remedies the sitution, but leaves transfer from the AEA on a voluntary basis. It would also allow the Government, subsequent to such a transfer, to maintain their proportional
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holding in the company if further capital needed to be introduced, and to acquire further shares from the other interests if they agreed that this should be done.
I emphasise that this would not empower the Government to compel anyone to transfer shares in NNC or to fix the transfer price. It would simply allow expenditure on buying shares if the holders are willing to sell; and to pay an agreed price, not a price fixed unilaterally. I would also emphasise that the provision does not mean that expenditure is in prospect. It is not. The Government have no proposals for buying any shares in NNC. I hope your Lordships will agree that this power to incur expenditure in acquiring NNC shares is a sensible one, and that it is sensible to take it now. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2ª. —(Lord Strabolgi.)
7.18 p.m.
Lord TREFGARNE: My Lords, the House will be grateful to the noble Lord, Lord Strabolgi, for a very full and careful explanation of the purposes of the Bill. It is, of course, a Money Bill. Therefore we shall not be considering it in detail in Committee and are thus denied the opportunity of tabling probing Amendments. I shall take the opportunity on this Second Reading to make a few points: first, of a rather general nature relating to our present nuclear programme and, finally, of a rather more detailed nature arising out of the specific provisions of the Bill.
The present Secretary of State for Energy, Mr. Benn, has held his present office for two years. We are hoping that soon he will be able to begin making some major decisions. I do not want to sound too critical in that way. I think that some of the decisions might well have been made by now, but one does not want to minimise the difficulties confronting him. The most important decision which is still on his desk is the decision as to which of the principal types of reactor he is to select for the next generation of power stations. This is a decision which, in the view of the industry at least, is now pressing, and which I would hope we can expect in the near future.
The three principal reactors which present themselves as possibilities are,

721
first, the steam generating heavy water reactor; secondly, the pressurised-type reactor, designed in the United States and used there; finally, the advanced gas-cooled reactor. Many of us will have read that the American pressurised-type reactor has been criticised in some quarters because of the alleged shortcomings in safety. But it is, we are told, the cheapest at least of the options available. I do not pretend that the decision is an easy one, but I hope that the noble Lord, Lord Strabolgi, will be able to give us some indication of whether the Minister's mind is moving in that direction.
A second matter to which I hope the Secretary of State will be turning his mind in the near future in conjunction with his European colleagues, is the question of the siting of the research centre for the JET project. The Secretary of State is just now himself the President of the Council of Energy Ministers, and we understand that they are to meet again on the 29th of this month. It is hoped that they will reach a decision then. The front runner, if I can call it that, for the decision as to where to site the research centre for this major product is our own Culham, and, when he replies in a moment, I would hope that the noble Lord can confirm the Government's intention to press for a decision to site the research centre at Culham. May I add, in parenthesis, that the JET project is of course the project to generate electricity by means of nuclear fusion rather than nuclear fission, which is the system we are presently using.
So much for the general points. I should like now to take up one or two detailed matters that occur in the Bill. I hope that the noble Lord will be able to give me some guidance on them in a moment. First, we know from our background information, and the noble Lord confirmed this in his speech, that the British Nuclear Fuels Corporation still has a substantial quantity of money borrowed from the Consolidated Fund. The figure I have is of £28 million still outstanding. I want to ask the noble Lord whether he is satisfied that the rate of interest paid on those monies, which is only 5½, per cent., is appropriate in modern conditions.
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The next point I was about to raise is one that the noble Lord emphasised and re-emphasised in his speech; that is, the question of the further acquisition of shares in the National Nuclear Corporation. I was glad to hear that there will be no compulsion on the existing shareholders to part with their shares unless they wish to and unless a price can be readily agreed. I must confess that at first sight that was a matter which gave me some concern. There are many other topics we could deal with in a general way in a debate such as this, but I do not propose to do so. We had a long debate not long ago on the Flowers Report in connection with the environment and waste. A little longer ago we dealt at length with the Atomic Energy Authority (Special Constables) Bill. It may well he that such matters will be raised by the noble Lord, Lord Avebury, when he speaks in a moment.
In general, we recognise the need for this measure which, as the noble Lord, Lord Strabolgi, has explained so clearly, increases the provision of funds for these companies within the nuclear industry. We regret that large additional quantities of public money are necessary, but we recognise the needs for it, and for that reason we shall be glad to see this Bill pass through into law.
7.25 p.m.
Lord AVEBURY: My Lords, I shall try to copy the noble Lord, Lord Trefgarne, in his admirable brevity. May I begin by endorsing the thanks which he has given to the noble Lord on the Government Front Bench for the lucidity and comprehensiveness with which he has explained the provisions of this Bill. I only wish that we could have had a little longer to study it. I realise that there were background circumstances which required us to look at this Bill only three days after it left another place, but it makes it difficult for those of us who have been concerned with other Bills to turn our minds suddenly to the complex affairs of the nuclear industry and to do them justice at such short notice. To do them justice we should have to pay a considerable amount of attention to the provisions of a Bill which includes a possible increase of £500 million in the capital of BNFL, to say nothing of the provisions regarding Radiochemical

723
Centre Limited, which I think are entirely uncontroversial and to which I shall not refer further.
The noble Lord, Lord Strabolgi, will realise that not everybody is entirely happy about a large expansion of nuclear reprocessing in this country at a time when some of the technological, environmental and political problems are, to say the least of it, not immediately soluble even if some of them can at some time be solved. I should like briefly to recapitulate some of the problems that were mentioned by my honourable friend Mr. David Penhaligon in another place. First, the Atomic Energy Authority and BNFL have consistently maintained that in the long term they will be able to develop a process for vitrifying the high level radioactive wastes which are at present held in liquid form on the Windscale site. They further claim that, even if it was to be quite a long time before the vitrification processes were perfected, they could manage to store liquid wastes arising from our domestic nuclear programme in the area that is available at Windscale. Speaking from memory, I think we are talking about an area of no more than 8,000 square metres by the year 2000 to accommodate the whole of the liquid wastes that could arise from our own programme.
Nevertheless, they admit that it would be much better if one could store these wastes in a solid form, whereby the management of them, and the control of the heat arising from the continuing decay processes, would be much more readily accomplished. So they say that this is an essential component of the long-term programme which they are confident can be solved technologically. Without in any way doubting their assertions of confidence, I think that the layman would be happier if there could be a demonstration of that capability before these very large sums of money were approved, let alone spent. The Atomic Energy Authority have had very many years of research on the subject—I think that the Fingal project goes back to the late 1950s, and after that we had Harvest, and now no doubt there is a further stage in the development of the vitrification process—but we are still a long way from achieving commercial success in that regard.
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The second point my honourable friend made—he dealt with this on several occasions during the proceedings on this subject in another place—was the question: What would happen to nuclear wastes not arising from our domestic programme but from the fuel which we are to process for overseas customers such as the Japanese and Swedes? I understand from the Secretary of State on Second Reading that we are not necessarily obliged to store the wastes arising from, for example, the Japanese contracts at Windscale, and that in certain circumstances we should be able to return them to the customers.
There are two questions I would put to the noble Lord about that, although I am not sure he can reply to them at this stage. First, how can we in fact guarantee that the contracts will include such a provision when presumably they are a matter for the day-to-day management of the BNFL rather than for the Secretary of State for Energy? I am not sure whether this matter is covered by the general direction powers of the Secretary of State. It is a difficult question and I accept that the noble Lord may not be able to answer it now. Secondly, I am concerned about the plutonium arising from nuclear wastes. As the noble Lord will appreciate, the point of the exercise is to extract from spent fuel elements which are returned to Windscale the components which it is possible to use as fuel; that is, uranium and plutonium still contained in the fuel elements.
On Second Reading the Secretary of State gave assurances--he repeated them on other occasions in another place—that any plutonium arising under these contracts with overseas customers would be subject to the "most stringent and careful safeguards". We already have stringent and careful safeguards because we are members of the International Atomic Energy Agency, but as the noble Lord will be aware, we and our allies who are members of that Agency are not satisfied with the existing safeguards; we say they should be strengthened and we as a nation are, according to the brief issued by the Department, taking a leading part in informal discussions with our friends to consider means for strengthening the control of plutonium, including the possibility of some form of international régime for its storage.

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The question which arises, therefore, is this. Supposing it is not feasible for us to arrive at any agreement with our partners in the International Atomic Energy Agency and we still have large masses of plutonium arising from the contracts we have entered into with overseas customers? Will we return that plutonium to them? And supposing they do not abide by the additional safeguards which we evidently think are necessary? Will we divert this plutonium to our own use, which of course would imply using it in commercial fast breeder reactors, a technological development which we have not yet decided on so far as our own energy needs are concerned?
Then there is the question of the ultimate disposal of radioactive wastes. If we have a large programme of nuclear energy, we cannot continue to store them at Windscale for ever, although, as I said, the Atomic Energy Authority and the BNFL are satisfied with the facilities they have there up to the end of the century. We must make provision beyond that and the National Radiological Protection Board has only today issued a report on the feasibility of dumping these solid wastes finally on the ocean bed. I found the accounts of this report in the newspapers this morning rather misleading because they purported to show that this problem was virtually solved by the NRPB's process research, whereas if one reads—I have not been able to obtain the whole report; it was not in the Library—the article by Paul Grimwood and Geoffrey Webb, who work at the NRPB, in today's New Scientist, one reads that the broad conclusion drawn from their study is that a great deal of additional work has to be done to solve some of the uncertainties that have been identified. They say:
"These uncertainties need to be substantially resolved before the disposal of high-level radioactive waste on the ocean floor is acceptable."
Thus, the point made by my honourable friend in another place still remains; we are undertaking this very large expansion of a reprocessing capability without having solved the difficult problem of what to do ultimately with the material that arises from the plant.
A question of which I have given the noble Lord notice is about the circum-
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stances in which the guarantees that he mentioned would come into operation. The guarantees, we have been told in the brief—Ministers have reaffirmed this in another place—are not guarantees of performance; in other words, that the Government would ensure repayment of advances if the plant is built but does not work. That is not what the guarantees are for, and such operational risks, equally, are not going to fall on the BNFL. Thus, the question that was asked by my honourable friend and by Mr. Nigel Forman in another place was simply on whom those risks would fall. If—customers having made advance payments for the reprocessing of their spent fuel—when the plant is finally constructed it is, for technical reasons, inoperable, on whom does that risk fall? Who must repay the advances which the BNFL are holding from customers?
In connection with the guarantees, the Americans have been extremely concerned about the growth of reprocessing facilities. Indeed, before the presidential election President Ford was expressing great anxiety about the avoidance of proliferation which, he said, must take precedence over economic interests. For that reason he announced in October 1976 a three-year moratorium on nuclear fuel reprocessing in the United States, fie said on that occasion that the United States should no longer regard the re-processing of used nuclear fuel to produce plutonium as a necessary and inevitable step in the nuclear fuel cycle and
"…we should pursue reprocessing and recycling in future only if they are found to be consistent with our international objectives".
I think that that policy is being continued by President Carter, and is probably being reinforced, because President Carter has been, I would say, perhaps more concerned about the possibility of United States reprocessing technology getting into the hands of nations overseas who might use it even less responsibly. The United States decided to withhold American nuclear technology from Brazil and, as noble Lords will be aware, there is some argument going on between the United States and West Germany, who would like to step in and take over this contract.
If the United States have come to the conclusion that expansion of reprocessing

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should be very limited and they are not going to do any themseleves, they might well seek to impose a ban on the transfer of nuclear material originating in the United States, and having been used as fuel in a country such as Japan, to Windscale for the purpose of these contracts. I am not sure what the international legalities of this matter are, but I understand that it was one of the reasons why there has been considerable delay in coming to a decision on those contracts with the Japanese. Obviously we cannot oppose this Bill here as we did in another place, but I must confess that, in spite of the debates that have taken place there, some considerable anxieties still remain in our minds and we should be most grateful for anything that the Minister can provide to resolve them this evening.
7.41 p.m.
Lord STRABOLGI: My Lords, I am very grateful to both noble Lords for taking part in this debate, particularly to the noble Lord, Lord Trefgarne, for his constructive speech, and to the noble Lord, Lord Avebury, for the very important matters that he has raised. The noble Lord, Lord Trefgarne, asked me a number of questions which I shall do my best to answer first. He asked me first which type of reactor we should eventually decide upon. The design and development work were undertaken by the Nuclear Power Company, which completed and submitted the reference design documentation to the generating boards last June. The Atomic Energy Authority then advised the Government that this was an appropriate point at which to take stock of progress with the SGHWR programme. The AEA recommended that, for a variety of reasons, the SGHWR looked less attractive than it had seemed two years before and said that, on balance, it was its view, the SSEB dissenting, that the programme should be replaced by AGRs or by pressurised water reactors. The Government have not yet reached a view on this advice. The Secretary of State has agreed to a proposal that NNC should carry out a six-month assessment of the SGHWR, AGR and PWR systems on the clear understanding that this will not jeopardise the nucelar industry's ability to start work on site on an SGHWR early in 1979. The Government are not committed to accepting the outcome of this
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assessment, but it should provide a firmer basis on which to reach a decision on the future of the SGHWR programme.
The noble Lord, Lord Trefgarne, also asked me about JET. The Joint European Torus, which is known as JET, is planned to be the centrepiece of the European Community's thermo-nuclear fusion research programme and it is estimated to cost about 135 million units of account to construct over the next four years. The main outstanding decision on JET is the choice of site, and we have had Starred Questions on this from time to time in your Lordships' House. This is on the agenda for the Council of Research Ministers next Tuesday, where we shall continue to press, as the noble Lord, Lord Trefgarne, asked me to confirm, the outstanding merits of the United Kingdom's candidate site at Culham near Oxford.
The noble Lord also asked me to clarify a point about the capital structure and the loans to BNFL. I am glad to have this opportunity to describe it a little further. The loans made to BNFL from the Consolidated Fund shown in the company's accounts as hearing interest rates of 5½ per cent. and 9½ per cent. were transferred to the company from the AEA when the company was set up in 1971. The loans at 5½ per cent.—all of which date back to before 1965—were transferred to BNFL at the interest rate that they bore when they were held by the AEA's trading fund. When the company obtained a further £10 million from the National Loans Fund during 1976, the interest rate on that was the rate prevailing at the time. There is no question of a subsidy to BNFL. These loans merely bear the interest rates fixed when they were issued.
Finally, the noble Lord, Lord Trefgarne, asked me for an assurance on NNC share acquisition. As I said in my opening speech, the powers to be given under the Bill are not in any sense powers of compulsory acquisition and there is not a power to nationalise. There is therefore no question of acquiring shares under this power against the wishes of their owners. It goes without saying that if this or any other Government were ever to wish to acquire shares by compulsion in the future, further legislation would he required. I confirm that we have no proposals of this kind.

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The noble Lord, Lord Avebury, dealt more with the environmental side of this matter, which I thought made for a very good balance in the debate. He raised a number of questions, asking me first about Windscale. As I said in my speech, this is of course the subject of an inquiry. I agree that there has been considerable public concern about the effects of Windscale operations on the health of those who work on the site and those who live in the area. It has been suggested that exposure to sources of radioactivity, including plutonium, causes a high incidence of blood cancer and similar diseases. In fact, comparison of mortality rates for Windscale employees and pensioners with the average for the population as a whole does not give any support to that theory. Statistics for West Cumbria as a whole do not indicate an excess of these diseases in the area.
With regard to the recent incidents at Windscale, I have nothing to add to the reports made to the House recently. However, it may be useful if I refer the noble Lord, Lord Avebury, to the last Statement made by my right honourable friend the Secretary of State for Energy, who said on 15th December that he wished to inform the House that the Nuclear Installations Inspectorate had informed him yesterday that,
"over the last year routine monitoring at Wind-scale has revealed detectable levels of tritium on the beach. Investigations by British Nuclear Fuels Limited, in consultation with the Department of the Environment, and NII have not yet established the source of the tritium, but cannot rule out that it may have come from the silo which is the possible source of the recent seepage of radioactive water. I am advised that the tritium level on the beach is well below that permissible in drinking water and constitutes no hazard to employees or the general public."— [Official Report (Commons W.A.), 15/12/76; col. 716.]
The Secretary of State will be reporting again to both Houses when its source is established. Meanwhile, the Government have asked BNFL to ensure that the unions on the site, the local authority and members of the local liaison committee are informed.
With regard to vitrification, early research work on the solidification of high-level liquid waste carried out at Harwell in the late 1950s and early 1960s demonstrated the feasibility of using a
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one-step vitrification process. The present programme of work which commenced in 1973 is aimed at developing this process to the industrial scale for demonstration by the mid-1980s. This project is now at such a stage that its successful conclusion can be confidently predicted.
Through its membership of United Reprocessors and its contacts within the United Kingdom, the company has access to work on other forms of solidification of waste being undertaken overseas, in particular in France, which has already been taken to the prototype stage. British Nuclear Fuels Limited would not hesitate to adopt an overseas process if it became clear that this had advantages or that it would be available sooner than its own processes.
With regard to ultimate disposal, to which the noble Lord referred, several options are available. After vitrification, it could be disposed of to stable geological structures; into suitable ocean deeps; or by burial under the ocean floor. The noble Lord also referred to the announcement on the radio this morning that the National Radiological Protection Board was asked by BNFL to examine the idea of using the seabed for final disposal of the highly active wastes from reprocessing spent nuclear fuel when they have been vitrified. The report suggests that there are sufficient indications that the ocean floor should not be ruled out as a possible site for the disposal of high-level wastes, but there should be further evaluation of the subject in the coming years. Research work has indeed demonstrated the feasibility of the vitrification process.
Turning to the question of guarantees, I appreciate the noble Lord's concern that the guarantee of refund of advance payments should not involve a loss to public funds if the plant on which they have been spent does not work. However, the Government have already made it clear that the proposed reprocessing contracts will put this technological and operational risk on the customer, not the company. With regard to safeguards, I should say that safeguards means a system designed to ensure by means of accounting control and independent international inspection and verification that nuclear materials are not diverted to nuclear weapons or other nuclear explosive devices.

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In regard to the United States, the noble Lord raised an interesting point. He also asked about the implications for the Japanese contract of US and other international restraints on the shipment of irradiated fuel. It is usual for nuclear fuel to be supplied subject to a requirement that it will not be transferred by the recipient to another country without the supplier's authorisation. This is the only international restraint on the transfer of spent fuel from Japan to the United Kingdom for reprocessing. This requirement is not new, and authorisation has never been refused for transfer to the United Kingdom. The Government of the United States are currently reviewing the conditions under which their authorisation for transfers is granted, against the conclusions of their recent review of nuclear export policy—
Lord AVEBURY: So, my Lords, is it conceivable that the Americans, at the end of this review, might come to the conclusion that fuel originating in the United States and being used in Japan was to be prohibited from being reprocessed in the United Kingdom? I agree that that would cause some diplomatic "agro" between Britain and the United States, but they might conceivably feel strongly enough about it to impose such a restriction.
Lord STRABOLGI: My Lords, much international work is being done to strengthen non-proliferation arrangements. There is no reason to believe that this will not be successful. The noble Lord has raised an important point, and of course we and all other Governments have this very much in mind.
Finally, the noble Lord, Lord Avebury, complained about the urgency and the short notice with which the Bill was set down. It completed its passage in another place only on Monday. This timetable, which I entirely accept was short, was agreed through the usual channels. It was forced upon us by the terms of the Parliament Act. As your Lordships are aware, this is a Money Bill, which we are expected to pass within a calendar month, and for most of that period we shall be in Recess. I therefore apologise to noble Lords for the short notice that there has been to deal with the Bill, but I do not think that it has in any way
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stopped us from having a first class debate. I am most grateful to the two noble Lords for taking part in it.
On Question, Bill read 2ª: Committee negatived.

PAY RESEARCH UNIT
7.55 p.m.
Lord BEAUMONT of WHITLEY Lord BEAUMONT of WHITLEY rose to ask Her Majesty's Government what action they have taken towards obtaining agreement to the publication of the material for the comparability studies of the Pay Research Unit, as promised on 11th December 1975. The noble Lord said: My Lords, on 11th December 1975, 15 months ago, the noble Lord, Lord Orr-Ewing, proposed a Motion, the purpose of which he stated was to elicit more information and more openness concerning the pay, pensions and perquisites of civil servants, and in order to try to see how these compared with those of similar people in the private sector.
In replying to the debate the noble Lord, Lord Shepherd, when dealing with a suggestion that the studies of the Pay Research Unit should be published, warned us that such information was sensitive and had been obtained on grounds of confidentiality, and the noble Lord, Lord Houghton of Sowerby, also reinforced that in his speech. But he said that he would consider what could be published and would consult the people who had provided the information on which comparability studies were based, to see whether they would allow this information to become public in some form or another. On 20th May 1976, five months later, I received an Answer to a Written Question in which I asked what progress had been made. I was again reminded of the sensitivity of the matter, but I was told that,
"the intention is to complete the study into the question, and to discuss it with the interested parties before the suspension [of the Pay Research process] is lifted."—[Official Report, 20/5/76; col. 1569.]
By that time, because of the Government's incomes policy, the Pay Research Unit had become dormant, or much of its work was not being done.
So far, so good. I was pleased by that reply. I thought that progress was being

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made, and I waited for an announcement. Nothing happened. Seven months passed. I returned to the attack. I again asked what progress had been made. I was told by the noble Lord the Leader of the House that the matter was under active consideration. I was reminded that there was an arrangement of confidentiality, which I must say I did know by then, and that people had to be consulted. At that moment, despite all my respect for the noble Lord the Leader of the House, my blood began to boil slightly because it seemed not only that nothing was being done but that we were actually moving backwards. The answer given by the noble Lord, Lord Peart, seemed to be a step backwards from what the noble Lord. Lord Shepherd, had said.
Therefore, I have tabled this Question again tonight, this time as an Unstarred Question. It is a Question which I think should really read: "Has anything at all been done? If so, what; and if not, is there any real intention of doing anything? "I believe that the importance of the matter is considerable. It may seem a small point on which to go pegging away, but in the original debate considerable disquiet was expressed that comparability studies were obviously producing some rather odd results. Cases were quoted where it seemed that civil servants were being paid between 20 and 50 per cent. above the rate for the job outside. I am told that there are plenty of explanations for some of these matters. One is that it tends to be because the Civil Service has national agreements: that out in the Provinces, particularly in the further parts of the United Kingdom, it may be that they are being paid much more than the local people who get regional agreements—I mean here the local people in private industry. Another reason, I am informed, is that, in order to have something comparable to the Civil Service, the comparability studies tend to be made of the big companies. Good employers are paying a lot, and are therefore not necessarily matching the mean of pay for that particular job.
But, my Lords, even granting all of this, we had a situation where there was disquiet—and this is the point, my Lords. It is not that we are trying to say that there was anything wrong, but that people were worried and thought that they had a right
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to ask for an explanation. In fact, there were very knowledgeable people who were saying (not in that first debate in this House, but were saying elsewhere) that comparability studies were in some ways inadequate; and people were worried, again, by the fact that the studies themselves were prepared entirely by civil servants, who then produced the material for both sides of the bargaining.
My Lords, our Civil Service is uncorrupt, and we all know it; and I hope no-one will assume that I am making any kind of an attack. I am merely saying that when you have a situation like this, where to a certain extent people appear to be their own judge, jury and providers of evidence, it is the more important that it should be open as to what that evidence is. It was as a means of allaying this disquiet, I think, that the noble Lord, Lord Shepherd, undertook to see what could he done about making the results public.
The work of the Pay Research Unit, as I have said, is in abeyance under the present phase of the Government's pay policy; but there are two reasons why work on the confidentiality question should have been pressed on with—and, if I may say so with respect, all the more so if the Pay Research Unit did not have very much to do over the period. First, the noble Lord, Lord Shepherd, in his Written Answer to my Question, stated that it ought to be done before the lifting of the suspension of the work of the Unit. That was a considered Written Answer. The suspension presumably will be lifted when free collective bargaining is restored. Both the Government and the Party to which I have the honour to belong, which are in sympathy on this as on a number of other subjects these days, believe we must have a sensible voluntary incomes policy; but the noble Lord the Leader of the House knows much better than I do the danger that this may not happen and that we may be flung into a free-for-all before very long. But by the admission of the noble Lord, Lord Shepherd, we should have an answer before that.
Secondly—I think this has possibly been missed in replies by the Government to my Questions for Written Answer—I think it is important that we are entitled, if it can be done, to have answers to the questions we were asking in December 1975 about what was happening then.

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We now come to the difficulties about producing the answers, and I am afraid I do not see why they are very great. In his Answer of 20th December 1976 to my Question for Written Answer, the noble Lord, Lord Peart, said that there would have to be full consultations with the national staff side. But the noble Lord, Lord Shepherd, had already said on llth December 1975—over one year before—in col. 1166 of Hansard that there was no difficulty from the point of view of the Civil Service Department and the trade unions. Putting those two statements together, that seems to imply that in fact no progress was made during that whole year in consulting with the staff side.
Nevertheless, if we accept the statement by the noble Lord, Lord Shepherd, that there should be no difficulty—and I do not see why there should—that leaves the employers, the people who provided the information for the comparability studies. I, too, understand that this is extremely sensitive. I am perfectly aware of this; but I am not able to understand why, as my noble friend Lady Seear said in the same original debate, there should not be a generalised answer. I have been informed privately, but I believe it to be true, that in fact when these studies are processed into statistical form they are unrecognisable as to what companies they come from, and a great many civil servants deal with them without being in any way able to discover the sources. If that is so, why cannot we, the public, have the statistical results as well?
My Lords, I understand that it may be that the Government have not been able to crack the nut of confidentiality; and, if so, of course they must honour the promises they gave—and I am not for a moment suggesting otherwise. But I am still, 15 months later, rather dubiously asking: Have they tried? What have they been doing these 15 months since this was first debated, when they gave certain promising encouragement, later repeated by the noble Lord, Lord Shepherd? For instance, how many firms which have produced information have been approached and consulted about this possibility? These are specific questions which, although I have not given the noble Lord the Leader of the House specific notice of them, I nevertheless
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think are so implicit in my Question that I am entitled to ask him. How many firms have been approached and consulted on this? How many replies have been received? And what were the answers? If, as I suspect, the answer may be that in fact very little has been done, I think we are entitled to ask, on the basis of what we were told 15 months ago, "Why not?"—and that, my Lords, is what I am asking tonight.
8.7 p.m.
The Earl of MANSFIELD: My Lords, as I think he has acknowledged, the Question of the noble Lord, Lord Beaumont, has been put on a somewhat narrow basis. Indeed, it was only when I came to examine the Official Report of 11th December 1975 that I found just how narrow the basis is. So, in fact, we are not, as I understand it, going into any of the matters except for this Question which the noble Lord has asked, which occupied the attention of the House when my noble friend Lord Orr-Ewing raised the matters which he did in that short debate. I am bound to say that when I examined Hansard I could not find that the Leader of the House, as he was then, had made any promise at all, and I must say that I do not altogether blame him. I will go further than that and say that I think he would have been very foolish if he had made any promise. What he did was to give the same sort of undertaking that Ministers usually give in the situation in which the noble Lord found himself. He said that he would consider matters; and this, as I read his second speech in col. 1166, to which the noble Lord has already referred, is as far as he went.
I must say that in those circumstances I do not think I would have been very moved to take part in this debate, and I should explain my presence, which is, I hope, a two-fold courtesy, both to the noble Lord and to the Leader of the House, who is going to reply. Bearing in mind the reasons which were given by the Government for not doing what they were doing at that particular moment in time, and recalling the fairly trenchant and, I thought, pertinent observations of the noble Lord, Lord Houghton, in the speech which he made on that date, one asks: What has happened to change matters?

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My Lords, inflation has continued. So has a pay policy of sorts. The Government are about to embark on a new round, and one assumes, as I think one must, that whatever the findings of the Pay Research Unit may have been (assuming that it has been in a position to make any) it is not going to be within the competence of the Government to put them into effect in the meantime. I see that the noble Lord the Leader of the House is nodding his head. I assume that he agrees with me in some measure. As I say, assuming the unit has been able to keep up its work, the Government are not really in a position to do very much about it.
One thing that has never been plain is whether in these studies the greater job security which goes with the Civil Service, in contrast with other jobs, has ever been taken into consideration. I understand that from time to time a number of noble Lords from these Benches have expressed the view—and I am going into generalities —that it would be desirable if at least one member of the PRU was to be someone from outside the Civil Service. He could be somebody who would be seconded from his firm for two or three years. I believe that such exchanges take place regularly in such other parts of the Civil Service as the Department of Industry. This would be something which, I think, would promote confidence in the eyes of the public; because it would be felt and understood that the Civil Service was being examined by experienced and confidential eyes, so to speak, from a position outside the Civil Service. This was not a matter which was dealt with in a comprehensive form in the 1975 debate, and it could be that the noble Lord the Leader of the House when he replies will give some consideration to it, because it might help alleviate any general unease that there may be.
So far as the main part of the noble Lord's Unstarred Question is concerned, I appreciate that information provided by individual firms, companies or even sectors of industry should be treated as confidential and not published if the companies make that request—as, I presume, they normally do. Indeed, as I think the noble Lord, Lord Beaumont, appreciated and acknowledged, it would he grossly improper if those companies or sectors ever felt that any confidentiality
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would be breached. However, I was struck by the very brief remarks of the noble Baroness, Lady Seear, in the 1975 debate. One assumes that eventually there comes a time when the unit makes up its mind and comes to some form of conclusion. Thereafter, one would think in terms of the publication of some form of generalised information—and one can think of instances of it, such as the average pay of a certain category of person, and such matters as those, which would be very broad in its scope. I do not believe that such publication could possibly cause any harm either to individuals, to companies, to a sector of industry or to the national interest.
My Lords, having, I hope, not criticised the noble Lord for asking the Unstarred Question which he has asked, I sympathise with his motives. I think there is here an opportunity for the Government to allay any public unease there may be. There seems to be, if I may say so, a certain passiveness in the Government approach to the Questions which the noble Lord has asked from time to time. I think that we should all be happy if the noble Lord, Lord Peart, were to put our minds at rest this evening.
8.14 p.m.
Lord HOUGHTON of SOWERBY: My Lords, perhaps I may recall that I was the chairman of the staff side of the National Whitley Council which negotiated the agreement for the setting up of the Civil Service Pay Research Unit; so that I have a very close interest in its origin and in the work it has done since. It was set up 20 years ago as a result of the recommendations of the Royal Commission on the Civil Service presided over by Sir Raymond Priestley. Up to that time, the only guide that we had for fixing Civil Service pay was the concept of the good employer—and nobody knew who he was or where we could find him. This had led to serious differences in negotiation and great difficulties in arbitration; and the staff side represented to the Priestley Commission that something more tangible, more ascertainable, should be substituted for the concept of the good employer.
The Priestley Commission recommended the adoption of the principle of fair comparability; that is that the pay

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within the Civil Service, as a whole and as divided between the various grades and sections, should be determined on the basis of fair comparisons with suitable employment outside. The then Prime Minister, the late Lord Avon—Sir Anthony Eden as he then was—had to give the new Civil Service Pay Research Unit a send off by sending a letter to a very large range of outside employers of all kinds explaining to them that a new Civil Service Pay Research Unit had been set up for the purpose of ascertaining more satisfactorily and more accurately the sort of pay civil servants should get and to ask for their co-operation. At the same time, he gave the firms a pledge about confidentiality. That is how it started.
Ever since, this Civil Service Pay Research Unit has been conducting this exercise in fair comparisons over the whole of the Civil Service. Now, in order to bring this work within the resources of a unit of this kind, it was necessary to conduct investigations over different sections of the Civil Service by instalments; and the PRU has taken the various sections from time to time in a kind of programme. Then, when special claims were made on behalf of certain sections of the Civil Service that they may have fallen substantially behind the pay and conditions of comparable employment outside, there would be a special exercise undertaken by the Civil Service Pay Research Unit.
This involved looking at the pay of professional, technical and scientific classes as well as the broader executive and clerical sections of the Civil Service—a very wide range of employment, as the House will fully understand, in the public services. To obtain this information, it was first necessary, under the agreement, to have accord between the official and staff sides of the Civil Service Whitley Council as to the area to be covered in this particular comparability test. Agreement was reached as to where the PRU should go for its information; this was often accompanied by actual inspections, because the nature of the work done was vital to a proper consideration of fair comparability. And then there were many differences in the conditions of employment which had to be taken into account. Some were tangible, like free holidays; some were intangible. There had to be
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the best attempt at a scientific appraisal of the value of the differences: whether they had contributory pensions, noncontributory pensions, their hours of work, special subventions given to staffs, sometimes education fees paid by firms on behalf of employees. All these matters had to be taken into account. It was not a simple question of a list of pay scales; it was an examination of the principle of fair comparability. It was a very complicated matter.
There is not only the aspect of confidentiality in this matter, but the nature of the information obtained. I thought that the whole question of publication was so naive that people did not understand what they were talking about. This is not just a list of pay scales; this is an examination of the content, of actual operations undertaken by particular sections of staff in particular firms, with their conditions of service related to that, and then compared and brought into the wider comparison with the particular section of the Civil Service. My Lords, where do you go for fair comparability for inspectors of taxes? Where do you go for fair comparability for professional valuers?—bear in mind that the State is the biggest employer of professional valuers. These are the factors which have to come into this most complicated business.
With that description, I can pass on to the more practical issue of the present. The Civil Service Pay Research Unit is suspended for the present time because of the operation of the pay restraint policies, and so forth, which apply to the Civil Service as well as elsewhere. The Unit has been virtually disbanded and its work suspended. Therefore, it is not collecting current information. Any publication of what the Civil Service Pay Research Unit has in its possession must relate to the past. I do not think that publication of information relating to the past is of particular value at the present time. It would be a waste of public money to publish a lot of out-dated information gathered by the Unit in the past.
Lord BEAUMONT of WHITLEY: My Lords, before the noble Lord leaves that point, would he not agree that some information related to the past would usefully serve to allay any fears which were expressed, and give greater trust and hope for the future?
Lord HOUGHTON of SOWERBY: My Lords, if the purpose of this publication is to allay public fears, then I would put this debate on an entirely different footing. This is not a form of private detective work on the operations of the Civil Service Pay Research Unit, the negotiations upon that information and, in many cases, the decisions of arbitration tribunals upon disputes which have arisen; this is the complex question of negotiating pay scales over a very wide area in the public service. There may be different ways of doing this in the future, but I cannot accept the idea of publishing out-of-date information in order to prove to a suspicious public that the Civil Service were overpaid some years ago and are still overpaid because of that. This is not a sensible approach to this important matter. If I were the chairman of the staff side at the present time, I would not stand for it, either. We in the Civil Service have our rights. It takes two sides of the Whitley Council system to reach agreement on matters of such importance affecting the staff.
Baroness SEEAR: My Lords, would the noble Lord not agree to two things which seem to be relevant to what he has been saying? The first is that the principle of fair comparison, to which he has drawn attention, and on which, as he rightly says, the Priestley Committee based their recommendations, has been questioned as a valid way of deciding Civil Service pay. It has been questioned in connection with the reports of the Boyle Committee, of which I have the honour to be a member, and it has also been questioned before the Diamond Committee. By itself the principle is today too inadequate a way of trying to determine pay. May I also ask the noble Lord whether he agrees that, when he says that the staff side have very important rights in this matter—as they have—the public also have a great interest in it? It is a very great public concern and the public are well aware of the fact that the two sides which enter into negotiations are civil servants, as are the members of the Civil Service Pay Research Unit.
Lord HOUGHTON of SOWERBY: My Lords, I agree that this system of deciding Civil Service pay has been questioned in some quarters. In my humble submission they are quarters
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which are not important enough to justify a revision of the system without sending it again to a Royal Commission. This was a recommendation of a Royal Commission which ended a battle between the official and staff sides of the Whitley Council on the principles to settle Civil Service pay which had gone unresolved for 25 years, in my experience, and we at last settled the matter by reference to a recognisable and practical principle.
There has since been another Royal Commission; that is the Fulton Commission. If the issue is that there is suspicion regarding the evidence upon which fair comparability has been based, and that the public must have their misgivings allayed by disclosure or some other form of satisfaction of public anxiety, then this is not the way to settle it. It should be settled not by publication but by asking for the matter to be referred again to an independent body who can look at all aspects of this problem. I am astonished that this comes from the Liberal Benches. I can only say with great respect to noble Lords that they are touching a vital spot in the whole fabric of peace and harmony in the public service which is not to be lightly taken after all the trouble that we had for so many years.
What I am going to say in calmer and more constructive vein is that I am not concerned so much with publication, because I do not think that that matters. What I am concerned about is the use to which this information can or should be put in a wider context of fair comparability, not only as between the public sector and private industry but between private industry and the public sector. This is where my attention is fully justified; this information is collected wholly for the purpose of fixing pay in the public sector. Should that be the sole use of information of this kind? Why should this not be a two-way arrangement? Why should information sought and obtained in this way be confined for application to Civil Service pay? Other people who have supplied the information may have an interest, too, in the fair comparability of their own conditions of service, and the pay of their own employees. This raises a much wider issue, one upon which I have dealt very fully in a fairly recent seminar conducted by the Financial Times.

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What is now in the minds of many people outside the Civil Service is the feeling that the Civil Service and local government are now better paid—grade for grade, class for class and work for work—than many people in similar positions in private industry. Many articles have been written to give examples which suggest that there may be some substance in this fear, especially as between middle management and people in executive positions in the public service. In the last 20 years we have seen a great deal more nationalisation. During that time, the expansion of the public sector has gone on apace, so it is not only the Civil Service but also the nationalised industries which in many cases are no longer subject to market pressures or market considerations. The railwaymen, for example, are not paid according to the profitability of the railway industry. I see the noble Lord looking at his watch, but when an issue such as this is raised I do not care what the hour is. If this important matter is raised, then I have an historic interest and a present duty, and I am going to discharge it. I am looking at the clock—
Lord MOWBRAY and STOURTON: My Lords, it is fifteen minutes!
Lord HOUGHTON of SOWERBY: I do not know what all this gesticulation is, my Lords, and I am not going to take any notice of it. I am going to finish what I have to say. I believe there is an entirely new dimension to this question of comparability, and I think that before this Pay Research Unit is restored, probably it would be desirable to look at the wider issue of the collection of information which would be of use to all who might seek it in order to have the benefit of investigations already conducted for other purposes being applied to particular issues of their own.
However, I can only say to the noble Lord, Lord Beaumont of Whitley, that he is obviously an impatient man. He has been asking for things to happen during the last 18 months, when it was quite obvious that nothing was happening and nothing was likely to happen because nobody was doing anything. I think that very shortly the time may come when the wider issues should be considered, but I do not offer that in any representative capacity. However, when I see my own
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handiwork—something in which I played a very important part at the inception of this scheme—coming under criticism, or when I see noble Lords wanting the whole basis of the scheme to be changed unilaterally, then, since I am in your Lordships' House, I am going to come here to to defend it.
Baroness SEEAR: My Lords, surely the noble Lord cannot be so conservative as to think that because he fixed something 20 years ago it is fixed for ever?
8.33 p.m.
Lord PEART: My Lords, this has been a rather interesting debate. We have had a debate in which the last few minutes have been rather exciting, rather like the other place. I do not regret it. I think it is good that people should speak frankly and honestly, and I congratulate my noble friend Lord Houghton on what he has said, because he knows so much of the subject—probably more than any of us—and I pay great tribute to what he has done. Quite rightly, he feels passionately about something which has worked—something which arose out of the Priestley Commission and something which we see before us now. It is also something which has created, if I may use his words, "peace and harmony" in the public service. I do not know whether that will always remain, but nevertheless it has been created.
I also welcome the concise statement which was made by the noble Earl, Lord Mansfield. He was very realistic: he knows the difficulties of Ministers. I do not complain about the noble Lord, Lord Beaumont, having raised this matter. He has questioned me about it. He said that my reply in the House to a Question gave the impression that we were going backwards and that his blood began to boil. I do not really think I have gone backwards at all. I made those statements carefully and I have carefully looked into the matter. Obviously, as a Minister, I cannot reveal certain matters to the House until they are completed. I take the view that inevitably and naturally we have to look at our institutions, but there is always a danger of destroying something which is working well—and I think that the system has worked well—and so we have to be extremely careful. I must

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apologise to the noble Lord, Lord Beaumont, if he feels, as I sense, that in past exchanges he has not received a sufficiently full response to his Questions. That is not unusual.
I shall try to do my best to remedy that this evening in my speech, which I hope will not be too long, at this time of night. First, it is right and proper that I should put this debate into context: indeed, my noble friend has also done that. I should like to remind noble Lords of the nature of the information on which the question of publication has arisen. My noble friend referred to that point. Noble Lords will recall from the very full debate on Civil Service pay and pensions a little over a year ago that, since the publication of the report of the Priestley Royal Commission in 1955, Civil Service pay has been based on the principle of fair comparisons. In recommending that this should be so, the Priestley Commission set out in great detail the way in which this principle should be applied.
Their basic view was that, to be fair to both the civil servants and the taxpayers, Civil Service pay should be fixed around the middle level of the remuneration received outside the Civil Service for work of broadly similar quality and responsibility. They recommended that a three part procedure should be adopted. This involved, first, fact-finding to collect the evidence on what was being paid for comparable jobs outside the service. Secondly, processing, to convert the raw data into a common currency, allowing for differences between hours and leave, pensions, perks—such as company cars, and other conditions of service. Mention was made of education facilities. Thirdly, negotiations between the management and the unions—subject, of course, to the scrutiny and final approval of Ministers.
So far as the fact-finding was concerned, the Royal Commission recommended that the facts should be collected for the management and unions by a body independent of the negotiating parties. They indicated in detail what evidence should be collected, and that it should cover the whole shooting match—not just basic pay rates but fringe benefits and other conditions of service as well.
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So it was that the Pay Research Unit came to be set up, and it had continued its work for nearly 20 years until the suspension of the operation of pay research as part of the Government's pay policy in 1975. I want to pay tribute to all those who created the Unit and to the work done by those concerned. That work is limited to providing reports on the facts to enable the processing and negotiation to be carried out by management and unions. In obtaining and reporting the facts, the Unit operates completely independently under a Director appointed by the Prime Minister. That, then, is the background to the debate, and I think it is just as well for noble Lords to he reminded of it, as my noble friend Lord Houghton has already reminded us. I have emphasised the facts.
If I have interpreted him correctly, the noble Lord, Lord Beaumont, has pressed two points on the Government, both in the debate a year ago and since then—quite rightly and I am not complaining, because he is doing the job expected of noble Lords in carrying out their Parliamentary duties. First, he has argued that Parliament should have access to the facts collected in the past by the Pay Research Unit, and he clarified this in the exchanges on 19th January this year. Secondly, he has suggested that in the future more information should automatically be made available than hitherto. On past information, the noble Lord has acknowledged—this has been accepted—that there is the problem of confidentiality. I would stress that over and over again.
When the Pay Research Unit has visited outside employers to collect data, it has always given an assurance that the information gathered would be seen only by the negotiating parties and would not be made generally available. I think that that was right. Otherwise there could not be negotiations. There could not be a development of the process which Priestley recommended.
Lord BEAUMONT of WHITLEY: My Lords, will the noble Lord give way for one second? I entirely agree with him. I am not pressing for the divulgence of the facts but of the processed facts, which I am sure are in unrecognisable form.
Lord PEART: My Lords, the noble Lord says that he entirely agrees with me.

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Let us continue in that mood for the moment. I thought lie argued, first, that Parliament should have access to the facts, which I have mentioned. I thought he clarified that and he now develops it. That is fair enough. I think he has suggested that in the future more information than hitherto should automatically be made available. I think perhaps he is right here, and even my noble friend Lord Houghton said that one should look at this He is not averse to having an examination. On the past information there is, as I have said, the problem of confidentiality, and I think it is right to give an assurance that the information gathered would be seen only by the negotiating parties.
The noble Lord has suggested that this problem could be overcome by preparing summaries of the information, and consulting employers to seek theft permission to publish such information. The noble Lord nod;. But like my predecessor, whose commitment to consult outside organisations related to the future and not to the past, I assure him that I have looked carefully into his suggestion. When I give an answer in this House, I hope noble Lords will think that I am straight in the sense that I believe in what I have done. I have never tried to equivocate, and I hope that I am not doing so tonight. I have looked carefully into this and have concluded that it would be a daunting task to process and summarise the data in any way, which would at one and the same time be enlightening and preserve the confidentiality on which they have been obtained.
Such an exercise would be extraordinarily complex and costly. That is because the reports to which the noble Lord referred are working documents. They contain raw data on pay rates and all conditions of service unconverted to common currency. The reports for the surveys, on which 1st April 1975 settlements were based, alone contain information on 2.000 pay rates and extend over some 1,300 pages. This information, by itself, would be well nigh impenetrable to the lay reader. I dare say the noble Lord will reply that it should not be beyond the wit of my civil servants, over a period of months, to produce some kind of resume of all this information. But I say quite frankly to him that I do not believe the game would be worth the candle.
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In my view, it would not be right or opportune now to reopen the question of the confidential undertakings which have applied to past data, and go through all the inevitable consultation with the interested parties on the form of publication. Moreover, if I understand the aim of the noble Lord correctly, and if he will excuse an analogy more appropriate to my time in another place as head of a Department, he would be trying to assess the quality of a crop of turnips from an aerial photograph. The kind of summary which could be produced at this late stage would certainly not indicate whether the processing and negotiation of past evidence had been fair. On that, I hope that the House will accept the judgments of successive Ministers of both Parties who have scrutinised Civil Service pay settlements and authorised the offers that have been made.
Baroness SEEAR: My Lords, I am sorry to interrupt the noble Lord. This is, in a sense, a technical question and it is one which interests me very much. I am not trying to catch him out. The noble Lord said—and I understand this to he the case—that the comparability negotiations are based on payments made by the good but not the best employer. In order to do this, the findings of the Pay Research Unit must be summarised to some extent, because you could not determine what is the payment in the range of employer that you are looking for. The 1,300 items must be reduced for negotiating purposes to some statistical figures. Surely, you could not otherwise use them.
Lord PEART: My Lords, I cannot accept the argument of the noble Baroness. I know that she follows this subject carefully, but I reassert what I have said. The kind of summary which could be produced at this late stage would certainly not indicate whether the processing and negotiation of past evidence had been fair.
So much for the past. As for the future, I explained to the House in January that the Civil Service pay system is still suspended under the rules of pay policy. Its reactivation will have to be considered in the light of developments in that policy. That is obvious. But, like my predecessor, I fully accept that in the future we will need to work out some way to ensure that the Civil Service pay system is not only fair, which I believe it is, but is also seen to be fair. This is the area where we want to

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have detailed consultations with those concerned. But these cannot, of course, usefully begin until we are in a position to talk about the future of the Civil Service pay system.
The difficulties of confidentiality, and the nature of the information which can be made available, will remain. But at an appropriate time—and I say this to the noble Lord, Lord Beaumont—this would need to be explored in consultation with the Civil Service unions with whom, of necessity, all such changes have to be negotiated. We should also need to consult the organisations then participating in the surveys. Whatever might be decided on publication, the Unit would then be aware of the requirements and this would enable it to plan its reports accordingly. I can assure the House that the question of greater openness will continue to be at the forefront of our minds, but it would be premature of me to say more at this time. I think that we have had a useful debate.

BRITISH TRANSPORT DOCKS BILL
  CITY OF LONDON (VARIOUS POWERS) BILL [H.L.]
  Reported with Amendments.
  COASTAL WATERS: DEPARTMENTAL RESPONSIBILITIES
  COASTAL WATERS: DEPARTMENTAL RESPONSIBILITIES
  IMPORT OF BATS
  IMPORT OF BATS
  PACKAGED MILK: RETAIL PRICE
  PACKAGED MILK: RETAIL PRICE