Sitting of 29 March 1977

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  IMMEDIATE TRANSPORTATION (DELIVERY WARRANTS) BILL [Lords]
  Read a Second time and committed.
ORAL ANSWERS TO QUESTIONS
  EMPLOYMENT

    Women
    Mrs. Renée Shortasked the Secretary of State for Employment what proposals he has to reduce unemployment among women.
    The Under-Secretary of State for Employment (Mr. John Grant): The Government's measures to reduce the level of unemployment are intended to benefit men and women alike.
    Mrs. Short: That is not a very communicative reply. Is my hon. Friend aware that there are about 1 million women unemployed, although only about one-third bother to register as unemployed? Does he accept that many women wish to work and that many have to work to meet the problems of inflation? Is he further aware that in connection with the Job Creation Programme, which is supposed to cater for young people of both sexes, it has been found that so far very few schemes cater for girls. Will he look at the prospects for both girls and women in job creation schemes?
    Mr. Grant: I shall try to be more communicative to my hon. Friend. I accept her analysis about the needs of working women, particularly in terms of keeping pace with inflation. I do not want to minimise the problem, but if we look at the figures it appears that
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    women's employment has suffered less than men's during the present recession, particularly if we take into account the extra number of women coming on to the register and the increased inclination by women to register.
    On my hon. Friend's second point, about the Job Creation Programme, it is true that about 75 per cent. of the jobs involved have gone to male workers, but this is a question very much of local initiative, and many of these jobs are for manual workers. Nevertheless, we shall look at the matter. I should add that the work experience programme has placed about four women to every three men.
    Mr. Budgen: Will the Minister confirm that recent legislation designed to improve the conditions of work for women has made it much more expensive for employers to employ women, and has thus only created more unemployed women?
    Mr. Grant: No. I certainly will not confirm that, because it does not happen to be the case. Of course there is extra cost for the employers involved but there is no evidence to show that it has resulted in the sort of situation described by the hon. Gentleman.
    Mr. Kilroy-Silk: Does my hon. Friend accept that one way of preventing further unemployment amongst women would be to save the 350 jobs threatened at the Plessey factory in Kirkby, in my constituency? Does he further accept that many of these women, because of high levels of unemployment in the area, are the breadwinners for their families? Will he impress upon his right hon. Friend the urgency of taking all measures possible to save these jobs?
    Mr. Grant: My right hon. Friend will have noted my hon. Friend's remarks, and we shall certainly see that they are noted by other Ministers involved.

    Coal, Petroleum and Chemical Industries
    Mr. George Rodgersasked the Secretary of State for Employment to what extent the labour force in the coal, petroleum and chemical industries has increased or decreased during the last 10 years.
    The Minister of State, Department of Employment (Mr. Harold Walker): Between June 1966 and June 1976 the numbers of employees in employment in Great Britain in the coal mining and general chemicals industries fell by 214,000 and 19,000, respectively. For the petroleum and natural gas industry the latest figures are for June 1975. Between June 1966 and June 1975 the numbers in this industry increased by 2,000.
    Mr. Rodgers: Does my hon. Friend agree that despite that quite staggering drop in the number employed in those industries there has been substantial investment and massive improvements in output? Would he deduce from this the fact that it is not by investment in industry that we shall resolve the problem of unemployment? Is he aware that we must turn to the public service sector for this effect?
    Mr. Walker: I have seen the interesting paper about these problems—a paper of which my hon. Friend is co-author—in which he continues to express and expand on these interesting ideas. It may be true that increased investment alone will not result in a significant drop in unemployment; there is also the question of aggregate demand and its expansion. Perhaps we ought to continue to look carefully at the ideas put forward in my hon. Friend's paper.

    Job Creation Programme
    Mr. Ioan Evansasked the Secretary of State for Employment what further measures are proposed as a part of the Job Creation Programme.
    The Secretary of State for Employment (Mr. Albert Booth): A further allocation of £25 million has been made to the Job Creation Programme to enable applications to be received up to 31st August 1977. A working party, set up by the Manpower Services Commission to study all the current measures to help unemployed young people, will be reporting to it in April, and the long-term future of job creation will be discussed between the Government and the Commission thereafter.
    Mr. Evans: Has my right hon. Friend considered the proposals of the TUC, contained in the 1977 Economic Review, which talks about the Job Creation Pro-
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    gramme being capable of substantial expansion? Will my right hon. Friend consider particularly the proposal that all young people between the ages of 16 and 18 who are not in employment should have the opportunity of receiving training through taking part in a Job Creation Programme or in work experience activities?
    Mr. Booth: I can assure any hon. Friend that I have given careful consideration to that proposal. I have discussed it with representatives of the Manpower Services Commission and I expect consideration of the issue to be reflected in its report, which I shall receive in April.
    Mr. Grimond: Is the Secretary of State aware that I hope that the Job Creation Programme will be expanded? When this happens will the right hon. Gentleman consider simplifying it, because I find that there is some reluctance on the part of companies to take on all the documentation and regulations involved for what may be a short period of employment?
    Mr. Booth: We are considering the possibility of simplifying and even operating a narrower range of measures. The advantages gained through simplicity have to be carefully weighed against the wide range of opportunities that exist now when we are able to tailor specific schemes to specific employers or even to the needs of special areas. It would be unwise to jump to the conclusion that we have to simplify this without having regard to the great advantage of flexibility over the wide range of unemployment problems particularly for young people.
    Mr. Loyden: When this review takes place will my right hon. Friend give consideration to an assessment of the value of the scheme, particularly its effects upon long-term prospects for employment and upon the development of industry in areas? Will he consider whether too much influence is exerted by the Civil Service and whether more authority should be vested in the local authority for the use of funds, so that they find the right target?
    Mr. Booth: I am not, as of now, convinced that the Civil Service is having any undue influence on the selection of job creation schemes. The area action

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    committees are examining the schemes and recommending them in the light of their local knowledge. I cannot give a general answer to this. I shall be glad to hear from any hon. Member who has a particular problem in his area or who feels that there is a complaint to be laid against an area action committee for refusing a project. At present I feel that we should maintain this control in the hands of the local area action committees.
    Mr. Emery: Does the right hon. Gentleman recall that when he last made his statement on the Job Creation Programme he informed the House that he was hopeful that it would have a beneficial effect in the West Country? Is he aware that male unemployment in the Exeter and East Devon areas is now 8·5 per cent. and is continuing to increase? We are dissatisfied with what is happening. What new steps does he propose to take?
    Mr. Booth: The seasonally adjusted figures for unemployment in the South-West area show a fall of 600, to a rate of 6·5 per cent. in the last period. That was not as good a drop as was experienced in many other parts of the country at that time. There is therefore a need to examine how effective these measures are in the South-West. I hope that I reflected that feeling to some extent when we debated employment problems in the South-West.

    Railways (Closed Shop)
    5. Mr. Gowasked the Secretary of State for Employment what discussions he has had with the British Railways Board about the operation of the closed shop.
    Mr. Harold Walker: None, Sir.
    Mr. Gow: Is the Minister aware that of 31 employees of the nationalised British Railways Board who have been dismissed for refusing to join a union seven had more than 29 years' service to the board? In view of the events of last Wednesday, does the Minister not understand that even the Liberals believe that there is a crucial issue of individual freedom involved here? Will the hon. Gentleman make a better statement to the House than that which he has just made?
    Mr. Walker: I must tell the hon. Gentleman again, as I have done many
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    times, that the Government's policy on these matters is one of neutrality. We leave these issues for determination by employers and trade unions. I am not sure whether the hon. Gentleman is advocating a return to the conditions that existed under the Industrial Relations Act—conditions that were emphatically rejected by the electorate in 1974 and which had had disastrous results.
    Mr. Skinner: Does my hon. Friend agree that there is another way of looking at this matter, namely, that a man who has not paid any trade union contributions for 29 years but has during that period allowed the trade unions to negotiate wages on his behalf and has taken the money, has been freeloading all of his life?
    Mr. Walker: The freeloader is a cause of genuine concern to all trade unionists. I do not want to take sides, because we adopt a position of neutrality. It is worth bearing in mind that if the persons to whom the hon. Gentleman refers have been in employment with British Railways for the period that he suggests they ought to have looked at their contracts of employment, which made provision for trade union membership.
    Mr. Hayhoe: Is the hon. Gentleman aware that while a closed shop can be organised—as some are—to take account of deeply-held personal convictions and the length of service of existing employees, it is deeply offensive and intensely unfair when these considerations are overridden and people with long service are sacked as a result? Is he aware that we cannot accept that in standing by and doing nothing in such circumstances the Government are being fair? They are being intensely partial. They are not being neutral.
    Mr. Walker: The hon. Gentleman persists in his inability to recognise the realities of the situation. The Opposition are under a duty to make their position clear. If they say that there ought to be a statutory right for an individual not to belong to a trade union, clearly they are once again moving along the disastrous road of the Industrial Relations Act, with all its harmful and ineffectual consequences.
    Mr. Gow: On a point of order, Mr. Speaker. In view of the disgraceful

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    nature of the Minister's reply, I beg to give notice that I shall seek to raise this matter on the Adjournment at the earliest opportunity.

    Disabled Persons
    Mr. Viggersasked the Secretary of State for Employment whether he has proposals to improve the employment prospects of those who are suffering from mental or physical disability.
    Mr. Ovendenasked the Secretary of State for Employment what is the current level of unemployment amongst registered disabled workers; and what percentage of such workers this represents.
    Mr. Ashleyasked the Secretary of State for Employment what is the latest figure of unemployment of registered disabled people; how this compares as a percentage with the national average; and if he will make a statement about Government policy for the employment of disabled people.
    Mr. John Grant: I am informed by the Manpower Services Commission that on 10th February, the latest date on which information is available, 77,951 registered disabled people were unemployed, representing 14·4 per cent. of the disabled persons register. The general unemployment rate was 5·9 per cent. I have nothing to add to the statement about the employment of disabled people which I made in reply to the hon. Member for Gosport (Mr. Viggers) on 7th March.
    Mr. Viggers: In view of the large number of mentally and physically disabled people among the long-term unemployed, amounting to one-third of the overall total in my constituency, may I ask the Government to reconsider this matter? In particular, will they ensure that no training facilities for the mentally disabled are lost as a result of the transfer of training facilities from the Social Services Department to the Education Department?
    Mr. Grant: The plight of the disabled who are unemployed for long periods is under active consideration. We hope to be able to do something about them soon. We shall certainly look into the point raised by the hon. Gentleman in the latter part of his supplementary question.
    Mr. Ashley: Is my hon. Friend aware that the best way to improve the employment prospects of disabled people is for Government Departments to mend their ways and to employ a reasonable number of disabled people? Is he aware that at present every Government Department, except two has less than 3 per cent. of disabled people on its staff?
    Mr. Grant: I accept that an unsatisfactory situation is revealed by the figures that we published recently. The fact that we published those figures was a major step in the right direction. I have been in touch with my ministerial colleagues about this to ask them to review their procedures. I have also asked them to approach the nationalised industries, where appropriate, and I have written this week to the chairmen of all disablement advisory committees so that they can take local initiatives in the public and private sectors.
    Mr. Hannam: Will the hon. Gentleman accept that one of the most important factors in this respect is the ability of disabled people to get to and from their place of work? Is not the Government's decision to take away vehicles from disabled people a retrograde action? Will the Minister press the Secretary of State for Social Services to reconsider this decision?
    Mr. Grant: I am conscious of this problem and have had discussions with my hon. Friend who is responsible for the disabled on the issue of travel to work. The Employment Services Agency's fares-to-work scheme is under active review. We hope to make improvements there. I would not want to mislead the House into thinking that that is a solution. There are other possibilities that we are examining. I shall press the views of the hon. Gentleman further.
    Mr. Carter-Jones: Will my hon. Friend bear in mind that where there are severely handicapped people the DRO gets to the home very quickly and gives good advice? Is he aware that the suppliers of equipment supply quickly but that there is a three-months' administrative gap in his Department between examination and distribution? Will he please give his attention to that matter?
    Mr. Grant: I shall certainly look at that. I think that that is probably a little

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    unfair, as in many cases equipment is available but it requires special adaptation to suit special needs. However, in view of my hon. Friend's comments I shall examine the matter and give consideration to any point that he wants to draw to my attention.

    Calderdale
    Mr. Maddenasked the Secretary of State for Employment what is the number of men and women unemployed in travel-to-work areas in Calderdale, expressed in numerical and percentage terms and compared with the same period last year.
    The Under-Secretary of State for Employment (Mr. John Golding): At 10th March, 2,289 males and 810 females were unemployed in Calderdale and the unemployment rates were 4·7 per cent. for males and 2·4 per cent. for females. These figures are provisional. The corresponding figures for March 1976 were 2,532, 729, 5·2 and 2·1.
    Mr. Madden: Do those figures include the large-scale redundancies of textile workers that have recently occurred in my constituency? Will my hon. Friend give an indication of the present trend of vacancies within the same area?
    Mr. Golding: Obviously the figures include all those who have been declared redundant, have finished work and have registered as unemployed. They cannot reflect any future trends.

    Collective Bargaining (Disclosure of Information)
    Mr. Greville Jannerasked the Secretary of State for Employment when he proposes to implement the provisions of the Employment Protection Act concerning disclosure of information to trade unions during the course of collective bargaining.
    Mr. Harold Walker: My right hon. Friend has approved the draft code of practice sent to him by the Advisory, Conciliation and Arbitration Service and proposes to lay it before both Houses as soon as printed copies are available. I expect this to be within the next four to six weeks.
    Mr. Janner: I welcome that announcement. In the circumstances, will my hon. Friend confirm that as the days of secre-
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    tive and authoritarian industrial rule are clearly numbered, managements that are not making disclosures to trade unions should start doing so?
    Mr. Walker: Yes, I think that is sensible. The code will have to be approved by both Houses. It will be for the House to make a decision. In the recognition that this was one of the less controversial aspects of the Employment Protection Act, it will probably be welcomed by both Houses. It will make sense for all employers to study ways and means of anticipating and fulfilling the provisions of the Code.
    Mr. McCrindle: Although I accept that this move is probably now inevitable, will the hon. Gentleman take on board the real fears of certain firms that information circulated to trade unions for the purpose to which the Question refers might some-how gain wider circulation, to their commercial disadvantage? Has the hon. Gentleman been able to take on board in any way these genuine fears?
    Mr. Walker: If the hon. Gentleman reads the Employment Protection Act he will see that protection is provided in respect of matters of a confidential nature, of the kind to which he referred. On that ground he will find that his fears are unjustified.
    Mr. Hayhoe: Will the hon. Gentleman confirm that full account has been taken of the representations that have been made and that the many criticisms that the first draft attracted will have been met in the final draft? As I understand it, this is something that is broadly acceptable within industry.
    Mr. Walker: Yes. By the very nature of ACAS it carries with it support from both sides of industry. The hon. Gentleman will find that this is a matter that has the backing of both sides of industry. There has been wide consultation. More than 140 organisations have expressed views to ACAS. In the last resort it will be for the House to make a decision.

    Mexborough and Wombwell
    Mr. Edwin Wainwrightasked the Secretary of State for Employment how many men, women, boys and girls, respectively, were registered as unemployed at

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    the Mexborough and Wombwell employment exchanges at the latest available date; what were the corresponding figures for the years 1974, 1975 and 1976; and if he will make a statement on what action he intends to take to find jobs for these unemployed persons.
    Mr. Golding: At 10th March there were provisionally 1,632 males and 780 females. In March 1974 the figures were 1,399 and 218, in March 1975 1,234 and 281, and in March 1976 1,629 and 633. Separate figures are not available for men, women, boys and girls. Mexborough and Wombwell should benefit from the extensions of the Job Creation Programme, Work Experience Programme and Youth Employment Subsidy Scheme, which were announced early this month. We have also provided more support for training and for a further expansion of Community Industry.
    Mr. Wainwright: Is my hon. Friend aware that the population in Mexborough and district is smaller than it was four decades ago? Is he further aware that that decline is mainly due to young people having to leave the district to find jobs elsewhere? Will he now take another look at this area? If my hon. Friend cannot include the whole of South Yorkshire, will he make this area a special development district? Does my hon. Friend appreciate that although an advance factory was built in the area three years ago not one job has been provided as a result?
    Mr. Golding: Development area status is a matter for my right hon. Friend the Secretary of State for Industry. I appreciate the problems of the area. I shall consider them personally and carefully with my right hon. Friend the Secretary of State and draw the attention of the Secretary of State for Industry to my hon. Friend's concern.

    Factories
    Mr. David Priceasked the Secretary of State for Employment if he will initiate studies into the human diseconomies of very large factories.
    Mr. John Grant: The Work Research Unit of the Department of Employment is concerned with the implications of problems of job satisfaction in factories of all sizes. It is co-ordinating and monitoring
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    a research programme on this subject. The unit is aware of the particular difficulties in large factories and it offers managements and trade unions advice on ways of reducing the problems that arise.
    Mr. Price: Will the hon. Gentleman take on board the fact that it is becoming more and more evident that bigger is not beautiful, and that we get a stepped function of disincentive for the individual, in terms of lack of job satisfaction and identity, as factories grow beyond a certain size?
    Mr. Grant: There is a good deal of truth in what the hon. Gentleman says. I shall certainly take his remarks on board. It is also true that in many larger industries and plants there is no industrial trouble.
    Mr. Awdry: Does the Minister accept that in factories where the number of employees is fewer than about 1,000 industrial relations tend to be more harmonious than in factories with a larger number?
    Mr. Grant: That is rather too much of a sweeping generalisation. Such matters vary considerably between industries, as well as between factories.

    Unemployed Persons
    Mr. Rostasked the Secretary of State for Employment what is the latest total number of unemployed; and how this compares with February and October 1974.
    Mr. Booth: At 10th March the provisional number of registered as unemployed in Great Britain, excluding school leavers, and seasonally adjusted, was 1,268,100, compared with 549,800 in February 1974 and 608,400 in October 1974.
    Mr. Rost: Does the right hon. Gentleman agree that these are disgraceful unemployment figures? Are they what the Government had in mind three years ago when they conned the electors into believing that it would be "back to work with Labour"?
    Mr. Booth: The figures reflect in part the efforts that the Government have successfully made to retain the level of employment in this country to a greater

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    degree than most other countries in Western Europe. In the period to which the Question relates—namely, between March 1974 and March 1976—the fall in the number of people working was only 233,000. The fact that the rise in unemployment was three times that is largely due to the fact that many more people are seeking employment. That will continue to be the case for some time to come. It is against such an objective assessment that the House must judge the measures that the Government bring forward to deal with an appalling problem.
    Mr. Flannery: Does my right hon. Friend accept that the working people of Stechford are fully aware that there would be twice as many unemployed if the Tories were in power? Will he take note that the Tories themselves clearly recognise that fact? Does my right hon. Friend discern any trend that shows that in the near future more people are likely to be employed?
    Mr. Booth: If Opposition Members were as assiduous in their study of what is happening in industry as they are in focussing on the particular problems of unemployment they would realise that such a trend exists. The number of people employed in vehicle manufacturing rose by 16,000 between January 1976 and January 1977. The number employed in the textile industry increased by 9,000 in the same period. The number of people employed in chemical manufacturing increased by 7,000. There is every evidence that the support of the industrial strategy for manufacturing industry is resulting in many more jobs.
    Mr. Maxwell-Hyslop: Is the right hon. Gentleman aware how much avoidable unemployment is caused in many instances by the refusal of the Department of the Environment to give local authorities permission, under Section 42 of the Community Land Act, to sell land to employers who are willing to go to areas as long as they can buy the land, so creating local employment.—[HON. MEMBERS: "Too long."]
    Mr. Speaker: Order. The hon. Gentleman is just concluding.
    Mr. Maxwell-Hyslop: Will the right hon. Gentleman take over from the Department of the Environment the
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    question of the release of land under Section 42 of the Community Land Act, so that employment can be provided?
    Mr. Booth: I am not aware that this is by any means a general problem. I know of only one or two very isolated cases of employers seeking to purchase land in which there is difficulty in creating new employment. In the overwhelming number of cases in which employers are prepared to move into areas and to obtain land to create employment they receive nothing but great assistance from Government Departments.
    Mr. Cronin: Does my right hon. Friend agree that these unsatisfactory unemployment figures are largely due to inflation of long duration, precipitated by the reckless monetary policies of the last Conservative Government?
    Mr. Booth: I agree with my hon. Friend that our inflation problem is one of the major constraints in dealing with unemployment. These "disastrous" figures which are being referred to arise at the end of two months which have seen successive drops in total unemployment, one of which was a drop of 38,000 in four weeks.
    Mr. Ian Lloyd: How does the Secretary of State reconcile what he has said about his concern for employment and what one of his colleagues said about the neutrality of his Department on the closed shop issue with the disclosures in the Business News of The Times this morning of the deplorable episode involving Tattersall Advertising Limited, in which an organisation in his Department—ACAS—was used to enforce a closed shop on that company?
    Mr. Booth: The rôle of ACAS is to conciliate and avoid disputes. That includes any disputes arising from breaches of closed shop agreements.
    Mr. Prior: Is not the Secretary of State's statement today and his answers to Questions a shameful indictment of the Government's pathetic employment record? Is he not aware that our figures are now above the average for EEC countries? [HON. MEMBERS: "No."] I have the latest figures here: ours are above the average. Is he not further aware that the Prime Minister said last Wednesday in the House that he thought

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    that the trend in unemployment over the next few months would certainly not be downwards? Would he now tell the House, the country and the electors of Stechford the Government's forecast for unemployment over the next year?
    Mr. Booth: I sometimes wonder what the right hon. Gentleman's programme is before he comes into the House to utter some of these phrases like "shameful indictment". If he would only pause to consider what I have reported, he would see that it includes a drop of 26,000 in the number of unemployed between January and February, a drop of 38,000 between February and March and an increase in the numbers employed in vehicles of 16,000, in textiles of 9,000 and in chemicals of 7,000. I hardly think that figures like that justify such phrases as "shameful indictment" of the Government, especially against a background of a major recession.

    Employment Protection Act
    Mr. Bulmerasked the Secretary of State for Employment whether the Employment Protection Act is achieving the objectives outlined by the Government.
    Mr. Harold Walker: I am satisfied that the Act is achieving its purpose to the extent that it has been implemented so far.
    Mr. Bulmer: Is the Minister aware that his Government have suspended free collective bargaining, which ACAS is bound under the Act to develop? Will he resolve that contradiction and tell us what steps his Government have in mind or what consultations are in progress for the reform of collective bargaining?
    Mr. Walker: If the hon. Gentleman thinks that this Government have suspended collective bargaining, he will believe anything.
    Mr. Greville Janner: Does the Minister agree that the Employment Protection Act and the Trade Union and Labour Relations (Amendment) Act do need amendment so as to restore protection against unfair dismissal to those thousands of people who work partly in the United Kingdom and partly overseas, or who have fixed-term contracts with provision to terminate them before their end
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    —all of whom have lost their protection as a result of judicial interpretations?
    Mr. Walker: Yes, there is a problem here, and my hon. Friend has put a Bill before the House in an attempt to remedy it. However, he will recognise that this is not a simple matter, because the words that have given rise to difficulty appear in a number of protective statutes, and it would be necessary to look at them all. However, one of the cases dealt with by the Employment Appeal Tribunal is still to be ruled on by the Court of Appeal, and I think that it would be wise to await the outcome of the Court of Appeal's decision.
    Mr. Prior: With regard to ACAS, what action is the Minister taking to draw attention to the disgraceful happenings in a number of Surrey hospitals, which are causing immense suffering and are absolutely disgraceful? What action is his Department taking to bring this matter to the attention of ACAS and the appropriate union, and to call for an immediate halt to what is going on?
    Mr. Walker: The right hon. Gentleman will know that the Secretary of State for Social Services has made a forthright statement, addressing his remarks to both the union involved and its members. I hope that there is a speedy return to normal working. Undoubtedly, this situation is causing the gravest hardship to a number of people, which should not be allowed. The services of ACAS are ready and available to help in this situation. I hope that if it cannot be speedily resolved by other means, the parties will have quick recourse to ACAS.
    Mr. Prior: The whole House will be grateful for what the Minister has said. Will he see that his Department and ACAS play a full part in bringing this dispute to a speedy end? If there are any further developments, will he report back to the House, perhaps tomorrow?
    Mr. Walker: On the first question, the right hon. Gentleman knows that in connection with industrial disputes we in the Department, having established ACAS as an independent body, want to preserve its independence. Nevertheless, I am sure that his remarks will be brought to the attention of the Chairman of ACAS. The second question would perhaps be more appropriately addressed

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    to my right hon. Friend the Secretary of State for Social Services. I shall certainly draw the right hon. Gentleman's request to his attention.

    School Leavers and Graduates
    Mr. Silvesterasked the Secretary of State for Employment what assessment he has made of the likely shortfall of jobs for school leavers and graduates at the end of the current academic year.
    Mr. Golding: No forecasts of the incidence of unemployment for particular groups have been made, although it is clear that many leaving school and university this summer to seek employment will have considerable difficulty in finding it.
    Mr. Silvester: In order to prevent further anxiety, will the Minister say now what steps he proposes to take to help those people who have been on a job creation project for a year and whose term is now coming to an end? They are likely to be swelling that number, whatever it turns out to be.
    Mr. Golding: It is because the Government have had particular concern for this group that they are waiting for the Manpower Services Commission's report on the future development of services in this field and have decided to continue the youth employment subsidy of £10 a week for 26 weeks for those unemployed for a long time. I appeal to employers to take up that subsidy and give long-term unemployed youngsters a chance.
    Mr. Molloy: Would the Minister be prepared to have discussions with the Secretary of State for the Environment about the serious development in West London, particularly in Ealing, of industrialists selling sites for massive profits followed by planning authorities allowing the mushrooming of warehouses on those sites? With this practice, any attempt to get industry to return to London is already jeopardised. This will have a serious effect on young people about to leave school to work in any Job Creation Programme.
    Mr. Golding: I always find discussion with my right hon. Friend the Secretary of State for the Environment stimulating and fruitful. I shall certainly have discussions with him after I have visited
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    Ealing on 13th April to assess the whole problem of unemployment in that area.
    Mr. Stokes: Does the Minister agree that those still at school who have jobs to go to should be encouraged to leave early and to continue their education by part-time studies?
    Mr. Golding: I am not absolutely clear what is meant by that question, but Labour Members believe that it is in the interests of young people to continue their education as long as it is practicable to do so.

    Wales
    Mr. Wyn Robertsasked the Secretary of State for Employment what steps he is taking to reduce unemployment in Wales.
    Mr. Golding: In addition to the further allocation of £46 million for training purposes throughout Great Britain announced on 3rd March, the Government are continuing the special measures which they introduced to alleviate the worst effects of unemployment. These measures have so far benefited nearly 29,000 workers in Wales. Other assistance is being given through the Department of Industry.
    Mr. Roberts: Does the Minister agree with the Manpower Services Commission's recent prediction that the present record level of youth unemployment, which affects Wales like other parts of the country, is likely to persist for another five years? Does the hon. Gentleman further agree that the best thing that he and his Government can do is to take the pressure off the private sector so that employers are free to employ?
    Mr. Golding: We do believe that there will be a persistent problem of youth unemployment because of the increased number of young people wanting jobs and the disappearance of jobs for young people. That is why we are awaiting the report of the Manpower Services Commission, a report which will lay before us proposals for the long-term solution to this problem.
    Mr. Cledwyn Hughes: Does my hon. Friend agree that the Government's approval of the building of the new general hospital in Bangor, of the new roadspan over the Britannia Bridge and

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    the continuation of the hydro-electric scheme in Llanberis will enormously relieve unemployment in the hon. Gentleman's constituency, and my home, and will give new apprenticeship opportunities for young people in the area?
    Mr. Golding: The Government are doing all that they can for that part of North Wales, which deserves attention because of the severe unemployment problem that it faces.
    Mr. Wigley: Does the Minister accept that the situation is quite unacceptable in Gwynedd, where unemployment is now between 10 per cent. and 12 per cent? That is something that we cannot tolerate, and it will worsen substantially because of the deliberate decision of the Government to do away with the regional employment premium. Will the Minister now say what alternative new proposals the Government have to replace the regional employment premium in order to encourage the development of manufacturing industry in areas like Gwynedd?
    Mr. Golding: You, Mr. Speaker, would be impatient were I to make the Budget Statement at this point in time, but we agree with Members on the Opposition Benches that the level of unemployment in North Wales is intolerable. That is why we were pleased to see the relief of Shotton, and that is why this morning I have been discussing the possibilities of giving additional community industry places to North Wales, because of the problem that the area faces.

    Manchester
    Mr. Roseasked the Secretary of State for Employment whether he will take urgent action to offset the decline of jobs in manufacturing industry in the Greater Manchester area by the allocation of a higher proportion of funds for the Job Creation Programme and general Government policy in relation to contracts and industrial development.
    Mr. Golding: The amount of help that Manchester receives from the Job Creation Programme will depend on the number of suitable projects that are devised and put forward by local sponsors.
    As far as manufacturing industry is concerned, qualifying firms can benefit from both the regional and national schemes of assistance for intermediate areas
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    administered by my right hon. Friend the Secretary of State for Industry.
    In addition, the Government will continue to bear in mind the employment needs of Greater Manchester, along with other areas, in relation to the placing of contracts.
    Mr. Rose: Is my hon. Friend aware of the quite dramatic fall in job opportunities in the inner Manchester area—the area of the Manchester district? Will he accord to that area no less a priority in consultation and in the provision of finance than he already does to development areas, and concentrate funds specifically on inner urban regeneration of industry rather than trying to spread the load thinly?
    Mr. Golding: That question would be more appropriately directed to my right hon. Friend the Secretary of State for Industry. Certainly, in terms of special measures, we in the Department of Employment give a fair share to Manchester.

  PRIME MINISTER (ENGAGEMENTS)
  Mr. Ashleyasked the Prime Minister if he will list his official engagements for 29th March.
  Mr. Rostasked the Prime Minister if he will list his official engagements for 29th March.
  Mr. WynRoberts asked the Prime Minister if he will list his official engagements for 29th March.
  Mr. Viggersasked the Prime Minister if he will list his official engagements for 29th March.
  The Prime Minister: In addition to my duties in this House, I shall be holding meetings with ministerial colleagues and others.
  Mr. Ashley: If my right hon. Friend discusses phase 3 with any of his ministerial colleagues, employers or trade unionists will he emphasise that, although there may be a need for some flexibility, if better-paid workers begin leapfrogging one over the other they may damage the interests of lower-paid workers and possibly destroy the social contract?
  The Prime Minister: I completely agree with my hon. Friend about this. It is part of the Government's economic policy for this year to seek, if at all possible, to get agreement with the trade unions on another phase of wage policy. As my hon. Friend says, that could be destroyed if there were leapfrogging of the sort that he has outlined. With regard to differentials, it has always been the Government's policy to recognise that the rigidities of phases 1 and 2 cannot be extended into phase 3, but that there must be more flexibility, so that differentials can be recognised.
  Mr. Rost: Now that the Prime Minister has abandoned Socialism as his price for a Liberal coalition, will he today explain to his beleagured candidate who is besieged in the Stechford by-election and those of his few Labour supporters who are still there why, if they wish to support Socialism, they should vote for the Labour candidate?
  The Prime Minister: When I read the Question I somehow thought that the hon. Gentleman was not really asking about my engagements for 29th March. The hon. Gentleman has had the opportunity of making his point. I shall not boast about the result of Stechford. I shall leave him to do that and we shall see on Friday morning.
  Mr. Wyn Roberts: Can the Prime Minister take some time off to study the contradictory statements made by Ministers and Members of the Liberal Party about the recently concluded pact? Will he confirm that he is still leading a Government dedicated to the pursuit of Socialism and that he has not abandoned a single legislative commitment?
  The Prime Minister: I do not think that it is of particular concern to the Conservative Party what arrangements are made between other parties in the House. I would not regard it—[Interruption.] When the hon. Member for Hastings (Mr. Warren) joins the Labour Party, if he ever does, I shall be glad to account for myself to him. Meanwhile, despite this eagerness on the part of the Conservative Party, I do not propose to assume ministerial responsibility for these inter-party arrangements. I am afraid that the curiosity of Conservative Members will have to remain unassuaged.
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  The Government's programme will continue to be carried through as we get a majority in this House for it.
  Mr. Viggers: Could the Prime Minister find time in his busy day to sit quietly and contemplate who is responsible for continuing in office a Chancellor of the Exchequer who has seen the retail price index rise, on a three-month basis, from 8·4 per cent. to 21·6 per cent.? Is this inflation not destroying all the plans and hopes of those who have tried to do their best for their retirement?
  The Prime Minister: The degree of inflation in this country has undermined many things. That is why the Government are resolutely determined to reduce it, and are succeeding—without much help from the Opposition. It is our view, which I have expressed in the House many times, that if we resolutely pursue the policies that we have embarked upon inflation will start to turn down in the second half of this year and will go down faster in the first half of the following year.
  Mr. Jim Marshall: Is my right hon. Friend aware this morning in Standing Committee A, which was considering the Coal Industry Bill, the hon. Member for Derbyshire, South East (Mr. Rost) advocated a policy that the price of gas should be—[HON. MEMBERS: "Order."]
  Mr. Speaker: Order. I think that hon. Members are mixing up a Select Committee and a Standing Committee, but I would also remind the hon. Gentleman that the giving of information is not the purpose of this period—[Laughter.]—except—let me put myself right—by the Front Bench.
  Mr. Marshall: I hope that in the course of one of his engagements today my right hon. Friend will send a message to our candidate at Stetchford, informing him that the Tory Party is advocating price increases in excess of the 10 per cent. proposed by the Government and that that has not been repudiated by Tory Front Bench spokesmen.
  The Prime Minister: I am aware that the Conservative Party's policy would be to increase prices substantially, and I hope that that message is well understood in the country. That is why my right hon. Friend the Minister of Agriculture,

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  Fisheries and Food has not accepted the Conservative Party's proposals in Brussels. He has not accepted the view put forward by the Conservative Front Bench on this matter, which would have had the effect of raising food prices. He has steadily resisted both their proposals and those of the other countries.
  Mrs. Thatcher: Is the Prime Minister aware that when it comes to rising prices we could not begin to rival his record and that of the Chancellor of the Exchequer in increasing them? Is he aware that when we left office their maximum was 13·2 per cent. per annum, a record that he has not begun to rival during the whole time that he has been in office?
  The Prime Minister: I know that the right hon. Lady's intentions are of the best, but I was wondering why the Conservative Front Bench spokesmen on food and agriculture should have put forward a proposition that would have the effect of raising food prices in this country by 1¼ per cent., by their proposed devaluation of the green pound, without anything in exchange for it.
  Mr. James Lamond: How can my right hon. Friend expect any congratulations from the right hon. Lady the Leader of the Opposition on the valiant battle that my right hon. Friend the Minister of Agriculture, Fisheries and Food is putting up in Europe when that is only one more bit of bad news for her in a very bad week?
  The Prime Minister: I hope that my hon. Friend is not intimating that he has had any sight of my right hon. Friend the Chancellor's Budget, because that would be extremely serious. As regards the other news of this week, it is certainly true that what my right hon. Friend the Minister of Agriculture, Fisheries and Food is doing in Brussels is to show that a determined fight on behalf of the British housewife will bring results.

  CONCORDE
  Mr. Dykesasked the Prime Minister when he next plans to fly in Concorde.
  The Prime Minister: I have at present no plans to do so.
  Mr. Dykes: Nevertheless, does the Prime Minister now feel more optimistic about the possibility of New York landing rights being granted? In that context, will he undertake two things? First, will he undertake from now on to press the case as hard as France has pressed it? Secondly, if success is achieved, will he undertake to take the inaugural flight into New York?
  The Prime Minister: It is proposed to submit more evidence on noise levels to the Port of New York Authority. The French authorities and our own are considering when this information should be submitted. There is a lawsuit in the background, about the date of which no final decision has been taken. We are continuing to work in close co-operation with the French on this matter. President Giscard d'Estaing and I had an exchange of views about the matter bilaterally in Rome last Friday.
  Mr. Terry Walker: Will my right hon. Friend make a renewed request to the Americans for a quick decision on the entry of Concorde into New York? The jobs of aircraft workers in my constituency are threatened, and all this is taking place when the new Aerospace Corporation is coming into being. A speedy decision is long overdue.
  The Prime Minister: The American authorities are aware of our anxieties about the matter. If Mr. Cyrus Vance comes to London later this week, as I understand he will, I or my right hon. Friend the Foreign and Commonwealth Secretary will make it our business to acquaint him of our views about the urgency of the matter. We have a battle to fight here in relation to noise and we must proceed by offering more evidence to the Port of New York Authority in the first place.

  TUC
  Mr. IoanEvans asked the Prime Minister when he last met the TUC.
  The Prime Minister: I refer my hon. Friend to the reply that I gave to my hon. Friend the Member for Hemel Hempstead (Mr. Corbett) on 3rd February.
  Mr. Evans: Does my right hon. Friend agree that the improving economic

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  situation in this country, despite the world recession, has been brought about by the co-operation that this Government have had from the trade union movement? Will he seek to ensure the continuation of that co-operation by meeting the trade union leaders soon after the Budget and considering the positive proposals that they are putting forward in their economic review to deal with the question of unemployment?
  The Prime Minister: Yes, Sir. I certainly undertake to do that, because there is no doubt that the TUC's co-operation in these matters is vital. We also need the co-operation of the CBI on prices and other matters. A Bill concerning this will be brought forward very shortly. I think that it is fair to say that the Government have carried this country through the deepest world recession, from which the world is now beginning to emerge, with less hardship and less poverty than has ever before been known in the history of these islands.
  Mr. Tim Renton: To what extent will the Liberal Party be involved in the Government's talks with the unions over phase 3 of the incomes policy?
  The Prime Minister: If you care to arrange a period of Question Time for the Liberal Party, Mr. Speaker, I am sure that its Leader will be very happy to answer.
  Mr. Skinner: Can my right hon. Friend confirm that every Government Department and every Minister has been told to try to take seriously the Liberals, especially the Bunny Girl manager?
  The Prime Minister: Like many of my hon. Friends, I was very happy to have Liberal support in the Lobbies last week. It has preserved the Government in office and will enable us to continue to carry out our policies.
  Mr. Tebbit: Has the Prime Minister been able to tell the TUC why it is that, to use the right hon. Gentleman's expression, in the Government's carrying Britain through the world recession the standard of living has fallen consistently in Britain whilst it has not so fallen in other Western European developed countries? This is a matter which is
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  of interest to all of us, but especially to the TUC.
  The Prime Minister: As always, the hon. Member has put his finger on a very important point. What is at stake is the level of Britain's industrial performance—whether there is sufficient productivity, whether investment is high enough, whether our managers are sufficiently good and whether our trade union practices are not too restrictive. These are the important issues and upon these—and in a major sense only upon these—our standard of living over the next decade will depend.
  Mr. Ron Thomas: When my right hon. Friend next meets the TUC will he discuss with it the latest TUC economic report, which clearly points out that only by direct intervention in our economic affairs in a Socialist fashion can we deal with the intolerable level of unemployment that is facing this country today?
  The Prime Minister: The Government never have any hesitation in intervening, because the free market economy is not capable of providing unaided the total level of life that is satisfactory, or the appropriate level of unemployment that is acceptable. This is being accepted increasingly throughout Europe today, and we shall intervene whenever it is necessary to do so in order to maintain the standard of living of our people.
  Mr. Ridley: On a point of order, Mr. Deputy Speaker. Just before you joined the Chair the Prime Minister said that he would hope to assist in making a period of time available for questioning Members of the Liberal Party. Despite the fact that the Liberal Party has just appointed more Shadow Ministers than it has actual hon. Members in this House, it would be for the convenience of the House if we could question them. Would it be possible—I am sure that all parties would be in favour, particularly the Liberals, who would like a Question Time of their own—to make these arrangements after Easter? Could you facilitate this and through your good offices help to set it up?
  Mr. Deputy Speaker (Mr. Oscar Murton): That is not a matter for the Chair.

  REGIONAL AFFAIRS
  Ordered,
  That the matter of the Health Service in the North West be referred to the Standing Committee on Regional Affairs.—[Mr. Foot.]

STATUTORY INSTRUMENTS, &c.
Mr. Deputy Speaker (Mr. Oscar Murton): In order to save the time of the House I propose to put the Questions on the Statutory Instruments together. I understand that the second item on the Order Paper—concerning the International Monetary Fund (Immunities and Privileges) Order—is not to be moved. Therefore I shall put the other three together.
Ordered,
That the draft European Patent Organisation (Immunities and Privileges) Order 1977 be referred to a Standing Committee on Statutory Instruments, &c.
That the Civil Aviation (Navigation Services Charges) (Fifth Amendment) Regulations 1977 (SI, 1977, No. 340) be referred to a Standing Committee on Statutory Instruments, &c.
That the Civil Aviation (Canadian Navigation Services) Regulations 1977 (S.I., 1977, No. 314) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Foot.]

WAYS AND MEANS
  BUDGET STATEMENT
  Mr. Deputy Speaker (Mr. Oscar Murton): Before I call the Chancellor of the Exchequer, it may be for the convenience of hon. Members if I remind them that at the end of the Chancellor's speech, as in past years, copies of the Budget resolutions will not be handed around in the Chamber but will be available to hon. Members in the Vote Office.

  INTRODUCTION
  3.33 p.m.
  The Chancellor of the Exchequer (Mr. Denis Healey): In my statement to the House last December I announced economic measures which were part of a medium-term programme for national recovery. I said that those measures, reinforced by the next Budget and further progress on the industrial strategy, would enable us to make the difficult transition to a more firmly based prosperity.
  The measures I then announced have succeeded in their main purpose. They have restored our financial stability. This is shown by the rise in the exchange rate, which has been stable at 16 cents above the low point it reached last October, by the increase in the reserves, by the Basle agreement on sterling balances, and by the market loan of $1½ billion which I signed in February. Domestically the success of the measures is shown by the sales of gilts which have kept the monetary aggregates under tight control and by the fall in interest rates—short rates are down by 5 per cent. since their peak in October.
  These striking financial successes are a necessary condition for our recovery and must be maintained. But they are not by themselves sufficient to achieve the fastest possible return to a high and sustainable level of output and employment, which remains this Government's overall economic objective. This Budget builds on the success of the December measures and moves us further towards recovery.
  The principal measures I shall be announcing will contribute to two key aims—getting our inflation down to the

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  level of our main competitors and improving the performance of our manufacturing industry. The scope for such measures is governed by the need to maintain the financial stability we have now achieved and to get rid of the deficit on our current balance of payments. It is still too soon to take risks in either of these fields, so, if anything, I must err on the side of caution this year, particularly while the precise path of our balance of payments is still uncertain.

  THE ECONOMIC BACKGROUND
  The United Kingdom is a trading nation. This means we cannot sustain our economic recovery without a major improvement in our trade performance so that we win and hold a larger share of both home and export markets. But the speed of our recovery will also depend heavily on conditions in the world economy and the growth of world trade. So I begin my review of the economic background to the Budget with a look at the world economy.

The World Economy
The industrialised countries as a whole achieved a relatively rapid recovery in output and trade at the beginning of 1976, but this fell off through the rest of the year. Over the year as a whole their gross national product rose by nearly 6 per cent., after falling 1½ per cent. in 1975; and world trade in manufactures increased by nearly 10 per cent. following a drop of nearly 4 per cent. in 1975. Nevertheless, there is growing concern that the pause has been unusually prolonged for this stage in the cycle.
More recently, growth in some major countries has shown signs of accelerating again. There now seems to be a reasonable prospect that this year GNP in the major countries will grow at around 5 per cent. World trade in manufactures may rise by about 8 per cent. Present policies in the United States and Japan should help to ensure that their recovery is sustained. But in Europe the prospects are more doubtful. Inflation and difficulties with the balance of payments have led several countries besides ourselves to take restrictive measures. Even countries with a strong balance of payments
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ments and low inflation rates are being very cautious in their fiscal policies.
The OPEC countries are expected to increase their imports by 15 per cent. in 1977, but as a group they will continue to run a massive surplus. In the non-oil developing countries, however, growth will remain constrained by shortage of foreign exchange. Many of them improved their position last year, as the price of primary commodities rose relative to manufactures, and this may continue to some extent in 1977. Nevertheless, their imports are likely to be held back by financing problems and the need to rebuild their reserves.
The most disturbing feature of the world scene is that over the last two or three years every major industrial country has seen its unemployment level rising well beyond what had been regarded in the post-war world as the limit for a well-managed economy. At the end of 1976 there were estimated to be 15 million unemployed in countries of the OECD, an average unemployment level of over 5 per cent. For the year ahead, Europe at least can expect little, if any, reduction in unemployment, and it will take concerted action to improve the outlook. I will return to this later.
This is the background against which I must review the present position and prospects of the British economy. A fuller and more detailed analysis will, as usual, be found in Part I of the Financial Statement and Budget Report, but I will now describe its principal features.

The Domestic Economy
During the last 12 months production has made a modest recovery from the recession of 1975. But the economy is still working well below its productive capacity, industrial investment is rising but is still too low, and there is still a substantial current account deficit on the balance of payments to be eliminated.
If we were to make no change whatever in present policies, I would see the prospects as follows. Production would grow only slightly in the next 12 months. The main increases in demand are likely to be in net exports and manufacturing investment—the sectors which we want to lead the recovery of the economy. From other sectors, however, little or no stimulus is to be expected. Public expenditure on goods and services

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will be rather lower than last year. And on present policies, I would expect no increase in private consumption. Indeed, there might be some decline.
Taken together, these trends could be expected to mean that demand and production would continue to grow slowly. But with so modest a recovery in output I would not expect any fall in the level of unemployment. Indeed, I fear that some further rise would be more likely. The rate of increase in unemployment has, however, been falling markedly. In 1975 the increase was 40,000 a month; in 1976 it was 13,000 a month; and this year there has been a welcome fall in the level of unemployment. But two months is too short a period on which to form a judgment. The plain fact is that the present level is unacceptably high; and action is clearly needed to improve the future prospect.
The rate of price increases is also a cause for acute concern. I have said many times that we need to get our inflation rate down to the level of our main competitors'. Last year's experience with the exchange rate shows what is bound to happen until we achieve that. Our inflation rate was falling rapidly in the first half of 1976, thanks to the £6 pay policy, but our rate was still much higher than those of our main competitors. The disparity caught up with us and caused a fall in the exchange rate. There were other factors, such as the drought and the world increase in commodity prices, but the fall in the exchange rate was the main factor which checked the decline in our rate of inflation last summer and prevented us from reaching single figures by the end of 1976.
The response of the trade union movement, first to the £6 pay limit and then to its successor, gives us a very good chance of resuming the fall in inflation in the second half of this year when the effects of last year's depreciation have finished feeding through into prices. Indeed, there is a real prospect of getting inflation into single figures by the second quarter of next year, provided that we can avoid substantial depreciation.
This will be possible only if we maintain confidence at home and abroad in our determination to reduce our inflation rate; and that, in turn, means that we
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must get a satisfactory agreement on pay to operate when the present pay agreement expires at the end of July.
There is no chance of getting a new agreement unless we make sure that the benefits of pay policy and a more stable exchange rate feed through into prices in the shops. So we intend to prevent any unreasonable profit mark-up, by keeping the price control on profit margins, and by taking a new power to freeze a particular price for up to a year when an independent investigation shows this to be justified. At the same time we have to be careful that price controls do not damage the rate of return on investment. This has been driven down by inflation and recession to exceptionally low levels. We must make sure that the return on capital is allowed to recover sufficiently to reinforce the upturn in investment and to ensure that the new jobs we need are created.
The balance of payments prospect is now a good deal better. During the next 12 months we can confidently expect a large increase in the flow of North Sea oil, and an increase in visible and invisible exports, all of which will substantially improve the balance of payments. Our current account deficit, which has been running at an annual rate of a little over £1½ billion in the last six months, should be progressively eliminated and we have good prospects of a healthy surplus in 1978.
The foreign exchange markets have been much more stable everywhere this year. The stability of sterling has been partly due to the December measures and the IMF agreement and also to the reassurance offered by the recent new agreement on the sterling balances, for which we are grateful to our central bank partners. Sterling has also been helped by the repayment of the sterling loans made to finance trade between third countries, which I took measures to stop late last year. I am now proposing to strengthen our exchange control powers over the raising of sterling finance by companies resident in the United Kingdom but controlled by non-residents.
The reserves are now at a much more satisfactory level. Provided that we secure and maintain a balance of payments surplus, we can begin to repay overseas debt. Until this repayment is safely under way, our domestic economic policies will be

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subject to constraints. I made it clear in the context of the agreement on the sterling balances that I do not intend to rely on sterling inflows on private account as a means of financing the remaining deficits. So I have continued to borrow on a secure medium-term basis, in order to improve the overall pattern and level of reserve assets in relation to the debt structure. But I do not expect this type of borrowing to be necessary much longer. It is a most welcome change to be speaking to the House about the prospect of repaying debt rather than reviewing the prospect for getting more overseas financing.
The outlook for the monetary aggregates has shown a significant improvement. Domestic credit has expanded very little in the last six months, and in the year to mid-April 1977 its expansion is now expected to be only about half that allowed for by the ceiling of £9 billion in the Letter of Intent. In my December statement I said that I expected the associated growth of sterling M3 to be between 9 and 13 per cent. With the much lower expansion of domestic credit, the growth of sterling M3 will now be at or below the bottom end of the range.
Finally, the public sector borrowing requirement has fallen. The total for the financial year now ending is currently estimated at £8·8 billion, but it will be some months before we know it for certain. We know very little yet about public borrowing in the last three months of the year apart from that of central Government itself. The reasons for this downward revision from the forecast in the Letter of Intent to the IMF are discussed in the Financial Statement and Budget Report. Some of the effects carry through to the forecast for 1977–78.
The estimates now suggest that if present policies were continued, the PSBR for the next financial year would be about £7½ billion, about £1¼ billion lower than the figure of £8·7 billion agreed as a ceiling with the IMF. This improvement is mainly due to better prospects for employment, interest rates and the exchange rate since the December measures.
The forecast for 1977–78 takes account of the intention, which I announced in
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December, to sell an amount of British Petroleum stock which will leave the total of the Government's and the Bank's holdings at 51 per cent.—more than we held before the Bank acquired the ex-Burmah shares. This sale will go ahead in 1977–78, and in framing my Budget proposals I have made full use of the room for manoeuvre which it will give me. Since there is still the impediment of Burmah's claim against the Bank of England, the Government will sell part of its own holding, in the expectation, based on strong legal advice about the merits of the Burmah claim, that we shall in due course be able to consolidate the 51 per cent. holding by securing the transfer to the Treasury of the stock now held by the Bank.

MEDIUM-TERM PROSPECTS
I turn now to our prospects in the medium term. The immediate situation provides a solid foundation on which we can build a return to full employment and a steadily improving standard of life. Whether we achieve these objectives, and how fast, will depend partly on improvements in our own economic behaviour, partly on developments in the world economy. None of the improvements we need is impossible, but none is certain either. All depend on acts of will.
Balance of Payments
First, let me deal with our trading performance. We must not only eliminate our balance of payments deficit but earn substantial surpluses, so that we can start repaying our accumulated international debt while still maintaining adequate reserves. That is the pre-condition for restoring our economic independence and making ourselves less vulnerable to external shocks in future. With the help of North Sea oil, we should earn a surplus next year. But this will be when our economy is still operating well below capacity. Our aim must be to earn a balance of payments surplus in conditions of full employment.

North Sea Oil
The growing output of North Sea oil will not be sufficient to achieve this. The return to full employment must depend primarily on increasing our industrial

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investment and our net exports of industrial goods, otherwise we can have no assurance that we shall be able to take up the slack in the economy, even when North Sea oil is in full production, without running once more into the familiar difficulties of supply constraints in industry and deficits on the balance of payments.
Moreover, North Sea oil will not last for ever. It is essential to use the advantages which it offers us during the period when it is available to strengthen our industrial base and our trading performance, so that we can maintain full employment and an acceptable standard of living when the flow of North Sea oil diminishes.
In sum, North Sea oil will not itself create a large number of new jobs, nor will it make possible a rapid return to full employment based on a sudden expansion of domestic demand, whether in the public or the private sector. But it does give us the prospect of a period of years in which we can pursue our industrial strategy, and so expand our manufacturing base, without the constant risk that balance of payments constraints will force us to cut back domestic demand just when the process of industrial expansion could otherwise have become self-sustaining.
In other words, it gives us solid grounds for confidence that, if we hold to our present policies, and apply them steadily and consistently, we shall be able to create the conditions for what I described in December as a decisive break away from the restrictive pattern of present circumstances and post-war disappointments.

Inflation
The necessary improvement in our trading performance depends in turn on a second improvement in our economic behaviour. We must bring down our rate of inflation so that of our principal trading rivals and keep it at that level.
Despite the deterioration in our inflation rate since last summer, we now have a chance of getting near that aim by the end of the next pay round. The recent increase in prices, despite the strict observance of the pay policy, reflects the operation of a vicious circle we have seen more than once in recent years. Even in
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a period when pay increases are limited, there can be a sharp fall in the exchange rate as a result of excessive pay increases in an earlier period. This fall robs us of the full price benefits which we hoped to gain from pay policy. And if the resulting disappointments makes it difficult to continue pay policy, it threatens us with a further fall in the exchange rate later on. I believe this time we can make a decisive break in the vicious circle and indeed turn it into a virtuous one.
As I shall explain later, the December measures and this Budget together should help to get another round of pay policy. The rise in the exchange rate from the low point it reached last October is worth about 3 per cent. off the retail price index by the end of this year. If, as I hope, my proposals today for income tax relief help to get another round of pay policy accepted, that will help with the future level both of the exchange rate and of prices.
In fact, a satisfactory pay policy can bring prices down in three ways. Provided we have effective price controls, it means lower prices for the goods we produce at home because wage costs are lower. It means lower prices for the goods we import from abroad because the £ sterling is worth more. And these two advantages help to bring down interest rates—which cuts the cost of everything we buy on credit, like housing, and helps employment by stimulating industrial activity and investment. By the same token a free-for-all leading to a wage explosion would send prices rocketing up for three reasons—through higher domestic costs, through a lower exchange rate, and through higher interest rates.

Industrial Performance
It is as necessary, then, to improve our inflation rate as our trading performance, and pay policy is the key. But in the medium term we shall not achieve the necessary improvement in either our trade or our inflation unless we also improve the competitiveness of our manufacturing industries. This is the third improvement we need to make. Price competitiveness is critically important; but we must aim to achieve this not through a lower exchange rate, which carries such a heavy cost in prices and living standards, but through higher productivity—by producing more goods for the same cost.
No less important is to improve what I have called "non-price competitiveness". By this I mean better product design, higher quality and greater reliability, allied to better salesmanship, delivery times and servicing arrangements. In the longer run, it is only by doing better in these aspects of competitiveness that we shall win and maintain an increased share of home and foreign markets. And only through increasing our market share shall we have a secure prospect of a return to sustained full employment and rising living standards.
British industry must respond better to economic opportunity in future than it has in the past. That is why in the industrial strategy we have embarked on a joint effort to improve our industrial performance, involving management, the unions and the Government, and are concentrating in particular on key sectors of manufacturing industry. This will take time, but it is already achieving results and we are determined to carry it through, and so are our partners.
As I have said, each of the three improvements we need in our economic behaviour depends on the other two. For example, if our industrial performance fails to improve, our balance of payments will deteriorate, and then we should be faced with a choice between a deflation which throws men and women out of work, or a depreciation which raises prices.

The World Economy
Other countries have found difficulty, like ourselves, in achieving all their various economic objectives at the same time. At the moment, a significant improvement is also required in the outlook for the world economy if any of us are to achieve our national aims in full.
The world-wide explosion of inflation in recent years has led most Governments to pursue exceptionally cautious demand policies: and in many countries there is no easy way of combining higher levels of activity and employment with a further fall in inflation. So the leading countries must work together in seeking ways of improving the prospects of the world as a whole. The Prime Minister and I will be pressing for this over the next two or three months—in the European
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Community, in the IMF, and at the Downing Street Summit.
If the stronger economies increase domestic demand and reduce their external surpluses, they would help greatly to sustain activity in the world as a whole. President Carter has recently given his support to the views of the OECD and IMF in this regard. On the other hand, countries with higher inflation rates and weaker balance of payments positions face more painful adjustments. They will need time to adjust their economies to the many shocks they have suffered over the last few years. In particular, they will need access to adequate finance on appropriate terms, so that they are neither forced unnecessarily to deflate their economies nor tempted into trade restrictions—either of these courses would be damaging to the world as a whole. This will be a major topic at the meeting of the Interim Committee of the IMF in Washington next month.
Many countries also need to achieve higher investment. As the Prime Minister made clear in Rome last weekend, we are exploring with our European partners the scope for co-operative efforts to stimulate investment and to maintain or create jobs, particularly in the field of youth employment. I look forward to the opportunity to review with our Community partners our progress in fighting unemployment in a further tripartite conference of Governments, trade unions and employers before the end of June.

THE SCOPE FOR FISCAL ACTION
This is the background against which I face my main task in this Budget—to consolidate the gains we have made so far and to create the conditions in which we can get our rate of inflation down and make the necessary improvements in our industrial and trading performance. [Laughter.] I think that the House will have noted that these are aims that both the British and the external markets greatly appreciated last week when there seemed to be some danger that they would be jeopardised by the possible defeat of the Government.
I have emphasised many times over the past few months that all these objectives

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will require some reduction in the present burden of income tax. The representations that I have received have been unanimous in advocating this. Both the TUC and the CBI have argued that substantial reductions in income tax are needed both to make it easier to agree on a satisfactory pay policy and to assist our industrial strategy. The sector working parties have reinforced these arguments by pressing for improvements in the structure of income tax to increase incentives at all levels of industry. I am convinced that working people throughout the country take the same view.
My problem in the Budget is to decide how far I can move in this direction this year without weakening the firm control that we have established over fiscal and monetary policy and without putting undue strain on the nation's productive capacity or on the balance of payments.
The economic prospect that I have just described gives some room for moving in this direction. There is all too much spare capacity in the economy, though this varies rather widely within the different sectors of industry. The balance of payments should have moved into surplus by the end of the year. The forecasts for the public sector borrowing requirement and domestic credit expansion give me significant headroom. So there is scope for a carefully controlled fiscal stimulus, to make at least a start in expanding domestic demand by reducing the burden of income tax.
I must also decide how far the prospect for a satisfactory agreement on pay policy justifies me in offering some of the tax reliefs before formal discussions on pay policy have even begun, still less been concluded. What I have heard about the intentions of the trade union movement and the CBI leads me to believe that a satisfactory agreement can be reached, although I would not seek to minimise the difficulties.
I am therefore recommending to the House in the Budget Resolutions which are being tabled today net fiscal action which will cost some £500 million net revenue in a full year. The £500 million package will take effect immediately. When, as I expect, a satisfactory agreement is reached in the coming months on the third round of pay policy, I shall
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bring before the House further proposals which will cost some £ 1 billion. The combined effect of both parts of the Budget will thus be to reduce the revenue by about £1·5 billion in a full year and to bring the PSBR for 1977–78 to a new forecast level of some £8·5 billion. This is within the ceiling of £8·7 billion agreed with the IMF.
Incidentally, it is not sufficiently recognised that the first year PSBR effect of a net reduction in tax is less than the full year revenue effect, partly because some of the revenue effect falls beyond the first year, and partly because the resulting rise in activity cuts unemployment and raises tax receipts. Thus the measures that I am proposing will affect the PSBR next year by only two-thirds of their full-year revenue effect.

MONETARY POLICY
A fiscal stimulus of this size will be fully consistent with maintaining the improvement in financial markets. In order to keep firm control of any inflationary pressures, I intend that domestic credit expansion in the coming year should be safely within the limit of £7·7 billion I set in December. The accompanying rate of growth of sterling M3 will depend on a number of factors, particularly the scale of the improvement in the balance of payments, since a surplus has the effect of expanding money supply. Although we expect a much better balance of payments next year, my best estimate is that the growth of sterling M3 will be in the range of 9 per cent. to 13 per cent.—the same as the estimate I gave in December for 1976–77.
In order to maintain this degree of control over the monetary aggregates, I intend that we should again finance a major part of the PSBR outside the banking system. I have already made a start with last week's gilt stock. It will also be prudent to maintain for the time being the present range of credit controls, and to operate them flexibly.
I am satisfied that on present trends these controls will allow sufficient room for industry's essential needs. The Government continue to regard the provision of adequate finance for industry as a key part of the industrial strategy, and I welcome the priority which the Wilson Committee on the Functioning of the Financial Institutions is giving to it.

PUBLIC EXPENDITURE
The Government's expenditure plans for the next two years were set out in the first volume of the White Paper issued in January. We shall stick firmly to these plans, making full use of the new techniques of control which have proved their worth dramatically this year. A White Paper setting out cash limits for 1977–78, over a wide range of public expenditure, has been presented to Parliament today by the Chief Secretary.

Employment Measures
The Government believe that it is essential to make room within the totals already published for further measures to relieve unemployment. The measures that we have already adopted have received international recognition and have made a major contribution to the recent improvement in unemployment. But although there has been a welcome fall in unemployment in the last two months, far too many people are still out of work and it is too early to conclude that the trend has changed.
My right hon. Friend the Secretary of State for Employment announced a series of measures on 3rd March, mainly to extend training and job creation, at a gross cost of £83 million. On his advice the Government has decided to supplement these measures substantially. The period in which firms can apply for the temporary employment subsidy was due to end next month. It will now be extended through the whole of 1977–78. The period of payment of the subsidy will also be extended from 12 to 18 months, at a reduced rate of £10 instead of £20 a week, for firms whose initial period of payment comes to an end after today but which reapply and continue to satisfy the other conditions for the subsidy; this extension will run until the end of March 1978. The combined gross cost of these extensions is £214 million spread over the next two years.
In addition, the Government propose four minor but important new schemes. First, there will be a selective job introduction scheme to provide an incentive for employers to engage disabled people by providing £30 a week per persons for a trial period of up to six weeks. The scheme will be administered by the Manpower
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Services Commission. We believe that this might help about 2,000 disabled people in 1977–78.
Secondly, there will be a special programme to train extra teachers many of whom are now unemployed—in mathematics and science. In these subjects, which are particularly important to our industrial strategy, there has been a shortage for some years which is still with us, despite the overall surplus of teachers in other subjects.
Thirdly, there will be an experimental scheme for six months from 1st July applying only to manufacturing firms in special development areas employing fewer than fifty workers. They will be given a weekly subsidy of £20 for six months for each additional worker taken on.
Fourthly, we are discussing with the Manpower Services Commission the possibility of introducing a selective scheme for an experimental period of six months to help the long term unemployed, who face problems of particular difficulty.
Details of all these new measures are being annonunced by my right hon. Friends the Secretary of State for Employment and the Secretary of State for Education and Science. The cost was in part allowed for in the White Paper programmes; the balance will be met out of the Contingency Reserve. In all these cases the gross cost will be significantly offset by savings on unemployment benefits.

Inner Cities—Construction
Within the general problem of unemployment, the construction industry has suffered particularly hard. Although the prospective upturn in industrial investment and a probable fall in mortgage interest rates will give it some relief, the Government intend to give it additional help by means which will also assist in coping with the growing problems of inner city areas.
For this reason £100 million of additional expenditure will be made available at once from the Contingency Reserve for construction work over the next two years, in certain inner city areas in England, and for similar work in selected areas in Scotland, Wales and Northern Ireland. The Government will consult

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the local authorities about the allocation and programming of this expenditure.
It is likely that the work in England will include the rehabilitation and improvement of old housing, industrial site preparation, the building of advance factories, school improvements, community buildings, day centres, health facilities and the reclamation of derelict and neglected land. My right hon. Friends the Secretary of State for the Environment and the Secretary of State for Scotland will be making a further statement about inner cities shortly.
The list of employment and construction measures I have just mentioned has a gross cost of about £400 million over the next two years. This includes £165 million from the sum I set aside for this purpose in my Statement last December. The measures should create or maintain between 150,000 and 200,000 jobs or training places by the fourth quarter of this year, depending on the allowance made for the displacement of jobs elsewhere in the economy. I think that the House will agree that this is a real contribution to reducing our unemployment problem.

INDIRECT TAX CHANGES
I come now to my proposals in the field of taxation. First, indirect taxation. I have said on several occasions that it is desirable to readjust the balance between direct and indirect taxation. In recent years the share of direct taxes has risen under successive Goverments, mainly because inflation has eroded the real value of income tax thresholds and the value of many of the specific duties. This produces fiscal boost as well as fiscal drag—a point often forgotten by commentators. This, however, is not the year to take a major step to reverse the balance, since the prospect of a steady fall in the rate of increase of the RPI is of critical importance to the negotiation of a satisfactory new pay agreement.
Nevertheless I believe that in two fields some increase in indirect taxation is desirable to support important objectives of national policy, providing it does not have a major impact on prices.
Energy conservation must remain a major objective throughout the industrialised world. This is a message which
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emerges clearly from the recent OECD report on the "World Energy Outlook". The pressure on the world's resources of fossil fuels, particularly oil, is bound to increase, as that report makes clear. Unless countries respond vigorously, the energy imbalance which struck the industrialised world so severely in 1973 could be upon us again in a much more severe and intractable form. If we allow this to happen, the economic and social consequences will be incalculable.
We must instead open up new sources of supply, and act on demand with conservation measures and through realistic pricing policies. We can claim that the United Kingdom's record in these areas is good. We are well endowed with indigenous energy resources, and we are developing them vigorously. In conservation, we have made a good and effective start, but we must maintain the momentum and develop our polices if we are to stay among the leaders. Fuel saving can bring forward the time when the balance of payments moves into surplus and so remove a major obstacle to high employment. In addition there are reasons of transport policy for increasing taxation on the use of road vehicles.

Petrol/derv duty
The taxation of road fuel was not affected by my December measures and the total effect on the private motorist of the changes in my Budget last spring amounted to no more than about 1p a gallon. My measures last year had a greater effect on the business user of road fuel, but for him it was the first increase in the taxation of derv for seven years. In these circumstances I feel justified in proposing an increase in the duty on road fuel of 5p a gallon. If fully passed on, this would raise the price of a gallon of petrol to the private motorist by a little over 5½p, including VAT. This increase does no more than restore the real value of the duty on petrol to its level after my last Budget. [Interruption.] I thought that the Conservative Party favoured indexation of taxes. Petrol will still be cheaper in Britain than in nearly all other countries of the European Community. My proposals for road fuel duty will produce an overall revenue increase, including VAT, of £300 million in a full year. The rebate of road fuel duty paid to stage bus operators will be increased so

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that their costs will not be affected by the rise in the duty.

Heavy Oil Duty
Road fuel is not, of course, the only oil which is subject to duty. The duty on most other oil products, for example heavy fuel oil, reached its present level of 1p a gallon as far back as 1969. Its real value has fallen very substantially since then, and I propose to restore it by raising the duty to 2½p a gallon. The oils affected will be all those which at present bear the 1p rate. I have made one exception only—paraffin commonly used used for domestic heating, particularly by the less well-off and by pensioners. This paraffin will continue to carry only 1p duty as at present. The increase in duty on heavy oils will produce an estimated £150 million in a full year. Both the oil duty changes I have proposed will be brought into effect on oils cleared from 6 p.m. tonight.

Vehicle Excise Duty
Vehicle excise duty on cars has remained unchanged at £40 a year since April 1975 and its value in real terms has fallen appreciably since then. An increase of £15 would be required to restore the real value to the 1975 level. But as I am already going a long way to meet the Government's objectives in transport and energy policy by substantial increases in the duty on petrol and derv, I am proposing a more limited increase in VED of £10 or 25 per cent., taking the duty to £50 a year. The same percentage increase will apply to all other licences except those for goods and haulage vehicles. The increased revenue will amount in a full year to some £150 million.
The tax burden on heavy lorries, in contrast to the position of the private car and the lighter lorries, fails to cover the costs which they impose on the community, such as wear and tear on the roads, even if no account is taken of the damage to amenities in the areas through which they pass. I think I should make a start on closing that gap, although in the case of the heaviest lorries the gap is too large to close in one move. The reasons for moving in this direction were set out in the Transport Consultative Document published last year and the European
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Community is expected to take a similar view later this year.
The lighter lorries already cover their costs to the community. So for vehicles up to 4 tons unladen weight I intend to raise the duty by about the same percentage as for the motor car. But for lorries above 4 tons and up to 6 tons I propose increases of around 30 per cent., and for those above 6 tons increases of around 35 per cent. For individual weight categories within these bands there will be some variation from these figures, This is necessary to ensure a smooth progression in the tax rates. For virtually all these vehicles the increases fall short of restoring the effective burden of the duty to its level two years ago. The total increase in revenue from these changes in VED on lorries will be about £60 million in a full year.

Tobacco Duty
There are compelling health arguments for increasing the duty on tobacco in real terms. Besides consolidating the increases on tobacco and tobacco products announced last December, I therefore propose to raise the duty on a packet of 20 cigarettes by 4p, with a corresponding increase on hand-rolling tobacco. A further increase on other tobacco products would not be justified at present; in particular pipe tobacco plays an important part in the life of many retired people. The increase, which will take effect from Monday 4th April, will produce an extra £150 million in a full year, including VAT.
The increase of 4p per 20 cigarettes which I have just announced will be added to the tobacco products duty as a flat rate per cigarrette. This is in itself a move towards the new structure of taxation on tobacco required by the EEC. The Financial Statement and Budget Report refers to the remaining stage of the transition, which will be reached on 1st January 1978. My hon. Friend will explain the details later in the debate. I propose no other changes in the excise duties.

Value Added Tax
I come now to my proposal for value added tax. It is—in spite of the recommendations of a Task Force which I read about yesterday—to make no change.
Effects of indirect tax increases
Thus, the only increases which I propose in indirect taxes are those justified by considerations of health, of energy or transport policy. These increases will produce extra revenue, including VAT, of about £810 million in a full year. The effect on the RPI by the fourth quarter of this year will be an increase of just under 1 per cent.

National Insurance Surcharge
I turn now to a matter which has attracted a good deal of interest on both sides of the House. This concerns the new National Insurance surcharge which, as I announced last July, will take effect from 6th April as a two percentage points addition to the rate of employers' National Insurance contributions.
I have received many representations from charities, including the Churches, and my right hon. Friend the Prime Minister has received a deputation from some very senior representatives of charitable interests. I have considered the representations very carefully, and I have concluded that there is a strong case for relief in view of the special position of these organisations. Many charities perform valuable work in the community, and the Government would not wish to see them hampered as a result of the operation of the surcharge.
All organisations accepted as charities for income tax purposes will therefore be eligible for relief from the surcharge. The concession will be available from the first payment in respect of the 1977–78 tax year, so that no charity will be required to pay the surcharge. Details of the arrangements are set out in a Press release to be issued this evening.

DIRECT TAX CHANGES
I turn now to direct tax changes. I am proposing no change in the rates of corporation tax. Stability in company taxation is an important part of the industrial strategy, as I pointed out last year, and should not be disturbed without compelling reason. I shall continue to direct the relief I give to companies through the provisions for capital allowances and stock relief which already exist.
However, I believe that small companies deserve special consideration. So for the second year running I propose to increase the profit level by which small companies are defined for the purpose of the preferential rate of corporation tax. This will go up from £30,000 to £40,000. The limit for marginal relief will be increased from £50,000 to £65,000. The cost of these changes, which will benefit the small company sector in real terms, will be about £20 million in a full year.

Stock Relief
In my Budget Statement last year I said that the interim scheme of stock relief would continue for two more years. I then thought that this would give sufficient time to devise a permanent scheme which could take account of the views of the accounting profession and of industry. However, although the Government and others have welcomed the principle of current cost accounting, the Morpeth Committee's detailed proposals are still at exposure draft stage and are not yet firm. We need more time for discussion and consultation on a permanent scheme; the implications are very important for industry, and we must get it right. I propose therefore to continue the scheme in its present form, not only for 1977–78 but also for 1978–79.
As I have said many times before, in moving to a permanent scheme there will be no question of any general withdrawal of the relief given under the current scheme. I cannot, obviously, foretell at this stage what sort of transitional arrangements may be appropriate, since this will depend upon the form of the permanent scheme, but again I repeat that, if necessary, special provisions will be included to ensure that the change of system does not lead to cash flow difficulties for individual companies.
On the question of deferred tax, a good deal has been said also, notably by several sector working parties in their end-year reports, about the troubles that some companies meet when they seek to raise finance because of the existence in their balance sheets of large deferred tax provisions. But for the normal continuing business there is little or no risk that any substantial part of the deferred liability will in fact arise. This should now be better understood in the financial world.

Capital Gains
I come now to proposals for improving the taxation of capital gains. These take account of recommendations made by a joint working party of the Inland Revenue and representative bodies, for whose help and advice we are grateful.
First, I propose an improved roll-over relief for what is often called "domestication", that is, the transfer of an overseas branch to a separate non-resident company.
Second, I intend to modify in certain respects the rules applying to company take-overs, amalgamations and reconstructions.

Avoidance
I intend to take further action to deal with tax avoidance. It is intolerable that when the overwhelming majority of men and women pay their taxes honestly, a small number of wealthy corporations or individuals should escape their responsibilities to society by tax dodging on a massive scale.
First, there is increasing evidence of some particularly objectionable avoidance schemes designed to manufacture wholly artificial capital losses by shifting value from one asset to another. I am sure that there will be general agreement that they should be stopped.
Second, I propose to deal with certain highly artificial schemes under which taxpayers undertake to pay annuities for a consideration which is not taxable, or not wholly taxable, in their hands. The Inland Revenue is challenging these schemes under the present law, but I propose to introduce provisions designed to annul them. These provisions will apply to payments made after today.

Oil
I have also asked my officials to begin urgent consultations with the companies concerned about the possibility of legislating in the Finance Bill to restrict unilateral relief for certain taxes paid by oil companies to Governments of oil producing countries.

Foreign Currency Borrowings
In my Budget speech last year, I referred to the question of tax relief for the extra cost to companies of repaying
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foreign currency loans where sterling has fallen in value. I have now considered this question fully in the light of the report I have received of the extensive discussions the Inland Revenue subsequently had with those affected.
As I made clear last year, the arguments for general relief for exchange losses are finely balanced. There are major areas where the balance of argument would be against relief, and in these areas there are real problems in distinguishing between different cases and in drawing lines between them. Moreover, although the recovery of sterling has reduced potential losses, the sums of tax at stake are considerable. I have had to conclude that, since this year there is an urgent need to concentrate on income tax reliefs, I cannot at the same time propose relief for exchange losses.

Foreign Earnings
I said last December that I believed it important to find ways of improving the tax treatment of employees living in this country and working abroad, particularly those at the sharp end of exporting. The Inland Revenue issued a consultative document with proposals for changes. In the light of many representations and discussions, I am putting forward some changes in the original proposals designed mainly to benefit those who work abroad for relatively short periods at a time.
I now propose that any employee who works abroad for a total of 30 days or more in a tax year should qualify for the tax relief, whether or not the 30 days are continuous. This means that he will pay no tax on 25 per cent. of his earnings from work overseas. And those who have separate employments with overseas companies requiring them to carry out all their duties abroad will also qualify for the reduction, regardless of the length of their absence abroad. Details of my proposals are set out in the Press release which the Inland Revenue will be issuing today.

Retirement Annuities—Ceiling for Relief
Finally, I propose to increase again this year the limits on the annual amounts within which self-employed people may claim tax relief on premiums paid for an annuity on retirement. Although these

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limits were raised last year, I have de-decided, after reviewing the position again, that it would be right to provide a further increase. Accordingly the limit of £2,250 will be raised to £3,000 and there will be proportionate increases in the limits for people born before 1916 and for the special types of contract first introduced in 1971.

Revenue Effects
Details of the effects of these changes of the yield of the revenue, and of certain other minor tax changes, are given in Table 16 of the Financial Statement and Budget Report.
The combined effect of all the indirect and direct changes I have announced so far this afternoon will be a net increase in revenue of £740 million in a full year.

PAY AND TAX
I now come to the heart of my Budget—the reductions in income tax and their relevance for pay policy. Given the size of the fiscal stimulus I consider justified and the net revenue resulting from the tax changes I have just described, I shall be able to make reductions in income tax amounting to some £2¼ billion in a full year—assuming we reach a pay agreement for the year from August 1977 which is consistent with our inflation objectives. To the extent we fall short of such an agreement the scope for overall tax relief would be that much smaller.
I need not go into all the reasons why substantial income tax relief is desirable. We shall discuss that fully in the Budget and Finance Bill debates. In a nutshell, the effect of inflation has been to put too high a proportion of the tax burden on to the income tax; to impose tax on too low a level of income; and to bring too many people into the higher rates of tax at each successive level, starting at a level not very far above average earnings. The effect has been to weaken the incentive to work throughout the economy. In correcting this, I have to distribute tax relief so as to give priority to the areas where the problem creates the greatest hardship or is most damaging to our economic performance.
The greatest hardship falls on the poorer members of our society. I could
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help them through three possible changes in the income tax—by increasing personal allowances, by introducing a reduced rate band, and in the case of retired people with only modest savings by raising the threshold for the surcharge on investment income. I shall take these in turn.

Personal Allowances
The various personal allowances reduce the burden of income tax at all levels but give special help to the very poor by relieving them altogether of all liability to pay income tax. I therefore propose to increase the single person's allowance and the wife's earned income allowance by £70 to £805 and to raise the married allowance by £140 to £1,225.
I am proposing a substantially larger increase in the married allowance so as to provide the family man with special help during the transition to the child benefit scheme. It would not be appropriate to adjust child tax allowances again as I did last year. Hon. Members have already been given details of reductions being made in child tax allowances this year as the first stage in their replacement by child benefit. The effect on family income of the reduction in the allowances will in general be more than offset by the child benefits which mothers will get. But I am conscious of the need to ease the effect of this change on the father's pay packet. That is why I am proposing a substantially larger increase in the married allowance.
I propose also to raise the additional personal allowance by £70 to £420. This will ensure that, as in previous years, the allowance for one-parent families is kept in line with that for two-parent families. I propose to increase the age allowances for those over 65, so that they become £1,080 for the single and £1,695 for the married.
These increases in personal allowances will give relief at all income levels. For those over 65 the resulting threshold will remain above the level of their retirement pensions and they will continue to be able to earn some supplement to their pensions without paying additional tax. As a result of these increases in personal allowances, 845,000 people who would otherwise have been paying income tax next year will not now do so.

Proposals for a reduced rate band
I turn now to the question of a reduced rate of tax for the initial band of taxable income. I have been urged from several quarters to move in this direction. There is much to be said for this in principle. But to insert a band of reasonable length would be very expensive and rule out action in areas which I believe are more important at this time.
For example, if the reduced rate were 25 per cent.—and anything higher would hardly be worth while—and the length of the band were the first £1,000 of taxable income, the special benefit of a lower marginal rate of tax would fall only on those coming between one-fifth and about three-fifths of average earnings. It would cost some £2,200 million—leaving nothing over for raising tax thresholds or meeting the special problems of those on average earnings and above.
So far as those on low incomes are concerned, the highest priority for the future must be to raise the tax threshold so as to maintain the real value of personal allowances as far as possible and, if circumstances permit, to increase their level to the point where they stand clear about the levels of the main social security benefits. Once this has been achieved I believe that the next priority should be the reintroduction of a reduced rate band. I have asked the Inland Revenue to examine the administrative problems which a reduced rate would pose for them, so that effect can be given to it as soon as circumstances permit.

Investment income surcharge
I am, however, particularly concerned about elderly people who now find themselves liable to the surcharge on their income from savings which are quite modest in modern terms. I propose therefore, for the first time since 1974, to make some increase this year in the thresholds for investment income surcharge. For those over 65 I propose that the threshold for the 10 per cent. rate should be raised by £500 to £2,000 and for the 15 per cent. rate by the same amount to £2,500. For those under 65 I propose that the starting point for the 10 per cent. rate should similarly be raised by £500 to £1,500, while the starting point for the 15 per cent. rate will remain at its present level of £2,000.

Extending the basic rate band
Before turning to higher rates of income tax, I must deal with the problem which arises at the upper end of the basic rate band. If I took no action this year, people earning less than one and a half times average earnings would find themselves moving out of the basic rate band into liability to the higher rates of tax. In two years inflation has already almost doubled the number of people paying tax at the higher rates, from 750,000 in 1974–75 to 1·4 million in the current year; and, if I took no action, the number would rise this year to 1·8 million.
I propose, therefore, to extend the basic rate band by £1,000, making the entry point to higher-rate liability £6,000. As a result, 800,000 people who would otherwise be paying tax at the higher rate will now not do so.
I now come to the rates of income tax above 35 per cent. These apply to successive bands of taxable income which will now start at £6,000. I want to produce a more rational sequence of bands above this level. The first higher rate band—charged at 40 per cent. tax—is only £500 long and I propose to extend it to £1,000. The next three bands will remain £1,000 long but the following band—charged at 60 per cent.—which I had to shorten last year from £2,000 to £1,500, I propose to restore to £2,000. I propose to make the following two bands £2,000 long and the 75 per cent. band £5,000 long, as it is now. Thus the maximum rate will be reached at £21,000—£1,000 higher than this year.
The effect of these changes will be to raise the thresholds for the higher rate bands by between £1,000 and £2,000. This will benefit all higher-rate taxpayers, but those in the area of middle management will gain proportionately more than those at the very top.
I should have liked to have been able to do more for senior managers, as I should have liked to do more for those at the bottom of the earnings scale. But I have felt it necessary this year to concentrate relief where it is most needed. I believe that the improvements I have announced strike a reasonable balance between the needs of the various groups which most require relief immediately.
The total cost of this whole group of measures in the field of personal taxation is £1,290 million in a full year. I propose that all these income tax reliefs should take effect immediately. The benefit will generally be felt in pay packets in May.

Further possible reductions
To make this sum up to the £2¼ billion of reductions in income tax which I said we could afford if we can be assured of a continuing fall in our inflation rate, I would propose to reduce the basic rate of income tax from 35 per cent. to 33 per cent. at a cost of £960 million in a full year. Though of course all taxpayers will benefit, this will be of special advantage to people on up to nearly twice average earnings, with the biggest proportionate benefit going to the highlyskilled worker.
I have explained why it would not be prudent to commit myself absolutely to this decision until a satisfactory agreement on a new pay policy has been reached, as I expect to happen well before the Finance Bill leaves the House. To do otherwise would be to take risks with the growing confidence which is being shown in our economy both at home and abroad—risks which could be avoided by deferment for a short period. I shall not, therefore, include this proposal in the resolutions to be tabled or in the Finance Bill to be introduced after the recess. I shall move an amendment proposing a reduction in the basic rate at the appropriate time and in the light of the pay agreement.
Particulars of the effects on different families and individuals of the total income tax reliefs which I have described will be available in the usual way, but it may be helpful if I give one or two examples now. Average earnings for men are now nearly £80 a week, and the earnings of four-fifths of employed men are within £30 either side of that. A married man on £80 a week would be just over £2 a week better off when all my income tax proposals were implemented. A married man on £50 a week would gain nearly £1·50, and a married man on £110 a week over £2·65. So, besides giving substantial help to the lower paid, these reliefs would increase cash differentials and broadly maintain percentage
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differentials for people in the basic rate band.
Perhaps I should remind the House that all mothers will receive child benefit from next Monday 4th April, and all but the richest families will be better off as a result. The tax reliefs which I have now proposed will more than compensate fathers for the associated loss of child tax allowances.
I believe that the advantage which working people will get from the tax reliefs I have proposed should make it easier to reach agreement on a pay policy which will reduce inflation substantially in the coming year. A tax benefit of rather over £2 a week to the married man earning £80 a week is worth as much as a pay increase of £3·50 from which tax and national insurance contributions take their bite. So my proposals give him as much as a pay rise of almost 41½ per cent.; and this sum would be paid not from the date of his next pay increase towards the end of this year or in the first half of 1978 but with effect from 6th April—next week. Moreover, this sort of increase in take-home pay would not add to wage costs and so to prices. So he would get further benefit from a lower rate of inflation. And this in turn will keep interest rates lower and the value of sterling higher than they would otherwise have been.
Therefore, as I have explained, there would be a triple benefit for prices, worth 2½ per cent. off the retail price index by the end of 1978. That would be equivalent to a further gross pay rise of over 4 per cent.—making nearly 9 per cent. in all. And the resulting addition to demand would help to produce more jobs.
In fact, it is difficult to exaggerate the advantages of a satisfactory pay agreement which makes it possible for me to proceed with the full income tax package of £2¼billion.
No one should underrate the difficulties of reaching such a pay agreement for the third year running. I know that it will demand a high degree of discipline from working people and their trade union representatives. I appreciate, too, the heavy burden of responsibility it places on the TUC and would like to acknowledge again the way in which it has shouldered that responsibility in its own and the nation's interest over the past two

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years. But the prize is even greater than the burden. We cannot afford at this of all moments, when the rewards of our sacrifices are within our grasp, to throw away what we have gained in those two years.
The TUC has written in its "Economic Review":
"All that can be said at the present stage is that the intention is to be in a single figure inflation position rather than allow the situation to deteriorate as it did two years ago. A 'single figure' pay-prices equation is not only the same in the short term for living standards as a 'double figure' one but is incomparably better designed to protect living standards over a two to three year period because of its impact on the exchange rate and on the possibility of economic growth".
I fully endorse that statement, and I hope that there is not a single Member of this House who would quarrel with it. The TUC should have the support of the whole nation in seeking to achieve the objective it has set itself. All of us will benefit from its success.
These, then, are my proposals. They constitute a significant first step in reducing the burden of direct personal taxation. At this time, I believe that this is the most effective way the Budget can contribute to the attack on inflation and the improvement of our industrial performance, on both of which our economic recovery depends.
The full tax changes I have proposed will shift the balance between direct and indirect taxation. Direct taxation is provided over half of total revenue—about 51½ per cent.—in the current year. It will provide under half—about 48 per cent.—next year.
If I am able to implement my proposals in full, the effect of my Budget will be to increase output by a little over ½ per cent. by this time next year and approaching ¾ per cent. by the end of 1978.
On this basis, I see the economy developing as follows between now and the first half of 1978. On the central forecast, I expect output to grow by about 1½ per cent. and manufacturing output by about 2½ per cent. Manufacturing investment should be recovering rather strongly, with an increase of some 15 to 20 per cent. between now and the first half of next year. The balance of payments should
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also be improving strongly this year and be in substantial surplus next year.
The rate of inflation should start falling again after about the middle of this year as the effects of last year's depreciation work themselves out of the system and we enjoy the benefits of this year's lower interest rates and more stable exchange markets. The measures which I have announced today will raise prices by about 1 per cent. by the end of this year. Thus, I now expect the year-on-year rate to be about 13 per cent. in the last quarter of 1977–2 per cent. lower than the forecast of 15 per cent. which I published in December. With a satisfactory pay agreement, the prospect is that the rate of inflation will fall to single figures by the second quarter of 1978. In consequence living standards, which have fallen sharply over the past six months, following the depreciation of the pound, should at least stabilise at something close to their present level. We are now through the worst.
As I said last December, no one can predict the path of unemployment with any hope of accuracy in current circumstances. Those who have done so have had ample cause to eat their words in recent months. But it is possible to estimate the effect on employment of all the measures which I have described this afternoon compared with what it would otherwise have been. The specific employment measures I have described will, as I have said, by the end of this year create or maintain between 150,000 and 200,000 jobs or training places. The effect of my proposed tax changes will build up more slowly, but if they are implemented in full they will increase employment by about 100,000 by the end of 1978.
But the House must recognise that the key to a sustained improvement in our unemployment prospects must lie in the success of our manufacturing industry in increasing the volume of our exports and countering the penetration of our domestic market by foreign imports. I believe that this Budget will make a significant contribution to that objective. For that reason I commend it to the House.
Mr. Deputy Speaker: I remind the House of the procedures to be followed. Under Paragraph 1 of Standing Order No. 94, the first motion, entitled

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"Provisional Collection of Taxes", must be decided without debate. When that matter has been disposed of, I shall call the Chancellor to move the motion entitled "Amendment of the Law". It is on that motion that the Budget debate will take place today and on the succeeding days. The remaining motions will not be put until the end of the debate on Monday 4th April and they will then be decided without debate.

PROVISIONAL COLLECTION OF TAXES
Motion made, and Question,
That pursuant to section 5 of the Provisional Collection of Taxes Act 1968 provisional statutory effect shall be given to the following Motions—

(a) Spirits (motion No. 2).

(b) Beer (motion No. 3).

(c) Wine (motion No. 4).

(d) Made-wine (motion No. 5).

(e) Cider (motion No. 6).

(f) Tobacco (motion No. 7).

(g) Termination of surcharge (motion No. 8).

(h) Tobacco products (motion No. 9).

(i) Hydrocarbon oil etc. (motion No. 11).

(j) Vehicles excise duty (motion No. 15.—[Mr. Healey.]

put forthwith, pursuant to Standing Order No. 94 (Ways and Means Motions), and agreed to.

BUDGET RESOLUTIONS AND ECONOMIC SITUATION

  AMENDMENT OF THE LAW
  Motion made, and Question proposed,
  That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance; but

  (a) this Resolution does not extend to the making of amendments with respect to the surcharge imposed by the National Insurance Surcharge Act 1976 other than amendments for affording relief to charities; and

  (b) without prejudice to any authorisation by virtue of any Resolution relating to value added tax, this Resolution does not extend to the making of amendments with respect to that tax so as to provide—

  (i) for zero-rating or exempting any supply;

  (ii) for refunding any amount of tax;

  (iii) for reducing the rate at which tax is for the time being chargeable on any supply or importation otherwise than by
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  reducing that rate in relation to all supplies and importations on which tax is for the time being chargeable at that rate; or

  (iv) for any relief other than relief applicable to goods of whatever description or services of whatever description.—[Mr. Healey.]

  [Relevant Commission Documents: Nos.R/566/77, R/567/77, R/2361/76 and R/2520/76.]
  4.56 p.m.
  Mrs. Margaret Thatcher: It is the custom for the Leader of the Opposition to congratulate the Chancellor of the Exchequer on the manner in which he presented his Budget. I congratulate him most warmly this time. We have never had such a short Budget Statement—it lasted 1 hour 23 minutes—and that was much appreciated. I notice that the right hon. Gentleman took the usual refreshment. I am not sure whether it was brandy or whisky, but I am sure that he needed it, as we did as we listened to him.
  By custom, the Chancellor of the Exchequer starts by giving the House some background to his Budget. There are three aspects of that background on which I should like to comment, but before I do that I must tell the right hon. Gentleman that what he said struck many of us as though, in this Budget he were really apologising for much of the damage that he had done in his other nine Budgets. We are glad that he is repenting the high level of direct taxation that he has imposed on people and, to some extent, the other levels of taxation that arise from the high level of public expenditure that it has been this Government's choice to impose on the economy and on the people.
  Looking at the Budget as a whole one finds that it is still a take-away Budget rather than a give-away Budget. He has taken his fiscal stand on £1½ billion. That is not quite enough to restore us to last year's level and it is nothing like enough to restore us to the level of the 1973 Budget.
  The Chancellor of the Exchequer said that much would depend on a satisfactory pay policy, but he made no attempt to say what that would constitute. He has given us no hint at all. I thought that the Government were still in charge. Perhaps they are not responsible. They do not like taking responsibility. The Chancellor of the Exchequer has staked everything on a satisfactory pay policy next

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  time, yet he has left himself absolutely free to bring in the reliefs, regardless of what that pay policy is.
  Last year the right hon. Gentleman said that there would be certain tax reliefs if the pay policy was set at 3 per cent., and he brought those reliefs in on the basis of 5 per cent. We have no means of judging what is in his mind.
  There is another gap. It is customary for the Chancellor of the Exchequer to say something about the annual review of social security benefits. He has said nothing about that. Usually there is a reference to the annual review either by the Chancellor today or during the course of the Budget debate. I am not quite sure whether it will be coming or not.
  Perhaps I may turn to three of the background factors. There seems this time to have been a singular unanimity in the forecasts of what will happen in the year ahead in Britain. They have not varied very much on a number of things. First, on the real gross domestic product that we may expect this coming year, what many of us are very worried about is that we are practically near the peak of the very temporary recovery and that we are in danger of going into a minor recession. Therefore, the whole Budget is against the background, once again, of stagnant or very slightly rising output; some forecasters say it is falling very slightly. But it is against a background of more or less stagnant output. That is one of the most serious aspects. Again, all commentators are agreed upon that.
  The next thing that they are agreed upon is that consumer prices will rise by about 15 per cent. That, too, is pretty devastating in terms of the cost of living for those who have absolutely no margin left in their incomes, and it is much too high. I shall say something about that again shortly.
  The third thing that they are agreed upon is that unemployment is likely to rise, particularly towards the end of the year, due no doubt to the stagnant output that is expected and to the increasing productivity that is expected.
  That is the background. I have not for a long time remembered such unanimity among the several forecasters in what they are expecting in the coming year.
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  The second background factor is how we adjudge what the Chancellor says about his own forecasts. I heard his broadcast last year. It was extremely interesting. I remember watching it and admiring it for the Chancellor's very polished performance. He started off by saying that we were expecting or hoping for "an economic miracle". I am not quite sure what happened to that, but it did not come about. He said in the House:
  "All that is required to achieve the formidable objectives which I have set is a marginal improvement in our industrial performance at every level. This will suffice to produce the economic miracle we need."—[Official Report, 6th April 1976; Vol. 909, c. 282.]
  The economic miracle never happened.
  Perhaps I may look at some of his other forecasts and analyse what he said would happen. First, he said that
  "World trade has already picked up and for once we are getting our proper share of it."
  World trade had picked up, but our share of it was in fact falling during the first three quarters of last year. Indeed, it fell from 9·2 per cent. to 8·6 per cent. according to Trade and Industry figures. So the Chancellor was not right about that one.
  The Chancellor went on to say
  "British industry is already on the move … and our output will be growing fast."
  First, our historic increase in output ever since 1948 has been on average over 3 per cent. per annum, but last year it was only 2¼ per cent.—the annual rate since the Budget. If one contrasts that with what many of our EEC colleagues were doing, one finds that, unlike us, they had got right back not merely to 1974 production but to their 1973 peak production, and over it. We are nothing like back there, in spite of the temporary increase during last year. Therefore, it could hardly be said that our output was growing fast.
  The Chancellor then went on to say,
  "In the next 12 months unemployment will be on the way down."
  In fact, in March 1976 it was 1,235,000; in March 1977 it was 1,328,000.
  Finally—and I could go on and on—there is just one other factor that I shall take. The Chancellor went on to say
  "Then our inflation will at last be down to the same level as it is in other countries."

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  But, of course, it is not. On the figures that the Government have placed before us, ours is 15·1 per cent., at an annual rate, and the average in the OECD is 8·4 per cent., so we are way, way ahead on inflation—"behind" would perhaps be the more appropriate word. We are behind the OECD countries on taking advantage of increased output.
  Somewhere during his speech today the Chancellor referred to the fact that other countries in Europe were having difficulty in getting their economies right. Of course, we all are, but I do not think that anyone except us has got pretty nearly all the indicators wrong together. Certainly Europe has difficulty with unemployment, although I believe that we are now slightly above the European average, but European countries have not got simultaneously difficulty with unemployment and inflation and the volume of increased production. Everything is going wrong with us simultaneously. Therefore, if we are to judge the Chancellor by his forecasts, we must look at them very circumspectly indeed.
  The third background factor is the increase in inflation, which has not come about in any way through wage inflation but, indirectly, through the level of the public sector borrowing requirement and public spending. It seemed to me that the Chancellor ducked this in what he said, but he knows that if he looks at the quarterly figures and not at the annual figures that he has always been very careful to quote, he will find that they dodge about like a yo-yo. This is because his money supply and domestic credit expansion have been so very much related to his borrowing needs that he has had great difficulty with sterling. It went out in the summer, and because of that he has very much higher import prices. That was due to the level of public expenditure and to the level of the deficit, which is still, even on IMF figures, proportionately high as compared with that of other countries. Eltis and Bacon brought this out in an article in The Sunday Times last Sunday, and in The Times previously.
  The CBI attributes to that mismanagement of borrowing, and sterling, and an increase of 6 per cent. in the level of inflation. That is a very great imposition on the British people—that large public
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  sector borrowing requirement and that mismanagement of sterling, which the people now have to endure.
  Perhaps I may say just one more thing about this factor. I know, or I deduce, that it is the Chancellor's policy to keep the £ sterling low to try to make export prices competitive. I believe that he bases this on the old German strategy that when they kept their exchange rate low they built up a big export trade, which has stood them in good stead ever since. But they were in circumstances that were very different from our present circumstances.
  It seems to me that the policy of Switzerland has been very much better, namely, to follow what I would call conservative—with a small "c"—policies, which is to have a more balanced Budget—I know that it is not possible at present—which has led to them having only a 1 per cent. rate of inflation and a high exchange rate. Certainly a high exchange rate makes it difficult to export—although not with the quality of their goods. But it does two other things. It means low import prices and, therefore, low costs feeding into one cost element of their exports; and it means a low demand for increased pay because their inflation is low.
  That seems to me a much better policy than the one that the Chancellor seems to be pursuing on the exchange rate. I hope that there will be no attempt now to hold the exchange rate down artificially, because that will land us in difficulties with the retail price index and inflation.
  I come now to some of the proposals that the Chancellor has put before us. I think that we were all shaken, perhaps, by the extent to which he has loaded extra taxes on the motorist, which will undoubtedly react very heavily on a number of people in the rural areas who have to use their cars.
  Concerning corporation tax, again we were very concerned this morning, as we have been for the past few days, to read that companies appear to be very short of cash. This is not when their stocks are high. This is when they have already liquidated their stocks, and, in fact, when they have had a year of low investment. The fact that they are short of cash is very worrying if one is wanting increased output next year.

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  I am particularly pleased that the Chancellor has raised the ceiling on premiums for retirement annuities for the self-employed. As for his income tax reductions, in the case of most of them he does not, in fact, even take us back to where we were last year. That is why it is, net, a take-away Budget and not a give-away Budget.
  I notice that the Chancellor has spread his reliefs. I think that he has spread them wisely, because the people at the lowest end of the taxpaying scale are to have considerable relief. After all, it was the Chancellor who brought them into paying income tax. We pay the highest rate of income tax at the lowest level of income of any country in the EEC. That is the measure of Socialism—the effect on the poorer people of this country. He had to do something about that. I noticed that he said that he would take 845,000 people out of paying income tax. With due respect, since he has been Chancellor of the Exchequer he has brought more than 1·1 million people into paying income tax. He still has a long way to go to undo the damage that he has done.
  The Chancellor was wise to give relief to those in the middle management band. There has been no more demoralised group in society than middle management. People in middle management have often seen their pay squeezed and have suffered heavy taxation on that pay. Many in middle management have had their standard of living drop not by 3 per cent. or 4 per cent.—which is the average—but by 20 per cent. or 25 per cent. They, at least, have managed to get some encouragement from the Chancellor's Statement.
  One wishes that the Chancellor could have been able to do more for the real wealth creators. I accept that middle management does a great deal, but those at the top could have been helped more. On them depends the creation of extra jobs. That is the single most important thing. It is not that we should just add to jobs by artificial means; we should add to the numbers of jobs available by creating real jobs, whether in the manufacturing sector or in the services sector. Both are equally important.
  The Chancellor certainly could not do without the very big bonus that he gets from the invisibles every time we have the balance of payments figure.
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  These are some of our initial comments. We are delighted that some of the direct tax is down. We know that the Chancellor is under the constraint of the IMF. There really is no Budget judgment this year, because it is an IMF Budget. In that sense the only judgment that the Chancellor of the Exchequer was able to make was whether he should be slightly tougher or take it at IMF terms. I notice that he has preferred to leave it roughly at the IMF level.
  Finally, this is not a revival Budget for Britain. That is what we were hoping for. Instead, it appears to be a survival Budget for the Labour Government.
  5.12 p.m.
  Mr. Alexander W. Lyon: In the course of my right hon. Friend's Budget speech he indicated that all the representations that he had received in recent weeks had suggested to him that there ought to be a cut in income tax. When he talked about all the representations I do not know whether he was thinking about representations from the Labour Party. I certainly have made representations to him not to cut tax in the way that he has.
  My right hon. Friend has given away the equivalent of £2,250 million in reduced taxation. The effect upon the average wage earner will be as little as £2 a week on a £80 a week income. The effect of that totally massive give-away on the living standards of the average worker will be minuscule. That undermines the whole of the approach both in the Chancellor's speech and in the speech of the Leader of the Opposition.
  The fact is that we have made a disastrous shift from the policy which has been pursued by both Governments over the last 10 to 15 years. The policy has always been to provide for the standard of living out of public expenditure, leaving the ordinary wage earner to provide, out of his wage packet, only for the less essential Darts of his standard of living. The shift has been most marked in the last 12 months by successive attacks upon public expenditure and the reduction that has taken place, for the prospective year, of about £3,500 million worth of public expenditure and the shift back to personal income that has taken place in this Budget.

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  It is against that policy that I wish to argue in my immediate reaction to my right hon. Friend's speech. That policy is totally misplaced. The reason why it has become misplaced is that the concentration has been upon the effects of the borrowing requirement and the effect that a high borrowing requirement has had upon the whole economy. It is not necessary to have a high borrowing requirement if we have high public expenditure.
  There is a sense in which we can take the Gladstonian rigid financial attitude towards high public expenditure by indicating that it will be paid for out of taxes, either direct or indirect. We could have a low borrowing requirement, if it were thought desirable, by ensuring that public expenditure was paid for out of income tax. That approach would have no more inflationary effect than the approach now being espoused both by the Opposition and by the Government.
  It would not mean that we were creating a demand for the printing of money or borrowing in gilts; it would simply mean that there was a shift between what a man received in his standard of living out of the tax he paid, through the State and what he provided himself out of his wage packet. That balance must always be judged according to what a man gets. Too much of the judgment involved in the suggestion that we are paying too high personal taxation comes from people who are looking back to time when the standard of living was almost entirely provided out of the private wage packet.
  The position just after the war, before the Welfare State was inaugurated, was that only the basic structure of government was provided through the State, with defence as the major item and education as perhaps the most important item after that. We now provide the whole of the education budget, certainly for the average worker, and most of the social security budget, including pensions. Any average worker would now be foolish to take out superannuation for himself when the present State superannuation, especially for someone under 45, will provide him with a better deal than he could get out of any insurance company.
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  We now provide a considerable share of housing expenditure and, although on a declining basis, some of the average worker's food. The essential part of his standard of living, which comes out of his pay packet, is the basic part of his food bill, some part of his housing bill, and his furniture and clothing bills. The rest, which he pays for himself, is either luxury or quasi-luxury. It is not part of the essential items in his standard of living.
  In order to get money to provide a man with an extra £2 a week—which will rightly be seen as minuscule by comparison with his expenditure—we have to garner about £2,000 million from public expenditure. It is monstrous, when that money could have provided better education for his children, better social services for him and his family, and a better Health Service. I forgot to mention that the whole of the National Health Service comes out of public expenditure. It is that kind of false judgment that has plagued our thinking too much in the last 12 months, and it is now crowned by this Budget.
  That is my immediate reaction to the tone and the overall effect of the Budget. But I have some misgivings, too, about the level at which the Chancellor has decided to aim at the motorist. It is true that there is a need to try to shift the balance of traffic from private transport to public transport—to the railways and the buses. I welcome that. But whether it is the right moment, when we are concerned about the effect upon the retail price index, to put such a heavy burden upon petrol, with the effect that it will have on industry and on the cost of living as a whole, seems questionable at the very least.
  I return to my major point, that the style of the Government has become quite misplaced in relation to the proportion of the standard of living that comes out of public expenditure and that which ought to come out of private expenditure. It is also misplaced in terms of the barrage of criticism that comes from the Opposition, who take a different dogmatic view about the reality of the earning man's standard of living.
  I am absolutely convinced that even if the Budget proves popular in the short term the overall cuts in public expenditure that will take place in the coming

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  years will have a disastrous effect upon the average worker's standard of living. Ultimately, we, as a Labour Party, sworn to uphold that proportion of the average man's standard of living that comes out of public expenditure, will be the sufferers.
  5.20 p.m.
  Mr. Alick Buchanan-Smith: I welcome the opportunity, so soon after the Chancellor's Statement, to enter the debate. I follow what the hon. Member for York (Mr. Lyon) has said about the effect on transport costs, which I regard as one of the most serious aspects of the Chanlor's Statement. While I welcome the general shift from direct to indirect taxation I must say that the way it has been done—and the little that has been done—means that the Chancellor is simply restoring what he took away in previous Budget judgments and replacing what has been eroded as a result of inflation following the failure of the Government's economic policies. While I welcome the shift in taxation, we must see it against that perspective.
  One of the main things that concerns me in relation to this shift of direction is the area in which indirect taxation has fallen. For example, if the decision had been to make a marginal increase in VAT, that would have been relatively fairly shared among all those who have to spend. I am concerned about the way the increase in indirect taxation has been largely centred on road fuel duty and the increase in car licences.
  Although the Chancellor may be right in saying that he wishes to see a shift from road transport—and I know the effect that heavy lorries have in my own constituency—what he must realise is that when he increases the cost of road transport and of travel for the private motorist he hits hardest those who live in the remoter areas of the country, far from centres of population. Further, it is not just the cost of living of the individual that is affected. It is the costs to industry, too. The Chancellor's actions will hurt those who live in these remote areas and for whom essentials have to be brought in by road. Transport costs cut far more into the cost of living for people in those areas than for people living elsewhere. The same is true of industry. We all want to see more industry and the employment base extended in these
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  remoter areas. However, much of the raw materials has to be brought in by road and the finished product must leave in the same way.
  It is all very well for the Chancellor to say that he would like to see a shift away from road transport. For the people and the industries I have in mind there is often no alternative form of transport. Areas in the North-East of Scotland, as well as being dependent upon road transport to bring in goods and food, also depend upon the transport industry for employment. The employment area of the city of Aberdeen contains a higher proportion of people employed in the road transport industry than any other area in the United Kingdom.
  I ask the Chancellor to remember that the car is essential for the person living in the remote areas. Bus services are practically non-existent in some areas, while they are rapidly deteriorating in others. I was in Angus in my constituency at the weekend. There, people who require out-patient treatment at hospital must leave by bus at 9 o'clock in the morning to undertake a 40-mile journey if they are to be sure of keeping an appointment three or four hours later. Because of this, such people are desperately dependent upon the car.
  Many of these people, particularly the older people, do not use their cars very often. They use the car on a limited scale socially, and perhaps once a week to go to the village or the town for shopping. They do not do a great mileage. This is when the cost of the licence will bear particularly heavily on them. I condemn this aspect of the Budget.
  Although I welcome the shift from direct to indirect taxation I feel it could have been done in a fairer and less discriminatory way. The way chosen by the Chancellor adds to the cost of living and to the costs of industry in the areas I represent.
  I come now to employment. We all wish to encourage employment and investment and to broaden the base of industry. I say this with a special feeling for my own part of Scotland. At one end of my constituency there is the Aberdeen area which has a low level of unemployment because of the industry inspired by North Sea oil development and so on. At the south end of my area in Tayside, there

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  is a different situation. Unemployment is running at a relatively high level.
  I took a deputation to meet the Minister of State responsible for industry at the Scottish Office last Friday. Fortunately, a threatened factory closure has been partly averted, but there will still be a great reduction in employment in the town of Brechin. The unemployment rate in this relatively small town will jump from about 7 per cent. to nearly 12 per cent. when this closure takes place. If the rate jumps to that level it will be very hard for the community. However, it will be rising only to the level that some other towns in the Tayside Region are suffering. I support anything that can be done to encourage employment and investment in such areas.
  Although Tayside has not benefited from oil development to the same extent as other areas we must recognise the benefits that have been gained from North Seal oil. We are now towards the end of the exploratory stage, which will be seen to have created the greatest stimulant in the North-East of Scotland. We are moving into the production phase, in which there will not be so many jobs. As we enter this phase we must recognise that there will not be the same boost to employment from North Sea oil. We must broaden the base of employment, even in the Aberdeen area, and begin preparing for the day when we cannot have the same reliance on North Sea oil and the encouragement that the boost has given to the economy of that part of Scotland.
  Notwithstanding the areas of oil development, there are small pockets of unemployment where new investment is needed. I appreciate the benefit of oil, as it has brought 50,000 or 60,000 jobs to Scotland. Equally I appreciate the benefits of the regional development policy as we have seen it developed over the years under successive Governments. A recent study by Dundee University has shown that, as a result of regional development policy, we invested about £220 million in Scotland from 1960 to 1970, leading to about 50,000 new jobs in private industry. That is something we must all welcome. The increase in new jobs as a result of the regional development policy is very nearly
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  equivalent to the benefit that we have had from North Sea oil.
  If the Scottish economy and Scottish industry had expanded at the same rate as that of the rest of the United Kingdom we would have required about another 90,000 jobs to keep pace. I am in no sense denigrating the benefits brought to us by the regional development policy. The benefits have been immense, but there has still been a shortfall in Scotland. That is the basis of much of the economic malaise in Scotland, compared with the rest of the United Kingdom. If we had not had the benefits of North Sea oil the shortfall in jobs in Scotland compared with the rest of the United Kingdom would have been even worse.
  I support the regional development policy, but with the removal of the regional employment premium we must look for a new strategy to encourage the creation of new jobs and industries in areas such as Scotland. The Chancellor rightly mentioned a number of the short-term schemes that he is continuing and new schemes that he is proposing, that are designed to alleviate unemployment. I welcome them, as I am sure that they will be of help. However, although they are good in the short term we must recognise that, when they come to an end, we are left with basic weaknesses in our economy that must be put right. I hope that we shall use the breathing space provided by the temporary schemes to work out a better long-term strategy for regional aids to industry.
  Various Committees of the House have drawn attention to present weaknesses in the economy and the schemes that we have introduced. I question whether we are getting the best advantage from investment of public money in terms of employment. In my area of the North-East of Scotland there are schemes being financed from public funds, and they would have gone ahead in any event because of North Sea oil and natural economic reasons; they would have gone ahead regardless of extra aid from public funds. I say that although I represent an area where the investment of public funds has taken place. I do not believe that investment to be sensible, even though my area has benefited. It is not the best use of public funds to continue to put them into investments that would have

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  taken place in any event. The money might have been better spent in other directions.
  We must take a fresh look at the amount of money that we put into industries that are highly capital intensive. The oil industry is an example. It is sometimes to be questioned whether the return in the number of jobs created has been commensurate with the amount invested from public funds. The money might have been spent in better ways and a Committee of the House has drawn attention to that argument.
  Although a great deal has been done to bring new industry into Scotland, industry which has helped to broaden the Scottish economy—there have been American money and industry as well as money and industry from Common Market countries—it seems that when we come on had times the firms from outside the United Kingdom are often the first to end their operations. For example, we all welcomed the investment that was made by the National Cash Register Company in Dundee a number of years ago. The transformation from dependence on the old jute-based industry was remarkable, but in the longer term it is something that must be questioned. It was a good kickoff, but, on its own, was it in the best long-term interests of Dundee? When the company hit difficult times the whole of the town was faced with difficulties once again.
  Another weakness we have seen in our policy to encourage regional development is that we have paid insufficient attention to encouraging local, indigenous industry based on Scottish enterprise. It is important that we encourage such industry to set up firms that have roots within Scotland and that will continue regardless of the economic climate. Such firms will be prepared to weather the storms so long as they do not continue too long. Indigenous Scottish industries might well provide a stronger economy for Scotland.
  As I have said, the temporary schemes have given us time to think out a new strategy for industrial policy within Scotland. We should put more emphasis on selective assistance instead of a blanket system for which people qualify regardless of whether there is justification in terms of development in a particular area, development which might have taken
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  place anyway, or development which will be far too expensive in terms of the investment of public funds in relation to the number of jobs provided. We should put increasing emphasis on selective assistance, using Government agencies, such as the Scottish Development Agency, to provide help for the areas that need it most. That assistance should be directed to areas that will offer the best return on public funds and the best long-term structural economy and employment prospects.
  I have discussed greater selectivity with the Minister of State. I am glad to see the hon. Gentleman on the Government Front Bench. I thank him for his courtesy in meeting the deputation that took to him last Friday. I thank him for the considerate way in which he listened to the matters that were put to him, and for his response. I believe that he takes the same view as myself in these matters. I hope that, through the SDA, and the selective assistance for which I am arguing this afternoon, we shall give more encouragement to local enterprise within communities in Scotland. I believe that that, more than anything else, will help to secure a much stronger long-term economy in Scotland.
  I deprecate certain parts of the Budget, especially those that affect the rural areas. I hope that the result of a rethink and a new industrial policy will be that some of my ideas may be carried through in Scotland.
  5.40 p.m.
  Mr. John Parker: In general, I support the Budget proposals. I disagree with my hon. Friend the Member for York (Mr. Lyon) about income tax. In the last six months or so, more of my correspondence has been about reducing income tax than about anything else—both from those with low incomes and from skilled workers who feel that they are not getting an adequate return for their skills. I therefore strongly support that main part of the Budget and I hope that it will assist the Government in reaching a further agreement on incomes with the unions.
  My constituency is in outer London, and includes the main factory of the Ford Motor Company. I hope that we shall not have a policy that in the long run will damage the motor car industry,

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  both on the home market and in exports. We should therefore think carefully about any increase in taxation on that industry. However, I support the higher taxation of the large lorry and look forward to the time when it pays its full complement for road maintenance and repair of the damage to amenities that it causes.
  I would make a plea on behalf of those who spend a large amount of their income and their time travelling to and from work—whether by car or by public transport. This applies, for instance, to those travelling from outer London to the centre. Travelling expenses, especially on public transport, should be allowed against tax.
  Many of the sons and daughters of those who work in Fords and neighbouring factories travel into central London to work. Travel costs are a serious impediment to their taking up the careers that they wish to follow.
  This problem arises in every large conurbation and for those who travel from villages to work in cities. In Oxfordshire, for example, an enormous proportion of the village population work in Cowley and Oxford. Many villages are kept going by inhabitants who work some way away from home. We want them to continue as living communities. These costs should be considered in taxation policy. This disability will increase and inhibit future population movement.
  The argument against my proposal is that a tax rebate will lead to more people moving still further from city centres. But the inconvenience of long travel to work is very serious and people are not anxious to suffer it. For instance, Leatherhead is 10 miles nearer London than is Dorking and the same kind of house is £1,000 dearer in Leatherhead than in Dorking, because of the shorter time spent travelling from Leatherhead into London. Since this disability will always exist, it will always counter the argument that many people are likely to move further out. This should be considered seriously in the long term as well as the short term.
  I am a heretic, in that I believe strongly in concentrating on improving our manufacturing industry. More
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  capital, whether Government or private, must go into developing our resources and thus our industrial base. But that will not, in my view, greatly affect unemployment in the long run. The more capital-intensive an industry becomes, the fewer people it will employ. We shall need new skills—I support the Government's training schemes—but as trade revives the expansion in employment will be in the service industries.
  Over the last 15 years there has been a 5 per cent. drop in employment in manufacturing industry. That proportion may stabilise for a while and new industries may be developed, but I do not see a large increase in employment resulting from improving manufacturing industry, necessary as it is.
  We must consider how to deal with the problem by longer holidays and earlier retirement when we are more prosperous. Retirement cannot be made compulsory, but in the long term we are mistaken if we believe that improving our industrial base will enormously increase employment. However, there will be more employment in the service industries. I hope that all parties will think about this long-term problem.
  5.48 p.m.
  Mr. David Knox: I join my right hon. Friend the Leader of the Opposition in commending the Chancellor on his brevity. I am sure that this was the shortest Budget speech since my arrival here in 1970. I hope that it sets a precedent. Chancellors who compile their speeches have always seemed to feel that they should be filled out and that we should all be kept sitting here bored for hours. It may seem churlish to say so, but the right hon. Gentleman could have dropped most of the first half hour of his speech, without great loss and to the great benefit of the House. However, it was a great improvement and I hope that we shall not revert to long Budget speeches.
  I share the reservations of my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith) about the Chancellor's proposals for the motorist. The increases in both road fuel duty and vehicle excise duty will eventually affect the retail price index. They will also place further burdens on people who live in rural constituencies like mine,

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  where the car is not a luxury but an absolute necessity. I regret this additional burden and it seems from what has been said so far that others share that view.
  My second detailed point concerns VAT. I was sorry that the Chancellor decided to take no action about VAT, because it strikes me that he missed a great opportunity to revert to a single rate. It was a great mistake to move away from this in his first Budget in 1974. Inevitably, two rates create much more work for small retailers, small business men and, indeed, larger business men. I believe that there would be substantial savings in administrative costs if the Chancellor decided to go back to one rate once again.
  My third point concerns the direct tax changes. One must obviously welcome these changes. As the Chancellor rightly pointed out, they will encourage initiative and hard work. Even more important, they will help remove the very strong feelings of injustice and grievance among people at all income levels. I cannot recollect a time when people have felt more bitter about the level of direct taxation. Although the Chancellor's steps are modest by any standard they are nevertheless, steps in the right direction.
  As my right hon. Friend the Leader of the Opposition rightly pointed out, the changes which the Chancellor has made go only a short way towards remedying the adverse effects that inflation has had over the past year, far less over the past three years. Nevertheless, one must welcome the changes as at least being a step in the right direction.
  I also welcome the conditional tax changes. This was a continuation of the idea in last year's Budget. I welcomed the concept then. It seems to be that the level of incomes and settlements is inevitably bound up with the kind of concessions that the Chancellor can make. In introducing any Budget it is only fair that the Chancellor should allow himself some leeway to adjust tax rates on the basis of the eventually determined income settlements for the year ahead.
  I now turn to certain more general matters. The Chancellor has now completed three years in office. I do not think that even his best friend would claim that his tenure has been anything other than disastrous. The past three years have
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  been punctuated by a series of crises of confidence of great gravity demanding enormous borrowings abroad which, eventually, we shall have to repay. Moreover, during this period the balance of payments has been in substantial deficit. Inflation has been higher for longer than ever before and at one time achieved a rate of 25 per cent.
  Unemployment has reached an unprecedented high level in the post-war era, reminiscent of the level during the 1930s. Moreover, as we heard yesterday, living standards during the past three years have fallen. That is during the period when the right hon. Member for Leeds, East (Mr. Healey) has been Chancellor. All in all, the last three years have been bad years economically for Britain.
  It would, of course, be quite unfair to pretend that all this is entirely due to the Chancellor or his policies. It is certainly the case that he inherited problems in March 1974. Not all the consequences of the commodity price explosion in the previous two years had worked their way through the economy when the Chancellor took office. The effects of the quadrupling of oil prices in the previous few months still had to work their way through as well. No one would hold the right hon. Gentleman or his party responsible for those matters. But the right hon. Gentleman also inherited the consequences of the utterly irresponsible attitude of his party and himself to every wage and salary claim during the 1970–74 period and, above all, to the final miners' dispute.
  It was that attitude which probably made inevitable the wage and salary explosion of 1974–75, to which the severity of our present situation can be directly attributed—particularly in relation to the balance of payments, inflation and unemployment. No one but the Chancellor and his friends can be held responsible for that.
  It is important that the seriousness of the present level of unemployment should not be underestimated. I have no doubt that it is the most serious social problem in Britain today and that it has serious long-term social consequences. It is not just that unemployment is far too high today. Even more, it is that it has risen far too steeply during the last three years. The sharp rise in unemployment undoubtedly causes deep concern not only to those directly affected by it but to those

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  at work who are worried that they might be next to lose their jobs.
  According to the figures provided to me yesterday by the Department of Employment, unemployment in the Leek parliamentary constituency has more than doubled since February 1974—that is, since this Government came into office. In the town of Leek itself unemployment has more than trebled during the same period. The sharp rise has undoubtedly caused deep concern to my constituents. Many of those at present in employment are worried that they may be next to lose their jobs. That is in an area where, thank God, unemployment is still less than the national average. How much worse is it in other areas of the country where unemployment is higher than the national average?
  We in this House must never forget that unemployment is a severe affront to human dignity. The feeling of not being wanted is an insult to the great majority of those who are without work today and whose only wish is the opportunity to earn their living and look after their families. Whether one likes it or not there is, unfortunately, still a stigma attached to being unemployed. This should not be the case, because the level of employment and unemployment is dependent on the demand for labour. It has very little to do with the qualities of those affected.
  Unemployment hits the good worker just as it hits the bad worker. It hits the hard worker and the lazy worker alike. It hits the skilled worker and the unskilled worker alike; unemployment does not discriminate. The great majority of unemployed lose their jobs through no fault of their own.
  The effects of unemployment on our society are very serious. It undoubtedly embitters those affected against society. It undermines their belief in our democratic system. It sours their attitude to their fellow men. It adversely affects the quality of their whole life, and not just during the period when they are out of work.
  More than anything else I believe that it has encouraged work-spreading restrictive practices, which so plague our industry and result in so much of the overmanning that we now have in British industry. If people see their jobs being
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  threatened, it is only natural that they should spread their work. If they see a lot of unemployment about, even if the threat to their job has disappeared, they are unlikely to drop these restrictive practices which they adopted in more difficult times. If we are treally serious about getting rid of overmanning in this country we must get rid of the main cause of it which is high unemployment.
  The oil crisis in late 1973 and early 1974 made a temporary rise in unemployment inevitable. But had the present Government pursued sensible policies during their first year in office—had they pursued policies of restraint in public spending and wage and salary increases—I believe that that rise in unemployment would have been temporary and that things would by now have been back to normal. The fact that things are not back to normal, that unemployment is more than twice what it was in February 1974, is one of the measures of the Chancellor's failure in the past three years.
  I turn to the question of inflation and incomes policy. I mentioned earlier that the seeds of the present Government's disastrous economic record were sown during their first year in office, and in particular during the period when the wages and salaries explosion took place in 1974 and 1975. During the period up to the summer of 1975, increases in wages and salaries of 30 per cent. and 40 per cent. were commonplace. Inevitably, these produced hyper-inflation, with a record rate of 25 per cent.
  Then the Government introduced their incomes policy—a policy that they should never have abandoned in the first place. First we had the £6 limit and then, more recently, the 4·per cent. limit. There can be no doubt that both those policies have worked. Of course, they have not stopped inflation, but if one generates a 25 per cent. rate of inflation one cannot eliminate it in two years. It has already fallen considerably and it should fall further in the future.
  In my view, phases 1 and 2 of this Government's incomes policy have played an important part in the improvement that has already taken place. I believe that wage and salary increases are less than they would have been had this policy not been introduced. If that is not the case, why has almost everyone received the full amount? If, as some

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  people claim, the market should have been allowed to deal with the situation, surely, with the present high level of unemployment, most if not all the wage settlements should have been for less than the full amount.
  The fact is that, as we have found again and again, the market cannot deal with the situation adequately. It does not do so, because the monopoly powers of trade unions and professional bodies and other imperfections in the labour market mean that the labour market works very crudely and that income-cost inflation will be contained only at an excessively high level of unemployment. The fact is that however much some people may dislike it, we need a third phase of the incomes policy to moderate income increases after the present limits end.
  We have been hearing a great deal recently about a return to free collective bargaining. I should not mind if it were free collective bargaining. It may well be collective, but there is nothing free about it, and it is certainly not real bargaining, because of the imperfections of the labour market and the monopolies in it. In fact, the term "free collective bargaining" is a euphemism for the exploitation of the public by trade unions and professional bodies through the monopoly power they have in the labour market.
  Free collective bargaining is freedom for the strong to exploit the weak. It is the very process that enabled the crippling income-cost inflation of recent years. We are always hearing about the defects and weaknesses of incomes policy. It is time to remind ourselves that in recent years the defects of so-called free collective bargaining have been far greater than those of an incomes policy.
  Of course, phases 1 and 2 have not been perfect. They have had weaknesses. They have undoubtedly been somewhat rigid and inflexible. Therefore, it is essential that the next phase should be less rigid and more flexible than the previous two phases. It must allow for some restoration of differentials, but it cannot allow a total restoration, because the damage done in terms of extra wage-and-salary cost inflation would far exceed any benefits that might accrue.
  In framing phase 3 of their policy, the Government might well closely examine
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  phase 3 of the last Conservative Government's income policy, because there has never been a more flexible phase of any incomes policy introduced by any Government in this country. If inflation is to be reduced, first to single figures and then to less than 5 per cent., the next phase of incomes policy must be less generous than the two previous phases. But, whatever the next phase may be, I hope that those of us on the Conservative Benches will adopt the same responsible attitude to it as we did to the two earlier phases. Our attitude compared very favourably with that of the Labour Opposition to the Conservative Government's incomes policy between 1970 and 1974.
  It may well be that the present Government do not deserve the Opposition's support for phase 3 of their incomes policy. But the country deserves it, the country expects it, and the Government will, I am sure, get the support of the Opposition for it.
  6.6 p.m.
  Mr. Evelyn King: It is not easy, a few minutes after a one-and-a-half-hour Budget speech, to make any useful comments. I shall certainly not range across the whole economic panorama. I wish merely to make one point briefly.
  I should have liked to comment on the speeches of the hon. Members for York (Mr. Lyon) and Dagenham (Mr. Parker), but both have left the Chamber. I thought that the remark of the hon. Member for Dagenham, who said "I am a heretic; I support manufacturing industry", was worthy of inclusion in "Sayings of the Week". If the hon. Gentleman is a heretic, does that imply that he is the only one on the Labour Benches who supports manufacturing industry? If so, I feel even more frightened than I was before I heard him.
  The hon. Member for York made a predictable speech, saying that he wanted more money spent in the public sector. I do not agree with him, but I do not think it worth following the matter up, because the disagreement is so fundamental. I still like Gladstone's remark that money fructifies best in the pockets of the people. I wish that all Governments would remember that phrase, because it is worth remembering.

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  I want to comment upon a matter that most closely affects my constituency. I am becoming desperately concerned about those whom I shall call the "responsibles"—mostly men of 60, 70 and even 80, who retired 10 or 20 years ago, having served their country faithfully for 40 years. They include retired civil servants, retired officers, and people retired from business. Such people are to be found all over my constituency, as they are to be found in most of South-West England. Being responsible people, they made their calculations and settled in a two-room or three-room bungalow. They had a small car. They thought that they would live upon their pensions and savings. Most of them had some savings, although those savings were not substantial.
  Those to whom I am referring represent an enormous body of people throughout the country, but perhaps particularly in Dorset. Inflation has struck them like a bomb. I shall not say that their savings are valueless, but the income derived from them after dividends have been restricted is now trifling. When these people took their houses 10 or 20 years ago, rates might have been £30 a year. They are now probably £150.
  Because of their age, these people can barely leave their houses. They thought that their greatest and most lasting asset was their little motor car, with which they could visit their children and grandchildren and see their lives out in that sort of style. Now the motor car is also being put beyond their reach.
  I am glad that every hon. Member who has spoken so far has dwelt on the question of the motor car. The hon. Member for Dagenham was of course concerned because of the Budget's effect on the industry manufacturing motor cars. It is perhaps the more surprising that this anti-motor trend seems to exist in Government circles when North Sea oil is just beginning to come in and the dollar content of the cost of petrol is likely to be less than ever before. This is the moment when the Government choose to make motoring more difficult still.
  I wish that I could bring home to Members of the Government the effect that this has in rural areas. I try to sound impartial when I say that I dread the trend that has been emerging over recent years—that economic policy always
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  seems to benefit those who live in the cities. I hesitate to say that this is because they vote Labour, because that is not fair, but the point is that economic policy is generally unfair to those who live in the countryside. We do not wish to make that political distinction, but recent economic and financial measures are making the distinction apparent.
  To illustrate the hardship that is being felt in the countryside I quote the example of the lovely town of Swanage, in my constituency, where two things have happened. Swanage is a little town at the end of a single road. In summer time that road is often impassable because of the number of tourists. The two things that have happened are that the maternity nursing home is to be closed and the town's ambulance is to be withdrawn. There have been protests, but if the ambulance stays it will have only one driver. Hon. Members should remember that this is a town of 8,000 to 10,000 people, yet it is being practically cut off from essential services. What about expectant mothers? There will be no services for them in the future. Here we have a community that is utterly dependent on the motor car.
  If one wanders around South Dorset, Devon or Cornwall one can find countless other examples. There are numerous villages which have had their bus services withdrawn. The very last thing that I would want the Chancellor to do is to make transport more difficult in these areas. I am thinking not in economic terms but in human terms, because we are getting near the point at which the hardship could be described as cruelty. This hardship falls on people who have served their country well, and they are now suffering greatly. The Chancellor should use his influence to see that things change, and I hope that the Treasury Bench will take note of what I have said.
  6.13 p.m.
  Mr. Roy Hughes: The hon. Member for Dorset, South (Mr. King), spoke of his constituency, which seems to be heavily populated by retired civil servants and officers—those he calls "the responsibles". I claim to represent equally responsible people, but they are essentially producers. They make the basic steel for our community and many manufactured products as well. In fairness, I should say that I do not entirely

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  disagree with the hon. Member's remarks, as I shall make clear in a moment.
  I endorse what the Leader of the Opposition said in her earlier remarks and what other hon. Members have said in congratulating the Chancellor on a very short Budget. Over the years we have grown accustomed to hearing much longer Budgets, with extended economic analyses. At least this one was relatively short.
  One's comments on the Budget at this stage can express only one's immediate reactions and not one's considered judgment. I welcome the proposals that the Chancellor made in a further attempt to combat unemployment, which, of course, along with inflation is one of the twin pillars of evil at present. Certainly the assistance that he announced to the construction industry is most welcome. A week ago I received a deputation from building trades employers in my constituency and I am sure that they will welcome the Chancellor's proposals. One of the beneficial aspects of helping the construction industry is that it relies on very few imported materials and therefore is essentially a home producer industry.
  One of our famous writers once said:
  "Hope springs eternal in the human breast."
  I confess to being a little disappointed by the Budget this afternoon. Certainly my hopes for it have not been entirely realised. Perhaps I was over-optimistic, but from the Labour Party point of view I do not think that there is very much to cheer about.
  I am not at all happy about the proposals on transport. I have already said that inflation is one of the twin pillars of evil at present, and of course these additional charges on essential transport will certainly not help the inflationary situation.
  The Chancellor has imposed additional taxes on heavy vehicles. I appreciate the difficulties that these vehicles cause to the environment, and I know that we get many protests about them from our constituents. Nevertheless, these vehicles carry essential goods and the additional costs will inevitably be passed on to the consumer.
  Then there is the question of individual motorists. Today, many work
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  people use their cars to follow their employment, so the £10 additional tax on motor cars will be much resented. The extra 5½p on a single gallon of petrol will be even more resented. My own feeling is that there will be a pretty bitter reaction to these two proposals.
  Speaking as a non-smoker, I would have thought that for health reasons alone tobacco could have been much more heavily taxed. This would have eased the tax on transport, which the Chancellor seems intent on levying.
  On the Question of the future of the incomes policy, one of the Chancellor's main inducements to comply with this is a reduction in the basic rate of income tax from 35 per cent. to 33 per cent. In their economic strategy the Government attach great importance to the third stage of the incomes policy. However, I do not think that they have given anything like sufficient assistance to trade union leaders, who have the most difficult task of persuading their members that there are benefits in a further stage of restraint.
  Undoubtedly there will be a major call for a return to free collective bargaining. There has been a disastrous toolroom strike at Leyland which has had catastrophic effects on our export performance, but in view of the inadequate proposals in the Budget I believe that in the weeks and months ahead the Government will face a great deal of trouble on the wages front.
  We all know that on the narrow political front there is a by-election on Thursday. According to an opinion poll published today, the Conservatives now have a very slender lead. The Chancellor's proposals this afternoon might possibly have provided an inducement to win over, or indeed to win back, voters in what in the past has been a Labour constituency. We must appreciate that the constituency contains a large number of motor car workers. I do not believe that my right hon. Friend's proposals will be well received in the Midlands.
  I sum up my few remarks by saying that I am a little disappointed in the Budget proposals, and I can only conclude that the Government's agreement with the Liberal Party will continue for a long time yet.
  6.22 p.m.
  Mr. John Stokes: I congratulate the Chancellor of the Exchequer on the fluency with which he produced his Budget speech. I also wish to commend him on the brevity of his remarks, which was appreciated in all parts of the House. I also wish to echo what was said by the hon. Member for Newport (Mr. Hughes), that certainly the Chancellor cannot be said to have tried to bribe the electors of Stechford in the forthcoming by-election.
  I find the Budget on the whole disappointing. The income tax changes, which were so heralded at first glance, only take inflation into account and do not represent any real reductions in tax paid. There is too little incentive to work hard, as people can and do on the Continent. No doubt this is why so many of our best and brightest young people are going abroad. This represents a serious loss to the country and will become more serious as time elapses unless steps are taken to deal with the situation.
  Unfortunately, the Chancellor of the Exchequer still bears down heavily on small businesses and on the self-employed. I represent a constituency that is almost wholly composed of producers—those in the wealth-creating sector of society from whose wealth everything else ultimately stems. That sector of the community believes—and I share that belief—that there have still not been enough cuts in public expenditure to allow for sufficient cuts in taxation. As a nation we still depend too heavily on foreign borrowing.
  I wish to support the remarks of my hon. Friend the Member for Dorset, South (Mr. King), who mentioned the number of responsible retired people who have given of their best in lives dedicated to the service of the nation, who have saved money and who expected to live in modest comfort on the dividends and interest flowing from that money. In the whole of the Budget speech, there was no mention of any lifting of dividend restraint which bears so hard on those people. Even the changes in investment surcharge were not enough to take account of inflation.
  I wish to deal mainly with the effect of the Budget on manufacturing industry, which is the great interest of the vast majority of my constituents in the West
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  Midlands. Manufacturing industry is still clobbered by heavy taxation, and every kind of hindrance is put in the way of employers who wish to take on more people. I hope that the Chancellor will ensure that the Secretary of State for Prices and Consumer Protection does not ruin the profitability of industry by imposing too harsh a policy on controls and prices, and I hope that those controls will not last for too long.
  The prime shortcoming of this country lies in our failure to produce. Because of that important factor, unemployment is unlikely to fall. I very much agree with the hon. Member for Dagenham (Mr. Parker) that in present-day industry we require not so much unskilled workers in the mass but scientists, technologists, engineers and skilled craftsmen. With the continuing improvement of automation and machine tools and every kind of production facility, machines will more and more replace men. Therefore, we must look to those engaged in export finance and other services to employ more people than they have done up to the present time.
  A great deal is heard about the failure of industry to invest, but the first task of industry is to produce from the existing rate of investment. We all know that there is serious under-capacity. We require production and productivity before investment, which will come only at a later stage. There is not enough incentive to invest, because there is not sufficient reward either in terms of investment or on the part of the individual in terms of risk and effort.
  So far, every contributor to this debate has mentioned the effect of the Budget on the motor car industry. I cannot see how the new taxes on the motorist will help British Leyland or, indeed, the British motor industry as a whole. If we are not careful, it will soon be regarded as a sin and anti-social to own and drive a motor car. We know from hon. Members who represent rural constituencies that the use of a motor car is essential following railway closures and the scarcity of buses.
  The Chancellor spoke at some length about job creation, but I regard that instrument largely as artificial and bogus. What the country wants is real jobs in real firms—firms that have confidence that they can make what customers want.

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  Those firms also want a fair return in profit terms, and they want to be satisfied that those profits will not be unduly taxed.
  As the Budget debate unfolds, we shall hear a great deal about the importance of preserving or enhancing differentials. How can we expect men to become foremen, foremen to become managers, or managers to take on the responsibility and strain of directorships of enterprises if there is virtually no additional gross pay and certainly hardly any additional net pay? That is one of the great differences between this country and the Continent and is why so many of our executives are now looking across the Channel for higher gross salaries and higher net rewards. I do not believe that anyone—from the workers at the bench to the directors in the boardroom—really wants an egalitarian society.
  High taxation, apart from being evil and inflationary, has many other disadvantages. It is one of the causes of the dishonesty of which we have heard today. It is because of the high level of taxes, and their often evident unfairness, that people feel that this is really too much. What was an honest nation could easily become a dishonest one unless taxes are substantially and regularly reduced.
  People are becoming more fed up with the tax changes proposed by the Chancellor coming into force by courtesy of the trades unions, and that is once again a feature of the Budget. As a result, the tax paid by the people in this country—most of whom are not in unions—depends on the view that the trade unions take of the Government.
  Mr. William Molloy: Would not the hon. Member also consider the fact that the CBI and eminent economists concerned with commerce and industry have asked trade unions to do precisely what the Government are asking them to do? Has not the British trade union movement responded admirably over the past few years to requests that have been made by the Government, the CBI and British commerce? Surely that is a good thing.
  Mr. Stokes: I shall first finish what I was saying, as I gave way immediately to the hon. Gentleman, and I shall then return to his point. The majority of the
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  people have to depend for their tax changes on the views of a minority of trade unionists and not on the view of Parliament, which represents everybody. That is wholly dangerous and wrong.
  I had not proposed, in the short time remaining, to talk about incomes policy, but shall make just a few comments and I am sure that they will represent the views of a great many people not only in my constituency but throughout the country. I am wholly opposed to an incomes policy. Such affairs should be settled by firms themselves dealing directly with their own trade unions and elected representatives, either nationally or, better still, at plant level. The longer that these so-called incomes policies continue, the greater the distortion and unfairness that will be created. The trouble with the tool room workers at British Leyland was entirely due to that. Sooner or later such a straitjacket must give way. The country's economy may be worse at the end than at the beginning of such a policy.
  I know that at a time of unemployment some attempt to hold down wages may reduce the speed at which unemployment arises, but in the end the damage that such a policy does to the whole economy, to incentives and to our efficiency as a great producing and manufacturing nation is far greater. Therefore, I am not an incomes policy man. I have the greatest faith in management and workpeople and in the good sense of most trade union representatives.
  This is one of many Budgets that we have heard from the present Chancellor. I said earlier that I am disappointed in it. I certainly welcome his change of heart and humility now, but on the evidence of the past why should we believe his promises today? If the Chancellor has been wrong so many times before, why should he be right today? The Chancellor is no doubt an incurable optimist, but I am not at all sure that we do not need a pessimist at the Treasury.
  The Budget exemplifies the failure of Socialism. Socialism cannot create wealth. It can only spend and distribute wealth that has been produced by others. I am old-fashioned enough to believe that we shall never get the economy right until we cut spending more substantially than we have done, balance the budget and in that way—it is the only way—halt

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  inflation. Inflation is a kind of revolution by stealth that robs people of their savings almost without their knowing it. Next to civil strife, it is about the worst thing that could happen to any country, as we know from the example of Germany and other countries. There must be a tremendous change of attitude here. We must roll back the extent to which the State increasingly, and certainly at ever greater expense, intrudes and intervenes in every facet of our lives. That not only deprives us of our basic freedom but it is enormously expensive. In the end, the salvation of the country will come from individuals and not the State, and certainly not from a Socialist State.
  6.37 p.m.
  Mr. Russell Fairgrieve: It is obvious that no one could make a detailed assessment of the Budget so soon after hearing it delivered, but I should like to add my congratulations to those already given to the Chancellor for speaking this year for a shorter time than he has done previously.
  There are two or three immediate points that I should like to make, albeit briefly. Today's Budget is not really aimed at attacking the twin evils of which hon. Members have spoken today—inflation and unemployment. This Budget will not attack them swiftly. We all know the harm that inflation does to everyone, whatever his wages, and how inflation is dangerously eating into people's jobs. With that is associated the whole problem of unemployment and what it does to people and to their morale.
  The one area that could help unemployment and inflation is industry. I should have preferred the Chancellor to give more encouragement to industry, and to let industry raise its dividends and thus increase its investment and its earnings in order to create more jobs by taking on more people. I should have liked the Chancellor to take another look at the level of corporation tax, because it is only through the productive sector of private industry and small businesses that we can cure unemployment.
  Naturally, we all welcome the Chancellor's cuts in direct taxation, but we must also realise that we have not gone back to where we were a few years ago
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  because inflation has already eroded such tax cuts as we have received today. I certainly agree with the Chancellor's move to tax spending rather than earning by putting anything additional on indirect taxes—with one exception, on which I add my voice to the others who have spoken this afternoon, and that is the tax on petrol and the licensing of vehicles. That will bear hardly on all rural constituencies such as mine of Aberdeenshire, West. An hon. Member who spoke earlier made the point—although I do not want to become too political on this—that it is obvious that this type of taxation hits the rural areas harder than the cities, where there is often subsidised public transport. In rural areas today, with less public transport, a car is not a luxury but a necessity for various needs such as taking old people to hospital and transporting children and so on. Therefore, it is a retrograde step to increase the cost of transport in rural areas.
  It is a great pity that the Chancellor did not take this opportunity to put right what he did wrong a few years ago when he introduced more than one level of VAT. Value added tax replaced purchase tax, and the thinking behind purchase tax is basically Socialist. It provides a series of rates of tax, and the Government—or, in reality, the man in Whitehall—decide what is a luxury and what is a necessity rather than leave it to the individual to make up his mind about what is a luxury and what is a necessity.
  I hope that the day is not far distant when we shall return to one low rate of VAT on everything. If the Chancellor had returned VAT to 10 per cent., which is a far easier rate to operate anyway, the cost would not have been large and it would have been a first sensible step in the right direction.
  Compared to our competitors in Western Europe, taxation in this country is still too high. This is because Government spending is too high. If we are to get a big reduction in taxation, we must have a cut in Government expenditure. This would allow money to be ploughed back into productive industry, and that would cure unemployment and inflation.
  6.41 p.m.
  Dr. Alan Glyn: I have undertaken to speak for

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  no more than five minutes. I regard this as a neutral Budget, and the one thing for which I must give the Chancellor credit is that it is not an electioneering Budget. It will not fire the imagination of the electorates at the forthcoming by-elections.
  It is an unimaginative Budget and it does not tackle the main problems facing this country—unemployment and inflation. Right through the Budget, the reliefs and gifts do not match the inflation through which this country has passed. No incentives are provided for investment, which is so essential in the creation of jobs, for differentials or for people to earn more and to do better in society.
  I welcome the move from direct to indirect taxation because I am a protagonist of that form of taxation. I believe that people should be allowed to have the maximum net amout of take-home pay and be allowed to decide on what they wish to spend it—and pay taxes accordingly.
  It is unfortunate that most of the burden of the increases in indirect taxation has fallen on the motorist. Those in rural areas will be particularly hard hit. Hon. Members with large constituencies like my own will know that public transport is becoming increasingly costly and that people are being obliged to use their cars for themselves and for such things as visiting or taking people to hospital.
  This Budget is almost the same as the sort of Budget that we had when the Government first came to office. It is an admission by them that inflation and other factors have overtaken us to such an extent that their forecasts have never materialised and we are back again or the same old treadmill of go-slow policies, with the Chancellor hoping that North Sea oil will help us to pay our debts and to live better lives. It is important for us to realise that we still have massive borrowings and that it may be a considerable time before we are able to pay them all off from the money that we get from North Sea oil.
  We must encourage industry and investors and make our industrial concerns far more viable. I cannot go along with the Government's ideas of high taxation and high rates of public expenditure.
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  I do not want to pour cold water on the agreement with the trade unions, but the Government have not spelt out what bargain they will require or how far the unions will be expected to respond. It seems that the Chancellor has offered an open-ended commitment. He also suggested that he would want to introduce yet another Budget.
  We must tackle inflation. It is eating into our way of life and into people's purses and savings and destroying the whole structure of life as we know it. Inflation and unemployment, which is equally destructive, must be tackled, and we shall do this only by making our country a place in which it is worth working, by giving more incentive and by creating an atmosphere in which people can work and earn more and increase the benefits for the country.
  I have no hesitation in repudiating the Budget. It does not take sufficient cognisance of the high rate of inflation, and I do not believe that it is right to have a neutral Budget at this time.
  When the Government came to power they said that our prosperity would increase. There is no indication of that prosperity in the Budget. I do not wish to be too political about these matters, but the Budget is an admission of three year of failure during which there has been no advance in the standard if living in this country.
  6.46 p.m.
  Mr. William Molloy: The hon. Member for Windsor and Maidenhead (Dr. Glyn) was correct when he said that this is not an election Budget. It is to the Chancellor's credit that he has put the nation before any by-election or electoral gain.
  I am reminded of the great consternation and no little anger caused by the late Sir Stafford Cripps when he introduced his famous Budget for the remarkable Labour Government of 1945–50 which did so much to put working people on the agenda for consideration. Sir Stafford Cripps' Budget was the day before the London County Council elections, but he did not hesitate to put enormous taxes on tobacco, drink and all sorts of fancy things.
  The electorate were angry and annoyed, and the Labour majority in County Hall was greatly threatened.

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  However, that did not deter that Labour Chancellor from putting Britain first without thought of electoral gain, and my right hon. Friend the present Chancellor has not been deterred from putting Britain first.
  The Budget can be described as a strategic Budget and a Budget of recognition. It is strategic in that it maintains what has been achieved in the past 12 to 18 months in trying to get Britain out of the morass of inflation and the evils of unemployment that follow it.
  It is about time that the House acknowledged that the inflationary blizzard through which we have been living is not the fault of Great Britain, the United States, Germany or even the EEC. If any people are chuckling with glee at the state of Western society and the massive unemployment in the United States, Great Britain, France and Germany, it will be those who despise and deplore the sort of system that allows us to come here and debate such issues. That ought to be recognised, and it is about time that the Leader of the Opposition recognised it. It is time she stopped talking about foreign countries and running her own country down. She should realise how dangerous that is. Slowly and surely, the right hon. Lady is becoming one of the finest recruiting sergeants for the Communist Party, and I should have expected that to be the last thing she wanted to do.
  As I say, the Budget is a recognition Budget too. It recognises where people's standards have been pinched. Well-off people have felt the pinch. They have had to do away with the Rolls and put up with the Jaguar. Only the elder boy can go to a private school, and the other will have to go to a State school for a little time.
  But then there are all the ordinary people, right down to old-age pensioners, who have been paying their income tax and making their contribution, helping to solve our problems and put the nation back on its feet. Our Chancellor of the Exchequer has done the right thing in recognising that these people have made the greatest contribution. He is not the first to do so. He is not the first to acknowledge that the comparatively poor have made the biggest contribution. I shall not remind the House in detail of the parable of the widow's mite, but the
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  principle is the same and the Chancellor has recognised it. It is only right and proper that people at the lower end of the scale who are paying income tax should have recognition.
  Income tax hurts and annoys, but people at the lower end of the scale have paid it. There have been no mass riots or terrible demonstrations. People have gritted their teeth in an ordinary British way and have paid up, although it has hurt. I am glad that their contribution is now acknowledged. They are to have some relief, having made their mite of contribution, and the rest of us will still be called upon to pay up, which is only right.
  I turn now to another aspect of the same matter, and I put an appeal to the Opposition. Negotiations and agreements in industry today can no longer be left to a couple of heads of departments, and neither can we have the Government laying down the law. That is wrong. The skilled artisan today demands that his voice be heard, and he demands that his skills be properly recognised. I should have thought that Conservatives would realise that.
  On the issue of differentials, I admit at once that Conservative Members are right when they say that there has been annoyance and irritation felt by those who no longer earn what they ought to earn according to the principle of differentials. But they should admit, for their part, that there is another side to the coin. There has been moaning and groaning, but people have carried on. Those of us who have experience in the Services know of the complaining and moaning that goes on among the other ranks. But they are always there when they are needed. That is why we are here in this place tonight—because they were always there.
  Although there has been moaning and complaining, except in just one instance there has not been any real confrontation on the differentials issue. Everyone should give credit for that to men who have had an excuse almost handed to them on a plate by some individuals and Conservative politicians who now claim to support the toolroom workers. In normal circumstances, the last people in the world to wish to sustain or help the toolroom workers of British Leyland would be Conservative politicians. I hear no interruption in response to that.

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  Right hon. and hon. Members opposite know that what I am saying is true, and it is pointless to challenge the truth.
  I believe that the time is very near when those differentials must be restored, but let the House of Commons tell the workers that it acknowledges their frustration and their anger, and that it recognises also that they did not hold the nation to ransom at a difficult time. They gritted their teeth and took what was coming. Let us give a little credit for that.
  Many single people and married couples with families have been exasperated to see the enormous amount of tax which they have to pay out of their weekly or monthly earnings. They resent it, and they resent the size of it. They resent it all the more when, having to make their contribution out of £40 or £50 a week, they know that if only they had been taught to play the guitar and learned to make appalling noises into a microphone they could have earned £1 million a year and shoved off to a foreign country, thereby avoiding tax.
  I am glad that the Chancellor has recognised the contribution which ordinary people make. The strategy of the Budget maintains the strategy which is getting us out of a difficult situation, and, above all, it recognises the position of those who have made the biggest contribution. For its overall philosophy, the Budget deserves to be highly successful, not just for the Chancellor's sake or for the Government's sake but for the sake of Britain.
  Debate adjourned.—[Mr. Coleman.]
  Debate to be resumed tomorrow.

ORDERS OF THE DAY

  AGRICULTURAL HOLDINGS (NOTICES TO QUIT) BILL [Lords]
  Read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Coleman.]
  Bill immediately considered in Committee.
  [Sir MYER GALPERN in the Chair]
  6.56 p.m.
  The First Deputy Chairman: With the agreement of the Committee, I shall, as is customary with consolidation Bills, put en bloc the Question on the clauses and the schedules.
  Clauses 1 to 15 ordered to stand part of the Bill.
  Schedules 1 and 2 agreed to.
  Bill reported, without amendment.
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
  Bill accordingly read the Third time and passed, without amendment.

BRITISH AIRWAYS BOARD BILL [Lords]
Read a Second time.
Bill committed to a Committee of the whole House.—[Mr. Coleman.]
Bill immediately considered in Committee.
[Sir MYER GALPERN in the Chair]
6.58 p.m.
The First Deputy Chairman: With the agreement of the Committee, I shall, as is customary with consolidation Bills, put en bloc the Question on the clauses and the schedules.
Clauses 1 to 25 ordered to stand part of the Bill.
Schedules 1 and 2 agreed to.
Bill reported, without amendment.
Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
Bill accordingly read the Third time and passed, without amendment.

SELECT COMMITTEE ON OVERSEAS DEVELOPMENT
Ordered,
That the Standing Order of 22nd November 1974 relating to the nomination of the Select Committee on Overseas Development be amended, by leaving out Mr. Lewis Carter-Jones and inserting Mr. Nigel Spearing.—[Mr. Walter Harrison.]

ST. PAUL'S PLAYING FIELD (TRUST) BILL (By Order)
Order for Second Reading read.
7.0 p.m.
Mr. Neil Macfarlane: I beg to move, That the Bill be now read a Second time.
Before proceeding with my central argument, I should like to give the House some of the background to the Bill. Its object, as stated in the Long Title, is
"to provide for the retention of St. Paul's Playing Field in the London Borough of Hammersmith as public open space for the use of the public and for educational purposes, to provide for its clearance of any obstacles to the full use of the Field for such purposes, to enable the Greater London Council and the Inner London Education Authority to spend money on capital account for the provision of alternative accommodation for the Hammersmith and West London College".
Pages 1 and 2 of the Bill describe the background to the local problems, and I have no doubt that this aspect of the Bill will attract a degree of comment from hon. Members in many parts of the House.
Clauses 1 to 4 deal with the title of the Bill, the retention of land for open space, the cessation of building and removal of objects, and the usage of alternative accommodation in Blythe Road for the accommodation of the Hammersmith and West London College of Further Education. Clause 5 deals at length with the formation of the charitable trust to be known as the St. Paul's Field Trust, with the appointment of trustees and with the creation of a trust fund and a management fund.
I hope and believe that this is not essentially a party or partisan issue. Nor do I and hon. Members in any part of the House who seek to give the Bill a Second Reading totally commit ourselves to support it prior to Third Reading. Our purpose is to obtain objective scrutiny, by a Committee of the House, of a case which has enough disquieting features to suggest at first glance that justice may not have been done.
That is not to say that any blame attaches to any political party, councillor, local authority or council officer. What has happened is that there has been a sequence of decisions, some no doubt

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bureaucratic, over a number of years, which have left many thousands of Hammersmith residents frustrated and disillusioned with the processes of democracy.
I can only quote a remark made last year by Baroness Young in a debate in the other place on the Greater London Council (Money) Bill. I think that her remark sums up the feeling of most hon. Members on the Conservative side of the House, and I have no doubt that it will appeal to others such as the right hon. Member for Fulham (Mr. Stewart). Baroness Young said
"looking at the history of the St. Paul's School site, as I have done, it is difficult to escape the conclusion that the responsibility for the present situation rests on both political parties."—[Official Report, House of Lords, 12th July 1976; Vol. 373, c. 91.]
The promoters of the Bill have shown themselves dedicated, persistent and courageous. They have been dedicated because they have conducted the battle entirely from their own resources of time and money without any outside backing. They have been consistent because they have not allowed disappointment to reconcile them to defeat but have taken what the Chairman of Ways and Means has termed an unusual use of the right to petition Parliament. They have been courageous because they have presented themselves, as individuals, to the risk of severe financial penalties should the House in due course so determine.
My hon. Friends and I would not be taking up the time of the House if we felt that no more was at stake than a routine local planning dispute, whose dying embers are being fanned by a small but vociferous group of disgruntled Fulham and Hammersmith residents. The fate of a 14¾acre parcel of publicly owned open space in the heart of our inner city is of concern to all Londoners. In so far as our capital might claim to set an example of the best modern planning practices, the outcome of this case is important to everyone in the country and everyone in the city who is interested in the environment.
Until 1968, the site which forms the subject of the Bill contained the playing fields, and only the playing fields, of St. Paul's Senior School. On the school's move to new premises at Barnes, the Greater London Council completed the
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purchase of the playing field for a total of £1·2 million, together with the site of the junior school—Colet Court, on the other side of the road—occupying 3¼acres on the north of Hammersmith Road, for which it paid £900,000. We are concerned solely with the senior school site, bounded by Talgarth Road, Colet Gardens, Hammersmith Road and Gliddon Road. Those negotiations and the progress payments had begun as long ago as 1964. During that year, the then London County Council had announced its intention to designate 10 of the site's 14 acres as public open space. It was on that basis that the purchase had been authorised.
Before embarking on the subsequent history of St. Paul's field, we should note that under the 1971 survey the London borough of Hammersmith has 74 acres of public open space less than the minimum envisaged in the Greater London Development Plan. It could well be an area of great deprivation in terms of public open space.
We now know that it is incumbent on local authorities, and it is suggested in that plan, that residents should live within a quarter of a mile of 5 acres of open space and within three-quarters of a mile of 50 acres of open space. Most of such open space as exists is situated at the northern and southern extremities of this long, thin borough, which stretches from Wormwood Scrubs to the Thames. In the centre, where the St. Paul's field is located, there is almost no other public space. Therefore, this is an area of open space deprivation.
Incidentally, as will appear relevant later, the field was used—no doubt without formal planning permission—for physical education and recreation by most of the local schools, including ILEA schools, between 1969 and 1976. It is interesting to note that Holland Park School was one which used it. These 9,500 schoolchildren now have to be driven to distant sports grounds, half an hour each way, and one school is involved in expenditure of £130 per week. That is the Mary Boon Girls' School, where pupils have to travel to Warren Farm in Southall. It may be true in a narrow technical sense that the field has never been public open space. In practice, however, it has provided public recreation

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space for thousands of children and adults for the best part of a decade.
If, as I hope, the House grants the Bill a Second Reading, it will be for the Committee to determine the rights and wrongs of the administrative, political and quasi-judicial statements and decisions which followed. Meanwhile, we should bear in mind two points. The first is that open space in the heart of London, once lost, is unlikely ever to be re-created. The bulldozers can destroy in a day the devoted husbandry of a century or more. Secondly, it is a fact that no alternative site for the Hammersmith and West London College, work on which has now begun on the field, was ever seriously considered.
For example, the College of St. Mark and St. John has stood empty on the King's Road since 1973, when plans for the West Cross route were abandoned. In a personal letter to Martin Stevens, Conservative parliamentary candidate for Fulham, the then Secretary of State for Education and Science, the right hon. Member for Sheffield, Park (Mr. Mulley), stated that this site would have been suitable, with some modifications.
I return to the field and its history. During 1968 the GLC and the Hammersmith Borough Council were considering the use to which it could be put. The Inner London Education Authority was offered 6 acres, and 8 acres were offered to Hammersmith borough at £1 million. The GLC's case all along has been that it has neither the power nor the responsibility to provide parks for deprived boroughs. Let me say right away that this claim, which was later reiterated by the then Secretary of State for the Environment, is totally untrue. Section 58 of the London Government Act 1963—to say nothing of the current GLC literature—contradicts that argument. At all events, the GLC puts the burden on the borough, and the borough said that it could not afford the £1 million. Both authorities at that time were Conservative-controlled, and the Fulham and Hammersmith Labour Parties had pledged themselves in their 1968 election manifestos to keep the field as a public open space.
During 1969 the GLC studied the possibilities for developing the land and in 1971 awarded itself outline planning permission
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for a scheme by which 4 acres formerly covered by the school buildings to the north of the site would be used for housing and the 6½ acres to the south would provide a new home for the West London College of Further Education. The borough council felt that it could not stop the scheme other than by buying the whole site, for which the GLC was then asking £6 million. The then Secretary of State for the Environment, my right hon. Friend the Member for Worcester (Mr. Walker), waived his right to intervene.
Since that date much use has been made of the suggestion, repeated by the right hon. Member for Fulham in the House, that the residents, who shortly formed themselves into the West Kensington Environment Campaign, were seeking to prevent the intrusion of council housing into their area. That is not true. At no time did they do that. The sole objection has been to the building of the college.
On 20th August 1970, at the height of the holiday season a single public notice appeared in the West London Obeserver under the Town and Country Planning Act 1962. It referred to the proposed development of the site jointly by the GLC and the Inner London Education Authority for housing and education purposes,
"with provision for public use of the open space on the site".
Naturally, the local people thought that this meant the existing 10 acres of open space. Even so, and in spite of the holiday season, 51 written objections were received from individual residents within the statutory 21 days.
During 1974 and 1975 the West Kensington Environment Campaign, one of the promoters of the Bill, began to be active. By this time government at all three levels had changed hands, but with no perceptible change of attitude to the project. The campaign was not invited to appear before the planning committee until 10th June 1975, only a matter of days before the time limit for requesting the Minister to order a public inquiry. The campaign asked the council to press for a public inquiry on a number of grounds. It said that there was a manifest need for the field to become a permanent public open space in view of

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the serious shortage of green parkland in that part of the borough.
The campaign went on to ask for the inquiry because of the loss of amenity through schoolchildren having to be bussed to Barnes for physical recreation and because of the unsuitability of the site, being bounded by two exceptionally busy roads, for the introduction daily of some 12,500 students at the college and others—students for whom no living accommodation was proposed. Subsequently it has been shown that there is inadequate parking for vehicles in this development. The campaign also pointed out the availability of other sites, already built on, for educational purposes which could be used for the purpose at much less expense. Another factor was the immense costs involved. They are reckoned by some to be of the order of £25 million.
To the campaign's consternation, the majority party on the committee unanimously rejected its appeal. The excuse was given that a request for a public inquiry could result in the council having to find £6 million to buy the land. This was untrue, and from being a peaceable group of conservationists the campaign now became militant. Within 10 days it had secured no fewer than 11,300 signatures from local residents to a petition calling for a public inquiry. On the strength of this it asked the right hon. Member for Fulham and the hon. Member for Hammersmith, North (Mr. Tomney) to receive a deputation here at the House. Both, surprisingly, refused. The right hon. Member may have had a point when he indicated that this was very much a matter for the Greater London Council or the local authority.
Mr. Michael Stewart: There are several matters in the hon. Member's speech to which I shall want to refer if I catch your eye, Mr. Deputy Speaker. This point, however, I must correct at once. I received members of the campaign in the House and I arranged for one of them to have a meeting with Lord Ponsonby of Shulbrede at the GLC to see whether a compromise solution could be reached. The statement which is repeatedly made by the campaign that I refused to see its members is untrue, and I hope that the hon. Member for Sutton and Cheam (Mr. Macfarlane) will withdraw it.
Mr. Macfarlane: I cannot withdraw it, much as I should like to do so because of my respect for the right hon. Gentleman. On this occasion, however, I wonder whether he recollects the situation with complete accuracy. A deputation arrived led by a number of prominent public figures in Fulham—the prospective Conservative parliamentary candidate, the GLC prospective candidate, an ex-mayor and the Labour Mayor of Hammersmith and Fulham. The deputation arrived outside the House of Commons. One or two broke away to come inside and saw the policeman at the desk in the Central Lobby. I understand that after that the right hon. Gentleman received one Socialist member and that subsequently three were received at the right hon. Gentleman's advice bureau.
I have no doubt that if I have maligned the right hon. Gentleman in any way he will have the opportunity of setting the record straight, but that is the situation which has been related to me by those concerned with the campaign.
Mr. Frank Tomney: I have no knowledge of having been contacted to receive a deputation, but I did receive two individuals connected with the campaign privately in my office at Hammersmith. I believe that one was a Mr. Fry. I have no knowledge of having been asked to receive a deputation. I submit that my reputation in this House stands at least as high as that of the hon. Member for Sutton and Cheam (Mr. Macfarlane), so will he now withdraw what he has said?
Mr. Macfarlane: I am grateful to the hon. Member for his observations, but the impression created among the campaign organisers is that they were refused a visitation into the House of Commons by the two Members of Parliament. That is the situation which has been presented to me. If the right hon. Member and the hon. Member wish to make any observations, of course I shall gladly withdraw, but I must point out that that is the situation which has been presented to me.
Mr. Tomney: In this Chamber hon. Members must make statements of fact, not statements of innuendo or permissive inference. There was no contact with me about a deputation. The only contact

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I had was in my office at Hammersmith with the leader of the campaign and one other person. Will the hon. Member now withdraw?
Mr. Macfarlane: The hon. Gentleman says that there was no contact. That is precisely what I have been told by the campaign organisers. However, if necessary, we shall no doubt set the record straight during the debate.
The Conservative prospective parliamentary candidate for Fulham, Mr. Martin Stevens, made a detailed case to the then Secretary of State asking him to receive a deputation and/or order a public inquiry. With the then Liberal candidate, Mr. Frank Brown, he organised a march on Westminster, where the campaigners were received by my hon. Friend the Member for Aylesbury (Mr. Raison) and the hon. Member for Isle of Wight (Mr. Ross), whom I cannot call an hon. Friend since he is a part of the Lib-Lab coalition.
Mr. Stephen Ross: The hon. Member must withdraw the word "coalition". I confirm that I met the deputation and the march when it came to Westminster, and I was very pleased to see them.
Mr. Macfarlane: It should go on record that the campaign organisers were much impressed by the general level of welcome that they received from the hon. Member for Isle of Wight. I repeat, in case the House should miss the point, that the only request of the marchers was for a public inquiry.
Although, by September 1975 the borough council had modified its position and drawn the GLC's attention to the unduly high density of the plan, the Minister refused an inquiry. Some slight modification, however, was made, involving a 1½-acre area of public open space, plus some temporary public use of another part of the field.
The campaign kept up its all-party pressure on the GLC. Then, on 12th July 1976, an objection was put down in another place to the Third Reading of the Greater London Council (Money) Bill. A Select Committee was set up there to examine the case of St. Paul's field and sat from 20th to 26th July. No
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doubt correctly, from a technical point of view, the promoters of the present Bill were not granted locus standi, and so were not allowed to present their case, although some were invited to answer questions. No councillors were called, though Councillor John Putnam, Conservative, and former mayor Councillor George Simpson, Labour, both offered to attend.
As a result, the Select Committee was concerned more with legal niceties than with the facts of the case, although it reported its:
"regret that the provision of public open space on the St. Paul's site should have been so sharply reduced."
The Greater London Council (Money) Bill received its Third Reading. The rest is history.
I now come to the present phase of the campaign's initiatives—the Private Bill which the Hammersmith Society and four public-spirited individuals have succeeded in bringing before the House today. Once again they have had the support of Martin Stevens and Councillor John Putnam, who have provided parliamentary briefings.
Without burdening hon. Members with an exhaustive analysis of the Bill, I shall summarise the argument. There is a prima facie case for retaining St. Paul's field as public open space. The Government-owned National Savings Bank building in Blythe Road, W.14, which is less than 400 yards from the St. Paul's site, will be vacant by July 1977. No other use for it is planned. Reliable professional opinions state that it is in excellent condition, that it would accommodate West London College comfortably and that it would cost about £1 million to buy and about £2 million to convert. The Inner London Education Authority could have it in use far sooner than the building now being started on the St. Paul's site.
According to current estimates, the St. Paul's site college building will cost £24 million. The National Savings Bank building could be acquired and converted, the field cleared, compensation paid and the rescued public open space set out at less cost to taxpayers and ratepayers than the present plan envisages.
The Bill recommends the establishment of a trust and management fund to ensure

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the preservation of the field for posterity and for the benefit of Londoners and visitors in perpetuity. A Select Committee is the proper forum in which to canvass the detailed merits of the Bill. But its outline is clear, and, at first glance, it appears to make sense.
Many of our citizens, representing all walks of life and political views, have been seeking a fair hearing for every side of the case for a number of years. They have been denied a hearing by their council, by their local Members of Parliament, by the GLC, by the Secretary of State for the Environment and by the other place. Their faith in our institutions as vehicles for the redress of grievances has become thin. At last they have brought their case before us—the elected House of Commons—as the last available democratic tribunal. They ask us not to judge their case tonight but only to agree to listen to it. I hope that the House will give the Bill a Second Reading.
7.23 p.m.
Mr. Frank Tomney: The hon. Member for Sutton and Cheam (Mr. Macfarlane) has tried to turn the case into a cause célèbre. He referred to the people involved as being dedicated, persistent and courageous. I agree with that. However, it has been false courage. It is one matter to tilt at windmills but another to be taken off by them. That is what has happened with the Bill.
The Bill is weak. I hope that the House will not give it a Second Reading but reject it. The Bill has been backwards and forwards. The debate has gone backwards and forwards in Hammersmith for two and a half years or more. It has been bandied backwards and forwards, and it has even reached the High Court which ruled against it. The Bill has produced the most unusual circumstances. The Chairman of Ways and Means draws attention to the Bill. In the last paragraph of his Report, he says:
"This is so unusual a use of the right to petition Parliament for a Private Bill that I have thought it right to exercise my power under S.O.875 to draw the Bill and the circumstances of its promotion to the special attention of the House."
The GLC and the Hammersmith council have been correct in all their proceedings.
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They have been correct in their legality, in their approach and with their advice. Whilst one may respect people who promote environmental causes in general, there are times when one must promote such causes knowing that there are differences of ideals and do so in good time before any commitment is made that involves public money. In this case a contract has been entered into, and to abandon the project now would cost the taxpayers of London £3½ million.
The substance of the argument is contained in a document that was sent to me today. It is of such consequence that even if public works had not already been undertaken the argument against the GLC developing the site would not be justified.
Hammersmith is short of public open space—probably more than any other borough in London. That is not the fault of today's planners or environmentalists. The site was once a public school, which I was sorry to see demolished, because of its architectural value. It was never an open public playing field. It was vested in the school and remained vested in the school.
Development is well under way. It is being physically and lawfully carried out in accordance with valid planning laws. It would cost millions of pounds to abandon the plan. The GLC has been prudent, correct and patient in its dealings. Even a Select Committee, after a five-day hearing, decided that the Bill and its Money Resolution should be allowed to proceed without amendment.
In paragraph 9 of its Report the Select Committee says:
"Administratively, matters have now gone so far that an attempt to prevent or substantially to modify the proposed development of the site might well do more harm than good; contracts have been entered into and cancellation would be costly.".
In the next paragraph, the Report continues:
"The Committee attach importance to the fact that their intervention came only at a very late stage. If Parliament is to express an opinion on, or to intervene in, a major project contemplated by the Greater London Council, it is preferable that it should do so at the outset. Intervention after plans have been completed and funds committed can be disruptive and costly.".
Once a project has begun and an objection has not been raised at an early

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stage, it should be allowed to continue. The Hammersmith council and the GLC were committed to a project that was necessary for the amenity of West London.
The premises for education in Hammersmith are scattered over 11 sites, Concentration on this site will benefit instruction, scholars and staff. With that in mind, the GLC decided to proceed.
Any cancellation at this stage would cost £3½ million in lawyers', contractors' and surveyors' fees. The trust would have to try to raise that money. In God's name, how would it do that? It would have compulsorily to acquire land vested in the GLC and the Hammersmith council. If a member of the trust died during the proceedings, the trust would be invalidated. The promoters of the Bill have got themselves into a mixed-up conglomeration of legal nothingness.
Genuine people are involved. I know Councillor Simpson well. He is a first-class councillor. The building and the field are situated in his area, and I understand his concern. However, at this stage there is no project that should be allowed to go forward with greater freedom than this.
Mr. Macfarlane: Will the hon. Gentleman address his mind, before he concludes his speech, to the deprivation of open space in that location? So far he has not applied his mind to that aspect of that neighbourhood.
Mr. Tomney: The hon. Gentleman could not have been listening. I said that Hammersmith has less open space than any other borough in London. That is not the fault of this generation or recent generations; it is probably the fault of the previous century. But that is the way in which the borough is constructed. It cannot be helped. However, there is also now a greater need, or as great a need, for housing the population of Hammersmith—there are 7,000 people on the waiting list—and for an extension of education facilities. This is applicable to the population not only of Hammersmith but of the whole of West London.
Mr. Macfarlane: Is not the Bill an opportunity to put this matter right? If there has been deprivation of open space for so long, surely we now have the ideal opportunity to put that right. We should
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not miss the opportunity to put that right now.
Mr. Tomney: As I have said, if the intervention had been made at the right time, with parliamentary counsel, the case would have been much better than it is now. The contracts have been entered into. The trust could not possibly find this money, even if it won the day on the vote. I am hoping that the House will have the sense not to force a vote on an issue such as this. The project has been supported in the past by councillors of various political colours. One cannot accept in reality that projects such as this should be abandoned. There would be an outcry from ratepayers and taxpayers.
Who would move the existing buildings from the site? Who would give the trust, so established, further planning permission to develop the site? The trust would have to go to the same bodies as are now being contested—the GLC and the council. Such permission would not be forthcoming.
Despite the efforts of the people concerned—who are, in the main, genuine people—this project has advanced so far that it should be allowed to continue. This House, in its wisdom, and recognising the dedication of the people concerned—I do not deny them that—should tonight decide not to vote on the issue. It has been through the High Court for a considered judgment. It has been through the House of Lords and through the Select Committee. It has been the subject of advice of counsel of this House and of the Chairman of Ways and Means. Regrettably, from the point of view of those concerned, it is time for them to admit that although they have put up a very good fight it really is time to call it a day on the issue.
7.33 p.m.
Mr. Percy Grieve: It is with considerable hesitation that I intervene in the debate, because I must declare an interest straight away. I live in the neighbourhood concerned. It is a neighbourhood that I know and appreciate. It has been my home for a great part of my life. I lived there during the First World War, and when I married in 1949 I went back to live in the same neighbourhood, and I am still living there.
It is a mixed part of London, with many characteristics that make it very

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typical of London. One of those has been the development of the original development around the area of the St. Paul's School playing field. Many of the houses around it and the artists' studios to the south grew up as part of a development of which late Victorian and Edwardian London might well have been proud and which has subsisted to this very day, all around the most important lung—I use that expression of the St. Paul's School playing field—in that part of London.
It is a tragedy for London and for Hammersmith, and not only for those who, like me, live relatively near that field, that that lung should now be destroyed when it has been there as a ready-made open space for the people of that part of London.
This evening I shall not indulge in recriminations. I dare say it is true that over the last six or seven years there have been mistakes and misunderstandings. However, they are mistakes and misunderstandings that could again and again have been righted. It was as long ago as 29th October 1974 that I wrote to the right hon. Member for Fulham (Mr. Stewart) and begged him to see that this vandalism—because such it is—was not perpetrated and that this open space was not destroyed. In 1975, in my personal capacity—because I am not a London Member; I represent a Midlands constituency and I am proud of it—repeatedly I wrote to the then Secretary of State, the late Anthony Crosland. The representations that were made to him resulted in some modification of the density of the housing that it was proposed to put on the site of the school.
Nevertheless, despite all those representations and the campaign that was launched by the people of West Kensington, that part of Hammersmith and Fulham, the Greater London Council persisted in going forward with the destruction of 14 acres of open space in an area which, as my hon. Friend the Member for Sutton and Cheam (Mr. Macfarlane) says, is lacking, to the extent of some 76 acres, in the most elementary necessities that are now deemed appropriate for any part of the metropolis.
The hon. Member for Hammersmith, North (Mr. Tomney) says that it is now too late and that we should withdraw and let the GLC get on with the building
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over the field—a field that has been the delight of residents of that part of London for many years. It is nothing of the kind. The cost is to be measured not only in money but in the effect upon the lives of the people who live in Hammersmith and the amenities of the area. The greater part of the cost of this building, the technical college, still remains to be incurred. It is not too late to give over to open space what no doubt in Hammersmith has been open space since the beginning of time, because there never was a building upon that land.
Many grave errors of judgment have been made in London in the last quarter of a century. Many grievous errors of planning have been made. We now rue the day when we allowed, for instance, high-rise flats to dominate the landscape of a large part of the metropolis. We shall rue the day—and those who come after us will not lightly forgive us—if this House does not, even at this eleventh hour, step in and stop this act of vandalism—this destruction of the most important open space that still exists in that part of London.
Thank you, Mr. Deputy Speaker.
7.39 p.m.
Mr. Michael Stewart: I am bound to say that the hon. Member for Sutton and Cheam (Mr. Macfarlane) has been misinformed on a good many points. I corrected him on one point, on which he ought to have withdrawn. It is untrue to say that I refused to receive the leading figures of the deputation. I spent a considerable time arguing with them. I made it clear that I could not agree with their general proposition. When, at one stage, it looked as if a compromise solution might be arrived at, I arranged to meet the leading figure on the GLC for that purpose. Therefore, the suggestions that the hon. Gentleman made will not stand up. He ought to withdraw what he said about me and my hon. Friend the Member for Hammersmith, North (Mr. Tomney). However, I mention that only in passing.
It was in 1968 that the GLC, with a Conservative majority, decided to use this site of 14½ or 14¾ acres partly for education, partly for housing and partly for open space. This decision was reached in full accord with planning law. The

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hon. Gentleman suggested that the democratic processes had been ignored. The GLC is a democratically elected body, which proceeded according to the laws made by this House. The necessary notice was given and the necessary opportunities were provided for objections. The GLC came to its conclusion.
By that time there was a change of central Government, and a Conservative Secretary of State approved the project. He did not exercise the right, given to him by law, of calling it in; he considered it to be a satisfactory project. However, the arguments continued. There was a change of party on the GLC. The GLC, with a Labour majority, also approved the plan. There was, as has been pointed out, some objections from the London borough of Hammersmith and modifications were made to the plan, which met those objections. The London borough of Hammersmith has now signified its opposition to the Bill.
The change of party meant that the matter came up for consideration by a Labour Secretary of State—the late Anthony Crosland—who also gave his approval. During these proceedings an attempt was made in the High Court to challenge the legality of what the GLC had done. The High Court made short work of that. It is quite clear that the GLC had acted legally throughout the whole proceedings. There have been parliamentary and GLC elections, during which time there was plenty of opportunity for people who objected to the proposal to use the democratic processes.
Mr. Grieve: Would it not be better if the right hon. Gentleman directed some of his remarks to the merits of the matter.
Mr. Stewart: I am doing so, but I have been replying to the points made by the hon. Gentleman who made incorrect statements about myself and my hon. Friend and who said that the democratic processes had been ignored. I am entitled to reply to that.
The campaign then proceeded to try to prevent the development by inserting a clause in the Greater London Council (Money) Bill in the House of Lords. In consequence, the matter was examined by a Select Committee of the House of Lords. The hon. Member for Sutton and Cheam was not quite right when he said
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that the members of that Committee concerned themselves only with the legal aspects of the matter. They visited the site, their Report considered the merits of it and, incidentally, on the question of a possible alternative site for the college, said:
"On the evidence adduced, none of the other sites proposed for the West London College appeared to the Committee to be even reasonably satisfactory."
The hon. Gentleman therefore did not fully acquaint the House with what the Select Committee in the Lords said.
We notice that the project has had the approval of a Labour GLC, a Conservative GLC, a Labour Secretary of State, a Conservative Secretary of State, the High Court, the Hammersmith Borough Council, and a Select Committee in another place.
Mr. Tomney: Also a Conservative-controlled Hammersmith Borough Council.
Mr. Stewart: Indeed—a Conservative-controlled Hammersmith Borough Council.
Mr. Grieve: I merely want to put right one matter that I am sure was a slip of the tongue. The scheme did not have the approval of the High Court; the High Court merely determined that the matter had been proceeded with on a proper legal basis.
Mr. Stewart: I accept that. But all those authorities approved the scheme—including, as my hon. Friend says, a Conservative borough council—although they had an alternative project to use the site partly for expensive private housing and a hotel. I am a little surprised that those who are running a personal campaign were quite silent when that appalling proposal was made. The desire to preserve open space did not operate at that stage of the proceedings. It can hardly be said, therefore, that this was a hurried or ill-considered proposal, or that the proper democratic processes were not gone through.
Let us look at the nature of the proposal and the needs that it meets. First, there is the need for housing. This is another matter on which the lion. Gentleman unintentionally misled the House, when he said that the campaign never

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opposed the provision of housing on the site. I have with me the campaign statement of aims, which says:
"Our immediate objective is to preserve 14½ acres of the old St. Paul's School playing fields as open space".
Fourteen and a half acres means the whole site. If that is preserved as open space there is no room left for housing.
The original objective of the campaign was to prevent the housing as much as the college. It has since realised that this might not be a welcome proposal and has modified its suggestion. The present Bill would put into its keeping only 9 acres instead of 14½. The effect of that would be that the provision of the housing for about 260 families would be halved, and then only if the nursery school and the old people's club are scrapped.
This was a well thought out housing project. There was provision not only for housing and flats but for an old people's club and a nursery school. The effect of the Bill would be to cut the number of people housed by half and to cut out the nursery school and the old people's club.
The hon. and learned Member for Solihull (Mr. Grieve) spoke movingly of the quality of life in this part of London. When one considers the conditions in which some Londoners are living, the prospect of some 260 families being able to live in decent surroundings with a nursery school and an old people's club, and with open space around them, seems an attractive and worthwhile project.
Dr. Alan Glyn: The right hon. Gentleman says that it is an attractive proposition, and it may be, for the 260 families—I have been following the right hon. Gentleman's arguments carefully—but surely, to use a large part of the site as an open space would be an even better use and would benefit more people.
Mr. Stewart: It is an arguable matter. Housing, education, open space and athletics all have their claims. It is the business of democratically elected local authorities to weigh up these matters, which they have done. But if every decision of a democratically elected local authority is to be brought before the House, planning will become a nightmare.
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There is also the provision for the West London College. There is great need for that, too. At present the college is trying to do its work in half a dozen different unsatisfactory places. It provides a wide range of courses. The kind of courses that I have mentioned are the low-level or comparatively elementary courses, which are of great value to young people who do not have many qualifications for employment and whose chances of getting a good job are increased if they can pursue courses of this kind.
The college has been promised a decent home for a long time. Since 1968, it has been the definite policy, irrespective of the party controlling the GLC, that this home should be provided for them. At present, of all the young people who apply to take part in a low-level course, three-quarters are refused because there is no room. I regard this as a good use of the site. The alternatives have been examined by the Select Committee of the House of Lords, by the GLC and by the two Secretaries of State who approved the project.
Anyone would be glad to turn this into an open space if there were no other pressing needs to be met. In the project as it now stands there are to be 5 acres of open space for the use of the public. The campaign, having now abandoned its attempt to make the whole area into open space, is saying that to get four more acres of open space it will frustrate the proper provision of the college and the housing as well as putting the ratepayers to considerable expense. All of this is getting things seriously out of proportion.
The House should look at the nature of the instrument through which the campaign proposes to do this. If the Bill were to be passed the GLC would be required to undo all the work: it has done on the site, at considerable expense. Secondly, it would have to cancel the contracts into which it has entered. Then it would lose control of the site.
At this point the position becomes a little mysterious. As the Special Report from the Chairman of the Standing Orders Committee has pointed out, apparently—it is difficult to be sure—the GLC would still be the nominal owners of the site but the trust would be the only

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group empowered to do anything with it. But who is the trust? The trust is to consist of 12 persons, four of whom are named in the Bill. For the others, we are told only what kind of people they are to be.
We do not know who has been approached or who has expressed any willingness to serve. If we pass this Bill we may find that the trust is hanging in the air. As long as it is doing that, since no one but it can have control of the site, nothing will be done on the site, except that the GLC will have to undo all its work. The site will become derelict. An open space ought not to mean a derelict, unattended piece of open space; it ought to mean recreational and athletic facilities, and a park. All these require money. There is no provision for this in the Bill. We have nothing that leads us to suppose that the trust, even if it came into existence, would be able to find the money to manage the site properly.
There is a curious provision in the Bill whereby the trust is under no obligation to pay the GLC anything at all for the site. The Bill provides that if the trust thinks that the majority of Londoners think that it ought to pay, it can pay. That is an extraordinary proceeding, and a great burden to impose upon a local authority. That is my concluding point. This is a matter of concern not only to London but to all local authorities.
The argument has been advanced that we ought to give the Bill a Second Reading so that the merits of this planning decision can be argued before a Private Bill Committee of this House. Is it to be suggested that no planning decision, however long it may have taken to arrive at, however many gauntlets it may have had to run, and however strictly and legally it may have been arrived at, can be regarded as valid until it has gone before a Private Bill Committee of this House? If that is the rule, how long will it take to arrive at a planning decision? This is a recipe for blight and dereliction everywhere. It is an interference with the powers that this House has rightly given to local planning authorities. If that sort of thing can be done to one local authority, no local authority in the country is safe from interference with its finances.
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This Bill is taking a decision that has been properly reached by a local authority—a decision that has led to the erection of works on this site—and is saying that the decision must be undone and the site must be handed over to people who would be under no obligation to pay for it and who are not at all sure what they would do with it. If the House approves that action, every local authority will be at risk. I ask the House to reject this Bill, on its merits, from a local—London—consideration and also because of its inherent danger to local democracy and local planning decisions everywhere.
7.45 p.m.
Mr. Stephen Ross: I agree with the final remarks of the right hon. Member for Fulham (Mr. Stewart), and it is because I agree with his remarks that I support the Second Reading of this Bill. It is time that the House faced up to the disastrous events that have resulted from bad government, bad planning and the bad land policy of both Governments in the past 10 years.
I became interested in this site just over a year ago. I realise that the campaign has been going on for much longer than that. We have only to look at the photostat copies of Press stories going back to July 1975 to realise that. I have one here that says:
"School site promise broken".
In 1976 letters were written to the Daily Telegraph and other newspapers, and I tabled a Question to the then Secretary of State, the present Minister for Agriculture, Fisheries and Food. I asked the right hon. Gentleman to call the matter in before it was too late. I also spoke, perhaps somewhat out of turn, on the Greater London Council (Money) Bill when it came before the House on 14th June last.
This is a typical story, which can, regrettably, be repeated in many other parts of the country. My own constituency is one such place. A bad planning decision is being allowed to go on because of the money involved. That is certainly the case in my constituency and I think it is probably the case here. We know that land costs have soared in the past 10 years. To get out of trouble local authorities have had to permit overdevelopment so as to balance their books.

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We are being asked to approve this. Surely a Labour Government containing—"Messrs. Silkin and Sons"—cannot condone it. I have not heard anyone deny that the original intention, when this land was purchased in 1964, was to retain 10 acres as public open space. I quote from the information that was given at that time. It said:
"The Planning Committee of the London County Council, a formerly empowered local planning authority now abolished but at the time responsible in its functions for the area now covered by the Inner London Education Authority (the 12 Inner London Boroughs and the City), met on 28th April 1964 and considered a full report from officers which pointed out in strong terms the need for public open space in the area and recommended to the full Council that the 18 acres be purchased, the 10 acres to be designated as public open space. The Housing Committee of this Authority, at that time controlled by the Labour Party, strongly supported this decision and urged strongly that the land be retained as public open space rather than for organised games. The leading Financial Officers, the Comptroller and the Finance Committee concurred with the price and the proposed use, and the Valuer reported that the proposed purchase price was a high one for open space, but that the advantages of acquiring so much open space together and of there being no rehousing liability weighed more strongly in favour of the purchase."
Was that not the original intention? Does anyone deny it? Why was it not allowed to go on?
Mr. Michael Stewart: It was not allowed to go on because the original decision had been taken by the LCC, which had the power to provide for open spaces. As a result of Conservative legislation the LCC was replaced by the GLC, which has no such power.
Mr. Ross: As a result of the legislation that we have passed and because of the lack of attention paid to the soaring price of land values between 1968 and 1974 a local authority has been faced with the problem of having to pay huge sums for land that it could not find and for the purchase of which there was no central fund. To get itself out of trouble it has had to acquiesce in a damned bad planning permission. I believe everyone would agree that that was so—
Mr. William Molloy: Speak for yourself.
Mr. Ross: Does the hon. Member deny it?
Mr. Molloy: The hon. Gentleman can make a speech, but he must not assume that everything that drops from his lips is agreed to by everyone else. To assume that would be as insolent as it would be for me to start talking about the Isle of Wight, which the hon. Member occasionally represents in this House.
Mr. Ross: I accept that I do not expect everyone to agee with me. However, I should have thought that there was a measure of agreement, namely, that the original purpose was to purchase the land to provide an open space. I suggest that the real reason for our having reached the present position is soaring land values. We have seen the value of this land rise from £1½ million to £6 million. The Hammersmith authority was unable to purchase. It could not afford to do so and, therefore, the GLC took over. We have seen over-development ensue, which was not the original intention. If that is the wrong history, perhaps someone will correct me.
I claim to have set out the reasons that should lead the House to give the Bill a Second Reading. It is a matter that we should try to sort out in Committee. It is a matter that faces other authorities throughout the country. They are landed with developments—not necessarily local authority-controlled, but private housing developments—and they have no opportunity of undoing what has happened.
Even if the undoing costs a substantial sum, it is something that should be faced by the House and country. Why should we have bad planning? Why should we have developments that we do not really need when we know that there are alternatives? We know that there are alternatives for the school building. A number of possibilities have been brought forward. Indeed, we have heard them quoted tonight. In some cases they are considered suitable. Those are some of the reasons that lead me to wish the Bill a Second Reading.
8.2 p.m.
Mr. John Cartwright: I have no axe to grind. I intervene to support my right hon. Friend the Member for Fulham (Mr. Stewart) and my hon. Friend the Member for Hammersmith, North (Mr. Tomney) because I am concerned about the implications of the

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Bill for the ratepayers of Greater London and for local government.
I am surprised that so much has been made about the issue of public open space. I notice that the Bill itself purports
"to provide for the retention for St. Paul's Playing Field … as public open space for the use of the public".
I notice that the Select Committee of the House of Lords made the position absolutely clear when, in paragraph 9 of its report, it stated:
"St. Paul's Playing Field has never been a public open space, since it was the private property of St. Paul's School until it was acquired by the Greater London Council, and it has not since then been open to the public. There is therefore no question of public open space being taken away."
That is an important point to bear in mind. As my right hon. Friend the Member for Fulham has said, on the basis of the development now under way there will be some 5 acres of genuine public open space. That is open space that the public may enjoy. That is a step very much in the right direction.
The Bill provides for the cessation of all construction work now under way on the playing field site. As my right hon. Friend the Member for Fulham has said, that site represents about two-thirds of the site now under consideration and development by the GLC. The whole of the ILEA development of the Hammersmith and West London College is on the playing field site. At least half of the housing development is on that site. If at this stage we are seriously to reconsider the cessation of development and the clearing of the site, the abortive costs will be phenomenal. I find it odd that Conservative Members who are involving themselves in the fighting of a Greater London Council election and alleging profligate spending by the GLC under Labour control should blithely talk about abandoning construction on the St. Paul's site and cheerfully talk about picking up the costs involved.
Mr. Macfarlane: The point must be made that the cost of the development of £6¼ million projected over 30 years would be an overall cost of £24 million at today's prices when interest rates are taken into account. If the House were to give approval to Second Reading, if the Committee were to approve the Bill, if
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it received a Third Reading and if the bulldozers were to go in with the development as it now is, the costs would be infinitely cheaper than the overall longterm costs.
Mr. Cartwright: I find that an entrancing piece of accountancy. If we were to agree to the prospect of the Bill, we would be clearing away what has now been built. There would be a total loss as a result of deciding to abandon the whole development. If we were to have the development on the costs that are being suggested, we should have something tangible—namely, the college, 267 homes and 5 acres of public open space. If we followed the proposal to clear what is now under way on behalf of the GLC, we would have abortive costs. Costs would be incurred with nothing to show for them.
On the basis of the GLC's most recent estimate, £3½ million is the current cost of abandoning the project. It points out that that is not the whole cost. That does not include the cost of breach of contract, land costs, loan charges and legal fees. Nor does it take into account the fact that expenditure is going on day by day, week by week and month by month. The building work is going forward. The GLC says that costs are escalating at approximately £200,000 a month. Before very much longer they will reach £300,000 a month.
If we were to follow the course that is being urged upon us by Opposition Members, the abortive costs would be quite frightening. That sort of approach does not take into account the costs of clearing an alternative site for the West London College. The House of Lords Select Committee had something clear and firm to say on this issue. In paragraph 9, it states:
"On the evidence adduced, none of the other sites proposed for the West London College appeared to the Committee to be even reasonably satisfactory."
On the basis of the House of Lords evidence, there are no alternatve sites available in any case. Even if they were available, the cost of acquiring them would have to be added to the phenomenal abortive costs of stopping this project in midstream.
I repeat that I find it odd that Conservative Members, with the great concern that they claim to have for good

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housekeeping in local government, should be prepared to throw London ratepayers' money down the drain at such a rate.
The second ground for opposing the Bill has been developed by my right hon. Friend the Member for Fulham. It is the argument put forward by some of the opponents of the scheme. Some of those who support the Bill imply that the matter has not been fully ventilated. A letter reached me today from a lady in West London who argues that I should support the Bill. She writes:
"This need not imply your support for the measure at the end of the day. You would he doing no more than enabling the arguments for it to be objectively considered by a Select Committee."
I find that somewhat disingenuous.
I should not mind if there had been no real, serious consideration of the project. However, when I hear my right hon. Friend the Member for Fulham outlining all the various bodies that have considered the project—for example, the London borough of Hammersmith in two political incarnations, the Greater London Council and the Inner London Education Authority over five years under two different forms of political control, two different Secretaries of State for the Environment and the Select Committee of the House of Lords, as well as the challenge in the High Court—I am bound to say that those who support the Bill can hardly make a case that the matter has not been carefully considered or scrutinised with great care.
I have another letter from the West Kensington Environment Campaign. It refers to the fact that there that I have mentioned. Its summing-up of the reaction of the various bodies is illuminating. It states:
"The Local Council has failed us. The local MPs have failed us. The GLC has failed us. The Secretary of State for the Environment has failed us."
If I were pursuing a case or launching a campaign and virtually everyone who considered it come out against me, I might begin to wonder whether there was something wrong with the campaign that I had espoused, but no campaign has gone on.
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The West Kensington Environment Campaign states in the final paragraph of its memorandum:
"We have found that nowhere else does the democratic process work. So we have come to Parliament in the hope of a fair hearing. This can only be achieved by a Committee hearing, which is dependent on a Second Reading."
It seems that the campaigners are saying that if they do not get their way "that ain't democracy". Democracy to them means getting their own way and their own viewpoint. If their democratic processes are exhausted and their point of view is not supported, they deny the democracy of that approach.
I am also concerned about the implications of the Bill for local government as a whole. I have the honour to be a vice-president of the Association of Metropolitan Authorities, which has expressed what it calls "very considerable alarm" about the Bill. It says:
"The Bill is of grave concern to all local authorities."
That is absolutely true. The Chairman of Ways and Means, in his measured tones, has drawn our attention to the implications if we are really to take unto ourselves the rôle of a local planning committee.
The House of Lords Select Committee has also drawn our attention to some of the implications. On the basis of the costs, for example, the Select Committee says in paragraph 10 of its report:
"The first slice of development expenditure on the project was authorised, without debate, by the Greater London Council (Money) Act of 1975. Some of the expenditure so authorised has already been incurred. There would be inconsistency were Parliament now to refuse to authorise further expenditure on this development project."
There would he even greater inconsistency if, having agreed the Money Acts in 1975 and 1976, we now said that the project must stop while we reconsidered the whole matter.
The House of Lords Select Committee went on further to consider the applications in relation to planning generally. In paragraph 12 it said:
"If Parliament wishes to review individual planning decisions, then it ought to do so at an earlier stage and not at the last moment when all that remains is for the necessary expenditure to be sanctioned, or even, as in the present case, where some expenditure, albeit not very great, has already been sanctioned by Parliament."

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But we are now six months on from the time of that report. More expenditure has been sanctioned, the construction work is well under way and at this stage it is ridiculous for us even seriously to consider putting the GLC through all the expense of having to oppose the Bill, after having submitted to a Select Committee.
Perhaps most important of all is what the Select Committee says in its final sentence:
"Moreover, the Committee can see no justification for submitting proposals for developments by the Greater London Council to risks of intervention which, if arbitrary or belated, could prove much more onerous than those which proposals foe developments by other authorities must undergo."
That is the basic point. As my right hon. Friend the Member for Fulham reminded us, if we go down this road no planning authority in the country will be safe. Any planning decision can apparently be reconsidered or overturned provided that those opposing it have the resources, the ability and the expertise to promote a Private Bill. That is a tremendous interference with the democratic rights of local authorities.
Mr. Stephen Ross: I am sure that as a member of local government the hon. Gentleman must know of many bodies in his constituency which are frustrated by planning decisions which have been made over the past five or six years, very often in the light of planning decisions or town maps which are 10 or 15 years out of date. Sometimes those decisions have been made by delegated committees and not by full councils. I do not know whether the planning committee in his area had to report to the full council, but it did not have to do so in my county council. We all know of decisions which have caused instant uproar. Often whole areas have got together to fight them. Is the hon. Gentleman really saying that as God Almighty we should not listen to these people and take some action? I am sure that that is not what he means.
Mr. Cartwright: If the hon. Gentleman is suggesting that this House should become a court of final appeal when anyone at local level objects to a planning decision by a planning authority, I do not agree. Nor do I believe that that
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sort of opportunity should be available to those who can mount the sort of operation which is necessary to promote a Private Bill.
I accept that many people are unhappy about planning decisions. One of the problems about planning decisions is that, whichever way they go—whether permission is given or refused—someone is upset. But these are decisions which Parliament in its wisdom has passed to local authorities to take. Many hon. Members are totally schizophrenic about their attitude to local government. At election times they say grandly that they believe in devolving power from Whitehall to local authorities—until those local authorities take decisions which conflict with their views. Then they want to hike power back here again.
That is not the right way to go. Basically, I do not believe that promotion of a Private Bill is the way in which we should reconsider a planning matter. This House is not properly constituted to act as a planning committee for the London borough of Hammersmith. On that basis, I hope that the House will refuse to give the Bill a Second Reading.
8.16 p.m.
Mr. David Crouch: I listened with interest to the right hon. Member for Fulham (Mr. Stewart), who is much concerned with this issue and speaks from a long experience of the state of the negotiations which have led to this argument. As he said, housing, education, open space and sports facilities should all be considered. All have a place in the mind of anyone considering the use of any space anywhere—whether urban, suburban or rural. When a house is erected, whether for one family or for 100, one must consider these other factors. Open space might be necessary or there might be sufficient open space nearby. Considerations like sewerage, access, lighting and sports facilities are beginning to appear more important than they did. Perhaps in future they will grow still more in importance as we try to make our society a society of players rather than spectators of sport.
I have listened to the debate as an outsider, from the smallest city in England—Canterbury. It may be said that an outsider has no place in a debate about London, but I do not accept that. We

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should occasionally pause in our great debates to consider the local problems which worry people. In this case, a small section of people are apparently concerned at the loss of something. They have gone through all the procedures. Some people are in favour of the GLC proceeding with this development.
I know this piece of land well. I was born a Londoner and I played cricket on this land before the war, and it has a special place in my heart.
Mr. Molloy: Will the hon. Gentleman give way?
Mr. Crouch: Not while I am talking cricket.
No hon. Member should refer to his love of a particular place and say that it should be kept for that nostalgic and emotive reason. I am not saying that. I come back to the factors that the right hon. Member for Fulham said should be considered. Parliament should consider whether decisions taken down the devolution line have properly represented the concerns and anxieties of their constituents.
It is remarkably arrogant of some hon. Members to say that Parliament should not represent the concern of constituents, wherever they may be, and that it has no right to interfere. I know of the long local government experience of the hon. Member for Woolwich, East (Mr. Cartwright) and his good service in local government and in this House. I was surprised to hear him suggest that it was wrong for us to interfere because we were, as it were, robbing a local authority of its delegated powers.
The hon. Gentleman went even further wrong in suggesting that this House should not interfere because it might spoil the authority of local government to use its power. He also suggested that it was wrong for anyone to approach this House through the proper procedures and to come to this House with a Private Bill. The hon. Gentleman should not suggest that. Only Parliament can pass a Bill to remove the liberty of the people to come to Parliament. I am glad to see my hon. and learned Friend the Member for Solihull (Mr. Grieve) remind me that I am not wrong in what I say.
If we change our procedures and pass an Act stating that the public cannot
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promote a Private Bill and come to this centre of democracy, Parliament will have taken that step and I shall abide by it because it will be the law of the land. As we stand, however, our constitution allows people to come to Parliament and to promote a Bill and ask Parliament to consider a problem which they consider has been wrongly decided lower down the 1ine.
I do not believe that we create open spaces today. All that we can do is save existing open space. I do not believe that in this day and this century of creating everything out of concrete and steel we create more open spaces. We can only save existing open spaces from concrete and steel.
The most accurate way of describing what has happened with regard to the St. Paul's playing field is that it is possibly a case of space being lost. I did not say public space because in the past it has been private space. I understand that, and those were the circumstances in which I played cricket there. I have been careful in my selection of words. Here is a case of space possibly being lost.
I was born a Londoner and I love London. I love its buildings and its streets. I love its old buildings of stone and brick, and I even love its buildings of concrete and steel. I enjoy its metalled pavements. London is perhaps the vastest area in the world of concrete, metalled pavements and asphalt. But it is still a pleasure for me to come to London from Greenwich, where I now live.
I came back to London during the war when I was on leave. I did not go anywhere else for peace and quiet. I like London. It has many grand and hard streets. London has—
Mr. Molloy: Slums.
Mr. Crouch: Of course it has, but it has something else. It has little gems of green tucked away in various parts, whether it is in Blackheath or Greenwich or the Royal parks. I know of no other city in the world that has managed to preserve its little gems of green.
I remember being in Los Angeles, which is bigger than London and perhaps has more concrete. It has no real open spaces. One has to get into a fast car

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and drive to get out of that infernal city. We do not have to do so in London because people in local government, citizens on their own, benefactors and others have ensured that London has kept its open space.
As I understand it, all we are doing by considering the Bill tonight—which I would like to see passed to Committee—is to allow this matter to be considered. It is important that we do not lose a piece of open space in this way. I believe that the open spaces in London are unique. If we lose them, housing is created. But in years to come the GLC will say, "We have lost the open space. We have not enough sports facilities. Things have changed since 1977 What a pity." We must defend London from spoliation and from over-building. We must save these little green gems I should like to stop the march of the GLC from destroying this little gem of space in Hammersmith which I know personally.
What better way of celebrating the Queen's Jubilee than to save this playing field in London and see it made into a public open space with sports facilities? It would be done in a small way because one cannot do much on less than 10 aces. But one can at least do something
My own constituency is short of housing. It is the same for every Member of Parliament. There was a clamour to build more houses in both the private and the public sectors. I stepped in and asked "What about the land we are losing? Where will the people in those several hundred houses be able to go? Where is the open space?"
I discovered that an Act or a requirement in the Ministry's files requires a certain amount of open space per dwelling. By using a little influence on my own local authority and writing to the Minister, I was able to ensure that we did not lose all that open space. There was a compromise. We had some housing and we retained some of the green land necessary to go alongside the housing.
I am sure that the GLC has not acted illegally. It has been to the High Court and has been cleared of any such charge. In my opinion, however, other charges remain. The fact that the Secretary of State has decided not to intervene and to refuse an inquiry on a matter so important,
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while not illegal, in a mistake. It is right that Parliament should stop to pause and consider this matter. The Government have had their chance and they have missed it. They have decided not to intervene. Now Parliament has its chance, and I shall not see it denied such a balance.
The promoters of the Bill should not be denied recourse to this centre of democracy. We should certainly support the Bill tonight, because it is right that it should go forward.
8.28 p.m.
The Under-Secretary of State for the Environment (Mr. Guy Barnett): I hope that it will be convenient if I intervene briefly in this very good debate to underline one or two arguments that have been put, in particular by my right hon. Friend the Member for Fulham (Mr. Stewart) and my hon. Friend the Member for Woolwich, East (Mr. Cartwright).
I want to emphasise that the present system of planning control has grown up over many years, beginning in real terms, with the Town and Country Planning Act 1947. It is a system that has had the support of all parties and is widely regarded as the best and fairest that can be devised. It has been held up as an example in many parts of the world.
The system provides that the basic decisions are taken at local authority level, because, as my right hon. Friend rightly pointed out, democratically elected members are not only responsible to their local electorates but have a wide knowledge of the needs and interests of their districts. I recognise that the hon. and learned Member for Solihull (Mr. Grieve) lives in the area about which we are talking and that the hon. Member for Canterbury (Mr. Crouch) played cricket there, but in general I believe that, as has been borne out by experience, it is right that these decisions should be taken locally.
Nevertheless, the system provides that in certain circumstances rights of appeal to the Secretary of State are available and that where issues of wider than local importance are raised he can require that they be brought to him for a decision. It also provides that recourse may be had to the courts on legal points.
My hon. Friend rightly pointed out that planning decisions, by their very nature,

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could not satisfy everyone. Planning permission is given or is refused, and either the proposer or the objector must be disappointed.
I am sure that I am right to say that the use of the various planning Acts enables reasonable decisions to be reached. There are sometimes bad decisions, as the hon. Member for Isle of Wight (Mr. Ross) has pointed out, but I should like to know what other system one could invent whereby better decisions would be made. For the few examples of bad decisions that are quoted there are many good ones. The planning system as a whole has worked extraordinarily well. It would be a serious matter if it were not generally accepted that there is built into the system protection for those who might suffer if the control system did not exist.
However, the promoters of the Bill do not appear to have accepted the fairness of the planning system. The method that they have adopted in bringing the matter before the House can surely be justified only, if at all, in very exceptional circumstances—
Mr. Grieve: I do not speak for the promoters of the Bill, of course, but I should think that it is not the planning system that they are criticising but the way in which it was operated in this case.
Mr. Barnett: I am about to deal with that very point. There may conceivably be an occasion on which such a matter should be considered by the House, but surely it can be justified only, if at all, in very exceptional circumstances, such as where a proposal has for some reason not been subjected to proper planning procedures or to legal proceedings in the courts. That is clearly not the case that we have before us. Proper procedures have been followed and upheld by Secretaries of State of both Labour and Conservative Governments, by a House of Lords Select Committee and by the High Court. All have found that valid planning permissions have been obtained for the development that is now under way.
Hon. Members will recognise that if the Bill were to succeed and other similar cases were to follow the whole planning system could be brought into disrepute. Therefore, our decision today
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must seek to preserve the system, not to throw doubt upon it.
Dr. Glyn: I have listened very carefully to what the Minister has said, as has the whole House, but the hon. Gentleman has already said that there are other methods available. If people outside the House believe that they are right, we have a procedure for them to follow, and that is the procedure that is now being adopted. It is a procedure for Parliament. As long as the procedure exists, people have every right to use it, especially in a matter concerning a site in central London that is of great importance to many people.
Mr. Barnett: I am arguing that many years ago the House approved an Act, and its procedures are the ones that we operate. They were followed precisely in every respect. No hon. Member has been able to show in this debate that that was not so. Therefore, I advise the House that under those circumstances it would seem extremely unwise for the House now to enter into a detailed consideration of the case, when it has so obviously been properly dealt with.
There are two points about the Title and Preamble to the Bill to which I want to draw attention. The Title and Preamble not only relate to matters of fact; they challenge the truth of statements made by the late Tony Crosland when he was Secretary of State for the Environment and his predecessor in that office, the right hon. Member for Worcester (Mr. Walker).
First, the Title purports to
"provide for the retention of St. Paul's Playing Field in the London Borough of Hammersmith as public open space".
The second matter is contained in paragraphs 5, 6 and 7 of the Preamble, which alleges that the phrase
"the site has never been held for public open space purposes",
which was used in a statement by my right hon. Friend the Secretary of State's predecessor, is not accurate.
I believe that both those charges have been answered in the quotation that my hon. Friend used from the report of the Select Committee in another place. I, too, agree with that conclusion, which confirms the statement of my right hon.

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Friend's predecessor. There is therefore no question of issuing a retraction of the statement that
"the site has never been held for public open space purposes".
The development of the site has been considered by Secretaries of State of both Labour and Conservative Governments, the House of Lords Select Committee and the High Court. All are agreed that the proper procedures have been followed and that planning permission was obtained for the present development which is now well under way. In view of that, the House must think very carefully before approving the Bill that we are now considering.
8.35 p.m.
Mr. Macfarlane: There are two or three points that I should tie up in replying to this debate. The hon. Member for Hammersmith (Mr. Tomney) and the right hon. Member for Fulham (Mr. Stewart) referred to the cost of cancellation being about £3,500,000. But that sum is for the entire site and we are talking about only 10 acres. Therefore, the figure would be substantially less than that.
According to the hon. Member for Hammersmith the Select Committee said that it was too late to intervene, but there are many other precedents in the House of Commons in which the House has interfered. Examples of this are Maplin, the Channel Tunnel and the TSR2.
The right hon. Member for Fulham made the point that there are certain weaknesses in the way in which the Bill has been presented. But this is mot the first time such a thing has happened in the House of Commons. That could be rectified in Committee. I remember when the Government tabled no less than 60 amendments to their own Finance Bill.
The right hon. Member for Fulham said that the matter had been to the High Court, but we must consider the observations of the High Court judge who, although id not criticise the legality of the posting of the notice in the newspaper, pointed out that perhaps the wording was not entirely satisfactory. Therefore, it may be said that he was highly critical of that feature.
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The merits of the case have never been discussed in any public forum. All the discussion has taken place behind closed doors.
Mr. Michael Stewart: Surely a meeting of the GLC is a public forum.
Mr. Macfarlane: I repeat that discussion of the merits of the case has not taken place effectively and fully. These complaints were not made, either, by the Hammersmith council at the time the House of Lords Select Committee was meeting. It was not ascertained by the various action committees that the National Savings Bank building was not far from the field. That building affords about 300,000 sq ft of large rooms, with high ceilings, wide corridors and parquet flooring, and it would be particularly suitable for this type of development.
The hon. Member for Woolwich, East (Mr. Cartwright) said that There were 5 acres of open space. I assume that he has been reading the GLC document that has been circulated to London Members. Its accuracy and validity could come under scrutiny, having been signed by one H. Wilson. I do not make any criticism of the GLC but I would point out that the 5 acres is non-existent. Of that, 1·55 acres is part of the old school forecourt and has been declared unsafe; 0·88 acres are miscellaneous patches of grass; 1·5 acres consist of patches in the south-cast corner, which is a temporary location; and 2·55 acres are walkways between the roads and the housing estates. Therefore, there is no open space as we understand the term.
My hon. and learned Friend the Member for Solihull (Mr. Grieve) said that this development was tantamount to an act of vandalism. That is a accurate description. My hon. Friend the Member for Canterbury (Mr. Crouch) spoke in glowing terms of this location in London and mentioned the important part it had played. It will be tragic to lose the site.
I hope that the House will give the Bill a Second Reading and ensure that the matter goes to Committee so that grievances can be aired and fully understood. I commend the Bill to the House.
Question put, That the Bill be now read a Second time:—
Question accordingly negatived.

PETITION

  Stockwell College
  Mr. Roger Sims: I beg to ask leave to present a petition on behalf of Stockwell College of Education, Bromley. The prayer of the petition is as follows:
  To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled. The Humble Petition of the undersigned sheweth.
  The House divided: Ayes 58, Noes 89.

  Division No. 98]

  AYES

  [8.40 p.m.

  Arnold, Tom

  Durant, Tony

  Monro, Hector

  Atkins, Rt. Hon. H. (Spelthorne)

  Elliott, Sir William

  Newton, Tony

  Beith, A. J.

  Eyre, Reginald

  Nott, John

  Bell, Ronald

  Farr, John

  Page, Rt. Hon. R. Graham (Crosby)

  Bennett, Dr. Reginald (Fareham)

  Fookes, Miss Janet

  Penhaligon, David

  Benyon, W.

  Glyn, Dr. Alan

  Ridsdale, Julian

  Berry, Hon. Anthony

  Grant, Anthony (Harrow C.)

  Shepherd, Colin

  Bottomley, Peter

  Gray, Hamish

  Silvester, Fred

  Bowden, A. (Brighton, Kemptown)

  Grist, Ian

  Sims, Roger

  Brooke, Peter

  Hampson, Dr. Keith

  Spence, John

  Brotherton, Michael

  Hayhoe, Barney

  Stewart, Ian (Hitchin)

  Buchanan-Smith, Alick

  Hunt, David (Wirral)

  Stradling Thomas, J.

  Butler, Adam (Bosworth)

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

  Thatcher, Rt. Hon. Margaret

  Chalker, Mrs. Lynda

  Jessel, Toby

  Wakeham, John

  Channon, Paul

  Kilfedder, James

  Weatherill, Bernard

  Cooke, Robert (Bristol W.)

  Le Merchant, Spencer

  Younger, Hon. George

  Cormack, Patrick

  McAdden, Sir Stephen

  Crouch, David

  Macfarlane, Neil

  TELLERS FOR THE AYES:

  Dean, Paul (N. Somerset)

  Marshall, Michael (Arundel)

  Mr. Percy Grieve and

  Douglas-Hamilton, Lord James

  Meyer, Sir Anthony

  Mr. Stephen Ross.

  Drayson, Burnaby

  Moate, Roger

  NOES

  Armstrong, Ernest

  Grant, George (Morpeth)

  Price, William (Rugby)

  Ashton, Joe

  Hamilton, James (Bothwell)

  Richardson, Miss Jo

  Barnett, Guy (Greenwich)

  Harper, Joseph

  Roderick, Caerwyn

  Bennett, Andrew (Stockport N)

  Hooley, Frank

  Rodgers, George (Chorley)

  Bidwell, Sydney

  Horam, John

  Rooker, J. W.

  Bishop, E. S.

  Hughes, Rt. Hon. C. (Anglesey)

  Ross, Rt. Hon. W. (Kilmarnock)

  Booth, Rt. Hon. Albert

  Hunter, Adam

  Sedgemore, Brian

  Bray, Dr. Jeremy

  Jeger, Mrs. Lena

  Skinner, Dennis

  Buchanan, Richard

  Jenkins, Hugh (Putney)

  Small, William

  Callaghan, Jim (Middleton & P.)

  John, Brynmor

  Spriggs, Leslie

  Campbell, Ian

  Johnson, James (Hull West)

  Stallard, A. W.

  Canavan, Dennis

  Jones, Dan (Burnley)

  Stewart, Rt. Hon. M. (Fulham)

  Cant, R. B.

  Kerr, Russell

  Taylor, Mrs. Ann (Bolton W.)

  Cocks, Rt. Hon. Michael

  Lamborn, Harry

  Thomas, Jeffrey (Abertillery)

  Cohen, Stanley

  Lee, John

  Tinn, James

  Coleman, Donald

  Lipton, Marcus

  Tomney, Frank

  Cox, Thomas (Tooting)

  Loyden, Eddie

  Wainwright, Edwin (Dearne V)

  Crowther, Stan (Rotherham)

  Lyons, Edward (Bradford W.)

  Walker, Harold (Doncaster)

  Cryer, Bob

  McDonald, Dr. Oonagh

  Walker, Terry (Kingswood)

  Davies, Ifor (Gower)

  McNamara, Kevin

  Ward, Michael

  Dean, Joseph (Leeds West)

  Madden, Max

  Watkins, David

  Dempsey, James

  Marks, Kenneth

  White, James (Pollok)

  Doig, Peter

  Maynard, Miss Joan

  Whitlock, William

  Dormand, J. D.

  Mendelson, John

  Wilson, Alexander (Hamilton)

  Duffy, A. E. P.

  Molloy, William

  Wise, Mrs. Audrey

  Dunn, James A.

  Moyle, Roland

  Woodall, Alec

  Ellis, John (Brigg & Scun)

  Murray, Rt. Hon. Ronald King

  Young, David (Bolton E)

  Ewing, Harry (Stirling)

  Oakes, Gordon

  Fletcher, Ted (Darlington)

  Orme, Rt. Hon. Stanley

  TELLERS FOR THE NOES:

  George, Bruce

  Parker, John

  Mr. Arnold Shaw and

  Graham, Ted

  Pavitt, Laurie

  Mr. John Cartwright.

  That a meeting at Stockwell College of Education, held on Wednesday 23rd February 1977, and attended by teachers from throughout the South East of England, as well as Members of Parliament, prospective parliamentary candidates, Bromley councillors, college staff and former students, unanimously passed the following resolution:
  This meeting deplores the proposal of the Secretary of State to end initial training at the Bromley Institute of Higher Education (Stockwell College) and urges her to reconsider the proposal on the following grounds:—

  (i) The closure of the initial training unit at Bromley, together with its in-service facilities would cause disadvantage to a large area of South East London and Kent.

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  (ii)At a time of increasing public concern about educational standards, it would be irresponsible to close a college of such high professional standing and with well-established links with schools.

  (iii)The loss of initial teacher training courses would seriously impair the planned development of the Bromley Institute of Higher Education.

  Wherefore your Petitioners pray your Honourable House to acknowledge the wide support for this resolution and actively to resist the said proposal in every possible way.
  And your Petitioners, as in duty bound, will ever pray, &c.
  The signatures on the petition are those of the Mayor of the London borough of Bromley, the President of the Bromley National Union of Teachers, the President of the South-East Branch of the Association of Headmistresses, the Vicar of Bromley, a professor of mathematics at London University and the Chairman of the Education Committee of the London borough of Bromley.
  I hope in a few moments to be able to dilate a little more upon the points made in the petition, but at present I confine myself to saying that although it covers only the names to which I referred it is similar to a petition that was widely circulated throughout the area and attracted 11,500 signatures.
  To lie upon the Table.

STOCKWELL COLLEGE (TEACHER TRAINING)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Tinn.]
8.55 p.m.
Mr. Roger Sims: In raising the subject of Stockwell College on the Adjournment tonight, I wish to make clear at the outset that I accept the need for reduced provision of teacher training in view of the probable school population in the next decade as indicated by the present birth rate figures. However, I think it well to note that the birth rate projections for 1980 and 1990 indicate a gradual increase, which emphasises the need for flexibility in teacher training provision and the importance of ensuring that any reduction now will not prevent extensions at a later date.
Naturally, all hon. Members accept that some colleges will have to be closed
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—provided, of course, that they are not the colleges in which they have a particular interest. But my notives in discussing the position of Stockwell College are not purely parochial. I consider that the proposal to cease teacher training at the college has not been adequately thought out.
I am grateful to the Minister of State for coming here this evening at what, I know, is considerable personal inconvenience. I appreciate his coming from the West Country to listen to the debate and hear what I have to say.
The original proposals were announced in the House on 24th January. In the course of her remarks then, the Secretary of State said:
"The individual proposals will be the subject of further consultations with the maintaining authorities and providing bodies concerned."—[Official Report, 24th January 1977; Vol. 924, c. 963.]
The House will note the reference to "further" consultations, the implication being that there have been some already. In fact, there has been no consultation at all about Stockwell College. However, I am glad to see that the Minister is willing to consult the authorities, and I hope he will be willing to receive representations from others closely involved. The professional staff, students and education authorities in a number of areas in South-East London and North-West Kent which use Stockwell College are anxious to ensure that their views are considered. I appreciate that the Minister cannot meet everyone who wants to see him, but I hope that if he is asked to meet a deputation representative of all interested parties he will be willing to do so.
The Secretary of State made clear that these are proposals, not final decisions. I hope that the Minister of State will confirm that that is so, and confirm also that the work of the college will go on as usual, with no delays in approving courses for the next academic year.
The case in favour of retaining teacher training facilities at Stockwell College is formidable. I hope I shall be forgiven for doubting that the Department gave it adequate consideration, since the letter to the director of education giving notice of the proposal was addressed to a director who retired more than six months ago, and in reply to a Question the Department apparently did not know exactly

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where the college was, having placed it in the constituency of my hon. Friend the Member for Ravensbourne (Mr. Hunt).
Be that as it may, Stockwell College was founded early in the nineteenth century in Southwark. In 1861 it moved to Stockwell, and it has been at Bromley since 1935. In recent years a number of new buildings have been added—most recently a fine library extension. Plans were formulated several years ago to merge the college with Bromley College of Technology and Ravensbourne College of Art and Design to form the Bromley Institute of Higher Education. That proposal was approved by the Minister in July 1975, a director has already been appointed and the merger is to take effect in September this year.
The new proposals by the Department, of course, completely overthrow those plans.
Yet one of the Minister's criteria for restructuring the teacher training system set out in a paper to her Advisory Committee on the Supply and Training of Teachers is—I quote from paragraph (a) of the relevant document—that
"Teacher education should be firmly integrated with other higher education."
Integration with other higher education is exactly what this new institute would effect if the proposed merger were allowed to go forward.
Stockwell College has trained more than 25,000 teachers, 5,000 of them in the last 10 years. It has a high academic record, with 33 per cent. of its teaching staff recognised as competent to take charge of the planning and implementation of degree courses. In 1976, 40 per cent. of students for the Bachelor of Education honours degree of the University of London gained first and second-class degrees, compared with 15 per cent. in the whole university list.
I have received many letters from ex-students testifying to the high quality of training that they received at the college. I shall not detain the House further by giving details of the quality of courses there because the professional deputation which I hope the Minister will agree to meet can speak with more authority.
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Another of the criteria for restructuring the system was one proposing that
"the teaching force should progressively become an all-graduate profession and existing Certificate courses should be phased out as soon as possible."
Stockwell College was one of the first to provide Bachelor of Education courses and the numbers taking the course have steadily risen, with the results that I have described. The college expects to take its first all-degree intake this September, and if the proposals go through Stockwell College will produce its first all-graduate output at exactly the same time as it is due to close down.
Finally I turn to criteria (b) in the document, which states:
"Initial and in-service teacher education should be closely related and the institutions providing the former should have a major role in relation to schools and teachers in their area."
The document goes on to refer to the need for a good geographical spread of teacher training institutions.
Stockwell College is the major training institute in outer South-East London and North-West Kent. A high proportion of initial teacher students come from the area and 50 per cent. live at home and travel daily to the college, a number of them being mature students.
The Minister admitted, in a Written Answer to a Question on 21st February, that if teacher training ceased at Stockwell there would be no facilities available in the London boroughs of Bromley, Bexley or Croydon or throughout North-West Kent, since Dartford College is an Inner London Education Authority institution. Had the debate begun at the usual time as was expected, several hon. Members representing constituencies which include the boroughs to which I have referred would have wished to add their weight to the representations I am now making.
Serious as the discontinuation of initial training would be, perhaps even more serious would be the discontinuation of in-service training. Stockwell College has the advantage of being easily accessible by public transport from a large area of Kent as well as the three London boroughs and inner South-East London, and accessible from an even wider area by private transport.

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It is estimated that the college serves 1½ million people, 700 schools, 13,000 teachers and a quarter of a million schoolchildren. I have been very impressed by the number of letters I have had from teachers over a wide area who benefited from in-service facilities at Stockwell. The number of such teachers on in-service courses is running at more than 1,000 a year. In addition, a lot of work is done by tutors visiting schools on a consultancy basis. At present they are spending anything up to 500 hours a week on this, and it is increasing.
All of this would go if teacher training at Stockwell ceased. I accept that there would still be some facilities in the ILEA area, but they would be needed for ILEA requirements. If the ILEA has to meet the needs of South-East London and Kent on the scale indicated, that would be to the disadvantage of the ILEA.
It is not good enough for the Minister to say, as he said in his reply on 21st February, that if Stockwell were closed
"arrangements for in-service training will be a matter for consideration by the local education authorities concerned."—[Official Report, 21st Feb. 1977; Vol. 926, c. 475.]
I am sure he must realise that local education authorities do not have access to the financial resources or the professional expertise to enable them to provide facilities comparable to Stockwell College.
I have restricted myself to a brief summary of some of the main arguments against the proposal to close teacher training at Stockwell. I hope the Minister will agree that they are valid arguments and that they merit closer examination. I began by accepting the need to reduce the volume of teacher training but not to close the particular college in my constituency. I am not therefore urging that others should be closed.
I invite the Minister to re-examine the geographical spread of teacher training facilities in the light of his own criteria. He has proposed reduced intakes in some institutions and the closing of others. I suggest that, by only a modest reduction in the proposed intake of some of the other institutions in the region, it would be possible to retain Stockwell and still keep within the overall figures which those proposals are designed to meet.
In that way, not only my constituency but Bromley, Bexley, Croydon and a
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large area of Kent would continue to enjoy the facilities and the high standard of teaching courses offered by Stockwell College. If the original proposals are implemented, however, a large part of the South-East Region will find itself, in educational terms, immeasurably the poorer.
9.7 p.m.
The Minister of State, Department of Education and Science (Mr. Gordon Oakes): The hon. Member for Chislehurst (Mr. Sims) spoke eloquently of the virtues of Stockwell College and argued against my right hon. Friend's proposals to cease teacher training at the college.
He made certain kind remarks about my somewhat hurried return from Exeter in order to reply to this debate, but I think that the hon. Member is entitled to have a Minister to reply to the debate, since he has tonight scored a hat trick. In my experience it is rare for an hon. Member to be able to present a petition and, immediately afterwards, be able to raise the issue in an Adjournment debate—and to do both on Budget night. The Gentleman should be congratulated on that score.
I know of the hon. Gentleman's concern, which he has represented to me in letters, about the closure of Stockwell College. I have so far received 240 individual letters about the closure of the college and 80 printed forms that emanated from a local newspaper, which also objects to the closure of the college.
I am certainly prepared to meet the joint education committee, which has already presented a detailed case to me concerning the closure of the college and its objections to that closure. I feel certain, knowing the great concern of the hon. Member for Chislehurst about this matter, that he will be present at the meeting and that I shall meet him as the constituency Member concerned when I meet the joint education committee to discuss the matter.
It may help the House to understand the reasons for my right hon. Friend's proposals and some of the difficulties in which we find ourselves if I explain some of the background to the proposals for restructuring the teacher training system that were announced on 24th January.

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The proposals represent one of the last stages in a process that has been going on for some time and that has two main aims. One aim has been to reduce the number of teacher training places from the peak figures of the early 1970s to something related to the prospective needs of the 1980s.
The other aim, which may have been lost sight of during the discussions about numbers, has been to reform the nature of teacher training following the findings of the committee under Lord James, which reported in 1972, and the subsequent White Paper "Education: A Framework for Expansion". Incidentally, I should say that although not every proposal put forward by the previous Conservative Government was accepted by Labour Members, we think that these proposals are very sensible and wise.
The aims were that the choice between teaching and other careers should be deferred as late as possible in a student's studies; that prospective teachers should be educated alongside other higher education students as far as possible; and, in the longer term, that the Certificate in Education should be phased out in favour of a new type of Bachelor of Education degree that would be deliberately developed not only as a teaching qualification but as a degree that would be generally acceptable for other employment outside the teaching profession. But we are trying to carry out these reforms against a background of reduced demand for numbers of teachers, which in turn derives from the fluctuations of the birth rate.
The number of births each year began to fall after the initial post-war "bulge" and fell steadily at first, until 1956. Thereafter, it rose again until 1964, but since then it has fallen again. On the evidence so far available it is still falling. The consequent fluctuations in the numbers of pupils and students have implications for the services for which my Department is responsible, especially for the provision of school buildings, further education colleges, and—most important—the training of teachers. The increased number of births between 1956 and 1964 meant that obviously there would be more pupils in the schools through the 1960s and into the 1970s, and that more teachers would have to be trained to deal
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with them. The demand for teacher training places was also increased by the decision to introduce the three-year training course in 1962 and the continuing aim of the Government to bring down the size of classes. Thus, there was a massive expansion of the teacher training system in the 1960s, as part of which Stockwell College grew from about 200 to 1,200 places.
It was obvious that at some time this expansion would have to stop and that there would even be some reduction in numbers, which would relieve the pressure under which many colleges were working. What was not foreseen—and I freely admit it—was the scale of the reduction.
The factor that is basic is the number of births. When they began to fall in the mid-1960s the first assumptions, based on data from the past about the age at which women had borne children and the size of families, was that this was a temporary phenomenon and that the birth rate would soon begin to rise again. The data from the past, however, did not and could not take into account the new factor of widespread contraception, especially the contraceptive pill. The number of births has fallen each year for the past 12 years and as a direct consequence the number of children in school will begin to fall dramatically from this year and for each year ahead for a considerable number of years.
In the current school year there are about 9 million children in school. By 1981 that will have fallen to 8½ million and by 1986 it is expected to fall to 7½ million and not to rise above that figure until the 1990s. That is one reason why there has had to be a change of plan. The authors of the 1972 White Paper estimated that by 1981 we should need a total of between 75,000 and 85,000 teacher training places outside the universities. Even that would have been a substantial reduction from the 117,000 places then available in the system. In asking local education authorities and voluntary bodies to prepare plans for reorganising their colleges, the Department recognised that there must be serious difficulties.
Since then, two major revisions of the forecasts have been necessary. In March 1975 the then Secretary of State

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announced that the teacher training capacity outside the universities would have to be contracted to a total of about 60,000 places by 1981. It was on that basis that planning proceeded and the plans that had been submitted under Circular 7/73 were considered and most of them approved.
It was in this context that the plans for Bromley, including Stockwell College, were approved in July 1975. Clearly, while the country was being asked to take a cut of about 50 per cent. in teacher training, Stockwell College could not escape some reduction. But the Secretary of State recognised the merits of the college, which have been so well described this evening, and the advantages of the plan for combining it with the college of technology and the college of art and design to produce a mixed institution of higher education strictly in accordance with the Government's policies. Within the total of 60,000 teacher training places then expected to be available it was possible to retain teacher training in this institution and to allot about 500 places to it.
However, by the autumn of last year it had become clear that in view of the revised projections of school population and the financial situation that was likely to slow down the rate of improvement in school staffing standards and the expansion of in-service and induction training, 60,000 places was a considerable overestimate of the need.
My right hon. Friend accordingly consulted the Advisory Committee on the Supply and Training of Teachers and secured its agreement to the proposition that the training system should be reduced to about 45,000 places. We cannot be sure that even this is the right number, since so much inevitably depends upon the unpredictable factor of the birth rate. However, in drawing up proposals for 45,000 places, what we have tried to do is to produce a system that is within the most likely range of demand, that can respond to minor fluctuations without being either wastefully unemployed or grossly overloaded and that is capable of fairly rapid expansion if the need arises for training substantially more teachers in the 1980s.
As a matter of fact, the design of the plan is for 45,000 teacher training places
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—35,000 for initial training and 10,000 for in-service training. We have tried to devise the capacity of the system so that if we are wrong that figure can be increased to 60,000 places in the 1980s. But that will depend on what the birth rate is in the latter years of the 1970s, which is a factor that we do not know at present. Statisticians tell us that it may increase, and that it has increased in the past. They have been telling us that for some years. But all our predictions and statistics show that consistently the birth rate is not rising or levelling out but is at present still falling.
We realise that the colleges feel that there have been enough changes of plan, so we have deliberately aimed at a figure that should not have to be significantly reduced again, with all the resulting misery of another round of cuts and closures. As a result, we have had to propose some very harsh measures indeed.
I appreciate that the college, and local people, will be disappointed and mystified at the proposal to take away teacher training, since the amalgamation of the colleges was approved so very recently and is in line with the Government's policies. I regret this as much as anyone. When I point out that we are making similar proposals in respect of three polytechnics and four institutes of higher education elsewhere in the country, this is not with any sense of pride but simply to illustrate the problems that arise when an operation of this sort is carried out in two stages and to underline the fact that Stockwell College has in no way been singled out for especially hard treatment.
We have been criticised because we allowed plans to go forward for the amalgamation of the Bromley colleges, even to the appointment of a director designate, while my right hon. Friend's proposals for reductions were being drawn up. This criticism, I think, illustrates our dilemma. Obviously a substantial number of colleges would have to give up teacher training, but my right hon. Friend did not wish to take any action which would seem to be prejudging the fate of any particular individual college.
I can assure the House that the future of every college was reviewed against the criteria presented to my right hon. Friend's advisory committee. A proposal to end teacher training at a particular

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college is not a reflection on the quality of the work of that college—indeed, one of the things that we regret most is the need to propose the end of teacher training at some colleges with distinguished records, such as Stockwell.
The dilemma that I am in, particularly with regard to London and the South-East Region, is that we tried regionally to arrange for a fair distribution of places. Greater London presents a particular problem. The provision of teacher training and higher education in and around the capital has been far greater than the needs of London and the region would justify, simply because of the special position that any capital city inevitably occupies. A strictly proportionate share of 45,000 teacher training places would allocate 5,560 to London and the Greater London area. The Secretary of State's proposals allocate 7,050. The hon. Gentleman will see the dilemma that I am in as a Minister in trying to deal with this position for the whole of England and Wales. I am dealing with what has become, because of the decline in the birth rate, an over-provision in the South-East and the Greater London area.
The hon. Gentleman raised the question of in-service training. In my reply to the parliamentary Question to which he referred I said, as I inevitably had to, that this was a matter for the local authority concerned, because the question of where in-service teacher training shall be provided is one for the local authority and not my Department. I assure the hon. Member there is no reason why, from a departmental point of view, in-service training should not continue at Stockwell College. It may not be able to go along with initial service training if the proposals
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are carried out, but there is no reason why in-service training should not continue.
These are proposals put by my right hon. Friend the Secretary of State for Education and Science at the instigation of the local authorities, which have said to the Government "We could never agree to this. You put your proposals and we shall fight over them." I assure the hon. Gentleman that I am more than willing to discuss this college and the other colleges. Since he has raised the future of Stockwell College so forcefully, with his petition and the Adjournment debate tonight, I say that in the light of these proposals I am willing to have discussions on the college with the joint education committee and the hon. Gentleman so that the full views of all concerned can be known before any final decisions are taken.
I do not know whether the final decisions will be in accord with the proposals. Some may be. The hon. Gentleman will agree that I could not prejudge the situation tonight before addressing him and his education committee or before I have heard the other representations concerning other colleges.
I thank the hon. Gentleman for raising this matter. He has done so by using every technique available to a Member and has ensured the presence of a Minister. I assure him that full consideration will be given to all his representations and to those which may be made by the joint education committee to me and the Secretary of State.
Question put and agreed to.
Adjourned accordingly at twenty-four minutes past Nine o'clock

  EASTERN MEDITERRANEAN DEFENCE
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Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Birmingham.

HOUSING ASSOCIATIONS
Lord JANNER: 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 steps have been or are being taken to deal with the misuse of assistance given to housing associations as exposed by the present revelations in relation to assistance given by the G.L.C.
Baroness STEDMAN: My Lords, it is primarily the responsibility of local authorities to ensure that proper use is made of the funds which they make available to housing associations. The Department is considering the need for further guidance, particularly in the context of responsibility for the homeless.
Lord JANNER: My Lords, while thanking my noble friend for that reply and while she will be aware that everybody appreciates the importance of the work of those housing associations which are doing a splendid job, may I ask whether she is aware that people are concerned about the fact that this incident occurred? Is it possible for the Government to ensure that, for example, the National Association of Housing Associations, the National Federation, or the Housing Corporation, shall be entitled to make sure that, when housing associations apply for grants, it is established that they are either registered or are reputable people?
Baroness STEDMAN: My Lords, I share the support for housing associations mentioned by my noble friend. The Government are convinced that housing associations which are registered and controlled by the Housing Corporation
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have played, and will continue to play, a very valuable part in helping local authorities to cope with the stress area rehabilitation and the needs of the homeless and the underprivileged. As I understand it, the Greater London Council has powers under its Act by which it can make monies available to various voluntary organisations to do some minor rehabilitation to some low standard housing. This was done under these powers and not by means of a housing association. When the new Bill on homelessness comes before this House and eventually gets approval and agreement, the Department will issue a code of guidance in which it will stress the importance of local authorities checking with housing associations to make sure that they are dealing with registered bodies.
Lord HAILSHAM of SAINT MARYLEBONE: However that may be, my Lords, and to come down to brass tacks, may I ask the noble Baroness whether the Government are really convinced that the scandal, to which the subject of the Question asked by the noble Lord, Lord Janner, has given rise, is not a question for the Director of Public Prosecutions or a tribunal under the Tribunals of Inquiry Evidence Act?
Baroness STEDMAN: Yes, my Lords; I admit that I did not see the television programme, but I have read reports of it. While we accept that what was shown in that television programme gave cause for concern—I am sure it did to every Member of your Lordships' House—I would remind the noble and learned Lord that we saw only one side of it. The GLC is now in negotiation with Yorkshire Television for an opportunity to put its side of the matter. Despite what the noble and learned Lord has said, before this event one of the associations concerned had been referred to the Director of Public Prosecutions. I understand that both of the housing associations which were referred to have now been referred to the DPP.
Lord JANNER: My Lords, may I ask my noble friend to reconsider what is being done at present? Although she is aware, as we all are, of the tremendous importance of housing associations, it is essential, as the Government are subsidising these associations, that they should

755
have considerable regard to ensuring that housing associations which receive grants consist of reputable people.
Baroness STEDMAN: Yes, my Lords.
Baroness VICKERS: My Lords, in view of the fact that not only local government contributes to this work but that these organisations also collect money from various individuals, may I ask the Minister whether these organisations are registered under the Charities Act? Are they duly inspected?
Baroness STEDMAN: My Lords, those Organisations which are registered with the Housing Corporation are subject to very stringent controls; the problem arises with regard to the unregistered ones and where local authorities do not always take the trouble to check that the associations are registered. The new code of guidance which we will be issuing shortly will stress to local authorities the need to check that the organisations which they are using are reputable and, where possible, are registered with the Housing Corporation.
Lord SLATER: My Lords, is it not a fact that not every local authority has felt bound to engage a housing association to assist in the building of council houses and to provide accommodation for those in need? In other words, is it not true to say that many local authorities do not engage housing associations but resort within their own authorities to what is known as direct labour?
Baroness STEDMAN: My Lords, that is another question, but the housing associations have done an extremely good job with many local authorities. We hope that they will continue to do so and that their services will still be asked for by local authorities.

SKIN DIVING AND SHELLFISH STOCKS
2.45 p.m.
Viscount MASSEREENE AND FERRARD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are aware of the great increase in commercial skin diving around the coasts of Britain and whether they will consider some system of control by licensing in order to conserve the stock of shellfish from undue exploitation.
Lord STRABOLGI: My Lords, commercial skin diving, which took place chiefly around the Cornish coast, has declined recently. The Government are, however, aware that the activities of amateur skin divers have created problems for fishermen in certain areas such as Start Bay and Hope Cove in Devon and the Government hope that these can in future be solved by discussion between the local Sea Fisheries Committees and the British Sub-Aqua Club.
Viscount MASSEREENE AND FERRARD: My Lords, I thank the noble Lord for that reply. Is he aware that in my part of Scotland—the Western Highlands and the Inner Hebrides—skin diving has not declined, and that skin divers can clear an area of most species of shellfish very quickly indeed, to the detriment of local fishermen using conventional methods? Is the noble Lord further aware that many skin divers come long distances by car and have no connection with the area where they fish? Would the noble Lord not agree that, as these skin divers can earn as much as £100 a day and sometimes a lot more, it might be logical to license skin divers in the same way as fishing boats are licensed?
Lord STRABOLGI: My Lords, while I note what the noble Viscount has said, I should like to say in reply that there is no evidence at present that skin diving is having an adverse effect on the fish stocks generally. However, it would be open to a Sea Fisheries Committee to propose a local bye-law if it believed that local circumstances required it. My right honourable friend the Minister of Agriculture, Fisheries and Food would give careful consideration to any such proposal.
Baroness EMMET of AMBERLEY: My Lords, might this not very well be part of the study of the Working Party of the Ministry of Agriculture, Fisheries

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and Food which is being set up at the present moment and which really needs a certain amount of legislation?
Lord STRABOLGI: My Lords, so far as this affects fish farming, which I know that the noble Baroness always has in mind, it will of course be taken into account.
Lord GLENKINGLAS: My Lords, while my noble friend's comments about what is happening on the West Coast of Scotland are certainly true, would the noble Lord also consider my belief that there is not any method by which local Sea Fisheries Committees can ban this type of operation? It is mainly done by students, who make very large sums of money during their holdiays and have a nice time. Would the noble Lord also bear in mind in the fish farming context that there are many possible developments for increasing mussels, oysters, lobsters and so on, all of which are at the moment frustrated by the inability to control the development which one has started?
Lord STRABOLGI: Yes, my Lords. I am sure that there is a lot in what the noble Lord has said. Any such proposals would of course have to be very carefully considered. We must remember that skin diving is not solely a method of fishing: many people dive simply to observe or photograph marine life. The Government have no intention of interfering with their enjoyment.
Viscount MASSEREENE and FERRARD: My Lords, may I remind the noble Lord that I referred to commercial skin diving, not skin diving for pleasure? Nobody wants to license that.
Lord STRABOLGI: My Lords, I do not know about Scotland. I shall go into that and will communicate with the noble Viscount, if he will allow me to. So far as commercial skin diving in the West Country is concerned, this has declined very substantially: there were 20 skin divers three or four years ago and there are now two or three.

COMMONWEALTH CONFERENCE: SECURITY
2.48 p.m.
Lord SHINWELL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether any of the Governments who are expected to attend the forthcoming Commonwealth Conference have asked for security assurances for their representatives during their stay in this country.
The MINISTER of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): No, my Lords.
Lord SHINWELL: My Lords, does not that somewhat negative reply indicate that many of the delegations will provide their own security facilities, and has not General Amin already offered to be accompanied by at least 250 of his very formidable bodyguard? In view of the expense involved in providing security facilities, would it not be better to encourage those delegations to follow the lead of General Amin and to be accompanied by their security assistants and accomplices, in order to save a great deal of expense and trouble?
Lord GORONWY-ROBERTS: On the contrary, my Lords. I have every confidence in our police, with whom the responsibility for the protection of those attending this conference lies.
Lord JANNER: My Lords, may I ask my noble friend whether, in view of the fact that it is President Amin to whom attention is drawn, it is we who need to be protected against him and his bodyguards?
Lord SHINWELL: My Lords, is my noble friend aware that the Answer that he gave was a very poor, impoverished answer? Is he aware that we have the utmost confidence in our police force and that I was not asking that question? I was asking whether these people who are coming here—many of whom will be very welcome—will be providing their own security facilities? Can my noble friend answer that question with a "Yes" or a "No"?
Lord GORONWY-ROBERTS: My Lords, I am not aware that any visiting delegation for the Heads of Government meeting is providing its own protective facilities because they are well aware from previous experience of the excellence of the provision by our own police.

AIRLINES AND PASSENGER OVERBOOKING
2.50 p.m.
Baroness BURTON of COVENTRY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in view of the inadequate publicity given by British airlines to the overbooking compensation scheme, they are in a position to add to their Statement of 13th July last.
Lord ORAM: My Lords, I understand that passengers denied carriage due to overbooking are given full details of the compensation scheme by the airlines, including advice as to their rights. In addition, the Airline Users' Committee has published a booklet referring to passengers' entitlement to compensation.
Baroness BURTON of COVENTRY: My Lords, that reply really will not do. Is the Minister aware that passengers are told of their rights when they have been off-loaded, when it has actually occurred? They do not know of them beforehand. Is he further aware that the Airline Users' Committee—seeing that he has mentioned the Committee—has been quite unable to obtain any information about the actual publicity given by the airlines? Lastly, does he recall that on 13th July last he told the House that the Civil Aviation Authority required the airlines to publicise these arrangements? Could he comment on what actually has been done?
Lord ORAM: Yes, my Lords; I agree with my noble friend that the information is given only after a passenger has been "bumped", as the expression goes; "denied carriage" is the more technical expression. I can understand my noble friend's view that this information should be given to passengers before they get into that situation, so that they know their rights earlier. I know that my noble friend has put forward her views in the Users' Committee (of which she is a member) and that these views have been conveyed to British Airways. I understand that a reply has now been received by the Committee, and no doubt my noble
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friend will be examining it at the next meeting. But if it will help her I will undertake to write to the chairman of the Civil Aviation Authority putting forward the views that she has expressed and adding my own support to her.
Baroness BURTON of COVENTRY: My Lords, I am most grateful for the support of my noble friend. Is he aware how much we appreciate this? However, may I ask whether he would also convey the fact that we are sick and tired of making these requests from as long ago as last July? Now we are told that an answer is on the way. Would he agree that, whether or not it is satisfactory, that is far too long a period for people to wait?
Lord ORAM: My Lords, I think that the answer that is on the way does not date from last July, but from more recent representations which have been made. But I certainly will study what my noble friend has said and will convey that as well.
Lord ORR-EWING: My Lords, will the noble Lord bear in mind that on these occasions—and I have been a sufferer—very often one finds that quite a number of airline personnel are travelling on concessionary passages, probably free? In one instance, a group of us, having paid for our tickets many weeks previously, stood our ground and asked that all the concessionary passengers be turned off. Seven were turned off, and six of us went on ahead. Surely it is up to the airline to ensure that people who have paid for their tickets and have booked some time ahead should be given priority over others who are travelling on concessionary grounds?
Lord ORAM: My Lords, I think that that is reasonable, and I am sure that airlines take that kind of position into account. There may be accidents otherwise from time to time, but in general I should think that that kind of consideration would be very much borne in mind. I referred to a reference about overbooking in a publication of the Airline Users' Committee. In that there is advice to passengers who are "bumped" that they should stand their ground in the way that the noble Lord suggests.
Baroness BURTON of COVENTRY: My Lords, I do not want to weary the

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House, but with respect to the noble Lord, Lord Orr-Ewing, I do not mind who is put off the plane because I think nobody should be. But would the Government, in the person of my noble friend, convey to the Civil Aviation Authority that they feel that it is the right of passengers when making their booking, whether it be at an agency, at British Airways, or anywhere else, to know of their rights, and could there not be a notice to this effect at all agencies?
Lord ORAM: My Lords, I am aware that that is my noble friend's view, and it is that that I will convey to the chairman.
Lord TREFGARNE: My Lords, I accept that this new scheme, for all its disadvantages, is a considerable step forward; but would the noble Lord not agree that the problem is really caused by those passengers who book one or more seats on one or more flights and then fail to show up?
Lord ORAM: My Lords, certainly that is an aspect of the problem which has been debated several times in this House, but I notice that my noble friend Lady Burton of Coventry has tabled a Question on the substantive business of overbooking for consideration on 5th May when, hopefully, I will be able to deal more fully with that matter.

BUSINESS OF THE HOUSE
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, on behalf of my noble friend the Leader of the House I beg to move the Motion standing in his name on the Order Paper.
Moved, That Standing Order No. 43 (No two stages of a Bill to be taken on one day) be suspended until the Easter Recess—(Baroness Llewelyn-Davies of Hastoe.)
On Question, Motion agreed to.

INTERNATIONAL FINANCE, TRADE AND AID BILL
Read 3a, and passed.
JOB RELEASE BILL
Read 3a, and passed.

COMMUNITY LAND (EXCEPTED DEVELOPMENT) AMENDMENT (WALES) REGULATIONS 1977
2.57 p.m.
The LORD CHANCELLOR (Lord Elwyn-Jones)The LORD CHANCELLOR (Lord Elwyn-Jones) rose to move, That the draft Community Land (Excepted Development) Amendment (Wales) Regulations 1977, laid before the House on 10th March, be approved. The noble and learned Lord said: My Lords, with your Lordships' permission, I will speak to the two Motions in my name, which relate to the Development Board for Rural Wales. Each Instrument is concerned with the position of the Development Board for Rural Wales under the community land scheme. The two existing Statutory Instruments which are to be amended already protect the position of the Welsh Development Agency, some of whose property is being transferred to the Board. The amending Instruments now laid in draft would, if approved, give similar status to the Development Board for Rural Wales. I refer first to the Community Land (Excepted Development) Amendment (Wales) Regulations 1977. These amending regulations seek to widen Class 8 in Part I of the Schedule to the Community Land (Excepted Development) Regulations 1976 in favour of the Development Board for Rural Wales. They amend the 1976 regulations by including any development of land, the freehold in which is owned by the Development Board, within the classes of development which are prescribed by the 1976 regulations. Development of such classes is excepted from the definition of "relevant development" in Section 3 of the Act.
Immediate effect of the amending regulations will be as follows. The Community Land Act 1975, provides for the Land Authority for Wales to be notified by the local planning authority of planning applications wherever made, and this includes the area covered by the Development Board for Rural Wales, (initially Powys County, Ceredigion and Meirionnydd Districts). The purpose of such notification is to determine whether

763
the Land Authority wish to acquire the land to which the planning application relates. If they do so wish, they may, where the application is for planning permission for relevant development, operate a statutory procedure for notifying the landowner of their intention, suspending the planning permission and giving them time to pursue acquisition. The notification procedure, however, operates only for "relevant development" applications, within the meaning of those words in the Act.
The effect of the amendment now proposed is to take any development on any freehold land held by the Board outside the definition of "relevant development" and therefore outside the notification procedure which I have mentioned. Such land is already in the public sector, and it is considered that development should be allowed to go ahead (subject, of course, to planning permission) without intervention by the Land Authority under the notice procedure.
As to the second, equally technical Instrument, the Compulsory Acquisition by Public Authorities (Compensation) Amendment No. 2 (Wales) Order 1977, that seeks to amend the earlier compulsory acquisition order of 1976 by including the Wales Development Board among the bodies enjoying the benefit of the special arrangements for assessing compensation where land passes from one public authority to another, or to a Minister. The bodies which at present take part in these arrangements are listed in Statutory Instrument 1218 and in the Explanatory Note. The purpose of the 1976 order was to prescribe the way in which the rules for assessing compensation should be modified when determining the price to be paid for land passing between any two of the bodies referred to in the Instrument, to allow for the fact that all such bodies are exempt from development land tax. The result of this amendment, therefore, will again be to enable the Development Board for Rural Wales to enjoy the advantage of that procedure. My Lords, while apologising for the technicality of what I have said, I beg to move.
Moved, That the draft Community Land (Excepted Development) Amend-
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ment (Wales) Regulations 1977, laid before the House on 10th March, be approved.—(The Lord Chancellor.)
Lord SANDFORD: My Lords, we are grateful to the noble and learned Lord for moving these two orders. Knowing how enthusiastic members of the Party opposite are about the Community Land Act, I was surprised at the absence of cheers when he had finished. But the noble and learned Lord will know that to those of us on this side of the House the Community Land Act is not a favourite piece of legislation. However, I think that in order to deal with it we shall have to take steps rather more radical than standing in the way of this particular measure. We are grateful to the noble and learned Lord.
The LORD CHANCELLOR: My Lords I am grateful for that somewhat qualified approval of what I propose, which will be, I am sure, of very great benefit to the areas that I have mentioned—Powys, Ceredigion and Meirionnydd. It is a great pleasure to move this Motion if only to speak those holy words aloud.
On Question, Motion agreed to.

COMPULSORY ACQUISITION BY PUBLIC AUTHORITIES (COMPENSATION) AMENDMENT No. 2 (WALES) ORDER 1977
The LORD CHANCELLOR: My Lords, I beg to move the second Motion standing in my name.
Moved, That the draft Compulsory Acquisition by Public Authorities (Compensation) Amendment No. 2 (Wales) Order 1977, laid before the House on 10th March, be approved.—(The Lord Chancellor.)
On Question, Motion agreed to.

NUCLEAR INDUSTRY (FINANCE) BILL
Read 3a, and passed.

REPRESENTATION OF THE PEOPLE BILL
3.4 p.m.
Lord STRABOLGI: My Lords, on behalf of my noble friend Lord Wells-Pestell, I beg to move that the Order of Commitment be discharged.
Moved, That the Order of Commitment be discharged.—(Lord Strabolgi.)
On Question, Motion agreed to.
Then, Standing Order No. 43 having been suspended, pursuant to Resolution:
Lord WELLS-PESTELL: My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3a—(Lord Wells-Pestell.)
Viscount LONG: My Lords, during the Second Reading debate I mentioned that candidates' expenses would be paid in cash. I ought to correct myself by saying that, as laid down in the Bill itself, they will in fact be allowed expenses only up to a certain figure, and not cash down on the nail, as I thought I saw in the Bill. Secondly, I should like to thank the noble Lord and say how grateful I am to him for assisting me and your Lordships with all the information that he gave us during the Second Reading debate. Other than that, I do not think that we on this side of the House need hold up the Bill any longer.
Lord WELLS-PESTELL: My Lords, I am grateful to the noble Viscount for making that comment and observation because it has been, and is, often felt by some people that these are expenses paid to candidates out of public funds. This is not so. It is an amount which has been fixed for different types of election in which the candidates can spend up to that particular amount. This confusion, I know, does arise in the minds of some people.
On Question, Bill read 3a, and passed.

PASSENGER VEHICLES (EXPERIMENTAL AREAS) BILL [H.L.]
3.7 p.m.
Read 3a.
Clause 1 [Public service vehicle licensing: designation of experimental areas]:
The Earl of KIMBERLEY The Earl of KIMBERLEY moved Amendment No. 1:
Page 1, line 11, at end insert—
("(2A) Any local authority not designated an area, or part of an area, under subsection (2) above, may be so designated by resolution of the local authority.").
The noble Earl said: My Lords, with the leave of your Lordships' House I should like to speak to Amendments Nos. 2, 3, 5 and 6 with Amendment No. 1, as they are all consequential on the first Amendment. When we had the Committee stage of this Bill several Amendments were moved and, after debate, were withdrawn. However, I feel that the Amendments I am moving this afternoon, which are not dissimilar to those which we discussed the other day, should be aired again. They relate to one fundamental idea, that it is wrong that central Government should have such a tight control over local government, particularly over local transport. This Amendment seeks to allow local authorities to opt into the scheme if they so wish.
I do not in any way wish to appear derogatory, but it seems that the Government's approach since 1974 has been somewhat unenthusiastic, perhaps lukewarm and even slow-moving to bring about a reform of our local transport system. I would be the first to agree that they have had many other things to cope with over the last three years, but what is the situation we have this afternoon? We have a Bill which is really only a stop-gap measure and which is really only an experiment. The reform of transport in rural areas may well seem way down the list of priorities. The other day the noble Lord, Lord Mowbray, stated that when the Conservatives took office they would reform local transport. I do not doubt the noble Lord's sincerity or his intent—he is a very old friend of mine—but these reforms may not occur immediately, so for the moment we are back to where we started, to three years ago. We must also bear in mind that when the hand of the Party of the noble Lord, Lord Mowbray, is at the helm one day, as it may be, they will find that they have many reefs and troubled waters to sail through; and I feel that, however sincere the noble Lord's

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thoughts and beliefs may be, once again local transport may find itself at the bottom of the list.
As I have said, it has taken this Government three years to produce this Bill, and I am afraid that it shows that their heart is not really in it. Therefore, I feel that all of us, wherever our political allegiance may lie, should think about this today and should try to improve the Bill with these modest Amendments. The Bill is not a meal in itself but, with a little sauce and seasoning, it could be made into an appetising starter. Should this Government or the next Government bring forward adequate legislation for local transport, well and good; but if they do not, for diverse reasons, this Bill will be, at least, a firm foundation stone on whch to build a more solid building. It is better that we make a start now and lay a foundation for reform by amending and improving this Bill than that we should wait for the hope that something may turn up in the future. If we amend this Bill this afternoon, we can afford to wait; but as it stands at the moment I do not think we can. I beg to move this Amendment which allows a local authority which has not been included in the scheme to participate in the scheme if it so wishes. It will allow the town hall to have the final say before Whitehall; in other words, elected representatives will have the choice and not the unelected civil servants. I beg to move.
Lord MOWBRAY and STOURTON: My Lords, I listened to the noble Earl, Lord Kimberley, with interest. He has really reiterated what we have already said in Committee. I have already said in Committee most of what I feel about this. Since the Committee stage, I have had letters from the noble Baroness, Lady Stedman, the Minister in charge of this Bill, and I have had letters from her Department dealing with this matter, for both of which I am grateful. I have the feeling that the Government are trying to improve the situation and, to that extent, as I have said before I support the Government in this measure. I said nasty things about it being a little mouse of a Bill nibbling at a mountain of cheese—not in those words; but they are the new version. It is improving the situation. The licensing system of this country is
768
moribund. The traffic commissioners are trying to do their best, but they are bound by legislation which is outdated.
Given these facts, the noble Earl, Lord Kimberley, and his Party have put down Amendments broadening to an extremely wide degree this experiment which the Government have set up. I have a lot of sympathy with his views, in particular the four designated areas; and having seen the excellent Press release from the noble Baroness's Department about these four experimental areas, I must confess that it is impressive. Nevertheless, I still see the noble Earl's point. Other counties and areas might want to do it, too.
I have talked to the noble Baroness and she has been kind enough to explain the problems. I have talked to various representatives and friends on the various county authorities. There is nothing sacred about a county boundary. Many services needed by communities do not necessarily coincide with Parliamentary, county or local electorate boundaries. To that extent, these county boundaries in the experiments are somewhat of a nuisance. Nevertheless, having talked to the noble Baroness, I must confess that I have been somewhat impressed by the willingness of her Department not to stick necessarily to complete particular boundaries. Given this willingness, and given the fact that this is an experiment, I am willing to accede to this.
The only worry I have still is in relation to certain counties in England. One thinks immediately of Oxfordshire and Northumberland—and especially the latter, about which my noble friend Lord Ridley has written to me. There you have the sixth largest county in the country with a small population, most of which is concentrated in a very small area. I therefore make Northumberland a very obvious target for such experiments as these. I know from people who attended the various meetings that it was considered, and outvoted on balance, that it should not be one of the four areas. In a democratic system, given there should be so many areas, one must accept this.
Nevertheless, there are counties like Northumberland which might well like to set up experimental areas. I understand that the Minister will tell us that the Government are willing for this to be

769
done, provided that the cash flow part of it, too, is done by the county itself. It is the labour involvement, I understand, which is the expense in this experiment, working out the pros and cons of the various forms of helping the population that is to use a particular service,
So, while sympathising with the noble Earl, Lord Kimberley, having heard from the county councils concerned that although they would like to be able to carry out these functions, county councils in particular are apt to feel that if they are given a right it may become a duty. And if it is a duty which, of necessity in this case, would involve their own outspending on cash—at a time when the central Government, quite rightly, are telling them that they must cut down—I think that under the noble Earl's Amendments we may be giving them more than they want. On balance, I do not think we should press these Amendments of the noble Earl.
Viscount AMORY: My Lords, I think, again on balance, that I find the arguments put forward by my noble friend Lord Mowbray and Stourton convincing.
Baroness STEDMAN: My Lords, with the leave of the House, I will do as the noble Earl did and speak to the group of Amendments in dealing mainly with Amendment No. 1. I felt in Committee that I had made some progress in clarifying the basic purposes of the Bill, but the noble Lord's Amendments which are, in the main, identical to the Amendments he put down in Committee, clearly indicate that I was perhaps too sanguine on that occasion.
As I thought the noble Earl had acknowledged in Committee—and as I certainly said several times—the Bill is not a blueprint for general changes in the licensing system. The Bill's purpose is rather to allow the value and effects of certain modifications to this system, mainly affecting private vehicles, to be carefully monitored and assessed under controlled conditions in specially selected areas. In this way, hard evidence (which is still far from plentiful in this field) can be accumulated as an aid in reviewing the terms of licensing law.
This Amendment is even less compatible with the limited, exploratory purpose of the
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Bill than the similar Amendment put down by the noble Earl in Committee. In that case, there was at least a 12-month period from the first designation of an area by the Secretary of State before a county council could designate its own area. In the present Amendment there is no such period; under it the strictly experimental modifications to licensing could be available over a very wide area before there had been any time at all for an assessment to be made of their value or their effects on existing public transport.
Moreover, this revised form of Amendment does not come to terms with the mechanics of Clause 1. The concept embodied in Clause 1 is that an experimental area would be the whole, or a part, of the area of a county council or the corresponding authority in Scotland. The Amendment is drawn up, however, on the assumption that the minimum area to be designated is a county, and that a designation order could go wider. This is not so.
In withdrawing the similar Amendment in Committee, the noble Earl commented (at column 511 of Hansard of 1st March) that
"…possibly more experimental areas could be included in the future".
I would assure the noble Earl that this is still the case. As I said in Committee, we will be open to suggestions for additional experimental areas aimed at the purposes I have outlined. I would also reiterate that it is open to any local authority to set up transport experiments of its own within the present licensing system. The Amendment is almost certainly outside the Long Title of the Bill which refers only to "areas designated as experimental areas by the Secretary of State".
I fully appreciate that there are noble Lords who feel that the Government's step-by-step approach is too cautious: that what we should be considering now is a Bill for general amendment of the law, not a Bill for variations in limited areas for the purpose of experiment. That is a point of view I respect, and I appreciate the sense of urgency that lies behind it. But the present Bill is an experimental areas Bill, and whether we should have proceeded in this way or by wholesale change in the law, there is one course which I do not think can

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possibly be justified; that is, to leave it to county councils to decide individually what the law in their county should be on such matters as neighbours giving each other lifts for payment. One can imagine the chaos and public indignation if this were permitted in one county and not in the next, particularly for people living near the county boundary whose nearest market-town was over the Border.
The noble Earl may feel that that was not his intention and I have misread what he intended in his Amendment. He may feel that he had intended only to permit further carefully-controlled experiments as a result of local initiative. The Bill at present permits such further experiments, as I have already mentioned, but the noble Earl's Amendment could in practice leave us wide open to the kind of difficulties I have described.
Noble Lords will wish to know the views of the various interests concerned in these experiments. It so happened quite by accident that I chaired last week's meeting of the Steering Committee for the rural transport experiments. This brought together the county councils and other local authorities, the two sides of the industries, and various voluntary movements. We had some discussion on the noble Earl's Amendments, and it was clear that neither the county councils nor any of the other interests supported these amendments. In view of this reaction from those to whom these powers would be offered, and the other interests concerned, and in view of what I have said, I trust that the noble Earl will feel he can withdraw this Amendment.
The noble Earl's Amendments Nos. 2, 3 and 5 would be consequential upon this Amendment being accepted. Turning to Amendment No. 6, it is clearly necessary, if the fullest possible advantage is to be taken of the experimental programme under the Bill, that the Secretary of State, acting on the advice of the local Working Groups and of the National Steering Committee, should retain complete control over the extent and duration of the experimental areas. The subsection in question in this Amendment constitutes one of the key provisions in that control. If it should emerge during an experiment under the Bill that the designated area could with advantage be altered to take
772
in some locally significant feature like a hospital, or that the experiment, as originally formulated, cannot provide the kind of evidence desired or that it is unmistakably evincing some unwanted side effects, then the Secretary of State must have the power to take the necessary remedial action. When we come to this Amendment, I would ask your Lordships, if the noble Earl does not withdraw it, to reject it.
The Earl of KIMBERLEY: My Lords, in listening on this Amendment to the great eloquence of the noble Baroness, I have much more peace of mind with her statement that other areas could be used if they were asked for as experimental areas by local authorities. In view of what the noble Baroness, and the noble Lord, Lord Mowbray and Stourton, have said, I hope that this airing in your Lordships' Chamber may well pave the way for a greater reform of local rural transport. I beg leave to withdraw Amendment No. 1.
Amendment, by leave, withdrawn.
3.27 p.m.
Lord TRANMIRE Lord TRANMIRE moved Amendment No. 4:
Page 1, line 15, leave out ("exceeding two") and insert ("less than two years and not exceeding five").
The noble Lord said: My Lords, at the Committee stage the noble Earl, Lord Kimberley, moved an Amendment to make the designation period a minimum of five years. The Bill as drafted gives no minimum period but puts the maximum period at two years with power to extend for further periods of two years. The noble Baroness, Lady Stedman, in replying to that debate said at column 515 of Hansard on 1st March:
"…I think the provision of an initial experimental period of two years which can be extended if necessary accords far better with the flavour and sort of operation we are conducting than the Amendment…"
I am following the advice of the noble Baroness She presumed, it appeared, that there was a minimum. There is no minimum. I am suggesting that there should be a minimum of two years. I attach importance to this because I am delighted that Her Majesty's Government have gone ahead with this measure in the way that they have. I want it to be a success. I

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do not believe that it can be a success unless there is some guarantee of a minimum or that the Government give some financial guarantee to all who are involved.
If I may illustrate this by referring to my own county of North Yorkshire—I was discussing the matter with them only yesterday—they are embarking on five experimental schemes: one, a flexible scheduled bus service where one rings up and diverts a bus if one has a telephone, which not everybody has; secondly, an extension of a feeder service provided by hired cars or taxis to existing scheduled services. Thirdly, a survey of the needs of the hospitals to see whether a hired car, a taxi or a private car service will serve the needs of visitors and patients. The other two schemes are shared car services.
As I understand the position, a guarantee will not matter for the "Phone-a-Bus". There is no risk there; it is merely a matter of whether it works, and that we shall have to see. On the feeder services, it will matter to a certain extent because a man will think, "If I am going to provide feeder services for the bus, it may be worth while getting another hire car or taxi for a period to make it work." But particularly with the shared car service, it is very important that there should either be a guarantee of a minimum of two years or that the Government say: "If you buy a minibus or get rid of your second car in order to make this scheme work, we will stand by you if we curtail it before the two years are finished." That is why I attach great importance to the minimum and rather less importance, I admit, to the maximum of five years. I rather fear that unless you have something like that there could be a failure of these experiments because people will not have sufficient inducement to co-operate.
In the rural areas from which I come there is great difficulty regarding the shared car service. A great many inhibitions have to be broken down, and therefore it is very important that the experiment should last for two years. If we were to say: "We will have two years, and you can make arrangements in your village to take people to the market town, with payment for the petrol and a little margin on top", then I think this will work. If we do not have two years, I do not think it will succeed and therefore it will not represent a fair experiment.
The whole purpose of this Bill is to see that there is a fair experiment. People must have sufficient assurance to induce them to go in for these shared car service schemes or to enable them to purchase the hire car or the taxi to provide the services. I therefore hope that the noble Baroness will look at this with some degree of sympathy, because we want the scheme to work. If she says that the Government will guarantee that no local authority will lose a penny on it or that no private persons will lose a penny if they go in for these schemes, then my Amendment may be unnecessary. But I cannot see that that is consistent with the present economic situation. I beg to move.
Lord MOWBRAY and STOURTON: My Lords, I should like briefly to endorse everything that my noble friend has said on this question. It will be appreciated, I think, that I have changed my viewpoint and have come round to trying to help the Government on this Bill in the hope that by this means we can put it on a sounder footing by designating a two-year to five-year period. That will give more security to all concerned. Because of the longer period which is allotted, they will know more clearly where they stand. I hope that on consideration the noble Baroness will be able to accept this good advice from my noble friend.
Baroness STEDMAN: My Lords, I accept that the noble Lord, Lord Tranmire, wants this scheme to be a success, and I am grateful for the welcome he has given to it and also for the support for the five schemes which, as is now public knowledge, are to operate in his part of Yorkshire. However, we still maintain that the Amendment is both unnecessary and potentially damaging to the whole object of the Bill. In so far as it seeks to permit experiments to last for up to five years, as I pointed out in Committee, the Secretary of State has power under Clause 1(4) of the Bill to extend by order the period for which any designation is in force. The extension period may not itself be more than two years but there is provision for further two-year extensions. In so far as it introduces both a minimum period and a maximum, it puts a completely different slant on timing, making the whole process into something of larger terms—a thought which is unlikely

775
to appeal to a number of noble Lords who have spoken on the Bill in the earlier stages.
There is adequate provision already in the Bill to cope with any experiment where firm conclusions cannot be drawn within two years—or, more likely, where it is considered desirable to test whether new arrangements will survive after support under the experimental programme has been withdrawn, and initial local interest may have passed. Careful and detailed monitoring of the experiments now being designed by Working Groups and the national Steering Committee will ensure not only that positive results will be obtained as quickly as possible, but that any experiments which need an extended period can be brought to the notice of the Secretary of State well before the initial order is due to lapse. To provide for a minimum period would risk creating a more leisurely atmosphere altogether.
The noble Lord, Lord Tranmire, expressed concern in Committee about those operating the experiments suffering financial loss when they end. As I explained on that occasion, most of the vehicles coming within the scope of the Bill will be private ones. I think there is still considerable misunderstanding of what the Bill is all about. The only commercial vehicles involved will be taxis and hire cars; if they are included in the experiments they will in all probability be operating already in the experimental area. These experiments would therefore clearly need little, if any, capital outlay to get started. If additional vehicles should be necessary, however, we would be prepared to help with their purchase. There should be no question of anyone losing their livelihood—or suffering a large financial loss, as envisaged by the noble Lord—when the experiments come to an end.
I must stress yet again that the purpose of the experiments is to provide detailed evidence of the value and effect of the licensing modifications contained in the Bill, which can then be used in considering whether there should be general changes in the licensing law. We still contend that the Amendment is therefore both unnecessary and makes the Bill less workable than I am sure the noble Lord
776
would wish; and I urge your Lordships to reject it.
Lord TRANMIRE: My Lords, in view of the assurance of the noble Baroness that, if necessary, the Government will supply the money for the purchase of the hire car, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clause 2 [Powers of local authorities in relation to experimental areas]:
3.39 p.m.
The Earl of KIMBERLEY The Earl of KIMBERLEY moved Amendment No. 7:
Page 3, line 6, leave out subsection (7).
The noble Earl said: My Lords, with the leave of the House, I should like to speak to Amendments Nos. 11 to 15 inclusive with Amendment No. 7, and also Nos. 17 and 18, which are consequential upon Amendment No. 7. I have already explained my approach to this Bill in speaking to previous Amendments, but I feel it is worth pursuing my thoughts. It is with that in view that I beg to move the Amendments. Amendment No. 7 in particular seeks to delete some of the powers of the Secretary of State to revoke or over-ride decisions of the elected local authority. It seeks to realise the intention of the clause in the Local Government Act 1972, which states quite plainly that it is the duty of a local authority to deal with local transport.
This Bill would make it difficult for a local authority to do its duty, as defined. On numerous occasions there is reference to the Secretary of State's power to revoke, vary or grant. I would ask: where is that responsibility and duty which is referred to? I agree that local authorities are volunteers as regards this scheme and there are several who would like to participate. But let us for one moment look at the conditions that are laid down for joining the club, and take the example of South Yorkshire, which is rightly included in this scheme.
South Yorkshire has stood up to the directives of central Government, telling it to increase public transport fares. This example of a local authority ignoring

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central Government and going its own way is not to be lightly dismissed. Here the duty to which I referred earlier has been firmly taken up by the local authority, and as a result central Government have decided to slash their transport support grant from £4 million to £241,000. In the face of this Whitehall aggression, South Yorkshire has bravely decided to put 2p on the rates rather than increase fares, which will mean that a South Yorkshire bus ticket for a journey of three miles will cost 8p, as opposed to 15p in Newcastle, 16p in Manchester and an astronomical 23p in Glasgow, for the same journey.
The local authority has done what it thought to be correct for its local transport, and for doing that has had the majority of its subsidy cut by the Government. I understand that the Secretary of State is thinking of having more central Governmental teeth for snapping at disobedient local authorities, and it looks as if South Yorkshire will feel those teeth first. I am a little worried as to exactly what further teeth could be added. In matters such as this, central Government today seem already to have fairly large fangs. I have quoted that as an example, because it is what may well happen in the case of other local authorities.
We in this country have one of the most rigorously controlled—if not the most rigorously controlled—public transport systems in Europe, and I have ascertained some information about one or two other European countries. In Germany, local transport is in the hands neither of federal government nor of individual State governments, but is run by local government; in France, it is the responsibility of local government; in Italy, it is the responsibility of local government; in Denmark, it is the responsibility of local government, and likewise in the Netherlands. In fact, we have one of the most centralised local transport systems in the EEC, which therefore makes it more inflexible from area to area.
I ask: why are we the odd man out? Why do we very often fall behind our European colleagues in developing new ideas and in tackling reforms? I hazard the guess, which may be wrong, that it is because for some extraordinary reason central Government, who demand a
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finger in every pie, have a feeling of insecurity. So I appeal to the Government to let local authorities have their heads, and do away with the Whitehall rubber stamp of Damocles which is hanging over them. As regards financial responsibility, if central Government allocate money to local government through the rate support grant, and the additional grant systems, why cannot local government be allowed to spend as it sees fit? If it overspends, then it has to foot the bill and the electorate will ask why through the ballot box. If it underspends, then more power to its elbow.
I am a passionate believer in democracy, which is the tradition in this country. In the best tradition of that democracy, I commend this Amendment to your Lordships and to the Government in the hope that your Lordships will agree with me that central Government have too strong a grip on rural transport at the moment, and that this Bill could be considerably improved by this Amendment. My Lords, I beg to move.
3.45 p.m.
Lord MOWBRAY and STOURTON: My Lords, in rising to speak to the Amendment of the noble Earl, Lord Kimberley, I feel rather like Humpty-Dumpty. I do not know whether I am standing on my head or my small end. First, I understood him to say that South Yorkshire is part of these experimental schemes, but in no way at all is it part of them. South Yorkshire has nothing to do with them and, on my understanding of rural transport, I would not think it likely to be a candidate. It is a very heavily industralised area, and is not the kind of rural area which is likely to commend itself to your Lordships for this purpose.
Having established that the noble Earl, speaking for the Liberal Party, was on a non sequitur, or a non-starter in this case, I should also like to dissociate myself immediately from what he said at the beginning of his speech, which was the kind of gospel which would be much more akin to the views of the Minister or her Party, than to my own views. We on these Benches have been trying to stop unthought-about subsidies without end, on both the transport front and the housing front. We have been saying for

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very many years that when people can pay they should pay, and we believe that help is better given in capital projects and things of that kind.
I cannot go along with what the noble Earl said about the South Yorkshire Council. I think that it has been criminally negligent in disregarding the Government's advice, economists' advice and the advice of most people in Yorkshire. It has caused itself a great deal of trouble and, to my mind, emptied its pockets unnecessarily. It has less money to spend on worthwhile projects. I said this only the other night when we were discussing the South Yorkshire Navigation, and I still believe that South Yorkshire was ill-advised. But we are not discussing South Yorkshire now, so let us leave that subject. I just wanted to establish the fact that I do not support the noble Earl's contention that open-ended subsidies towards the cost of bus tickets are a good thing. I think that when passengers can pay, they should pay. If necessary, there should be a subsidy towards capital development. But I repeat that South Yorkshire is not a genuinely rural area, such as I envisage.
Getting back to what I understood subsection (7) to be about, I should like to return to the question of Oxfordshire and Northumberland. Having made my original comments on the noble Earl's first set of Amendments, I should like to ask the noble Baroness whether she is able to say anything about the conditions under which Oxfordshire and Northumberland will be able to participate in these experiments. What conditions will they have to fulfil, what costs will have to be met and what research will have to be done? I accept the general principle of what the noble Earl is trying to accomplish, but I should like to know what counties such as Oxfordshire and Northumberland will have to do. Finally, I felt that I must make my position clear as regards the noble Earl's other comments.
Baroness STEDMAN: My Lords, I should first like to support the assertion of the noble Lord, Lord Mowbray, that South Yorkshire is not one of the counties likely to be considered as an experimental area. South Yorkshire is one of the metropolitan counties. It is very built-up, and does not have as desperate a need
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for rural transport as the North Yorkshire area where we have five extremely good schemes, which we hope will all be successful. As regards Oxfordshire, Northumberland and any other counties which might like to carry out experiments, I said earlier that there is nothing to prevent them from making any experiments that they want, within the existing traffic laws. My Department can offer them no money to help them to carry out these experiments. We have a limited budget with which to finance the four groups of experiments in the scheme which will be under the control of the local working parties and the National Steering Committee. Northumberland was one of the counties which was originally considered by the National Steering Committee, but it did not come democratically within the first four. I am not in a position to say whether or not Oxfordshire was also considered, but I know that Northumberland was and that for some reason it was turned down as being not quite such a good candidate for the schemes that they had in mind as the other four areas selected. The Department are quite happy to make available any technical advice that they can to any counties, but I must repeat that no money will be made available by the Government for any additional schemes which are outside those that are being sponsored under this experimental areas Bill.
When the noble Earl withdrew this same Amendment in Committee he acknowledged that it was an experimental, not a permanent scheme. The Bill has not changed one iota in the interim. This Amendment would still vitiate the purposes of the experiments which are being carried out under the Bill. As I said in Committee, this subsection is intended to ensure that experiments in designated areas involving the grant of authorisations are carried out in strictly controlled conditions. This will help us to attain the objective of collecting and assessing the maximum amount of evidence on the effect of the revised arrangements that can be made under the Bill. We are certainly not trying to dictate to the local authorities. Any experiments will be carried out in the fullest consultation with them. The local authority representatives sit on both the National Steering Committee and the Working Groups which are at present preparing the experiments.

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I asked the representatives of the local authorities at the meeting of the National Steering Committee whether they had any views on extending the scheme to other counties. They agreed that there is not the wherewithal to extend the scheme further than we have gone at the moment and they were not prepared to push for any other counties to be included in these initial experimental areas. I would remind your Lordships of what the noble Lord, Lord Mowbray and Stourton, said in Committee. He said that the Secretary of State is,
"better positioned to co-ordinate and view the whole spectrum, which I think must be desirable."
The Bill deals with experiments which are going to provide us with the evidence that will assist in considering whether general changes should be made to the licensing system. This is quintessentially a field for national, not local government, and I urge your Lordships not to accept the Amendment.
The Earl of KIMBERLEY: My Lords, I do not want any Members of your Lordships' House to think that I am against the Bill. I am not. I can only say that I hope that what I have said this afternoon will lead the Government in the near future to get a move on with the Bill. I hope also that the Bill may lead to bigger and better things. In view of the assurances given by the noble Baroness, Lady Stedman, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
3.53 p.m.
Baroness STEDMAN Baroness STEDMAN moved Amendment No. 8:
After Clause 2, insert the following new Clause:
Travel concessions.
".—(1) A local authority may make with any person whose use of a motor vehicle is covered by an authorisation under section 2 above the like arrangements for the grant of travel concessions by that person as the authority have power to make under section 138(3) of the Transport Act 1968 (travel concessions) with a person who operates a public service vehicle undertaking.
(2) Subsections (4) and (5) of the said section 138 shall, so far as applicable, apply in relation to arrangements under this section as they apply in relation to arrangements under subsection (3) of that section; and in this section "local authority" and "travel concession" have the same meaning as in the said section 138."
The noble Baroness said: My Lords, I beg to move this Amendment. The noble Lord, Lord Mowbray and Stourton, put down an Amendment at Committee stage which sought to achieve the same objective as this one, and he was supported on that occasion by the noble Viscount, Lord Amory. I said at the time that I had doubts whether a specific provision was needed to arrange for concessionary fares experiments under the Bill, but I agreed to take the necessary action if it were. This Amendment is the result, because, on reflection, we accept that a specific power would be appropriate to cover concessionary travel arrangements in experiments under the Bill.
The Amendment has therefore been drafted accordingly, and I hope that the noble Lord will agree that we have met the point which he raised. However, I am sure that noble Lords will forgive me if I say once again that the Bill is not a blueprint for future general legislation. I made that point on a number of aspects of the Bill as introduced and I make it again on this Amendment. In particular, the Government are not committed on the question of the extension of travel concessions as part of any new arrangements that might be adopted following these experiments nor, of course, on the public expenditure implications. With that proviso, I beg to move.
Lord MOWBRAY and STOURTON: My Lords, it would be churlish of me to say anything but thank you to the noble Baroness the Minister for what she has done. May I also endorse what I have said already: that I do not regard this as a major Bill upon which to hang important hats on many pegs. I have always regarded the Bill as an experimental, interim measure, out of which something bigger will come. With those few words, again I should like to say thank you to the noble Baroness.
Viscount AMORY: My Lords, may I join my noble friend Lord Mowbray and Stourton in a courteous bow to the noble Baroness. When we raised the matter on Report she gave us a very courteous reply, as she always does. The noble Baroness promised to look at the point. She has done exactly what she said and has produced an Amendment which seems to meet the point entirely. I also

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take note of the reservation that the noble Baroness made at the conclusion of her remarks.
On Question, Amendment agreed to.
Clause 3 [Short title, interpretation and extent]:
Baroness STEDMAN Baroness STEDMAN moved Amendment No. 9:
Page 4, line 18, after (""local authority"") insert (",except in section (Travel concessions) above,").
The noble Baroness said: My Lords, this Amendment is consequential on the Amendment to introduce the new clause relating to the arrangements for travel concessions. Therefore I beg to move.
Viscount AMORY: My Lords, I wonder whether the noble Baroness could explain how this is a consequential Amendment. I may be a little drowsy this afternoon, but I cannot follow this point exactly. I am sure that what the noble Baroness has said is right, but perhaps she will be kind enough to explain it.
Baroness STEDMAN: My Lords, the effect of the Amendment is that the definition in the Bill as drafted does not include district councils within the definition of "local authority". The powers in Section 138 of the Transport Act 1968 relating to arrangements for concessionary travel can also be exercised by district councils in England and Wales. This is reflected in the wording of the previous Amendment, and the Amendment that we are now discussing adjusts the definition of "local authority" in the Bill.
On Question, Amendment agreed to.
In the Schedule [Authorisations under Section 2]:
3.58 p.m.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 10:
Page 5, line 6, leave out sub-paragraph (a).
The noble Lord said: My Lords, during the Committee proceedings I took the opportunity of complaining about the drafting of this sub-paragraph. It has not become any more lucid or felicitously phrased during the intervening days, nor
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have I become any more convinced by the arguments in favour of the restrictions that it seeks to impose. It seems desirable to integrate these experiments, so far as possible, with existing transport. I do not understand why the noble Baroness should be so suspicious of the intentions of existing operators who might be covered by these restrictions and I hope that she will clarify the Bill in both style and content by abandoning them. I beg to move.
Viscount AMORY: My Lords, I support my noble friend Lord Mowbray and Stourton in asking the noble Baroness to be kind enough to explain why it is still proposed to exclude this type of transport in this ownership. As I think I said at the Report stage, it seems to me that the important point is whether this type of transport will provide a more economical service, supplementing existing services. If so, and if the service is used, I cannot see why it is relevant who will make a profit out of it. It seems to me to be irrelevant to the aim and I still cannot quite understand the objection of the noble Baroness to the exclusion of this sub-paragraph.
Lord TRANMIRE: My Lords, I should like to support my noble friend. Sub-paragraph (a) is a replica of paragraph 6 of Schedule 12 to the Road Traffic Act 1960 which dealt with commercial vehicles carrying fewer than four people. This is an attempt to deal with private cars generally and the minibus, and I do not see how that paragraph carries very much weight in this new relationship. I can see why, in the old days under the 1960 Act, one did not want to have any connivance between the hire car operator and the bus company. That is the purpose in that Act of sub-paragraph (a). But I do not quite know who one is attempting to hit by putting it in here, suggesting that the private car owner has some clandestine arrangement with a scheduled bus service.
As I said at the Committee stage, the only thing I can think of is that in the very rural areas there are a number of minibuses which are operated for the public good in conjunction with the education committees. I should hate to do anything to restrict those minibuses, which usually are operated only at 9 o'clock in the morning and half past three in the

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afternoon. But I should very much like them, in the middle of the day, to do some work by taking into the market town people who do not have cars. It is conceivable, but I think unlikely, that subparagraph (a) as drafted might hit those minibuses. Otherwise it has not got a target and I should have thought that if you were to leave sub-paragraph (a) out of the Schedule that would meet all that it needed to meet, because the point of paragraph 6 of the Fourth Schedule to the 1960 Act does not arise here, where we are dealing merely with general authorisations and not with special authorisations. I wish to support my noble friend.
Baroness STEDMAN: My Lords, this Amendment was thoroughly discussed, and then withdrawn, in Committee, and I would refer noble Lords to the record of that debate. The limitation in this subparagraph applies only to the general authorisations, not—and I emphasise this—to the specific authorisations. So perhaps we may consider the particular purpose of the general authorisations under the Bill. They are intended essentially to allow lift-giving against payment on a regular basis where it is of an informal variety. As I said in Committee, private motorists can hardly be expected to go through the public service vehicle licensing system in order to get authority to enable contributions towards petrol costs to be accepted. Licensed operators, such as those people who use minibuses for getting children to school, on the other hand, should have little or no difficulty in making use of the normal public service vehicle licensing procedures to extend their services in this manner.
If it is a matter of operators making vehicles available, on hire, say, to private individuals—not, I should have thought, a very likely proceeding for the purposes covered by a general authorisation—then this can be done under other provisions in the Bill. It would be open to a licensed operator to apply for, or to be associated with, an application for a special authorisation. As I have already mentioned, this restriction does not in any way affect special authorisations. Nor does it in any way prevent individuals or voluntary groups from providing links to existing bus services with their own vehicles.
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If the noble Lord's objection to this sub-paragraph is merely on drafting grounds—on grounds of aesthetics—I am quite prepared to ask Parliamentary Counsel to have another look at it from this point of view. We feel that the Amendment is misconceived and that it would unnecessarily widen the provisions of general authorisations; it would blur the distinction between the different types of experiment and hence would potentially reduce the value of the conclusions that may be drawn. I would urge the noble Lord not to press the Amendment but, as I have said, if noble Lords want me to look at the wording of it in order to make it a little more aesthetically acceptable, I will certainly ask Parliamentary Counsel to do that, and we will do something about it in another place at a later stage.
Lord MOWBRAY and STOURTON: My Lords, speaking only for myself and not for my noble friend Lord Tranmire, with whom I have not been able to communicate since the noble Baroness sat down, I would accept the intention of the noble Baroness that the difference between the special authorisations and the general authorisations is sufficiently established. Personally, I should he grateful if she would ask her Parliamentary draftsmen to see whether—if I may use the words I used before—they can more felicitously word it. But I should like to hear what my noble friend Lord Tranmire feels about this before we formally withdraw the Amendment.
Lord TRANMIRE: My Lords, I hope the noble Baroness will look at the point I was making because I do not think her reply, which I think was prepared before I made my speech, really dealt with my point. As I see it, sub-paragraph (a) in this Bill is not necessarily dealing with a general authorisation. It would have been necessary of course if it had been dealing with a special authorisation, because there you are dealing with commercial vehicles and with this link-up there would be an evasion of the licensing law; but I respectfully suggest to the noble Baroness that it could not be so in connection with a private vehicle. Perhaps she will look at this point again as the Bill goes through another place and, if necessary, make the amendments, apart from tightening up the language, because certainly the language of

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the 1960 Act is somewhat diffuse and not very clear. I am sure it could be tightened up a great deal, as my noble friend suggested; and on the major point I was making, I should like the noble Baroness to ascertain whether sub-paragraph (a) is really needed when we are dealing with a general authorisation.
Baroness STEDMAN: My Lords, I think my answer will still be, "Yes, it is", but I will certainly look at it again.
Lord MOWBRAY and STOURTON: My Lords, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
4.7 p.m.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 16:
Page 7, line 39, at end insert—
("() Not less than twenty-one days before passing such a resolution the local authority shall give notice of its intention to consider a resolution under this paragraph in one or more local newspapers circulating in the experimental area to which, or to one or more parts of which, the authorisation applies or would apply as the case may be and before so resolving shall take into account any representations received from any such organisations or bodies as are referred to in section 1(5).")
The noble Lord said: My Lords, my purpose in moving this Amendment on Third Reading is simply to give the noble Baroness the Minister an opportunity to put on record the intentions of her Department. I have already had words in private with her on this subject and substantially she accepted our arguments during the Committee proceedings. I believe she may have some information for us as to the intentions of her right honourable friend in another place. I beg to move.
The Earl of KIMBERLEY: My Lords, when the noble Baroness answers the noble Lord, Lord Mowbray and Stourton, I wonder whether she will have anything to say to me in regard to the question I asked at a previous stage; namely, because the local authorities should publicise this fact as much as possible, that these notices should be put in public transport prior to the necessary date?
Baroness STEDMAN: My Lords, when the noble Lord, Lord Mowbray and
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Stourton, moved this Amendment at Committee stage, as he has said, I undertook that the views of the Steering Committee overseeing the current programme of the sponsored experiments would be sought on the principles underlying it. If they thought it desirable then the Government would consider putting down a suitable Amendment, since the one moved at that stage did not seem technically satisfactory. On that basis the Amendment was withdrawn by the noble Lord.
As I said, the Steering Committee met on Thursday last and the consumers were very well and vocally represented on that Steering Committee. They brought to our notice the various things that would have to be done in order to publicise what was going to happen. The consensus at that Committee meeting was that there should be arrangements for advance notice of, and the making of representations about, the intention of a local authority to grant a general authorisation. The Committee went further and suggested that similar arrangements should apply in relation to an intention to grant special as well as general authorisations. They did not consider whether the means suggested by the noble Earl, Lord Kimberley, should be one of those used, but I am sure they will take advantage of every possible means of publicity.
At the Steering Committee time did not allow us to give proper consideration to the drafting of the appropriate Amendment for discussion today, but I am happy to give the noble Lord a firm undertaking that the Government will be introducing such an Amendment in another place as the Bill proceeds.
Lord MOWBRAY and STOURTON: My Lords, I am most grateful to the noble Baroness. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Schedule agreed to.
Privilege Amendment made.
Baroness STEDMAN: My Lords, I beg to move that this Bill do now pass. There is not a great deal more that I wish to say. First, I would thank all your Lordships who have contributed to the passage of the Bill. We have had several

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useful debates, useful in the sense not only that they have led, I believe, to a better general understanding of what the Bill is seeking to achieve, but also because they have served to illuminate aspects of its provisions, and indeed of the experiments which will be carried out under it, which have been causing concern to some of the interests involved. This has enabled me, I hope, to offer reassurance on many of these. I have been able to accept some of the changes proposed by noble Lords opposite by putting down the Government Amendment we have made today, or, where there was not sufficient time, by my firm undertaking that the Government will put down Amendments in another place. As to the other changes which I did not feel able to accept and which noble Lords withdrew, I think these helped us a great deal to bring out the essential nature and the limitations of the present Bill.
May I say one more thing. Arising from the meeting of the Steering Committee on Thursday, concern was expressed at several points that some financial loss might be suffered by commercial operators as a result of one or two of the experiments planned in the four study areas under the Bill's provisions. I gave an assurance to the Steering Committee then, which I now repeat, that there are adequate powers available to pay compensation and that compensation will be paid if such losses are shown to have occurred as a result of our granting authorisations within these four areas. I thank noble Lords for their support for the Bill.
Moved, That the Bill do now pass.—(Baroness Stedman.)
Lord MOWBRAY and STOURTON: My Lords, I thank the noble Baroness for the way that she has guided this small Bill through the House. Her task has not been easy; she has been faced with a House which has discussed these measures many times before, and from these Benches with perhaps a slight measure of impatience against her Government for not having moved more hastily in the way which we had been wanting. Rural transport, as we know, is in urgent need of revision. This Bill goes some way towards helping to free the licensing system, as I have said in various stages of the Bill. The way that she has helped
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the passage of the Bill has been exemplary. I heard about the Steering Committee later that evening from her private secretary.
I heard from another source about one of the matters to which I think she is probably referring. In Devonshire two bus services were perhaps endangered. I repeat that I have not heard this from the noble Baroness or her private secretary; I have heard this from another source within the Steering Committee. I should like to make that absolutely clear. The unions, from their point of view quite rightly, raised the point that two bus services might have their prospects affected. But by heavens!, my Lords, this is what change is about. To bring in several smaller services is almost certain to injure some already existing services. It is because the existing services are not serving a wide enough public; they are perhaps too big for the public they are serving and are therefore uneconomic. That is what we are discussing. There will be no improvement without some existing service being slightly injured. At the end of the day we hope that we will have a more useful service, more fully used, although perhaps each particular service is not coping with as many people. As we know, the bus services are probably under-used at the moment. What we are doing in this Bill is suggesting more but smaller services.
Having said that, I should again like to thank the noble Baroness for her courtesy in putting up with my criticisms, which, as she knows, are Party political and not personal. I thank her, and also the Government, for the way in which they have been open to honest criticism and suggestion. I thank them for what they have done.
The Earl of KIMBERLEY: My Lords, we on these Benches would also like to thank the noble Baroness for the very courteous way that she has dealt with this small Bill. I hope that, as a result of some of the difficulties that we have raised, this Bill will be the first foundation stone to a reformed rural transport system. We thank her very much for her courtesy.
On Question, Bill passed, and sent to the Commons.

NEW TOWNS (SCOTLAND) BILL
4.17 p.m.
The MINISTER of STATE, SCOTTISH OFFICE (Lord Kirkhill): My Lords, I beg to move that this Bill be now read a second time. This is a short Bill. On 12th May 1976 my right honourable friend the Secretary of State for Scotland announced in another place that the development of the new town at Stonehouse was not to proceed. This Bill is a consequence of that decision. The Bill is necessary because existing provisions in the New Towns (Scotland) Act 1968 for winding up a new town apply only where its development has been completed.
My Lords, there were three major reasons for the decision to cancel Stone-house. First, population growth estimates in the West Central Scotland Plan showed that a major motive for the development of a new town at Stonehouse—the need to relieve population pressure in Glasgow —had in large part been met by the other new towns in Scotland. Secondly, both the Plan and the Strathclyde Regional Report revised downwards the employment projections of previous forecasts and showed that there was enough housing and industrial land in West Central Scotland without Stonehouse. Thirdly, both central and local government, recognising that changed circumstances required new policies, have shifted the emphasis of their social and economic policies towards urban renewal in West Central Scotland.
When my right honourable friend the Secretary of State for Scotland took his decision, development at Stonehouse was just beginning. Only 96 houses were under construction and work on the first industrial site at Canderside was at a very early stage. To have continued development would have entailed major expenditure on infrastructure, which, for the reasons I have given, was not considered to be justifiable.
Cancellation of the new town, however, does not halt plans for industrial development at Stonehouse. In his announcement on 12th May last, my right honourable friend invited the Scottish Development Agency to take over the main industrial site at Canderside for development. The Agency, in conjunction with Strathclyde Regional Council, have looked
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very carefully into this proposal, and on 14th December last announced that they would purchase the site and hold it for use by a single major incoming industry at a later date. Nor does the cancellation of Stonehouse imply any lessening of the Government's support for the continued development of the five established new towns in Scotland; they have a substantial contribution to make to the Scottish economy in providing employment and relieving housing stress.
The Bill has three main provisions. It makes possible the dismantling of the legal and administrative structure of a Scottish new town within five years of its designation. It provides for the appointment of a development corporation or other statutory body to wind up the terminated new town, to sell off the property acquired for its development, and to meet the liabilities and claims for compensation arising from initial development. It also provides for the closure of the new town's accounts once the wind up of the new town has been completed, with any surplus being paid into the Consolidated Fund and any deficit being met out of monies provided by Parliament.
I shall now give a brief outline of the provisions of the Bill. Clause 1 empowers the Secretary of State, after consulting any interested local authorities, to make within five years of the designation of a new town in Scotland an order discontinuing its development. At present it can apply only to Stonehouse as the other Scottish new towns are considerably older. The termination of the new town is achieved by revoking the Designation Order and by revoking or varying the Development Corporation Order which establishes the new town's managing body. The assets and liabilities of the defunct new town will be transferred to a winding-up body which may be a development corporation or other statutory body. In the case of Stonehouse, the East Kilbride Development Corporation, as it will become, will be the winding-up body. The order will be subject to the Negative Resolution procedure.
Clause 2 specifies the duties and powers to be given to the winding-up body. The winding-up body will be required to manage and maintain the assets and meet the liabilities and obligations of the former development corporation and to conform

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to any instructions the Secretary of State may give to sell property to particular bodies or individuals. This is to ensure that the industrial site at Canderside may be sold to the Scottish Development Agency and the 96 houses which the development corporation have built to Hamilton District Council. These assets will all be sold for the best terms which can be obtained—the normal disposal terms for development corporations.
In Stonehouse the assets to be disposed of—Canderside and the 96 houses apart—comprise mainly agricultural land and some private houses. The Bill provides that previous owners will be given the opportunity to repurchase their land or property on terms approved by the Secretary of State and the Treasury, before it is offered for sale to a third party. Only if they decline to repurchase, will their property be offered to Government Departments and public authorities, and thereafter to the public at large, on the best terms which can reasonably be obtained. This is the normal procedure for the disposal of surplus Government land. To enable the winding-up body to carry out its function, it will be given the powers of a development corporation, and the Secretary of State is empowered to specify the date on which the winding-up is to be completed.
Clause 3 provides for the payment of compensation to members and staff of a development corporation of a new town which is de-designated. No compensation will be paid to members of the East Kilbride and Stonehouse Development Corporation, however, as the corporation will continue in being as the East Kilbride Development Corporation, and the compensation regulations for staff, which will be subject to Negative Resolution procedure, will follow the standard practice for such circumstances.
Clause 4 empowers the winding-up body, subject to the consent of the Secretary of State, to meet certain claims for compensation. These are, first, claims from a local authority or statutory undertaker for expenditure incurred in carrying out work for the development of the new town which was rendered abortive. Secondly, persons may claim the reimbursement of the legal and other professional expenses incurred in negotiations with the develop-
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ment corporation where these have been terminated.
Clause 5 requires the winding-up body to keep accounts and other records in respect of its activities, and provides for a final settlement when the winding-up is complete. The financial controls are the same as for a development corporation and the accounts will be subject to Parliamentary scrutiny. Clause 6 makes consequential Amendments to the Licensing (Scotland) Acts of 1959 and 1976, so that the Licensing Planning Committee for a new town shall cease to exist where a new town is cancelled. Both the 1959 and the 1976 Acts are referred to as this Bill may be enacted before the relevant provisions of the Licensing (Scotland) Act 1976 come into effect. Clause 7 is the formal interpretation clause.
Since the announcement of the cancellation of Stonehouse on 12th May 1976, there has been much uncertainty over the planning status of the area. Only when the Bill is enacted will local interests be able to re-acquire their property, will regulations be made awarding compensation to staff, and will local authorities and others be able to claim compensation for abortive expenditure. It is to remove this uncertainty and to clarify the administration of planning and licensing in the area, that I commend this Bill to your Lordships as the necessary consequence of the decision last May to halt the development of Stonehouse New Town.
Moved, that the Bill be now read 2a—(Lord Kirkhill).
4.27 p.m.
Lord CAMPBELL of CROY: My Lords, we are grateful to the noble Lord, Lord Kirkhill, for explaining clearly and concisely the purposes of the Bill. I recognise that he personally was not involved in this sad story until very recently, when he became Minister of State at the Scottish Office. It is a sad story, because it is most disappointing that we should have to look at this Bill at all.
It is a Bill to wind up the new town of Stonehouse in Lanarkshire, upon which over the past 10 years many in that area have placed their hopes. Briefly, I should like to remind your Lordships that it was in the later 1960s that a Labour Government first indicated that a new town in the Stonehouse area would be

795
desirable. We took that up when we came into office in 1970, and in 1971 the new town was designated. It was applauded on all sides. So far as I can remember, not a voice was raised against it. All were in favour, whether they were concerned with housing, employment or industry, and so were the people in Lanarkshire and, so far as I know, in the Glasgow area as a whole. If there was any opposition, it was invisible. At the time I was Secretary of State for Scotland and I remember it because the fact that there was no opposition was not an every day occurence. It is not often that a Government make a proposal and receive unanimous approval. It is certainly an experience which the Secretary of State for Scotland does not meet every day.
Further, the nearby East Kilbride Corporation was given the task of being the corporation for this new town. That was very appropriate because East Kilbride was the first and is the oldest new town in Scotland. It has been exceedingly successful and the work of the corporation is gradually being reduced. Here was new work for an exceedingly experienced team led by the noble Lord, Lord Wallace of Campsie, who was then the chairman and who has been recently succeeded by the noble Lord, Lord Hughes, who I am glad to see here today. The general manager, Mr. Young, also had great success in bringing industry to East Kilbride and in the general running of that new town.
The town of East Kilbride has had tremendous success in the selling of its houses. Thousands of the houses have been most successfully sold, many being built for sale. This helped the housing situation in the area and brought back money to the corporation and the Government. In September 1974, after a change of Government, the then Secretary of State for Scotland, Mr. William Ross, said that the Government would continue with the new town of Stonehouse. I am not being cynical when I point out that that was a month before the last General Election, but none the less it was. Therefore, we wonder why a counter-decision was taken and announced in May of last year.
The Minister of State in another place, Mr. Gregor Mackenzie, gave the same
796
reasons as the noble Lord, Lord Kirkhill, gave today. Let us just consider them. It is stated that the employment projections fell short of previous forecasts. That I regard as an euphemism for the highest unemployment in Scotland since the war. I recognise that there is a situation of very high unemployment, but I still do not think that that is a reason for giving up this new town scheme. Then, another reason repeated today was a changed emphasis in Government policies to urban renewal. That is simply a way of saying that the money is no longer available. I accept that public expenditure has to be reduced, and no doubt in another place the Chancellor of the Exchequer will be expanding on this theme at this moment. But let us recognise what is being done. Why not call a spade a spade and simply say that the Government have decided to reduce public expenditure in this area. We know that the IMF has prescribed the need for a reduction on this scale, but it does follow directly this Government's policy of 1974 of letting inflation get out of hand, in order, some would say, to stay in office.
I must say, because I feel strongly about this, that when I and my colleagues were in Government in late 1973 and early 1974 our principal aim was containing inflation, and we made it our first priority to reduce it. This was not some kind of confrontation, as some have stated, but it was largely to protect and preserve schemes such as these—major schemes which we knew were vulnerable, and indeed might prove impossible, if inflation got out of control and was rampant. Of course, with the 26 per cent. inflation that was later reached, a scheme like this has to disappear. May I give another example, with which the noble Lord, Lord Kirkhill, will be familiar. In Scotland, the Kessock Bridge, a major project which would take the road North of Inverness to the North of Scotland, cutting out a ferry and 15 miles of road round, was another victim of runaway inflation. There was a reasonable estimate for that about four years ago; now it is several times more, and that scheme has been postponed. Now this new town is a similar victim.
I mentioned that the noble Lord, Lord Hughes, is with us, the present chairman of East Kilbride Corporation. It is still called the East Kilbride and Stonehouse Corporation. I am aware that the

797
Addison Rules probably prevent him from taking part in this debate, but I am sure that he must be disappointed, too, that this has had to happen. Certainly the right honourable Lady, Mrs. Judith Hart, made it absolutely clear, speaking in another place when she was on the Back-Benches two or three months ago, that she was completely in opposition to this Bill, and she is a Member for Lanarkshire. Since then she has rejoined the Government, which has meant that her opposition was muted at the final stage of the Bill. However, she was certainly on the record as being completely against what was proposed by the Government from the point of view of the people she represented in Lanarkshire. This is because many people knew that jobs were coming to Stonehouse; jobs that would go to Stonehouse but not elsewhere in Scotland. That is the important point. Stonehouse was able to offer by its geographical situation and other conditions, sites and proposals for industry which could not be replaced elsewhere in Scotland. We know of at least one major project which has gone South of the Border because Stone-house can no longer take it as a new town. Many people in Lanarkshire have had high hopes for at least 10 years, and they have now been dashed.
In another place, there has been discussion in detail about provisions in the Bill, which I shall not go into now and I do not think at the later stages that we need go over those details again. However, I should like to draw attention to one point, on which a great deal of time was spent in another place, because it is important from the point of view of the citizen; that is, that the Government did eventually put forward an Amendment which was accepted, to provide for proper arrangements to enable the former owners of land to have reasonable rights and terms for the repurchase of their land if they wished to buy it back.
It is especially disappointing for me, as I am sure you will understand, because I was Secretary of State for Scotland at the time of the designation of the new town, that this Bill should be before us. I was aware of the enthusiasm of the East Kilbride Corporation, and of the enthusiasm of all in that area who saw not only a new community which would help the very densely populated area of Glasgow
798
but also a way in which more employment, which was much needed, could be brought to Lanarkshire.
4.36 p.m.
Viscount THURSO: My Lords, I have one worry about this Bill. Unlike the noble Lord, Lord Campbell of Croy, I see that there may well be a need to stop or to dismantle a new town corporation even after work on creating a new town has started. However, the one thing that worries me—and I do not see anywhere in this Bill provision for dealing with this situation—is how, where work and plans have started to create something which is very much larger, where perhaps farms have been cut in half and partly built on, where housing has been put up, where factory sites have been created, it is practicable to plan to return this to something of a smaller size.
It seems to me that it is very difficult to take a project of a large size on which work has started, stop it, and then turn it into something which does not involve an increase. There is a planning problem here. There seems to be very little provision for passing on this planning problem to the surrounding local authorities, and a passing on of the powers and perhaps the finance necessary to round off developments which have been started in such a way, so that you do not simply leave an uninhabitable eyesore on the face of Scotland. This is a big query in my mind. I do not see it dealt with anywhere in this Bill, and I should like to hear what Her Majesty's Government have to say about the problem.
4.38 p.m.
Lord KIRKHILL: My Lords, the noble Lord, Lord Campbell of Croy, has expressed his sadness at the Government decision to de-designate Stonehouse New Town. Of course I recognise very clearly that it was under his Secretaryship of State for Scotland that considerable initiatives in this direction were taken. But I would put it to the noble Lord that in the past five years there has been a material change in the whole of the circumstances of the West Central belt of Scotland. Although he has said that he thinks that the projection now of a population graph downwards is merely a euphemism, I have to say to the noble Lord that it is a fact.

799
Further I have to say to the noble Lord that the Government have taken account of the Strathclyde regional report, which has shown clearly that there is already in the West Central belt of Scotland sufficient industrial land available without continuing with the development of Stonehouse, however desirable such a development might be were funds almost wholly available for every desirable project. But the fact is that at the present moment Government expenditure is being carefully and closely monitored. In my opinion the new Government emphasis on regenerating the Glasgow East End project is the beginning of a new impulse in the West Central belt of Scotland. In that area we do not have mobility of labour; yet already we have schools and houses there, and the people there are becoming even more disadvantaged with each passing year.
The Secretary of State for Scotland is just about to give £1 million to that project. I do not think that is a cut-back of any kind in Scottish public expenditure. I suggest that it is re-zoning of some of the expenditure because the Secretary of State is taking a different emphasis. In my view, he is entitled to take that view in the circumstances of the day. I understand of course that Mrs. Judith Hart would have had an interest in making the representations she made; she represents the constituency and I think it was a vested interest that was made by her. For the noble Lord to mention Kessock as a further example of Government cutback of expenditure in Scotland was grossly unfair. The Kessock position, far from being postponed, is under very careful review at this time.
Lord CAMPBELL of CROY: My Lords, the noble Lord seems to have misunderstood what I said. I said it was a victim of 26 per cent. inflation. I agree that the Government have had to make reductions and cut-backs, but if we had not had inflation on that scale, the estimate for the Kessock Bridge would not have reached the height where the Secretary of State for Scotland had to reject it.
Lord KIRKHILL: My Lords, it was the Administration of which the noble Lord was a part which in my opinion led
800
to the raging inflation of 1974. He will not agree, but that is my view. The figure which came in for Kessock, of almost £30 million, was a figure which no Secretary of State—I submit that this would have applied to the noble Lord, Lord Campbell of Croy, had he been Secretary of State at the time—would accept, and I believe that events will prove the previous Secretary of State right in his hesitation in granting that particular contract. The one point I wish to emphasise—Lord Campbell made no mention of this—is that Canderside, which is the industrial estate, will come under the aegis of the Scottish Development Agency, so there will be many jobs in the Stone-house area; there will be job regeneration in the Stonehouse area despite the fact that Stonehouse New Town is to be de-designated.
As for the points which were put to me by the noble Viscount, Lord Thurso, I would want to give those consideration. I will have to go through the Bill very carefully and I will either reply to him in writing or we can have some conversation. If that is not enough for him, then of course the matter can be raised at a later stage.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

TOWN AND COUNTRY PLANNING (SCOTLAND) BILL [H.L.]
4.43 p.m.
Lord KIRKHILL: My Lords, I beg to move that the Commons Amendments be now considered.
Moved, That the Commons Amendments be now considered.—(Lord Kirkhill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[References are to Bill [51] as first printed for the Commons]
[No. 1]
Page 2, line 24, after 'authority' insert—
'(1) After subsection (1), there shall be inserted the following subsection—
"(2) Where subsection (5) of section 32 of the Act of 1972 applies to an exercise of power by the regional planning authority under that section, the person appointed by the regional planning authority shall be a person approved by the Secretary of State."(2)'
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 10. This Government Amendment was made to give effect to a recommendation of the Scottish Committee of the Council on Tribunals. The Committee were concerned that where a regional planning authority have called in a planning application, and either the applicant or the district planning authority ask for an inquiry, the person appointed to preside at that inquiry should be seen to be independent, and in no way biased towards the regional planning authority. There is already an administrative arrangement which has this effect. SDD Circular 76/1975 advises regional planning authorities to appoint a Reporter from the Secretary of State's panel. But the Committee believe—and the Government on balance accept—that it will increase public confidence in the handling of applications by regional planning authorities if the requirement to appoint a "Secretary of State-approved" Reporter is spelled out in the Bill.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
Lord CAMPBELL of CROY: My Lords, I understand that this is an improvement to the Bill which was suggested by the Scottish Committee of the Council on Tribunals, which follows up the principles which the Franks Committee several years ago proposed and which have been universally accepted, and I therefore commend the Amendment to the House.
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 2 and 3]
Page 3, leave out line 16 and insert 'the'
Page 3, leave out line 17, after 'continuing' insert 'of'
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 2 and 3. With the permission of the House, I will speak at the same time to Amendments Nos. 6 to 9 inclusive.
I have moved consideration of these Amendments en bloc because they all relate to the drafting of Clause 4. The purpose of this clause is to strengthen the enforcement powers available to
802
planning authorities under the Town and Country Planning (Scotland) Act 1972. This will be achieved, first, by extending the scope of stop notices to include all breaches of planning control. Second, stop notices will be publicised by means of site notices, which will bring all those involved in unauthorised activities within the scope of the stop notice prohibition.
We are naturally concerned that the new provisions in the Bill should be effective and watertight. We received advice that the wording of Clause 4 as it left this House might not fully achieve what the Government had set out to do. Amendments were moved therefore in another place which I believe have greatly improved the drafting of the clause, and removed any possible loopholes which might have enabled people to escape the effect of stop notices. The apparent weakness in the wording of the clause arose over the relationship between stop notices and the new site notices. The old wording of subsection (4) stated that a stop notice should,
"have effect in relation to any person when it is served on him or when it is publicised in accordance with subsection (3) above".
In other words, by a site notice. The old subsection (1), on the other hand, stated that a stop notice would prohibit any person "on whom the stop notice is served" from continuing the unauthorised activities. The intention of subsection (4) was clearly that a site notice should extend the effect of the stop notice on people as if they had been served with a copy of the stop notice itself. We were advised, however, that subsection (1) would be overriding as it stood. In other words, as the clause was drafted, stop notices would affect only those people served with them individually. This group of Amendments was tabled to put this right.
First, Amendment No. 2 takes out the overriding provision in the old subsection (1), which related the stop notice prohibition specifically to notices served on people. The new subsection (1) will have general effect in stopping the unauthorised activities. Amendment No. 3 is a minor consequential drafting Amendment. Amendment No. 6 revises the provisions of subsections (3) and (4) and inserts a new subsection (5). This provides that a stop notice shall cease to have effect in

803
relation to any activity when the enforcement notice is varied by the Secretary of State on appeal so that it no longer relates to that activity.
Amendment No. 7 provides that site notices will now have effect by virtue of the new subsection (7), which replaces the second half of the old subsection (3). Since under subsection (1) as amended the effect of a stop notice is no longer restricted to those served with it personally, publicity by means of a site notice will extend the prohibition to all those involved in the unauthorised activity. Amendment No. 8 deletes the old subsection (4) as a consequence of Amendment No. 6. Finally, Amendment No. 9 is consequential on Amendment No. 2 which gave stop notices general effect; that is, their application is no longer restricted to people served with notices.
I have explained this group of Amendments in some detail. I could see no alternative to doing so and I hope that what I have said has helped to clarify what seems to me to be a very complex question of drafting.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Kirkhill.)
Lord CAMPBELL of CROY: My Lords, it seems to us that the new drafting makes the position clearer. As the noble Lord, Lord Kirkhill, has said, it is a complicated matter. It was good of him to explain it in the way he has, at some length, and I believe that we shall have to take his word for much of what the draftsman has advised. I suggest that we accept the new wording in the Amendments.
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 4 and 5]
Page 3, line 26, leave out 'may' and insert 'shall'
Page 3, leave out lines 32 to 37.
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 4 and 5. I should like also to link in Amendment No. 12 as I speak to these Amendments. These Amendments were moved by the Government at Report stage in another place after discussion in
804
Committee on an Opposition Amendment to delete Clause 4(2)(c). This paragraph introduced a 12 months' time limit from the commencement of an activity after which a stop notice could not be served, provided that the activity had been substantially continuous throughout that period. My honourable friend the Under-Secretary of State undertook at Committee stage to look again at this provision. The Government decided on balance that the 12 months' restriction should be removed, and Amendments were moved accordingly.
The limitation on the use of stop notices was originally included in the Bill because it was felt that it would be unfair for a planning authority to use a drastic power of this kind suddenly to prohibit a longstanding and continuous activity which it was previously prepared to tolerate. Against this, it was argued that planning authorities must be trusted to act responsibly in deciding what enforcement action to take in a particular case.
Members of the Opposition in another place raised the question of the problem of intensification of an activity. What happens if an activity has begun in a small way and is then intensified to the point where the planning authority decides that enforcement action is necessary? In principle, the Bill provides for this by enabling the planning authority to apply a stop notice to part of any activity alleged in the enforcement notice to be in breach of planning control. However, the Government appreciate that there is considerable scope here for argument about what the level of an activity was on any particular date, and that there might thus be difficulties in applying a stop notice in these circumstances.
In addition, the noble Lord, Lord Campbell of Croy, made the point in Committee that it might sometimes be difficult to prove whether or not a particular use had been carried on for more than a year. There is also the difficulty of someone who successfully conceals his unauthorised activity from the planning authority for 12 months and thereby escapes a stop notice. Though such cases might rarely give rise to serious consequences, this is an additional point which the Government have considered.
All in all, while we acknowledge that there may be an element of rough justice about

805
this, the Government believe that we will have a simpler and more useful Statute as a result of removing the 12 months' limitation.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Kirkhill.)
Lord CAMPBELL of CROY: My Lords, I recognise that the Government have met criticism from the Conservative Opposition in both Houses in coming forward with these Amendments. I must, on Amendment No. 4, refer to the fact that it was my noble friend Lord Selkirk who made this suggestion when the Bill was before your Lordships' House. As regards Amendment No. 5, as the noble Lord, Lord Kirkhill, has said, the Conservative Opposition in another place went on raising points which I had started in your Lordships' House and the Government made the Amendment in order to meet those points. Again, I would commend the Amendments to the House.
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 6 to 9]
Page 3, line 37, at end insert—
'(3) A stop notice shall specify the date when it is to come into effect, such date not being less than three nor more than 28 days from the date when it is first served (on whatever person) in accordance with the provisions of subsection (6) below.
(4) A stop notice shall cease to have effect—

(a) when it is withdrawn under the provisions of subsection (10) below;

(b) when the enforcement notice to which it relates is withdrawn or quashed; or

(c) when the period for compliance with that enforcement notice specified under section 84(7)(c) of this Act has expired; whichever is the earlier.

(5) Where the enforcement notice to which a stop notice relates is varied so that it no longer relates to any activity prohibited by the stop notice, the stop notice shall cease to have effect in relation to that activity.'
Page 3, line 42, leave out from 'notice' to end of line 48 and insert—
'(7) The planning authority may publicise a stop notice by displaying on the land a notice (to be referred to as a "site notice") which shall state—

(a) the requirements of the stop notice;

(b) that the stop notice has been served on a particular person or persons; and

(c) the consequences under subsection (8) below of contravention of the stop notice.'

Page 4, line 1, leave out subsection (4).
Page 4, line 27, leave out 'in relation to him' and insert 'and which has been served on him or has been publicised in accordance with the provisions of subsection (7) above,'.
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 6, 7, 8 and 9 en bloc. These were discussed earlier with Amendments Nos. 2 and 3.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Kirkhill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 10]
Page 5, leave out lines 9 to 26.
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 10. This subsection was written into the 1969 Town and Country Planning (Scotland) Act when stop notices were first introduced. It was thought then that a contractor who had entered into a contract with a developer before the end of 1969 to carry out operations (for instance, mineral working) on land, and who suffered loss or damage as a result of the requirement to comply with a stop notice, should normally be entitled to compensation from the developer.
It is very unlikely that there are any existing contracts to which this provision would apply. It is just conceivable that some long term contract for mineral extraction could still fall within the terms of the subsection and, for this reason, the Government were at first inclined to retain the provision, at least for the time being. However, an Opposition Amendment was moved in Committee in another place to delete the subsection on the grounds that it would be inappropriate to re-enact in 1977 a provision which related only to contracts made before 1970. The Government accepted this argument and, therefore, agreed to the Opposition Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
Lord CAMPBELL of CROY: My Lords, it seemed that, after eight years, it ought not to be necessary to re-enact this

807
provision which refers to a period before the end of 1969, but I assume that the Government have made all the inquiries that they consider appropriate to ensure that this would not cause any unfairness or hardship to anyone who might still be affected by some contract entered into before the end of 1969. On that basis, I suggest that we approve this Amendment.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 11]
Clause 5, page 5, line 41, at end insert—
'(b) in subsection (3), for "operations" in both places where that word occurs substitute the word "activity",
(c) in subsection (5) leave out from "or of" to end'
4.59 p.m.
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 11. This is simply a drafting Amendment to bring Section 166 of the 1972 Act into line with the new stop notice provisions in Clause 4.
Moved That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
Lord CAMPBELL of CROY: My Lords, as this is the last Amendment—for we have already discussed Amendment No. 12—I should like to ask the noble Lord, Lord Kirkhill, whether he can tell us about the equivalent Bill applying to England and Wales. I gave him notice of this some days ago because it is one of the most important matters arising from the Bill. We are making changes in the town and country planning procedures for Scotland and in recent years there has been an aim by both Parties that have been in Government to try to promote uniformity in the planning procedures North and South of the Border. Therefore, we inquired what was happening in England and Wales, and the noble Lord, Lord Kirkhill, told us that the Government were about to give their support to a Private Member's Bill in another place. That became the Bill introduced by my honourable friend Mr. Dudley Smith, and it had its Second Reading on 28th January. I should be grateful if the noble Lord could tell us briefly how he sees progress on that Bill. From the point of view of developers
808
and those engaged in housing and many other subjects affected by planning, it is of some importance that, if possible, the procedures North and South of the Border should be similar if not precisely the same; otherwise it leads to all kinds of difficulties.
The Government have made it clear that the intention is to try to make the change more or less at the same time in Scotland and in England and Wales, but if that is to be done it depends on progress with Mr. Dudley Smith's Bill, which I am glad to say obtained its Second Reading because he was one of the fortunate Members in the Private Members' Ballot. It also depends on how that Bill fares and the support that the Government are prepared to give it in its later stages in another place.
Lord KIRKHILL: My Lords, I can tell the noble Lord, Lord Campbell of Croy, that the Government are continuing their support of Mr. Dudley Smith's Bill in another place. I should point out that the Scottish Bill and the English Bill have differences; they are not exactly the same. Of course in part this stems from the fact that in Scotland, at least in some aspects of our Governmental activity, we are, we think, occasionally one step ahead of those South of the Border. Perhaps that is a personal view, but I think it is one that could be sustained. I think that the only significant difference between the two Bills at the moment, apart from the fact that the Scottish Bill is rather wider in its impact, is that in Scotland we have abandoned the 12 months' limit, whereas in the English Bill this is retained. We decided that we would accept the point which the Opposition had put in that regard so far as the Scottish Bill was concerned. With regard to the English Bill, I understand that the Department of the Environment and others have listened to serious representations from the CBI and have taken a rather different decision. But surely that lies within the reasonable purview of the Ministers concerned, and we think that we are moving in the correct direction on the Scottish Bill.
Lord CAMPBELL of CROY: My Lords, before the noble Lord sits down, I should like to say that this is not so much a question of the legislation being exactly

809
the same; as I tried to make clear, Scots law is different from law in England and Wales, and one does not expect it to be the same. But when a major change of principle is being adopted on one side of the Border, it is highly inconvenient if it is not to apply on the other side. So far as Scotland is concerned, industry could be adversely affected if it found itself dealing with what was to it quite strange procedure if that was not being carried out South of the Border as well, and universally in the United Kingdom. I was glad to hear what the noble Lord said. I made this inquiry to find out whether there were any snags arising which would stop the equivalent legislation—not exactly the same legislation —South of the Border.
Lord KIRKHILL: My Lords, I can only confirm that thus far in regard to the Scottish Bill we have attempted to be reasonably flexible.
On Question, Motion agreed to.

COMM0NS AMENDMENT
[No. 12]
Page 6, leave out lines 35 to 37.
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 12. I move this Amendment formally as we have already discussed it.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
On Question, Motion agreed to.

RETURNING OFFICERS (SCOTLAND) BILL
5.3 p.m.
Lord KIRKHILL: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Kirkhill.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Baroness WOOTTON of ABINGER in the Chair.]
Clauses 1 to 3 agreed to.
Clause 4 [Short title, commencement and extent]:
Lord KIRKHILL Lord KIRKHILL moved the following Amendment:
Page 2, line 21, leave out from ("operation") to end of line 23 and insert ("on such day as the Secretary of State may by order made by statutory instrument appoint.")
The noble Lord said: The purpose of this Amendment is to substitute for the three-month period provided for in Clause 4 of the Bill, a provision enabling the operative date to be fixed by order made by the Secretary of State. The three-month period for which the Bill as introduced provides, was intended to afford the new returning officers and the supporting local authority staffs adequate time to plan for the changeover of responsibilities. That remains the intention, and it is very unlikely that the Secretary of State will find it necessary under the proposed order-making power to fix an earlier operative date. Circumstances could, however, arise, for example, in the event of a by-election, or perhaps a speeded up version of last week's events in the other place, where it would clearly be desirable to invoke the order-making power. The changeover of responsibility for which the Bill provides has been under discussion now for some considerable time, and it is only reasonable and fair to all the parties affected that there should at this stage be no uncertainty as to where the statutory responsibility would lie should the eventuality of a by-election obtain. The sheriffs and I are sure that the local authority staffs concerned would welcome clarification of the situation in this way. I beg to move.
Lord CAMPBELL of CROY: This Bill aims to produce a new system for running elections in Scotland. The staffs who used to run the polling stations and the whole system, including the returning officer, operated under the sheriff and they were the sheriff court staffs. The Bill proposes a new system and we discussed that at Second Reading. The Second Reading debate took place on 14th March, and of course I cannot help being amused by this Amendment coming forward at this stage because we understood that there was not to be a Committee stage. We did not have any Amendments, and no other noble Lord

811
put down an Amendment, but now the Government have put down an Amendment at short notice.
I think this arose from something I said on Second Reading, as reported at column 1408 of the Official Report of 14th March. I asked what would happen if there were to be a General Election in the next few weeks or months? That was just over two weeks ago. The noble Lord, Lord Kirkhill, said that everything would be all right. But under the Bill as it stands, without this Amendment, the new system does not enter into force until three months after the Bill is enacted. Therefore, I cannot help but think that in the intervening two weeks, when there has been the prospect of an immediate General Election, and that has come and gone—even though the noble Lord, just over two weeks ago, did not realise that—it has been brought home, in a way that I do not think could have been bettered, that it was necessary to introduce some flexibility into the Bill.
Lord KIRKHILL: To strike a personal note only, I should say that I am a hawk in these matters, not a dove.
Lord CAMPBELL of CROY: I am sure that the noble Lord, Lord Kirkhill, has done nothing other than give very good advice to his colleagues in the Govern-merit. But since he was reassuring us on 14th March, when I raised this point, I think that he must have looked into it with more than academic interest during the past two weeks.
I think that it would be wise to provide this discretion to the Secretary of State, rather than have a date which is rigidly three months after the enactment of the Bill. Therefore I regard the Amendment as an improvement, and that would be obvious I think from the remarks that I made on 14th March. But can the Minister tell us whether the new arrangements could be brought in immediately? For instance, let us suppose that the Liberal Party decided not to support the Government on something important in a month's time—and, after all, they voted against the Government on Defence yesterday—and there were to be a General Election in April or May. In those circumstances, given that the Bill is, I understand, to go through all its remaining
812
stages in the next 24 hours or so, and probably receive Royal Assent later this week, would it be possible for the new system to be brought into effect in April or May? I know that under this arrangement the Secretary of State will be able to take the decision, which is much better than the situation under the Bill as it now stands. But many of us would be interested to know whether it would be physically possible to introduce a new system within the next two months.
Furthermore, should there be a by-election in Scotland within the next two or three months, would it be possible for the change to take place in that time? I am talking about the practicability, knowing that the Secretary of State can take the decision himself whether to use the old or the new system. I think we should like to know whether the Minister can give us an assessment of how long it will take for the new arrangements to be available for a by-election or a General Election, given the fact that the Bill is likely to be enacted this week with this Amendment, which I of course support.
Lord LLOYD of KILGERRAN: Before the noble Lord sits down, in view of the spirit of confrontation in which he has addressed your Lordships' Committee perhaps I may remind him that, of course, the Liberal Party was not consulted on the Defence matters, voted on yesterday in another place. It is perhaps not quite inappropriate to point that out in view of the words of the noble Lord. But if, on a matter on which there is a serious confrontation taking place at this stage, I can help either noble Lord in any way, perhaps they will let me know.
Lord HUGHES: I do not know whether or not the noble Lord who has just sat down is speaking in the capacity of a Shadow Minister—
Lord LLOYD of KILGERRAN: I was speaking purely in my private capacity.
Lord HUGHES: I am not rising to concern myself with the possibilities of a General Election, but to speak to something of which I have given notice to my noble friend Lord Kirkhill. I intended doing this on Third Reading, but the remarks just made by the noble Lord,

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Lord Campbell of Croy, about bringing these changes into operation at an early date make it appropriate that I should perhaps say what I have to say at this point.
The Explanatory Memorandum refers to the fact that, under Section 20 of the Representation of the People Act,
"…exchequer payments to returning officers are regulated on a common basis throughout Great Britain".
This implies that when the new arrangements come into effect the sort of payments which have been made in the past to the sheriff clerk and his staff will be made to the new returning officers, who will be the chief executives of local authorities. I am quite certain that both the noble Lord, Lord Campbell of Croy, and my noble friend Lord Kirkhill are aware of the dismay with which the ratepayers in Scotland have greeted the intimation recently made that, provided the local authorities agree to do so, the chief executives of local authorities are to collect payments of perhaps £600 or £700, or even £800, for performing the duties of returning officers, which on paper, at least, used to be carried out by Lord Provosts and Provosts of burghs. My noble friend Lord Kirkhill himself did this in Aberdeen, as I did in Dundee, and we received no payment for it at all; but in fact we were returning officers only nominally, and the work was done in the departments of the town clerks and of the county clerks. But it is equally the case that the work was not done by the town clerk or by the county clerk, and it is quite iniquitous that the town clerk and an official or officials designated as deputy returning clerks should receive these sums of money when in fact the work is done as part of the ordinary work of the clerk's department; and I am quite certain that it could be regarded as part of the ordinary work of the chief executives of the new authorities.
It used to be that in some authorities, perhaps in all authorities, there was a fund known as the county clerk's fee fund and the town clerk's fee fund, and any payments which these officers received in that capacity were put at the disposal of the local authorities. I would certainly hope that my noble friend Lord Kirkhill would encourage local authorities to ensure that any payments which are made to their
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staff as a consequence of this measure go into the funds of the local authorities, and do not go into the pockets of the individual officers. I should like to add that at this time, when ratepayers generally are so hard pressed, it would be regarded as an act of grace on the part of the Government if my noble friend were to use his influence with local authorities to withhold payments of these sums to their individual officers because under the new dispensation of local authorities they are not doing anything different from what they have done for many years in the past. There has been much criticism, a great deal of it unjustified, of the reform of local government, but something which is entirely justified is the outcry from ratepayers about these totally unjustified payments to officials who, in the most cases, are receiving substantially more money for the jobs which they are now carrying out and, in some cases, are receiving more money for doing less work than they formerly did.
Lord KIRKHILL: I can certainly give the noble Lord, Lord Campbell of Croy, an assurance that, as to the possibility of there being a by-election in the next few weeks—it will not, of course, be a General Election; I have some assurance from the noble Lord, Lord Lloyd of Kilgerran, about that meantime, and I am delighted to welcome him on board, as it were—if there be one then the new arrangements can be put into effect. So far as the point raised by my noble friend Lord Hughes is concerned, he will know, having occupied the position I now hold, that I have no statutory power in this regard as it relates to the local authorities concerned.
Lord HUGHES: Influence.
Lord KIRKHILL: But I have some influence, and he still has a residue of great influence. I would think that the remarks he has made in your Lordships' Committee this afternoon might well be noted in certain places in Scotland.
On Question, Amendment agreed to.
Clause 4, as amended, agreed to.
House resumed: Bill reported with an Amendment.
Then, Standing Order No. 43 having been suspended pursuant to Resolution:

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Report received; Bill read 3a, with the Amendment; and passed, and returned to the Commons.

PATENTS BILL [H.L.]
5.18 p.m.
Lord ORAM: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do again resolve itself into Committee.—(Lord Oram.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Baroness WOOTTON of ABINGER in the Chair.]
Clause 111 agreed to.
Clause 112 [Rules]:
Lord LLOYD of KILGERRAN Lord LLOYD of KILGERRAN had given Notice of his intention to move Amendment No. 347:
Page 81, line 40, after ("comptroller") insert ("or of a tribunal")
The noble Lord said: I have spoken already at length and with passion about the desirability of having a tribunal for dealing with disputes. I have spoken to this Amendment, which is not moved.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 348A:
Page 82, line 29, at beginning insert—
("without prejudice to any other provision of this Act, requiring and regulating the translation of documents in connection with an application for a patent or a European patent or an international application for a patent and the filing and authentication of any such translations;
(hh) requiring the keeping of a register of patent agents and")
The noble and learned Lord said: Before we embark upon the multifarious number of Amendments which still face us, I think I should express my regret to noble Lords that so many Amendments have had to be put down at this stage. Our task was to try to get the Bill on the stocks, so to speak, as soon as possible, so that we could be parties to the European arrangements, as founder members, as
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soon as possible. I am afraid that that meant rushing especially the preparation of the Schedule, and that accounts for some later thinking and rethinking, which has in turn necessitated the labour which faces the Committee, which I think may in the event prove to be not quite so burdensome or so lenghty as at first sight it appears.
I renew my apologies. We are now dealing with Amendment No. 348A and it might be convenient to deal also with Amendment No. 349. Amendment No. 348A fills two gaps in the Bill. First, it provides a clear rule-making power dealing with the translations which may be necessary under the Bill; and, secondly, it allows rules to be made requiring the keeping of a register of patent agents. Amendment No. 349 is a drafting Amendment to clarify the meaning and does no more than that. I beg to move.
Lord BELSTEAD: On behalf of my noble friend and myself, we fully understand the position Ministers have been in under this Bill and are grateful to the noble and learned Lord for what he has said before moving the Amendment. As these two Government Amendments cover, and to a considerable extent meet, our Amendment No. 348 we have no objection to them and shall be supporting them.
On Question, Amendment agreed to.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 349:
Page 82, line 30, leave out ("it") and insert ("the register of patent agents").
On Question, Amendment agreed to.
On Question, Whether Clause 112, as amended, shall be agreed to?
Lord LLOYD of KILGERRAN: This clause is of very serious administrative importance because it gives the Secretary of State powers to make such rules as are expedient for regulating the business of the Patent Office and also to make rules which give direction or control of the Comptroller General of Patents. If I may, I shall briefly submit to the Government that in so far as the rules drafted under this clause refer to the powers of the Comptroller General of Patents, the powers should be given to the Comptroller General of Patents under Section 37,

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particularly, of the Patents Act. Where the Comptroller General has the power to make awards to employee inventors, he should also, under the rules, have power to introduce some kind of conciliation procedure.
It is quite frequently the case in patent matters that disputes arise; but they can be settled provided the parties can come along and see some person who is sympathetic with a view to try to resolve the difficulties. It seems to me that it would be in conformity with some of the practice on the Continent where concilation procedures are in use for the purpose of trying to resolve disputes between an employee inventor and his employer. My submission is that the Government might in due course consider whether the powers of the comptroller could be so extended as to introduce some kind of conciliation procedure before the case comes to a formal hearing.
The LORD CHANCELLOR: I am grateful for the suggestion that Lord Lloyd of Kilgerran has made. I shall look at the point. I am certainly in favour of encouraging the concept of conciliation. Whether there is any necessity to give the comptroller a rule-making power to deal with it, I should like to consider. Perhaps we shall return to it at a later stage.
Lord LLOYD of KILGERRAN: I am obliged to the noble and learned Lord. I apologise for not giving him notice about it beforehand.
Clause 112, as amended, agreed to.
Clause 113 [Rules, regulations and orders; supplementary.]:
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 349A:
Page 83, line 8, after ("conferred") insert ("on the Secretary of State").
The noble and learned Lord said: It may be convenient also to deal with Amendment No. 349C in this connection and, possibly, if noble Lords opposite are happy about it, with Amendment 350. Amendments Nos. 349A and 349C are mainly drafting Amendments. The first makes it clear that subsection (1) of Clause 113 is concerned solely with powers conferred on the Secretary of State and has nothing to do with orders which may be
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made by the court or the comptroller. Clearly, Clause 113 is not intended to bite on an order made by the comptroller under, for example, Clause 7(1). The purpose of these Amendments is very much the same as that underlying Amendment No. 350 put down by noble Lords opposite. I am grateful to them for drawing attention to the defect in Clause 113; although perhaps their Amendment does not deal with the defect so far as subsection (1) is concerned. I hope that, in the light of what I have said, noble Lords will feel able to accept the Amendments which I propose, which are largely drafting, and perhaps will withdraw their own. I beg to move.
Lord LYELL: I should like to thank the noble and learned Lord for taking the three Amendments together. We are also grateful for his very full explanation of why Amendment No. 349C is superior to our Amendment in that the Government Amendment seems to go further and remedies several defects that certainly have been apparent to the (dare I say it?) advisers to the noble and learned Lord, but which were not apparent at that earlier stage to our very capable advisers. We understand that the Amendment to which the noble and learned Lord has spoken meets and provides satisfactorily for our Amendment.
On Question, Amendment agreed to.
The DEPUTY CHAIRMAN of COMMITTEES (Baroness Wootton of Abinger): if Amendment No. 349C is agreed to, then Amendment No. 350 cannot be moved.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 349C:
Page 83, line 10, leave out from ("Council") to ("shall") in line 13 and insert ("and any statutory instrument containing an order, rules or regulations under this Act other than an order required to be laid before Parliament in draft or an order under section 120(4) below").
On Question, Amendment agreed to.
Clause 113, as amended, agreed to.
Clause 114. [Extent of Invention]:
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 350A:
Page 83, line 17, after ("invention") insert ("for a patent for which an application has been made or for which a patent has been granted").
The noble and learned Lord said: It may be convenient to discuss also Amendment No. 350B in this connection. Clause 114 at present only defines "invention" and the extent of protection afforded in relation to granted patents. Under Clauses 54 and 67, however, it is necessary to determine what invention an application relates to and whether an act can be said to infringe that application. The Amendments therefore make it clear that the invention for which an application has been made and the extent of protection conferred are to be determined in the same way as for a granted patent. I beg to move.
On Question, Amendment agreed to.
Lord LYELL Lord LYELL moved Amendment No. 351:
Page 83, line 18, leave out ("that specified") and insert ("the matter defined").
The noble Lord said: This is a brief Amendment. If the Committee were to turn back in the Bill to look at Clause 11(5)—which we dealt with, it seems, light years ago, but certainly on the first day of the Committee—we should find that Clause 11(5) provides that in any application,
"The claim or claims shall…define the matter for which the applicant seeks protection;…"
To look forward again to the clause in the Bill that we are now dealing with, this Amendment seeks to repeat exactly the wording used in Clause 11(5). We believe that the wording in that particular clause of the Bill is apposite and particularly accurate and we hope that it fits into this clause. For that reason, I beg to move.
5.30 p.m.
The LORD CHANCELLOR: As I understand it from what the noble Lord, Lord Lyell, has said, it is intended by this Amendment to align the wording of Clause 114 with that used in Clause 11(5)(a). But I venture to think the two clauses are directed to different propositions. The effect of the Amendment would be to equate the invention with the matter defined in the claim and so preventing the possibility of a claim relating to more than one invention and making something of a nonsense of Clause 11(5)(d). It is true that the claim must define the matter for which the applicant seeks
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protection, but that matter may relate to more than one invention in accordance with Clause 11(5)(d). Clause 114, in specifying that an invention shall be taken to be that specified in a claim, does not preclude the possibility of a claim specifying other inventions. In equating the invention with the matter defined in the claim, the Amendment would preclude that possibility. It is difficult ground but, in the light of that, the proposed simplification which the Amendment had in mind would I fear make confusion worse confounded.
Lord LYELL: We are grateful to the noble and learned Lord. He has sought to make this less difficult ground. He has indeed sought to throw a bridge out over this boggy ground. Alas! I have not followed him too far along that bridge (mainly, I suspect, through fear) but I will read what the noble and learned Lord has said. I hope that before the next stage we shall be able to take further consultations, both with the noble and learned Lord and elsewhere. For that reason, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 350B:
Page 83, line 19, leave out from ("application") to second ("as") in line 20 and insert ("or patent, as the case may be").
The noble and learned Lord said: I have spoken to this Amendment when speaking to Amendment No. 350A. I beg to move.
On Question, Amendment agreed to.
Lord BELSTEAD Lord BELSTEAD moved Amendment No. 353:
Page 83, line 24, at end insert—
("(3) In determing the extent of the protection conferred by a patent, attention shall be paid to the Protocol on the Interpretation of Article 69 of the European Patent Convention included as an integral part of that convention.").
The noble Lord said: It is to be hoped that the decisions of our courts are going to influence Continental courts in adopting their views of Article 69 of the European Patent Convention regarding the scope of protection. I think that I am right in saying that when in 1963 it was necessary

821
to define the extent of protection, the definition which was decided on was that protection shall be decided by the terms of the claim. Article 69 of the EPC provided for this accordingly, and this was very satisfactory from the point of view of this country because in the United Kingdom this has always been the understanding of how protection shall be defined.
In the discussions leading up to the signing of the EPC it became clear that some other countries, particularly the French and Germans, interpreted this definition in a different way from our definition. In particular, the French in translating terms used the French noun le teneur which means either terms or the tenor or gist of a conversation. So it was decided, I am told, that there must be a Protocol to Article 69 which in essence says that the extent of the protection conferred by European patents should be interpreted as defining a position:
"…which combines a fair protection for the patentee with a reasonable degree of certainty for third parties".
So reference to the Protocol to Article 69 of the EPC I would have thought should be included in Clause 114. Otherwise, judgments given in our courts will be criticised for not giving enough weight to the agreed manner of interpretation of Article 69. This is important in order that the judgment of our courts shall carry influence with other courts in the various convention countries. I beg to move.
The LORD CHANCELLOR: Clause 114 of the Bill corresponds to Article 69 of the European Patent Convention. As the noble Lord, Lord Belstead, has pointed out, the European Patent Convention is to be interpreted in accordance with the Protocol on the interpretation of Article 69. I understand that the object of the Amendment is to make it clear that the same principles as are contained in the Protocol are applied in determining the extent of protection conferred by the Bill. I venture to think that the Bill already has this effect by virtue of Clause 118(5).
I fully appreciate the concern of the noble Lord that the extent of protection conferred by the Bill should not differ from that conferred by the European Patent Convention and that therefore
822
Clause 114 should be interpreted in like manner to Article 69 of the Convention. Any fears that this is not accomplished by the Bill are groundless. Clause 114 corresponds to Article 69; I do not think there is any difference between us on that. It is purely a question of interpretation. In this connection, I must draw your Lordships' attention to Clause 118(5), to which I have already referred, which specifically refers to certain provisions of the Bill which are drafted so as to ensure so far as we can, conformity with the equivalent provisions of the Conventions and Treaty to which I have referred. Clause 114 is specifically included among the provisions in Clause 118(5). In construing Clause 114 therefore Clause 118(5), by referring to the corresponding provisions of the EPC, directs attention to Article 69 of the EPC, and in so doing also directs attention to the Protocol which is an integral part of the Convention and which governs Article 69. I hope that, in the light of that explanation, the anxieties that have been properly raised may be allayed, and I hope that we have covered the point already, in effect, in Clause 118(5).
Lord LLOYD of KILGERRAN: It seems to me very helpful to the Community as a whole if decisions of our courts made by patent judges of great eminence could be taken into the general jurisprudence and consideration of European Courts. Prima facie, I would have thought what the noble Lord, Lord Belstead, has submitted would be helpful in that direction. In suggesting that this Amendment should be withdrawn, I have listened carefully to what the noble and learned Lord has said. He has referred to Clause 118(5). I have had the greatest difficulty in understanding this very long clause and its purpose. I wonder whether the noble and learned Lord has had regard to the words at line 10 of Clause 18(5), where it says that the provisions of the Act,
"…are so framed as to have, as nearly as practicable, the same effects in the United Kingdom as the corresponding provisions of the European Patent Convention."
It is the words, "as nearly as practicable" which caused me great anxiety, whereas the wording of the Amendment moved by the noble Lord, Lord Belstead, draws attention to the Convention and

823
suggests methods of interpretation without the qualification of the words, "as nearly as practicable".
The LORD CHANCELLOR: At a later stage we will come to an Amendment dealing with those much discussed words, "as nearly as practicable" which always provide some difficulties. "As nearly as we can possibly get" is a rough translation which will do for the moment. We will look into that later. I am sorry that the noble Lord, Lord Lloyd, with his normally acute mind, finds himself troubled by Clause 118(5). I will look at it again. It is very important that these things should be clear, but I believe that the protocol point is fully covered by the reference in Clause 118(5) and that we have got "as nearly as practicable" to ensuring what the noble Lord had in mind in moving his Amendment.
Lord DAVIES of LEEK: May I intervene, as a mere layman who has been looking at this all the way through from the point of view of the protection of the small entrepreneur and small inventor who is lost in a sea of international jurisprudence. If lawyers do not know where they are, God help the poor layman in the Common Market who is struggling to get protection! I was delighted to hear my noble and learned friend, with his usual Welsh eloquence, say that he would look into the definition "as nearly as practicable". I could give ten interpretations of that now; and, being a mere layman, I am completely lost in this sea of litigious dissension. I am grateful that there has been a promise that if possible this will be simplified. I have looked at these various clauses, and I hope that we shall be able to take care of the poor, small inventor who wants to find his way to protection and truth through this international language used by the lawyers.
Lord LYELL: I think that every word the noble Lord has said in fact reflects the feeling of many Members of your Lordships' House and many others in the Committee. Many of us find it extremely hard, and we are very much guided by the noble and learned Lord the Lord Chancellor. We agree that when the Bill states, "as far as practicable", it is possible to take that phrase and give it at least two definitions. I notice that the noble Lord,
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Lord Davies of Leek, can supply ten, and we look forward to hearing the other eight on a later occasion.
The LORD CHANCELLOR: The difficulty we are in concerns the verbal ingenuity of my noble friend Lord Davies of Leek. It does not surprise me at all that he can find 10 alternative definitions; but if he reads Clause 118(5) with that calm which perhaps he does not always bring to matters concerning the European Economic Community—because he does not always display that cold intellectual detachment on anything which relates to this field—I think he may find himself helped. However, I must not tease him about that.
I really do not think it is very difficult, but we will have a look at the words "as nearly as practicable". They are broad words, and we are setting out to make our law have the same effect, as far as we can, as the corresponding provisions of European Conventions. That is really as far as we can hope to go, bearing in mind differences of language and other similar matters. I hope that, in the light of what I have said, subject to returning to the phrase as nearly as practicable", the noble Lord will feel disposed to withdraw his Amendment.
Lord BELSTEAD: I am very grateful to the noble and learned Lord for the consideration he has obviously given to this Amendment. However, I am a little worried over the fact that the noble and learned Lord referred me to Clause 118(5), for the reason which has been given by the noble Lord, Lord Lloyd of Kilgerran. Clause 118(5) says that various clauses including Clause 114 are,—
"so framed as to have, as nearly as practicable, the same effects in the United Kingdom as the corresponding provisions of the European Patent Convention…".
It is true that we shall be returning to this when we reach Amendment No. 365. I do not know how the courts will determine the effect of that provision, but presumably it could allow a slightly different interpretation of the protocol to Article 69 from the views which are held by other Continental countries. If that is the case, then the decisions taken by our courts, based on the interpretation of Article 69, will be decisions which will not carry so much weight with Continental courts—or, at least, so I would hazard.

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Another thing which worries me, and which the noble and learned Lord was kind enough to make clear in his opening remarks on this Amendment—and I do not think this has been picked up so far—is that Clause 114 and Article 69 correspond. Of course, the noble and learned Lord is, as always, absolutely right about that but, if one looks at Clause 118(5) it is provided that various clauses in this Bill shall be:
"so framed as to have as nearly as practicable the same effects in the United Kingdom as the corresponding provisions of the European Patent Convention, the Community Patent Convention and the Patent Co-operation Treaty …".
What worries me is that the proviso to Article 69 is surely not a corresponding provision to Clause 114: that is precisely what it is not. Clause 114 provides that protection shall be decided by the terms of the claim, and that is what Article 69 of the EPC decided. The two are absolutely on all fours, but because, as I sought to explain in moving the Amendment, different countries have interpreted Article 69 in different ways, the proviso to Article 69 had to be worked out in the 1960s and agreed upon by the signatories to the European Patent Convention.
I would ask the noble and learned Lord to be so kind as to consider before the next stage of the Bill, quite apart from the difference of opinion we may have regarding the words "as nearly as practicable", whether the words in the next line, "the corresponding provisions", can possibly mean that Clause 114 of this Bill corresponds to a protocol to Article 69, which is mentioned nowhere in the Bill. Perhaps I ought to leave the matter there. Clearly my own view is worth nothing at all on this, compared with those which have been put forward by the noble and learned Lord and others. If the noble and learned Lord would be so kind as to look at that point in addition to the "as nearly as practicable" point I shall feel that the Amendment has been worth moving.
The LORD CHANCELLOR: I think the noble Lord underestimates the value of his contributions to our discussions on these and other matters, if I may say so. I will look at the point, of course. As the protocol is an integral part of the Convention, I am still disposed to the view that the situation is covered by
826
Clause 118(5), but certainly I will look at this again.
Lord BELSTEAD: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 114, as amended, agreed to.
Clause 115 agreed to.
Clause 116 [Existing patents and applications]:
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 353A:
Page 84, line 4, at end insert ("to").
The noble and learned Lord said: This is a minor drafting change and it does not affect the meaning of Clause 116. It may well be that the noble Lord, Lord Lyell, will agree that if the Committee approves of it, it makes superfluous Amendment No. 354, which is to the same effect. I beg to move.
Lord LYELL: I would certainly concur with the noble and learned Lord, and I am happy to support him.
On Question, Amendment agreed to.
5.50 p.m.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 354A:
Page 84, line 6, leave out ("made") and insert("filed").
The noble and learned Lord said: Amendments Nos. 354A, 354B and 354C are drafting Amendments. The first reflects the wording of the 1949 Act; Amendment No. 354B corrects a printing error, while Amendment No. 354C paves the way for the reference in subsection (4) to the priority effect of an application made under the 1949 Act. I beg to move.
Lord LYELL: Once again, we are grateful to the noble and learned Lord and we believe that this Amendment clarifies the position.
On Question, Amendment agreed to.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 354B:
Page 84, line 7, leave out second ("a").
On Question, Amendment agreed to.
The DEPUTY CHAIRMAN of COMMITTEES (Baroness Wootton of Abinger): If Amendment No. 354C is agreed to, Amendment No. 355 cannot be moved.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 354C:
Page 84, line 15, leave out ("that Schedule") and insert ("the following provisions of this Act").
On Question, Amendment agreed to.
Lord LLOYD of KILGERRAN Lord LLOYD of KILGERRAN moved Amendment No. 356:
Page 84, line 16, at end insert—
("(4A) Any patent to which subsection (2) above relates and whose term had not expired on or before the appointed day shall have effect as if the term mentioned therein was twenty years, subject to the following conditions—

(a) any licence existing at the day on which this subsection comes into operation which has been granted for the term of the patent shall be treated as having been granted for the term as so extended if the licensee so desires;

(b) if the patent would apart from this section have expired on or before the day ending the period of 12 months after this subsection comes into operation, the patent shall during the period of the extension be deemed to be subject to the provisions of section 43 above as if an entry had been made in the register to the effect that licences under the patent are to be available as of right.

(4B) Where before the day on which subsection (4A) above comes into operation a person made in good faith effective and serious preparations to do an act which would constitute infringement of a patent by virtue only of the extension under subsection (4A) above, and it appears to the comptroller having regard to all the circumstances that it would be just to order the grant of a licence to that person, the comptroller shall have power to order the grant to that person of a licence under the patent on such terms as he thinks fit.
(4C) The provisions of subsections (4A) and (4B) above shall not apply to any patent whose term was extended under the provisions of section 23 or 24 of the 1949 Act to a term of twenty years or more.")
The noble Lord said: We now come to a series of Amendments which deal with the term of patents. Your Lordships will recall that this Bill extends the life of all patents to 20 years. Under the Patents Act 1949, which is still in force, the term of a patent is 16 years, subject to the payment of fees. But there are two sections which enable a patentee to obtain an extension of 10 years, if the exploitation of his patent has been interfered with
828
because of war difficulties, and if the court considers that the invention of the patent is of outstanding merit. It seems to me that anomalies will arise if only patents granted after the passing of this Bill will be extended to 20 years, and the object of these Amendments is that all patents granted and in force at the time when the Bill is passed should have their term extended to 20 years, instead of the normal 16 years, subject to certain safeguards for other firms which are in the industry with which the patent is concerned.
Your Lordships will see that if a patent is granted today, under the old Act it will have a life of only 16 years, although there is a paragraph in one of the Schedules which states that in special circumstances, if it is a meritorious invention, there can be a further extension of four years. That kind of procedure might cause certain anomalies, and therefore it seems that a simpler procedure would be, subject to certain safeguards, to extend to 20 years the term of all the patents that are in force when this Bill is passed.
In connection with Amendment No. 356, may I also refer to consequential Amendments Nos. 366, 371, 372, 375, 381, 382 and 383? Amendment No. 356 states that any patent,
"whose term had not expired on or before the appointed day shall have effect as if the term mentioned therein was twenty years".
Paragraph (b) of the Amendment states that if the patent that had been granted under the 1949 Act would have expired before the period of 20 years, then there should be a licence available as of right to anybody who has been using that invention during an interim period of one year and,
"the patent shall during the period of the extension be deemed to be subject to the provisions of"
Section 43 of this Bill, which enables somebody to come along and say, "I have been using this invention. It will be quite intolerable if this extension interferes with my business, so I can have a licence as of right for this period".
Subsection (4B) of this Amendment gives protection to the person who may have been watching patents that have been on the register of patents under the 1949 Act, thinking that when the patent expires he will be able to go into that kind of business. It is a rather long subsection, which states that if,

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"a person made in good faith effective and serious preparations to do an act which would constitute infringement of a patent by virtue only of the extension under subsection (4A) above, and it appears to the comptroller having regard to all the circumstances that it would be just to order the grant of a licence to that person, the comptroller shall have power to order the grant to that person of a licence under the patent on such terms as he thinks fit."
As I have said, that is a safeguard for industrialists who consider going into a certain kind of business, and have made plans, before any extension has been given. Subsection (4C) of this Amendment is a minor matter. It states, in effect, that no patent shall have a life of more than 20 years. There is a clause in the Bill which gives power for the extension of a patent by four years, but that would not apply if the life of the patent had already been extended to 20 years.
Amendments Nos. 366, 371 and 372 are merely consequential, but perhaps I may speak to Amendment No. 382, which is entitled Extension of Term of Patents. This is a rather long clause, but its whole object is merely to safeguard the position of a patentee who has made, or will make, an application for an extension of the term of his patent under the 1949 Act, which gives the court, at its discretion, powers to extend the term for 10 years. It safeguards the position of a person who makes such an application under the present Act, and before the present Bill has been passed, and enables the court to give an extension of the term of the patent to not more than 20 years. This is really a consequential Amendment, to safeguard the interests of those patentees who have been operating under the present Patents Act. I beg to move.
6 p.m.
The LORD CHANCELLOR: I do not wish to truncate the debate, least of all to prevent the valuable contribution of the noble Earl, Lord Halsbury, but there have been important developments in regard to this matter about which I think noble Lords might like to know. They may, indeed, have the effect of shortening the debate.
As the noble Lord, Lord Lloyd of Kilgerran, has indicated, the Bill as drafted provides that the term of patents granted under the 1949 Act shall remain at 16 years. That policy was based on consultations held after the publication
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of the Banks Report, which recommended that in future the term of patents should be 20 years. However, in response to the urgings of some sectors of industry, particularly the chemical industry, very recently the Government have again referred the term of "old" patents to the Standing Advisory Committee on Patents, upon which, as noble Lords will know, industry, commerce and those who are professionally involved are all represented. As a result of that new round of consultation, during which I am happy to say that a fresh consensus emerged, it is intended that old patents, which have less than five years of their life to run, shall continue to have a term of 16 years, but that all other old patents shall have a term of 20 years, subject to safeguards for licensees and others who might be adversely affected by the increase in the term of patents which would normally have been expected to expire at the end of their sixteenth year.
It will be apparent that this new policy, to which the Government propose to give effect by amendments to the Schedules to the Bill which will be tabled on Report, closely resembles the proposals contained in the Amendments set down by the noble Earl, Lord Halsbury, and the noble Lord, Lord Lloyd of Kilgerran, except that I believe that their Amendment would give a 20-year term to all old patents. However, since the Government's policy on this point and on some details of the provisions for safeguarding the position of licensees and others is based on consultation with the industries that are directly and closely affected, and is further endorsed by the Standing Advisory Committee, I hope that noble Lords may feel that the proposed policy is acceptable and, indeed, is to be preferred.
If that generous view of the matter is taken by those who have raised the question, it will mean that, if noble Lords are so disposed, a number of Amendments might be withdrawn in the light of the assurance that I have given. As the noble Lord, Lord Lloyd of Kilgerran, has said, that assurance embraces Amendments Nos. 366, 371, 372, 375, 381, 382 and 383. It embraces also the Amendments which the noble Lord, Lord Lyell, the noble Lord, Lord Belstead, and the noble Lord, Lord Cawley, have put down in Amendments Nos. 373, 374, 376 and 377. Naturally, I shall be very willing to hear

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what noble Lords have to say. I apologise for intervening, but I thought that it might concentrate the debate if I indicated the Government's intentions, supported as they are by industry itself and by the Standing Advisory Committee.
Lord LLOYD of KILGERRAN: Before the noble and learned Lord sits down, is he able to explain what is the magic of the five-year period? It is patents that have another five years to run which will be extended. It seems to me prima facie that that period of five years does not have regard to the practical matters which industrialists, particularly in the chemical field, have to face.
The LORD CHANCELLOR: It is thought that if patents have a term of less than five years to run it is not unreasonable to adhere to the 16-year rule. That is the only explanation I can give.
Lord NORTHFIELD: Before my noble and learned friend finally sits down, in considering this point and reaching the offer he is making to the Committee, may I ask him whether a comparison with practice in Europe has been taken into account? It is very important that under the Community Patent Convention we should all be working on the same lines so that rights in one country can be asserted against rights in other countries. Therefore, is it not important to get that point right before finally we agree to what the noble and learned Lord is now proposing?
Lord HARMAR-NICHOLLS: Under the 1949 Act, patentees with less than five years to run on their patent would still be able, for special reasons, to obtain an extension if their case justified it. It would not mean that automatically they would be barred.
The Earl of HALSBURY: In supporting the Amendment of the noble Lord, Lord Lloyd of Kilgerran, I very much commend what he had in mind originally. I had something like it in mind, but I thought that his drafting was so superior to mine that, rather than pursue my own points, I added my name to his Amendment. I am very gratified to hear what the noble and learned Lord has said and that the Government have advance their thinking
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in the direction of doing justice to inventors. However, I am deeply disturbed at this magic five-year period which is going to divide inventors into first and second-class citizens. Those who got a patent on Monday or earlier have a 16 years' life, while those who got it on Tuesday or later have a 20 years' life. I believe that this Parliamentary democracy of ours is on a collision course with destiny, and that when the day comes when we have to defend it the fewer disgruntled people there are the better. I cannot see that what I might call the terminal five-year inventor can be other than disgruntled. I am an inventor—or was an inventor at one time. I should feel that Parliament was doing injustice between one citizen and another by dividing them in this way into first and second-class citizens.
Although it would be quite inappropriate to divide the Committee at this point on the issue, because we are hearing about it for the first time now, it is one about which I feel very strongly. I should like to take such action as would be compatible, at least, with raising the matter again on Report or at a later stage, when we have had time to think about it. I hope that the noble and learned Lord will think very carefully about whether or not we ought to divide these people into first and second-class citizens. This is the kind of issue upon which Governments suffer from characteristic faults. They are timid when they ought to be decisive and rash when they ought to be cautious. I am sure that this five-year terminal concept is just super-caution when decisiveness is called for. I do not believe that any harm whatever would come from putting all inventors on the same footing. I must leave it to the noble Lord, Lord Lloyd of Kilgerran, to say the last word on the subject, but I think that I shall be with him on whatever action he chooses to take.
Lord CAWLEY: Before the noble Lord withdraws his Amendment, there are, of course, first and second class licensees, too. The five-year rule in this case would be of great importance to licensees, because those who are at present licensees would not know what their position is. They might have bargained that the licence would come to an end and that they would cease paying royalties.

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They might have taken almost any industrial action to safeguard themselves. The fact that the patent under which they have a licence has been extended completely fortituously might embarrass them very seriously. Therefore one must think of the licensees as well as the patentees.
Lord HARMAR-NICHOLLS: My point was based upon that concept. There is the inventor and the licensee. Both are equally important in operating any good which may come from this. If this new Bill, when it becomes an Act, does not remove from the inventor who has special reasons for getting it the 10-year extension which has already been explained by the noble Lord, Lord Lloyd of Kilgerran, it may meet the point at a stage which is a reasonable compromise for both sides. However, if the effect of the Bill is to remove the 10-year extension, the 1949 Act period, then clearly it would be unfair to the licensee.
Baroness WARD of NORTH TYNESIDE: Having listened carefully, with very little knowledge, to what the noble Earl, Lord Halsbury, has said, when the noble and learned Lord was speaking and was making the first, second and third classes, he said that he had consulted all the people who ought to be consulted—at least that is what I understood him to say. Did the people whom he consulted agree to all the points that are now being made, despite the criticisms that have come from very experienced people?
Lord NORTHFIELD: My noble and learned friend has been asked some questions and no doubt he will be replying, but I should like to put to him one further point. Has account been taken of the fact that in 1919 when the terms of patents were extended from 14 to 16 years it was applied to all patents at that time? In other words, there was no attempt at that time to have first-and second-class, some extended and some not extended. I wonder why a few are now being excepted in the proposal in the way outlined by the noble and learned Lord, when in 1919 there was a clear across-the-board extension?
6.12 p.m.
Lord LYELL: I should like to support the noble Lord, Lord Northfield, in that
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regard. He has a particular point there, and I believe it links with the Amendment we are discussing. The noble Lord, Lord Lloyd of Kilgerran, has pointed out that there are safeguards in this Amendment to protect any person who might be contemplating taking any action in the light of a 16-year patent, but I wonder whether the noble and learned Lord will accept that we find it difficult to equate the safeguard described by the noble Lord, Lord Lloyd of Kilgerran, with what is perhaps intended to be the safeguard of the five year life—and the more than five year life—of the current 16-year patents. We wonder whether the division into young and not so young patents is the safeguard that the noble and learned Lord intends it to be.
The LORD CHANCELLOR: No doubt these are problems of complexity and difficulty, but I should like to begin by assuring the noble Baroness, Lady Ward, that we have indeed consulted with the industries directly affected, and especially the chemical industry, and also we have had the matter referred back to the Standing Advisory Committee. That Committee represents all the industrial interests affected and all the expertise in this field. What has emerged is, I suppose, to a slight extent a compromise. But what have emerged are the proposals which I have put to your Lordships. I think the clue to the five year-rule proposal—if I may so define it—is that it is thought that if this provision were put in there would be the least disturbance to the arrangements contemplated.
With regard to the intervention of the noble Lord, Lord Cawley, of course licensees are particularly concerned, but they would not be embarrassed by this. Indeed I should have thought they would be freed. Coming to some of the questions that I was asked, the noble Lord, Lord Harmar-Nicholls, raised a question about extensions for special reasons. The power of extension will remain, but I am bound to say that it will be reduced from a 10-year period to a four-year period in the light of the general benefit that will be gained from the new policy by the "not so old" patents, as the noble Lord, Lord Lyell, so attractively described them. I would not call them "young" patents but certainly not "old" ones.

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My noble friend Lord Northfield asked me a question in regard to the European patent rules. My understanding is that it will be for each country to lay down its own rules, but the European rule will be a 20-year period. So what really remains at issue between us at the moment is the five-year problem. I will certainly look at this again and it may well be that all of us are prepared to look at it in the light of the new compromise—if that is the right way to describe it—which I have submitted to your Lordships. As I have said, it is not so much an emanation of a governmental mind; there is nothing political about this. It really is the best solution to the problem and the best advance with the best experts in the field whom we have consulted—until of course we heard the expertise in this debate. That is the advice we have received. Therefore, I will undertake to look at what has been said, and perhaps in view of its importance we may return to this matter again at the Report stage.
Lord HARMAR-NICHOLLS: I should like to emphasise one point arising out of the reply made by the noble and learned Lord. I think I am voicing the opinion of the people who have been "lobbying" me on this point: I cannot see the merit or perhaps the fairness of reducing the 10-year period for extension to four years, if before this Bill was conceived the general feeling was that, if it could be justified that a 10-year period of extension was right, it would be provided.
There is no suggestion that it would be 10 years, the amount that could be given could be even less. If the maximum allowed is reduced from 10 years to four years, then the noble and learned Lord will be removing part of the rights that were previously possessed by a minority of inventors. I should have thought that, from the point of view of creating the sort of atmosphere that would allow his very sensible submission that what he is suggesting comes from the people who understand this matter and who are to be affected by it, it would remove the one or two—and there may not be more than one or two—who would feel that they had something taken away from them.
Lord DAVIES of LEEK: I should like to declare a slight interest in the pharma-
836
ceutical industry and to point out that many people will be aware that the Government at least have made an effort to clarify this very difficult problem. Consequently, I agree entirely that we should look into this a little deeper and perhaps obtain greater clarification when we reach the next stage of the Bill. I am grateful for the efforts made by the noble and learned Lord and his colleagues to obtain some clarification of this position.
The LORD CHANCELLOR: I will certainly look into the point just made by my noble friend and also that made by the noble Lord, Lord Harmar-Nicholls. Obviously what we want in this matter is a consensus on the part of all those affected. That is what this whole operation is about and we will look at it again to see whether we can make some adjustment to achieve a consensus which, I may say, already exists within the Standing Advisory Committee. If we can extend it to embrace your Lordships as well, we shall be all the happier. It may be possible, but at the moment I do not know.
Lord LLOYD of KILGERRAN: I am grateful to the noble and learned Lord for his expression of sympathy with the Amendment. He has said that negotiations have been going on and that the expert committee has advised what he refers to as the five-year plan. But I wonder whether the noble and learned Lord is quite up to date with the further negotiations that are going on? He referred to the chemical industry: I have in my hand at the moment a letter written by the Imperial Chemical Industries Limited dated 22nd February, addressed to the Secretary of State in the other place, the right honourable gentleman, Mr. Edmund Dell, which refers to my proposal and also to the five-year proposal of the expert committee.
There is a suggestion by the representatives of the deputation from this large sector of the chemical industry that perhaps, in all the circumstances, a two-year plan would be more appropriate than a five-year plan. Also, I have been advised that the pharmaceutical industry still considers that the Amendments I have put forward would be the proper ones to safeguard their interest, not only in this country but internationally, by extending all the patents to 20 years,

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subject to the safeguards which I have adumbrated. But, in view of the sympathy expressed by the noble and learned Lord and the fact that the matter is to be looked into, I beg leave to withdraw the Amendment.
The Earl of HALSBURY: In associating myself with the request made by the noble Lord, Lord Lloyd of Kilgerran, for leave to withdraw the Amendment, I would ask the noble and learned Lord to consider one factor among all the others he has promised to consider. The concept of an inventor without a licensee is a viable concept but you could not have licensees without inventors. Inventors are the creative factor in this situation, and it is they whose arrangements ought not to be interfered with, rather than licensees. If the noble and learned Lord will just remember that one, I will be very happy to withdraw.
Amendment, by leave, withdrawn.
6.20 p.m.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 356A:
Page 84, line 20, after ("but") insert (",notwithstanding anything in section 5(3) above,").
The noble and learned Lord said: It may be convenient also to consider with this Amendment, if noble Lords opposite agree, Amendment No. 357. Clause 116(4) provides that an application under the new Act may claim priority from an application accompanied by a provisional specification filed under the 1949 Act but in respect of which a complete specification has not been filed before the appointed day. But since there is nothing in the 1949 Act corresponding to Clause 5(3) of the Bill, which nullified the priority effect of an earlier application, if there has been filed an even earlier application disclosing the same invention, it is necessary to provide that in the case of a new Act application relying for priority on a 1949 Act provisional specification priority shall not be subject to the nullifying effect of Clause 5(3) of the Bill. This is what Amendment No. 356A does.
If any noble Lord did not understand all that I have just read out, I fully, whole heartedly and entirely sympathise with him, but perhaps noble Lords will be good enough to look at what I have sug-
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gested from my notes. Amendment No. 357, which was tabled by noble Lords opposite, would have achieved the same result in a slightly different way, and I am grateful to them for drawing our attention to the point. I hope that after they have had an opportunity of studying that which I have unashamedly read out they may feel reasonably content. I beg to move.
Lord LYELL: I saw the noble and learned Lord looking straight at me as he pointed out those who might not have understood what he was saying.
The LORD CHANCELLOR: If I had had a mirror I would have reflected my own face.
Lord LYELL: I remember the tale of the mirror which was asked, and indeed replied, who was fairest—or should I say cleverest—of them all. But certainly the noble and learned Lord, if he was looking in my direction, hit the target first time, because I found it just a little difficult to follow what he was driving at. However, immediately I was gratified by the fact that he said he was grateful that we had tabled Amendment No. 357 and he understood that our Amendment No. 357 had been met by Amendment No. 356A. I believe that, certainly if the noble and learned Lord says that at this stage, and therefore I would not wish to proceed further with Amendment No. 357 when we come to it. There is a point that I hope we will be able to cover under Amendment No. 356B. Nevertheless, I am very grateful for the amount of effort and brain-power the noble and learned Lord has put into explaining Amendment No. 356A, and indeed we shall look at his words with great attention.
On Question, Amendment agreed to.
The DEPUTY CHAIRMAN of COMMITTEES (Lord Derwent): I must inform your Lordships that if Amendment No. 356B is agreed to I will not be able to call Amendment No. 357.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 356B:
Page 84, line 22, leave out from ("Act") to end of line 23 and insert ("if the date of filing the abandoned application falls within the period of fifteen months immediately preceding the filing of the later application").
The noble and learned Lord said: This Amendment clarifies the status of provisional applications made under the 1949 Act and in being on the appointed day. They cease to exist on that day because they are only provisional applications, but they may, of course, be used to found the priority of new Act applications. I beg to move.
Lord LYELL: We are once again grateful to the noble and learned Lord. It seems that our efforts in Amendment 357 are indeed met by the purpose of this Amendment, No. 356B. My noble colleague Lord Belstead and I had some questions to ask about the abandoned application. The brief explanation that the noble and learned Lord has given has certainly satisfied us for the moment, and I think probably for the longer term. However, we shall consult and look at the noble and learned Lord's words with attention once again, and we thank him for his explanation.
On Question, Amendment agreed to.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 357C:
Page 84, line 24, leave out subsection (5) and insert—
("(5) Schedule 3 to this Act shall have effect for repealing certain provisions of the 1949 Act.")
The noble and learned Lord said: This is a purely paving Amendment for Amendment No. 381B, which proposes deletion of the existing Schedule 3 and insertion of an entirely new Schedule dealing with repeals of provisions of the 1949 Act. I beg to move.
On Question, Amendment agreed to.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 357A:
Page 84, line 28, leave out subsection (7) and insert—
("(7) In Schedules 1 to 4 to this Act "existing patents and applications" means any patents and applications mentioned in subsection (2) above and expressions used in the 1949 Act and those Schedules have the same meanings in those Schedules as in Act.").
The noble and learned Lord said: This Amendment paves the way for Government Amendments to the Schedules (which relate to the effect of the Bill on 1949 Act patents and applications) referring
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to existing patents and applications. The Amendment also makes clear that where an expression is used in the Schedules and also in the 1949 Act it shall have the meaning given to it in the Act. In other words, in relation to 1949 Act patents and applications the 1949 Act meanings shall apply and not the meanings of the Bill, in so far as they may differ from those of the 1949 Act. I beg to move.
On Question, Amendment agreed to.
On Question, Whether Clause 116, as amended, shall stand part of the Bill?
The LORD CHANCELLOR: May I intervene briefly to deal with one matter which is convenient to be dealt with on the Question, Whether Clause 116 shall stand part. Since the clause that we have been discussing is concerned with the future of patents granted under the 1949 Act, I think I should rectify an error which I made during the debate on Second Reading. Your Lordships may remember that the noble Lord, Lord Cawley, asked me whether there would be a subsequent Bill to consolidate the 1949 Act and this Bill, and I then replied without hesitation that there would be such consolidation. I was relying, in making that observation, on a statement in the Law Commission's Eleventh Annual Report to the effect that a consolidation Bill was in the course of preparation. I now understand that although a consolidation Bill was at one time considered, that proposal was subsequently dropped, and it is not now the intention to proceed with one. I therefore apologise for unintentionally and innocently misleading the House on this matter.
Perhaps I should explain why there has been a change of mind on this. It was always the intention to keep alive at least, the provisions of the 1949 Act about the processing of applications and many related provisions, and it had originally been thought that it would be useful to consolidate the surviving provisions. But, in fact, fewer of the 1949 provisions will survive than was at first envisaged. Those that do survive have been little amended, and although the Bill may amend them further the Amendments are not likely to be extensive. Practitioners already know the surviving provisions very well—the noble Lord, Lord Lloyd of Kilgerran, no doubt can recite every one in his sleep. However, I do not think that consolida-

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tion would help them in their labours. Indeed, changing the numbering of sections, which would be inevitable on consolidation, would, I think, cause confusion. It has therefore been thought better to leave the unrepealed portions of the 1949 Act as they are and to wait for them to die a natural death on the expiry of all the patents granted under that Act. On reflection, that seems to be a sensible course to adopt, but I again apologise to the House for having misled it on Second Reading.
Lord CAWLEY: I am very grateful to the noble and learned Lord. On second thoughts, I think that he is right and that my idea of consolidation would not quite work.
Clause 116, as amended, agreed to.
Clause 117 agreed to.
Clause 118 [Interpretation.]:
6.31 p.m.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 357B:
Page 84, line 37, leave out ("as published") and insert ("on the first occasion on which it has a date of filing").
The noble and learned Lord said: The Bill as drafted makes designation of the United Kingdom at publication the crucial date, both in relation to European and international applications. In fact, an application is to have some effects—for example, it can form the basis for a claim to priority—even if the designation of the United Kingdom is withdrawn between filing and publication. Under the Conventions it is not possible to add designations subsequently. Accordingly, it is more correct for the Bill to make designation at filing the basic test. If the United Kingdom designation is later withdrawn the application will cease to have certain effects. I beg to move.
On Question, Amendment agreed to.
Lord IRONSIDE Lord IRONSIDE moved Amendment No. 358:
Page 85, line 6, at end insert—
(""computer program" means one or more recorded symbols or signals representing a sequence of instructions which is capable of causing a computer to perform a useful function;").
The noble Lord said: I believe this definition of a computer program to be a necessary part of the Bill. It is not a nitpicking Amendment because there is a genuine need for this definition. I have studied the Amendment to Clause 1(2) which was moved by the noble Lord, Lord Oram, and I have closely studied Hansard to see what the noble Lord said, as I was not in my seat at the time. It is quite clear that he touched upon the points that I wish to make in moving this Amendment, and his Amendment to Clause 1 goes some way at least towards recognising the problem. However, assuming that one understands the term, "computer program", I do not think that, by nesting up one line the phrase "a program for a computer", the effect of this subsection on this wording is materially altered or, for that matter, altered in the way in which the noble Lord obviously felt it should be altered.
The exceptions in Clause 1 are not listed in any way that expresses the intentions of the European Patent Convention. I think that the noble Lord, Lord Oram, made it clear to the Committee that the Bill incorporates only what is necessary for the purpose of an Act of Parliament to accede to the Convention. We all understand and accept that. The noble Lord's Amendment undoubtedly meets the criticism made on Second Reading, particularly the criticism of the noble Lord, Lord Alexander of Potterhill, that the phraseology should more closely follow that of the European Patent Convention. However, I do not think that that is sufficient.
I have consulted International Computers Limited, the International Telephone and Telegraph Company Limited and the British Electrical and Allied Manufacturers' Association Limited of which GEC for instance is a member, on this matter. They all believe that the intentions of the European Patent Convention must be clearly expressed in the Bill in order to distinguish between intellectual activity covering flowcharts, programs written in high-level programming languages, coded instructions and so forth, all of which is symbolic, and engineering activity which is producing adaptive and programmed hardware which is represented by logic circuits, wiring, pathways in a

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semi-conductor and so on, which is not symbolic. In the words of the European Patent Convention, the latter is "susceptible of industrial application". The Bill uses the words "capable of" in Clause 1(1) which is, as far as I can see, a materially different way of putting the matter.
The present position in, for example, the United States, is that a decision in the courts has granted patents for two inventions the novel features of which were embodied purely in the software aspect of a piece of hardware. The International Association for the Protection of Industrial Property has come out in favour of patents for software, and the climate of opinion has somewhat changed in this respect since the Banks Committee reported. The basic reason for this is that computers now incorporate hardware which introduce a sense of learning and adaption which is unrelated to symbolic instruction. That is clearly brought out as being a very important matter in the four-year programme for the development of informatics in the European Community.
I should like to quote a short statement from this four-year programme. The Commission state:
"The mini or microcomputer moreover is becoming indistinguishable from many other kinds of so-called 'intelligent' terminals-devices for input and output incorporating some kind of specialised or general processing and memory power.… The explosive development of a great variety of intelligent devices owes much to the development of electronic component technology."
That is a very important fact. Later on in the same document the Commission goes on to show and consider what a computer program in fact is. This Amendment simply defines the computer program as expressed in the European Patent Convention and does not alter the effects of Clause 1(2). It would enable electronic circuit designers, on whom this country so greatly depends, to seek adequate protection for their inventions involving adaptive devices. Nor does it destroy the hopes of a programmer for some other form of intellectual right.
A memorandum sent to the comptroller of the United Kingdom Patent Office by the London Chamber of Commerce and Industry in January 1972 referred to the proposed exclusion of computer programs
844
from patentability in the draft of the European Patent Convention. It pointed out that there was no generally accepted definition of the term and that use of such a broad term might lead to exclusion of otherwise patentable subject matter simply because some form of programming was a component part of the subject matter.
The World Intellectual Property Organisation, which is a United Nations organisation, published draft model provisions for a national law on the protection of computer software on 28th January 1977. This includes a definition of a computer program. The draft is based on the work of a so-called advisory group of non-governmental experts. This group includes representatives of computer manufacturers, users, patent and copyright lawyers and academics with Government representatives as participating observers. There were many views as to the most suitable definition, but there were no suggestions at any time that the expression "computer program" was so well understood that no definition was necessary.
I hope that the noble and learned Lord is susceptible to my arguments. I hope that the whole House will agree that he is very capable but I do not think that anyone for one moment would consider that he is generally susceptible. I hope that he is at least susceptible to my arguments. I hope that the wording of my definition is also acceptable. If it is not, I hope that the noble and learned Lord can look at this matter again and perhaps introduce at a later stage a suitable Amendment, in which case I should certainly be happy to withdraw my own Amendment. I beg to move.
6.40 p.m.
The LORD CHANCELLOR: I am certainly sympathetic to the intention of this Amendment which embarks on a field about which I cannot pretend to any capability at all; namely, this difficult field of electronics in which the noble Lord obviously has considerable expertise. As I understand it, the purpose of the Amendment is to prevent the term "computer program" in Clause 1(2)(f) of the Bill being interpreted so widely as to include certain electronic devices and others which ought to be patentable. As I understand it, that is the purpose of the Amendment, and the point was raised by the noble Lord on Second Reading.

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The noble Lord readily conceded that we tried in the Amendment that was put down to Clause 1(2) to go some of the way to meet what he had in mind. The Amendment that was put down, to which your Lordships agreed, has the effect of causing the subsection to follow the European Patent Convention in including "computer program" in a list which reads:
"… a scheme, rule or method for performing a mental act, playing a game or doing business".
It would seem from that grouping that the term must be construed as covering items of the same nature as the other items in that list.
The proposal of the noble Lord departs from the Convention in attempting an exhaustive definition of the term, "computer program". As I understand it, that would take a course quite different from that which the other participants in the Convention think desirable or necessary. I confess that at the moment I feel that what has already been done is about as far as we can go. Various matters have been raised by the noble Lord in the discussion this evening, and experiences and statements from other highly eminent sources have been cited. All I willingly undertake to do is to look at what has been said and look at this again. If we could have kept in line with the European Patent Convention language, and that protected the kinds of interests and initiatives that the noble Lord has in mind, I should have been happy with that course. However, I am willing to look at it again in the light of what the noble Lord has said.
Lord IRONSIDE: I should like to thank the noble and learned Lord for what he has said. So far as I can see in the clause, the list of exclusions is merely a string of items in no particular order because this is the way the Bill has been prepared, and it has not been prepared in exactly the same way as the European Patent Convention. However, I should like to thank him for agreeing to look at this matter again. The most important point here is that, in the computer industry in Europe, everybody is trying to strengthen the technological base against the United States' efforts in the computer industry. Therefore, anything that can possibly be done to help the patentees of electronic circuits will be welcome in this Bill and
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would give them the degree of protection that they would need. I beg leave to withdraw this Amendment.
Lord DAVIES of LEEK: Before the noble Lord sits down, may I ask him a question, knowing very little about this subject? My first meeting with this kind of idea was with music. There was a similar device nearly 80 years ago on the old pianola. Does the noble Lord envisage a period where we can programme a computer to get a tune out of the old fashioned pianola much better than we did? The roll on a pianola could be patented 40, 50 or 60 years ago. When the Lord Chancellor mentioned music, I hoped that music would be included in this, because it is within the bounds of possibility for a computer to be programmed to produce first-class sonatas, and everything else.
Lord IRONSIDE: In answer to the noble Lord, the pianola was programmed by what was virtually a punched card, so far as I remember. Of course programmes can now be written to play electronic music, and that kind of thing. I do not think that I should like to predict the future very far, except to say that artistically speaking it may well be possible at some time in the future to write a book, or compose music, in such a way that it is immediately accepted by a computer and, as you might say, transmuted into art, music, or whatever it is. However, I should not like to predict the future.
The Earl of HALSBURY: In associating myself with the withdrawal of this Amendment by the noble Lord, Lord Ironside, may I ask the noble and learned Lord to ask his advisers in this matter to bear in mind that when you dial a telephone number you are generating a signal which is obeyed by the telephone exchange in exactly the same way that a computer obeys its instructions, except that it does not carry out arithmetical operations in the signal generated but merely regards it as an instruction to connect one subscriber to another subscriber. The whole of this is done with the mechanical action of your finger and the switchgear in the telephone exchange. What the noble Lord and I seek to exclude from the operation of this Bill is purely mechanical and electrical engineering hardware, and

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leave "computer program" to stand as the symbolic recorded signal which is characteristic of computer inputs.
The LORD CHANCELLOR: I am grateful for that information, which has helped to clarify matters in my mind a good deal.
Amendment, by leave, withdrawn.
6.47 p.m.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 358B:
Page 86, line 9, after ("of") insert ("or applicant for").
The noble and learned Lord said: With this Amendment, it may be convenient to speak to Amendments Nos. 358C and 358D. These are purely drafting Amendments to make it clear that the definition of an "exclusive licence" applies equally to such licences granted by applicants in respect of applications as to those granted by proprietors in respect of patents. I beg to move.
On Question, Amendment agreed to.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 358C:
Page 86, line 11, after ("proprietor") insert ("or applicant").
On Question, Amendment agreed to.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 358D:
Page 86, line 12, leave out ("patented invention") and insert ("invention to which the patent or application relates").
On Question, Amendment agreed to.
6.50 p.m.
Lord LYELL Lord LYELL moved Amendment No. 359:
Page 87, line 5, leave out (""prescribed" and").
The noble Lord said: This, we hope, deals with a simple matter and we look forward to guidance from the noble and learned Lord the Lord Chancellor. As the Committee will see, we simply wish to remove the words "prescribed and". If noble Lords will turn to Clause 112 they will find that the rules which are mentioned in Clause 118 are defined, but my noble friends and I cannot
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find any definition of the prescribing which is supposed to be defined in this provision and we therefore seek clarification from the noble and learned Lord, if any is available.
The LORD CHANCELLOR: It is true that Clause 112 does not contain a specific definition of "prescribed", and so at first sight it might be thought that the Amendment is helpful. However, it will be seen that Clause 112(2) contains numerous references to "prescribing" and "prescribed"; in paragraphs (a), (e),(f)and particularly (j), which empowers the rules to prescribe anything authorised or required "to be prescribed by the Act." The definition is therefore required to pick up all those diverse references. I do not think it does any harm; let it stay in.
Lord LYELL: Once again the noble and learned Lord has made a particularly heart-rending plea. I had the impression of a fairly lengthy small dog chasing its own tail, but I hasten to add that I would not compare the noble and learned Lord with such a small beast. I, too, had noticed the use of this expression in the provisions to which he referred, and I am sure that he and others of his profession are used to defining such words every day and even through most of the night; I believe the noble and learned Lord referred to the noble Lord, Lord Lloyd of Kilgerran, defining such matters in his sleep. However, laymen like myself have doubts about such matters, and that is why the Amendment was tabled. In view of the noble and learned Lord's plea, I willingly withdraw it at this stage.
Amendment, by leave, withdrawn.
6.53 p.m.
Lord LYELL Lord LYELL moved Amendment No. 360:
Page 87, line 10, after ("and") insert ("without prejudice to the generality of the foregoing").
The noble Lord said: This is only slightly more complicated than the last Amendment with which we were dealing, and the Committee will see the words which we seek to insert into Clause 118, words which are included in the interpretation of "publishing" in Section 101 of the 1949 Act, which is governing patent law at the moment. May we be told why these words have been omitted from this Bill?
The LORD CHANCELLOR: I confess that the purpose of the Amendment was not clear to me, but in view of what the noble Lord, Lord Lyell, has said I will certainly consider his observations and, on that undertaking, perhaps he will not press the Amendment.
Lord LYELL: Certainly, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 362:
Page 87, line 31, at end insert—
("(2A) References in this Act to an application for a patent, as filed, are references to such an application in the state it was on the date of filing.").
The noble and learned Lord said: This Amendment clarifies a point on which the Bill could be thought to be ambiguous, in that under Clause 12 an application may be accorded a date of filing before it complies with all the conditions of an application under Clause 11. Further, under Clause 12(3) and (4) an application may be treated as having a date of filing earlier or later than the actual date on which it was filed. The Amendment is required because various provisions of the Bill, notably Clause 70(1)(d) on revocation, and the new clause which has been inserted after Clause 72, impose as a test the matter disclosed in the application as filed. It is necessary to define what this expression means and the intention of the Amendment is to make sure that it links up with Clause 12, the date of filing applications.
On Question, Amendment agreed to.
6.55 p.m.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 362A:
Page 88, line 9, leave out from beginning to ("76") and insert ("1(1) to (4), 2 to 4, 11(3), (5) and (6), 58, 67, 70(1),").
The noble and learned Lord said: This Amendment adds Clause 70(1] to, and removes Clause 1(5) from, the list of provisions in Clause 118(5) which are to have the same effect as the corresponding provisions of the European and Community Patent Conventions and the Patent Co-operation Treaty. It is clearly right that the provisions contained in Clause 70(1) should be included in that list. They set out the grounds on which
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United Kingdom patents, including European patents designating the United Kingdom, may be revoked. These must correspond with the provisions of Article 138 of the European Patent Convention, which specifies the grounds upon which European patents may be revoked. That Article makes it plain that the grounds specified in it are the only grounds upon which revocation is to be permitted.
Amendment No. 363 set down by the noble Lords opposite also seeks to add to the list, among other provisions, that contained in Clause 70(1), so it seems that we are in agreement so far. It is equally clear that Clause 1(5), which is concerned with the powers of the Secretary of State has nothing to do with the Conventions and should not, therefore, be included. I therefore hope that this deletion is equally acceptable to noble Lords opposite and that the Amendment can be accepted.
The DEPUTY CHAIRMAN of COMMITTEES (Lord Derwent): I have to inform the Committee that if this Amendment is agreed to, I will not be able to call Amendment No. 363.
Lord BELSTEAD: As the noble and learned Lord the Lord Chancellor has explained, the effect of the Amendment is that the clauses included in Clause 118 are as nearly as practicable to have the same effects in the United Kingdom as the corresponding provisions of the EPC, the CPC and the PCT, and it is true that the Government and my noble friends and I have been trying to do the same thing in the sense that we felt that the existing provisions as set out in Clause 118 were not quite comprehensive enough. As the noble and learned Lord said, we there part company. I would not in any way wish to critise what he said about the merits of his Amendment, which is No. 362A, but I would draw to the attention of the Committee the merits of our Amendment, No. 363.
Perhaps the noble and learned Lord was misled by referring to Clause 1(5) which our Amendment, he felt, would write into the Bill. In fact, that would not be the effect of our Amendment; our Amendment is designed to include Clause 5, not subsection (5) of Clause 1. If reference to Clause 5 is to be omitted here, presumably

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then the Bill will be saying that rules about priority under the Bill will be different from the rules about priority in Europe, and that seems extraordinary considering the absolutely crucial importance of the effect of priority.
That is one major difference of opinion, but there is another minor one. We have inserted reference to Clause 11(7), which has been omitted from the Government Amendment. That refers to abstracts and all I would ask—if that is the reason why the effect of Clause 11(7) is to be different from the European Convention—is why that is to be the case. Both the Government and my noble friends and I have included references to Clause 70 and we are particularly pleased to see that; we always understood that Clause 70 was deliberately drafted to conform with Article 138 of the EPC and certainly the Government Amendment meets us in that way. There are, therefore, just those two differences of opinion and we should be grateful if it were possible for the noble and learned Lord to deal with them.
The LORD CHANCELLOR: The noble Lord is quite right. When I spoke of Clause 1(5), that was clearly a mistake. Clause 5 is the relevant reference in Amendment No. 363. The difficulty we see about Clause 5 is that, in our opinion, the provisions of Clause 5 achieve the same result as the Convention provisions on priority but, since the structure of our provisions is different from the Convention structure, it would be inappropriate to talk of the two sets of provisions "corresponding". Our provision looks backward from the date of filing the application in suit to the earlier application from which priority is claimed. The European provisions in Articles 87 to 89 of the EPC are prospective; that is, they look forward in the sense that they grant a right exercisable in the 12 months after filing the first application in which to file a subsequent application in respect of the same invention claiming priority from the date of the first. Furthermore, in any event, it is Clause 2 which gives effect to the concept of priority date and that clause is included in the list of provisions in Clause 118(5) which are stated to correspond to the provisions of the Conventions. So, in our view, the Bill already achieves the result which this Amendment seeks.
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As to Clause 11(7), that subsection contains procedural provisions enabling the comptroller to reframe the abstract, so it would be inappropriate to declare that these provisions have the same effect as does Article 85 of the EPC. It is true that the Bill, as printed, did not fully implement Article 85 in relation to European patents and we are grateful to noble Lords for bringing this point to our attention. Amendment No. 294K to Clause 74, which we dealt with aeons ago and which the noble Lord, Lord Lyell, referred to, dealt with it. Those are the reasons for the differences between us. I do not pretend that they are simple matters; but we certainly gave consideration to this and came to the view that what we have set out in our Amendment probably meets the need of the situation better.
Lord BELSTEAD: I am grateful to the noble and learned Lord for the explanation that he has given. I believe I understood him when he explained that because the provisions of Clause 5 are, in a sense, retrospective, whereas the provisions of the corresponding Articles dealing with priority in the European Patent Convention are prospective—they talk about 12 months ahead—these two sets of provisions cannot be said to be corresponding.
As the noble and learned Lord was speaking, my mind went back to an earlier Amendment—Amendment No. 353—when I taxed the noble and learned Lord with being able to argue that something is corresponding when it does not even appear in the Bill. That was the Protocol to Article 69 which the Government are busily suggesting to the Committee through the skilful words of the noble and learned Lord corresponds to Articles in European Conventions when it does not even appear in the Bill. I feel that the argument that the noble and learned Lord has used this evening on the present Amendment strengthens the case for putting in something to do with the Protocol to Article 69 of the EPC. However, that is another matter. I am grateful to the noble and learned Lord for explaining why Clause 5 is left out of the Government's Amendment and particularly for drawing my attention to Clause 2 to which I made no reference at all, a matter for which I must apologise.

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The noble and learned Lord quite rightly pointed out that it is Clause 2 which gives effect to the provision of priority date. I should like to read what the noble and learned Lord has said and also his explanation of the reason for the exclusion of Clause 11(7) from the Government Amendment.
On Question, Amendment agreed to.
7.5 p.m.
Lord BELSTEAD Lord BELSTEAD moved Amendment No. 364:
Page 88, line 10, leave out ("are") and insert ("have been").
The noble Lord said: Perhaps it may be for the convenience of the Committee if I speak also to Amendment No. 365. It would seem desirable that the clauses mentioned in line 9 of page 88 should have exactly the same effect as the corresponding provisions of the EPC, the CPC, and the PCT, even if the wording is not exactly the same effects, if not the same wording, ment's previous Amendment which has just been agreed adds some more clauses to the list but, for reasons which were given when we were discussing that Amendment, I feel that there is reason to believe that the total list now should have the same effects if not the same wording as the relevant provisions in the European Conventions and Treaties. I am therefore moving this probing Amendment to find out the real meaning.
Lord DAVIES of LEEK: May I ask to which Amendment the noble Lord is speaking?
Lord BELSTEAD: I have moved Amendment No. 364 and I am speaking also to Amendment No. 365. In speaking also to the latter Amendment, the case which I am making is that, though it may be that the words should not be exactly the same in the clauses which are set out in line 9 as the corresponding provisions in the European Conventions and Treaties, I think that there should be the same effect. If that is not the case, perhaps the Government can tell us a little more as to why they feel that this should not be so. I beg to move.
The LORD CHANCELLOR: Amendment No. 364 raises an interesting little point. Strangely enough, it is customary
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for Acts of Parliament to speak as from the present. It may be true that the Bill was framed in draft before your Lordships' House ordered it to be printed or considered it, but, happily, it is Parliament which makes the law and not the draftsman, whom I bless practically every day of my Ministerial life! It would be quite wrong to depart from that principle. Accordingly, it is right for the Bill to say that in passing the Bill it "is" framed in a certain manner and "is" to be interpreted in a certain fashion. I hope that noble Lords will accept that piece of theology in relation to drafting.
On Amendment No. 365, we come to the interesting wording, "as nearly as practicable", which clearly has not many amateurs, as the French say, in the Committee. This Amendment would make the clause declare that certain provisions of the Bill are to have identical effect to those of the Conventions. But the words which the Amendment seeks to delete are taken straight from the Resolution on the Adjustment of National Patent Law annexed to the Community Patent Convention. "Practical" is a term of art, so used in that Resolution. It is a strong word. It does not mean "more or less" or "roughly". It means, as I ventured to say earlier, "as closely as can possibly be achieved" consistent with the fact that drafting styles differ between the United Kingdom and Europe. The fact that the corresponding provisions of the Conventions necessarily contain different cross-references and refer, for example, to the "contracting States" as a whole when we are concerned only with the United Kingdom is a good illustration of our difficulty.
Perhaps I could take an example to show why absolute conformity cannot be achieved. The Committee might care to look at Clause 58 as an illustration. That corresponds to Articles 29 to 31 of the Community Patent Convention, but it refers in certain cases to acts done within the United Kingdom, whereas quite clearly the Convention refers to acts done within the Contracting States. If the words "as nearly as practicable" were deleted, it would mean that in our legislation we would have to put "contracting States" instead of "the United Kingdom." We are already having certain difficulties with our dear neighbours across the Channel, with France, and I am quite sure

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that they would not be at all enthusiastic for us legislating as to infringement in France; but that is just an illustration of the kind of difficulty we are in. In my view, the words strengthen the clause and will direct the court to the substance of the matter and allow it to ignore incidentals. Accordingly, I hope that the Amendment will not be pressed.
Lord BELSTEAD: I am grateful to the noble and learned Lord for his explanation and his reply to both Amendments. As to the first one, I accept absolutely what the noble and learned Lord has said. It seems particularly apposite this evening that the present tense should be used. Indeed, the Parliamentary draftsman seems permanently to be with us. I do not make any apology for speaking to Amendment No. 365, to which I was also referring, because this is in fact the first time that there has been a chance to get from the Government Front Bench a substantive reply as to exactly what the words are supposed to mean, and it will be interesting for people to read what the noble and learned Lord has said as to the interpretation of the words. I beg leave to withdraw the first Amendment.
Amendment, by leave, withdrawn.
Clause 118, as amended, agreed to.
Clause 119 agreed to.
Clause 120 [Short title, extent, commencement and repeals]:
The CHAIRMAN of COMMITTEES (Lord Aberdare): I should point out that if Amendment No. 365C is agreed to I cannot call Amendment No. 365A.
7.13 p.m.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 365C:
Page 88, line 40, leave out subsection (3) and insert—
("(3) For the purposes of this Act the territorial waters of the United Kingdom shall be treated as part of the United Kingdom.
(3A) This Act applies to acts done in an area designated by order under section 1(7) of the Continental Shelf Act 1964, in connection with the exploration of the sea bed or subsoil or exploitation of their natural resources, as it applies to acts done in the United Kingdom.").
The noble and learned Lord said: Clause 120(3) requires an Order in Council
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to apply the provisions of the Bill to United Kingdom territorial waters and, for certain purposes, to an area designated by order under Section 1(7) of the Continental Shelf Act 1964. The 1949 Act has been considered to apply to United Kingdom territorial waters and, so far as an area designated under the Continental Shelf Act is concerned, a Community patent will have effect in such an area, by virtue of Article 97(8) of the Community Patent Convention. For these reasons it is desirable that the Bill should apply directly in the two cases concerned without the necessity for an Order in Council. The Amendment effects this change. I beg to move.
On Question, Amendment agreed to.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 365G:
Page 89, line 3, after ("Act") insert ("(except sections 73(5), (6) and (8), 74(5) and (7) and this subsection)").
The noble and learned Lord said: This Amendment takes the place of Amendment No. 365B, a Government Amendment which has been withdrawn. In explanation of Amendment No. 365G I should say that Clause 120(4) gives the Secretary of State power to make commencement orders. This subsection does not therefore itself require a commencement order, but enters into force on Royal Assent.
The Amendment also refers to certain subsections of Clauses 73 and 74. These clauses have been considerably amended earlier in the Committee stage, but the subsections now referred to are those which relate to the translation of European patents and applications. These are provisions which it may never be necessary to invoke, and for this reason the power to bring them into operation is left to rules. As a consequence, the rule-making power, which is contained in Clause 73(8) and Clause 74(7), will itself come into operation on Royal Assent. I beg to move.
On Question, Amendment agreed to.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 365D:
Page 89, line 7, at beginning insert ("Subject to the provisions of Schedule 4 to this Act,").
The noble and learned Lord said: This Amendment makes it clear that the

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enactments repealed by Schedule 5 nevertheless remain in operation so far as is necessary for the purely transitional provisions of Schedule 4. I beg to move.
On Question, Amendment agreed to.
Clause 120, as amended, agreed to.
Schedule 1 [Application of 1949 Act]:
7.17 p.m.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 365E:
Page 90, line 6, leave out from ("applications") to end of line 8.
The noble and learned Lord said: It may be convenient to consider with Amendment No. 365E, Amendments Nos. 365F and 370C. Amendments Nos. 365E and 370C are purely drafting Amendments. Amendment No. 365F is intended to correct the minor inaccuracies which exist in paragraph 1(2) of Schedule 1. I beg to move.
On Question, Amendment agreed to.
The CHAIRMAN of COMMITTEES: I should point out that if Amendment No. 365F is agreed to I cannot call Amendments Nos. 366 and 367.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 365F:
Page 90, line 9, leave out from ("sections") to end of line and insert ("1 to 10, 11(1) and (2), 12, 13, 15 to 17, 19 to 26, 28 to 33, 50 to 53, 55, 56, 69, 76, 80, 87(2), 92(1), 96,").
Lord CAWLEY: This Amendment partially subsumes my Amendment No. 382R in which I seek to repeal Section 56 of the 1949 Act. Section 56 has been brought in by this Amendment where it was not present before. I think that I ought to say something about this section because it is thought by practitioners in the law of patents to have been a misconceived section, and therefore it seems unnecessary that it should have any further relevance. The section reads as follows, so far as relevant:
"Where a dispute arises between an employer and a person who is or was at the material time his employee"—
The LORD CHANCELLOR: From what is the noble Lord reading?
Lord CAWLEY: From Section 56 of the 1949 Act. If the noble and learned Lord looks at my Amendment No. 382R he will see that it deals with this. The section continues:
"… as to the rights of the parties in respect of an invention made by the employee either alone or jointly with other employees or in respect of any patent granted or to be granted in respect thereof, the comptroller may, upon application made to him in the prescribed manner by either of the parties, and after giving to each of them an opportunity to be heard, determine the matter in dispute …"
et cetera. I do not think that there is any argument about subsection (1). Subsection (2) states:
"In proceedings before the court between an employer and a person who is or was at the material time his employee, or upon an application made to the comptroller under subsection (1) of this section, the court or comptroller may, unless satisfied that one or other of the parties is entitled, to the exclusion of the other, to the benefit of an invention made by the employee, by order provide for the apportionment between them of the benefit of the invention, and of any patent granted or to be granted in respect thereof, in such manner as the court or comptroller considers just"
This section was considered by your Lordships' House, sitting judicially, in Patchett v. Sterling Engineering Company, 72 Reports of Patent Cases, page 51. There, the noble and learned Viscount, Lord Simmonds, referring to Section 56(2), said:
"That jurisdiction only arises if the court is not satisfied that one or other of the parties is entitled, to the exclusion of the other, to the benefit of an invention. The word 'entitled' refers to legal right".
Under Clause 36 of the Bill there seems to be no doubt that either the employee or the employer owns the whole legal rights of a patent which is made by the employee, so there is no question of apportioning the legal rights in a patent. I should have said, following the speech of the noble and learned Viscount, Lord Simmonds, in Patchett v. Sterling Engineering Company, that that was the situation under the 1949 Act, and that really, at any rate if subsection (2) is left in force in relation, as now, to the 1949 Act patents and to the patents in force, it is merely misleading and certainly ought to be repealed and not applied to any patent that exists now.
The LORD CHANCELLOR: I am very willing to look at the point which the noble Lord has made in regard to

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Section 56 of the 1949 Act, and perhaps we can return to that specific point at a later stage. I am most happy to do so.
Lord CAWLEY: I am grateful to the noble and learned Lord.
On Question, Amendment agreed to.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 370C:
Page 90, line 10, at end insert—
("(3) Sub-paragraph (1) above shall have effect subject to the following provisions of this Schedule, paragraph 2(2)(b) of Schedule 3 below and the provisions of Schedule 4 below.").
On Question, Amendment agreed to.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 370D:
Page 90, line 11, leave out paragraph 2.
The noble and learned Lord said: This Amendment paves the way for an Amendment to Schedule 4 which, if accepted, deals fully with the question of appeals from the comptroller under the continuing provisions of the 1949 Act. I beg to move.
On Question, Amendment agreed to.
The CHAIRMAN of COMMITTEES: I have to point out that if Amendment No. 370E is agreed to I cannot call Amendments Nos. 370A and 370B.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 370E:
Page 90, line 31, leave out paragraphs 4 to 6.
The noble and learned Lord said: With Amendment No. 370E it may be convenient to speak to Amendment No. 379B as well. These two Amendments will result in the deletion from Schedule 1 of paragraphs 4, 5, 6 and 10. Paragraph 4 would have repealed Section 9 of the 1949 Act, but as a result of Amendment No. 365F Section 9 will continue to apply to existing patents and applications. Paragraphs 5, 6 and 10 would have repealed Sections 11(3) and 14 of the 1949 Act and part of Section 32(1). It is still intended to repeal these provisions, and Amendment No. 381B will transfer the repeals to Schedule 3, which deals with repeals of provisions of the 1949 Act. I beg to move.
Lord LYELL: The noble and learned Lord mentioned paragraph 10. We shall
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be coming to this in Amendment No. 379A, which unfortunately follows Amendment No. 379B in the Marshalled List. That may be of some assistance to the noble and learned Lord. We have one or two queries on Amendment No. 379A, and if the noble and learned Lord is speaking to that—he cannot move it yet, of course—we can probably deal with it.
The LORD CHANCELLOR: I do not think I have spoken to No. 379A yet.
Lord LYELL: Amendment No. 379B is the Amendment that the noble and learned Lord mentioned, I think. I do not know whether he has spoken to this. He mentioned paragraph 10 and Section 32 of the 1949 Act.
The LORD CHANCELLOR: The noble Lord is quite right.
Lord LYELL: We had one or two points that we wanted to raise on that, but I think we would be happy enough to accept the explanation which the noble and learned Lord has given at this stage, so that we would not raise anything further.
On Question, Amendment agreed to.
The CHAIRMAN of COMMITTEES: I should point out that if Amendment No. 379B is agreed to I cannot call Amendment No. 379A.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 379B:
Page 91, line 11, leave out paragraph 10.
The noble and learned Lord said: I think this Amendment was considered with Amendment No. 370E.
On Question, Amendment agreed to.
7.28 p.m.
Lord LYELL Lord LYELL moved Amendment No. 380:
Page 91, line 21, after ("Act:"") insert ("and in subsection (3) the proviso shall cease to have effect")
The noble Lord said: This is where we are in some minor difficulty ourselves. The Committee will see that we seek to insert some words which are set out on the Marshalled List. This Amendment arises from the 1949 Act. The noble and learned Lord will find that in Section 33(3) of that

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Act it is provided that the comptroller shall not revoke a patent unless he finds the circumstances are such that he would have refused to grant the patent originally—and that, I think, occurs under Section 14 of the existing Patents Act. After our consideration of the Bill in its present form, this proviso no longer makes sense because it seems to us that this proviso will be in conflict with the rest of paragraph 11 of Schedule 1 to the Bill which we are now considering. I think it is line 15 on page 91. Paragraph 11 is going to allow the comptroller to revoke a patent on the grounds set out in Section 32. These grounds are available only to the court as Section 32 is written at the moment. However, Section 14 of the 1949 Act gives only a few of the grounds set out in Section 32. If the noble and learned Lord is able to see the length of Section 32—we have a volume with us here—
The LORD CHANCELLOR: I will take the noble Lord's word for it.
Lord LYELL: I am grateful to the noble and learned Lord. The length of Section 32(1) is considerable, and contains variegated grounds. However, Section 14 gives only a few of these grounds. It seems to us, therefore, that in one breath the comptroller is being given revocation powers under Section 32(1) of the 1949 Act but the reference to Section 14 will be taking some of those powers away. The effect of the Amendment that we are putting forward is, we hope, to remove the reference to Section 14 of the 1949 Act which is contained in the proviso to Section 33(3) of that Act. I hope that I have struck a blow against complexity in the direction of the noble and learned Lord. I have tried to make it simple. It is not as simple as I would wish. I beg to move.
The LORD CHANCELLOR: We are discussing Amendment No. 380 at this moment.
Lord LYELL: That is what I am speaking to.
The LORD CHANCELLOR: I wanted to reassure what I am pleased to call my mind at this late hour: that it is being applied to the Amendment to which the noble Lord has spoken so clearly. He has raised a point of a good deal of
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interest. I am grateful to him for drawing my attention to it. It may be a question of drafting—whether the words he proposes meet the point. I am happy to accept this Amendment in principle. If he does not press it, but agrees to let it lie fallow, so to speak, so that we can look to see whether the drafting is the best we can contrive, I should be grateful.
Lord LYELL: The noble and learned Lord does himself an injustice. Nothing lies fallow with the noble Lord. I understand that his advisers will go straight through this Amendment. I mentioned at least three other sections of the 1949 Act. Given the noble and learned Lord's kindness and willingness to consider it, I hope that we have got it right and I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Schedule 1, as amended, agreed to.
Schedule 2 [Application of this Act to 1949 Act patents and applications.]:
7.32 p.m.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 380B:
Page 91, line 28, leave out ("1949 ACT") and insert ("EXISTING")
The noble and learned Lord said: It may be convenient to discuss Amendment No. 380C in connection with this. These are purely drafting Amendments to clarify the text. I beg to move.
On Question, Amendment agreed to.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 380C:
Page 91, line 33, leave out ("to the transitional provisions in") and insert ("the provisions of")
On Question, Amendment agreed to.
The CHAIRMAN of COMMITTEES: If Amendment No. 380D is agreed to, then Amendment No. 380A cannot be called.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 380D:
Page 91, line 35, leave out from ("sections") to ("118") in line 36 and insert ("19, 20, 26 to 33, 41 to 69, 80, 90, 92, 93, 95 to 104, 106, 108 to 112")
The noble and learned Lord said: Schedule 2, paragraph 1(2) sets out the

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clauses of the Bill which are to apply to existing applications and patents. In the main, these are clauses which have counterparts in the 1949 Act. Thus it is not necessary, where Schedule 1 retains an existing section, to apply the counterpart in Schedule 2 to existing applications and patents. The Amendment therefore reflects the Amendments made to Schedule 1, paragraph 1(2). Clauses 7,34 and 35 are deleted from Schedule 2 since Sections 55 and 56 of the 1949 Act are retained in Schedule 1 for existing applications and patents. Similarly, Clauses 105 and 118 correspond to Sections 76 and 101 in the amended Schedule 1 and reference to them is no longer necessary.
Section 18, relating to secrecy, has been removed by Amendment No. 365F from Schedule 1, paragraph 1(2), and the corresponding Clause 20 in the Bill has been added to the Schedule 2 list so that directions given after the appointed day in respect of existing applications will be made under Clause 20. Schedule 4, paragraph 4, continues existing directions already given under Section 18 in respect of existing applications. Finally, Clause 80 has been included since the provisions of the Community Patent Convention which affect national patents must apply equally to existing patents as well as to patents granted under the Bill. I beg to move.
On Question, Amendment agreed to.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 380E:
Page 92, line 2, leave out ("patent") and insert ("product")
The noble and learned Lord said: This is a drafting Amendment to correct an error in the text. I beg to move.
On Question, Amendment agreed to.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 380F:
Page 92, line 4, leave out from beginning to ("(and") in line 6 and insert ("references to a published application for a patent under this Act, and to publication of such an application, include respectively references to a complete specification which has been published under the 1949 Act and to publication of such a specification")
The noble and learned Lord said: The purpose of this Amendment is to fill a
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lacuna in paragraph 2(e). As drafted that paragraph equates published applications under the 1949 Act to published applications under the Bill. It is also necessary to equate publication of specifications, as such, under the 1949 Act to publication of specifications under the Bill. The Amendment effects this addition. I beg to move.
On Question, Amendment agreed to.
The CHAIRMAN of COMMITTEES: If Amendment No. 380G is agreed to, I cannot call Amendments Nos. 381 and 381A.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 380G:
Page 92, line 16, leave out from beginning to end of line 28.
The noble and learned Lord said: This Amendment deletes paragraphs 2(h), 3 and 4 from Schedule 2. Deletion of paragraphs 2(h) and 3 is necessary since Clauses 22 and 91(1), to which those paragraphs relate, are not applied to existing patents and applications by virtue of Schedule 2 paragraph 1(2). The deletion of paragraph 4 is purely a paving Amendment to Amendment No. 381B to Schedule 3 which incorporates the provisions of paragraph 4. I beg to move.
On Question, Amendment agreed to.
Schedule 2, as amended, agreed to.
Schedule 3 [Minor Amendments.]:
The CHAIRMAN of COMMITTEES: If this Amendment is agreed to, I cannot call Amendment No. 382A.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 381B:
Page 92, line 29, leave out from beginning to end of line 35 and insert—
("REPEALS OF PROVISIONS OF 1949 ACT]
1.—(1) Subject to the provisions of Schedule 4 below, the provisions of the 1949 Act referred to in sub-paragraph (2) below (which are superseded by virtue of paragraph 1 of Schedule 2 above) shall cease to have effect.
(2) The provisions are sections 11(3), 18, 27, 34 to 40, 43 to 49, 54, 57 to 68, 70, 73 to 75, 77 to 79, 81 to 86, 87(1) and (3), 85 to 90, 91(1), 93 to 95, 97 to 100 and 102(2) and Schedule 1.
2.—(1) Subject to the provisions of Schedule 4 below, the provisions of the 1949 Act referred

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to in sub-paragraph (2) below (which have no counterpart in the new law of patents established by this Act in relation to future patents and applications) shall also cease to have effect.
(2) The provisions are—

(a) section 14 (opposition to grant of patent);

(b) in section 32 (revocation of patent by court), in sub-section (1) paragraphs (g), (j) and (l), in paragraph (h) the words from "or does not" to the end and in paragraph (i) the words from "or that" to the end, and subsections (2) and (3);

(c) section 41 (inventions relating to food or medicine, etc.);

(d) section 42 (comptroller's power to revoke patent after expiry of two years from grant of compulsory licence);

(e) section 71 (extension of time for certain convention applications);

(f) section 72 (protection of inventions communicated under international agreements);

(g) section 91(2) (false use of words "Patent Office" and offence).")

The noble and learned Lord said: This Amendment in effect introduces a new Schedule into the Bill in which all repeals of the provisions of the 1949 Act are collected and contained, in substitution of the existing Schedule 3 which deals only with minor Amendments. No overall change of substance is, however, effected. I beg to move.
Lord BELSTEAD: I see that the effect of paragraph 2(2)(b) is that Section 32 of the 1949 Act is to be considerably altered. The Amendment reads:
"Subject to the provisions of Schedule 4 below, the provisions of the 1949 Act referred to in subparagraph (2) below…shall also cease to have effect."
The ways in which Section 32 is to cease to have effect are set out. I make no complaint about that. Then I look ahead at Amendment 382T. This is the beginning of an immensly long, newly-worded last part of Schedule 4 which the Government are intending to write into the Bill. The first provision of that Amendment reads as follows:
"5.—(1) Where before the appointed day a petition has been presented under section 32 of the 1949 Act for the revocation of a patent, and issue has been joined on the petition before that day, the petition shall be continued and disposed of under the old law"
The only point I wish to raise with the noble and learned Lord is that I trust that that means under the old law, and not as amended by Government Amendment
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No. 381B. If Section 32 actions for revocation of patents shall be continued and disposed of after the appointed day under the old law, and the old law on the appointed day is to be amended, as it is being amended by Government Amendment No. 381B, I think that the situation would have been chaotic, and I cannot believe that that is the intention.
The LORD CHANCELLOR: May I look at that point and write to the noble Lord? Obviously, it is essential that we should not have the chaos to which he refers.
Lord BELSTEAD: I wonder whether, at the risk of delaying the Committee, I may say this. The reason I refer to the chaotic situation is that presumably if a party goes to a patent agent and says "I am worried that I may be going to infringe a patent", the patent agent or other professional adviser—a solicitor perhaps—might very well say, "You do not need to worry about infringement because, under Section 32 of the 1949 Act, I can advise you definitely that the patent which you are worried about is not going to stand up; it will be invalid." My worry quite simply is that, if on the appointed day Section 32 is to be amended, as it is being amended by Government Amendment No. 381B, but a revocation action for invalidity is going on at that time and suddenly the rules are changed then that professional advice which has been given to a potential infringer may lead that potential infringer into a chaotic situation. That is my worry.
The LORD CHANCELLOR: I am grateful to the noble Lord for pointing out this problem. The noble Lord asked a question about the old law in the new provisions in Amendment No. 382T. Paragraph 14 of Schedule 4 specifies:
"In this Schedule 'the old law' means the 1949 Act, any rules made under it and any relevant rule of law as it was or they were immediately before the appointed day."
I will gladly look at the point which has been made by the noble Lord.
On Question, Amendment agreed to.
Schedule 3, as amended, agreed to.
Schedule 4 [Transitional provisions]:
7.43 p.m.
Lord LYELL Lord LYELL moved Amendment No. 382B:
Page 94, line 7, at end insert—
("(7) Where an act, if performed before the appointed day, would not amount to an infringement, the performance of a like act after that day shall not (despite anything in this paragraph) amount to infringement.").
The noble Lord said: The effect of this small Amendment is to provide that, if there is an act which is performed before the appointed day and this would not have infringed a patent which had already been granted under the 1949 Act, then we would hope that a similar act shall not be an infringement of an old patent after the appointed day. We have to note that paragraph (6) would be the corollary of this Amendment, because under paragraph (6) where an act is begun before the appointed day, and it continues afterwards, then such an act, if it would not amount to an infringement before the appointed day, shall not be an infringement after that day, even if it continues to be performed. We think the Government consider paragraph (6) to be fair and we hope that paragraph (7), as provided in this Amendment, would also be fair and reasonable in the circumstances. I beg to move.
The LORD CHANCELLOR: I appreciate the thinking behind this Amendment and I can well understand that from a theoretical point of view there is a good deal to be said for it. But on the crucial issues with which patent proceedings are principally concerned—namely, revocation and infringement—we have thought that it was necessary to maintain as much simplicity as was practicable, to coin a much maligned phase, and that the effects of the existence of two different kinds of patent should be minimised. We have sought to do so, but we feel that this Amendment might defeat that purpose. I am afraid that I cannot commend it.
Lord LYELL: We accept that the noble and learned Lord is always seeking after clarity. We hoped this clarified the Bill somewhat. Given that the noble and learned Lord has expressed his opinion firmly, kindly but gently, we seek leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 382S:
Page 94, line 12, leave out paragraphs (a) and (b) and insert—

("(a) if issue has been joined on the notice before the appointed day, the opposition, any appeal from the comptroller's decision on it and any further appeal shall be prosecuted under the old law, but as if references in the 1949 Act and rules made under it to the Appeal Tribunal were references to the Patents Court;

(b) in any other case, the notice shall be taken to have abated immediately before the appointed day").

(2) Sub-paragraph (1)(a) above shall have effect subject to paragraph 10(2) below.").
The noble and learned Lord said: This Amendment relates to paragraph 3 of Schedule 4 which deals with the transitional provisions required in respect of cases where notice of opposition to the grant of a patent has been given under Section 14 of the 1949 Act before the appointed day. Transitional provisions are always very difficult to provide for in legislation.
In the cases specified in paragraph 3(a) appeals against any decision on the notice given by the comptroller before the appointed day will continue to be dealt with under the old law. Paragraph 3(b) provides that, if the comptroller has not given such a decision before that day the notice will be taken to be an application under Section 33 of the 1949 Act (as amended by the Bill) for the revocation of patent on any ground under that section which, in the comptroller's opinion, corresponds to the ground on which the notice was given, or if there is no such ground, the notice will be taken to have lapsed immediately before the appointed day. The substituted proceedings will then continue under the new law introduced by the Bill.
In some cases it might be to the advantage of the applicant for the notice to be dealt with under sub-paragraph (b), because the Section 33 grounds for revocation, as amended by the Bill, do not include some of the grounds upon which Section 14 of the old Act allowed the grant of a patent to be opposed. Consequently, this Amendment is introduced with a view to reducing to a minimum the opportunity which any party might have of using delaying tactics in order to prevent the proceedings reaching the stage of decision before the appointed day. Instead of

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drawing the line at the moment of decision, the Amendment would draw it at that point in time when issue is joined between the parties; that is, at the first moment when there is a formal dispute between them. The point at which issue is joined on a notice of opposition under Section 14 of the 1949 Act is defined in a new paragraph 15(a) which I will be seeking to add to Schedule 4 as part of Amendment No. 382T which follows. I beg to move.
On Question, Amendment agreed to.
The CHAIRMAN of COMMITTEES: If Amendment No. 382T is agree to, I cannot call Amendments Nos. 382C to 382M inclusive.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 382T:
Page 94, line 44, leave out paragraphs 5 to 7 and insert—
("5.—(1) Where before the appointed day a petition has been presented under section 32 of the 1949 Act for the revocation of a patent, and issue has been joined on the petition before that day, the petition shall be continued and disposed of under the old law.
(2) Where such a petition has been so presented but issue has not been so joined, then—

(a) if the ground of the petition continues to be contained in that section as amended by Schedule 3 above, it shall be taken to be a petition on that ground;

(b) in any other case, the petition shall be taken to have abated immediately before that day.

(3) Sub-paragraphs (1) and (2) above shall apply to a counter-claim made for the revocation of a patent in proceedings for its infringement as they apply to a petition presented for the revocation of a patent.
6.—(1) Where before the appointed day an application has been made under section 33 of the 1949 Act for the revocation of a patent (the original application), the following provisions shall apply:—

(a) if issue has been joined on the application before the appointed day, the application, any appeal from the comptroller's decision on it and any further appeal shall be prosecuted under the old law, but as if references in the 1949 Act and rules made under it to the Appeal Tribunal were references to the Patents Court;

(b) if issue has not been so joined, the original application shall be taken to be an application under section 33 of the 1949 Act for the revocation of the patent on whichever of the grounds referred to in section 32(1) of that Act corresponds (in the comptroller's opinion) to the ground on which the original application was made, or, if there is
870
no ground which so corresponds, shall be taken to have abated immediately before the appointed day.

(2) Sub-paragraph (1)(e) above shall have effect subject to paragraph 9(3) below.
7.—(1) This paragraph applies where an application has been made before the appointed day under section 42 of the 1949 Act for the revocation of a patent.
(2) Where the comptroller has made no order before that day for the revocation of the patent under that section, the application shall be taken to have abated immediately before that day.
(3) Where the comptroller has made such an order before that day, then, without prejudice to section 38 of the Interpretation Act 1889, section 42 shall continue to apply to the patent concerned on and after that day as if this Act had not been enacted.
Licences of right and compulsory licences
8.—(1) Sections 35 to 41 and 43 to 45 of the 1949 Act shall continue to apply on and after the appointed day—

(a) to any endorsement or order made or licence granted under sections 35 to 41 which is in force immediately before that day; and

(b) to any application made before that day under sections 35 to 41.

(2) Any appeal from a decision or order of the comptroller instituted under sections 35 to 41 or 43 to 45 on or after the appointed day (and any further appeal) shall be prosecuted under the old law, but as if references in the 1949 Act and rules made under it to the Appeal Tribunal were references to the Patents Court.
Appeals from comptroller under continuing provisions of 1949 Act
9.—(1) In this paragraph "the continuing 1949 Act provisions" means the provisions of the 1949 Act which continue to apply on and after the appointed day as mentioned in paragraph 1 of Schedule 1 above.
(2) This paragraph applies where—

(a) the comptroller gives a decision or direction (whether before or on or after the appointed day) under any of the continuing 1949 Act provisions, and

(b) an appeal lies under those provisions from the decision or direction;

but this paragraph applies subject to the foregoing provisions of this Schedule.
(3) Where such an appeal has been instituted before the Appeal Tribunal before the appointed day, and the hearing of the appeal has begun but has not been completed before that day, the appeal (and any further appeal) shall be continued and disposed of under the old law.
(4) Where such an appeal has been so instituted, but the hearing of it has not begun before the appointed day, it shall be transferred by virtue of this sub-paragraph to the Patents Court on that day and the appeal (and any further appeal) shall be prosecuted under the old law, but as if references in the 1949 Act and rules made under it to the Appeal Tribunal were references to the Patents Court.

871
(5) Any such appeal instituted on or after the appointed day shall lie to the Patents Court or, where the proceedings appealed against were held in Scotland, the Court of Session; and accordingly, the reference to the Appeal Tribunal in section 31(2) of the 1949 Act shall be taken to include a reference to the Patents Court or (as the case may be) the Court of Session.
(6) Section 91(3) of this Act shall apply to any decision of the Patents Court on an appeal instituted on or after the appointed day from a decision or direction of the comptroller under any of the continuing 1949 Act provisions as it applies to a decision of that Court referred to in that subsection, except that for references to the sections mentioned in paragraph (a) of that subsection there shall be substituted references to sections 33, 55 and 56 of the 1949 Act.
Appeals from comptroller under repealed provisions of 1949 Act
10.—(1) This paragraph applies where an appeal to the Appeal Tribunal has been instituted before the appointed day under any provision of the 1949 Act repealed by this Act.
(2) Where the hearing of such an appeal has begun but has not been completed before that day, the appeal (and any further appeal) shall be continued and disposed of under the old law.
(3) Where the hearing of such an appeal has not begun before that day, it shall be transferred by virtue of this sub-paragraph to the Patents Court on that day and the appeal (and any further appeal) shall be prosecuted under the old law, but as if as references in the 1949 Act and rules made under it to the Appeal Tribunal were references to the Patents Court.
Appeals from Appeal Tribunal to Court of Appeal
11. Section 87(1) of the 1949 Act shall continue to apply on and after the appointed day to any decision of the Appeal Tribunal given before that day, and any appeal by virtue of this paragraph (and any further appeal) shall be prosecuted under the old law.
Rules
12. The power to make rules under section 112 of this Act shall include power to make rules for any purpose mentioned in section 94 of the 1949 Act.
Supplementary
13. Section 91(2) of this Act shall apply to—

(a) any appeal to the Patents Court by virtue of paragraph 3(1)(a), 6(1)(a), 8(2) or 9(5) above, and

(b) any appeal which is transferred to that Court by virtue of paragraph 9(4) or 10(3) above,

as it applies to an appeal under that section; and section 90 of this Act shall apply for the purposes of any such appeal instead of section 85 of the 1949 Act.
14. In this Schedule "the old law" means the 1949 Act, any rules made under it and any
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relevant rule of law as it was or they were immediately before the appointed day.
15. For the purposes of this Schedule—

(a) issue is joined on a notice of opposition to the grant of a patent under section 14 of the 1949 Act when the applicant for the patent files a counter-statement fully setting out the grounds on which the opposition is contested;

(b) issue is joined on a petition for the revocation of a patent under section 32 of that Act when the respondent to the petition serves an answer on the petitioner in accordance with rules of court;

(c) issue is joined on an application for the revocation of a patent under section 33 of that Act when the patentee files a counter-statement fully setting out the grounds on which the application is contested.")

The noble and learned Lord said: We have already had our attention drawn to this massive Amendment to Schedule 4 and the new paragraphs which this Amendment seeks to insert and deal more completely with the various problems which will arise on the transition from the old code to the new where actions of various kinds are pending. I am afraid that the provisions are perhaps somewhat difficult to follow and for those who may have to interpret these matters later it may be desirable for me to deal with the matter in a little detail. I apologise to the Committee for doing so, but I think it must be done.
The new paragraph 5 deals with petitions for revocation, whether by themselves or by way of counter-claims in infringement actions, to the court under Section 32 of the Patents Act 1949. Where issue has been joined, everything continues as before. Where issue has not been joined, the paragraph provides, in effect, that only those grounds of revocation which have a counterpart in the new code should be available to the petitioner. It may seem that by making the cut-off date the date when the respondent, that is, the patentee, serves an answer on the petitioner—we look to paragraph 15(b) of the Schedule as proposed to be amended by this Amendment—we are giving the patentee a chance to delay things until after the appointed day, and so avoid having to face an attack on certain grounds. However, of the various possible dates which we considered, this one seemed to us the least arbitrary. Order 103, Rule 18 of the Rules of the Supreme Court gives a respondent 21 days to serve his answer. Although that

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period is extendable, I think we can rely on the fact that extensions will not be allowed except for good cause.
The next paragraph, paragraph 6, deals with applications of the comptroller for revocation under Section 33 of the 1949 Act. In this case the problems are different, in that under paragraph 11 of Schedule 1 the grounds for revocation open to the comptroller are widened so that they are now to be the same as those open to the court under Section 32, as amended. At the same time, there are certain grounds under Section 33—they are set out in Section 14—which do not have a counterpart in Section 32 as proposed to be amended. After reflection, we decided that the same cut-off date as we have proposed in relation to petitions to the court for revocation would produce the least unfairness in this case, also. To cater for grounds which have no counterpart it was, however, necessary to include the provision which your Lordships will see in paragraph 6(1)(b) of the Amendment.
Paragraph 7 deals with revocation under Section 42 of the 1949 Act. This section provides that where an order for a compulsory licence has been made, in certain circumstances after two years any person interested can apply for revocation on what might be called "compulsory licence grounds". The provision has been little used and, since revocation on these grounds will not be permitted under the new code, it seems to us that the fairest thing would be to make the cut-off date the conclusion of the proceedings, and to say that after that no application under Section 42 is possible. In practice, we think the chances of anyone being caught, so to speak, in mid-action, are extremely slim.
Paragraph 8 provides that where actions have begun under the compulsory licence provisions, apart from Section 42, they are in effect to continue under the old code. In practice, that provision is largely a technicality, since the old and new codes are almost identical. Paragraphs 9 and 10 effectively re-route appeals from the comptroller to the new Patents Court. There is, however, no point in disturbing appeals to the Patents Appeal Tribunal, where these have already begun to be heard, and those appeals will continue unaffected. I should add that in
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appropriate cases the appeal will be not to the Patents Court but to the Court of Session. The same principles apply.
Paragraph 11 similarly preserves the existing position, so far as further appeals to the tribunal are concerned. Paragraph 12 is a technical provision designed to ensure that, if necessary, the rule-making power in the Bill can be used to make rules about anything about which rules could have been made in the 1949 Act. Paragraph 13 is also a technical provision, designed to avoid the result which might otherwise have occurred; in certain circumstances the Patents Court would have to be treated as a divisional court when hearing appeals re-routed to it under the Schedule. Paragraphs 14 and 15 define terms used in the Schedule, and I have already dealt with their substance in discussing earlier paragraphs. I apologise for the length of my reading, but it was inescapable. I beg to move.
Lord BELSTEAD: The Lord Chairman reminded us that, if this Amendment is agreed to, the following 10 Amendments cannot be moved. I should just like to thank the Government because—I hope I am right—even given the lucidity of the noble and learned Lord, it is not all that easy to decipher the exact meaning of all the provisions of this Amendment. But I think that our first three Amendments, which are not going to be moved—that is. Amendments Nos. 382C, 382D and 382E—have been met by paragraph 5(3) of the new Amendment. All the rest of our Amendments have been met by paragraph 5(1) of the new Amendment. I believe that is the case, and with that in mind I should like to thank the noble and learned Lord for his explanation. I support this Amendment.
The LORD CHANCELLOR: I can assure the noble Lord that he is right. This was really one of the matters covered in the Amendment.
Lord LLOYD of KILGERRAN: May I briefly associate myself with the noble Lord, Lord Belstead, in thanking the noble and learned Lord for the explanation he has given of these four pages of Amendments, in relation to revocation, infringement and other matters. I cannot, even at this late hour, resist the temptation to

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say once again that I feel so many of the difficulties which may be presented to small firms and individual inventors could he solved if some of these matters of infringement and revocation could be dealt with by a tribunal, so that it would not be necessary to invoke all the clauses of this Act, of the old Act and of the orders, of course, which will no doubt arise.
The LORD CHANCELLOR: May I thank the noble Lord for producing his King Charles's head!
Lord CAWLEY: May I make one small observation. According to Section 32(4), the grounds of revocation may be used as a defence. It looks to me as though, under this Amendment, paragraph 5(1) merely deals with a petition presented under Section 32. If somebody merely defends himself, and I have known that to occur, we shall have to apply the new grounds and not rely on Section 32.
The LORD CHANCELLOR: I will look again at the point and communicate with the noble Lord.
On Question, Amendment agreed to.
Schedule 4, as amended, agreed to.
Schedule 5 [Enactments repealed]:
The CHAIRMAN of COMMITTEES: I should point out that if this Amendment is agreed to, I cannot call Amendment No. 382U.
7.51 p.m.
Lord LYELL Lord LYELL moved Amendment No. 382N:
Page 96, column 3, leave out lines 4 to 7.
The noble Lord said: Perhaps I might be permitted to speak to our Amendment No. 382N and also to Amendment No. 382U. I shall be very brief. We agree very much with the Amendment which stands in the name of the noble Lord, Lord Oram, and doubtless we shall hear an explanation of it, either from the noble Lord or from the noble and learned Lord. It seems that Amendment No. 382U meets our Amendment; but one small question arises, in that our Amendment would omit the first line of Amendment
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No. 382U, referring to Section 11 (3) That is the only point on which the Amendment of the noble and learned Lord does not tie up with our wishes, as set out in Amendment No. 382N. We should like to hear what the noble and learned Lord is able to tell us on that. I beg to move.
The LORD CHANCELLOR: I am grateful to the noble Lord for having also discussed Amendment No. 382U, which deals with most of the matters contained in Amendment No. 382N. The only difference between us is the retention of Section 11(3) in the list of repeals. That has to be kept in the list, because it has been repealed by paragraph 1(2) of Schedule 3, having been superseded by Clause 104, as amended by Amendments Nos. 343 and 344.
Lord BELSTEAD: How could we have missed it!
The LORD CHANCELLOR: I am amazed that we have, as we have followed every detail with such memorable clarity. As regards Amendment No. 382U, there appears to be a printer's error in the first line. It should, of course, read:
"Page 96, in column 3, leave out lines 4 to 24".
Otherwise, Amendment No. 382U substitutes a new list of sections of the 1949 Act which are being repealed by Clause 120(5) of the Bill for that in column 3 of Schedule 5 to the Bill as printed, and specifies the extent of their repeal. The changes are consequent upon Amendments made to the Bill in this Committee.
Lord LYELL: I am happy to beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
The CHAIRMAN of COMMITTEES: If Amendment No. 382U is agreed to, I cannot call Amendments Nos. 383, 382P 382R and 382Q.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 382U:
Page 96, in column 3, leave out lines 4 to 24 and insert—
("Section 11(3).
Section 14.
Section 18.
In section 24(7) the words from "but" to the end.
Section 27.
In section 32, in subsection (1) paragraphs (g), (j) and (l), in paragraph (h) the words from "or does not" to the end and in paragraph (i) the words from "or that" to the end, and subsections (2) and (3).
Sections 34 to 49.
Section 54.
Sections 57 to 68.
Sections 70 to 75.
Sections 77 to 79.
Sections 81 to 86.
Section 87(1) and (3).
Sections 88 to 91.
Sections 93 to 95.")
On Question, Amendment agreed to.
Schedule 5, as amended, agreed to.
In the Title:
Lord CAWLEY Lord CAWLEY moved Amendment No. 384:
Line 3, leave out from ("law") to first ("to") in line 4 and insert ("applicable to existing letters patent for inventions and applications therefor;")
The noble Lord said: I think that the Bill ought to have started by saying:
"From the commencement of this Act the Crown shall cease to grant letters patent for inventions, and there shall be a new right called a patent."
That would have told us quite clearly what was the new law of patents. This Amendment is to deal with this point, to some extent, and to put a little accuracy into the Title. The word "patent", under the old law, is therefore changed to,
"…existing letters patent for inventions and applications therefor".
I beg to move.
The LORD CHANCELLOR: This Amendment appears to be of a drafting nature designed to introduce a reference to existing "letters patent". They will, of course, disappear under the new law. That does not seem to us to be necessary. The present reference to,
"the law of patents applicable to existing patents and applications for patents"
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is consistent in terms with, and contrasts with, the earlier reference to,
"a new law of patents applicable to future patents and applications for patents".
I do not know whether that application reassures the noble Lord, but for what it is worth I present it for reassurance. We think that, as it stands, the Title is satisfactory.
Lord BELSTEAD: Before my noble friend withdraws the Amendment, may I just say this. The noble and learned Lord was good enough, at the beginning of our proceedings this evening, to apologise for the weight of Government Amendments. It was nothing that he needed to apologise about. He has had to cope single-handed this evening, and it has been a long evening for him. I really rise to congratulate the Government on moving 999 Amendments to this Bill which have, in effect, completely rewritten it. A little more seriously, I think that there has been some strain, certainly on this side of the Committee, because of the weight of the Amendments, and I am sure that a smoke signal will go out from the noble and learned Lord's Office that perhaps it would not be wise to repeat this kind of exercise too often on future Government legislation.
I speak for my noble friend Lord Lyell and myself when I say that we would have foundered completely had it not been for the forbearance of people who understand the law, like the noble and learned Lord and the noble Lord, Lord Lloyd of Kilgerran, not to mention my noble friend Lord Cawley. We have been particularly helped by being allowed some technical briefing, which the noble Lord, Lord Oram, very kindly allowed us to have. Quite honestly, I do not think I could have coped with the Bill without it. Also, we have been given some very wise advice by people outside the Chamber, who have admirably discharged Bagehot's constitutional duty of the Sovereign, to be consulted, to encourage and to warn. That is more than enough from me. I should like to congratulate the Government on the felicity with which, with practice, they have moved their Amendments, and to express the hope that, so far as our Amendments were concerned, perhaps sometimes the sentiment was mutual.
The LORD CHANCELLOR: I am most grateful to the noble Lord, Lord Belstead, for the most gracious observations which he has made. Indeed, I should like to thank the noble quartet, if they do not mind being so described, Lord Lyell, Lord Belstead, Lord Cawley, and, last but not least, Lord Lloyd of Kilgerran, whom I forgive for having resurrected King Charles's head from time to time, to our great delectation.
This has been a very difficult phase in the consideration of this highly technical but very important Bill for the future of our industry and commerce. All I should like to say is that so much of the discussion has been technical and there is still more to come in the Report stage. So that, if we can give some assistance in at least making available the technical information which we have in regard to Amendments which may arise, perhaps we can discuss together to see whether we can save some of the burning of the midnight oil by those who do not necessarily have the resources which, while one is in Government, one gets. I have laboured in the Opposition vineyard for many years in another place, knowing how difficult dealing with these technical matters is.
But I am most grateful to noble Lords who have taken part, including the eloquent contributions from my noble friend Lord Davies of Leek, from time to time. Before I conclude, may I also express our thanks to the Chair for the magnificent way in which the noble Lord, Lord Aberdare, and his predecessors have guided us in what has not been an easy task. I thank your Lordships very much.
LORD CAWLEY: In withdrawing my Amendment, may I say that nobody reads the Long Title of a Bill, anyhow. I beg leave to withdraw the Amendment.
Lord DAVIES of LEEK: I just want to say, "Thank you". Even the ranks of Tuscany could scarce bear not to cheer at the efforts of the noble Lords, Lord Belstead, Lord Cawley and Lord Lyell. I should also like to say "Thank you" for the magnificent work that has been put in by the noble Lord, Lord Lloyd of Kilgerran, silo has made a valuable contribution.
Amendment, by leave, withdrawn.
Title agreed to.
House resumed: Bill reported with the Amendments.

AUSTRALIA AND NEW ZEALAND BANKING GROUP BILL
Examiners' Certificate that no further Standing Order is applicable: Ordered to lie on the Table.
NEATH BOROUGH COUNCIL BILL [H.L.]
Reported with Amendments.
GENERAL RATE (PUBLIC UTILITIES) BILL [H.L.]
Returned from the Commons agreed to.
MARRIAGE (SCOTLAND) BILL [H.L.]
Returned from the Commons agreed to with Amendments; the said Amendments to be printed.
SOCIAL SECURITY (MISCELLANEOUS PROVISIONS) BILL
Returned from the Commons with the Amendments agreed to.
  INNER CITIES: RESPONSIBILITY
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  ALCOHOL CONSUMPTION AND RELATED DISEASES
  ALCOHOL CONSUMPTION AND RELATED DISEASES
  POLICE FORCE STRENGTH
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  FARMHOUSE CIDER: PRODUCTION AND TAXATION
  FARMHOUSE CIDER: PRODUCTION AND TAXATION
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  NON-PATRIAL CITIZENS: SPECIAL VOUCHERS SCHEME
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