Sitting of 8 February 1978

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRAYERS
  MESSAGES FROM THE QUEEN

    PAPUA NEW GUINEA (GIFT OF A CLOCK)
    The Vice-Chamberlain of the Householdreported Her Majesty's Answer to the Address, as follows:
    I have received your Address praying that I will give directions that there be presented on behalf of your House a gift of a clock for the Clerk's Table to the National Parliament of Papua New Guinea and assuring me that your House will make good the expenses attending the same.
    It gave me the greatest pleasure to learn that your House desires to make such a presentation and I will gladly give directions for carrying your proposal into effect.

    DOUBLE TAXATION RELIEF
    The Vice-Chamberlain of the Householdreported Her Majesty's Answers to the Addresses as follows:
    I have received your Address praying that the Double Taxation Relief (Taxes on Income) (Botswana) Order 1978 be made in the form of a draft laid before your House.
    I will comply with your request.
    I have received your Address praying that on the ratification by the Government of Korea of the convention set out in the Schedule to the draft Order entitled Double Taxation Relief (Taxes on Income) (Republic of Korea) Order 1978, which draft was laid before your House, an Order may be made in the form of that draft.
    I will comply with your request.

ORAL ANSWERS TO QUESTIONS
  ENVIRONMENT

    Derelict Land (Public Bodies)
    Mr. Durantasked the Secretary of State for the Environment what estimate he has of the acreage of derelict and unused land held by nationalised industries.
    Mr. Nicholas Wintertonasked the Secretary of State for the Environment what estimate he has of the acreage of derelict and unused land held by local authorities.
    Mr. Montgomeryasked the Secretary of State for the Environment what estimate he has of the acreage of derelict and unused land held by the water authorities.
    Mr. Sainsburyasked the Secretary of State for the Environment what estimate he has of the acreage of derelict land and unused land held by the Property Services Agency.
    Mr. Stanbrookasked the Secretary of State for the Environment what proposals he has for securing the early development or use of unused land owned by local authorities and other public authorities.
    The Secretary of State for the Environment (Mr. Peter Shore): No reliable estimates of the total acreage of derelict land have been made since the 1974 survey of derelict and despoiled land, which put the total for England at 106,000 acres. This survey did not provide figures broken down by ownership. Neither did it cover land classified as unused—a category for which there is no commonly agreed definition. The figure for the Property Services Agency is 580 acres. Many local authorities have their own figures, though these are often compiled according to different definitions, and cannot, therefore, simply be added together.
    My aim is to concentrate efforts to secure early development of unused land in those areas where the problem is most serious, particularly the inner city areas.

    1427
    I have recently written to the main nationalised industries and statutory undertakers concerned asking them to make a preliminary survey of their vacant and underused sites in the inner city areas. Proposals for dealing with the problem will be an important part of the programmes currently being drawn up by the partnership committees.
    Mr. Speaker: I shall follow my usual custom of first calling the hon. Members whose Questions are being answered, and then other hon. Members. Mr. Durant.
    Mr. Durant: Does the Secretary of State agree that these are appalling figures? Do they not illustrate the urgent need to put pressure on the chairmen of the nationalised industries to dispose of this land, particularly in inner city areas, where, if we are to tackle the problem, we must have the land made available?
    Will the Secretary of State further consider the possibility of a local Domesday Book in which particulars of land owned by the local community, by local government and by the nationalised industries could be displayed, so that people could know who owned the land?
    Mr. Shore: I can see the attractions of having, as it were, an up-to-date register of land in the areas. I know that the hon. Member for Hornsey (Mr. Rossi) spoke on this matter some months ago. I believe that by far the most important thing that we have to do is not so much to identify land, which is generally known to local authorities, as to take steps to see that that land is put to good use, and that is not easy to achieve.
    Mr. Winterton: Is the Secretary of State aware that the worst offenders among those who hold on to derelict land are nationalised industries and local authorities? Is he further aware that 80 per cent. of urban land requirements could be met from derelict land at the present time within those urban areas? Will he treat rather more seriously and with deeper dedication the moves that he has now started in the inner city areas to develop derelict land at the earliest possible date?
    Mr. Shore: The fact that I have recently written to all the chairmen of the nationalised industries indicates that I believe that they can make an important contribution.
    1428
    It is true that there is a good deal of unused or derelict land owned both by local authorities and public corporations in the inner city areas, but we should be very foolish if we did not understand how these accumulations have come about. A great deal of local authority land is land which previously held tenement buildings and slums which have been pulled down, and which is now left to the local authorities to make good use of. But we are aware of this and will push forward, particularly, in the first instance, in the partnership areas.
    Mr. Montgomery: In the survey that the Secretary of State is undertaking he said that he was contacting the statutory authorities. Does that include the water authorities? If it does not, why not?
    Mr. Shore: It includes the water authorities along with other statutory authorities and the nationalised industries.
    Mr. Sainsbury: The Secretary of State referred to 580 acres of derelict land owned by the Property Services Agency. Will he assure the House that we will be told more about it? Will we be told why the land is held, and where, in the report to which we all very much look forward?
    Secondly, in view of the importance that he attaches to this subject, will the right hon. Gentleman's Department now support the second land use survey?
    Mr. Shore: I believe that the best thing for the hon. Gentleman, if he wants a detailed breakdown of the PSA, is to table a Question to that effect. I shall then happily give him such information as we have.
    Mr. Blenkinsop: Does the Secretary of State agree that a great deal of this derelict and unused land is held at quite unrealistic book values? Will he take some action to write down some of those values to a realistic figure?
    Mr. Shore: I agree with my hon. Friend that this is an important point. However, I would make plain that when local authorities dispose of land they are required in law only to do so for the best price that can reasonably be obtained. I think that those are the exact words. If the price turns out to be lower than the price that they paid for it, they are free to accept that price.
    Mr. Litterick: Does the Secretary of State agree that the Conservative Party does not know what it is talking about when it talks about unused, derelict sites, and so forth, and about public ownership? However, as he has given an assurance to the House that he is now seeking to put pressure on public bodies to use derelict land—this will be welcomed by the Labour Party, at least—will he assure us that he will seek to bring pressure to bear on private owners of derelict sites, with which my constituency is all too much defaced?
    Mr. Shore: I believe that we should have the whole picture before us. It is not just a question of local authority and statutory undertakers' "land"; there is also land in private ownership which is not being properly used and is derelict land. Therefore, local authorities which are drawing up what I hope will be much more effective strategies for land use and development in their areas should consider all land, regardless of ownership.
    Mr. Stephen Ross: Will the Secretary of State take on board once again the right way of dealing with derelict land that is lying idle, namely, to put on it a site value tax?
    Mr. Shore: I should have been surprised had the hon. Gentleman not put that point. It has at least certain superficial attractions. This matter was considered thoroughly as recently as in the Layfield Report, and great difficulties were then revealed.
    Mr. Rossi: I welcome the Secretary of State's conversion to our ideas on those matters. There has been much conversion by him in recent months over the whole range of housing and land. We welcome the fact that at least practical common sense is prevailing.
    I have news for the Secretary of State. We welcome the survey that he has asked to be conducted amongst nationalised industries, but I conducted my own survey amongst—
    Mr. Speaker: Order. Even Front Bench Members must ask a question.
    Mr. Rossi: Is the Secretary of State aware that the survey that I conducted amongst the chairmen of nationalised industries shows some very interesting results? Is he aware, for example, that
    1430
    the British steel industry, whose finances are not in the best of order at the moment, can only reply that it has 25,000 acres of land, inherited on nationalisation, of the financial consequences of which it has no idea?
    Mr. Speaker: Order. We must have fair play. The hon. Gentleman is, I fear, taking a little advantage.
    Mr. Rossi: I hope that I am always fair on these occasions, Mr. Speaker. May I ask the Minister why he restricts his survey to the nationalised industries and does not extend it to local authorities, in whose hands vast quantities of land are held at the moment at unrealistic figures? Will he bring this into use for the benefit of the economy?
    Mr. Shore: Yes, Sir.

    Mortgage Interest Rates (Local Authorities)
    Mr. Newtonasked the Secretary of State for the Environment when he expects to introduce legislation on local authority mortgage interest rates.
    The Minister for Housing and Construction (Mr. Reginald Freeson): We must first consider the local authority responses to the Green Paper proposal for legislation to enable them to charge the BSA recommended mortgage rate by use of the rate fund.
    Mr. Newton: Does the Minister recognise that the Green Paper contained a definite commitment to legislate on this subject which was welcomed by those of us whose councils are now forced to charge substantially more than the building society rate—in the case of Braintree 2 per cent. more? Why has he not taken the opportunity of yesterday's Bill to do this? Will he put that right in Committee?
    Mr. Freeson: There is a host of proposals on policy changes in the Green Paper on the housing policy review, some of which require legislation and others not. It would be theoretically possible to jump ahead and put all of them into a Bill concerned with one or two particular issues. At present we are in consultation with local authority associations and others on this proposal. When we have received their responses we shall be in a

    1431 better position to judge what form, if any, the legislation should take.
    Mr. MacFarquhar: Clearly consultation with local authorities is important. However, does my right hon. Friend recognise that the people who are suffering are those who are paying mortgage interest far higher than the going market rate? Will he undertake to take action as soon as possible?
    Mr. Freeson: I understand the problem only too well. It has arisen before in recent years. I cannot take action without legislation. That is why we made the proposal that we did in the Green Paper and on which we are seeking responses. We are not receiving responses that are universally in agreement with the proposal—I would not expect that—but we have to await the responses and evaluate them, and then we shall come forward with proposals.
    Mr. Peter Bottomley: Is the Minister aware that most legislation in this country does not have universal agreement? But there is overwhelming agreement—except on the Government Front Bench—that this anomaly must be put right. If it is just a question of legislation, will he commit the Government to introduce legislation very soon?
    Mr. Freeson: When we have completed consultations we shall be in a better position to bring forward proposals for legislation. It was us on this Front Bench who put forward proposals in the first instance, not those on the Opposition Benches.
    Mr. Frank Allaun: Will the Minister again consider the real solution, which is that building societies should be required to provide 10 per cent. of their £7 billion a year loans at their current interest rate to the local authorities, which in turn could on-loan it particularly to people buying cheaper, older houses who cannot, as things are, obtain mortgages from the building societies?
    Mr. Freeson: As has been said frequently by myself and by my right hon. Friend, this is at one level an attractive proposition. The only difficulty is that if it were to be undertaken as policy it would add to the total amount of public expenditure under the rules of public expenditure provision.
    1432
    Even if such a scheme were in operation, it would not necessarily alter the position with regard to the interest rates for local authorities because they base their rates on the consolidated loan fund interest rates. Whatever borrowing was undertaken, whether from building societies or any other source, it would come within the consolidated loan fund which is operated by local authorities individually. They charge rates according to that broad system.

    Derelict Land (Birmingham)
    Mr. MacKayasked the Secretary of State for the Environment what estimate he has of the extent of derelict and unused land in Birmingham.
    Mr. Freeson: The West Midlands County Council estimates that there are 1,920 acres of derelict and waste land in Birmingham.
    Mr. MacKay: Will the right hon. Gentleman join with me in congratulating the Conservative-controlled Birmingham City Council on selling derelict land to local builders on which to construct much-needed houses for first-time buyers? Does he agree that the development land tax, which he so frequently supports in this House, is actually doing a great deal of damage because it means that private developers and owners are not allowing derelict land to come on to the market, and that therefore these vast acreages in cities such as Birmingham are remaining derelict?
    Mr. Freeson: I think two factors are being mixed up here. On the provision of down-market owner-occupation on local authority housing land, Birmingham is dealing with a different category of land from the 1,920 acres which is derelict and waste land and is not land bought under the Housing Acts. It is not land which Birmingham is redirecting from one aspect of housing activity to another.
    As for the development land tax, we have not received evidence from Birmingham or anywhere else that development of this kind of derelict and waste land, particularly the commercial and industrial land about which the hon. Member appears to be thinking, is being held back because of the impact of DLT.
    Mr. Sever: Will my right hon. Friend accept that the amount of waste and

    1433
    derelict land in the inner areas of Birmingham would be considerably reduced very quickly if the Conservative-controlled district and county councils took steps immediately to do something about it?
    Mr. Freeson: Certainly that is the main intention behind the correspondence mentioned by my right hon. Friend earlier. In the context of the partnership authorities and the programme authorities concerned with inner city policy—of which Birmingham is one—we certainly intend to get land management moved to the centre of the inner city programmes which are to be developed and implemented from next year.
    Mr. Rossi: Is the Minister aware that many nationalised industries refuse to dispose of their excess land because of the incidence of development land tax upon them? Is he further aware that until that problem is solved his survey will produce very few effective and useful results?
    Mr. Freeson: We must wait and see. I accept that this point has been put by some of the nationalised industries. I have discussed the matter with representatives of British Rail and there is a certain amount of probing into that aspect. The tax is not proving, as was originally suggested, a disincentive. There may be ways round the kind of problems being put forward by British Rail and others in this respect.

    Disasters (Aid to Ratepayers)
    Mr. Molloyasked the Secretary of State for the Environment whether he will seek to amend Section 138 of the Local Government Act 1972 to enable him to direct local authorities to assist ratepayers who have suffered from a disaster.
    Mr. Shore: No, Sir. Local authorities are best placed to assess the impact of emergencies and disasters in their areas and the needs of those affected.
    Mr. Molloy: Is my right hon. Friend aware that the Under-Secretary has contributed magnificently to helping the London borough of Ealing, particularly Greenford, to get some assistance from the local authority, which has dithered in a
    1434
    remarkable way? It would appear that the councillors have been appallingly misled by some officers of the council. Will my right hon. Friend therefore reconsider his reply and introduce legislation which would enable local authorities to act immediately, as some local authorities did to alleviate the distressing circumstances in which some people found themselves, particularly in the London borough of Ealing, as a result of the floods last August?
    Mr. Shore: I thank my hon. Friend for his tribute to my hon. Friend the Under-Secretary. I am very sorry to hear that the officers concerned seemed to be in doubt about the meaning of the powers that are available to them under Section 138. These are very wide powers, and in my view we certainly do not need to amend them. I shall consider whether we should find some way of making certain that the local authorities understand just how full those powers are.
    Mr. Anthony Grant: Does the Minister agree that, with the problem of flooding, prevention is better than cure and that ratepayers as a whole simply cannot meet the large expense involved? That is the role of central Government. Is the right hon. Gentleman aware of the tedious dispute between the Ministry of Agriculture and the Greater London Council in this respect? Will he use his best endeavours to bring the parties together to resolve this matter in order to help people such as my constituents who have suffered?
    Mr. Shore: Flood prevention is the responsibility of my right hon. Friend the Minister of Agriculture. I shall have a word with him in the light of what the hon. Member has said.
    Mr. Roy Hughes: Does my right hon. Friend agree that the biggest disaster to ratepayers in recent years was the reorganisation of local government carried out by the Conservatives? Does he agree also that there is an urgent need to cut bureaucracy and to give back to the towns and cities the control of services that they have enjoyed for centuries?
    Mr. Shore: My hon. Friend makes a point which is, I believe, generally accepted by hon. and right hon. Members on both sides of the House. But these matters are the subject of further thought,

    1435
    and I cannot take the point much further than that on this occasion.
    Sir George Young: Will the right hon. Gentleman accept that in London the power to assist ratepayers rests with the district councils and that, therefore, it would be wrong to criticise the GLC for not exercising powers it does not possess?
    Mr. Shore: My information is that, although the London boroughs have such powers, there is a concurrent GLC power as well.
    Mr. Alison: Is the right hon. Gentleman satisfied that the machinery and resources are available, whether at national or local government level, to bring into operation complete rescue or aid, financial or otherwise, for people involved in disasters? Is he aware of the catastrophe which can occur to an individual—such as loss of home or livelihood—which is at least as serious as the possible loss of a job? Does he agree that the scale of resources for assisting here should be, for example, on the lines of the scale of resources that we consider appropriate to support employment in declining industries?
    Mr. Shore: I am aware how great the impact of a natural disaster can be on a particular community and on individuals within it. From reports that we have received on areas which experienced flood and gale damage last month and in November, I believe that the local machinery, to use that word in its broadest sense, has on the whole acted very quickly and effectively. However, I shall study the reports closely.

    Community Land Act 1975
    Mr. Michael Lathamasked the Secretary of State for the Environment whether he will introduce legislation to repeal the Community Land Act 1975.
    The Under-Secretary of State for the Environment (Mr. Guy Barnett): Far from repealing this valuable measure, we intend to develop the land scheme on the basis of the sound start it has already made.
    Mr. Latham: Will the Minister confirm that the first two years of operation of the Act in England have produced a net loss to the taxpayer of just under £20
    1436
    million? When will he wind up this expensive and bureaucratic mess?
    Mr. Barnett: I cannot confirm a figure of that kind. I do not know upon what basis the hon. Gentleman produces it. I am not aware of the measure of research he has undertaken. I do not know whether he has up-to-date figures on the disposals of land. However, if the scheme is as he describes it, it seems odd that more than 200 local authorities, at least half of them Conservative-controlled, should have asked for loan sanction under the scheme.
    Mr. Gwilym Roberts: Rather than repeal the Act, will my hon. Friend consider the difficulty experienced by authorities such as the Cannock Chase District Council in obtaining land under the Act for industrial purposes, particularly since in this area there is a high level of unemployment?
    Mr. Barnett: I should be more than delighted to assist the council in question in any way I could by advice. I would do everything I could to encourage it to use the Act for providing jobs for local people. I hope that either my hon. Friend or the council in question will get in touch.
    Mr. Heseltine: As it is abundantly clear that in the urban areas there is a mass of acreage of derelict land already in the hands of local authorities, what conceivable argument is there for giving them the right to acquire even more?
    Mr. Barnett: I think that the hon. Gentleman takes too simplistic a view. The purpose of the Community Land Act is the production of land for development—for owner-occupation, industrial development or commercial development. If the hon. Gentleman has studied the problem at all, he will know that there are special problems involved with derelict land and waste land in inner areas with which my right hon. Friend is dealing.

    Birmingham (Partnership Area)
    Mr. Litterickasked the Secretary of State for the Environment if it is his intention to revise the definition of the inner city partnership area defined for the city of Birmingham, with particular reference to the Bournbrook area of Selly Oak.
    Mr. Freeson: No, Sir. The boundaries were agreed by central Government, the local authorities and the health authority at the first meeting of the Birmingham Partnership Committee. It is essential to concentrate effort and resources on that part of inner Birmingham where social, economic and housing problems are most acute and widespread.
    Mr. Litterick: I understand the rationale of the Minister's answer. Does he agree that the Bournbrook area of Selly Oak has all the characteristics described for the inner urban areas which have prompted the policy now being brought forward? That area has rundown housing, masses of derelict factory sites, run-down shopping areas, obsolete schools—in fact, the whole business— notwithstanding the distance of the Bournbrook area from the centre of the city. Can my hon. Friend give the people of Selly Oak some assurance that notwithstanding the positive discrimination implicit in the partnership area strategy they will not suffer thereby?
    Mr. Freeson: I can give my hon. Friend that assurance. I make the point that what my hon. Friend has illustrated is not confined to Selly Oak. One finds it across the country. We have chosen certain areas in which to start this initiative. But the kind of lessons that we can learn from organising total programmes for urban renewal—economic, social, environmental, housing, and so on—in the main core of Birmingham and other partnership areas could well be applied to areas such as Selly Oak.
    The second point is that it will still be open for the Birmingham authority to seek to apply some of the urban area money to areas outside the core area—the inner-city Birmingham area. We shall sympathetically consider other proposals. Already the construction package that we announced some months ago has, for example, produced a new health centre in the Selly Oak area. Activity will be encouraged along these lines as we develop our policy.
    Mr. Eyre: Will the Minister be careful not to allow the central Government representatives to override the opinions of local representatives in the drawing up of the core area and partnership area lines? Reports are coming in about
    1438
    irregularities and areas of unfairness in certain recommendations.
    Mr. Freeson: I fear that the hon. Gentleman is not as fully in touch with this aspect of the matter as I hope he will be in future. As I indicated in my original answer, the inner area boundary was agreed jointly at the first meeting of the partnership committee. That did not involve simply a central Government decision; on the contrary, the paperwork and study that produced the boundary was done locally and came to the partnership committee under my chairmanship.

    Windscale (Inquiry)
    Mr. Hooleyasked the Secretary of State for the Environment when he expects to receive the report of Mr. Justice Parker on the Windscale inquiry.
    Mr. Shore: I received it on 26th January.
    Mr. Hooley: Does my right hon. Friend agree that this will be a classic document in the ongoing controversy about nuclear fuel? Will he therefore undertake to publish it in full and also to consider the possibility of publishing a popular digest for those who cannot afford the full document? Will he give an assurance that the House will be able to debate the document before he comes to any firm conclusion about its findings?
    Mr. Shore: It is normally the practice to publish a report. My hon. Friend's further suggestion that there might be a popular version is something to which I shall give some thought. I am very much aware that hon. Members on both sides of the House would like to have a debate before a decision is taken. There are difficulties, but I am considering them very carefully.
    Mr. Emery: Does the Secretary of State accept that while there is obviously much concern about this matter there has been much ill-informed and inaccurate information which has been used by certain pressure groups in a most emotive manner to detract from, and even, perhaps, to undermine, the ability of the Windscale reprocessing scheme to obtain approval, which, after all, could bring major economic benefits to the country? Will he therefore underline that

    1439
    what he is interested in is factual information rather than emotive information and come to his decision as quickly as possible because of the economic aspects, which are of great importance?
    Mr. Shore: I have no doubt that among the vast amount of material received and considered by the Parker inquiry was some ill-informed information, but I think that the great mass of it was serious information by people with doubt in their minds about what is a major matter of public interest. I take the hon. Gentleman's point that a decision is needed without undue delay. It was precisely that promise which I gave the House over a year ago when I set up the inquiry. I shall do my best.
    Mr. Crawshaw: Is my right hon. Friend aware that people like myself who feel that the way ahead is through progress in the atomic area now appreciate that there is genuine concern among many members of the public about this issue? Is he also aware that the cause of those who wish to go ahead with this matter is not helped by those who say that such a disaster will never happen? Surely it would be much better for the public to know what are the consequences of the worst sort of disaster that could happen. If they realised the limitations of such a disaster, their minds might be made up more easily in favour of going ahead in this area.
    Mr. Shore: I am sure that it is right that the public should have the fullest information available before we move along, or take important new steps, in the development of nuclear energy. That was one of the many reasons in my mind when I established the Parker inquiry, because I felt that it would open up the subject in a way that had not been done before.
    Mr. Heseltine: Does the Secretary of State recognise that we realise the traditional difficulty in which he finds himself because of the statutory inhibitions that would affect him if he were to be seen to be taking into consideration factors which had not been put before the Parker inquiry? Does he also recognise that the decision that flows from the Windscale inquiry has to be a political decision and that in practice Ministers will be able to discuss this matter with the advantages of departmental briefs, all of which will not be based upon the evidence submitted
    1440
    to the Parker inquiry? In practice, factors will be taken into consideration on a wider scale even than the inquiry itself.
    One accepts that, but it is difficult to argue that the House is not entitled to express its views in advance of what, perhaps, is one of the most significant decisions that this country has ever had to take.
    Mr. Shore: I thank the hon. Gentleman for his recognition and, indeed, statement of the problem as it is bound to present itself to any Secretary of State for the Environment, taking account not of the precedents but of the Act itself and the statutory regulations that have been laid under it. Nevertheless, I wholly agree with the hon. Gentleman that there is much merit and benefit to be obtained if we can assist the House with the discussion of this issue. As I said earlier, I am studying both the report and the way of handling it, and I hope to come to a conclusion as soon as I can.

    Isle of Wight
    Mr. Stephen Rossasked the Secretary of State for the Environment whether he will now extend the role of the Development Commission by granting special investment area status to the Isle of Wight.
    Mr. Guy Barnett: The term "special investment area" has no statutory significance; it is simply an administrative term used by the Development Commission, and it is therefore for the Commission to decide which areas qualify for special investment area status. However, my right hon. Friend is very anxious to extend the valuable role of the Development Commission as resources allow.
    Mr. Ross: Is the Minister aware that the Development Commission has supported the Isle of Wight's call for further assistance, and that that support has been with the Department of the Environment awaiting the approval of the Secretary of State since last October? As unemployment on the island is 9·1 per cent. and is likely to rise still further, I urge him to come to a decision as quickly as possible.
    Mr. Barnett: Certainly, we shall take account of that point. However, the Commission's general policy is to

    1441
    designate a special investment area where there is a long-term problem of rural depopulation. I recognise that the Isle of Wight has an unemployment problem, but assistance is being afforded by the construction of small workshops at Newport and by credit and advisory services from the Council for Small Industries in Rural Areas. We are also considering proposals for a three-year programme for 6,000 sq ft of small advance factories annually. I shall take account of what the hon. Member has said.

    House Building
    Mr. Frank Allaunasked the Secretary of State for the Environment what is his approximate estimate of the number of council houses to be completed in Great Britain in 1978 and in each of the three subsequent years; and what steps he plans to take to increase council house building to meet the need for such housing.
    Mr. Skinnerasked the Secretary of State for the Environment what further measures he is taking to increase house building in the next four years.
    Mr. Freeson: At present about 200,000 public sector homes are under construction in Great Britain, which should lead to about 150,000 completions in 1978. Completions in following years will depend upon the balance of investment locally between building, buying, conversion and rehabilitation, home loans and improvement within overall housing programmes.
    Mr. Allaun: Will the Minister tell the Cabinet—[HON. MEMBERS: "Why don't you tell them?"] It is a free country. Will he tell them that far more of the budget of North Sea oil potentiality should go to housing than is planned at present? The recent public expenditure survey shows that in the last two years £536 million a year has been cut from public housing, building, improvements, acquisition and land purchase and that in the next four years only half of that will be restored. That is not good enough.
    Mr. Freeson: My hon. Friend has his channels of communication just as I have mine, and I am sure that together we can make our views known very clearly in the various quarters politically.
    1442
    Although there have been cuts in either the planned or the prospective public expenditure on housing in recent times, the biggest single drop experienced this year and forecast for the future is the drop in expenditure on interest charges on capital loans. The main problem is to try to ensure that the resources that we make available to the public sector authorities are taken up. My great concern is that these resources are not being taken up, however much I may wish to increase that expenditure.
    Mr. Skinner: Is the Minister aware that in the great and glorious oil years an average forecast of 160,000 public sector houses annually is abysmal? Does this not arise from the fact that the IMF decided in December 1976 to cut £300 million from public expenditure in this financial year, never mind last year? Will my right hon. Friend take account of the fact that the hon. Member for Henley (Mr. Heseltine) said at the local government Tory conference that Tory local authorities should not build houses and should not spend money? He chided those Tory authorities that were doing a little towards building council houses, and complained that they were doing too much.
    Mr. Freeson: I take my hon. Friend's point about seeking to get some benefit from North Sea oil for public housing and urban renewal. I share his concern about that. However, on the figure of an average of 160,000 public sector houses in the years to come, I do not accept that this derives simply from decisions on North Sea oil revenues and public expenditure levels. It derives equally from the balance of investment in different kinds of housing activities in the future. I want to see equal attention paid to maintaining and improving the existing stock and management of the stock as a whole. Both are important. My concern is that the investment resources available are being rejected by a growing number of authorities, which is causing great disturbance in our housing programme.
    Mr. Michael Morris: Does the Minister agree that the money would be better spent in tackling the waste in district councils like Salford, Liverpool and the London boroughs of Camden and Islington where there are thousands of empty

    1443
    houses because of massive municipalisation? When will he tackle that problem?
    Mr. Freeson: I remind the hon. Member that that question was answered on a previous occasion. In co-operation with local authority associations, a special study has been established which has completed part I of its first report on the management of the house-building programme. I expect some very good results from the study.
    Mr. Carter-Jones: Is the Minister aware that even if the average rate of council house building was 200,000 a year there would still be people in Salford and other parts of the country waiting for a long, long time? Is it not right that the rate of building should be stepped up?
    Mr. Freeson: If my hon. Friend will apply that figure—or even a larger one as years go by—to the total housing activity he will see that not just new buildings are concerned, but conversions and improvements. These all mean a net addition to the housing stock. Apart from that reservation, I accept the point that he makes.
    Mr. Heseltine: When the Minister takes advice from the hon. Member for Salford, East (Mr. Allaun) and reports on his stewardship to the Cabinet, will he explain why, in each of the years that he has been Minister for Housing, the record has been worse than in the four previous years? The number of starts is down by 50,000 a year, the number of houses for sale is down by 80,000 a year and the number of improvement grants is down by 40,000 a year. All this adds up to the record of the worst Housing Minister since the war.
    Mr. Freeson: When I come to the end of my term in office, whenever that may be—probably some time after 1979—there will be many things that I shall still wish to see done in housing and in urban renewal. However, I do not accept any criticism based on the phoney figures that we have just heard.

    Council House Sales
    Mr. Adleyasked the Secretary of State for the Environment how many representations he has received in the
    1444
    current year in connection with assisting council house tenants to acquire their homes.
    Mr. Freeson: We have received several, reflecting various views.
    Mr. Adley: Does the Minister agree that there are some rather odd bedfellows opposing the sale of council houses? There are the doctrinaire Socialists, who want to see an extension of municipalisation and State control, there are the blimps who believe that once a council house tenant, always a council house tenant, and there are those in the housing authorities who do not want to see their housing empires diminished. When are the Government going to respond to the legitimate desire for freedom of choice among people who want to own the homes in which they have lived for half their lifetime or even longer?
    Mr. Freeson: We believe that we have developed the right balanced approach to this question. I only wish that those foolish people who rabbit on about the indiscriminate sale of council houses as the solution to all our problems of home ownership, housing improvement and urban renewal would turn their minds to the realities of the housing problems on the ground and take a more balanced view.
    Mr. Hardy: Has the Minister any view about those local authorities which, despite long waiting lists, wish to emulate the GLC and raffle off houses? They will receive no criticism from the Conservatives. Will he ensure that where a local authority sells its houses it does so on terms that are fair to the community as a whole?
    Mr. Freeson: I certainly accept that. We believe that the time will come when we must review the criteria and the circumstances under which this policy is applied. We believe that since April 1974, when we issued the first policy circular covering this question, we have got the balance just about right. All I ask is a balanced approach. I must point out that we cannot solve the problems of demand for rented housing by reducing the housing stock available.

    Council Estates (Community Facilities)
    Mr. Eyreasked the Secretary of State for the Environment to what extent

    1445
    the urban aid programme will be used to make good deficiencies in over-large council estates in urban areas.
    Mr. Steenasked the Secretary of State for the Environment if he will make available partnership money to Liverpool to help tackle the problem of people living on the over-large council estates on the edges of the city, many of which are without basic social or community facilities.
    Mr. Guy Barnett: The bulk of additional resources under the urban programme has been allocated to selected inner urban areas, where economic, physical and social problems are most severe and on the greatest scale. But resources will continue to be available for other areas—including council estates on the edges of cities or in suburban areas.
    Mr. Eyre: Can the hon. Gentleman say what percentage of the urban aid programme will be taken up by the inner area spending programme? Will he bear in mind that a great number of people have been transferred from inner areas to vast council estates in the outer wards of cities, where they lack community facilities, that therefore there has been a transfer of problems from the inner to the outer areas and that some help must be given to deal with these problems?
    Mr. Barnett: I cannot, without notice, give the percentage figure for which the hon. Gentleman asks, but about half the urban programme grants are for inner city partnership areas where problems are on a scale and intensity not found elsewhere. I recognise the sort of problem that the hon. Gentleman has described, as it affects both suburban areas and the estates on the edge of towns. I emphasise that urban programme grants are available for application where particular problems arise. Other funds can be made available by local authorities to deal with some of the problems on large estates.
    Mr. Steen: Will the hon. Gentleman explain why, if partnership agreements are for the inner cities, Liverpool, Garston, which is five miles from the city centre, should be included in the Liverpool partnership agreement when there are other areas in far worse order? Has it been included just because it is a marginal Labour seat?
    Mr. Barnett: I cannot comment on the decision of the partnership on that point.
    Mr. Heffer: Will my hon. Friend explain to the hon. Member for Liverpool, Wavertree (Mr. Steen) that Garston is a very old part of Liverpool and that, like Walton, it has a number of slums? Will he also explain that certain areas, apart from inner city areas, that have council property have peculiar problems and need additional support? What pressure is being applied, particularly on Liverpool City Council, to ensure that council houses that are old and that have outside toilets are modernised, in the interests of local people?
    Mr. Barnett: I take my hon. Friend's point. I cannot say what pressure may have been applied, but I shall write to my hon. Friend on that matter.
    Mr. Heseltine: Will the hon. Gentleman explain why he is not prepared to comment on the partnership boundaries in Liverpool but the Minister for Housing and Construction is perfectly happy to talk about the partnership boundaries in Birmingham?
    Mr. Barnett: The hon. Gentleman should understand that the partnership committees make the agreements in these cases. If he studies the Official Report, he will find that the replies given by my right hon. Friend and myself were of the same nature.

    Waste Land (Clearance)
    Mr. John Huntasked the Secretary of State for the Environment what assistance he is providing to voluntary organisations engaged in clearing and restoring waste land.
    Mr. Guy Barnett: The Department provides direct financial assistance to a number of national and regional organisations which may undertake land improvement schemes. Local authorities are, however, the main source of help for local projects.
    Mr. Hunt: Does the hon. Gentleman agree with the Civic Trust that voluntary groups have an important role to play in this sphere? As he has said that local authorities are important, will he give verbal and, perhaps, financial encouragement to help them undertake surveys in their areas, identify the derelict land

    1447
    which exists and help voluntary groups with the provision of rubbish skips and other facilities so that they can get on with the work of clearing the derelict land?
    Mr. Barnett: I very much welcome the hon. Gentleman's concern in this matter. We already encourage local authorities to do what they can to clear up waste land and I am aware of the Civic Trust's concern in this matter and the work that it has already done, particularly in the North-East. There have been a number of outstanding examples of what can be achieved as a consequence of the relatively small grants that the Department provides. A main objective of those grants is to provide opportunities for innovation, and I hope that local authorities will benefit from the experience of others in this area.
    Mr. Skinner: With 1,500,000 people on the dole, would it not be sensible to use some of them to clear derelict land, never mind allowing it to be done by voluntary organisations?
    Mr. Barnett: My hon. Friend may be aware that this is already done under the job creation programme.

    Local Government (Bristol and Avon)
    Mr. Palmerasked the Secretary of State for the Environment when he will announce his proposals for the reorganisation of local government responsibilities in relation to the city of Bristol and the county of Avon, in view of their bearing on future electoral arrangements for Bristol now under consideration by the Boundary Commission.
    Mr. Shore: The possibility of limited changes in local government responsibilities is under review. Consultations are taking place between those Ministers responsible for local government functions and the local authority associations and other bodies. The Prime Minister has asked me to co-ordinate this matter and I shall report to the House as soon as I am able to do so. I cannot yet say when this will be.
    Mr. Palmer: Did my right hon. Friend learn from his recent visit to Bristol the strong feelings there about the present misgovernment of the area because of the confused division of responsibilities be
    1448
    tween Bristol and Avon, which is apparently now going to result in a reduction in the number of elected representatives on the Bristol City Council, which once had almost total powers?
    Mr. Shore: I recognise the strong feelings that exist in local authorities, not only among Labour supporters but among Conservative supporters, in favour of a change. I cannot prejudge the results of the consultations to which I have referred, but I cannot think that there is any authority with a stronger case for some change in terms of an increase in its powers than the city of Bristol, with its size, resources and proven competence.

    Floods (East Coast)
    Mr. Brothertonasked the Secretary of State for the Environment if he will make a statement about the recent flooding on the East Coast.
    Mr. Shore: Yes, Sir. I have considered further the question of Government assistance to local authorities whose areas have suffered substantial damage in the floods and gales of November 1977 and January 1978.
    In order to ensure that local ratepayers do not have to carry an excessive burden, a local authority that has incurred, as a direct result of these floods and gales, net additional expenditure that is in excess of its product of a 1p rate will receive, by way of special financial assistance, 75 per cent. of that excess.
    Details of the application of this formula will be given to local authorities, which will, of course, have to submit claims for consideration by my Department.
    A Supplementary Estimate will be presented to Parliament for approval at the earliest opportunity.
    Mr. Brotherton: Is the right hon. Gentleman aware that his reply will give considerable pleasure, particularly in places, such as Cleethorpes, which have suffered twice from flooding in the past two years? Can he assure us that if there should be further flooding at future high tides, similar help will be made available?
    Mr. Shore: The formula will stand. I thought it right to make that clear in order to remove any uncertainties that may be in the minds of local authorities

    1449
    that have, unhappily, been affected by recent floods.
    Mr. Molloy: Does my right hon. Friend agree that one of the vital elements in any disaster is the warning system, whether for floods caused by the sea or by the unhappy releasing of water from one controlled source which floods another source? Will my right hon. Friend ask the Minister of Agriculture why the GLC warning system failed lamentably in August last year and resulted in 300 or 400 homes in my constituency being, if not unnecessarily flooded, certainly flooded without any warning being given?
    Mr. Shore: My hon. Friend is right in emphasising the key importance of the warning services and systems. I know that my right hon. Friend is very much concerned that they should operate at the highest level of efficiency. I know that he is considering their performance, which I believe has been pretty good overall.
    Several Hon. Members rose—
    Mr. Speaker: Order. I propose to exercise my discretion on behalf of those hon. Members who have a direct constituency interest in this matter and who have been seeking to ask supplementary questions.
    Mr. Crouch: I am grateful to you, Mr. Speaker. Unusual as it may be at Question Time, I thank the Secretary of State, on behalf of my constituents at Whitstable and Herne Bay, for his statement on the contribution towards flood relief. In those two towns the calculations of damage suffered by the local authority and private individuals are in excess of £1 million. I am grateful on behalf of my constituents.
    Mr. Shore: I note what the hon. Gentleman says, and I thank him.
    Mr. Joseph Dean: On a point of order, Mr. Speaker. You did say that you were relaxing the normal rules in respect of hon. Members having a particular constituency interest in Question No. 21. However, Question No. 22, which is my Question, has a wide-ranging interest for other hon. Members, as it concerns mortgage interest rates for council houses, which is just as important a matter. I do not see why a privilege should be extended to a certain section.
    Mr. Speaker: I am sorry that we did not reach the Question of the hon. Member for Leeds, West (Mr. Dean) before 3.30 p.m., but the hon. Gentleman knows well why we did not reach it. The reason lies with the inordinately long questions and answers that we had today. The questions were longer than the answers, except in one instance. I think now that it is the will of the House that when a Question is reached in which hon. Members are directly interested, their constituents having been so gravely involved, I should give them an opportunity to ask supplementary questions.
    Mr. Moate: I, too, wish to express my thanks to the right hon. Gentleman for the help that he has given. However, does he agree that it is unsatisfactory that it has taken nearly one month to establish what assistance can be given to local authorities? Will he look again at Section 138, bearing in mind the help that local authorities have given in different ways to those who have suffered from the floods because they had no knowledge of what resources were to be made available to them? Will he consider some way of giving a clear guideline so that when a future disaster occurs local authorities will know exactly what they can and should do immediately after the disaster has occurred?
    Mr. Shore: It is precisely to give local authorities that major guideline in terms of the resource contribution that the Government would make that I have made my statement. Beyond that, I do not really think that there is any great problem that we cannot solve with local authorities in the ordinary course of discussion.
    Mr. Fell: I wonder whether the right hon. Gentleman would give a word of commendation to the local authorities of Great Yarmouth, the town on the East Coast that was the worst affected in the 1953 floods and that has done so well since that time. Does the right hon. Gentleman appreciate that this time the town escaped almost scot-free?
    Mr. Shore: I am delighted to hear that. There is special warmth in my commendation to the local authority of the town of my birth.
    Mr. Stainton: Without detracting from what the right hon. Gentleman has said,

    1451
    may I ask whether he agrees that he has merely touched on one aspect? When will the right hon. Gentleman and his colleague, the Minister of Agriculture, Fisheries and Food, make a more comprehensive statement on the whole situation?
    Mr. Shore: I shall consider whether any such further statement is required. I think that we had better see what the response is to what I have said.
    Mr. Costain: Will the Secretary of State make it clear that the compensation that he has announced will apply to South-East Kent as well as the East Coast?
    Mr. Shore: It is of general application.
    Mr. Freud: The Secretary of State will know, because we have had conversations, that an assurance has been given that my local authority—I represent Fenland, which suffered as badly as any other area—will not be unduly helped by payments that were made and will be made under Section 138. Does the right hon. Gentleman appreciate that the extent of the damage at Wisbech is in the neighbourhood of £3 million, and that 25 per cent. of that will put about 6p on the rate? Does he accept that that it is a considerable blow to the ratepayers, who are already suffering an 11p increase over last year?
    Mr. Shore: I understand the hon. Gentleman's concern, especially as Wisbech was one of the worst affected areas. I ask the hon. Gentleman not to jump to conclusions on quick arithmetic based on my statement, which I believe will be far more helpful to his area than his initial reaction suggests.
    Mr. Alison: The Secretary of State's announcement has been generally welcomed, but I ask him about one aspect of it. Does he appreciate that it will be the poorer authorities, which have a low product of a 1p rate, which will have an excessive burden placed upon them if they have to raise the 25 per cent. margin of grant? Will the right hon. Gentleman consider whether it is possible to adapt the percentage so that the poorer authorities have a 100 per cent. grant?
    Mr. Shore: I think that the hon. Gentleman will find that the system will
    1452
    work out reasonably well. That is because it is related to the resources of a particular area. I do not believe that any requirement beyond about 2 per cent. on the average rate bill will accrue to those in the local authorities concerned. The Government will be able to help with the rest.

    Floods (East Coast)
      BILLS PRESENTED
        EMPLOYMENT SUBSIDIES
        Mr. Secretary Booth, supported by Mr. Secretary Mason, Mr. Secretary Millan, Mr. Secretary Morris, Mr. Robert Sheldon and Mr. John Golding, presented under Standing Order No. 91 (Procedure upon Bills whose main object is to create a charge upon the public revenue) a Bill to authorise payments to employers as a means of contributing to the alleviation of unemployment; And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed [Bill 61].
        SEA FISH (CONSERVATION) (AMENDMENT) (SCOTLAND)
        Sir John Gilmour, presented a Bill to make further provision in relation to Scotland for the regulation of nets and other fishing gear; And the same was read the First time; and ordered to be read a Second time upon Friday 24th February and to be printed [Bill 62].

OVERSEAS AID
3.37 p.m.
Mr. Victor Goodhew: I beg to move,
That leave be given to bring in a Bill to revise the arrangement for the granting of aid to overseas countries; and for purposes connected therewith.
Overseas aid can be a most controversial subject. Views on its effectiveness and value range over a wide sphere. At one extreme there are those who cannot see the sense of Her Majesty's Government borrowing vast sums at high interest rates only to lend to developing countries at low rates of interest, or free of interest altogether. They would say that it makes more sense for the wealthy countries that lend to us to lend their money direct to the developing countries.
At the other extreme, there are those who argue that we have a duty, at no

1453
matter what cost to our economy, to provide massive aid to the developing countries, even if that money may be used directly or indirectly to the disadvantage of our interests. There is a wide range of opinion between those extremes.
I do not propose to enter into that wide debate this afternoon, although the abyssmal speech of the Under-Secretary of State for Foreign and Commonwealth Affairs on 6th February tempts me to do so. The hon. Gentleman referred to aid to Mozambique and said:
"in all cases we have received assurances, which the Government find totally satisfactory from the Mozambique Government, that British assistance will be used for peaceful purposes only."—[Official Report, 6th February 1978; Vol. 943; c. 1089.]
How naïve can the hon. Gentleman be? Surely he knows that £20 million loaned interest-free for 25 years to that country must make it easier for the Mozambique Government to train and harbour terrorists who murder innocent Rhodesians, black and white. However, I must not be diverted from the purpose of my Bill by the naivety and stupidity of Ministers.
I am attempting a minor and limited change that I believe will be acceptable to most people. I believe that Private Members' Bills should always be drafted with modest objects in view, objects that are likely to commend themselves to hon. Members on both sides of the House.
My aim is simply that where this country is giving aid to another country and that country's Government nationalise a British company, or expropriate the assets of a British company or British subject and refuse to pay compensation, it shall be made mandatory for Her Majesty's Government to reduce the aid paid to that country by the amount of the compensation unpaid. As a private Member, I have no power to legislate for the payment of the money thus saved but I would hope that any honourable British Government would pay it to the company or subject deprived of their rightful dues.
This Bill is prompted by a case history in the Sunday Telegraph of 8th January. I can do no better than to read the report, which runs as follows:
"Beira Town Sites, the British company which owned and sold land in Mozambique since 1903, has had its assets stripped.
The Frelimo Government of President Machel has confiscated its property, worth about £450,000. Vivian Oury, chairman of
1454
the company, has been advised by our Foreign Office to press for compensation through the Mozambique courts.
But there is no longer any private legal practice in Mozambique. In any case a Government decree specifically precludes foreigners from receiving compensation.
This is the country to which Judith Hart, Minister for Overseas Development, has obligingly agreed to provide loans of £20 million for 25 years, interest free.
Her compassion does not extend to British shareholders. She has turned down a request from Beira Town Sites to offset the £450,000 of expropriated assets against her generous loan of British taxpayers' money.
This is not the first case. Her Department says that representations to Frelimo would be 'provocative and counter-productive' ".
We come to a later report in The Daily Telegraph headed "Keeping Mozambique Sweet". This reads:
"In a drop of rain can he seen the colours of the sun.' A reader put a query recently to the Sunday Telegraph City page. His small shareholding in a Mozambique land-owning firm had been nationalised by the Frelimo dictatorship under a decree which specifically excluded compensation. Was there any way he could seek redress through the British Government? The reply was both discouraging and revealing. The Foreign Office had made representations to the Mozambique Government about the principle of compensation. In the meantime, it advises expropriated owners to seek compensation 'through the legal means available in Mozambique'. But there are no legal means available in Mozambique. Law there is simply the administrative assistant of political power, and the Government has precluded foreigners from compensation.
But Britain is providing Mozambique with £20 million in interest-free loans. Might not some of this money be used instead to compensate the plundered investors? To do that, retorts the Ministry of Overseas Development under Mrs. Hart, would be 'provocative and counter-productive'. But what could it provoke? We are in the strong position of having nothing left to be seized in Mozambique. The worst that could happen is that they might refuse to accept our money. And if we are not prepared to risk such slight inconveniences, why should Mozambique concern itself with the Foreign Office's 'representations'?"
That is one case. I have been told of another, concerning an estate in Egypt where an executor and trustee is still valiantly fighting, with the help of my right hon. Friend the Member for Spelthorne (Mr. Atkins), who is the constituency Member. This concerns a Mr. Camplin of Staines. The loss suffered, in this case in 1956, was £1,212. A battle has been going on over all these years. The first interim payment of 5 per cent.

1455
was not made until January 1976–20 years after the loss was sustained. A second interim payment of 5 per cent. was made in December 1977. How long will it take for the money to be repaid, and what will it be worth at the end of it all?
There must be many cases of this type. It is wrong that the British Government should not take some action. Many people resent aid being given to certain countries. I do not believe that anyone in this country would resent the withholding of aid from countries to the amount which those countries owe British companies and British subjects for assets which have been nationalised or expropriated. If the Government, who have the power to act in this matter, will not do so, I ask the House to support this Bill which makes it mandatory for the Government to act in the way I have suggested.
3.45 p.m.
Miss Joan Lestor: I urge the House not to support this Bill on the strength of the flimsy evidence which has been brought before it by the hon. Member for St. Albans (Mr. Goodhew). It is a well-known fact that Conservative Members have never liked the idea of our giving aid to Mozambique. Because they failed to stop that aid, they are now seeking back-door methods of bringing it to an end. The hon. Member began his speech by saying that it seemed that certain people in Government, and others, were prepared to see Britain involved in massive aid—I wish to God some of it were a little more massive—to all sorts of countries, irrespective of the cost to this country and the economic consequences for us.
The hon. Member for St. Albans also raised the question—although he said he did not want to dwell on it—of the situation in any country receiving aid and particularly identified Mozambique. I do not speak for anyone other than myself—although I hope that my hon. Friends will join me in opposing the Bill—when I say that I believe that aid given anywhere in the world should be allotted on the basis that it will enhance the standard of living of those in the recipient country and help to make a long-term
1456
contribution to their well-being. The attitude of the Government in the recipient country and the election of that Government is a matter for that country, except when a denial of human rights is involved. This would call into question the use to which the aid was being put. It is important to stress that, irrespective of where British aid goes, most of it is tied to the purchase of United Kingdom goods and services. Two-thirds of our overseas aid in 1976 was so tied.
Behind the argument about Mozambique lie many other matters. The issue of nationalisation has been raised, suggesting that it is a reason for us to deny Mozambique any further aid. That issue has come up lately because of certain complications which I would not deny have arisen. The hon. Member said that there were no legal means available in Mozambique. I know that the British Government are looking closely at the legal means that exist in Mozambique and are examining the whole question of aid and public ownership to ensure that the issue of compensation is dealt with. It is much more important that this is got straight at the beginning rather than that an attempt should be made to introduce a Bill that will jeopardise the standard of living and the future of a large number of people in Mozambique who are dependent on British aid. I wish that the hon. Gentleman, who keeps interrupting from a sedentary position, would display the good manners he says that his educational background has given him. I did not interrupt his speech. I listened to him closely.
Mr. Goodhew: The hon. Lady wrote her speech before hearing me.
Mr. Deputy Speaker (Mr. Oscar Murton): Order. The hon. Lady must be heard. The hon. Gentleman was heard in silence and the hon. Lady has the right of reply.
Miss Lestor: The hon. Gentleman claims that I wrote my speech before hearing what he had to say. That does not say much for his ingenuity in producing a speech which I could answer before hearing it. What he said was pretty predictable. I hope that these interruptions will not be counted against my time, because that would be most unfair.

1457
I defended and was pleased by the Government's decision to make aid available to Mozambique. Whatever the problems we may be experiencing at the moment, which I would be glad to see ironed out, on the question of compensation and nationalisation, they do not justify the withdrawal of aid. Mozambique suffered a colonial war for 10 years. It has closed its borders with Southern Rhodesia, and has suffered all the problems arising from the sanctions policy.
Mr. Goodhew: On a point of order, Mr. Deputy Speaker. I did not suggest that aid should be withdrawn—
Mr. Deputy Speaker: Order. The hon. Lady must be allowed to present her case in her own way.
Miss Lestor: The hon. Gentleman does not seem to like what I am saying. He made some nasty and unfortunate remarks about Mozambique. I said at the beginning of my speech that he was using back-door methods in order to try to stop aid to Mozambique. I am using the front-door method in order to ensure that Mozambique does get aid. He complained about public ownership and the difficulties over compensation to previous owners. But that is a Government-to-Government argument, not a people-to-people argument.
The people of Mozambique have suffered as a result of sanctions against
Southern Rhodesia which they have implemented. They have suffered a 10-year colonial war. They have suffered from incursions by Ian Smith's forces into their territory. They have suffered floods and a whole mass of devastation. I do not want to see them suffer more because we withdraw our aid over problems arising from the question of public ownership.
I believe that the Bill is less concerned with the question of compensation than with the whole question of aid to a particular country which many Conservatives have opposed from the moment it was brought into being.
One of the lessons we have to learn on the question of aid in particular and all that relates to it is that, if we do not continue our aid programme and try to enhance and raise the standard of living of the people of Mozambique, irrespective of whether they have nationalisation, we shall open the door to the very thing that many hon. Members opposite say they fear—Soviet influence in Africa. I ask the House to reject the Bill.
Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at Commencement of Public Business):—
The House divided: Ayes 141, Noes 219.

Division No. 102]

AYES

[3.52 p.m.

Adley, Robert

Craig, Rt Hon W. (Belfast E)

Howell, Ralph (North Norfolk)

Atkins, Rt Hon H. (Spelthorne)

Dean, Paul (N Somerset)

Hunt, David (Wirral)

Atkinson, David (Bournemouth, East)

Eyre, Reginald

Hurd, Douglas

Awdry, Daniel

Falrgrieve, Russell

Hutchison, Michael Clark

Banks, Robert

Farr, John

James, David

Bennett, Sir Frederic (Torbay)

Finsberg, Geoffrey

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

Bennett, Dr Reginald (Fareham)

Fisher, Sir Nigel

Johnson Smith, G. (E Grinstead)

Benyon, W.

Fletcher, Alex (Edinburgh N)

Jones, Arthur (Daventry)

Berry, Hon Anthony

Fletcher-Cooke, Charles

Jopling, Michael

Bitten, John

Fookes, Miss Janet

Kellett-Bowman, Mrs Elaine

Boscawen, Hon Robert

Fowler, Norman (Sutton C'f'd)

Kershaw, Anthony

Bottomley, Peter

Fox, Marcus

Knight, Mrs Jill

Boyson, Dr Rhodes (Brent)

Fraser, Rt Hon H. (Stafford & St)

Langford-Holt, Sir John

Braine, Sir Bernard

Galbraith, Hon T. G. D.

Latham, Michael (Melton)

Brotherton, Michael

Gilmour, Rt Hon Ian (Chesham)

Le Marchant, Spencer

Brown, Sir Edward (Bath)

Gilmour, Sir John (East Fife)

Lester, Jim (Beeston)

Buchanan-Smith, Alick

Glyn, Dr Alan

Lewis, Kenneth (Rutland)

Buck, Antony

Goodhart, Philip

Luce, Richard

Budgen, Nick

Gower, Sir Raymond (Barry)

Macfarlane, Neil

Butler, Adam (Bosworth)

Gray, Hamish

MacKay, Andrew (Stechford)

Chalker, Mrs Lynda

Grist, Ian

Mather, Carol

Churchill, W. S.

Hall-Davis, A. G. F.

Maudling, Rt Hon Reginald

Clark, William (Croydon S)

Hamilton, Michael (Salisbury)

Mawby, Ray

Clarke, Kenneth (Rushcliffe)

Hampson, Dr Keith

Mills, Peter

Clegg, Walter

Hannam, John

Molyneaux, James

Cooke, Robert (Bristol W)

Harrison, Col Sir Harwood (Eye)

Monro, Hector

Cope, John

Harvie Anderson, Rt Hon Miss

Montgomery, Fergus

Cormack, Patrick

Havers, Rt Hon Sir Michael

Morgan, Geraint

Corrie, John

Holland, Philip

Morris, Michael (Northampton S)

Costain, A. P.

Howell, David (Guildford)

Morrison, Hon Peter (Chester)

Neave, Airey

Sainsbury, Tim

Thomas, Rt Hon P. (Hendon S)

Neubert, Michael

Scott-Hopkins, James

Trotter, Neville

Newton, Tony

Shaw, Giles (Pudsey)

Vaughan, Dr Gerard

Normanton, Tom

Shaw, Michael (Scarborough)

Walder, David (Clitheroe)

Nott, John

Shersby, Michael

Walker-Smith, Rt Hon Sir Derek

Onslow, Cranley

Sims, Roger

Walters, Dennis

Osborn, John

Skeet, T. H. H.

Warren, Kenneth

Page, Richard (Workington)

Smith, Dudley (Warwick)

Weatherill, Bernard

Paisley, Rev Ian

Smith, Timothy John (Ashfield)

Wells, John

Parkinson, Cecil

Speed, Keith

Whitelaw, Rt Hon William

Pattie, Geoffrey

Spence, John

Wiggin, Jerry

Price, David (Eastleigh)

Sproat, Iain

Winterton, Nicholas

Pym, Rt Hon Francis

Stainton, Keith

Young, Sir G. (Ealing, Acton)

Rhys Williams, Sir Brandon

Stanley, John

Younger, Hon George

Ridley, Hon Nicholas

Steen, Anthony (Wavertree)

Rifkind, Malcolm

Stradling Thomas, J.

TELLERS FOR THE AYES:

Ross, William (Londonderry)

Taylor, Teddy (Cathcart)

Mr. Victor Goodhew and

Rossi, Hugh (Hornsey)

Tebbit, Norman

Mr. Ian Gow

Rost, Peter (SE Derbyshire)

NOES

Allaun, Frank

Fitch, Alan (Wigan)

Marshall, Dr Edmund (Goole)

Anderson, Donald

Flannery, Martin

Marshall, Jim (Leicester S)

Archer, Rt Hon Peter

Foot, Rt Hon Michael

Mason, Rt Hon Roy

Ashley, Jack

Forrester, John

Maynard, Miss Joan

Ashton, Joe

Freeson, Rt Hon Reginald

Meacher, Michael

Atkins, Ronald (Preston N)

Freud, Clement

Mendelson, John

Bagier, Gordon A. T.

Garrett, John (Norwich S)

Mikardo, Ian

Bain, Mrs Margaret

Garrett, W. E. (Wallsend)

Millan, Rt Hon Bruce

Barnett, Guy (Greenwich)

George, Bruce

Miller, Dr M. S. (E Kilbride)

Barnett, Rt Hon Joel (Heywood)

Gilbert, Rt Hon Dr John

Mitchell, Austin

Bates, Alf

Golding, John

Molloy, William

Beith, A. J.

Gould, Bryan

Moonman, Eric

Benn, Rt Hon Anthony Wedgwood

Gourlay, Harry

Morris, Alfred (Wythenshawe)

Bidwell, Sydney

Graham, Ted

Morris, Rt Hon Charles R.

Blenkinsop, Arthur

Grant, John (Islington C)

Morris, Rt Hon J. (Aberavon)

Boardman, H.

Grocott, Bruce

Mulley, Rt Hon Frederick

Booth, Rt Hon Albert

Hamilton, James (Bothwell)

Murray, Rt Hon Ronald King

Boothroyd, Miss Betty

Hardy, Peter

Noble, Mike

Bottomley, Rt Hon Arthur

Harper, Joseph

O'Halloran, Michael

Bray, Dr Jeremy

Harrison, Rt Hon Walter

Orbach, Maurice

Brown, Hugh D. (Provan)

Hart, Rt Hon Judith

Orme, Rt Hon Stanley

Brown, Robert C. (Newcastle W)

Hattersley, Rt Hon Roy

Ovenden, John

Buchan, Norman

Hayman, Mrs Helene

Owen, Rt Hon Dr David

Butler, Mrs Joyce (Wood Green)

Healey, Rt Hon Denis

Park, George

Callaghan, Rt Hon J. (Cardiff SE)

Heller, Eric S.

Parker, John

Callaghan, Jim (Middleton & P)

Hooson, Emlyn

Parry, Robert

Campbell, Ian

Horam, John

Pavitt, Laurie

Canavan, Dennis

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

Pendry, Tom

Carmichael, Neil

Howells, Geraint (Cardigan)

Perry, Ernest

Carter, Ray

Hoyle, Doug (Nelson)

Phipps, Dr Colin

Carter-Jones, Lewis

Huckfield, Les

Price, William (Rugby)

Cartwright, John

Hughes, Rt Hon C. (Anglesey)

Radice, Giles

Castle, Rt Hon Barbara

Hughes, Robert (Aberdeen N)

Richardson, Miss Jo

Clemitson, Ivor

Hughes, Roy (Newport)

Roberts, Albert (Normanton)

Cocks, Rt Hon Michael (Bristol S)

Hunter, Adam

Roberts, Gwilym (Cannock)

Cohen, Stanley

Jackson, Colin (Brighouse)

Robinson, Geoffrey

Coleman, Donald

Janner, Greville

Rodgers, George (Chorley)

Corbett, Robin

Jay, Rt Hon Douglas

Rooker, J. W.

Cox, Thomas (Tooting)

Jenkins, Hugh (Putney)

Roper, John

Craigen, Jim (Maryhill)

John, Brynmor

Ross, Stephen (Isle of Wight)

Crawshaw, Richard

Johnson, James (Hull West)

Sandelson, Neville

Crowther, Stan (Rotherham)

Jones, Alec (Rhondda)

Sever, John

Cryer, Bob

Judd, Frank

Shaw, Arnold (Ilford South)

Cunningham, G. (Islington S)

Kaufman, Gerald

Sheldon, Rt Hon Robert

Cunningham, Dr J. (Whiteh)

Kelley, Richard

Short, Mrs Renée (Wolv NE)

Davidson, Arthur

Kerr, Russell

Skinner, Dennis

Davies, Bryan (Enfield N)

Kinnock, Neil

Smith, John (N Lanarkshire)

Davies, Ifor (Gower)

Lamborn, Harry

Spearing, Nigel

Davis, Clinton (Hackney C)

Lamond, James

Spriggs, Leslie

Dean, Joseph (Leeds West)

Latham, Arthur (Paddington)

Stallard, A. W.

Dempsey, James

Lewis, Ron (Carlisle)

Steel, Rt Hon David

Doig, Peter

Lipton, Marcus

Stewart, Rt Hon Donald

Dormand, J. D.

Litterick, Tom

Stewart, Rt Hon M. (Fulham)

Dunn, James A.

Loyden, Eddie

Stoddart, David

Dunnett, Jack

Luard, Evan

Stott, Roger

Eadie, Alex

Lyon, Alexander (York)

Surmmerskill, Hon Dr Shirley

Ellis, John (Brigg & Scun)

McCartney, Hugh

Thomas, Jeffrey (Abertillery)

English, Michael

McDonald, Dr Oonagh

Thomas, Ron (Bristol NW)

Ennals, Rt Hon David

McElhone, Frank

Thompson, George

Evans, Fred (Caerphilly)

MacFarquhar, Roderick

Thorpe, Rt Hon Jeremy (N Devon)

Evans, Gwynfor (Carmarthen)

Maclennan, Robert

Tinn, James

Ewing, Harry (Stirling)

McNamara, Kevin

Tomlinson, John

Faulds, Andrew

Madden, Max

Torney, Tom

Fernyhough, Rt Hon E.

Mallalieu, J. P. W.

Urwin, T. W.

Varley, Rt Hon Eric G.

White, James (Pollok)

Wilson. Gordon (Dundee E)

Wainwright, Edwin (Dearne V)

Whitehead, Phillip

Wise, Mrs Audrey

Wainwright, Richard (Colne V)

Whitlock, William

Woodall, Alec

Walker, Harold (Doncaster)

Wigley, Dafydd

Woof, Robert

Walker, Terry (Kingswood)

Willey, Rt Hon Frederick

Wrigglesworth, Ian

Ward, Michael

Williams, Rt Hon Alan (Swansea W)

Young, David (Bolton E)

Watkinson, John

Williams, Alan Lee (Hornch'ch)

Watt, Hamish

Williams, Rt Hon Shirley (Hertford)

TELLERS FOR THE NOES:

Weetch, Ken

Williams, Sir Thomas (Warrington)

Miss Joan Lestor and

Welsh, Andrew

Wilson, Alexander (Hamilton)

Mr. Ioan Evans

Question accordingly negatived.

ORDERS OF THE DAY

  EUROPEAN ASSEMBLY ELECTIONS BILL
  [2ND ALLOTTED DAY]
  Considered in Committee. [Progress, 2nd February]
  [Mr. OSCAR MURTON in the Chair]
  4.0 p.m.
  Mr. Nigel Spearing: On a point of order, Mr. Murton. You may recall that at the last sitting of the Committee there was some difficulty over matters of legal interpretation. Requests were made for Law Officers to attend to help the Committee. That was not possible, but the Foreign Secretary conceded to the hon. Members for Wolverhampton, South-West (Mr. Budgen) and Harrow, East (Mr. Dykes) that matters of substance were involved. He said,
  "I shall see that an answer is given."—[Official Report, 2nd February 1978; Vol. 943. c. 801.]
  I understand that there has been correspondence involving at least one of those hon. Members on that and another matter. On the same matter of substance I was given information by the Minister of State, but this is not on the record since it is not part of the Committee's proceedings. Is there any way in which these answers can be put on the record since this would help us, particularly in tabling amendments for the Report stage?
  The Chairman: The debate on New Clause No. 8 was concluded by the fall of the guillotine at midnight last Thursday. As the hon. Member for Newham, South (Mr. Spearing) knows, it would be out of order to resume that debate at this stage. There is no method by which any subsequent discussion can be recorded.
  Mr. Bryan Gould: On a point of order. Mr. Murton. May I seek your guidance about Amendment No. 198, which has not been selected? It might be helpful if you could tell the Committee whether the amendment was not selected at your discretion or whether it was out of order.
  The Chairman: I can help the hon. Member to the extent of saying that I did exercise the discretion which lies in my hands.

  EUROPEAN ASSEMBLY ELECTIONS BILL
    Schedule 1

      SIMPLE MAJORITY SYSTEM (FOR GREAT BRITAIN) WITH S.T.V. (FOR NORTHERN IRELAND).
      Mr. Douglas Hurd: I beg to move Amendment No. 183, in page 11, line 30, at end insert:
      '(aa) those who were entitled to vote as electors at a parliamentary election in a parliamentary constituency wholly or partly comprised in the Assembly constituency but who. on that day, are not so entitled being resident in one of the other member States of the European Communities, and who have made a written declaration to the registration officer in the parliamentary constituency in which they were last entitled to vote as electors at a parliamentary election to the effect that—

      (i) they have established, or are able to establish, right of abode in the United Kingdom within the meaning of section 2 of the Immigration Act 1971; and

      (ii) they or their spouses have been resident in the United Kingdom; and

      (iii) they or their spouses will on the day appointed under paragraph 3 below for the election be resident in one of the other member States of the European Communities by virtue of their occupation, service or employment; and

      (iv) they intend to return to reside in the United Kingdom,

      such persons being entitled to vote by proxy subject to the provisions of any regulation made under sub-paragraph (3)(c) below (including any provision for the verification of their written declaration); and '.
      The Chairman: With this we may discuss the following amendments:
      No. 53, in page 11, line 35, at end insert:
      (c) United Kingdom nationals temporarily resident in other member States of the European Communities provided that two weeks notice of intention to vote is lodged in writing at the nearest United Kingdom consular post.'
      No. 54, in page 11, line 35, at end insert—
      `(c) nationals of any country within the European Community who have been continuously resident in the United Kingdom for the past 10 years or have been resident here for a period aggregating 10 years in the past 15 years provided their names appear on a special register of electors prepared pursuant to the requirements of paragraphs 7 to 10 of this Schedule'.

      1465
      No. 184,in page 12, line 10, at end insert' and
      (c) as to the form in which written declarations under paragraph 2(1)(aa) above shall be made, the procedure to be followed for the verification of such declarations and for the issue of poll cards to those appointed as proxies for persons entitled to vote by virtue of paragraph 2(1)(aa) above.'.
      No. 55, in page 15, line 5, at end add—
      '(7) The Secretary of State shall cause a special register of nationals of the European Community who have been resident in the United Kingdom for 10 years or have been resident in the United Kingdom aggregating 10 years in the past 15 years to be compiled in all assembly constituencies and may make regulations for that purpose.
      (8) Ten years continuous residence in the United Kingdom shall be construed as covering that period immediately prior to the date set by the Secretary of State for the compilation of the special register.
      (9) Community residents in the United Kingdom shall vote in only one country. It will be an offence under section 12 of this Act if having voted for a candidate in the Assembly Elections in the United Kingdom he votes or attempts to vote elsewhere in the Community or registers or attempts to register a vote in an Embassy within this country for that purpose.
      (10) Special registers shall be available in all assembly constituencies and shall be treated as supplementary to the general register of electors.'.
      Mr. Hurd: The purpose of Amendment No. 183 and the consequential Amendment No. 184 is to enfranchise for European elections only British nationals and their wives or husbands who are living and working in the European Community. We believe that these are important amendments and we hope that the Government will accept them.
      I shall deal first with the principle involved and then with the specific proposal. The principle is that we are dealing with a group of British people who are in effect the spearhead, or part of the spearhead, of Britain's effort in Europe. Upon them depends in part our chances of making a success of the partnership in Europe to which we now belong. Furthermore, their lives and prospects are probably more deeply affected than those of most people by the decisions which the Community has taken and will take and which the European Parliament, when directly elected, will influence more strongly than at present.
      These people feel strongly that they should not be excluded from this franchise. The information which individuals
      1466
      and groups gave to the Select Committee on this matter provides copious evidence to that effect. We believe that they are right in this contention. That is why we tabled the amendments.
      It would not be accurate to say that all Britons resident in the Community are excluded from the franchise in these elections under the present arrangements. Far from it. Not only are there many Service men in the British Army of the Rhine and elsewhere but we have Government servants in embassies and British Council offices who, under longstanding arrangements, are entitled to the franchise. They are also part of the vanguard of our effort in Europe. In natural justice it is not clear why they should be accorded a right which is denied to people who work in private firms or international organisations instead of British Government organisations. Yet if we simply hold to the existing arrangements, that is the distinction or discrimination which will apply.
      Most hon. Members present will recall that when we went over some of the same ground—it was broadly similar ground at the time of the referendum—many people were active in this connection. My hon. Friend the Member for Christchurch and Lymington (Mr. Adley) was particularly active in assembling a massive petition which showed the strength of feeling on the issue.
      The proposal which the House debated on that occasion came from the hon. Member for Belper (Mr. MacFarquhar), whom I am glad to see in his place this afternoon ready, I hope, to give us support on the present proposal.
      On that earlier occasion, the proposal similarly to enfranchise the Britons to whom we are referring was resisted by the Government. It was resisted, basically, on two grounds. The first was the familiar ground that it was something new and should therefore be resisted. Indeed, the hon. Member for The Wrekin (Mr. Fowler), then Minister of State at the Privy Council Office, coined the daring phrase that we were being asked to make a leap into the dark.
      That is a familiar defensive ploy, and I hope that we shall not hear it from the Minister today. Whenever proposal A is put before the House, Ministers shake their heads gravely and say that it would

      1467
      be quite wrong to consider or to endorse proposal A without considering proposals B and C at the same time. Then, when that argument has prevailed with their supporters and proposal A is out of the way, they go back to sleep and neither proposal A nor proposals B and C are discussed thereafter. I hope, therefore, that we shall not again have that stonewalling tactic which we had from the hon. Member for The Wrekin.
      The Lord President of that day enlivened the debate and made great play with his description of the unworthy people who would be admitted to the franchise then proposed. We heard about lotus eaters who live by the Mediterranean, and hon. Members on the Government Benches were whipped into a high state of excitement by the prospect of people being allowed to vote when they had left this country in search of the sun or in order to avoid taxes.
      I do not know whether the then Lord President, now Lord Glenamara, holds the same view about lotus eaters now, but we have tried in this amendment to take account of the Puritan preoccupations which the Government then expressed.
      Mr. Roderick MacFarquhar: Does the hon. Gentleman recall that, due to Lord Glenamara's pronunciation, presumably, a correspondent of a French newspaper reported the reference as being to lettuce eaters?
      Mr. Hurd: I am grateful to the hon. Gentleman for that admirable footnote to history.
      I turn now to the logic of the matter as we move from the referendum to the question of direct elections.
      Mr. Nick Budgen: Will my hon. Friend explain where the logic of these proposals will take us? First, what proposal would he have for EEC nationals resident in this country? Would he wish them to vote in this country if they had no vote in their own?
      Mr. Hurd: My hon. Friend has a keenly developed sense of logic, and he senses that, in the logical development of my case, I was about to come to that point. He leads me naturally to the next step.
      1468
      My hon. Friend is right to remind us that, as we move from the referendum, which was concerned simply with this country, to direct elections held across the Community at the same time, there is another perfectly logical way of tackling the problem, and that would be to allow people to vote in their country of residence inside the Community rather than anywhere else.
      In paragraph 48 of its evidence to the Select Committee, the Labour Committee for Europe made that specific proposal, saying:
      "We believe it would be in the best interests of the development of the European Community if nationals of any member State were allowed to vote in their country of residence…rather than in their country of origin."
      That may be, but it would require an agreement among the Community States. The Select Committee looked into it, and there is on the record a memorandum from the Foreign Office showing—convincingly, in my view—that there is no possibility of achieving that agreement within the Community before the first round of direct elections. The only two member States which have such an arrangement between themselves are the United Kingdom and the Irish Republic, and the Committee will be glad to hear that I do not intend to get into that argument since it is not relevant to the amendment before us.
      What is certain is that, whatever the merits of such a special arrangement, there is no possibility of extending that principle through the Community at the present stage. The Foreign Office memorandum submitted in evidence to the Select Committee makes that point and, I believe, proves it.
      Therefore, if we believe, as we on these Benches do, that it is right on the occasion of European elections to enfranchise people working in the Community, we have to fall back on specific arrangements enabling United Kingdom nationals to vote in the United Kingdom. Such specific arrangements are made by several of our partners in the Community in regard to their own nationals.
      4.15 p.m.
      Mr. Max Madden: A few moments ago the hon. Gentleman referred to taxation, and he spoke earlier of those whom he described as being in the van

      1469
      guard of the Community. How many of those people are not subject to United Kingdom taxation, and does he agree that there is no case for someone not subject to United Kingdom taxation to have rights to determine representation from the United Kingdom?
      Mr. Hurd: I suppose that, in practice, it would vary from individual to individual according to the application of our Inland Revenue rules, but on this occasion, when we are talking about elections to the European Assembly or Parliament, I would not accept the principle which the hon. Gentleman enunciates. Clearly, it does not apply in the present context, although, if we were talking about extending the franchise in this way to General Elections held in this country, the hon. Gentleman would, I imagine, be entitled to argue that case.
      Mr. MacFarquhar: It will be remembered that when Lord Glenamara was dealing with this very topic in the referendum debate, the lotus eaters—or lettuce eaters—were said to be mainly resident in Spain and Portugal, and the question of those countries does not arise on the present amendment.
      Mr. Robert Adley: I am grateful to my hon. Friend for allowing me to add another word before he resumes. Having recalled the occasion when we last debated this matter, perhaps my hon. Friend will invite the hon. Member for Sowerby (Mr. Madden) to say whether he believes that anyone who pays taxes to this country is entitled to vote. That is an interesting point.
      Mr. Hurd: I dare say that the hon. Member for Sowerby (Mr. Madden) will resist no temptation to seek to catch the eye of the Chair in order to develop his argument. Since we are talking about elections to the European Assembly, I do not accept the principle that he sought to establish.
      The hon. Member for Belper has rightly led me on to the next point. If we believe that there must be a special United Kingdom arrangement for people to vote in the United Kingdom, we then have to consider the scope of the coverage. In our amendment we have laid down a very restrictive definition. Indeed, it may be disappointing to some who have
      1470
      argued the case in the past, that the definition is so restrictive.
      For example, our definition is narrower than that recommended by the Select Committee in its report. The Select Committee recommended that United Kingdom nationals working—I shall come to "working" in a moment—outside the EEC as well as inside should be enfranchised for these elections.
      I believe that there are strong arguments for the Select Committee's recommendation, but we wish to persuade the Government on this matter. We recognise their reluctance or slowness, and we are, in effect, offering the Minister a compromise rather than an extreme proposal—a compromise which, we hope, he will accept.
      We have introduced a further restriction compared with what was being considered at the time of the referendum. The amendment would restrict the franchise to those working within the European Community, together with their wives or husbands. The phrase is:
      " by virtue of their occupation, service or employment."
      That means, in effect, that lotus eaters need not apply. I should say, in passing, that I think that a harsh term to use to describe people who, towards the end of their lives, use their savings to establish themselves in a warmer climate than we enjoy. However, that is not an issue in this debate, since we are talking about people who are actually working.
      Here again we have recognised the Government's reluctance and genuinely seek to meet the points they have made. In regard to numbers there is some confusion in the evidence that is available to us and perhaps the Minister could comment. At one stage in the evidence a figure of 270,000 people is given as representing those who are resident in the EEC, that is to say, including people who are retired. At another point the same figure is given for those who are actually working and covered by the amendment. Therefore, we need from the Government some indication whether that 270,000 figure is the best estimate or whether it should be a lower figure, because one has to deduct those who have retired.
      Mr. Budgen: I hope that my hon. Friend will put forward the general philosophy to explain who will be allowed to

      1471
      vote in Britain in these EEC elections. I hope that he will consider the proposition that only those whose primary loyalty is to the United Kingdom nation State should be allowed to vote here in the United Kingdom. If that is the proper principle to apply in deciding where to draw the line, it is interesting to note that some United Kingdom nationals who will be working for the EEC institutions apparently have a vote in this country. Is that not an anomaly, because their primary loyalty may be to the EEC?
      The Chairman: Order. I urge hon. Members not to make interventions too long. They will have an opportunity to catch the eye of the Chair at a later stage.
      Mr. Hurd: I am amazed at the development of my hon. Friend's thoughts. I had regarded him as a person with libertarian principles. On this matter he seems to be proposing loyalty tests opening the windows into men's souls, as Queen Elizabeth I remarked. I do not see that the opening of windows into the souls of European Commissioners is profitable. The present situation will mean that some people in certain parts of Brussels, for example at the Rond Point Schumann, will be able to vote, because they are working in the United Kingdom Mission, but others who are also working for Britain's efforts in Europe a few yards away would be debarred. That is not an acceptable situation.
      Dr. Colin Phipps: I am seeking clarification. I do not believe that it is reasonable to prevent United Kingdom citizens who may seek to retire from their employment in the United Kingdom to an EEC country from voting, but I want to know what is the exact meaning of
      "by virtue of their occupation, service or employment".
      I rather hoped that that would encompass those who had retired from the United Kingdom and who were living in the South of France.
      Mr. Hurd: I am sorry to disappoint the hon. Member. He is clearly disappointed that we have drawn our proposals so narrowly.
      Dr. Phipps: Yes.
      Mr. Hurd: I see the strength of the hon. Gentleman's case, but we felt that
      1472
      to obtain even a step forward by the Government in this matter we should make our proposal fairly narrowly confined, and we deliberately excluded the category which the hon. Gentleman has in mind. The restrictions that I have mentioned would confine this extension of the franchise to people who, by virtue of occupation, service or employment—not retired people—are absent from the United Kingdom.
      I turn to the mechanics of this proposal. If the principle is accepted, there are many ways of implementing it. We see two ingenious schemes set out on the Amendment Paper by my hon. Friends the Members for Harrow, East (Mr. Dykes) and Bedford (Mr. Skeet), who have set themselves this task. The Opposition, whether Front Bench or Back Bench, are always vulnerable on technicalities. It is easy for the Minister to rise, shake his head and say "If only we knew all the technicalities, such an amendment would not be acceptable". We think we have a small advantage in this respect—this is why we preferred to table an amendment of our own—in that the specific amendment we have tabled embodies a Home Office scheme. It has been lifted from the helpful memorandum submitted to the Select Committee by the Home Office and reproduced on page 3 of the minutes annexed to the Select Committee's Third Report. In that report will be found not only the germ but the whole content of this amendment.
      The Committee will find in that memorandum the principle of the written declaration, which is the key to our amendment. There are four definitions of qualification laid down in the amendment, and again they are set out in the Home Office memorandum. I believe that the choice of proxy voting is the right mechanism for delivering the vote. That, too, is set out in the Home Office memorandum. So too is the desire to avoid placing the work load which might—I emphasise "might"—prove excessive in respect of embassy and consular posts. The Select Committee heard evidence on this point and the amendment is tabled to avoid any great burden or expense involved for Her Majesty's overseas missions.
      The amendment puts on paper exactly the propositions which were put to us in the Home Office memorandum

      1473
      for what it would be reasonable to recommend in a scheme if it were decided in principle that a scheme were required. some importance which we do not cover
      There are technical difficulties of in the amendment. It is the purpose of the consequntial Amendment No. 184, which leaves to the Home Secretary the task of making the regulations together with many other regulations that he will have to make for approval by this House, to fill in the mechanical gaps that exist in our amendment. Without burdening the Amendment Paper with almost a book, one could not fill in all the administrative regulations required.
      There is the subject of the register and how new names appear there. Evidence was taken by the Select Committee from the Home Office on that point, and it is available. There is the question of verification which we discussed at length in the Select Committee with witnesses from the Home Office. We specifically mention that as something to be covered in the regulations.
      It seems to us right that the Home Secretary should consider and put into the regulations, if the Committee accepts the principle of this amendment, the safeguards that he considers desirable to safeguard against fraudulent declarations and double voting. This is important and it could give rise to concern. But the Committee should consider whether as a matter of common sense a large number of people are likely to devote a great deal of energy and run the risk of prosecution in order to vote fraudulently in these European Assembly elections. It is right to introduce safeguards, and we have tried to indicate what they should be. However, we do not believe that the need for safeguards should be used as an excuse for defeating the whole proposition. If one or two people use a right to which they are not entitled—and there is a chance that we shall have one or two of them—this does not seem to be sensible reason for depriving a large number of people of a right to which they are entitled. That leads us back to the principle that we believe to be important.
      I have received a large number of letters and I wish to quote from one of them.
      4.30 p.m.
      Mr. J. Enoch Powell: I apologise for interrupting the hon. Member, but before he leaves the content of the amendment, I wonder whether he would clear up a point of explanation which some of us may find difficult. I refer to the words at the beginning of the amendment:
      "those who were entitled to vote as electors…but who…are not so entitled".
      What does that mean? Does it mean that this is restricted to people who at some past time have been entitled to vote but are not entitled on the day in question? That would appear to be grammatically possible. On the other hand, since the alternative of a spouse having been resident is permitted in sub-paragraph (ii), that would appear not to be the case. Therefore, I wonder whether the hon. Gentleman could explain the meaning of the words,
      "those who were entitled to vote as electors".
      When, and in what circumstances?
      Mr. Hurd: I think that the entitlement is restricted to those who at some stage in the past were entitled to vote—that is, those who were on the register of electors for a parliamentary election but who are no longer on the register because, by virtue of their occupation, service or employment, they have moved to an EEC country and are not longer, therefore, on the current register. I see the point at which the right hon. Gentleman is aiming, but I doubt whether in practice there would be great difficulty over that because I think that the purport of the amendment is clear.
      Mr. Douglas Jay: I am trying to follow what the hon. Member is saying. Surely the words do not mean that. They would mean that anyone who at any time, perhaps 20 years before, was on the register and had then ceased to be on it for any reason whatever would now be covered by the wording.
      Mr. Hurd: No, indeed not. Of course, the amendment does not lay down at what stage the persons concerned had to be on the register in order to qualify. I think that that would be absurd. But the reason for which they are no longer on the register is clearly defined in subparagraph (iii) of the amendment. It is

      1475
      by virtue of their occupation, service or employment. I think that the right hon. Gentleman is here pursuing a difficulty that does not exist.
      Mr. Powell: As the hon Member has explained that this is intended to mean "who have at some past date been on the register "—because one cannot be entitled to vote unless one is on the register—what is the point of sub-paragraph (ii), which makes it a condition that they or their spouses have been resident so that it might cover a person who has not himself been resident? That is in contradiction to the specification that he must at some past time have been on the register and means, therefore, that he must at some past time have been resident.
      Mr. Hurd: I speak subject to correction. This is an illustration of the point that I made earlier about the technicalities in these amendments. I should have thought that the more restrictive application must apply. The amendment starts with the proposition
      "those who were entitled to vote as electors at a parliamentary election".
      That is our intention, and I should have thought that that governs what follows.
      Mr. Adley: On this point, is it not clear that the word at the end of line 8 is "and" and not "or", in relation to their spouses? Therefore, the right hon. Gentleman's point is not relevant.
      Mr. Hurd: Either right hon. Gentleman can develop this point. I think it will be found to be a small one if it exists at all and that the two phrases that the right hon. Member for Down, South (Mr. Powell) has quoted do not contradict but reinforce each other, and the earlier one is the clear introduction and purpose of the amendment.
      However, in conclusion, one must return to the principle of the matter, which is of very great importance and is certainly felt to be such by large numbers of our fellow citizens. Over the last two years I have had a surprisingly large number of letters on this subject, and I am certainly not unique in that respect. I shall quote from only one of them, because it happens to be the latest letter that I received, last week, from a British
      1476
      business man living in France. He says:
      "With regards the EEC, the British practice of prohibiting its citizens voting is absolutely contrary to the spirit of the Community which encourages its member citizens to live and work in other States, presumably with the aim of increasing mutual understanding and co-operation."
      I think that that is quite moderately and cogently put.
      That feeling underlies a great deal of the comment that I have received. The people concerned simply do not understand how they are asked by their firms or their organisations to work in Europe and to work to make the European Community to which we belong a success, if at the same time, by virtue of having agreed to undertake that task, and because of it, they are denied the right to vote in European elections.
      Therefore, we believe that there is an overwhelmingly strong case for the amendment. We know the strong sense of disappointment—indeed, anger—that will result if this right is denied. We urge the Minister to accept the amendment. If by mischance he decides not to do so, we should feel obliged to ask our right hon. and hon. Friends to support it in the Lobby.
      Dr. Phipps: When the matter of voting by overseas United Kingdom citizens was raised in regard to the referendum by an amendment in the name of my hon. Friend the Member for Belper (Mr. MacFarquhar) and in my name, I argued very strongly that the franchise for the referendum should be extended not merely to United Kingdom citizens resident within EEC countries but to United Kingdom citizens resident outside the United Kingdom anywhere in the world.
      The reasons for my argument were based very strongly upon personal experience. For eight years I was a United Kingdom citizen who lived and worked outside the United Kingdom, for part of that period within the EEC, in Holland, for a longer part of that period, in the United States, and, in particular, in South America—Venezuela.
      The point that struck me when I was living overseas was that as a United Kingdom citizen with children who had every intention of returning to the United Kingdom, I was in a position in which I had absolutely no say about that which

      1477 was going on politically in the United Kingdom and which would determine the kind of country to which I would return and in which my children would be brought up. I had no franchise at all. What was going on in my country was something over which I had no control or influence. Had I had a vote in Venezuela, it might have been a different matter, but I did not have a vote there and it was never my intention to stay there.
      Mr. T. H. H. Skeet: When the hon. Member was in Venezuela, I dare say he was paying the local taxation. If he was there for a number of years, would it not be right to assume that he should have had some say as regards the legislature of the place in which he was residing?
      Dr. Phipps: I do not wish to go into the argument about whether I should have been allowed to vote in Venezuela, the United States, or Holland. However, on the question of taxation, which I proposed to take up later, although it is an argument that non-residents are paying taxation in the countries in which they live, most of those countries are the subject of double taxation agreements with the United Kingdom, and on return to the United Kingdom one must bring back all the money that has been earned or saved overseas. It is part of the Bank of England's controls. That was certainly the case with myself when I returned. We have double taxation agreements with most other countries.
      I accept that when this argument was put forward in the referendum debate in the form in which the amendment was worded many points were raised concerning the lesser breeds without the law, the lotus eaters and many others who would in some way be abusing the privilege of voting. It was said that these were points which certainly had not been included in that amendment and were perhaps validly to be taken into account. But that hardly seems to be the case with the present amendment which, as the hon. Member for Mid-Oxon (Mr. Hurd) has quite clearly demonstrated, has been drawn just about as tightly as possible in order to take into account all the criticisms which were made in the referendum debate of the
      1478
      amendment in the name of my hon. Friend the Member for Belper.
      I think that there is also a case for restricting the provision in this instance to the United Kingdom citizens resident within the EEC countries. I am basically in favour of allowing United Kingdom citizens who are non-resident to have a vote in elections in this country and in the EEC. Other countries do this and I see no reason why we should not do it. But I accept the point made by the hon. Member for Mid-Oxon, that in seeking to persuade the Government that this is a principle which should be adopted it is perhaps better to draw it as tightly as we possibly can in order that there should not be the opportunity for the Government to say that it throws open this or that door or creates this or that anomaly.
      In supporting the amendment, the aspect of it which disappoints me most is the one that I have already raised—that in drawing it so tightly it has excluded the people who quite legitimately, it seems to me, could have spent a lifetime working within the United Kingdom and then decided that they preferred to spend their retirement somewhere else. I appreciate that this is getting very close to the nub of the European argument in general, that is, are we Europeans or are we Britons? Are we to merge ourselves in Europe and to regard Europe as a greater sovereignty to which we shall belong? I fully understand why such a suggestion should be anathema to people who are opposed to Europe in general. It strikes at the very heart of that which those of us who are pro-European—or even unashamedly pro-federalist—wish to see brought about, namely that we should become members and citizens of a greater Europe.
      There may be arguments for restricting the vote in the case of people who retire to Spain, but it seems to me that someone who has spent his working life in this country and decided, as a citizen of the EEC, that he wishes to spend his retirement in some part of the EEC should be fully justified in so doing and not thereby be robbed of the franchise.
      If our approach to Europe means anything, it means that that which is done in Europe is done for and on behalf of all of us. I hear laughter from some of my

      1479
      hon. Friends and can appreciate that those who do not wish this to happen might be upset to see us moving in that direction, but this is the reality of the EEC that many of us hope to see achieved. If, indeed, decisions taken by the EEC are taken on behalf of all citizens of the EEC, it seems to me perfectly reasonable and legitimate that all citizens of the EEC, no matter where they live within the EEC, should have the right to the franchise to determine those matters which will directly affect them.
      Mr. Budgen: Does the hon. Gentleman agree that the amendment is an important step towards the federal outcome of the EEC that he wants?
      4.45 p.m.
      Dr. Phipps: I certainly accept the argument. I hope that no one believes that I am guilty of subterfuge in this matter. I do not think that I have ever hidden from hon. Members my desire for a federal Europe. I unashamedly accept that the amendment is for me a step in the right direction, but I should like, nevertheless, to go to the principle which is at stake and try to be as objective as possible, in much the same way as I hope I was in the referendum debate.
      I think that we are all guilty perhaps of gerrymandering in the mind when we consider measures of this kind. We perhaps tend to ask ourselves whether it is good from the point of view that we support, whether it is good for our party, and whether the people who are enfranchised are likely to vote Labour or Conservative or to be pro-European or anti-European. I accept that it is very difficult not to take account of questions of this sort. One would have to be extremely objective so to do.
      In looking at the question as objectively as I can, I still believe that the principle—and it is, after all, a principle which has been adopted by many other countries for which this particular problem of Europe does not arise—stands up of its own accord. That principle struck me forcefully in the years in which I lived overseas, working for a British company. Although three of my four children were born in other countries, they all have British nationality. I knew that all of them would come back to this country to be educated, and I knew that
      1480
      I would come back to this country, yet there were proposals for the development of my country about which I had no say whatever.
      That seems to me to be the overriding principle. Applying it in particular to Europe, where we are all citizens and all under the same sovereignty, I find it impossible to accept that someone who is a United Kingdom citizen but happens to be resident in France should not have the right to vote for a European Parliament which will make decisions about the way he lives, whether he lives in the United Kingdom or in France. This seems to be the central point. It does not matter where in the EEC he lives. The decisions made by the European Parliament will affect him.
      Mr. Adley: The hon. Gentleman will recall that earlier in his speech my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) intervened to attribute motives to him. Perhaps the hon. Gentleman will join me in hoping that when my hon. Friend makes his speech he will attribute motives to New Zealand or United States citizens or to the citizens of many other countries which similarly offer to their citizens the right to vote when working abroad.
      Dr. Phipps: I do not accept the hon. Gentleman's point entirely. The principle is well established internationally. One of the reasons given in the past for this country not giving that right to its citizens was the very reason brought up by the Government in refusing the amendment on the referendum Bill. I think that the Opposition are seeking to obviate it by their close definition in the amendment before us today.
      I believe that, irrespective of the factors involved which appear to favour one future or another for Europe, there is at stake here a wider principle, and I would wish to see it applied not merely to EEC elections but to United Kingdom internal elections. The amendment is not as widely drawn as I should have wished, but I accept the reasons for drawing it as tightly as it has been drawn. I shall be supporting it in the Lobbies this evening, and I hope that the Government will accept it.
      Mr. Powell: The speech of the hon. Member for Dudley, West (Dr. Phipps)

      1481
      has made it very easy for me to deploy briefly the reasons why my hon. Friends and I find ourselves opposed to the amendment. The hon. Gentleman was certainly right when he said that the whole principle of direct elections to the European Assembly implies a European electorate, and he went on to indicate that to recognise the existence of a European electorate is to recognise the argument for a European franchise.
      But even if we had a European franchise—even if we had gone all that distance and drawn that deduction—we should still be faced with the question which the amendment poses, and to which the hon. Gentleman returned at the end of his speech—the question of extra-territorial voting, because the electors of the Community would then be asking "When we go abroad and work and reside in New York or in Australia, are we to be deprived of the opportunity of exercising our European franchise?"
      We come back, even after the interesting excursion on which the hon. Member for Dudley, West took us, to the question whether we are to attempt to introduce by the amendment, however partially, the principle of extra-territorial voting. Make no mistake: whatever we decide on, the amendment cannot but reflect upon our law governing parliamentary representation, governing representation in the House of Commons.
      It is impossible to argue that, dealing with an Assembly vaunted as being merely consultative, we ought to provide for those who are not resident in the United Kingdom to be able to participate in the Assembly's decisions, and at the same time to deny to those who were in the position in which the hon. Member for Dudley, West has been for most of his life—
      Dr. Phipps: Eight years.
      Mr. Powell: Eight years. I am sorry—the position in which for a considerable period of his life he has found himself, the opportunity to participate in decisions which could be of a most radical character which are taken for this country at a parliamentary General Election.
      Mr. Adley: While the United States is not yet, at any rate, a member of the EEC, why does the right hon. Member
      1482
      for Down, South (Mr. Powell) argue that because a Briton working in the other eight EEC countries might have the right to vote, a Frenchman working in the United States might demand the same thing? The whole point is that one is restricting it to other people living in other EEC countries.
      Mr. Powell: The argument is that here are EEC elections which will be as determinant for the future of our nationals resident in EEC countries as they are for the future of our nationals resident here. That is exactly the same as the case posed by the hon. Member for Dudley, West in respect of a franchise for elections to the House of Commons, namely, that those elections may just as much affect the future of British nationals temporarily resident abroad as they affect those who actually elected us to sit in the House of Commons. We are raising the whole question of the basis of parliamentary franchise.
      The parliamentary franchise has basically two elements. One is citizenship or national status, though in fact it is the status of British subject and not of a citizen of the United Kingdom and Colonies which is the qualification. At any rate, the one qualification is nationality. But the second essential qualification is residence. The House of Commons is not merely a national representation. It is also a territorial representation.
      The same does not apply to other countries. Other countries confer franchise on the basis of nationality. Consequently other countries are capable of allowing the franchise to their nationals even though at the time their nationals are not resident in them.
      But that is not the law of parliamentary franchise, for this House is a geographical as well as a national representation.
      Mr. Hurd: I have followed the right hon. Gentleman's definitions with care about the qualification of residence being an essential principle. Is he, therefore, in favour of depriving of the franchise British soldiers and diplomats serving overseas?
      Mr. Powell: No, because they have been given a residence in this country. It is only because they claim "a local habitation and a name" in this country,

      1483
      though there is a straining implicit in it, that they can be brought within the ambit of the principles of the parliamentary franchise.
      There may or may not be a case for departing from the established basis of the parliamentary franchise in this country. That is not a principle with which we ought to tamper by a side wind in the context of the new elections which we are creating for direct representation in the European Assembly.
      Mr. Jeremy Thorpe: Would the right hon. Member for Down, South (Mr. Powell) not agree that there is no logic in saying that it is unfair to grant a vote to someone in the Community because one might be depriving a British citizen living in New York of a vote? Surely there is a reason for depriving him of that vote? What is happening is an election in an area covering nine countries, and a citizen may be resident in one of those nine countries. Therefore, there is the qualification of residence.
      Mr. Powell: If the right hon. Gentleman wishes to make a case for those Assembly elections being based upon a new dispensation, if we are to take a new view based upon the electorate of the Community and set up a Community franchise, I am prepared to agree that it is implicit, though I detest it, in the step that we are taking. I understand that perfectly well. But what we are doing in this legislation is applying our electoral process to this new purpose in relation to this consultative Assembly.
      I believe that we ought in doing that to maintain all the rules and qualifications of the parliamentary franchise since, if we once depart from those, we call in question the validity of those rules. Those rules ought to be debated and considered first and primarily, if we are to alter them, in the parliamentary context.
      That is not the only reason why I object, as a Member of this House. to the change that is proposed in the amendment, but it is a reason why it is so strongly repudiated by my hon. Friends and myself, representing, as we do, constituencies in a part of the United Kingdom upon which the House of Commons has seen fit to set the mark of a separate form of election from that
      1484
      which applies in elections to the House of Commons for parliamentary purposes. We believe that it was an entirely wrong step not to apply to the whole of the United Kingdom for this purpose the principles of parliamentary election. We are certainly not prepared to consent to the alteration of those rules in any other context.
      Mr. Adley: Following the logic of the right hon. Gentleman's argument about making exceptions for Northern Ireland, I understand his position. Can he say how he voted on the proposition for a referendum for the Scottish Assembly that there should be a 40 per cent. qualification clause?
      Mr. Powell: I voted for it. I am prepared to vote for anything which results in the wrecking of that Bill. In doing that I am not calling in question the validity and integrity of the electoral practices and the law of franchise in so far as it governs elections to the House of Commons. It is because the amendment does that by a side wind that I believe the Committee would be well advised to reject it.
      Mr. Michael Stewart: I refer to a small point raised earlier by the right hon. Member for Down, South (Mr. Powell) concerning paragraph (ii) of the amendment, which says:
      "they or their spouses have been resident in the United Kingdom; "
      I think that I am right in saying that if those words were deleted it would make no difference to the meaning of the amendment and that their presence does not make any difference, either. We probably need not bother to argue about them further.
      Mr. Powell: That is right.
      Mr. Stewart: On the main issue, I do not think that we need to try to draw parallels with British subjects resident, say, in the United States or Venezuela. We are discussing a narrower and simpler issue than that. I take it that we are all agreed that anyone who is both a British subject and resident in the United Kingdom is entitled to vote for the Parliament of the United Kingdom.
      However, I should have thought that it was equally a just proposition that anyone who is a citizen or a subject of an

      1485
      EEC State and lives in the EEC should be entitled to vote for the European Assembly. That seems to me to be quite reasonable. The ideal way to do that, and the way that I think in the end it will be done, is for EEC citizens to vote for the European Assembly in the country in which they are resident at the time, though there would be the usual procedures for getting oneself on the voting register. But whether one voted in Paris or London, it would be a matter of where one was residing.
      5.0 p.m.
      We have not got that position at present and cannot get it in time for the Bill. We have to accept the fact that many of the provisions of the Bill are, by their nature, temporary until the EEC agrees on a convention for election by a uniform method throughout the Community. On several occasions in the Bill, therefore, we have had to consider what is the nearest approach we can get to justice and common sense until that event takes place. On this issue I think that this amendment is the answer.
      The ideal way of getting the right result is for every EEC citizen to be able to vote in the part of the EEC in which he is living. At present we cannot do that. We therefore make provision that at any rate for those for whom we can do something we shall enable people to vote, presumably in the constituencies in which they were last resident when they were resident in this country. It seems to me to be very difficult in justice to deny that. I most earnestly hope that the Government will decide to accept the amendment.
      Mr. Skeet: I have listened carefully to the right hon. Member for Fulham (Mr. Stewart) and I am glad that he approves of my Amendments Nos. 54 and 55. We have been considering Amendments Nos. 183, 184 and 53 which would enable Britons in the EEC the right to vote in the United Kingdom. Amendments Nos. 54 and 55 seek to enfranchise for the purpose of these elections EEC residents who have held long residence in the United Kingdom. This, I agree with the right hon. Member, is a logical step and one which makes common sense, but I do not ignore the obstacles to it. I am looking ahead to the common European
      1486
      nationality that will eventually come. But it is not immediately round the corner.
      Let me read the terms of the amendment because it sets out exactly what I have in mind. It says that people entitled to vote are
      "nationals of any country within the European Community who have been continuously resident in the United Kingdom for the past 10 years or have been resident here for a period aggregating 10 years in the past 15 years provided their names appear on a special register of electors prepared pursuant to the requirements of"
      a later part of the schedule.
      The 1971 census showed that 108,900 Italians who were born in Italy were then resident in the United Kingdom. That was out of a total population of 53·9 million. Their number represented only 0·2 per cent. of the United Kingdom population. Since then the number has gone up considerably. I think that the number in London is more than 100,000, and the number outside London over 150,000.
      No fewer than 8,000 to 10,000 Italians are living in Bedfordshire. They came to work in the brickfields many years ago, but still they have no opportunity to vote in parliamentary or local government elections. I earnestly suggest that European elections are a natural subject upon which they should vote. Of course, we should not forget the West Germans and the Dutch who live here. These people cannot be ruled out on the basis that they are minority groups of inconsiderable numbers who should not be considered. My hon. Friend the Member for Mid-Oxon (Mr. Hurd) has referred to a group who might be on business in Paris or elsewhere and who should not be overlooked in the election. I draw attention to paragraph (2)(b) of the schedule which seeks to enfranchise peers for the purposes of the election. Their numbers are relatively small.
      I want this matter to be ventilated today because the European Assembly will involve a community of nine countries, of which the United Kingdom and Italy are but two. It is therefore prudent for us to anticipate the implications of a common European nationality. This concept was offered to the French in the Second World War, but was not unfortunately taken up when it was put forward by Winston Churchill. The course

      1487
      of European history might have been different had that been accepted then.
      Community individuals who are long resident in the United Kingdom have ample opportunity to acquaint themselves with local United Kingdom candidates for EEC elections, but they will have little interest, knowledge or say in the Italian candidates who are standing in Italy for constituencies they have long since left, and, in many cases, remember only from their adolescent days. This then is a question of identity and of whether they are to back anyone in whom they can have confidence.
      The Minister of State, Home Office (Mr. Brynmor John): I take it from the argument that the hon. Member is adducing about Italians who have little connection with Italian constituencies that he will not be supporting the amendment moved by his Front Bench.
      Mr. Skeet: I find that amendment embarrassing to the argument I am pursuing. It has much too narrow a base. The lotus eaters are not included, but on that narrow basis it includes only those who are working abroad. My amendment includes all people who are resident in the United Kingdom and have been here for 10 years.
      It may be assumed that Italians long resident in the United Kingdom might be excused if they are more intimately concerned about European matters affecting the country in which they live than European issues which affect their counterparts in Italy. This is recognition of a political reality.
      I turn now to a point that I put to the hon. Member for Dudley, West (Dr. Phipps). When a person pays his tax should have some say in the election of the Member who is to represent him. If this right cannot be conceded to EEC nationals in local and parliamentary elections, the anomaly should be corrected now, since the House is discussing representation on a broad front.
      Dr. Phipps: I accept that for the EEC.
      Mr. Skeet: I am grateful to the hon. Member for that.
      One difficulty to which the right hon. Member for Down, South (Mr. Powell) referred is that there is a block on those who do not hold United Kingdom nationality. But it is strange that the
      1488
      Southern Irish have a vote in the United Kingdom. An exception has been made for them, and if this is so, why cannot it be conceded to the very small number of people who have taken up permanent residence in the United Kingdom because they like living here and have obtained jobs here?
      I have provided, in Amendment No. 55, under the register, the ways and means whereby plural voting is to be avoided. Perhaps the Committee would like to know what alternative arrangements are likely to occur. On this I have had the opportunity of consulting the Italian Embassy in London which told me that the prospect is that Italians will have the opportunity to vote on the Saturday or the Sunday following the United Kingdom elections, which will probably be held on a Thursday. There are to be about 140 polling stations alongside the British ones, and these will be furnished with lists prepared by the Embassy. Of course, the United Kingdom Government will have no right of access to these registers.
      I see possible complications here. If a United Kingdom Italian, for the sake of argument, is to receive a polling card in respect of a candidate in Bari, a candidate he does not know, he will have little idea for what the candidate stands and he will have little interest in voting for him. The card will probably go straight into the wastepaper basket and the elector will disfranchise himself by not voting.
      Further, if arrangements similar to those for the Italians are to be provided for the other EEC nationals, there will be a multiplicity of polling stations all over the United Kingdom, and that will eventually defer the result of the poll. In addition, I see the prospect of plural voting in a big way.
      I do not propose to go further than to suggest that the House might consider the possibilities of anticipating the movement towards a common European nationality. This is a subject on which we should think carefully and deeply in view of its great importance.
      Mr. MacFarquhar: I do not wish to detain the Committee for very long. It seems to me that on this issue, compared with 1975, we are discussing something of slightly less fundamental importance.

      1489
      I remember arguing at the time—I still believe strongly—that if we were to take the major step of having a Community referendum it was right that all British citizens should have a vote in the matter because it was likely to affect them for many years beyond. But in the present case, of course, we are taking a decision with regard to elections to an Assembly that will have a fixed term. Therefore, it is always possible—as in the case of domestic elections—for people to return to this country and perhaps vote in the next elections. That is assuming we do not pass this amendment.
      Nevertheless, there are strong grounds, which the right hon. Member for Down, South (Mr. Powell) has enumerated, for agreeing to this amendment in this particular context. We are faced with a European-wide election. We shall almost certainly have the elections on the same day. It seems to me only right and proper that all people who are residents and citizens within the European Community on that day—or two days—should have the right to vote.
      All sorts of memories have been conjured up from the past with regard to the 1975 debate. The phrase "lotus eater" was one. Another was the famous phrase of the right hon. Member for Down, South—"side wind". That was a phrase introduced by the right hon. Gentleman at the time. I remember having heard it on that occasion for the first time. It is a totally inappropriate phrase to use in this kind of discussion.
      The right hon. Gentleman has argued—and I entirely agree—that the whole business of moving into Europe and tightening ties between this country and the other members of the EEC is not a side wind; it is a major constitutional change—a major process of change. On that, the opponents of EEC legislation and myself are at one. Nothing we can do in this respect is a side wind. There is no reason at all why in discussing this Bill for the first direct elections to the Assembly we should not take a major step forward in widening the franchise.
      It is precisely because this is not a side issue—the right hon. Member for Down, South must be the first to admit that because he has argued cogently night after night—that we can afford and ought to
      1490
      take a step forward in widening the franchise on this occasion.
      Mr. Adley: It is a pleasure and a happy coincidence to follow the hon. Member for Belper (Mr. MacFarquhar) on this occasion since he and I, the hon. Member for Dudley, West (Dr. Phipps) and my hon. Friend the Member for Harrow, East (Mr. Dykes) went through this earnestly and carefully on the previous occasion in 1975.
      My hon. Friend the Member for Mid-Oxon (Mr. Hurd) was kind enough to mention my name. Perhaps I can only add that on 9th April 1975 I presented a petition to the House signed by more than 10,000 British citizens living and/or working in continental Europe.
      It is quite true that the amendment which stands in the name of the Conservative Opposition is a great deal narrower than the amendment which we discussed at that time. I support today's amendment. It is not as fundamental as I should have liked to see it, but it is a great deal better than the present unsatisfactory position.
      It is also a happy coincidence that my hon. Friend the Member for Bedfordshire, South (Mr. Madel) has today had published his Representation of the People (Amendment) Bill which also seeks to right an injustice—at any rate, many of us feel is an injustice—with regard to the way in which people are unable to vote in British General Elections because they happen to be away on holiday.
      My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) asked about the principle that we were discussing this afternoon. Perhaps I may be so bold as to say that we are trying to cater for those who are entitled to vote, but who are unable physically to get to a polling station. We look after Service voters, sick voters and people who are temporarily absent by postal voting. I cannot believe that what is poposed in the amendment is in any way unfair or contrary to natural justice.
      5.15 p.m.
      I hope that the Minister of State will be able to tell the House that the principle—if it be such—enunciated by the then Lord President, Lord Glenamara, on 10th April 1975 has now been abandoned. Lord Glenamara said with

      1491
      regard to the question of voting rights of Britons temporarily working overseas:
      "That matter has been examined with care by the Foreign Office and the Home Office by request. They assure me that the problems involved are insoluble."—[Official Report, 10th April 1975; Vol. 889, c. 1424.]
      I hope that the Home Office Minister will tell us that the problems are not insoluble even if this is actually contrary to the wishes of the Government.
      I want to quote from The Sunday Times of 20th April 1975 because it is wholly relevant to what we are discussing today. The article refers to the same Government. It states:
      "Towards overseas Britons, on the other hand, the Government is being less statesmanlike. It wants to admit none of them to the poll, and is putting pressure on its own MPs who think otherwise. No one knows how many extra voters are involved, and Mr. Short has put up every kind of administrative objection to offering enfranchisement to any of them. Admittedly, time is short. But the most practical amendment, proposed by the Conservatives, would limit the external vote to passport-holders …"
      and so on.
      The first objection put forward at the time was the question of time within the confines of the referendum. Perhaps we can look at three possible arguments which the Home Office Minister might deploy today. The first is that the Home Office might still believe that what has been proposed is impossible. It might believe that there is not enough time or that the proposition is undesirable.
      Surely it is not impossible for this country, with its long traditions of democracy and as an innovator of the democratic process over many years, to find a way of emulating other countries—New Zealand, France, Sweden, Italy, United States and Denmark, to name but six—which have simply found ways of enabling citizens forced to be out of their own country on polling day to vote at election time.
      Mr. John Roper: The hon. Gentleman quoted the example of Italy. My understanding was that it was possible for Italians who were outside Italy to vote, but only if they returned physically to Italy. Perhaps that is not the case, and perhaps the hon. Gentleman can give the evidence for his assertion.
      Mr. Adley: I am grateful to the hon. Gentleman. I discussed this with the Italian Embassy in London three years ago, but I do not have all the information with me. If I can find time to skip upstairs to my office and unearth it I shall do so. But I cannot promise the hon. Gentleman that it will be easy to find. The boxes and files with the 10,000 signatures took up so much room in my office that some time ago my colleagues insisted that it be removed.
      There are various methods by which many countries arrange for their citizens who are out of the country temporarily to vote. I hope that we shall not hear the Home Office Minister say that it is beyond the ability of the Home Office to devise a system.
      The second question relates to time. Because of the vote during the earlier proceedings on the Bill we know that the elections to the European Parliament will be delayed. As the Foreign Secretary put it so graphically in Brussels,
      "Britain is not the only nigger in the woodpile".
      I do not know how the Race Relations Board would take that comment, but that remark indicates that we are not the only country causing the elections to be delayed. Therefore, the argument about lack of time, which was used by the Government in the referendum debate, is surely not an argument which the Home Office can now put forward. I hope that the Minister of State will say something about that.
      The third argument is the undesirability—as the Government may see it—of accepting the principle. Perhaps the Minister of State will tell us whether the amendments we are discussing are impractical or undesirable. Does he find the principle that we are discussing wholly objectionable? It would be a good thing to have on record whether the Government accept the principle but not the amendments.
      A number of hon. Members have made the point about the creation of a European electorate. Anyone who is opposed to the principle of membership of the EEC will do his darnedest to prevent an amendment like this one from getting on to the statute book. Like direct elections themselves, the amendment will help

      1493
      to democratise the whole process of Europeanisation.
      Is our present system of voting so perfect and free from anomaly that we can put our hands on our hearts and say that this innovation is such as to spoil the perfect system of voting within the United Kingdom? That would be a very hard position to substantiate.
      Our system has, for example, the anomaly of the Irish vote. A citizen of the Irish Republic can vote in a General Election in Eire and then vote in a General Election in the United Kingdom, and undoubtedly this has an influence on a number of constituencies. At the last General Election the percentage of votes cast by postal vote throughout the 635 United Kingdom constituencies was 2·9. In Fermanagh and South Tyrone it was 14·2 per cent and in Mid Ulster 11·8 per cent. When I took this point up with the Secretary of State for Northern Ireland, he tried to justify it by saying
      "A high proportion of people seek work elsewhere, outside the constituency, and for this reason, they may be away from their qualifying address on the date of the election."
      That seems a powerful reason for supporting the amendment.
      Mr. Powell: Before the Secretary of State is allowed to get away with that prevarication may I point out that there is no difficulty in distinguishing between the postal votes due to a change of address and postal votes of those who allege inability on physical grounds to get to the polls.
      Mr. Adley: I am grateful to the right hon. Member. Perhaps I can now quote from a booklet entitled "The British General Election of 1951" sent to me by David Butler. It says:
      "In one remote polling-district in Mid-Ulster there were 128 electors all told; sixty-eight of these applied for postal ballots, but only six of them on the ground that they had moved away from the district. Of the 128 electors, fifty-seven shared the surname McHugh and thirty-five of these were certified as unable to get to the polling-station in person. The innocent might enquire the nature of the epidemic which struck the clan McHugh during October 1951."
      That strengthens the argument that our system is less than perfect. We have a long way to go to make it perfect. Some people may say that despite the amendment we shall still have a long way to go because our system does not cater for everybody's needs. During the Bourne
      1494
      mouth, East by-election you will recall, Mr. Murton, that it was a very cold night—
      The Chairman: The Chair is totally indifferent to the weather, either in this Committee or elsewhere outside.
      Mr. Adley: The Bournemouth, East constituency is roughly adjacent to yours, Mr. Murton, and I thought you might have some recollection of the weather that night. On polling night I met a lady when I was knocking on doors and she said that the weather was not conducive to her attendance at the polling booth. When I urged her to go and offered to take her in my car she told me that I was very kind but perhaps she would go tomorrow instead. By no stretch of the imagination will the amendment be able to satisfy people whose aspirations are as diverse as those of that lady. However, we must improve on the present position in so much as people who live in Britain but have interests in the EEC have to stay at home or lose the vote. That is a wholly undemocratic position. Therefore, I support the amendment.
      Mr. Roper: This is a rather difficult amendment because while there is considerable sympathy for those who are covered by it, there are a number of practical problems about the way in which it is drafted. I want to raise two or three points in order to get clarification either from the hon. Member for Mid-Oxon (Mr. Hurd) or the hon. Member for Guildford (Mr. Howell).
      Like many other hon. Members I have been lobbied by those who feel they will be deprived of a vote in the future European elections and obviously if there is a common voting procedure throughout the Community there will have to be arrangements for citizens who are not resident in their own countries on polling day.
      Are there not some difficulties about procedures such as these? I have been very concerned to read the interesting experiences in France where there is provision for overseas representation. A most unfortunate situation—I am being charitable—has arisen in which agents of the French diplomatic service seem to have been involved by political parties in the distribution of postal vote forms. These people made sure that the postal votes were directed towards marginal constituencies in large numbers. I am not

      1495
      suggesting that members of the British diplomatic service would be involved in such things. But when it comes to elections, temptations are placed in front of those standing at the elections.
      Mr. MacFarquhar: Would the hon. Member not agree that we are talking about British elections, not French elections? In the case he has cited the French diplomats knew which were the marginal seats because they were dealing with familiar constituencies. We are dealing with totally new constituencies and we do not know which are marginal seats.
      Mr. Roper: My hon. Friend may well be right about the differences in morals of those involved in British and French elections. I was not making moral judgments between us and other member States of the Community. My hon. Friend raises the question about the lack of knowledge of marginality. But it is perfectly possible to make assumptions, from the combination of United Kingdom constituencies, about those that are likely to be fairly safe and those that are likely to be less safe. Therefore, I do not understand the argument.
      Mr. Hugh Dykes: Perhaps the hon. Member for Farnworth (Mr. Roper) might wish to change, modify, alter or withdraw the allegation that the French diplomatic service is lacking in morality in the preparation of postal votes. I must point out that the distribution of those blanks from one place on the occasion he has mentioned was very unclear, and the way in which he has represented the French diplomatic service and election authorities is very unfair.
      Mr. Roper: I was not attempting to make a judgment. I have read the reports of the case before the electoral courts in France. Certain electoral papers have been ruled out of order because they came from the same hand and the same post. I do not know who was responsible for preparing them, but there seem to be opportunities for abuse in systems that are not necessarily too different from those proposed in the amendment.
      5.30 p.m.
      There are a number of points about the amendment that need clarifying. Line 3 refers to those who are
      1496
      "resident in one of the other member States of the European Communities".
      I have a number of constituents involved in the long-distance road haulage business on a European basis. They often drive their lorries not merely to France and Italy but sometimes as far as Turkey.
      Mr. William Clark: The hon. Gentleman is labouring the point. Even in parliamentary elections, if one goes away on business, one is entitled to a proxy vote.
      Mr. Roper: The Minister of State may be able to deal with this point. I am talking about a person who is abroad on business at the time of the election. I understand that one is not entitled to a postal vote in those circumstances.
      Mr. Kenneth Clarke: A person abroad on business is entitled to a proxy vote in the constituency in which he resides. The amendment seeks to remove the absurdity of the hon. Gentleman's constituent who is driving a lorry through Turkey having a proxy vote that can be exercised by his wife while someone running an office in Brussels will have no such vote.
      Mr. Roper: Some people are regularly involved in the road haulage business and therefore may not remain on the register in this country. What will happen about those in the road haulage business who may be resident in Turkey but working in the Community on election day? What is the concept of "resident" in the amendment? If a lorry driver spends most of his time in the Community, would this count?
      Lines 5 and 6 of the amendment refer to the places where people were "last entitled" to vote as electors. The amendment appears to entitle people to a vote even though they are not on the register. Indeed, it seems possible that a person could claim a vote when he had never been on the United Kingdom register.
      On a similar point of detail, what will be the position of a person from the Republic of Ireland who has spent, say, six months here and would have been entitled to a vote if he had been resident in this country when the election register was drawn up? Would the amendment still entitle him to a vote even though he may have returned to the Republic where he had lived for, perhaps, 40 or

      1497
      50 years? It appears that anyone from the Republic who has spent however little or however much time in the United Kingdom would be entitled to claim a vote when he was back in the Republic.
      Mr. Adley: That would depend on whether he had the right of abode as defined in the amendment and in the Immigration Act 1971.
      Mr. Roper: I understand that such a person would have the right of abode in the United Kingdom. If I am wrong, no doubt I shall be corrected later. If a person has been here, he will have the right of abode, and most Community citizens have the right to come into this country.
      The amendment is widely drawn and needs more attention. I am not altogether unsympathetic to its objectives, but the way in which it has been drafted has left it open to abuse and it could harm the objectives that I share.
      Mr. William Clark: The hon. Member for Farnworth (Mr. Roper) seemed to be saying that he liked the spirit behind the amendment but felt that it should be tidied up. I am sure that if the Minister accepts the principle and says that he will bring the amendment back suitably reworded, there will be no need for a vote.
      I should like to take up the point of the right hon. Member for Fulham (Mr. Stewart), who said that we were part of nine States and that everyone living in those States should have the right to vote in the direct elections. Our Select Committee deliberated upon this matter and came down firmly on the side of British citizens living in the Nine having the right to vote.
      I do not think that this is a great change from our normal voting practice. We have 635 parliamentary constituencies and if a person moves from constituency "A" before an election, he will be entitled to a postal vote in that constituency. I accept that he will be moving within British territory, but the amendment is analogous to that situation. It gives British citizens in the Nine the right to a postal or proxy vote.
      This is a one-off amendment. The method of voting in the European elections is due to be harmonised before the second set of elections and if the method
      1498
      is to be harmonised we shall probably have harmonisation of who can and cannot vote. The amendment is a temporary measure designed to give British citizens, wherever they live in the Community, the right to vote. It is an extension of the postal vote system.
      Mr. Dykes: The principle behind the amendment is very important. Equally, it is easy for us to say that we shall inevitably be arbitrary in the way in which we first decide on what is effectively a major extension of the franchise going beyond the territorial principle, but limited, at this stage, to European elections.
      I disagree with the hon. Member for Farnworth (Mr. Roper) who said that the amendment was widely drawn. It is limiting and, to some extent, frustrating to many who would like to see the principle established in a substantial way without further delay.
      My hon. Friend the Member for Rushcliffe (Mr. Clarke) was right to point out that one of the most important aims of the amendment is to remove the anomaly of postal votes being available for temporarily absent business men in national elections but not in European elections. Added to that is the obvious attraction that there is included not only the possibility of business men temporarily absent being included in the franchise for European elections, but also those who are absent for a long period but coming within the definition of "working" and the full corpus of officials and functionaries of British nationality and British residence in the European Community. That must be one of the most important parts of the amendment.
      As is evident from the Order Paper, I with other hon. Friends proposed an amendment some weeks before Amendment No. 183 was drafted. It is drawn in wider terms and refers to
      "United Kingdom nationals temporarily resident in other member States of the European Community"
      having the right to vote in the first set of European direct elections. Whatever we may say in the continuation of the debate about who should be included, how the definition should be drawn, and what importance we should attach to the important fact that we are dealing with the Home Office model scheme as put

      1499
      to the Select Committee, I believe that the principle is even more important than the details. That may sound somewhat illogical, but that must be so.
      The amendment is the first step to the necessary extension of the franchise that in due course I hope to see extended into national elections. The experience during the referendum was disappointing. Many of my hon. Friends were fed up with the reaction of the Government, and certainly of the Civil Service, which showed a classical resistance to change or new ideas. I hope that on this occasion the reaction of both the Government and civil servants will be different.
      I shall say a few words on Amendment No. 53. I shall not dwell on it at excessive length as it is not my wish to make you impatient on that score, Mr. Murton. The much wider character of its text and that of a related amendment was originally in one of the clauses. It is attractive in that "temporarily resident" would by definition, and certainly on all visible evidence, include in the franchise far more of those who are living abroad temporarily, working abroad temporarily or even abroad on holiday, than would Amendment No. 183.
      I do not intend to labour that argument as I think that the first step, in whatever form and structure it is couched, is more important than the total encapsulation of the full principle, which would be unrealistic at this stage. As time goes on, the encapsulation of the full principle will need much more parliamentary work.
      In common with my hon. Friend the Member for Christchurch and Lymington (Mr. Adley), I am a sponsor of the Bill that is being published today by my hon. Friend the Member for Bedfordshire, South (Mr. Madel). It is a Bill that seeks to give people the right to vote if on holiday overseas. By definition those people would be included in Amendment No. 53. If that amendment were conceded, in due course they would be included both for national and for other elections. It is important to air these views even if amendments are not pressed.
      The Home Office, and to a lesser extent the Foreign Office, might object to that which I propose, claiming that there needs to be a more precise and close definition such as that embodied in the model
      1500
      scheme, which is to be found in Amendment No. 183. It is said that we must not go beyond that because to do so would inevitably be to create complicated machinery. I am not sure whether that is an acceptable explanation or whether it is right.
      I cite briefly the example and experience of another foreign country. It is not a member of the Community but it aspires to be so. I refer to Spain. The kingdom of Spain had its first elections last year. The very fact that they were held was a notable political triumph for the Spanish people and everyone involved in creating them. They were the first set of elections after years of dictatorial rule.
      I hope that the right hon. Member for Battersea, North (Mr. Jay) will concede that we in this place can often look usefully to the experience of other countries in deciding modalities for elections and other purposes. We can usefully pursue, or investigate and study, the experience of those in other countries.
      5.45 p.m.
      I am conscious that I am being provocative by describing the experience of a non-Community country and being rash enough to select Spain, a kingdom that for years had no democracy and no real politics. In 1977 it had its first General Election for 40 years. It was held without difficulty. Presumably, far more people would be involved in a system akin to that which is outlined in Amendment No. 53—namely, reporting to the nearest consular post by a certain time before an election.
      I do not wish to detain the Committee for too long, but I shall quote from the relevant document that was sent out to all Spaniards living abroad that indicated the way in which they could vote. It is a system that might conceivably prove to be a model not only for this country—I say that with some hesitation bearing in mind the length and tradition of our electoral experience compared with the puny experience of the Spanish—but for some other European countries where conventional election practice does not take place.
      The notice reads:
      "Spanish Nationals abroad, over 21 years of age, included in the Electoral Census of Spain can vote by post in the General Elections

      1501
      which will take place on 15th June 1977 according to the rules of the Royal Law-Decree of 18th March 1977.
      "In order to vote by post your personal attendance is required with documentation at the Consulates General of Spain in London, Liverpool, Southampton and the Honorary Vice-Consulates dependent on the same.
      "The Consular intervention is limited to the free issue of the necessary paper that the interested party should send direct to the appropriate Junta de Zona'—
      that means the electoral district—
      "or in some cases their legal representative."
      The notice then goes into the period of time and urges people to proceed as soon as possible to help the Spanish Post Office.
      That raises a couple of interesting points. Why should we emulate the Spanish when the Home Office has already provided us with a suitable model? Presumably, the British GPO would face the same difficulties as the Spanish Post Office if such a system were employed. However, there are interesting features that lead one to the tempting conclusion that a much freer system incorporating a much larger number of potential voters might be incorporated in this country's arrangements and elsewhere.
      When we consider the situation that confronted the Spaniards and the mathematics of the population involved, we know full well that many Spaniards were resident abroad who presumably, on all the evidence, took advantage of the opportunity to vote. Therefore, an inexperienced and totally immature Spanish monarchy, which was unable to handle its elections with the facility and skill to which the United Kingdom is fully accustomed and justly proud of, encouraged the use of a system that enabled many Spaniards living abroad to vote, although there were some who probably did not want to take part in the elections.
      All the experience suggests that many Spaniards took advantage of the system that was put before them, although some were understandably reluctant to take part. That reluctance may have had something to do with their previous absence from Spain under the former regime. It may be that there were political complications that made some unwilling to produce formal identification. However, that is a separate consideration. The fact is that the system was used
      1502
      widely. There were nearly 3 million people entitled to vote within the terms of the notice, but not nearly as many as that did. None the less, several hundred thousand, and probably more, successfully voted and there were no hiccoughs. There was none of the problems to which the hon. Member for Farnworth referred when dealing with an isolated scandal in France in the preparations for the French elections.
      I have explained the Spanish experience in some detail to show that there are other possibilities. It would be easy for our Civil Service to say "We must take this carefully. Let us have the narrowly drawn definition of those who may vote overseas for the first set of European elections." I hope that it will go beyond that. It will be disappointing to the Committee if the Government react in a negative way to the narrowly drawn amendment that is before it. That would mean that we are nowhere near the wider form that is encompassed in amendments such as Amendment No. 53.
      There have been ideas put forward in the reverse direction by my hon. Friend the Member for Bedford (Mr. Skeet). The Committee expects a positive reaction from the Government in respect of this amendment, which has been scientifically drawn up by civil servants. It has been rationally constructed with great care to enable those in other European countries who are entitled, by natural justice, to a vote in this first set of elections to be able to exercise their right.
      I readily concede that there may be some objections to sub-paragraphs (i), (ii) and (iii). None of these objections can outweigh or gainsay the fundamental point. I accept that the Government might wish to return with counter proposals in textual terms which will not alter the spirit and principle of the amendment but may change some of the controls and definitions in the subsections.
      Like my hon. Friend the Member for Mid-Oxon (Mr. Hurd) I believe that there is an understandable and legitimate pressure over these elections. All hon. Members will have received a good deal of correspondence on the issue from people who felt aggrieved because, at the time of the EEC referendum, they were in other European countries and

      1503
      could not take part. These people feel even more strongly about these critical direct elections. They will feel justly aggrieved if they are prevented from voting because there is resistance to change, to a legitimate and respectable electoral innovation. They will not accept resistance to adopting a system which many would like to see adopted in national general elections.
      Mr. Paul Channon: I, too, support the amendment. I agree with my hon. Friend the Member for Harrow, East (Mr. Dykes) that the amendment is drawn extremely narrowly. There are some odd concepts in it. That the right to vote should be restricted to people in employment is a curious concept. It can only be justified by a desire to meet the objections advanced on the last occasion when this suggestion was put forward.
      I agree with my hon. Friend also that there can be no grounds for saying that it is impossible to achieve the objectives set out in the amendment. Many of my hon. Friends, including my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) have shown conclusively that many other countries have managed to put the provisions of this amendment into effect. The argument on the grounds of practicality cannot be sustained.
      The second thing which my hon. Friends have managed to show conclusively is that the argument that there is insufficient time to carry out this provision cannot be sustained. I do not know whether we can be given more information during the course of the debate about a likely date for the holding of the elections but we do know that they are not to be held this year so that there is plenty of time for any new scheme of this kind to be put forward if it is the will of the Committee.
      The only argument that can be advanced against the amendment is an argument on the grounds of principle, if the Government are not prepared to concede the principle. I consider that there is an overwhelming case for the principle of allowing British people living and working in the countries of the Community to vote in the elections for the European Assembly. There is a distinction between
      1504
      voting in those elections and voting for this Parliament. A British citizen resident and working in France or Belgium would not have such a strong case for claiming the right to vote in elections to the British Parliament, which takes decisions on domestic matters such as the law of housing, taxation or education. The argument which says that a British resident living in one of the countries of the Community should have the right to vote for the European Assembly, set up by the Nine countries to deal with the affairs of the Community as a whole, is overwhelming.
      I agree with those who have said that the time will come when people will be entitled to take part in elections irrespective of where they are living. An Englishman living in Paris would be entitled to vote in Paris, while a Frenchman living in Birmingham would be entitled to vote there. I am sure that this will come about when direct elections have taken place. A convention will be drawn up to allow that to happen. Until such a situation occurs, it is monstrously unjust that people working abroad, doing important jobs, trying to advance the interests of our country—
      Mr. Budgen: Not necessarily.
      Mr. Channon: I did not say that they all were. It is unjust that such people, trying to do good for British industry, should not be entitled to vote in elections to the European Assembly.
      I do not believe that the difficulties put forward by the hon. Member for Farnworth (Mr. Roper) can be sustained. The illustration he gave of the long-distance lorry driver is already covered by legislation. Such a person can obtain a postal or proxy vote with the greatest of ease. We might get an anomalous situation whereby the long-distance lorry driver trundling along the roads of Europe would be entitled to vote wherever he might be while the business man in Brussels would be unable to vote.
      Mr. Adley: Among the 10,000 signatures which I presented was a handful from a group of British construction workers working for a British company at a site in Southern Italy.
      Mr. Channon: They have a strong case for being allowed to vote. I cannot think

      1505
      why, under existing law, they cannot do so if they are there for a temporary period.
      Mr. Adley: It was a two-year contract.
      Mr. Channon: Then they would be unable to vote. I believe that they certainly should be entitled to vote. It is interesting to note that the Council of Europe has brought strong pressure to bear with a view to allowing aliens to vote in elections in member countries. It is said that foreign workers in Switzerland should be given the right to vote in Swiss municipal and, possibly, national elections.
      The idea that the vote should be confined to nationals in any country, an idea which I support, is nevertheless not supported by many in other countries who are experimenting with the idea of giving the vote to aliens in municipal and even national elections. The whole of the British Labour delegation voted in favour of such a proposition, which rather surprised me. I hope that it is in accord with Government policy. We can have such a situation without wanting to vote for federalism, without wanting a federalist State in Europe. None of us, except possibly members of the Labour delegation, wants to go that far or thinks that that is likely to happen. This modest amendment will right what those working abroad feel to be an injustice. I hope that the Government will be prepared to accept it in principle.
      Mr. Roger Moate: The Committee would be ill-advised to accept this amendment. Having said that, I must say that it is easy to have a good deal of sympathy for those resident on the continent of Europe in particular who feel frustrated at being unable to register a vote in these elections. I have some sympathy with them, although that sympathy is diminished when I reflect on the fact that many of them are paying a much lower rate of taxation than they would be if they were living in this country. I suspect that one of the reasons they have taken care to ensure that they do not have rights in this country is to make certain they are entitled to the very much lower rates of taxation obtaining in Europe.
      We are familiar with the cry of "No taxation without representation". I wonder whether, in this instance, we
      1506
      should not reverse it and say "No representation without taxation". If people were prepared to say "If I vote as a resident of the United Kingdom, I will pay taxation as a resident", I would be prepared to concede the case.
      6.0 p.m.
      Mr. Adley: My hon. Friend must have a low opinion of the diligence of Inland Revenue officials. Thousands of people living and working in other EEC countries, some of them for two, three or four years, are still paying, and are obliged to pay, British taxes. What my hon. Friend is saying is not borne out by the facts.
      Mr. Moate: There may be many of them, but I suspect that there may be more who have arranged their affairs—sensibly; I am not criticising them—so as to pay lower rates of taxation than they would otherwise.
      Mr. Roper: I have some sympathy with the hon. Gentleman's criticism of the amendment. Would he not consider that his is a powerful argument in the case of national elections but that if people are resident in the EEC, where the own-resources situation operates, they will be levied the same percentage rate of value added tax towards the Community budget as those paying VAT in this country?
      Mr. Moate: I can understand their feelings of frustration that they cannot vote in the European context, but I shall return to that point. There are certain other principles of our own electoral system that are even more important. It occurs to me that those people enjoying this privileged tax position abroad might be endangering it if they were able to establish that they had certain rights of residence in the United Kingdom under this provision. I would not want to put them off from voting if they were so minded, but they must think carefully before registering a vote if that would bring them back into the United Kingdom tax ambit.
      Nevertheless, I can understand the frustration of such people, but frustration at not being able to take part in elections affecting the future of one's own country is widespread. Many other people are frustrated in this way, and I think that my hon. Friends supporting the amendment have placed it on such a narrow

      1507
      basis as to imply a lack of principle in what they are doing. The frustration is shared by British business men whether they live in Brussels or in New York. Surely a British business man living in New York is as concerned for the future of Europe or of the United Kingdom as is a business man in Brussels. Why, therefore, is it proposed that a person has to be resident in the Community?
      My hon. Friend the Member for Harrow, East (Mr. Dykes) referred to his own proposition that people on holiday should also be entitled to vote. That is another category of people who will be frustrated at their inability to vote in the direct elections. But my hon. Friend does not suggest that they would have to be on holiday within the EEC. Presumably, he argues that they should have a right to vote in the elections wherever they might be in the world. If he is saying that a person who is a citizen of one of the countries of the EEC should be entitled to vote wherever he is in the world and should not be restricted to residence in the EEC at the time, that is an unfair proposition.
      If that were the only objection, I should not think it right to support such a proposition, but there are many other objections as well. It has also been pointed out that, for some strange reason, the amendment would restrict the right to vote to people still in employment. That would be most unfair to people who have retired abroad. I can think of no sound reason for invoking such prejudice against pensioners. It would introduce an unfortunate principle, and I hope that on that ground also the amendment will not be accepted.
      Mr. Neil Marten: It is very un-Conservative.
      Mr. Moate: It is very undesirable. If we are asked to allow this right to people resident abroad, I do not see that we could exclude those who have retired, including those who have retired to places outside the EEC.
      Mr. John: Under the amendment it would be difficult for a retired person to satisfy the returning officer of his intention to live in this country. That is also a limiting factor in the amendment.
      Mr. Moate: It is a limiting factor, since I do not know how one can prove satisfactorily in any circumstances that one has the intention to reside in the United Kingdom. It is a proposition incapable of proof. It is an intention, and no one can certify that that is what one will actually do. For example, it would be hard to prove that those in retirement intended to return. So again it is an unfair proposition. Many retired British citizens living abroad are desperately concerned about the future of the country. They have been described as lotus eaters, but they are still concerned about the country's future. They have been denied the right to vote, however. If we are to give the right to vote in these elections to the business man abroad, or in the EEC, we should give it to all other British citizens who are resident abroad.
      Again, what about the Scots who are not to be allowed to vote in the Scottish referendum on devolution? Are not millions of Scots living abroad equally concerned about the future of Scotland or the future of the United Kingdom? They are to be denied that right to vote. It seems to me that my hon. Friends are advancing a limited case on the basis of special pleading and not on the basis of principle. If they came forward with a broadly based proposition, we could consider it, but as it is not being done in that way the Committee should not accept the amendment.
      Mr. Dykes: Does my hon. Friend mean that if the Government give a pledge either to accept the amendment or to put forward something wider he will vote for it and accept a much wider extension of the vote overseas?
      Mr. Moate: My hon. Friend missed the point of my earlier remarks and has anticipated my next point. Even if that were to be so, the proposition introduces certain features which would be in conflict with our parliamentary and electoral practices. It contradicts two vitally important factors. The first is the requirement of national residence in the United Kingdom. The second, and even more important, is the vital nature of the constituency link between elector and Member.
      The amendment would require a person to produce evidence of some link with

      1509
      a constituency. Clearly, it could be a tenuous link. No time limit is proposed. The person concerned could go back to any parliamentary election—it could be an election of many years ago—and say "Such-and-such is my constituency." But we know that in practice it would not be his constituency and that he would have little interest in the candidates or in the nature of the candidacies. The proposition would undermine the constituency link.
      I accept that if we were talking about a national list system, or some other kind of system, this idea would be acceptable, but the House has decided on the traditional first-past-the-post system and to preserve the very important constituency link.
      Sir Raymond Gower: Is not my hon. Friend making a powerful case against ever altering our system, even if that would mean improvement? Americans living in London choose whether they will vote for someone in California or New York. Their votes can be credited to a particular part of the electoral college, although they are overseas. Is not our system capable and susceptible of improvement? Is my hon. Friend resigned to having an inferior system always?
      Mr. Moate: I do not want to make ourselves part of a federal system as in the United States. That is the analogy that my hon. Friend volunteers. We are talking about the vital constituency link that the amendment proposes to undermine. If we were talking about a national list system there would be logic in the case, but we are not. We are talking of our traditional system with the constituency link that is so precious.
      In all the arguments that we have had about proportional representation and different systems of voting it has come through clearly that the vast majority want to preserve the individual Member link with the constituency. That is one of the most important things of all.
      Mr. Robert J. Bradford: What about Northern Ireland?
      Mr. Moate: I would not deny it to Northern Ireland. I regret that we have not got a uniform system for European elections as we have for Westminster
      1510
      elections. That is a regretable breach of our principles. For that last reason above all the Committee should reject the amendment.
      Mr. Budgen: When I asked my hon. Friend the Member for Mid-Oxon (Mr. Hurd) to attempt to explain where the line should be drawn in deciding who should have the vote in the European elections he rightly avoided the question. No doubt it is true that English thought dwells more easily upon practicalities than upon principles. I shall be so un-English as to suggest a guiding principle. It is that we should accord the vote to those who show that their primary loyalty is to the British nation State.
      I believe that people demonstrate that they adhere to that principle by showing that they conform to the two pieces of evidence that we require. The first evidence is that they have British nationality and the second that they have British residence.
      Mr. Channon: There are exceptions and anomalies.
      Mr. Budgen: I accept what my hon. Friend the Member for Southend, West (Mr. Channon) says. There is the question of the Southern Irish. That opens up a whole host of different arguments over which my hon. Friend and I might take a different view.
      Mr. Channon: My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) says that a loyalty to the British State is one of the prerequisites. That is also ruled out by the Irish situation.
      Mr. Budgen: By conforming to these two requirements people adduce evidence that their primary loyalty is to the British nation State. I regard the Irish situation not only as an anomaly but as a denial of our overall principle. That is why I think that my hon. Friend and I would disagree.
      Mr. Adley: Is my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) suggesting that the manager of British Airways office in Milan is a traitor?
      Mr. Budgen: I am not saying that. I am saying that residence is a necessary part of showing where the primary loyalty

      1511
      of the individual is. There are exceptions by way of the business vote and for diplomats and Service men because they have been asked to be resident elsewhere and it would be wrong to deny them the right to vote.
      Of course we do not say to others who live abroad "You are a traitor". All we say is "You do not conform to one of the criteria and it is uncertain where your primary loyalty lies." To a chap who has been resident in the South of France for 20 years we say" You are a British national; you have been enjoying the sun in the South of France and paying lower taxes for 20 years. We are uncertain where your primary loyalty lies."
      Mr. Dennis Skinner: Does the hon. Member agree that those people are not all that much different from such people as Tony Jacklin, Michael Caine, and a host of others, who make money in this country, have a good start in life and then, because they have to pay a bit extra in tax move abroad? Is not the loyalty of such as Roy Jenkins, the claret drinkers and others of that ilk no different from that of the Tony Jacklins?
      6.15 p.m.
      Mr. Budgen: People are entitled to change their loyalties. They are entitled to live in another country and say that they prefer the French or Spanish way of life. But certain consequences flow from that.
      Mr. Adley: What would my hon. Friend say about the loyalty of a Jamaican living in Birmingham who goes to a Test match at Edgbaston and cheers the West Indians?
      Mr. Budgen: These are matters that must be considered when we review the law of British nationality. In deciding where the primary loyalty of the citizen lies the criteria of residence and nationality are useful.
      Even if I am wrong in saying that a primary loyalty to this country should be the test, the amendment has no principle attached to it. The more one looks at it the more uncertain one is about the principle. It is a mere bodge-up. There must be some principle involved in deciding where the line is drawn. Why, for
      1512
      instance, should people who work and live abroad be given the vote whilst those with an investment income who live abroad are denied the vote? How can it be proved whether a person who has lived abroad for 20 years intends to return to this country? There is no way of checking a person's intention.
      Sir Raymond Gower: A retired person has a greater degree of choice than a person who might, by the exigencies of his employment, temporarily work in another country for a firm. Such a person has no choice whereas the retired person has a lot of choice. Does my hon. Friend make any distinction between them?
      Mr. Budgen: Such people must face the consequences of their actions. A man working abroad may pay lower taxation, be paid more, and live in a better climate. One of the consequences of that is that his links with this country are, temporarily at least, slightly less close. Nobody is saying that such people should be denied the vote when they return to this country.
      I am driven to vote against the amendment partly because it is defective in detail and partly because of the compelling argument of the hon. Member for Dudley, West (Dr. Phipps), who sees it as an important step along the road towards a federal Europe. I am not an anti-Marketeer, I am a pro-Marketeer, but a Gaullist. I want to see the electorate voting for people whose primary duty is to uphold the interests of the British nation State. If a large part of the electorate is resident in the EEC, it is possible, and even likely, that those who are resident in the EEC but voting in this country will wish to see a federal Europe.
      Mr. MacFarquhar: Is it not equally possible that they will be at the sharp end fighting for British interests in Europe?
      Mr. Budgen: I do not hold the view that anyone who is going to Europe is doing a job for Britain and that anyone who is importing is a traitor. I am saying that the person who lives in the EEC has temporarily slackened his links with this country. I say that such a person is more likely to be in favour of a federal Europe, more likely to be in favour of European nationality and of a European currency. I say that he is altogether less

      1513
      likely to want to support primarily the interests of the British nation State.
      If, on the other hand, any right hon. or hon. Member wants to see this country progress within the EEC towards the federal solution—I see that the hon. Member for Dudley, West nods—he should know what he is doing. This is a significant step towards a federal Europe, and for that reason I shall vote against it.
      Mr. John: My speech has been made so often for me by hon. Members on the Opposition Benches that it will be a relief to me now to present my argument in my own way.
      I must start by giving one piece of information to the hon. Member for Mid-Oxon (Mr. Hurd) on the question of numbers—the 270,000. These are the people resident in the EEC countries who are patrial to the United Kingdom. That figure takes in about 70,000 children, so that the likely effect in respect of voting will be about 200,000 voters. That is our best estimate. We have no exact numbers to present.
      Secondly—this will save him interrupting in ebullient fashion later—let me tell the hon. Member for Mid-Oxon that when the Home Office gave evidence to the Select Committee it did so at the request of the Select Committee, which asked the Home Office whether there was a feasible system.
      It will be no part of my argument to say that the system proposed in the amendment is impossible. I shall argue that there are certain weaknesses in it, but at no stage was it a system put forward by the Home Office as a preferred system. That has to be made clear, just as it has to be made clear that there are some differences between that and the Opposition amendment today, and there were certainly some caveats in the Home Office technical evidence which the hon. Gentleman did not bring out. I shall deal with that in the course of my argument.
      I have been invited to say whether I am in favour, in principle, of extending the vote overseas or of confining it to the present franchise. It is always difficult and dangerous to argue on behalf of the right hon. Member for Down. South (Mr. Powell), but his reference to a side
      1514
      wind, as I understand it, means essentially that the proposals now presented not only depart from the fact of our franchise but they depart substantially from the method of changing the franchise which this country has adopted over many years.
      Since 1917 there has been the mechanism of the Speaker's Conference, which has considered and examined in great detail the question of franchise. The hon. Member for Mid-Oxon is already looking impatient. If he has reached that point at this stage in my speech, I feel that I should advise him to have a break outside, because his blood pressure will rise beyond endurance at the end of 10 minutes. However, the hon. Gentleman's reaction to what I am saying does not deflect me from my argument.
      What I have heard today convinces me not only that this is an important amendment since it involves a significant extension of the franchise for one set of elections but that it cannot be hermetically sealed to those elections, and it will at least have some potential repercussions on the internal franchise. That is why I say that before we go back to a position which the House adopted pre-1917, when we tried, during the course of legislation on the Floor of the House, to collect together our own electoral rules, we should go to the tried method of the Speaker's Conference, where these matters can be discussed in detail and evidence about them can be given in detail.
      Mr. Channon: If the Minister intends to resist the amendment, as his tone indicates, is he nevertheless prepared to say that the Government would refer the whole of this question to a Speaker's Conference, so that matters could be carefully thought out?
      Mr. John: It is no secret that, although it would be extremely difficult to arrange, the Government would like there to be a Speaker's Conference. All I am saying is that this is a vital matter, which ought to be discussed through some such mechanism as the Speaker's Conference if we are to extend the franchise in a constitutional matter of this kind.
      Mr. Thorpe rose—
      Mr. John: I prefer to make my points in my own way.
      Mr. Thorpe: Since the Minister is so anxious to follow precedent and to refer matters to the Speaker's Conference, is it within his contemplation that his own Government departed dramatically from that rule when they asked the House of Commons to decide between varying electoral systems? That would normally be a matter for the Speaker's Conference. Does the hon. Gentleman realise that that was breaking with precedent?
      Mr. John: I take it that the right hon. Gentleman is referring to the electoral system under the Bill.
      Mr. Thorpe: Yes.
      Mr. John: The right hon. Gentleman has only just returned to the Chamber and he may not have heard all my argument thus far. My argument was not that the system here cannot be dealt with on a one-off basis but that inevitably the proposal to extend the franchise will have domestic repercussions, and because of the potential domestic repercussions we cannot treat it as a sort of one-off job, as we could the electoral method.
      Before those interruptions I was dealing with the discussions in the Select Committee. It is important to note that the Select Committee discussed these matters, including restriction to EEC nationals. The Select Committee came to the conclusion that the extension of the franchise ought to be based anywhere in the world where British nationals are. With respect, I think that the hon. Member for Mid-Oxon admits that, so it is in no sense an accusation when I say that he has adopted a self-denying ordinance.
      I see some difficulty here. Clearly, on a Bill of this kind, especially when we have been at pains to assimilate the procedure which we adopt for the first European elections to the existing electoral pattern in this country, it is perfectly respectable to maintain the principle which has been set forth in the amendment. But it is perfectly respectable also to point out that, because the European Economic Community affects all countries in the world, or its decisions affect all countries in the world, the franchise should be extended to all British nationals wherever they may be.
      However, there is a fallacy, I suggest, in the argument which has been pre
      1516
      sented. I do not say that it rules it out as impracticable or that it should not commend itself to the Committee on that score, but it is right to point out that the amendment consciously restricts the franchise to those British nationals who happen to live in a particular area.
      This limb of the case depends to a large extent on the argument that those who reside within the EEC are more closely affected than are others elsewhere in the world.
      Mr. Dykes: That is rubbish.
      Mr. John: It was an argument nut. The hon. Gentleman may think it rubbish, but it was put from the Conservative Benches and I suggest that he takes it up with his hon. Friend rather than with me. I am trying to respond to the debate.
      As I was saying, I believe it to be generally accepted that EEC decisions affect people in many parts of the world—certainly, the developing countries would not say that decisions of the EEC leave them unaffected—and herein lies one of the fallacies in the argument.
      The second fallacy in the argument relates to those called the vanguard, the people necessarily abroad on business. As I see it, in putting forward that argument, the hon. Member for Mid-Oxon—his hon. Friend the Member for Harrow. East (Mr. Dykes) spoke about it, too—was speaking of a category of people who are involved with the EEC and who know a great deal about the EEC. But one cannot lump all those who live abroad into one category and say that they are the vanguard of Britain abroad or Britain in Europe.
      Mr. Adley: Nonsense.
      Mr. John: That was the argument. The hon. Member for Christchurch and Lymington (Mr. Adley), who is shaking his head, ought to have listened rather more.
      Mr. Adley: I remember perfectly well.
      Mr. John: Last Saturday there was a story about an English rugby player who plays for a French club and runs a bar in the South of France. It may be that he is the vanguard of English rugby, teaching the merits of English rugby to the French, who are so singularly inept on the subject.
      6.30 p.m.
      Mr. Dykes: The Committee appreciates that the Minister is feeling embarrassed at having to put forward these diversionary arguments, which have nothing to do with the text of the first amendment. I submit that there is no way in which the text of the amendment delimits or narrows the categories of people entitled to vote in the elections. It seeks to draw up the procedures whereby they can register to vote and that must have a delimiting effect, but that is a different matter.
      Mr. John: The hon. Gentleman is perversely trying to misunderstand me. I was not arguing that there was such a delimitation, but I am saying that the examples given here today related to those people who were forced by the exigencies of their work to work in Europe. I am saying that there is a distinct category of people who choose to work and live abroad and who do so conscious of the effect that will have on their civic rights and obligations. Therefore, it is right in discussing this matter to deal with this category of persons as well as with the situation of those who are forced into difficulties by reason of their jobs.
      Mr. Adley: Does the Minister recall the quotation that I read from the letter sent to me by the Secretary of State for Northern Ireland? Does not exactly the same proposition apply—that he was justifying a high level of postal votes in the Fermanagh constituency for the same reason which the Minister now puts forward—namely, that people have chosen to live and work elsewhere, but are still entitled to vote?
      Mr. John: The hon. Gentleman must decide whether he believes that Northern Ireland is part of the United Kingdom. We are now talking about people living outside the United Kingdom within the ambit of present British representation. I was trying to make the point that the people who still live and work abroad may do so in the knowledge that, for their own good and sufficient reasons, they are sacrificing their civic rights and obligations.
      I do not follow the argument advanced by the hon. Member for Faversham (Mr. Moate) on the subject of taxation. However, I found his argument about the nature of the representation we are providing a good deal more cogent. What
      1518
      we have done by our decision to elect by a first-past-the-post system in constituencies will not express an opinion about the overall composition of a delegation that goes to the Assembly. It also forces us to choose the man who will represent a particular constituency in that Assembly.
      In my view, the nexus between a constituent and his representative, which was urged on my right hon. Friend as being the great advantage of the first-past-the-post system, will be lost if people are claiming to vote in a constituency in which at one time they had an entitlement to vote. They must have an intent to return to this country. I am conscious of the fact that it appeared in the scheme that was put forward.
      There is a difficulty to which I shall return because it is an important point. I must point out that the intent to return to Britain is a variable factor. People will often say that they intend to return to the Highlands or Islands of Scotland, and one often sees in those Islands empty crofts, which are a symbol of people living abroad. It is such an indefinite concept that this will produce problems of verification with which I shall deal in due course.
      We are saying that, for however long a person has been away from this country, he not only has a connection with this country which is sentimental, but a connection with the constituency, in terms of deciding which man should represent and act for that constituency.
      Other arguments were adduced. The hon. Member for Bedford (Mr. Skeet) puffs like a disgruntled steam engine, but it has been said many times that the Italians have lost their sense of connection with the constituency in Italy in which they are expected to vote. If the hon. Gentleman wishes to turn that round and to say that that applies to Britons abroad, he is at one with me in this argument.
      Mrs. Elaine Kellett-Bowman: Why does the Minister when referring to representatives of constituencies refer always to men? There are women representatives, too.
      Mr. John: I beg the hon. Lady's pardon. I am guilty of breaching the legal maxim that man equals woman.

      1519
      The hon. Member for Christchurch and Lymington said that a regional list system had been put forward. That system was turned down by a majority of this House in order to meet the argument "We in the West Country cannot be linked with another constituency because we have special fishing interests and need to be protected." Devon cannot be linked with Cornwall, because the problems are so dissimilar. Yet hon. Gentlemen who support that argument are now prepared to say that a person who is resident abroad and who may not have been back for many years to the constituency should be able to speak and to vote on the specific problems of the region.
      Mr. Roper: Will the Minister give the Committee his views about a further subsection which should be included? There is no reference in the amendment, as drafted, to an individual's intention to vote in any other way in this election. Going back to the example of the Irish voter, it would be possible for such a person, in the European elections, to vote in the United Kingdom as well as in Ireland. Does the Minister not agree that there is a gap in the amendment and that there should be a subsection (5) suggesting that he must assure the authorities that in direct elections he will not vote elsewhere?
      Mr. John: The problem does not involve double voting. There is provision in the Bill. The problem to which my hon. Friend refers relates to verification. Lest the hon. Member for Mid-Oxon mutters "Home Office", let me refer him to paragraph 14 of the memorandum submitted to the Select Committee, in which the Home Office specifically refers to the difficulties of verification which arise. I believe that, if this amendment were passed, the electoral registration officer might find himself in an invidious position. He would not have the ability physically to check in the same way as he would in this country. We would not have the same guarantee of validity in the overseas operation.
      That can be got round in two ways. The first is by placing a great burden on the Foreign and Commonwealth Office Overseas Posts. I know that the hon. Member for Mid-Oxon would not want that to
      1520
      happen. The second, as the Select Committee recommended, is to appoint an appropriate official under the law of the host country, verified by the applicant's employers, to do it. It is nowhere made explicit in the amendment, but I presume that some such scheme as that was what the hon. Gentleman had in mind.
      However, that would involve the electoral registration officer not only in a judgment of the validity of the applicant but, on some occasions, in a judgment of the validity of the official who has attested the application made by the person concerned.
      Sir Raymond Gower: Is the Minister really saying that these are valid objections? Is he saying that this country cannot do what is done by other countries, in permitting their nationals abroad to vote? Is he saying that that is beyond our ingenuity?
      Mr. John: Of course I am not saying that. I regret that my neighbour cannot mentally leap the Aberthaw Brook sufficiently to follow my argument. What I am trying to say is that we should have an awareness of these problems. I am not saying that they cannot be overcome, but we should consider them in rather more detail. Hitherto, it has always been the province of the Speaker's Conference to consider matters such as this, and it is for the Speaker's Conference to consider some of the problems still inherent in this case.
      Sir Raymond Gower: Nineteenth century.
      Mr. John: The hon. Member mutters "Nineteenth century". In fact, it was during the twentieth century that we adopted the Speaker's Conference in order to get away from nineteenth-century modes of determining electoral practices in this country. I hope that the hon. Member will not drag us back to the nineteenth century by his blindness on this problem.
      I turn now to the amendment in the name of the hon. Member for Harrow, East—after having been so politely interrupted. The hon. Member for Harrow, East was gracious enough to say that it included holidaymakers temporarily resident as well as those resident abroad on work. This, too, imports—it may be a desirable thing or an undesirable thing

      1521
      —a concept which hitherto has not been part of our system. The House must look at the amendment in the light of that fact. The 14 days' notice means that no true validation of applications to vote from abroad will be possible in so short a time as 14 days.
      The hon. Member for Bedford based his argument against the main amendment on his constituency experience. In his amendment, he referred to people who have been here for 10 years, or for 10 years out of the last 15 years. He will know that in such cases they would themselves have been entitled to apply for naturalisation and, therefore, to become British nationals. If their connection with the country is now as great as I ant sure it is in many cases, they would have applied for naturalisation. But the hon. Member will know that the Italian Government, in the particular case to which he has referred, is making arrangements about voting in EEC elections. My hon. Friend the Member for Farnworth (Mr. Roper), who mentioned physical return, should be aware that at any rate there is a proposal by the Italian Government that physical return to Italy would not be necessary in such cases.
      Mr. Skeet: I am sure that the Minister will recognise that for naturalisation to be taken out and for the whole thing to be completed an expenditure of about £100 is required. I thought that it would be very much easier to do it in the way that I have recommended.
      6.45 p.m.
      Mr. John: The hon. Gentleman will probably find that many of the people concerned will do so. I thought that the argument would be slightly different from ment would be slightly different from that, and that the younger people, the man, wife and child, might be naturalised, but that the aged mother who was perhaps admitted with them might not wish to give up her Italian nationality. However, I do not think that the problem is as great as the hon. Member supposes. That is why, with respect, his amendment is unnecessary.
      I should like to recapitulate very briefly, because I am sure that I may be misunderstood in this winding-up speech. That is a traditional feature. It is probably better if I encapsulate what I am saying.
      1522
      It is not that I have taken a fixed view against the extension of the franchise. Some of my hon. Friends may laugh. They started from a fixed position, like myself, but they have ended in the same position. What I am saying—and this is my fixed position—is that this ought not to be done without proper consideration by a Speaker's Conference, and because that proper consideration has not been given I believe that any major change or any change with a potential implication as major as this one should be discussed. That is why I cannot advise the House to accept the amendment.
      Mr. Hurd: That was a very sad speech. I thought that the speech of the former Minister of State, Privy Council Office, the hon. Member for The Wrekin (Mr. Fowler), on the last occasion, was a sad speech, but its repetition was even more dismal. The argument about Speaker's Conferences is wholly absurd coming from a Minister who has, within the recent recollection of us all, proposed to Parliament a much wider revolution in our affairs in the form of the regional list without any mention of a Speaker's Conference at all. It does not lie in the Minister's mouth to say that we cannot have this relatively minor and narrow change without a Speaker's Conference when he proposes that we should swallow an enormous whale of an electoral system without any mention of a Speaker's Conference.
      Having made clear that he will not accept any extension at all, the Minister criticised the amendment for not being wide enough to enfranchise people working all over the world. There is a common sense view that people in the Community have a claim to vote in elections within the Community. That is the common sense view to which, in an attempt to be moderate and helpful, we have pinned ourselves today. It does not lie with the Minister to say that we have not proposed a much wider amendment when he has made clear that he will not accept any extension at all.
      The Minister really dredged the barrel with his administrative arguments. Normally he would have deployed them with great force, but he could not do so on this occasion because the scheme originated in his Department. Therefore, he had to pick on a few minor difficulties about verification. Those difficulties exist. However, the whole tone of what the

      1523
      Minister said is in sad contrast to the tone of the officials who gave evidence on this matter. For example, on the point about verification, the official concerned, in reply to a question, said:
      "I think there is a difficulty for the electoral registration officers, but they normally have to apply their own judgment."
      That is not brushing aside the difficulty; it is approaching it in the tone of voice of someone who wishes to solve it.
      It is the business of Ministers not to drag back their officials but to spur them on. If the impact of the Minister on all Departments is to get them to move more slowly than they otherwise would move. Heaven help us.
      For these reasons we believe that there is a serious point here and a serious grievance to be redressed. We are very sad that in no way has the Minister gone any way to meet what we had already devised as a half-way position. We hope that the House will not take too much notice of his miserable advice and will support the amendment. We hope that even those right hon. and hon. Members, on both sides of the Committee, who would have liked it to go rather further will support it. It is at least a first step in a reasonable direction.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 149, Noes 160.

      Division No. 103]

      AYES

      [6.49 p.m.

      Adley, Robert

      Grant, Anthony (Harrow C)

      Morrison, Hon Peter (Chester)

      Arnold, Tom

      Grieve, Percy

      Neave, Airey

      Atkins, Rt Hon H. (Spelthorne)

      Grimond, Rt Hon J.

      Nelson, Anthony

      Atkinson, David (Bournemouth, East)

      Grist, Ian

      Nott, John

      Awdry, Daniel

      Grylls, Michael

      Page, Rt Hon R. Graham (Crosby)

      Banks, Robert

      Hamilton, Michael (Salisbury)

      Pardoe, John

      Beith, A. J.

      Hampson, Dr Keith

      Parkinson, Cecil

      Bennett, Sir Frederic (Torbay)

      Harrison, Col Sir Harwood (Eye)

      Pattie, Geoffrey

      Bennett, Dr Reginald (Fareham)

      Harvie Anderson, Rt Hon Miss

      Penhaligon, David

      Benyon, W.

      Haselhurst, Alan

      Peyton, Rt Hon John

      Boscawen, Hon Robert

      Hawkins, Paul

      Prentice, Rt Hon Reg

      Bottomley, Peter

      Hicks, Robert

      Pym, Rt Hon Francis

      Boyson, Dr Rhodes (Brent)

      Holland, Philip

      Rees, Peter (Dover & Deal)

      Braine, Sir Bernard

      Hooson, Emlyn

      Renton, Tim (Mid-Sussex)

      Brocklebank-Fowler. C.

      Hordern, Peter

      Rhodes, James R.

      Brooke, Peter

      Howell, David (Guildford)

      Rifkind, Malcolm

      Bryan, Sir Paul

      Howells, Geraint (Cardigan)

      Roberts, Wyn (Conway)

      Buchanan-Smith, Alick

      Hurd, Douglas

      Rost, Peter (SE Derbyshire)

      Butler, Adam (Bosworth)

      James, David

      Sainsbury, Tim

      Carlisle, Mark

      Johnson Smith, G. (E Grinstead)

      Shaw, Giles (Pudsey)

      Chalker, Mrs Lynda

      Jopling, Michael

      Shelton, William (Streatham)

      Channon, Paul

      Joseph, Rt Hon Sir Keith

      Shersby, Michael

      Churchill, W. S.

      Kershaw, Anthony

      Silvester, Fred

      Clark, William (Croydon S)

      Kimball, Marcus

      Sims, Roger

      Clarke, Kenneth (Rushcliffe)

      King, Tom (Bridgwater)

      Sinclair, Sir George

      Clegg, Walter

      Kitson, Sir Timothy

      Speed, Keith

      Cockroft, John

      Knight, Mrs Jill

      Spence, John

      Cooke, Robert (Bristol W)

      Knox, David

      Spicer, Michael (S Worcester)

      Cope, John

      Langford-Holt, Sir John

      Sproat, Iain

      Costain, A. P.

      Lawson, Nigel

      Stainton, Keith

      Craig, Rt Hon W. (Belfast E)

      Le Marchant, Spencer

      Stanbrook, Ivor

      Crawshaw, Richard

      Lester, Jim (Beeston)

      Steel, Rt Hon David

      Crouch, David

      Loveridge, John

      Steen, Anthony (Wavertree)

      Davies, Rt Hon J. (Knutsford)

      Luce, Richard

      Stewart, Rt Hon M. (Fulham)

      Dean, Paul (N Somerset)

      MacFarquhar, Roderick

      Stradling Thomas, J.

      Dodsworth, Geoffrey

      MacGregor, John

      Tebbit, Norman

      Dykes, Hugh

      MacKay, Andrew (Stechford)

      Temple-Morris, Peter

      Eden, Rt Hon Sir John

      Macmillan, Rt Hon M. (Farnham)

      Thomas, Rt Hon P. (Hendon S)

      Elliott, Sir William

      McNair-Wilson, M. (Newbury)

      Thorpe, Rt Hon Jeremy (N Devon)

      Emery, Peter

      Marshall, Michael (Arundel)

      Viggers, Peter

      Eyre, Reginald

      Mates, Michael

      Wainwright, Richard (Colne V)

      Fairgrieve, Russell

      Mather, Carol

      Walters, Dennis

      Fisher, Sir Nigel

      Maudling, Rt Hon Reginald

      Ward, Michael

      Fookes, Miss Janet

      Mawby, Ray

      Warren, Kenneth

      Fowler, Norman (Sutton C'f'd)

      Maxwell-Hyslop, Robin

      Weatherill, Bernard

      Gardiner, George (Reigate)

      Meyer, Sir Anthony

      Williams, Alan Lee (Hornch'ch)

      Gardner, Edward (S Fylde)

      Miller, Hal (Bromsgrove)

      Wood, Rt Hon Richard

      Gilmour, Sir John (East Fife)

      Mills, Peter

      Glyn, Dr Alan

      Monro, Hector

      TELLERS FOR THE AYES:

      Goodhew, Victor

      Morgan, Geraint

      Sir George Young and

      Gower, Sir Raymond (Barry)

      Morrison, Charles (Devizes)

      Mr. Anthony Berry.

      NOES

      Abse, Leo

      Ashley, Jack

      Atkinson, Norman

      Allaun, Frank

      Ashton, Joe

      Bagier, Gordon A. T.

      Archer, Rt Hon Peter

      Atkins, Ronald (Preston N)

      Bain, Mrs Margaret

      Barnett, Guy (Greenwich)

      Grant, John (Islington C)

      Pendry, Tom

      Bates Alf

      Hamilton, James (Bothwell)

      Powell, Rt Hon J. Enoch

      Bean, R. E.

      Harrison, Rt Hon Walter

      Price, William (Rugby)

      Biffen, John

      Hooley, Frank

      Radice, Giles

      Blenkinsop, Arthur

      Horam, John

      Richardson, Miss Jo

      Boardman, H.

      Hughes, Rt Hon C. (Anglesey)

      Roberts, Albert (Normanton)

      Booth, Rt Hon Albert

      Hughes, Robert (Aberdeen N)

      Robinson, Geoffrey

      Bottomley, Rt Hon Arthur

      Hughes, Roy (Newport)

      Rodgers, George (Chorley)

      Bradford, Rev Robert

      Hunter, Adam

      Rooker, J. W.

      Bray, Dr Jeremy

      Hutchison, Michael Clark

      Roper, John

      Brown, Hugh D. (Provan)

      Jackson, Colin (Brighouse)

      Ross, Rt Hon W. (Kilmarnock)

      Buchan, Norman

      Jay, Rt Hon Douglas

      Ross, William (Londonderry)

      Budgen, Nick

      John, Brynmor

      Ryman, John

      Butler, Mrs Joyce (Wood Green)

      Johnson, James (Hull West)

      Sever, John

      Callaghan, Jim (Middleton & P)

      Judd, Frank

      Sheldon, Rt Hon Robert

      Campbell, Ian

      Kerr, Russell

      Skinner, Dennis

      Carmichael, Neil

      Lamborn, Harry

      Smith, John (N Lanarkshire)

      Carson, John

      Lamond, James

      Snape, Peter

      Cocks, Rt Hon Michael (Bristol S)

      Latham, Arthur (Paddington)

      Spearing, Nigel

      Coleman, Donald

      Lee, John

      Spriggs, Leslie

      Conlan, Bernard

      Lewis, Ron (Carlisle)

      Stallard, A. W.

      Cook, Robin F. (Edin C)

      Lipton, Marcus

      Stewart, Rt Hon Donald

      Cox, Thomas (Tooting)

      Litterick, Tom

      Stoddart, David

      Craigen, Jim (Maryhill)

      Loyden, Eddie

      Stott, Roger

      Cryer, Bob

      Luard, Evan

      Surmmerskill, Hon Dr Shirley

      Cunningham, Dr J. (Whiteh)

      Lyons, Edward (Bradford W)

      Taylor, Mrs Ann (Bolton W)

      Davies, Bryan (Enfield N)

      McCartney, Hugh

      Thomas, Jeffrey (Abertillery)

      Deakins, Eric

      McCusker, H.

      Thomas, Ron (Bristol NW)

      Dean, Joseph (Leeds West)

      McDonald, Dr Oonagh

      Thompson, George

      Dempsey, James

      Maclennan, Robert

      Tinn, James

      Doig, Peter

      Madden, Max

      Tomlinson, John

      Dormand, J. D.

      Mallalieu, J. P. W.

      Wainwright, Edwin (Dearne V)

      Duffy, A. E. P.

      Marshall, Dr Edmund (Goole)

      Walker, Terry (Kingswood)

      Dunlop, John

      Marshall, Jim (Leicester S)

      Watkinson, John

      Ellis, John (Brigg & Scun)

      Marten, Neil

      Watt, Hamish

      English, Michael

      Mendelson, John

      White, James (Pollok)

      Ennals, Rt Hon David

      Millan, Rt Hon Bruce

      Whitehead, Phillip

      Evans, Fred (Caerphilly)

      Miller, Dr M. S. (E Kilbride)

      Whitlock, William

      Evans, Ioan (Aberdare)

      Moate, Roger

      Wigley, Dafydd

      Ewing, Harry (Stirling)

      Molloy, William

      Williams, Rt Hon Shirley (Hertford)

      Fernyhough, Rt Hon E.

      Molyneaux, James

      Wilson, Alexander (Hamilton)

      Fitch, Alan (Wigan)

      Noble, Mike

      Wiison, William (Coventry SE)

      Flannery, Martin

      Ogden, Eric

      Winterton, Nicholas

      Foot, Rt Hon Michael

      Orbach, Maurice

      Wise, Mrs Audrey

      Garrett, W. E. (Wallsend)

      Orme, Rt Hon Stanley

      Woodall, Alec

      Gilbert, Rt Hon Dr John

      Ovenden, John

      Woof, Robert

      Ginsburg, David

      Owen, Rt Hon Dr David

      Wrigglesworth, Ian

      Golding, John

      Paisley, Rev Ian

      Gould, Bryan

      Palmer, Arthur

      TELLERS FOR THE NOES:

      Gourlay, Harry

      Park, George

      Mr. Joseph Harper and

      Gow, Ian (Eastbourne)

      Parker, John

      Mr. Ted Graham.

      Grant, George (Morpeth)

      Parry, Robert

      Question accordingly negatived.
      7.0 p.m.
      Mr. Jay: I beg to move Amendment No 195, in page 12, line 8, leave out from 'expenses' to end of line 10 and insert:
      provided that in no case shall a candidate's election expenses exceed the election expenses permitted to a candidate in elections held under the Representation of the People Acts; and'.
      This amendment refers to electoral expenses in elections for the EEC Assembly held in the United Kingdom. It is as well to realise that we are, after all, discussing a Bill that controls elections held in the United Kingdom. Nothing that the Bill can do can affect elections for the EEC Assembly held outside the country.
      The simple proposition put forward in the amendment is that the same control and the same limitation on a candidate's
      1526
      electoral expenses should apply in elections for the EEC Assembly as apply in elections in the United Kingdom for the present Parliament.
      Under the Representation of the People Acts it is already the fact that the expenses that a candidate is allowed to incur are larger in proportion to the size of the electorate. That would already be provided for under the present Acts as they now operate.
      The Committee has, in effect, decided by a majority that in the matter of the electoral register the same rules should apply for those elections conducted within the United Kingdom as for ordinary parliamentary elections for this Parliament. The Committee has, in my view, rightly decided that, and I am arguing that the same principle should apply to the electoral expenses of candidates, that is to

      1527
      say, that the limitation should be on similar principles to those that apply now.
      The need for clear and well-understood restrictions on expenses is all the greater because of the peculiar arrangements which I understand will apply in these elections for the EEC Assembly. I do not think that the Minister will deny that EEC funds are now to be made available to the parties which are conducting the elections for the EEC Assembly. We would like to know how far the full facts can be explained. I suppose that funds will be made available from the EEC budget to the party organisations in the EEC Assembly and then allocated in some way from that central EEC party body to whatever organisation is supporting the same party's candidates in this country.
      This is a novelty. I think that many people will look at it rather narrowly to ensure that abuses do not arise under this system. in which not merely are we to have public funds used to finance party campaigns but to have what we can scarcely have had in this country before—funds from overseas used to influence United Kingdom elections. That is a primary reason why some control is necessary.
      The whole Committee will probably agree that it would be undesirable for there to be any suggestion that the EEC elections will be conducted in an atmosphere of extravagance or even anything that could be called corruption. It is not wholly fanciful to suggest that public opinion in this country associates extravagance and dubious financial practices with some of the EEC institutions. For that reason, if these elections are to take place and if they are to be seen to be reputable, it is all the more essential that there should be strict control.
      Later today, if there is time, we shall deal with the question of the salaries of members of the EEC Assembly, which are also important and in many ways relevant to what we are now discussing. There should be some relation between the salaries received and the expenses paid. Public opinion in the referendum, for instance, and on many occasions recently in British politics, has been worried by the extent to which money apparently emanating from the EEC
      1528
      through its information or propaganda budget, and even more from the European Movement—whose sources of funds are always rather mysterious—has been used to influence public opinion and British politics.
      Mr. Alan Lee Williams: My right hon. Friend the Member for Battersea, North (Mr. Jay) says that the sources of funds of the European Movement are mysterious. Will he indicate in what way he thinks they are mysterious?
      Mr. Jay: I do not know the sources of its funds. I do not know where they come from or who the subscribers are. I do not know whether they are individuals, or from what parts of the world the sources are available. If my hon. Friend the Member for Hornchurch (Mr. Williams) has this information I shall be very glad to have it.
      Mr. Roper: The accounts of the European Movement are published and are available. I am sure that my right hon. Friend the Member for Battersea, North (Mr. Jay) will, having made those comments, take the next opportunity to have a look at the accounts.
      Mr. Jay: If the accounts of the European Movement cover all the sources of the funds of that movement, I shall be very interested to see them. It would be going rather far on the amendment if we were to pursue the details of the funds of the European Movement. It is clear that the funds of the EEC itself, which has what it calls an information budget of between £5 million and £10 million, have been used for political purposes.
      I do not think that the hon. Member for Farnworth (Mr. Roper) will deny that those funds have been used to lavish hospitality on journalists, business men, trade unionists and, no doubt, on representatives of various Parliaments in Western Europe. Very large sums have been spent over the last 10 years in this way. There may be a case for or against that, but if public money is to be used on this sort of scale for political propaganda there is a great need for regulation and scrutiny. This is after all something that has not been done in our system in this country.
      Mr. Dykes: Does the right hon. Gentleman agree that, given these budgetary

      1529
      disbursements from the European Parliament and EEC funds, the Socialist Group apart from all the promotional efforts that it may make for direct elections in all the member States, is the largest group and includes the British Labour contingent? Presumably it will be making money available to the British Labour Party, and that would presumably include those who oppose the idea of direct elections and the Community as well as others who welcome direct elections in the conventional sense. In that case, does the right hon. Gentleman accept that under his argument a substantial amount of money would be equally available to those who wish to put counter arguments?
      Mr. Jay: I do not know whether the hon. Gentleman is saying that these funds for conducting electoral campaigns will be made available only to those who subscribe to the election manifesto of some Euro-group of Conservatives, Liberals, Socialists or whatever. If that it true—and we should like to know on what terms the funds will be made available—it will arouse even greater anxiety in this country about the conduct of these elections.
      However, in addition to that it is desirable at some stage in the discussions to have some idea not merely of how we are to regulate campaign expenses but of what the relationship will be of campaign expenses to the actual salaries or allowances that are paid to the Members of the EEC Assembly.
      As I understand it, there is at present no straight salary. I am sure that hon. Members who go to the European Parliament will correct me if I am wrong. I understand that there is an allowance of £50 a day, which is presumably paid on the condition that the Member actually attends the Assembly on that date. One reads reports—perhaps my hon. Friend the Minister can confirm them—that a salary is now proposed of about £25,000 a year for future members of the Assembly. I should like to know whether that is true, whether the facts are known and what sort of an Assembly we are now proposing should be elected.
      If the so-called dual mandate is to continue and if Members are to receive that sort of salary and a parliamentary
      1530
      salary from this House, that is an extraordinary situation which members of the public will not think altogether desirable. They will oppose Members of Parliament trying to do two jobs and earning about £30,000 a year plus allowances. It seems to me even more undesirable that we should have to discuss this Bill without knowing the facts. If the facts are available I should like to hear them tonight.
      Mr. Thorpe: I am genuinely trying to understand the right hon. Gentleman's argument, but I shall not raise the question of salaries because it does not seem relevant to his amendment. Is he suggesting that there should be a global total of expenses for candidates, that is, a global total as one would expect in an ordinary United Kingdom parliamentary constituency? Or is he saying that there should be a calculation on the same basis as now exists, namely, of so many pence per elector, which for a 500,000 electorate would be 10 times that of a 50,000 electorate? If the right hon. Gentleman wishes to prevent money channelled from foreign sources being used centrally for election expenses for individuals, there is nothing in his amendment to take account of that.
      Mr. Jay: The present system is that there is a minimum payment plus so much per head of the electorate in the constituency. I think that the sum is 6p per head in an urban constituency and 8p in a rural constituency. My amendment would ensure that the same system would apply, but the actual sum would be much larger, because each candidate would be representing or canvassing a much greater number of voters. That seems reasonable and fair.
      The main point behind the amendment is that there should be some sort of regulation which, in the absence of very strong arguments to the contrary, would employ the same principle as applies in General Elections at present. These elections will be taking place within the United Kingdom. We need to bear in mind the factor of public opinion and to make it clear that there will be no extravagance, and that excessive salaries and expenses will not be made available either to candidates or to Members of the Assembly.
      7.15 p.m.
      Mr. Dykes: I hope that the right hon. Member for Battersea, North (Mr. Jay) will not be discomfited or surprised if I say that I found a great deal of what he said quite reasonable. One of the points that worries those who have a range of opinions on the Community, on the European Parliament and on direct elections, and so on, is the question of finances. When I say that I do not mean it in an exaggerated or hysterical sense. I do not accept for one moment the rumours that are swirling about without any authentic source that a huge figure has been established for the salary in the European Parliament by some existing working party or whatever. It has not, as far as I can tell, but I do not want to give the wrong impression by leading hon. Members to think that I am still a Member of the European Parliament. I am not, but my understanding is that no specific proposal has been made or is about to be made in any official way within the European Parliament or anywhere else.
      Ideas have been put forward by politicians from other countries where, for all sorts of reasons, not least the differential economic performance over many years, salary levels are higher than they are here.
      Mr. Jay: Does the hon. Member not think that we should know the facts and not merely have ideas before proceeding to the final stages of the Bill?
      Mr. Dykes: Yes I do, except that there are no facts, because there cannot be such facts. On the logic of the situation it is wrong of the right hon. Member to suggest that there is a sinister absence of facts and to complain excessively about it.
      Mr. John Mendelson: Although no final view may have been formed on this matter, is the hon. Member aware that the Members of the German Bundestag are determined that the salaries in question should be at least as high as theirs, and does that not take us into very high figures?
      Mr. Dykes: That matter does not come strictly within the terms of the amendment, but I shall respond briefly to the point. It is correct that in a series of informal and wholly non-definitive discussions in one of the European Assembly
      1532
      Committees—it was not a standing Committee of the Parliament—some German politicians said that the salary in the Parliament should be as high as that for the German Parliament. That takes us to the figure of about £25,000, which includes expenses but most of which is salary. The sum could be higher. That is one figure emanating from one source, but it is in no way a final figure. It is misleading for those who use this opportunity to attack direct elections, the European Parliament and the Community to keep harping on this.
      I, too, would find it wholly wrong, for all sorts of reasons, for us in this Parliament or those getting involved in European direct elections to think in terms of high salaries.
      I was glad that the right hon. Member for Battersea, North reassured the right hon. Member for Devon, North (Mr. Thorpe) about the terms of his amendment, because it is written in a confusing way. It appeared prima facie to me that he had in mind a global total the same as for one national constituency, and that would have been wholly unacceptable and impractical. Even if one employs a rough and ready pragmatic "10 times" principle to embrace a European constituency of 500,000 electors instead of a United Kingdom constituency of, say, 50,000 electors, I wonder whether that basis would be sufficient.
      That does not imply that I am in favour of lavish expenses or extravagance. That is always a danger with regard to international bodies and certainly when we are constructing the first set of international elections in the strict sense of the word.
      It is important for the Committee to be realistic about the expenses that will be needed by the time direct elections come about. I hope that it is in order to say that I myself drafted New Clause No. 3, referring to the specific expenses that might be devoted to candidates with regard to broadcasting facilities. I concede that it is hardly likely to be considered as a proper, respectable and conventional part of this Bill to consider something along those lines, but I originally drafted the new clause so that the issue could be aired.
      I believe that the principle that we have established in this House, whereby domestic broadcasting arrangements are

      1533
      covered through inter-party committees rather than by any legislative process, must generally have substantial approval from hon. Members. There is no reason why this should not continue for European elections.
      In airing the issue we bring to the public, as well as to hon. Members, the whole range of opinion about European elections. I hope that even those hon. Members who are against direct elections will agree that when the time comes a most important informative and educational function will fall on candidates of whatever party.
      One of the unique features of these elections must undoubtedly be that when the candidate is on the platform or promoting his or her case—I use that word not in any disagreeable sense—a good slug of time will be taken up in explaining the constitutional, Community and structural arguments as they relate to Europe and European party politics, of whatever grouping.
      If that is so, surely the educational function must have adequate resources at its disposal, bearing in mind the large European constituencies that will eventually be drawn up by the Boundary Commission.
      The economy of scale will provide a certain capacity to save money, but equally the large size of the operation, and the fact that the campaign may be of six weeks' duration, will call for greater resources. If, under the terms of a later amendment, there are sub-agents as well as a European agent, the sub-operations will also need additional resources. All of them must be carefully controlled and tightly monitored. The public must be reassured that they are wholly legitimate expenses, though none the less substantial.
      Mr. John Lee: The hon. Gentleman is realistically accepting that this is a campaign which could well be rather remote from the electors. That means that the kind of door-to-door or street-to-street canvasses that we associate with domestic elections would be impossible. That being so, the kind of expenses associated with the door-to-door distribution of leaflets—one of the major sources of expenditure for a candidate in a domestic election—will not be necessary or pos
      1534
      sible. Does that not indicate the possibility of reduced expenditure?
      Mr. Dykes: That is a point of view. Many people contend that the European campaign will involve much less door-to-door canvassing. I wonder whether that is so. I believe that it will depend on how long the campaign will be. I do not think that it ought to be longer than a national campaign of three weeks. It will also depend on how it is organised and operated by energetic candidates, energetic political parties and energetic agents.
      If it is possible, as a result of the arrangements, to move around the European constituency faster than one is able to move around the normal pro rata area on a national basis, it would be possible and, indeed, wholly desirable to achieve a lot of door-to-door operations.
      At the same time I must concede that a kind of "Americanisation"—I use the word with extreme hesitation—could come into the matter. I am not specifically speculating on how this might eventuate in practical terms, but it would be possible to envisage a situation in which candidates would not be able to move around by motor car because it would be impossible to cover an area the size of 10 national constituencies. In that sense, again, the case for greater resources pro rata, albeit under tight control, can be established. I would have thought that the public would go along with that.
      There is a view that the public are not interested in the European Community and will not be interested in these European elections. I believe that they will be interested, provided only that the candidates themselves are energetic and unself-effacing in putting forward positive views with regard to the elections once the legislation has been passed by this House.
      In that sense I believe that they will strike a chord in the mind of the public about what this is all about. That will bring home the central arguments and must equally call for proper resources.
      I very much agree with the right hon. member for Battersea, North that any money emanating from Europe must be visibly monitored, that the full knowledge of its sources and usages must be available at all times, and that it must

      1535
      be tightly controlled. This could probably be done along domestic lines, perhaps along the lines of an amendment like this. I am not saying that I approve of the amendment or that I would support it, because I am not sure about the text. I should need to think a lot more about that.
      There is another reason why I would argue along the lines of the right hon. Member for Battersea, North—although we disagree about the ends involved. Given the financial control that needs to be constructed for election expenses, the more those expenses are provided through the public service by way of voucher services and services in kind—rather than a cash distribution available for the discretionary use of the political groups—the more I shall personally like it. That sentiment fits in well with the thoughts behind the right hon. Gentleman's amendment.
      7.30 p.m.
      Mr. John Mendelson: My right hon. Friend the Member for Battersea, North (Mr. Jay) has moved this amendment in very moderate terms, as is his custom. Nevertheless, I think that we should try to underline the extreme political importance of this debate before we come to any decision.
      Any right hon. or hon. Member who has been a member of a Speaker's Conference in the past will know that normally these matters are discussed at such conferences in very great detail. The debates go on for many weeks. I have always regretted, and regarded as archaic, the fact that we do not publish the proceedings of the Speaker's Conference because these would be very instructive for our whole system of politics.
      Now that we are entering a larger system of politics—assuming that we pass this Bill—we are always being told that in other EEC countries it is accepted that Britain's major contribution to the wider system will be in the organisation of domestic politics. It would be useful if all information were made available. Very often these problems take more time in the Speaker's Conference than any other subject discussed. The reason is that we are dealing never just with technicalities in election expenses but with the very stuff of politics.
      1536
      There are new dangers in the EEC elections. I do not want to convey the impression at home and abroad that there is any kind of pettiness in our approach to this problem. I do not worry particularly about the amount of money my colleagues earn at parliamentary assemblies abroad. I hope that my right hon. Friend is not worried about the allowances paid either. Being a member of a parliamentary assembly abroad is a tedious task involving long hours and expensive meals and accommodation. I am not the least bit worried that those who are prepared to do the job should get the proper allowances—indeed, even generous ones. If people are wanted for the job, the rate must be paid.
      It would be contradictory if we who are waging a major campaign against having European elections in Britain were to complain about the system of double membership. If we have our way, double membership will continue ad infinitum. We cannot have it both ways.
      What worries me is purely and exclusively the political implication of what we are discussing tonight. When a Speaker's Conference discusses expenses it is discussing interests. Parliament is meaningless without discussion of interests. It is not dishonourable that people should represent interests. In fact, Parliament would be just a repetition of the Oxford Debating Society if they did not. Obviously interests must be represented in Parliament if it is to be a real Parliament.
      If the interests represented are within the confines of the United Kingdom the way in which these interests play a part in politics is solely within the control of the United Kingdom Government and Parliament. What will happen if we go beyond the arrangements for the United Kingdom and have political groups forming themselves which are, of necessity, representing interests that lie beyond the frontiers of this country? It is not my business to consider the interests of the Bavarians, for example. There are plenty of people there who will look after their interests. I shall confine myself exclusively to the effect of these interests on the United Kingdom people.
      If we have international political groupings based on a Community of nine

      1537
      States we shall have international interests that will form across the borders of the United Kingdom. Perhaps a strong farming interest will be formed. I have an interesting group of farmers in my constituency who press their interests on me from time to time. That is their job. But I believe that they do not represent the interests of the consumer very well; they represent the interests of producers. Inevitably, I find myself often representing two views—theirs because they are my constituents, and those of the consumers. That does not lead to easy or harmonious meetings but somehow we manage.
      In this context the final decisions are made. Supposing chemical or farming interests formed across the frontiers. Many of these would be interests with strong capital behind them and they would be providing large sums of money to further their interests—
      Sir Anthony Meyer: I have been listening very carefully to the forceful remarks of the hon. Member for Penistone (Mr. Mendelson). However, the points that he is making are not covered effectively by the amendment. The amendment will deal only with restrictions within the United Kingdom and it will have no effect whatever on reducing the scale of international pressure groups or the interests that will make a further call on the European Parliament. If this is so, would it not be better to make the objective of the amendment the ensuring of full disclosure, rather than theoretical restrictions on the interests?
      Mr. Mendelson: I shall come to the point about disclosure shortly. In many ways this amendment provides for the first time a vehicle for raising all the points that I am introducing into the debate. Although it does not lead to an international consortium, the impact of raising funds on an international level might be used indirectly to influence the elected Members in the United Kingdom. It would mean therefore that if the interests on an international level had strong capital backing and organised themselves they could in many ways and over a period through the media, television and radio decide to influence elections in this country.
      1538
      What are the elements of control at our disposal? We must consider these before we part with the Bill. It is no good accepting the legislation and then worrying about this matter at a later stage.
      On the point about control, the United States, which is a federal country, has been fighting a losing battle on control for many years. That has occurred even within one federation. It is no good being doctrinaire about it, because some difficulties reside in the fact that we shall not have a federation. It would be much easier to deal with this matter if we were setting up a federation.
      Of course there are protestations from Ministers and from the Leader of the Opposition that they want nothing to do with confederation. I do not include some of my hon. Friends, who are honourable men. No doubt we have honourable women who take the federal view, though I cannot see one in the Chamber. There is no suggestion that my hon. Friend the Under-Secretary of State at the Home Office takes the federal view.
      The sort of hybrid system that we are setting up will, according to the Foreign Secretary's latest speech, which has my full approval, continue for a very long time. We shall be living in this twilight for many years. What is happening to the element of control? We must have from the Government firm proposals for stringent controls of the financing of elections and electoral expenditure and additional apparatus of control before we part with the legislation. That is the significance of the amendment and my right hon. Friend has done the House a service in raising all these matters.
      Mr. Marten: The hon. Member for Penistone (Mr. Mendelson) touched on the speech of the Foreign Secretary in Brussels this week about the federal question which is behind the Bill. I agree with what the Foreign Secretary said and I hope to hear the same sort of speech from my Front Bench so that Britain can be united in its opposition to federalism and so that our partners know where they stand with this country whichever Government is in power.
      My hon. Friend the Member for Harrow, East (Mr. Dykes) said that candidates in the European elections, if they ever come, would need additional expenses in order

      1539
      to explain the new constitution with which British voters are not acquainted. I do not believe that to be true. We have been in for five years and I can explain the constitution of the Common Market without incurring any extra expenditure.
      However, my hon. Friend was right in one respect. My constituency is a fairly average size with about 75,000 electors and at the last General Election I held 60 public meetings. I had to go round to many villages. Before my hon. Friend on the Front Bench became the Member for Mid-Oxon I had many more villages in my constituency. He pinched a lot of the desirable ones, which is why he is now sitting so happily on the Front Bench.
      The Euro-constituencies will have electorates of about 500,000—the size of about seven or eight parliamentary constituencies. If the wretched candidates want to do their job properly, they will have to hold 350 or so public meetings, and I agree that this would be pretty expensive.
      This is the last occasion on which we shall be able to exercise control over this issue so I am sure that the Minister will accept the amendment willingly and prevent the need for a Division.
      The salary levels of Members of the European Assembly have been discussed and I have been trying to get at the heart of this matter for many months, so far without success. I have learned that the final decision will be taken by the Council of Ministers. That is a relief because we shall be able to exercise the veto on excessive salaries. I know that my right hon. Friend the Leader of the Opposition is very much against Members of the Assembly receiving excessive salaries.
      We should attack the Council of Ministers for dragging its feet on this issue, as it is on one or two other matters. The Council wants the Bills in the United Kingdom and the other four countries which are dragging their feet even more than we are, on the statute book before the salaries of Members are arranged.
      7.45 p.m.
      The question of salaries is of great importance, though I admit that it is not relevant to the amendment. I was just touching on it as I was passing. The points raised by the right hon. Member
      1540
      for Battersea, North (Mr. Jay) are much more relevant and I have the answer to one of them.
      I asked in December last year how much money from official Community sources was being given to the respective political parties in the United Kingdom for the preparation for direct elections to the European Assembly. A Foreign Office Minister replied:
      "The Assembly made provision in its 1977 budget"
      —I mentioned this subject when we debated that budget—
      "for the distribution of 2 million units of account—about £830,000 in sterling—to the political groups in the European Assembly on the basis of the strength of their representation. The distribution to the parties in each group is for decision within that group. The Assembly's provision in the 1978 budget is for … about £3 million to be distributed on the same basis."—[Official Report, 8th December 1978 Vol. 940, c. 814.]
      There is a jump from £830,000 to £3 million between 1977 and 1978.
      I wanted to know how much of that money had gone, for example, to the Conservative Party and how the party was spending it. I want this money monitored. The Community has no money other than that which it raises by taxation on member States. Part of that money is our taxpayers' money and it is a scandal that we are not able to investigate this matter rather more than we have.
      Mr. Spearing: Will the hon. Gentleman confirm that the figure was £3 million not for the conduct of the elections, but for education and preparation—what some of us call a softening-up campaign—and that the electoral sums may be considerably greater?
      Mr. Marten: Exactly. That money was for the preparation of direct elections to a European Assembly.
      Mr. Roper: Was not the £3 million put in the budget by the Assembly and approved by the Council when it was expected that the elections would take place in 1978? Does it not include all the sums coming to political parties during 1978, including those available for the election campaigns?
      Mr. Marten: That point was raised in our debate on the Comunity budget, but we did not get a satisfactory answer.

      1541
      What worries me is that the amount has increased from £830,000 to £3 million. If the elections are postponed, as I am sure they will be, until 1979, will there be a transfer from one budget or one chapter to another? Shall we get more money in 1979?
      The important point to remember is that unless the Community starts dragging its feet over the entry of Greece, we might as well wait until the Greeks are members and all have our elections at the same time. That would mean a delay of another year, but it would be much more convenient.
      Mr. Jay: Surely the hon. Gentleman is not suggesting that if the elections are not held in 1978—it is now highly improbable that they will be—the £3 million will be made available to the British political parties to do whatever they like with it? Surely we should know whether they receive the money.
      Mr. Marten: That is why I tabled the Question. There should be proper monitoring of the Community's proposals. I have a feeling that the money will be spent. Various things are already going at full blast. We all receive, for example, the stuff that pours through the mail from the European Community office in London. We are told the most extraordinary things. We are told to whom grants have been given. The other day a grant of £35,000 was given to the National Coal Board for it to investigate the case of someone who had the end of his finger cut off.
      We receive the most extraordinary lists of grants. It is extraordinary that the Community should pay for the National Coal Board to consider such a case. My hon. Friend the Member for Mid-Oxon must read these lists. Even my hon. Friend, with his well-known love of the Community, must find some parts of the lists extraordinary.
      The extravagance already exhibited by the Community office in London is enormous. An article in one of the weekly papers states that the Press is now reaching the state of Euro-boredom through the sheer volume of papers that pours out of the Community. It is inevitable that there will be a cascade at election time. All that could be most unhealthy.
      1542
      The right hon. Member for Battersea, North has said that the Community has used its funds to take great parties to Brussels to see what is going on. I recall a debate in Committee when we debated a communication from the Community. It was one of the few occasions when that happened. We investigated the budget and we found that the Community was trying to get opinion-formers over to Brussels in their droves. That is going back to the Goebbels technique before the war. That is exactly what Goebbels used to do. Some hon. Members who are grinning are perhaps too young to remember. As a young man I remember seeing the opinion-formers. The great national newspapers—I shall not mention which ones—went over to Berlin. We now have the Common Market doing much the same. In fact, it is using exactly the same technique.
      Sir A. Meyer rose—
      Mr. Marten: I am not saying that the Community is Nazi, or anything like that. At any rate, I am not saying that yet. All that I am saying is that the technique that the Community is using is exactly that which it has stolen from the—
      The First Deputy Chairman (Sir Myer Galpern): Order. I have allowed a wide discussion, but I think that the hon. Member for Banbury (Mr Marten) fully realises that we are not discussing the techniques of the EEC. We are discussing a straightforward amendment. I am sure that the hon. Gentleman realises that he is well wide of the amendment.
      Mr. Marten: I agree with you whole heartedly, Sir Myer, and I apologise. I was provoked—
      The First Deputy Chairman: Order. I think that the hon. Gentleman wanted to tell us something about his youth or childhood.
      Mr. Marten: I shall do that outside the Chamber, Sir Myer.
      Sir A. Meyer rose—
      Mr. Marten: No, I have moved on.
      Sir. A. Meyer: I shall not take my hon. Friend from his argument.
      Mr. Marten: I am out of order already.
      Sir A. Meyer: I shall bring my hon. Friend back into order. My intervention relates to the expenditure allowed to each candidate. As I listened to my hon. Friend, my existing admiration for him knew no bounds. I know of the very firm hold that he has on the affections of his constituents. I am astonished that he contrives to maintain his approach without in any way attempting to influence the opinion of the opinion-formers within his constituency—for example, the editor of the local newspaper and the local schoolteacher, those who are in a position to influence others. Also included must be the leaders of his local party. Does my hon. Friend say that within his constituency he makes no attempt to use the funds provided to him by Parliament to bring round to his point of view the opinion-formers?
      Mr. Marten: No, I do not do much of that. I am elected without much of that sort of thing. I do not know what taxpayers' money I use, except, perhaps, the free postage.
      I am worried about the way in which the Community is spending money now. I am worried that it might do the same thing in the direct elections unless the Committee accepts the amendments.
      I have had a long enough chat about these matters, Sir Myer, and I shall sit down.
      Mr. Spearing: The amendment, which deals with election expenses, is one on which the whole Committee seems to be agreed and is a matter of principle. As far as I can detect, there is no dissent. I take it that whatever may be said by my hon. Friend the Member for Farnworth (Mr. Roper) or by others, especially from the Government Front Bench, unless some major argument is about to be put forward there is agreement that in principle there should be some restriction on the election expenses of candidates for the election period for the EEC Assembly.
      If those elections occur, will the election expenses be pro rata to the expenses available for our own parliamentary elections, namely, about five times or six times that amount? How do we achieve that? I think that the amendment provides the answer, but it may be that other hon. Members think differently. I believe that it is self-evident, and so far no one
      1544
      has challenged it. I do not think that anyone will do so.
      We must probe a little further the election expenses conventions which have been built up in the United Kingdom and which have been taken too much for granted. My hon. Friend the Member for Penistone (Mr. Mendelson) rightly drew to our attention the proceedings of the Speaker's Conference. I did not know that a significant proportion of the time of the Conference was spent dealing with that very matter. On reflection, I am not surprised. That fact alone shows how important our discussions and the amendment could become if the elections ever come to pass.
      We have lived with our own election expenses and we have grown up into that system. Most of us have fought seats that we have not won before coming to this place. We take almost for granted the structure that we enter. However, if we have elections to the EEC Assembly, the type and form of the elections will be set in a different context. There will not be the familiar context of which we have experience. It may be that the way in which the elections are held will be very different and that some of us may be taken by surprise.
      It has been said that a great deal of the money, if not all of it, might come from public sources. If that is correct no one has denied that that is the intention, and we have had confirmation from my hon. Friend the Member for Farnworth in an intervention concerning the £3 million—and if it is implemented, a precedent will be set. That might be claimed to have some indication as to how the country should react to the Houghton Report. There is significance in that respect alone, let alone for anything else.
      To some extent we have already had experience of the sort of election that is proposed for the EEC Assembly. I refer to the referendum campaign, in which public money was made available to the contending "parties". It was made available from the United Kingdom Exchequer and not from the EEC. I suspect that the issues in the European elections, if they take place, will not be so dissimilar, although I know that there are differences. There were no specific

      1545
      candidates, but there was a larger organisation in each area. From that point of view the European elections would not be so dissimilar.
      Mr. MacFarquhar: I imagine that my hon. Friend will be going on to explain that remark. It would seem that there will be great dissimilarity between the referendum campaign and the direct elections. In the referendum campaign there was a contest, broadly, between those who were in favour of staying in Europe and those who were not. In the direct elections there will be a contest between the different parties and their representatives. Some of the Labour representatives may be in favour of being in the EEC while some may be against the proposition.
      8.0 p.m.
      Mr. Spearing: I did qualify my remarks. I was about to say that, while there are dissimilarities in that respect, the similarities that I want to draw to the attention of the Committee will be there. They are similarities in respect of information, the media, what is being talked about and what is being produced for the electorate about the EEC. I do not think that anyone would deny that during the period immediately preceding the referendum and during the campaign almost anything that was concerned with Europe, meaning the EEC, was news. In other words, public opinion was heightened by information and stories of all sorts which were not necessarily directly related to the election or to election issues but which were related to our friends in Europe. The Committee will know that I am interested in waterways. At that time, great interest was evinced by certain people who saw me about European waterways. Any European angle was introduced to heighten interest in the campaign.
      Because the issues will not be focused on the everyday domestic experiences of the electorate there will be a great element of the sort of thing we had during the EEC referendum at the time of the EEC elections. That is almost inevitable. Therefore, funds devoted to the effective election campaign will often be outside the formal campaign. We have conventions about that with which, by and large, we live. There are accusations about advertising campaigns before
      1546
      the General Election starts and we have our disagreements about that. I suggest that the equivalent of those disagreements about the pre-election campaign and about what resources are available will be important at the time of the EEC election campaign.
      It is true that the amendment may not be able to deal with this difficulty. I do not say that that is a defect of the amendment; it is not. The point is that we do not have the machinery to deal with such a situation. We have done it by conventions, largely limited by the fact that the money for such pre-election propaganda is limited. In the case that I am talking of it is not so limited. We have experience of that fact all the time. There is the continuing information fund of the EEC. This will be greatly intensified during an ejection period.
      My hon. Friend the Member for Horn-church (Mr. Williams) is connected with the European Movement and I understand his point of view. What he, perhaps, does not understand about some of us being a little worried over this is that his voluntary movement, with its published accounts and the rest, can fit end-on, service, and be the executive arm of a much larger publicity machine paid for by public funds from the EEC. That is something that we cannot stop even if we wish to.
      I suggest that before the election campaign this sort of election machinery and campaigning will be in high gear. The trouble is that it will be running on public money. Almost everything will be oriented towards the EEC, whether we like it or not. Those of us with particular views about that organisation will be placed at a disadvantage because most of the information coming from the EEC will carry a message almost opposite to that which we shall be putting out.
      The Committee should take cognisance of that fact. Even if a majority in the Committee is at the moment in favour of the EEC and of getting involved in these elections, that does not mean that the same circumstances will apply in future. Once we are in, and once these conventions and expenditures are settled, it will be difficult for another House of Commons to get to grips with the problem.

      1547
      The other matter relating to election expenditure that I wish to raise in the context of this important debate—and it will be much more important than the preceding debate—is the question of broadcasting. Again, for the election period, this country has produced certain conventions applying to broadcasting—conventions which broadly work. It is only in the past 15 to 20 years that broadcasting has played a major part in election campaigns. The fact that there has not been great public and parliamentary debate about the conventions not working shows that, generally speaking, they have worked. This is by virtue of the "in kind" contribution that has been mentioned. The channels of television and the radio programmes provide opportunities on an agreed basis for parties and candidates. This is what we have grown into.
      I understand, in relation to the EEC, that the BBC is combining with the broadcasting authorities of the other members of the EEC and proposing that there should be half-hour transmissions every day of items culled from all over the EEC, edited by a unit in London and put into the main EEC languages. This programme would be transmitted on tape or by private wire to the countries concerned. The identical matter will be broadcast in the various languages of the EEC. The proposal is that this will be tried out—surprise, surprise—in the period preceding the first elections to the EEC Assembly.
      This may be news to hon. Members but it is information that I have confirmed with the BBC. I do not say that it will happen. It is a proposal. There will be no charge on United Kingdom public funds and no charge on the BBC if the proposal goes through. The only additional expense would be for the editing unit in London, because the cost of the source material and of the broadcasting would be absorbed in the existing arrangements of the broadcasting authorities. The additional charge of the editing unit might be carried by a grant, half of which would come from the EEC Commission and half from the EEC Assembly.
      I do not say that this proposal will actually materialise. It is only a proposal. Clearly, it will have an effect upon the election campaign. If the material is to
      1548
      be common, there will be a balance of coverage from all over the EEC. We shall hear what the Danes, the Germans, the French and the Italians are saying. What is being said in Britain will be but one-ninth of the total coverage. If that is so, people will get a view of the election campaign in the EEC which will not reflect the campaign as it would be in the United Kingdom alone. Therefore, the view of what is happening in the parties and in the pan-European political set-up would be entirely different from that which would obtain if we were relying upon United Kingdom coverage of the EEC campaign in the United Kingdom.
      It may be that the coverage would be supplemented by United Kingdom coverage of the EEC campaign. No doubt it would be, although that is not binding and certain, because once this unit is set up people will tend to say "That is the EEC's lot, let them get on with it." If that were to happen, people would complain about unfairness, because it might be that those elected to the EEC would have benefited as a result of there being a different type of media coverage in the United Kingdom from that given by, say, the French authorities.
      I shall not pursue that point much further, because much of it is speculation. That is the point—we do not know what may eventuate. This has a bearing on election expenses, because so far our system has been based on entirely different suppositions. Those suppositions will cease to operate if these elections get going.
      Mr. Lee: We are all grateful to my hon. Friend for the information that he has given, alarming as it is. Has he had a chance to reflect upon the possibility that this may circumvent the statutory regulation of independent broadcasting providing for political balance in domestic elections, since the stuff would be predigested and pre-prepared before presentation to this country and would be likely to be slanted one way? That is something for which our concept of political balance does not provide.
      The First Deputy Chairman: Order. Before the hon. Member for Newham, South (Mr. Spearing) replies to that intervention, I would ask him to relate his remarks to the amendment. He was coming to the end of his speech so I

      1549
      did not want to intervene, but I do not want him to pursue this aspect any further.
      Mr. Spearing: I shall not do so, Sir Myer, but I say to my hon. Friend the Member for Birmingham, Handsworth (Mr. Lee) that I do not make such an accusation. I think that the material would be fairly edited, but on the basis of pan-European views and not of those of the United Kingdom. The House of Commons must be careful about these matters.
      The amendment deals with what is in the control of the House of Commons and what we can reasonably do within our own experience of elections in this country. That is why I support it, and I hope that the Committee will at least accept it in principle. I have been trying to point out what even the amendment cannot do, but I hope that, nevertheless, the Committee will say that even if there are things that the amendment cannot do, it should at least be supported, because it puts the House of Commons in the saddle and gives it the sort of control that every decent and democratic person in the country wants to see.
      Sir A. Meyer: We must bear in mind that whatever we do today will almost certainly be valid only for the first election to be held to the European Parliament, and that it would be realistic to think in terms of promoting action within that Parliament if we wish to enshrine permanently any safeguards over the amount of money that candidates may spend.
      Much to my surprise, I think that if the right hon. Member for Battersea, North (Mr. Jay) puts his amendment to a Division, I shall find myself in the Lobby with him. I think it desirable to impose, and publicly to impose, limitations on the amount of money a candidate may spend. I was reassured that the right hon. Gentleman made it plain that he is thinking in terms of a realistic total—that is to say, a total related to the number of electors in each constituency. That being so, my inclination, unless I hear further arguments, will be to support him.
      I think that it is understood on both sides of the Committee that the amendment will not deal with what is perhaps the larger problem, the total expen
      1550
      diture of the central organisations of the parties in the election campaign. It may be that the expenditure of individual candidates will be only an inconsiderable element in deciding the result, but the amendment can do nothing to control the expenditure by the individual parties.
      8.15 p.m.
      I wish I shared the view of the hon. Member for Newham, South (Mr. Spearing) that publication of the course of the campaign in other European countries—news of what is happening in Denmark, Eire and Italy, for example—will have a profound effect on the attitudes of the British electors. I remain rather of the opinion that, unless the election coincides with a General Election, it will take on very much the character of local elections and become the opportunity for people to express their content or discontent with whatever happens to be the ruling party at the time.
      I cannot imagine that our people will vote according to what has been said by the leader of the Social Democratic Party in Denmark. I wish that it were so, and I speak as one of the small band of unashamed, unabashed federalists in the House of Commons. I will stand up and be counted on that.
      My inclination is to support the amendment, bearing in mind that the safeguards we are erecting are very impermanent, and expressing a regret that so far in the debate no one has thought in terms of the kind of action that will be necessary within the European Parliament, when it is set up, in order to ensure that the elections in future are conducted on the sort of lines that I think most of us would like to see. We do not want to see money speaking too loudly in this or any other election. For these reasons, I suspect that I shall find myself supporting the amendment in the Lobby.
      Mr. Roper: I will resist the temptation to follow some of the directions which you have already ruled out of order, Sir Myer, but I want to take up one point which is only indirectly connected with the amendment. It has been referred to. This concerns the funds which the Assembly has voted to political parties. The figure which caused shock to my right hon. Friend the Member for Battersea, North (Mr. Jay) and to the hon. Member for Banbury (Mr. Marten) was,

      1551
      I believe, £3 million. But that is £3 million for about 300 million people, or about 1p per head of the population of the EEC. Put in perspective, that seems a not unreasonable amount of money, and it is available to all of the political parties.
      Recently, the Labour Party produced an interesting statement—I did not agree with all of it—for submission to the party conference. It dealt with the Common Market. I indicated to the general secretary of the party that I thought it reasonable for him to submit a bill to the Confederation of Socialist Parties of the Community for it to pay the cost of publishing that statement. However, he felt that, in spite of the financial difficulties in which the Labour Party sometimes finds itself, he could probably find other resources rather than accept the money which was available for such purposes.
      I do not want to follow immediately what my hon. Friend the Member for Newham. South (Mr. Spearing) said about broadcasting. There are certain problems which I hope that the Home Office and the political parties are considering about broadcasting during the election. I am sorry we do not have the chance to discuss New Clause No. 3, put down by the hon. Member for Harrow, East (Mr. Dykes) and dealing with the allocation of time. The allocation of time will produce certain problems in an environment that is different from that of a General Election, when, I believe, the time is allocated according to candidates and parties and the existing size of political parties in the House of Commons. This aspect requires consideration.
      Like others, I have enormous sympathy for the principle behind Amendment No. 195. It is obviously essential that there should be some effective measure of control over spending by candidates in the election. One of the things that we can claim to be proud of in this country is the effective control that we have had over expenditure in elections in general, and the principles which have stood us in good stead in national elections should be applied where appropriate at the European level as well.
      But I have some difficulty in following the detail of what my right hon. Friend
      1552
      the Member for Battersea, North proposes, and I hope that I shall not take up too much time by first looking at the arithmetic in the light of the Representation of the People Act 1974. The amendment says:
      " … in no case shall a candidate's election expenses exceed the election expenses permitted to a candidate in elections held under the Representation of the People Acts; "
      We operate under the 1974 Act as far as election expenses are concerned. My first thought was of the problem that the Boundary Commissions might have under the amendment in designating what are borough and county constituencies when we get to the question of European constituencies. But I have given it more thought, and now the problem does not seem quite as difficult.
      Euro-constituencies will be made up of a number of Westminster constituencies, some of them borough and some county. Those in borough constituencies would be permitted the allowance that is already appropriate for a Westminster borough constituency, and those in county constituencies would be permitted the rate allowed for Westminster county constituencies.
      There is a problem of hybridity of an unusual kind. But it is not an impossible problem. The 1974 Act limits our expenses in county constituencies to £1,075 plus an additional 6p for every six entries on the register. The limit for borough elections is £1,075 with an additional 6p for every eight entries on the register.
      It would be helpful to look at examples of a typical constituency and a Euroconstituency and see what would be the effect of applying the formula in the amendment. For ease of calculation let us take a county constituency of 60,000 electors. That is a little light compared with some, but not too light. There would be a fixed sum of £1,075 with an additional £600, being the 6p for each six electors. There would be 60,000p which amounts to £600, making the total of £1,675.
      Let us scale the matter up to a Euroconstituency which I shall say has an electorate of 600,000. In that case there would be £1,075 plus £6,000 as the proportional share of expenses. That makes a total of £7,075. By doing that exercise we have scaled up the electorate tenfold

      1553
      but scaled up the limit only fourfold. We have scaled up the electorate from 60,000 to 600,000 but, if my arithmetic is correct, we have scaled up the limit only from £1,675 to £7,075. That is a ratio of four to one compared with a ratio of electors of ten to one.
      Mr. MacFarquhar: That is the intervention that I wished to make in the original statement by my right hon. Friend the Member for Battersea, North (Mr. Jay). Surely he should accept that the base sum should also be scaled up along with the electorate.
      Mr. Roper: That might be what is intended, but on my reading of the amendment it does not allow for the scaling up of the base sum. It would bind us to the figures in the 1974 Act.
      I am not disagreeing with my right hon. Friend the Member for Battersea, North on the principle of the amendment. That is absolutely right. I am sorry that the hon. Member for Flint, West (Sir A. Meyer) is not here since he said that he wished to hear the arguments against the amendment. There seems to be some practical reason why this amendment is defective. I hope that the Minister will be able to comment on the problems that have arisen. We may want to consider this matter again at Report stage.
      My right hon. Friend the Member for Battersea, North will understand the logic of my argument, but I shall have some difficulty in voting for the amendment as it stands. There may be some economies of scale—the hon. Member for Harrow, East referred to some of them—but I do not believe that the economies of scale in going up from 60,000 to 600,000 will be great enough to compensate for the limit on expenses being increased four times rather than 10 times. I hope that the Minister will be able to say something to help the Committee on this matter.
      I assume that candidates will be provided with facilities such as free post, which is available to candidates in Westminster elections. Whether that is available or not, there will be the cost of printing which will, if not increase tenfold, increase considerably, particularly as it will be the printed word rather than the individual candidate on the knocker that will be used to communicate ideas.
      1554
      There will also be increases in the cost of meetings, travel and polling day organisation.
      These elections will be of great importance. It will be important that candidates have sufficient—although not lavish—resources to involve and inform their electors.
      Mr. Madden: Does my hon. Friend the Member for Farnworth (Mr. Roper) envisage that candidates will publish their own election manifestos or merely distribute manifestos which have been prepared by the party organisations within the European Assembly?
      Mr. Roper: I think that different parties and different candidates will do different things. We shall have to see what candidates and parties do when we are nearer the election. I shall respond more seriously to the question. I should imagine that in many cases the situation would resemble that in our county council elections. Part of the manifesto will be common to all candidates of that party, part will be common to candidates of that party in this country and a third component will contain the candidate's own point of view. I should not be surprised if something like that happened.
      I hope that when my right hon. Friend replies he will look closely at the terms of his amendment, particularly in the light of Section 1 of the Representation of the People Act 1974. The House does not believe that his intention is considerably to reduce the per capita funds that are available for each candidate.
      Mr. MacFarquhar: I return briefly to the essence of the amendment. It is designed to preserve what everyone considers to be an essential aspect of the British electoral system—tight control of funds. At present they are relatively modest, to the extent that when Americans come here and ask us what we spend on elections they do not believe us. I am sure that no one objects to the basic proposition in the amendment.
      As I said in an intervention a few moments ago, I should like my right hon. Friend to explain whether, in the context of his proposal, he expects that the base sum would be multiplied in relation to the number of constituencies. I think that that would deal with the matter

      1555
      raised by my hon. Friend the Member for Farnworth (Mr. Roper).
      Before we hear the replies from the Government Front Bench and front my right hon. Friend, it is essential to grasp, especially in the light of the remarks of my hon. Friend the Member for Newham, South (Mr. Spearing), just what these election expenses are for. As I say, I believe that the aim has been to keep expenses reasonably small in the British context, but the other essential, and the reason why we control them so tightly, is the wish to maintain a fair balance in party expenditure.
      I feel that my hon. Friend the Member for Newham, South has failed to grasp those essentials. If I may say so, he seems to be fighting not the European elections in prospect but the referendum campaign in retrospect. If I read it aright, the aim of my right hon. Friend's amendment is to achieve a balance between the parties fighting the European elections.
      In this country those parties will be the Conservative Party, the Liberal Party, the Labour Party, one or two other parties and, perhaps, several independents. The aim of the amendment, surely, must be to keep expenses fair as among those various parties or groupings.
      Looking at the amendment in that light, I suggest that it is irrelevant to consider what my hon. Friend the Member for Newham, South said with reference to massive expenditure on BBC organised programmes about what is happening in Denmark and elsewhere, or even massive expenditure on publicity about what is happening in the EEC in general. We are not fighting the referendum campaign, and there is no reason to suppose that the material which came out of Brussels—if that were its source—in the massive quantities feared by my hon. Friend would be pro-Conservative, which he and I would regret, or pro-Labour, which we might welcome but which would not, in fact, be in consonance with the fairness to which we both aspire.
      8.30 p.m.
      Mr. Spearing: On the face of it, the point that my hon. Friend makes is valid, and I did not deal with it as I went
      1556
      along, but what really concerned me was that a great deal of the material would, perhaps quite openly, be pro-federalist, and that is another issue. I do not believe that any party in this country is yet pro-federalist.
      Mr. MacFarquhar: If that is my hon. Friend's objection, I think that it is a chimera. He knows my position on that issue. He knows that I and some members of my party, as well as others who feel as I do, are very much in a minority on this issue. Moreover, the idea that the EEC will be allowed by President Giscard d'Estaing, our Prime Minister and others to produce during the election campaign material that preached federalism is utterly unlikely.
      Furthermore, that has nothing to do with the election campaign. I repeat that the election campaign will be conducted between Conservative and Labour candidates fighting the European elections. Federalism will not be an issue. Indeed, I suspect that most candidates of all parties will be anti-federalist.
      Mr. Budgen: The hon. Gentleman says that federalism will not be an issue. Is it not possible, at least in this country, that the European elections will split the great parties? It may well be that candidates will not be divided upon present party lines as in the House of Commons but that the division will be between those who are pro-federalism and those who adopt a more Gaullist solution, in which case the prospect of influence by the media from Europe could be extremely important.
      Mr. MacFarquhar: That may well be an issue in the future when the federalist papers for Europe are written, but I do not believe that it will be an issue in the forthcoming elections. I certainly hope that it will not, because, as a federalist, I should expect all the material emanating from Brussels, controlled by a Council of Ministers virtually all of whom are anti-federalist, to be totally opposed to my point of view.
      People will not fight these elections on the basis of federalism or anti-federalism. The hon. Gentleman knows that. No one will vote for a candidate because he says he is a federalist, or, at least, very few will. They will vote for a candidate

      1557
      in certain areas because he is a Labour candidate and they know what Labour candidates and Labour Members of Par-liament stand for.
      Mr. Jay: If I understand my own amendment correctly, what it does is attempt to achieve fairness not between parties but between candidates. I suggest that we conduct the debate on the assumption that if a candidate wishes to stand as a federalist or an anti-federalist, Conservative or Labour, or as a pro-Marketeer or an anti-Marketeer, it will be possible for him to do so. Therefore, the considerations which my hon. Friend is advancing have some relevance, and we must not assume that there will be only Conservative and Labour candidates.
      Mr. MacFarquhar: I did not assume that. Indeed, if my right hon. Friend looks at Hansard tomorrow he will see that I referred to other parties and other groupings. But if he now puts forward the chimera of a federalist candidate running in his area of London and, because he is a federalist candidate, massive funds suddenly swelling his coffers uncontrolled by the amendment. I must say that that is an utterly unlikely event.
      Mr. Jay: Unlikely.
      Mr. MacFarquhar: I hear my right hon. Friend agree that that is so. I do not wish to prolong this debate, but I thought it worth while to make the distinction which exists between a General Election campaign with party candidates, political manifestos and all the rest of it, and a referendum campaign which is pro or anti-Europe. It is not the same thing.
      Mr. David Howell: The hon. Member for Penistone (Mr. Mendelson) was right to remind us that election expenses are at the heart of politics. This is not a mere technical matter. We are dealing with what traditionally was the stuff of politics. This is right, and this debate has shown a serious and sensitive approach to that issue and reflected the hon. Gentleman's accurate perspective.
      It is true that over the years, through a long series of enactments, the expenses of candidates have been curbed by various legislation. The days of Eatanswill and of firkins of beer being trailed round Guildford High Street are, I am
      1558
      afraid, all past. We now have the expenditure of our national elections emerging in a different form through the national party organisations—which is sometimes a formidable task—and in a variety of ways in advertising on national television, in national literature and in propaganda of various kinds. That is the way the system works in our own elections.
      In the forthcoming European Assembly elections there will be parties, but some of the parties may have titles or names that are not normally associated with our national elements. Some may stand on platforms that have nothing to do with Europe, or with its shape and size. There may be National Front candidates and Socialist Workers' Party candidates. We do not know. It is hard to say. In all cases expenditure will be made by the national party organisations.
      In addition, we should not forget that every party that puts up candidates will qualify for certain expenditures at the cost of the Community or the British taxpayer. We are not yet clear where these funds will come from. If there is to be free passage, and if it is to be on the scale of parliamentary elections as at present, it is estimated to be worth £4,500 per candidate per Westminster seat. Therefore, we are talking of a minimum of £30,000, free passage for every candidate who puts up in one of the new European Assembly seats. On top there will be broadcasting time available for those parties that field a sufficient number of candidates to qualify. We shall need to examine closely how that will work and what parties will be entitled to air time on the broadcasting and television channels.
      Let us not disguise from ourselves the fact that substantial benefits will be available in terms of free publicity to any candidates who put up in these elections. This raises the question, with which we shall be dealing in later amendments, about the hurdles that candidates will face before they put up for these elections.
      These are important matters, and the debate has swirled round them. You, Mr. Murton, have kindly let that happen—or should I say that the Chair has let that happen? But those matters are not in the amendment and the amendment is not really about those matters. The amendment is about the expenses of candidates,

      1559
      and I should like some more illumination on that topic. As the hon. Member for Farnworth (Mr. Roper) reminded us, these expenses are now governed by the Representation of the People Act 1974, which lays down very carefully for parliamentary candidates the limits to which they may spend.
      Therefore, I think that we are all agreed that there must be a limit. The Government's original Green Paper on direct elections said that there should be a limit on candidates' expenses, as did the Select Committee. I certainly agree that it makes sense to have some kind of limit.
      In due course the Government will be required to bring forward regulations which we shall be able to debate under the affirmative resolution procedure, because by then, we hope, the Government will have tabled on Report the amendments that they have promised in order to enable us to do that. We shall then be able to debate precisely what proposals the Government put forward on the question of the limit. But before that time comes, it is very valuable and useful that we have had this opportunity to air our views on the whole subject.
      I come to the intentions behind the amendment. Like other hon. Members, I am not entirely clear what the right hon. Member for Battersea, North (Mr. Jay) had in mind. If it was that we should multiply up the provisions for Westminster seats, the arithmetic through which the hon. Member for Farnworth went would be roughly right. I have some similar calculations on paper.
      If we are talking about a constituency of 500,000 electors, that is, seven or eight times the size of a Westminster constituency, if we multiply up the existing provisions, what do we get? We get seven or eight times £1,075, which is the amount provided in every county constituency for a candidate, plus the rate provided for every Westminster constituency, again multiplied up. That rate for a county constituency is exactly 1p per elector. In a borough constituency it is slightly less than 1p per elector.
      Doing one's sums, one finds that all this comes to between £12,000 and £14,000—depending on whether there are seven Westminster constituencies or eight West
      1560
      minster constituencies in the new European seat.
      Was it the intention of the right hon. Gentleman to argue that that was the sort of sum that he had in mind for each candidate as the maximum for his expenses for the European Assembly elections? I do not know. If it was, by the standards of 1974, when the Act was passed, possibly it is a reasonable figure. I do not know. It is very hard to tell how the elections will be fought. By the standards of 1978, however, it is not a reasonable figure, because since the Act has been on the statute book prices have risen—I imagine that that includes the prices and expenses involved in campaigning—by, at present, 85·3 per cent. By the time we get to the European elections, in 1979, I have no doubt that there will have been a 100 per cent. increase on the prices of 1974.
      Mr. Jay: Does the hon. Member agree that that argument would presumably also apply to the next General Election in this country and that there may have to be some adjustment anyway?
      Mr. Howell: That is a valid point. I do not know whether the Minister would want to comment on that matter now. Certainly the 1974 increases, which upgraded the 1969 figures, are themselves now hopelessly out of date. Therefore, if one follows through the principle of the right hon. Gentleman's intention, as I understand it, and adjusts for inflation, one finds that one is talking of a sum between £20,000 and £25,000 per candidate as the limit on expenses. That is if I have what the right hon. Gentleman intended aright.
      I sum up by saying that I agree with the proposition that we have developed over the years that the expenses of a candidate should be restrained. There should be a limit, as the Green Paper and the Select Committee recommended. I also agree with the idea of a formula related to the number of electors. That does not take me on to saying that I would support the amendment, for the obvious reason that if we were to put the amendment into the Bill, we would freeze expenses at the 1974 level.
      8.45 p.m.
      That is why I counsel my hon. Friend the Member for Flint, West (Sir A. Meyer) not to support an amendment

      1561
      that would freeze expenses under the Representation of the People Act 1974, which would mean at the 1974 level. That would be a mistake. Nevertheless, it is right that there should be a limit and that we should devise a formula. We should now need to hear from the Government whether they see things in this way, and how influenced they will be in their judgment by the question where the money comes from.
      We should like to know a good deal more about that, and about the point that discussions have reached on the sources of money, from the Community or from the British taxpayer. Do the Government also accept that this is the right kind of formula? Will they therefore be putting forward regulations which we can debate under the affirmative resolution procedure, when the necessary amendment has been made by the Government on Report, as promised, to enable the House to reflect the view, which on the whole has been expressed in this Committee with some unanimity today, that there should be a limit and that there should be some kind of formula?
      The Under-Secretary of State for the Home Department (Dr. Shirley Summerskill): The amendment in the name of my right hon. Friend the Member for Battersea, North (Mr. Jay) has received a general welcome in the debate, in terms of the principle behind it. I was hesitant to criticise the amendment for not being totally clear in its meaning, because my right hon. Friend is a Fellow of All Souls, but during the debate many hon. Members have made that criticism; therefore I hope that he can now accept that the amendment does not perfectly express what he felt. Perhaps after hearing the comments on it he will agree with that criticism.
      I welcome the opportunity to discuss the question of candidates' expenses. As my hon. Friend the Member for Belper (Mr. MacFarquhar) said, it is most important that no candidate or party should secure an unfair advantage over another by virtue of money that can be spent, and that there should be no suspicion of any unfairness in the control over candidates' expenditure. It is quite right that the House should have assurances on this important matter.
      1562
      As hon. Members will know, the limits on parliamentary election expenses are set out in Section 64(2) of the Representation of the People Act 1949, which is amended from time to time to allow for inflation. Expense limits were last increased in February 1974 by the Representation of the People Act 1974, and there is no power to vary the permissible amount of expenses by order or any other method. Primary legislation is needed on each occasion. The Act can, of course, be applied in regulations to other, non-parliamentary, elections.
      Under the present expenses limits £1,075 is allowed for each constituency together with an additional 6p for every six entries in the register of electors in a county constituency, or 6p for every eight entries in a borough constituency. Clearly, inflation has reduced the real value of these allowances and the Government will need to consider introducing legislation at an appropriate time for the General Election.
      Paragraph 2(3)(a) of Schedule 1 to the Bill says that the Secretary of State may make regulations in connection with the conduct of Assembly elections, including limitations on candidates' expenses. Paragraph 2(4) goes on to say that these regulations may apply, modified as necessary, any provision of the Representation of the People Acts or any other enactment relating to parliamentary or local government elections.
      I assure the House that it is our intention to base the limits on candidates' expenses, which will be set out in the regulations which we shall draw up on the limits for parliamentary candidates.
      The precise format of this depends on the timing of the elections. If they were to be held now I doubt whether it would be sufficient simply to apply the limits that were set out for the 1974 elections. It would be necessary to apply them with some increases, so as to set a reasonable level of expenses for candidates. But if they are held very soon after a General Election they could be based on the amounts that had been determined for the General Election without modification.
      Mr. Roper: I tried to develop in what I said earlier the thesis that they are made up of two parts. There is a fixed

      1563
      part, which is £1,075 for one Westminster constituency, and a part which varies according to the size of the electorate. The second part is quite clear as far as the European constituency is concerned.
      The Committee would appreciate information from the Minister on what she envisages the fixed part would be. Does she think that it would be the £1,075 for the whole of the European constituency or that the figure would also be multiplied according to the number of Westminster constituencies in the European constituency?
      Dr. Summerskill: My hon. Friend the Member for Farnworth (Mr. Roper) has posed the question which will have to be decided between now and the laying down of the regulations and which will have to be decided by Parliament when the regulations come before the House of Commons. We intend that there should be consultation with the political parties in advance from now on until the regulations come before the House of Commons so that we arrive at an appropriate formula. This was laid down in the White Paper.
      There are several ways of approaching the question. For example, one way of proceeding would be to calculate separately the expense limits for each parliamentary constituency comprised in one Assembly constituency, or the total could be calculated treating the Assembly constituency as a single unit. This could produce a much lower figure.
      One of the purposes of the debate was to find out from hon. Members what their views were on the matter, and several hon. Members have dealt with this. As I have said, we shall continue to have consultations to see what is the best way in which the expense limits can be set out in the regulations that will be laid before the House of Commons.
      It is our intention to amend the Bill on Report so that an affirmative resolution of both Houses of Parliament is required to approve the regulations. I should make it clear that the limits that will be proposed will be the maximum that individual candidates may spend or that may be spent on individual candidates. Fears have been expressed about moneys being provided from elsewhere, but those are not relevant, providing that
      1564
      the provision that I have just given is adhered to, that is, that the limits are those which now pertain in a parliamentary election. In fact, the rules and regulations will be very similar to the existing ones in a parliamentary election.
      Fears have also been expressed about expenditure of money from outside sources. Nobody except the agent can incur expenditure on behalf of the individual candidate in his name. The regulations will be very similar to, or the same as, the ones that apply at the moment in a parliamentary election.
      Regulations under the Bill will be drawn up to apply the provisions of the Representation of the People Acts to control broadcasting during the election period about five weeks before polling day. These restrictions will relate mainly to programmes in which candidates take part. Similarly, there will be regulations concerning leaflets aimed at the support of particular candidates. Party political broadcasts will presumably be covered by arrangements similar to those that exist in elections at the moment, that is, arrangements between the parties and the BBC and the IBA.
      I think that I have shown that the principle behind my right hon. Friend's amendment is acceptable, but the wording is slightly unclear and does not state on what basis the calculation of the maximum is made.
      Mr. David Howell: Will the hon. Lady say a word about the free postal delivery provision and whether the funds for it will come from the Community or the British taxpayer? Does she accept that it is in the slight lack of clarity that we have asserted exists in the amendment that a great deal of this debate lies, because, as she said, there is a considerable difference between a calculation for a whole constituency for one candidate having just £1,075, and the calculation for a European constituency which multiplies up the expenses for each separate constituency? That is a very important issue on which, while there may be an agreement on the principle of there being a formula, there is no agreement as between the lower figure and the higher. I urge that we should consider the higher figure.
      Dr. Summerskill: One of the purposes of the debate was to find out the Committee's views on expenses. Several hon. Members expressed a view on limits and went into some detail. We shall be consulting the political parties.
      As for postage, the White Paper says that the Government will propose that there should be a free postal delivery for candidates of election addresses on the same basis as for parliamentary elections, so I hope that my right hon. Friend will accept the undertaking that I have given about the regulations which have been drawn up and will feel able to ask leave to withdraw the amendment.
      Mr. Jay: I do not dispute my hon. Friend's judgment that my amendment is not technically perfect. That is a common misfortune among all Back Benchers. If I understand my hon. Friend aright, she accepts the principle that each candidate's expenditure must be limited and that the same limit will apply to all candidates. Secondly, she said that she will introduce an amendment on Report to ensure that the regulations which finally lay this down are subject to affirmative resolution in the House. They will not be amendable, but they will at least be subject to affirmative resolution.
      I ask her, however, for an assurance that the formula she accepts will at least coincide with the figure which will be available for the candidate's expenses for these elections and will, whatever the exact numbers, bear some rational relationship to the figure which will be used for ordinary parliamentary elections in this country, allowing for the different sizes of the constituencies.
      I think that ordinary people will want to know that the same principle is being applied and that, allowing for the different size of the constituencies, the figure will be similar if not identical. If my hon. Friend will give me that assurance, I do not think it will be necessary to press the amendment.
      Dr. Summerskill: I feel that I can certainly give my right hon. Friend that assurance. As I said, the limits on candidates' expenses will be based on the limits for parliamentary candidates.
      Mr. Roper: I wish to put a further point to the Minister, because this appears
      1566
      to be the last opportunity the House will have to debate the detail of this matter. The regulations will come to the House, but in an affirmative order that we shall be unable to amend. We must therefore give my hon. Friend some indication now as to our thinking on the alternative schemes that she outlined—the aggregate of the expenses maximum for each Westminster constituency, or taking one amount as a base and scaling it up to the whole constituency.
      I gather from the intervention by the hon. Member for Guildford (Mr. Howell) that on balance he prefers using the individual Westminster constituency limits and aggregating them for the European constituency. To some extent, my right hon. Friend the Member for Battersea, North (Mr. Jay) seemed to give the same general proposition his assent. I am not absolutely convinced yet that we need to make a clear choice between these two extremes.
      It seems to me that there are certain economies of scale in a European election as compared with a Westminster election. My hon. Friend should again look very carefully at this matter before she goes to the maximum figures which, as the hon. Member for Guildford said, if it were to be scaled up for inflation as well, would produce a figure of between £25,000 and £30,000 per candidate in a constituency.
      9.0 p.m.
      We should look very carefully before we find appearing a figure of about £20,000-plus per candidate. We need to do so to protect what has been a tradition in this country—that election expenses are kept down to reasonable levels. In spite of what has been said, I believe that we should look very carefully at the economies of scale before accepting automatically the principle of aggregation.
      Even though there will be no chance for the House to amend this provision before the regulations are finally laid, I hope that those regulations will be made available in draft form so that the House will have an opportunity of commenting upon them to the Home Office.
      Mr. Spearing: The Committee is drawing to a fairly precise conclusion on a wide-ranging debate. That is in the best tradition of the Committee, and we have

      1567
      my hon. Friend the Minister to thank for that.
      My hon. Friend might well wish to lay other regulations concerning the conduct of the elections. There is a later amendment about whether they will be draft or final regulations. Can she tell the Committee whether she intends to table regulations concerning the obligation on candidates and agents to return their accounts in respect of these elections? If she is not going to do so, can she say why? That is part of the procedure concerning limits which is, of course, traditionally related to this issue. There may well be other regulations that my hon. Friend wishes to table in due course. I do not think they are covered in full detail in the Bill. Will my hon. Friend, either now or on Report, give an indication of the sort of things that we might expect?
      As was mentioned earlier, this is the last opportunity that the Committee may have to discuss matters which, in the event of any trouble or dispute, could be of great and crucial importance.
      Dr. Summerskill: I can assure my hon. Friend that accounts will have to be produced in exactly the same way as they are produced in parliamentary elections. Regulations will be laid to that effect.
      Mr. Jay: In view of my hon. Friend's assurances, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Mr. David Rowell: I beg to move Amendment No. 186, in page 12, line 10, at end insert—
      '(3A) Notwithstanding the provisions of subparagraph (3) above, the Secretary of State shall in any such regulations provide that in any provision relating to the subscription of the nomination paper every nomination paper shall be subscribed by two electors as proposer and seconder, and by ninety-eight other electors as assenting to the nominaton, and not more than twenty of those so subscribing may be registered as electors in any one partliamentary constituency wholly or party comprised in the Assembly constituency for which the nomination is made.'
      The Chairman (Mr. Oscar Murton): With this we may take the following amendments:
      No. 185, in. page 12, line 10, at end insert—
      '(3A) Notwithstanding the provisions of subparagraph (3) above, the Secretary of State
      1568
      shall in any such regulations provide that in any provision relating to the timetable of proceedings at the election polling shall take place between the hours of 7 a.m. and 9 p.m. on the day of the election.'
      No. 187, in page 12, line 10, at end insert—
      '(3A) Notwithstanding the provisions of subparagraph (3) above, the Secretary of State shall in any such regulations provide that in any provision relating to the deposit a person shall not be validly nominated unless the sum of £1,500 is deposited by him or on his behalf with the returning officer at the place and during the time for delivery of nomination papers.'
      No. 188, in page 12, line 10, at end insert—
      '(3A) Notwithstanding the provisions of subparagraph (3) above, the Secretary of State shall in any such regulations provide that in any provision relating to the election agent an election agent of a candidate may appoint one deputy agent to act within each parliamentary constituency wholly or partly comprised in the Assembly constituency for which the candidate is nominated.'
      Mr. Howell: I should like to put some points before the Committee with regard to Amendments Nos. 186 and 187, which have a common aim, before referring to Amendments Nos. 185 and 188.
      Again we are dealing with matters which at first glance may look technical but which raise extremely important issues concerning not merely the conduct of elections generally in this country but the way in which this particular election will turn out.
      The broad aims of Amendments Nos. 186 and 187 are, of course, to deter frivolous candidates. Mention was made earlier that candidates who stand in the European Assembly elections will get considerable free publicity. From the Minister's reply we do not know how the free postage provisions will work out exactly, but she said that the free postage would probably be on the same basis as for Westminster parliamentary elections.
      If that is so, assuming that there are seven Westminster seats for one European Assembly seat, it gives each candidate the facility of £31,500 worth of free postage straight away. If there were a party that fielded candidates in all 78 constituencies in Britain—as I am sure there will be—that party would have available over £2 million worth of free postal expenditure to use in sending out its addresses to electors.

      1569
      It is important to make provisions to ensure that we do not discourage candidates from standing in the election. On the other hand, all those who are frivolous and simply seeking free postage should not be presented with such an obvious bargain if they are just rushing into the election without serious intent. The prizes are very big and the proposals in the amendment are designed to ensure that there are real disincentives to grabbing these prizes.
      In Amendment No. 186 we propose a procedure for nomination that is designed to provide some hurdle for the would-be candidate. The Select Committee proposed another procedure which would require the candidate to secure the signatures of at least 10 electors from each Westminster constituency contained within the European Assembly constituency, in addition to the signatures of the proposer and seconder. Either this amendment or the proposal of the Select Committee would provide a sensible means of discouraging frivolous candidates. We should like to hear the Minister's views on both these proposals and we should like an indication of which one she would be prepared to adopt.
      We are faced from now on merely with affirmative resolution debates on proposals which cannot be amended. Therefore we require very firm assurances from the Minister. It is not enough to say that there will be discussions and that something will be brought forward. By that time it will be too late and we shall not be able to amend it.
      The same applies to Amendment No. 187, which is concerned with the size of the deposit. We have debated frequently whether the deposit of £150 required for the Westminster election is still realistic. That has been the deposit since 1918 and it is clearly wildly out of line with the intentions originally behind a deposit of that size. It would have to be very much larger. Does the Minister intend the calculation of the deposit to be simply a multiplication of £150 for each of the Westminster seats, or is it her intention to choose a figure in line with present-day values and make it higher still?
      If the Government chose to multiply by £150, this would amount to £1,200 for an eight-seat constituency. We have suggested a figure of £1,500, which is
      1570
      very much on the modest side. There have been proposals from various groups and organisations for very much higher figures and we shall want a clear assurance from the Minister that the Government's proposal would include a figure of at least the size that we suggest. Nothing less would be sufficient hurdle or deterrent for frivolous, publicity-seeking candidates.
      Mr. Thorpe: This matter was given considerable thought by the Select Committee of which I was a member. Will the hon. Gentleman consider the following point on which we should welcome his view? If we assume that a candidate will lose his deposit if he does not poll 121 per cent. of the total vote, that would mean that in an electorate of 500,000, he could poll 62,000 votes, which is a not inconsiderable number, and lose his deposit. In an electorate of 750,000, he could poll more than 90,000 votes and still lose his deposit. Surely that would be regrettable?
      Mr. Howell: The right hon. Gentleman is correct. The Select Committee looked at this matter and recommended in its Third Report that the deposit should be calculated on the basis of £150 for each parliamentary constituency in the larger constituency. As I said earlier, that is on the modest side. The Committee recommended that, as in our national elections, the deposit should be forfeited if a candidate failed to obtain 12½ per cent. of the votes cast. However, I take the right hon. Gentleman's point. In these large constituencies a deposit could be lost even with a very large vote and we might be right to set a lower percentage. That is a matter that we need to consider. The real deterrent must lie in making the deposit a sensible sum and in making nomination procedures that require a serious candidacy and a serious effort by serious organisations that put forward candidates.
      Mr. Roper: Does the hon. Gentleman not agree that his proposal will make the elections the monopoly of existing political parties and that it will be difficult for independent candidates to stand?
      Mr. Howell: Obviously, we must strike a balance. I said earlier that it would be absurd and outside the spirit of the elections to do what the hon. Gentleman suggests. However, at the other extreme,

      1571
      I am sure he will agree that the elections could become dangerously downgraded if every sort of publicity-seeking candidate could plunge in immediately and be entitled to a substantial amount of free postage and other publicity.
      Figures of the size that I am suggesting represent a fair balance. Lower figures might pave the way for a bargain in free publicity. A small investment could bring a large return for those who had no serious intent but were anxious to get their faces on television, their cause in the newspapers and other free publicity. I do not agree with the hon. Gentleman's interpretation of what I am saying.
      The other amendments deal with polling hours and the appointment of deputy agents. Polling hours are a non-controversial matter. A 10 p.m. close has been tried in our national elections. One gets varying views on this, but most of the views that I have received indicate that the last hour gains us nothing.
      Mr. Thorpe: Who is "us"?
      Mr. Howell: I am speaking about fair elections that are well organised, politicians and this House. That is the "us" to whom I refer. I was not trying to speak in party terms. If the right hon. Gentleman has had different advice from his party officials, I am sure that he will pass it on to us. I understood that all political parties held the view that the arguments in favour of an extension of polling hours to 10 p.m. were not as valid as was claimed by those who first put forward the idea. In particular, it was argued that it would avoid the 8.45 p.m. rush for a 9 o'clock closing of the poll and that everything would be a little easier at the end of the day. However, I understand that not very much difference has been found.
      9.15 p.m.
      Members of Parliament and the advisers in their political parties—indeed, in all political parties—can use only their best endeavours and offer their best advice on the basis of their past experience. The impression of the Conservative Party is that matters would not be much assisted and, indeed, would be more difficult for those who have to manage and organise the elections and their administration.
      1572
      That is why we have tabled the amendment.
      I think that the tone that I have used is enough to indicate that this is not an issue for which we would fight in the last ditch. It is a proposal that I hope will receive the support of the Committee. If it does, I hope that the Minister will take full account of it. If it does not, we shall see how the debate turns out—
      Mr. Marten: I am in search of information. Does my hon. Friend know the practice in the other countries of the Common Market?
      Mr. Howell: Yes. I think that I can tell my hon. Friend. Italy is the only other country where the polls stay open as late as 10 o'clock at night. In almost all other countries the closing time is earlier. I believe that in Belgium one has to vote before 1 o'clock. Britain has one of the longest opening spans in the Community. I believe that in Italy the polls stay open between 6 o'clock in the morning and 10 o'clock at night. Their hours are a little longer than ours.
      Mr. Roper: Does the hon. Gentleman agree that in many of the other countries of the Community voting takes place on a Sunday, which is a holiday, rather than on a working day as in this country?
      Mr. Howell: Except, that in this case we shall all be voting on weekdays.
      Mr. Gould: No.
      Mr. Howell: Perhaps not in some cases. There is a variety of practice and I do not feel strongly about it either way. My hon. Friend the Member for Banbury (Mr. Marten) is right to remind me to remind the Committee that polling times in this country are longer than in other countries in the rest of the Community with the exception of Italy.
      Amendment No. 188 deals with the appointment of deputy agents for each parliamentary constituency. I must confess that in a sense the amendment is speculative. We do not yet know how the Minister proposes that the count shall be organised under the first-past-the-post system. There is an indication in the Bill of how the count would have been organised under the regional list system.

      1573
      If it is to be the first-past-the-post system, we want to know how the count will be organised. If it is to be broken down on the basis of the Westminster constituencies within the overall European constituency, it is important that there should be deputy agents for each parliamentary constituency. If it is a question of verification at local level before central counting, to which the Select Committee refers, it may be that the need for deputy agents is less, although some assistance to the agent managing the campaign for the candidate would be useful.
      Our attachment to the amendment depends very much on the information that the Minister can give about how the Government intend these matters to be organised. Again, I ask for information now rather than for assurances that all will come forward subject to an affirmative resolution, by which stage it will be too late for amendments to be made.
      Mr. Madden: The hon. Member for Guildford (Mr. Howell) does not seem to be approaching these elections with any great sense of zest or enthusiasm. His comments about the rush to the polls in the last hour did not seem to coincide with the tone of his earlier remarks. I am sure that these elections, if they ever occur, will not be noted for the rush to the polls in the last hour. I was surprised that the hon. Member did not suggest, with a view to adding a little enthusiasm to the whole thing and making the voting process a more pleasant prospect for the people of this country, that we should have a holiday at the time of the elections.
      I wish to ask the Minister to consider a matter not wholly unconnected with the suggestions made in the amendment. It concerns a problem that we have seen in recent General Elections, whereby rich individuals seek to contest several constituencies. Often they are not seen in any constituency, but the fact that they are candidates creates problems under the terms of the Representation of the People Act. This is because any events which are organised—for example, television debates—cannot take place unless all of the candidates in a constituency are present. I understand that if one candidate is not present the tele
      1574
      vision authorities are bound not to proceed with the programme.
      The participation in elections of individuals who seek to contest a large number of constituencies causes difficulties and is a denial of democracy for many people. Are the Government considering introducing regulations whereby a candidate contesting one Euro-constituency, to use that rather unattractive term, will not be able to contest simultaneously another such constituency? If people are to be free to become candidates in a number of different constituencies I assume that we shall encounter the same problems as we encountered in recent General Elections.
      I would have thought that we would not seek to prevent anyone who wished to be considered in these elections from taking part in them. The annual salary and tax-free expenses that are being rumoured make me fear that the number of candidates will outnumber the electorate. We should attempt to make certain that there are no insuperable barriers for genuinely independent candidates offering themselves in the elections. We must consider carefully the size of the deposit that will be required. If it is too high it will deter such genuinely independent candidates, particularly as there will be the possibility of their losing that sum if they do not secure a sufficient number of the votes cast. It is important that the maximum number of candidates put themselves forward.
      I ask the Minister to consider the first point that I have put forward because in the recent past we have seen how candidates contesting a number of constituencies can frustrate election campaigns elsewhere.
      Mr. Alan Lee Williams: I am not sure that I agree with the implications of the opening remarks of my hon. Friend the Member for Sowerby (Mr. Madden), when he said that the election might be a monumental bore. A great deal depends on the quality of the candidates, which is why I regard Amendment No. 186 as so important. But I agree with him about the amount of money proposed in Amendment No. 187.
      There is genuine danger that if one makes the sum very high, one will not necessarily discourage frivolous wealthy candidates. My theory is that some of

      1575
      the more colourful characters who present themselves at Westminster by-elections are the sort of people who have money behind them. Sometimes they are attractive people, sometimes less attractive, but, generally speaking, they have money behind them. I fear that if we pitched the deposit at the high figure mentioned in Amendment No. 187 we should weight the scales unduly in their favour. I know that that is not the intention of the hon. Member for Guildford (Mr. Howell), as he made clear in an intervention during the speech of my hon. Friend the Member for Sowerby.
      I would not be in favour of over-weighting this factor in favour of the big political parties. Many individual candidates and smaller parties would find it extremely difficult if we went for the figure mentioned by the hon. Member for Guildford. I think that the whole Committee is in favour of trying to deter frivolous candidates, but it would be unfortunate if we succeeded only in deterring the less wealthy and favouring the more wealthy frivolous candidates.
      Sir A. Meyer: I think that the figure proposed by my hon. Friend the Member for Guildford (Mr. Howell) is just about right. It is difficult to be sure that one is not going to deter the genuine independent, but simply to multiply the existing level of deposit by the number of constituencies is a realistic approach. It does not seem to me to present an insuperable barrier to any serious candidate. I find myself in agreement with the hon. Member for Sowerby (Mr. Madden) in his suggestion that it would be desirable substantially to lower the figure at which the deposit is lost. I am unashamedly an electoral reformer and very keen on the additional-Member system.
      In all these schemes of electoral reform there is a threshold figure. I am not aware of any proposal for a threshold as high as 12½ per cent. The usual figure is about 5 per cent. If we are talking about constituencies as large as those for the European Parliament, 5 per cent. is a reasonable figure, and that, coupled with a realistic deposit, would provide a sufficient deterrent against the purely frivolous or publicity seeking candidate. Unfortunately, there is no amendment on the figure required to save one's deposit—perhaps one will be put forward at a
      1576
      later stage. In default of such an amendment, I support the case put by my hon. Friend the Member for Guildford.
      Mr. Roper: We have been reminded by my hon. Friend the Member for Penistone (Mr. Mendelson) that these are often matters which would be considered by a Speaker's Conference. Certainly, election expenses would be. One of the difficulties is that we are not having proper opportunity to consider in detail these important matters of election law.
      We are also venturing into something new, and I am therefore cautious about making drastic changes in systems that we know. That is my view of Amendment No. 185. It may be that there are rural areas in the country where everyone has gone to bed by 9 o'clock and no one bothers to vote between then and 10 o'clock, but in my constituency a significant number of the electorate record their votes between 9 o'clock and 10 o'clock.
      9.30 p.m.
      I have heard no suggestion that the option of the final hour in Westminster elections should be removed, although some such suggestions might have been made. In areas where people have to travel considerable distances from work, where they may work overtime until 6 o'clock or 7 o'clock, they have an evening meal and do not vote until after 9 o'clock. Unless my hon. Friend can reassure me that there is a general wish for the final hour to be removed I am reluctant to support such a proposal. If no such assurance is given, I shall resist the proposal to remove the final hour. I was pleased to hear that the hon. Member for Guildford (Mr. Howell) is not prepared to die in the last ditch for this amendment.
      I turn to the linked amendments—Amendments Nos. 186 and 187. Amendment No. 187 deals with deposits and Amendment No. 186 deals with nomination papers. Again, we have to be careful not to set figures that are too high. If we had chosen the regional list system, the figure of 50 nominations in Schedule 4 would have applied. The Select Committee would have struck a figure of 70 or 80. I think that it should be higher than the present figure but lower than 100. One knows the problems of gathering

      1577
      the various interests. It would be a substantial organisational job to collect 100 signatures, particularly if one had to ensure that they were representative of the area. Fifty signatures may be closer to what is appropriate rather than the 100 in the amendment. But I assure the hon. Member for Guildford that I shall not die in the last ditch for that view.
      I turn to the more important question of the deposit. It would be a mistake if it varied according to the number of Westminster constituencies in the European constituencies. In some parts of the country where eight or nine constituencies were grouped together the sum would be nine times £150. Somewhere else, where there were only six Westminster constituencies, it would be only six times £150. That would be bad. The Irish Parliament has put the sum of £1,500 into its legislation, so there is some precedent for that sum.
      In their proposals for the regional list system the Government favoured £500. I think that the correct figure is somewhere in between—about £1,000, although we might go slightly higher than that.
      As I tried to point out in an intervention during the hon. Member for Guildford's speech, we have a certain responsibility to ensure that we are not seen to be setting up the elections in such a way that only those who are members of the large parties are able to stand as candidates. If it were thought that we were fixing the figure at too high a level people might claim that we were carving it up between the two large parties.
      Although we must guard against irresponsible or frivolous candidates in these elections, we must remember, as has been said, that there will be a new election structure and there may well be people who want to stand apart from the pattern of our traditional parties, or who may want to stand because they are faster Europeans or slower Europeans than the majority of their party. We should therefore, be careful before we set a figure which is a significant deterrent to individuals who are quite serious in wanting to contest the election.
      I feel that the problem of the candidate who is seeking publicity—although I recognise that it arises sometimes—will be rather less in a General Election
      1578
      than in a by-election. In a General Election, when there are about 80 campaigns going on in different parts of the country, the individual is unlikely to seek as much national coverage as a candidate will in seeking publicity in a by-election. Therefore, we should not make too much of that argument in setting the figure at this particularly high level.
      However, I very much agree with what has been said by the hon. Member for Flint, West (Sir A. Meyer) and my hon. Friend the Member for Sowerby (Mr. Madden) to the effect that, if we make a significant increase, we should trade this off against a reduction in the threshold that we should expect a candidate to reach in order to have his deposit returned.
      Whether one would want to go quite as low as the suggested 5 per cent. or to a figure closer to 8 per cent. as more reasonable is something which one would wish to consider. However, as has already been said, this is probably the last time that the House of Commons will have a chance to give these matters detailed study, and on this matter we look forward to hearing the Minister give us the Government's thinking. I hope that we shall be told whether they have considered the possibility of a lower percentage to be achieved before a candidate loses his deposit.
      Finally, I come to Amendment No. 188. I confess that I was somewhat mystified about the new animal that the hon. Member for Guildford wished to bring in here. Under our present parliamentary election rules there is power to appoint sub-agents, and I was not altogether clear what additional powers he wanted a deputy agent to have in a Westminster constituency which could not be achieved by appointing, under the normal parliamentary election rules—assuming that they are to be applied to the European election—a sub-agent for each of the Westminster constituencies making up the European constituency.
      I hope that the hon. Gentleman will explain the precise role of the deputy agent as distinct from a sub-agent, especially in the counties.
      Mr. MacFarquhar: I do not wish to detain the Committee but, as my hon. Friend the Member for Farnworth (Mr.

      1579
      Roper) has just reminded us, this is probably the last occasion when each of us can put a nut or bolt before our Front Bench for consideration.
      I differ somewhat from my hon. Friend the Member for Farnworth on one matter. Obviously, in this new type of election one does not wish totally to prevent new parties or new types of candidate from coming forward—that is perfectly fair—but we have to link that to our earlier consideration on the subject of election expenses.
      I think that it was my hon. Friend the Member for Farnworth himself who said that the Government should not too readily think simply in terms of aggregation up to 10 times one constituency for the overall permitted limit for election expenses. That would be a considerable sum—I think that my hon. Friend estimated it at about £25,000—and it would put into the mind of the electorate the idea that we were wasting a lot of money on the election, even though one could argue that there were only 81 constituencies.
      On the other hand, if we put the deposit too low and we allow in too many non-serious candidates, each with an ability to make use of the free post, which in a Euro-constituency will be very valuable and expensive, as the literature comes thudding through the door, and, in some cases, as we find in by-elections, perhaps, rather more than in General Elections, there are some pretty bizarre candidates, there may well be quite a ground swell of resentment that our election legislation was so framed that it was possible for all sorts of candidates to put themselves forward without too much worry about losing a great sum of money in these vast constituences but able to propagate their views at the taxpayers' expense.
      I would not go so far as the hon. Member for Farnworth (Mr. Roper), but I am more inclined to believe that the Government should look sympathetically at the upper figure suggested by the Opposition Front Bench, although perhaps not going quite as far as that.
      Mr. Lee: I did not intend to intervene, but I wish to say a few words following the remarks made by my hon. Friend the Member for Belper (Mr. MacFarquhar). Let me say at the outset that I have no
      1580
      intention of voting in this so-called election because I refuse to recognise any such body as having any authority whatever.
      Is not the best way to guard against what are called frivolous candidates—although we are always careful not to define what we mean—to increase the number of persons required to nominate or be supporters on the ballot paper and not to demand too high a level of deposit? If anybody is sufficiently reckless enough, for whatever reason, to put himself forward, it should be for the electors to decide whether they will treat such a candidate as frivolous.
      I do not think there has been any question this century of a candidate receiving no votes whatever. There was one candidate who received short of two figures. There was a by-election in Islington where somebody received 32 votes. It is for the electors to decide.
      Mr. John: In the recent Grimsby by-election the Malcolm Muggeridge Fan Club candidate received 30 votes.
      Mr. Lee: Speaking as one who is not an admirer of that gentleman, I am so glad that he has only 30 fans. I am obliged for that information. Therefore, even skittish or faddish candidates attract some kind of support. We take something on ourselves if we say that such-and-such a candidate is a frivolous candidate. That may be so, but it is very difficult to be objective. A number of people whom we would all regard as dreadful candidates politically have stood. There was even a Mebyon Kernow candidate—a Cornish nationalist—who stood at Camborne, Falmouth and received over 800 votes, which is not quite a derisory figure. That is an indication that, however way out or eccentric a person may be, he appears to aggregate together a measure of support. Therefore, in so far as this Bill is of any relevance I shall do with the ballot paper in this instance what I did with the voting paper at the Parliamentary Labour Party meeting the other day: I shall tear it up and refuse to have anything to do with it.
      The way to handle this matter is to put it to a proper democratic test involving a person's acceptability. If the candidate is made to do a great deal of work

      1581
      rushing round trying to find a great number of nominators, and cannot find them, that is his bad luck and he cannot stand.
      9.45 p.m.
      Mr. Kenneth Clarke: I wish to emphasise that we are discussing amendments to a schedule that gives the Government wide regulation-making powers. The Bill as it stands provides for the nuts and bolts of the elections all to be determined by regulations laid by the Government Department. It has been said and will be asserted again that the regulations that will be produced will be produced in line with all the precedents to which we are accustomed for ordinary General Elections. Nevertheless, the European elections are rather an important innovation.
      The House of Commons obviously contains Members who regard themselves as experts on the conduct of elections, if on nothing else. I should think that it would be possible to draft a Bill that at least trusted the House of Commons to be able to give its opinion on these nuts and bolts issues, and not to leave it all to these wide regulation-making powers.
      I shall not trespass on the subject matter of the next amendment, but it seems to me that the House of Commons is entitled to more than one and a half hours in which to discuss the entire detailed regulations on the conduct of an election, when they are finally decided. Again, it seems quite unnecessary to reserve power to the Home Office, or whatever the responsible Department is, and to refuse to allow the House of Commons to have the final say on quite important details of election procedure.
      These amendments give us the opportunity to discuss one or two nuts and bolts issues. Amendment No. 185 deals with the actual times between which an election shall be held. Personally, I very much support that amendment in saying that the timing of polling in any European elections should be between 7 a.m. and 9 p.m. The additional hour which is nowadays accorded to General Elections has been a matter of some controversy. Most of us here have fought a varying number of General Elections. Certainly my experience in the elections that I have fought has been that the additional hour
      1582
      9 p.m. is, on the whole, a considerable waste of time and public money. The number of people who vote in that time who could not vote before 9 p.m. is not very significant.
      It has been an interesting experiment. I do not know whether the Department holds any figures to show the proportion of the electorate who vote after 9 p.m. All I can say is that in my experience what happens is that the whole tempo of the campaign shuts down after 9 p.m. If a well-organised committee room is being conducted, all those supporters of a political party who might be induced to vote on the day have been turned out by 9 p.m. or have refused point blank to turn out at all, and it tends to be a very stray section of the population who drift in after 9 p.m.
      If we are to hold more elections for devolved Assemblies in Scotland and Wales, for all our local authorities, for the House of Commons and for the European Parliament as well, it is important that we keep in mind the question of public expenditure. It seems to me that the whole process is unnecessarily prolonged for an hour when by 9 p.m. the time has been reached when all those who want to vote have voted and the candidates and their helpers are becoming quite desperate and are biting their finger nails about precisely where they have got to. All those working in the election are bored to death with the process of manning a committee room when fewer and fewer people are coming through the door. Then the time has come for the police and everyone on duty to be allowed to bring in the boxes and to bring the proceedings to an end.
      I hope that the Minister will accept Amendment No. 185. I hope that he will express an opinion and will not simply say "Leave it to the wisdom of the Home Office, because in due course wise regulations will be produced which will cover this matter."
      Sir A. Meyer: There was one very valid argument against extending the poll to 10 p.m. That was that it made it virtually impossible in a large number of constituencies to count the votes on the same night. With the size of the constituencies about which we are now talking, I rather assumed that there would be no question of counting on the same night, so I

      1583
      suppose that in all honesty one must set that argument against the other.
      Mr. Clarke: The Minister appears to be expressing strong views, which no doubt he will wish to give to us in due course. My personal preference has always been for counting the same night. That is purely from a personal and selfish point of view. As a candidate, I would much rather know how things have gone and not, through the night, have to sit and watch a television set giving the results in everyone else's constituency while I wait for my own result. The Minister of State has apparently such strong views that he is anxious to intervene.
      Mr. John: The only view I was expressing strongly was in response to the statement that it was impossible in a constituency with a large electorate for the counting to take place the same night. My hon. Friend the Member for Bebington and Ellesmere Port (Mr. Bates) has 90,000 electors and the votes are counted the same night.
      Mr. Alf Bates: They get it right.
      Mr. Clarke: Perhaps from the electorate's point of view. It is not impossible, but we reach a stage where the whole process is being conducted at a very late hour. Obviously, I do not think that anyone will want to conduct an election in such a way as to deprive any elector of a vote which he could not otherwise cast, but in my constituency I have never had the feeling that any electors were being deprived when the polls closed at 9 p.m. I have the feeling, as has been said, that the counting is either protracted into the night or put off until the following morning. Certainly the whole process is turned into a late night and a delayed event because of the extra hour.
      Mr. Hurd: As to counting the same night, I do not think that this will arise in the European elections. If our votes were counted the same night, our results would be known on Friday, before some of our European partners had gone to the polls on Sunday. I understand that the idea is that the counting should start throughout the Community after the polls have closed on Sunday night; therefore
      1584
      my hon. Friend's nail biting will be somewhat protracted.
      Mr. Clarke: I have never previously heard that suggestion. If that is seriously the case, I would have great reservations about it. My hon. Friend will know that the process in America at the moment involves the polls being closed on the East Coast and the early results being declared while voting is still taking place on the West Coast of America. No one has ever asserted that that is somehow an improper and unconstitutional procedure.
      If my hon. Friend's understanding of the time factor is right, it seems that he is holding up the possibility that the voting in the United Kingdom, and the results being declared in the United Kingdom on the Friday, might influence the casting of votes in continental Europe on the Sunday. I would see nothing wrong with that. I can see no point whatever in having ballot boxes locked up solely for the sake of not prejudicing Continental elections. I hope that the elections would be conducted on European party political lines so that our votes here might bear some relevance to European issues. They might well, therefore, be relevant to the elections in Europe. If the consequence is that the views of British electors will have some opportunity of influencing the votes cast in Germany or Italy, I can see nothing wrong with that and would be in favour of it. It had not crossed my mind before that it was seriously suggested that all our ballot boxes should be locked away until the Italian poll was completed.
      Mr. Roper: I understood that the only basis on which we were able to have elections on a Thursday and were not obliged to have them on some day such as Sunday, to get some degree of Community harmonisation, was that it was agreed that the ballot boxes would not be opened until everyone throughout the Community had voted. I am rather alarmed that at this late stage of the operation the hon. Gentleman—who I thought up till now had been a fairly committed enthusiast for these elections—is considering changing his support for the whole concept of direct elections because he might have to wait two days in agony until he knew the results.
      Mr. Clarke: I am sure that the hon. Gentleman knows me well enough to

      1585
      know that my basic position on the Bill will not be changed by last-minute discoveries about the date of polling. It has been my belief throughout that the view that we should not hold elections for the European Parliament until there was complete agreement throughout the Nine on systems of election, methods of voting, and so on, was fallacious. I have always agreed with the view that until each nation State could conduct its own elections in the way it thought best, we should have no elections at all. That has always been my view.
      I have supported the idea that we should have a completely different election system certainly the first time round and probably for a few times afterwards for each of the member States. I also support the view that we should have a different polling day according to the customs of the individual nation States the first time round.
      It is a new discussion to me in which in some way it is suggested that our votes should be cast on a different day of the week but not counted until some later date in case some voter in the Mezzogiorno should read, gripped by the morning papers, the result of the vote in Warrington, suddenly change his mind and abandon Euro-Communism and change to Christian Democracy, having been influenced by opinion in Lancashire.
      We ought to conduct our elections in as efficient a manner as possible. That involves the polling booths opening at 7 o'clock in the morning and closing at 9 o'clock at night and allowing the count to take place thereafter so that in the small hours of the morning the candidates and their supporters should have a result declared without unnecessary delay and expense.
      Having learned a lot about the times of polling and the counting of votes, I now turn to the question of the deposit to be asked of candidates. I do not see why the House of Commons should not declare an opinion on what is an entirely political matter. It should not be left to the Home Office to draft suitable regulations. It is a matter on which the House of Commons should give an opinion.
      The sum of £1,500 is proposed in Amendment No. 187. I think that is reasonable. I accept the points made by
      1586
      the hon. Member for Handsworth that nobody wants to deter a candidate who wishes to put himself before the electorate. In an ideal world we would allow the Sunshine Party, the Malcolm Muggeridge Fan Club and even a group of people in favour of a particular route for a by-pass round the village, to stand in any election. Unfortunately, such is the state of modern democracy and its expense that I personally think that the level of deposits for parliamentary elections is now too low and that we are not only encouraging frivolous candidates but allowing frivolous candidates to cause quite unnecessary trouble, delay and expense by putting themselves up for election.
      As one of my hon. Friends has said, the ability to stand for an election in this country now enables one to have a free post circulation to every elector. I understand, that the free post facility will be provided for European elections in the regulations which will be made. If we envisage something of the size of the Euro-constituencies, a free circulation of an election address is quite a substantial piece of publicity material being provided at public expense to a large number of electors. It will attract a lot of people who are not remotely interested in being elected to the European Parliament, who realise that they have no reasonable prospect of being so elected, but happen to want to use the opportunity of this free distribution of mail and publicity material to propound a particular point of view, however eccentric.
      There is, as we all know from parliamentary by-elections, no limit to the eccentricity of candidates who are prepared to be put forward. We have reached the stage at which a prize should be given to the candidate who succeeds in getting the lowest number of votes in a parliamentary election. All experience has shown that anybody who stands on a campaign of "Don't vote for me. I am mad", will not find it possible to get fewer than about 30 votes in any parliamentary by-election.
      There are enough members of the electorate who so despise the electoral system, or who are so short-sighted that they will vote for anybody. There are enough of them who have such poor memories that they will fail to recall the name of

      1587
      the candidate representing the party of their choice and will vote for some other name when they go into the voting booth. In parliamentary elections there are a limited number of these, but they are annoying enough. At parliamentary by-elections they are becoming irritating and costly, and it is not being antidemocratic or unreasonable to suggest that in Euro-elections they will prove a positive distraction. Such elections will attract cranks, publicity seekers and certainly those who just want the free circulation of literature for the requisite time.
      10 p.m.
      Mr. Lee: But, accepting that point, is there not likely to be as effective a deterrent if the candidate who stands on the proposition that the moon is made of green cheese is required to secure 200 nominators? Surely the sheer slog of getting 200 people to nominate him on that peculiar supposition is likely to present just as many difficulties as getting together a certain sum of money.
      Mr. Clarke: In an ideal world with a politically sophisticated, honest and frank electorate I would agree with the hon. Member. But he knows as well as I do from the number of petitions and round robins and so on that he receives that it must be possible to persuade 200 people to sign anything if one is persistent enough in going round and collecting signatures. The plain fact about collecting signatures for petitions is that as long as someone actually presents himself at a door and makes it clear that he will not go away without arguing some ridiculous case ad nauseam until a signature is put on the paper, that is all that suffices to get a petition together.
      In saying that, I do not disparage some of the worthy petitions we receive. But it is not just the occasional appearance of the names of Queen Victoria and Wellington and other unlikely characters on a petition that gives the game away. One finds that one is presented with a petition demonstrating massive public support for some opinion. When, rarely, I have been led to respond by individual letters to some of the signatories for their having taken the trouble to inform me of their views, I have received in reply letters expressing amazement that they had associated themselves with the
      1588
      petition on the case I was so carefully trying to argue.
      At the moment electors have to nominate some of the extremely unlikely candidates who put up for by-elections, and it is clearly possible to obtain nominations of candidature from people who have not the slightest intention of voting for that candidate when he stands. People will sign nomination papers out of generosity and out of concern for the democratic process, but the time has come for them to feel concern for the expenditure that they are allowing the crank individual to incur and also for the confusion they are permitting to be caused to the electorate. In a situation in Euro-elections in this country where there are likely to be up to 10 candidates appearing on the ballot paper, of whom only two or three are serious candidates, positive harm will probably be done to the results of the poll.
      Sir A. Meyer: I am suspicious of the calculations I make on the back of envelopes, but I estimate that the cost of free post in a constituency of half a million people would be about £30,000. The candidate who is maintaining that the moon is made of green cheese could easily induce a hundred or so people, for the price of a whole Stilton each, to sign his nomination paper and still come out with a clear profit in terms of the free publicity for his views.
      Mr. Clarke: I have never heard of anyone having to bribe the electorate to sign nomination papers, but no doubt the Minister will tell us that the regulations will provide protection against such an eventuality. The figure of £30,000 does not surprise me. These are substantial sums and one has to strike a balance between, on the one hand, allowing anyone with a serious prospect of election and a serious interest in being elected to stand and, on the other hand, the substantial expenditure and confusion caused to the electorate. The sum of £1,500 may sound substantial, but I shall be interested to know how it compares with the up-dated figure, taking account of inflation, of the £150 that was originally introduced. I suspect that that new figure would be much greater than £1,500. I see the Minister of State shaking his head. Allowing for inflation, I should be surprised if the equivalent to the figure

      1589
      of £150—first established in 1918—was not now greatly in excess of £1,500.
      Of course, it is all right to err on the side of reducing financial disqualifications with regard to standing at elections. But nowadays vast public expenditure is involved, so I would have thought that £1,500 was absolutely reasonable. One still runs the risk that some pop star—as happened in the past in Huyton on one occasion—might decide that £1,500 was small payment in order to send around an election manifesto consisting of a picture of himself and his group and a plug for his latest record.
      Possibly the Minister will be able to reassure us that the regulations will take account of that. But I doubt it. I do not see any prospect whatever of providing restrictions on the material, however scurrilous or commercial, which one can put in an election address. It is therefore more than sensible to make sure that at least a substantial payment has to be put at risk by way of deposit. I would have thought that £1,500 was right.
      I would personally envisage a figure of £1,500 without making an adjustment in the level of the votes to be cast in order to safeguard that deposit. We are not making some comparison with the minimum which most Parliaments that have PR systems set as the minimum national vote for the election of representatives to their national Parliaments. We are setting a minimum vote that has to be cast for a candidate in a new constituency in order, as it were, to demonstrate that his candidature was justified and that he was standing with some reasonable possibility either of winning the seat or of putting forward a serious political point of view. I believe that 12½ per cent. is an eminently reasonable figure.
      We are in danger in this country of steadily multiplying the number of political parties that we have, even before we move towards any of the electoral reforms which some hon. Members would like to see. Any candidate who could not get one in eight of the electorate to support him could not say that his candidature did not cause some unnecessary expense, difficulty and complication in that constituency.
      1590
      I would have thought that 12½ per cent. remained a reasonable hurdle. Otherwise, the SNP, Welsh nationalists and the Irish parties might seek to put up candidates in the European constituencies of England in order to try to appeal to the expatriate votes of people from those parts of the United Kingdom.
      I believe that we have enough political parties in this House already. I do not think that this new form of election should be a way of encouraging the growth of more political parties. I therefore believe that 12½ per cent. and £1,500 is about the right balance, and I hope that the Minister will concede that.
      Mr. Marten: I enjoyed the speech of my hon. Friend the Member for Rushcliffe (Mr. Clarke). It was lighthearted and interesting, but underlying it were many serious points. First, he said—I totally agree with him—that he regretted the shortage of time devoted to this item in the Bill. I. too, regret it very much indeed, because it is an important part of the Bill. However, until I have done my research I shall not know how my hon. Friend voted during the debate on the guillotine. I voted against the guillotine.
      After all the screaming about Britain dragging her feet, getting on with the Bill, and so on, I do not see many hon. Members present who supported the Bill. Talking of screaming brings me to the question of deposits. In the constituency next to mine—Stratford-on-Avon—it so hapened that in a by-election one of the candidates was a gentleman called Screaming Lord Sutch. He was a pop star. I do not know quite how "pop" he was or is, but he stood, and he put his posters all over my constituency because he did not really know where the boundaries were.
      Dr. Alan Glyn: He did exactly the same in my old constituency, but he did not get many votes.
      Mr. Marten: He may not have got many votes, but he got a lot of publicity. Personally, I had never heard of him at the time and have not heard of him since. However, he was graded as a pop star by the BBC, or whoever grades these people.

      1591
      The number of candidates likely to stand in these elections is another matter. Clearly the three major parties will put up candidates in most constituencies. Let us take the position of the Conservative Party. When a candidate comes forward to seek adoption for a Euro-constituency it is likely that he will be one of several. He will be asked whether, if elected, he will stand up for British interests or will place Europeanism and Communityism before Britain.
      Mr. Dykes: One can do both.
      Mr. Marten: No, it is impossible to do both, as many people have found to their cost.
      If a candidate facing a selection committee says that he is a federalist who believes in a federal Europe, clearly other Conservatives will stand against him as anti-federalists. The whole argument about the Bill is whether Europe is a federalist State or a confederation of nation States. Therefore, it is likely that there will be two Conservatives in each constituency—one a federalist and one a non-federalist.
      The same will happen in the Labour Party, where there are committed federalists, though not as many as in the Conservative Party. I do not know what the Liberals will do. Probably they will have three different types of candidate. Therefore, before one starts on the Screaming Lord Sutches of this world one is faced with five or six candidates from the three major political parties.
      Mr. Budgen: Will my hon. Friend comment on the possibility that for the European elections the whole basis of political parties as formed in this House will wither away, and it may well end as a divide between the federalists and the non-federalists?
      Mr. Marten: Yes, I believe that very much. This has been a continuing trend since 1971. A tremendous cross-party alliance has built up, starting in 1971 and going through the referendum. It is still there, and it is a developing political structure in this country.
      Mr. George Gardiner: On that basis should my hon. Friend not have been opposed in the last General Election by a Conservative who was pro-European?
      Mr. Marten: No, because a General Election is about so many different issues. If my hon. Friends do not know that, they must have fought extraordinary election campaigns. Perhaps they were blinded and their elections were just about Europe.
      The election to the European Parliament will be about the development of Europe alone. It will not take account of matters like industrial relations in Britain. It will come down to the one thing—will Europe succeed, and will it go ahead as a federal State?
      With the free postage the electorate will be inundated with Euro-bumf After that, Euro-boredom will set in. This election will bring it about and there will be a very small turn-out.
      10.15 p.m.
      Mr. George Gardiner: I am moved to make a few observations on the amendments, particularly by recent speeches such as that of the hon. Member for Birmingham, Handsworth (Mr. Lee). I found his speech fascinating in a number of respects, not least because of his revelation, at least to me, that even after the Bill has become law, he will still refuse to recognise the legitimacy of the elections and will go to the extent of refusing to cast a vote in them.
      We have all had experience of knocking on doors during election campaigns, asking the elector whether we can count on his support and receiving in reply a frosty gaze and the words "We don't vote". When one inquires further, more often than not the reply is "God will decide". I am touched to learn that the hon. Member for Handsworth is placing all his trust in the Almighty to monitor and check the activities of the European Commission rather than in his elected representative.
      However, I take the hon. Gentleman's point that if we are to erect hurdles to discourage fringe or frivolous candidates, it is better to require a large number of signatures on a nomination paper than to put all our reliance upon a high deposit. I do not accept the arguments of my hon. Friend the Member for Rushcliffe (Mr. Clarke.) It is important that such candidates should be compelled to do a considerable amount of work before their nomination papers go in. For that reason, particularly, I am glad that this batch of amendments hangs on Amendment No. 186.
      I commend Amendment No. 186 because, apart from specifying that there must be 100 names on every nomination paper, it also specifies that there should be a certain spread of the nominations throughout one of the new Euro-constituencies. It provides that no more than 20 of the nominees must be registered as electors in any one parliamentary constituency within the larger constituency. It is important that we should do what we can to ensure that candidates do not come forward with a power base that is narrowly and geographically defined within the new Euro-seats. The amendment is one way of securing that.
      1594
      The requirement that nominees must come from a fairly widely spread geographical area presents a hurdle to the sort of candidates that have been mentioned in the debate. From personal experience, I have slightly mixed views about such candidates. I have been opposed by the same independent candidate in both the General Elections in which I have stood. Far from being frivolous, he is one of the most serious candidates that I have met and his personality is most endearing. He has, of course, lost his deposit on every occasion, but he said in his last letter to me that he had nearly saved the money that he had no doubt he would forfeit again. I would weep some tears if he disappeared from the scene at the next election. A touch of individualism of that sort is no bad thing in our democratic process. For that reason I shall feel a little torn if I am ever asked to vote on what for other logical reasons I would support—namely, the proposition that the deposit for a candidate in parliamentary elections should be increased.
      We need to ask ourselves seriously whether such individualistic, and perhaps by some tests eccentric, candidates should be encouraged in the sort of election of which we are speaking, involving about 500,000 voters in each Euro-constituency and involving the large sums that have been referred to, especially for the free election post.
      Of the amendments before us I prefer the formula that is put forward in No. 186, which requires a large number of nominations and a broad spread of them through the Euro-constituency rather than putting total reliance upon the greatly increased deposit, for much the same reasons as were advanced by the hon. Member for Handsworth.
      I have a word to say about Amendment No. 185, which seeks to lop the ridiculous extra hour from our voting day. I accept the arguments that have been advanced that the far shorter voting days in a number of European countries relate to the fact that their polling takes place on a Sunday. I should never go so far as to suggest that our voting hours should be those that apply, for example, in West Germany and in France, where

      1595
      I think the polling booths open from 8 o'clock in the morning and close at 6 o'clock in the evening.
      A few years ago we decided as an experiment to add an hour to the length of the polling day. I have yet to meet any party worker in any party who thinks that the extra hour has served any useful purpose. It involves longer hours of work for the polling station officers and the police, not to mention the active party workers. Where a count immediately follows the close of poll, it means that all the counters involved start work later than would otherwise have been the case. I am sure that the time is not far removed when for our parliamentary elections we shall bring the close of poll back to 9 o'clock. I see no reason for our not starting that good habit in the Bill. We can wait for our parliamentary elections to be brought into line at a later date.
      Mr. Roper: No.
      Mr. Gardiner: I am interested to hear the shout of "No". I have not heard much justification in the debate for the final hour. No one has yet advanced the argument that the number voting is increased as a result of having an extra hour available. My experience is to the contrary. We should have no lower turn out by ending polling at an hour that is more convenient to us all. I support Amendment No. 185, but find it somewhat unfortunate that it has been argued with the other amendments, which are designed to guard against the fringe or frivolous candidate.
      I hope that the Minister will consider seriously the argument advanced by my hon. Friend the Member for Guildford (Mr. Howell) in support of Amendment No. 186, and on this occasion at least will make a concession to feeling in the Committee.
      Mr. Budgen: I take up one or two of the points advanced by my hon. Friend the Member for Rushcliffe (Mr. Clarke). He suggested that a deposit should be lost if an individual candidate obtained less than 12½ per cent. of the vote. He rightly said that in his opinion it was important to keep out the self-seeking person who had no interest in politics, people such as Screaming Lord Sutch, the pop singer, who merely wanted some
      1596
      free publicity. I agree with him entirely about that. My hon. Friend went a little further and spoke about the one-issue fringe party. Here I disagree with him.
      While it may be that an SNP candidate, a Socialist Worker candidate or a National Front candidate may not have very much to say about the broad spectrum of issues likely to be considered, none the less he has something to say about an issue. It is important that this vehicle of protest should not be made too difficult to use in our democracy. I hope that the Home Office will not take too much notice of my hon. Friend's suggestion of 12½ per cent.
      The protest vote is an important part of our democracy. It is a useful way of assessing public opinion on individual issues. It should not be made too expensive for individual citizens to express a point of view on a single issue. It is difficult to know exactly where the line should be drawn, but I contend that 12½ per cent. is drawing the line at too high a point. I would draw it somewhere between 5 per cent. and 10 per cent. It is a matter of judgment, but I believe that to say that it should be 12½ per cent. with the specific intention of keeping out the protest vote is a dangerous way of stifling a useful vehicle of protest.
      Dr. Summerskill: We have been discussing four amendments, concerning the number of subscribers, the hours of polling, deposits and deputy agents. The discussion has shown the differences of view that exist in the Committee on these issues. This has been a valuable debate because these four subjects will now be included in the regulations which will be debated in both Houses when they are presented. There has been some criticism that the Government are not presenting definite views at the end of the debate. If the Government present a fait accompli they are accused of not seeking the views of the Committee. If we set out to seek the views of the Committee, we are asked for firm assurances, as we were by the hon. Member for Guildford (Mr. Howell).
      The variety of views means that we shall have to consider what is the best thing to do and how to get it right. That is the purpose of having regulations. Regulations were criticised by the hon. Member for Rushcliffe (Mr. Clarke), who

      1597
      preferred substantive legislation. There are always criticisms of regulations on that basis. The regulations will be based on the Representation of the People legislation. To give some idea of the magnitude of the Bill that would be needed if we did not have regulations, I can tell hon. Members that the Representation of the People Act 1949 is a major piece of electoral legislation with 176 sections and nine schedules. Well over 100 of the sections are relevant to Assembly elections, together with the election rules in the Second Schedule. The vast majority of them represent widely accepted features of our traditional electoral system. There are clearly different views on the subject we have been debating. We shall have to consult the political parties and consider the views of hon. Members.
      Mr. Kenneth Clarke: I accept that it would be absurd to bring before the House of Commons a full set of regulations for a decision on every item. By the amendments that have been tabled, the Committee has clearly accepted as major matters such things as the hours of opening of polls and the amount of the deposit. Why could the Government not meet that concern by tabling their own preferred conclusion on those matters and allowing the Committee to vote? Why should the decisions on hours of opening of polls and the level of deposits not be taken by the 635 hon. Members in the House? Why rely on the Home Office to assure us that it will listen carefully to our representations and then produce its preferred solution?
      10.30 p.m.
      Dr. Summerskill: Surely it is more democratic and reasonable to have this debate before regulations come before the House on which the House can then vote, rather than present the House with the Government's decision on what should be done before they have listened to the debate.
      On Amendment No. 186, I listened with interest to the arguments of the hon. Member for Guildford in favour of setting a fairly large figure for the number of subscribers to each nomination. Naturally, the Committee is concerned to deter frivolous candidates whilst not inhibiting genuine ones, particularly independent candidates, as my hon. Friend
      1598
      the Member for Sowerby (Mr. Madden) said, who need not necessarily be frivolous because they are independent.
      In the context of parliamentary elections this will be considered by the Speaker's Conference, but we have to consider it in connection with the Assembly elections. The Select Committee recommended that nominations should be accompanied by the signatures of 10 Assembly electors for each parliamentary constituency within the Assembly constituency. This would mean that in a constituency formed out of five Westminster seats, 50 subscribers would be required for a constituency formed out of 10 seats, there would need to be 100 subscribers. That is the number proposed in the amendment. The Select Committee recommended what would, in fact, become a variable, whereas at least the hon. Member for Guildford proposes a fixed number.
      The Government's view, as explained in the White Paper, was that the number of nominations required for Assembly elections should be greater than that required for a parliamentary election, but the Government did not consider that the increase should be in proportion. We felt that the figure should be fixed rather than vary from one constituency to another and proposed that it should be fixed at 50. But, in the light of what has been said, we shall be considering the arguments in favour of 100, although I must add that the hon. Gentleman's suggestion of 100 was not very strongly supported on either side of the Committee. Indeed, some hon. Members positively disagreed with it.
      I think the hon. Gentleman will agree that the more people who are sponsoring a candidate, the more chance there is of an election being ruled out on technicalities and being declared null and void. That is one criticism of the figure.
      The amendment also places an upper limit on those subscribing from one part of the Assembly constituency. I recognise the hon. Gentleman's aim in wanting a candidate to show that he has support throughout the Assembly constituency. I am, however, doubtful whether 20 persons in a constituency of about 500,000 is the sort of support which justifies the intention behind the amendment, because, presumably, it would not be all that difficult

      1599
      to find 20 such people. However, this, too, will be looked at in consultation with the parliamentary parties.
      Amendment No. 187 would have the effect of requiring the Home Secretary to make a provision, in the regulations which he is empowered to make about the conduct of Assembly elections, to fix the level of the candidate's deposit at £1,500. The issue of the deposit and the level at which it should be set raised several questions in the debate. Indeed, there has been a good deal of debate during the past year whether some increase in the £150 parliamentary deposits, fixed as long ago as 1918, should be made. If we look at it in simple economic terms, £150 in 1918 is worth about £1,250 now. That in itself is a justification for a significant increase. It is suggested that it is now too easy for small parties or independent candidates to stand and take advantage of the free publicity and free postal arrangements to which a candidate is entitled.
      The White Paper on direct elections refers to the problem at all elections of how to deter frivolous candidates without inhibiting genuine candidates. There are other ways of doing this without increasing the deposit, but the deposit method seems to be one of the ways that hon. Members think important.
      These are proposals which, in the Westminster context, require the type of careful consideration that one obtains from the Speaker's Conference. When arriving at a view about the level of deposit for Assembly elections, we must be careful not to do anything which might prejudice consideration of these issues in relation to Westminster elections.
      The Select Committee recommended that the deposit should be set at £150 for each parliamentary constituency contained in an Assembly constituency. This would mean that for an Assembly constituency containing five parliamentary constituencies the deposit would be £750, but for one containing 10 parliamentary constituencies it would be £1,500. That is the figure contained in the amendment.
      Although no decision has been taken by the Government on the size of the deposit, we have taken the view so far that it would be preferable to have a fixed deposit, irrespective of the size of the
      1600
      Assembly constituency. We also thought that a lower deposit was appropriate. The sum of £500 was in the White Paper. One of the objections to a larger deposit, such as the one proposed, is that practical difficulties might accrue for the smaller parties which cannot guarantee to save their deposits when fighting a series of elections and having to find substantial deposits. Nationwide, almost £120,000 is involved for each party if the proposal is accepted.
      Mr. David Howell: Can the Minister confirm what she said in an earlier debate—that for each candidate, £40,000 worth of free postage will be available?
      Dr. Summerskill: I can confirm that, but we are discussing the deposit.
      Mr. Howell: I am drawing the Minister's attention to the obvious comparison between the modest deposit that might be at risk and the free postage. The two are miles apart.
      Dr. Summerskill: The hon. Member favours a large deposit but there are other arguments for a small deposit, particularly for the smaller parties and independent candidates. One does not wish these elections to be the monopoly of the large, rich parties.
      I turn to the question of polling hours. The Bill provides that the Secretary of State may make provision for them in regulations.
      Mr. Kenneth Clarke: Before the Minister moves on, can she indicate the level at which a deposit will be lost? It is relevant to the amount of money that has to be put up to have some indication of the Government's view of what size of vote will be required to retain a deposit.
      Dr. Summerskill: Many hon. Members have raised the issue of the lost deposit and we have listened carefully. Naturally, their views will be taken into account in conjunction with the regulation on the deposit.
      Mr. Kenneth Clarke: With the greatest respect, I cannot believe that the Government have not formed a provisional view about the level at which the deposit is saved. If the hon. Lady insists that all will be done by regulation, at least she should give some idea about that so that representations can be made.
      Dr. Summerskill: Although the hon. Gentleman will not believe it, the Government do in fact consider the views of the Committee and of the House. I think that there would be some objection if I said simply that this is what we have decided to do and this is what we shall do, regardless of what has been said this evening. I repeat that the question of the loss of deposit is related to the amount of the deposit in the first instance.
      I return to the question of hours of polling. I hope that hon. Members will acknowledge that this also is a matter which regulations can cover in detail when they are produced. We have heard various suggestions about whether earlier or later closing hours affect the total poll, although no statistics have been produced.
      The hours of poll for parliamentary elections are fixed by paragraph 1 of Schedule 2 to the Representation of the People Act 1949 as being between 7 a.m. and 10 p.m. For local elections the hours are between 8 a.m. and 9 p.m. These are fixed by a separate schedule to the Local Elections (Principal Areas) Rules.
      The hours of poll have changed from time to time for both parliamentary and local elections, and, clearly, the hours must reflect the needs of the electors and must be conducive to the efficient organisation of the election.
      In the White Paper the Government said that they had accepted the Select Committee's recommendation that, in general, normal United Kingdom parliamentary electoral law should apply to the conduct of Assembly elections. This suggests that the hours of poll should be fixed from 7 a.m. to 10 p.m. rather than be changed to 7 a.m. to 9 p.m. I must add that I did not hear any overwhelming or even strong argument in the debate in favour of an earlier closing, and there were some very strong views expressed against earlier closing. However, as I say, we shall look again at the matter.
      Mr. Roper: There was reference to the time of counting and the question of the size of constituency, as well as reference to European agreement. Is it not certain, given the much greater geographical area to be covered in European election constituencies and the enormous distances over which ballot boxes will have to be transported, that, whether we
      1602
      close at 9 o'clock, 10 o'clock or even 8 o'clock, it will be virtually impossible to have the count on the same night?
      Dr. Summerskill: Yes, I confirm what has been said, that we cannot count the votes until all the European countries have voted, which would be on the Monday. Article 9(2) of the annexed Act to the decision of the Council of Ministers of 20th September 1976 prohibits counting until after polling ceases in all countries.
      I come now to the relationship between the count and the deputy agent. It is intended to make provision in the regulations for verification of the ballot papers locally by district or constituency, as appropriate, and then to count them in one central place for each Assembly constituency. The regulations will provide for representatives of the candidates to be present at the verification and at the count. These need not necessarily be sub-agents as defined in the Representation of the People Act.
      Mr. Kenneth Clarke: I am grateful to the hon. Lady for giving way again and I apologise for the interruptions, but arising out of what she has just said, confirming that the count will take place on the Monday, what is to happen to the ballot boxes between Thursday and Monday? Is there to be—presumably, there is—a police guard mounted on the ballot boxes between Thursday and Monday to make sure that there is no interference? If that is right, can the hon. Lady explain why our Ministers agreed to this rather preposterous arrangement when the Council of Ministers agreed on the common counting date?
      10.45 p.m.
      Dr. Summerskill: It would be more preposterous if they were not sealed and guarded.
      In parliamentary elections for a county constituency an election agent for a candidate may appoint a deputy election agent for each part of the constituency. Section 56 of the Representation of the People Act 1949, as amended, provides that only one deputy election agent may be appointed for each part of the constituency, but contains no restriction on the parts into which a constituency may be divided. A similar scheme might be

      1603
      appropriate for Assembly elections whereby the total number of deputy election agents is left to the discretion of the election agent, provided there is not more than one deputy for each part of the Assembly constituency. Election agents might well wish to divide the Assembly constituency into its constituent parliamentary constituencies and appoint a deputy agent for each, as is suggested in the amendment. Clearly that is something which can and will be discussed with the political parties.
      In conclusion, I would assure the Committee that all these amendments and the debate on them will be carefully considered before the Government draw up regulations on these points. Every effort will be made to find the best and the right way in which to incorporate the views of the House into the regulations.
      Mr. David Howell: I am sorry if I seemed to the hon. Member for Sowerby (Mr. Madden) to lack enthusiasm in moving the amendment. I think that the cause is that I have yet to have my supper rather than I lack enthusiasm for direct elections. My enthusiasm for direct elections and for the Bill remains undiminished. I have made no secret of my view nor of the views of many of my right hon. and hon. Friends. We support the aims of the Bill and want direct elections to take place.
      I shall deal with the four amendments, beginning with the rather less contentious, although all have generated divided views. On the question of polling hours, I said at the beginning that it was not a matter to which we gave the highest priority. My experience is like that of my hon. Friend the Member for Reigate (Mr. Gardiner), that the last hour adds a burden to the administrators and to those trying to organise the election at the end of their day, without much increasing the opportunity to vote. Statisstically, the evidence seems to give no indication that the number voting has increased with the extra hour. However, I said at the beginning that our view was not held strongly and I accept what emerged from the debate—as has the Minister—that there are divided views on the matter.
      On Amendment No. 188, I note what the hon. Lady says about deputy agents,
      1604
      that regulations will provide for the possible appointment of deputy agents so that local verification procedures can be attended by those deputy agents. I also note the hon. Lady's view that there will be a central count. If that is the case and regulations will provide for deputy agents to look at the count, we are glad to hear it.
      I come to the amendments designed to deter what we refer to as frivolous candidates. As has been said, it is not easy to describe frivolous candidates, but, like the elephant, we all know them when we see them. On this matter the attitude of the Government varies slightly on the two amendments, and so, therefore, does my response.
      On the first, concerning the number of signatures on a nomination paper, I think the principle is accepted that there should be a large and well-spread number of names on the nomination paper. The hon. Lady mentioned the figure of 50 and said that in view of the debate she would look at it again—implying that 50 would be the minimum and that perhaps regulations would be brought forward with a larger number. If that is the hon. Lady's view, and if I have that right, I think that my hon. Friends and I would accept that the Government are moving in the right direction on the matter. If I have not interpreted correctly what the hon. Lady said, perhaps she would intervene and say so. My impression is that she has put 50 as the minimum figure that might be in the regulations and that the Government will consider a larger number in the light of comments made in this debate.
      Dr. Summerskill indicated assent.
      Mr. Howell: I come to the question of the deposit. One's judgment on this is connected with views about the proportion of votes required to avoid the loss of the deposit. I still feel very strongly that the Government are not facing reality in this area. We are discussing this matter against a background figure of £150 for the parliamentary constituency that was fixed 60 years ago. Although my hon. Friend the Member for Reigate said that he would not wish to see that sum increased, the fact is that over the years the arguments for that figure must have been

      1605
      destroyed, pulverised, by the rate of inflation. Any intentions that our forebears had a fixing the figure at £150 must have been totally destroyed by the onward march on inflation. A figure of 10 times that amount would probably maintain the real value as intended in 1918.
      That is just for the parliamentary constituency. If we then start thinking about seven parliamentary constituencies put together, it seems absolutely inevitable that a figure very much bigger than the £150 and the £500 mentioned by the hon. Lady must be right.
      One recognises the vital importance of allowing the eccentric candidate and the protest vote candidate to stand. That is absolutely right. But the basic economics of this from the point of view of the taxpayer or Community funds—we are not quite sure which—are also very relevant. Free publicity to the tune of between £30,000 and £40,000 will be available through free postage to any candidate who can raise the deposit, collect the nomination papers, get the signatures of the electors and then stand. That is a very serious impost on the funds that will finance this free postage. We are not yet clear about where those funds will come from.
      The Government must look at this matter again very closely and compare in their minds their figure of £500, which is the ante that they are requiring a candidate to put up, with the figure of £30,000 or £40,000 in free postage to which the candidate will become entitled. It does not make sense to put aside that consideration and fix one's mind solely on the question of the sum that would or would not deter the eccentric candidate in a small party.
      Mr. Roper: The hon. Member mentioned uncertainty as to whether the funding of the free post or other expenses would come from Brussels or British funds. However, given that the elections are to take place throughout the Community and that if it is to come out of Community funds it must be collected from member States, and assuming that every member State will pay up pro rata, in terms of accounting it does not matter whether the funds come through Brussels or from the British taxpayer.
      Mr. Howell: These are all matters on which in due course—perhaps the
      1606
      "course" should have been this evening—the House of Commons deserves a little more elucidation. We are talking about the cost of postage. That is where the figure I am quoting arises. I do not have the precise facts to enable me to state whether the cost of postage is the same in Holland as it is in Britain, or that the cost of postage in Italy is the same as that in France. I do not know. Perhaps it is less in other countries; perhaps it is more. Certainly in Britain the cost keeps rising. These are matters to which the Government will have to give second thoughts. I do not think they have thought it through, and I do not think that the figure of £500 mentioned by the Under-Secretary is at all realistic.
      The Government's answer to all these points is that they will be very carefully considered, that there will be consultations between the parties, and that after that the matter will be put to the House. But by then it will be beyond discussion and we shall merely be able to vote it down or vote it up. That will be our only choice. That leaves me, as it leaves some of my hon. Friends, feeling extremely uneasy.
      Mr. Spearing: I think that it is a right description of the Bill as it now stands. There is another amendment which the hon. Gentleman may wish to support. If a draft of such regulations were to be laid, would it not in effect be possible to have two attempts at regulations?
      Mr. Howell: The hon. Gentleman anticipates me. I was going on to say that there is an amendment ahead of us on the Order Paper which would put a rather different light on this process. It is fine to have consultations between the parties, although individual candidates and protest candidates will not have any part in the consultations in which the great parties will be involved. But those consultations will be better than nothing. I do not want the hon. Lady to get out of order by indicating anything that she is intending to say later. She said that the Government would take account of hon. Members views, but will hon. Members be able to take account of the Government's views?
      Mr. John: I shall certainly be indicating a line to meet that point of view in the debate on the next amendment.
      Mr. Howell: I realise the Minister of State's difficulty about being any more specific on this amendment about a matter which will clearly be discussed in very great detail on the next amendment, but I take heart from what he said. It seems to me that a chance is opening out for hon. Members to take account, in a constructive way, of the Government's views before they are served up ready cooked for approval or disapproval under the affirmative resolution procedure.
      In the light of that, and in the light of what the hon. Lady has said about Amendments Nos. 186, 185 and 188, I reserve our position on Amendment No. 187. We shall listen very carefully to what the Minister of State has to say in the next debate. In the meantime, I end by urging Ministers to reconsider their view about the £500 deposit, which I believe is too low, even to meet the point about the small parties and the individual eccentric candidate, in relation to the enormous benefits that will flow in free publicity. If Ministers will bear that in mind, we shall listen to the next debate and we shall hope to be able to feel confident of the chance to return to these matters and discuss them.
      Mr. Robert Rhodes James: I support the argument concerning the candidate who has a particular point of view and a particular cause which some might describe as frivolous and others as independent. In my own by-election there was a candidate who stood for the self-employed. He was not very successful but he caused all the other candidates to think furiously about the subject, and his contribution was significant.
      If the Committee is to consider very carefully the implications of what it is doing in the Bill, it must also consider the implications for elections to this House. I should regret very deeply a situation in which ordinary people, poor people, were denied the opportunity to stand for membership of this House, however cranky, frivolous and independent their views. When Mr. Keir Hardie first stood for Parliament he was regarded as frivolous, independent and cranky. I consider that a situation in which the large parties and the large groups had the priority of nominating candidates for this House would be very regrettable.
      Amendment negatived.
      11.0 p.m.
      Mr. Gould: I beg to move Amendment No. 194, in page 12, line 29, leave out from "instrument" to end of line 31 and insert
      "shall not be made under this paragraph unless a draft of the instrument has been approved by a resolution of each House of Parliament".
      I intend to do so briefly since my hon. Friend the Minister of State has indicated in earlier debates today that he proposes to introduce an amendment on Report which would in effect serve the purpose of my amendment. I understand that what he intends is that the regulations made under paragraph 2 should be subject to the affirmative resolution procedure. If he cares to confirm that assurance I shall be very glad to accept it.
      There is one further point which requires dealing with. In the ordinary course of events these regulations would be subject to the affirmative resolution procedure, would be published, debated and voted upon, but would not be subject to amendment. Therefore, while the House will properly have the opportunity to express a view on the issues raised by the regulations—and they are clearly important issues—the Committee will not have the opportunity to make any representations to the Government as to what regulations should contain. I hope, therefore, that in replying to the debate my hon. Friend the Minister of State will comment on that and offer assurances which will meet the proper concern expressed in the Committee.
      Mr. Roper: I wish briefly to support my hon. Friend the Member for Southampton, Test (Mr. Gould) and to stress the point he made about the need for the House to have some opportunity to study these matters and make representations, perhaps in a preliminary debate before the order is laid for approval by affirmative resolution.
      We have heard several times this evening that normally a Speaker's Conference would be set up to consider matters such as these before any decisions of this importance were taken in terms of a national election. Therefore, I hope that we shall find a way of ensuring that the House will be able to make its representations to the Minister before he tables them in their final form for decision by the House.
      Mr. John: I realise that underlying the debate, apart from the points of detail and the actual figures on deposits and so on, has been the form of resolution for consideration of the regulations which are laid down in the Bill, the question of how we consider them, and whether hon. Members have an opportunity to consider what lessons the Government have drawn from the debates this evening.
      On the first aspect, the Government have been impressed on this and previous occasions with the representations that have been made, and the comments on the procedure to be adopted, and I am able to say that they accept that it should be done by affirmative resolution procedure rather than by the negative procedure. Unfortunately, the amendment is technically defective. I undertake on behalf of the Government to put a correct one down for Report stage, and I hope that will be of benefit to hon. Members.
      The second point that has arisen during the course of the evening is simply what happens when we have the regulations before us. Clearly, even under the affirmative procedure we shall have a take-it-or-leave-it situation in which hon. Members will have to judge the regulations as a whole and either accept or reject them.
      If they were to be rejected, a further draft would be brought before the House, and in that sense there would be a sanction. But I do not think that that would be a proper way of proceeding. I am sorry that the hon. Member for Rushcliffe (Mr. Clarke) is not here, because it seems that we are in grave danger in this Committee of not being able to make up our minds whether the Government are ignoring the wishes of the Committee or are accepting them. Either way we seem to be criticised. We have had a valuable debate and I have listened to the views of hon. Members on issues on which, if no one else thinks we are experts, we think we are experts—that is, in matters of deposits and so on.
      I undertake to find a way of having the draft regulations considered by hon. Members before they are laid before the House on a take-it-or-leave-it basis. One way of doing that would be in the form of a White Paper. Many Members will recollect that that was done with regard
      1610
      to the rules for the referendum on the EEC. Even if there were no debate on the subject, hon. Members would be able to look at the regulations and make representations to us.
      As hon. Members will understand, I am in some difficulty because I cannot commit Government time. It is not within my province to do so. However, I shall certainly consider the best way of doing this. As I have said, one way would be in the form of a White Paper. I undertake that the discussions and consideration of hon. Members will have a meaning. They will not be a charade. I shall try to ensure in the best way possible that hon. Members have the opportunity of considering the regulations in draft form.
      Mr. Hurd: I think it is the wish of the Committee for me to thank the Minister for having advanced quite considerably in two respects. First, he has accepted the principle of the affirmative resolution procedure. In addition, he will ensure that the Government's proposals are put forward in a form which can be considered by hon. Members before they actually consider the regulations themselves.
      I am sure the Minister recognises the difficulty we are in. We are in an un-usual situation. For understandable reasons Ministers are not showing very much of their hand. By the time we get to the final form of the regulations it will be too late—it is now too early—to make representations that will affect the Government's conclusion. We shall then simply have the choice of either accepting or rejecting the regulations.
      The Conservative Opposition would like to reserve their position until we see the nature of the White Paper. That might be the least troublesome and most fruitful way of giving the Government the opportunity of considering the views of hon. Members before getting to the final question whether we approve or disapprove the regulations.
      We are grateful to the Minister for responding in this way. In doing so I believe that he has done a service to the proper consideration of this matter.
      Mr. Gould: I, too, am grateful to my hon. Friend for his two undertakings. I

      1611
      accept them with gratitude. I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Dr. Phipps: I beg to move Amendment No. 196, in page 13, leave out lines 39 to 41 and insert—
      "(a) he is not a member of either House of Parliament".
      The First Deputy Chairman (Sir Myer Galpern): With this we may take Amendment No. 86, in page 13, line 42, after "Ordinary", insert "or—
      (c) he is a Member of the House of Commons".
      Dr. Phipps: One of the most considerable criticisms that can be made of the guillotine procedure is that the only opportunity we have to discuss in any detail the relationship between Members of this House and Members of the European Parliament should commence at nearly 11.10 p.m. when the debate is due to finish at midnight. That is unfortunate, because the most contentious element that I personally see developing is the relationship between the two sets of MPs.
      I speak as a convinced pro-European who wishes to see the European Parliament a success and who believes that if the relationship between the two Houses of Parliament is not properly debated and organised therein lies one of the strongest bones of contention and one of the impediments with regard to the workings of the European Parliament
      Hon. Members will know that I have recently written an article in the Socialist Commentary in which I discussed at some length the necessity for considering the dual mandate, and I am glad that we have a limited opportunity to discuss it tonight.
      An obvious difficulty arising from the amendment is that a Member of the European Parliament has to be a Member of this House or another place. That might be a possible proposition for the first elections to the European Parliament in that it would mean that the only people who could stand as candidates would be those who were Members of this House or another place. That would not necessarily be able to be continued after the first General Election subsequent to the first election to the European Parlia
      1612
      ment. It would be possible for Members of this House who become European Members to be defeated at a General Election, and then they would automatically cease to be Members of the European Parliament. Then we would have to hold by-elections for positions that could be undertaken only by Members of this House and another place.
      Mr. Roper: Perhaps it would help the complicated procedure for preventing frivolous candidates if by definition the only people who could be candidates for Europe were those who were already Members of this House or another place. Clearly, there would be no ludicrous or frivolous candidates standing. But what would happen in a situation after the first British General Election if all the European Members were defeated in their Westminster constituencies because their constituents felt that they were neglecting their duties, and none of the new Westminster Members was prepared to volunteer as a candidate in the ensuing European elections?
      Dr. Phipps: I am grateful to my hon. Friend for putting a point that I was about to develop.
      Clearly, the difficulty raised by having a system which allows only United Kingdom Members of Parliament and Members of another place to offer to be candidates is that this would not be generally accepted in the electorate at large. Nor would it be accepted by the many people who might wish to stand as candidates for Europe. I can see very considerable resistance to having only Members of this House and another place.
      Nevertheless, it is extremely important that in the initial period of the European Parliament some kind of dual mandate and responsibility to this House is maintained by the European Members. If such contact is not maintained we shall inevitably and rapidly reach a situation in which we are at loggerheads with the European Parliament.
      Accepting the necessity for some kind of connection between the two Houses, I must also accept the point already made that it would not be acceptable to the electorate for membership of the European Parliament to be restricted to Members of this House and another place.
      Mr. Ian Wrigglesworth: Does my hon. Friend know anywhere else in the world where similar arrangements exist between two assemblies of this kind? Does he know any other example of a dual mandate like this?
      11.15 p.m.
      Dr. Phipps: I understand that there is the possibility of a dual mandate in certain federal systems and, within the United Kingdom, hon. Members can also be members of district councils. That is a similar system. However, I know of no country where such a system is mandatory.
      In the initial years it will be important for some sort of dual mandate to be observed, and this could be done on the basis of restricting membership of the European Parliament to Members of this House and another place. We have to consider a system that will, if not make European Members responsible to our Parliament, at least give them access to it and, more important, give hon. Members access to them.
      It has been suggested by some hon. Members that this might be done by making European Members automatic members of the House of Lords for the duration of their tenure of office in the European Parliament. That is a simple device.
      Mr. Budgen: if that is the hon. Gentlemen's preferred solution, can he explain what element of sanctions would exist in that procedure?
      Dr. Phipps: It is not my preferred solution. I merely put it forward as a solution which has been suggested. I think that it would be unsatisfactory, particularly for hon. Members. I have considered the problem at some length and I think the best solution would be that for an interim period—not less than five years or more than 10 years—there should be a non-voting dual mandate for Members of the European Parliament who are not already Members of this House. I can see the difficulties. Hon. Members may say that such a system has not been tried before, but I cannot see that it is impossible to allow European Members to speak here.
      Mr. Marten: Why should they?
      Dr. Phipps: The answer to that question is not so much in order that they
      1614
      may hear us as that we should be able to get at them.
      Mr. Channon: What would happen if the European Member was already a Member of the House of Lords? Would he be allowed to sit in both places?
      Dr. Phipps: The European Parliament is already making ordinary citizens of Members of another place. Particularly at a time when we are beginning to look at another place with a view to closing it or altering its nature, it would not be a mammoth step to allow Members of that place who are also Members of the European Parliament to come into this House.
      Mr. Budgen: If that is the hon. Gentlemen's preferred solution, what sanctions could there be against Members who cannot vote and who cannot be kicked out until their five-year term has expired?
      Dr. Phipps: The question of sanctions is a wider one to which I hope hon. Members will address themselves, but it is not one which I shall take up, because I do not wish to see sanctions imposed on European Members.
      I am seeking a middle way that will allow this House to have some two-way contact with European Members. I am not prepared to contemplate sanctions being imposed, but I am prepared for other hon. Members to devise methods whereby we can control European Members. I accept that if such measures were mooted they would be defeated in the House of Commons, but I am prepared to see hon. Members produce arguments in favour of them.
      It is my view that for the short period that is involved it will be valuable for both the European Parliament and this place to grow accustomed to one another—for instance, to the powers that each will hold. The only route open to us that I can see that will allow that sort of contact is that which I have proposed. It is not merely a matter of the European Parliament having access to us but of our having access to it. I have thought long and hard of systems that might be employed to give it and us that advantage, and at the moment that is the best that I can envisage. If other hon. Members have better suggestions, I am prepared to adopt them.

      1615
      I do not believe that a dual mandate that restricts itself entirely to Members of the House of Commons will find any sort of acceptance generally. However, I believe that some form of dual mandate is desirable. I hope that the Government will be prepared to consider the method that I have adopted.
      Mr. Dykes: I do not know whether I am being unfair if I suggest that the hon. Member for Dudley, West (Dr. Phipps) caused tremendous confusion. The hon. Gentleman did so in my mind, and perhaps he did in the minds of others.
      I know that the hon. Gentleman was not one of the original signatories to the amendment. I understand that he reached the amendment somewhat later than the other signatories. I also understand that he was anxious to be the original promoter of the amendment. However, he missed that chance. It may be that that happened as he was exercising the dual mandate of representing Dudley and being a Member of this place. It may be that he did not have time clearly to think out what he meant and had in mind, and that he was inflicting on the Committee his thought processes as he went along, perhaps not coming to a good conclusion.
      I am not wishing to be unfair. I should like to praise the hon. Gentleman for having been honest enough to say that we are dealing with a difficult problem. It is confusing, and it is all too glib to suggest that we can come to a quick conclusion.
      Mr. Marten: I think that my hon. Friend implied that the hon. Member for Dudley, West (Dr. Phipps) was thinking aloud and developing his thoughts as he went along. However, he was developing what he had written in the Socialist Commentary. Apparently that is how the article goes—merely thinking aloud.
      Mr. Dykes: I assume that my hon. Friend is correct. Of course, it is dangerous and risky to write anything for the Socialist Commentary. Undoubtedly one is nervous about doing so.
      It appears that the hon. Gentleman has come to a dangerous conclusion. I say that with great hesitation and diffidence. It might be that both amendments should not be considered for more than a certain time. Both of them, although they
      1616
      go in opposite directions, cannot be entertained as serious propositions by the Committee.
      Mr. Moate: Filibustering. Time wasting.
      Mr. Dykes: No. It is a long time since I last made a contribution to the Committee's deliberations.
      To prohibit the dual mandate specifically, to rule it out of order, raises important matters.
      Mr. Moate: Time wasting.
      Mr. Dykes: For a number of reasons the Committee could realistically come to a decision one way or the other. It is possible and realistic—I hope that this will happen when the elections come—to have a voluntary dual mandate, or in most cases not to have it subject to any sensible overlapping arrangement that may apply to Members of this place who wish eventually to leave and stand as candidates in European elections and hope to win a seat.
      Dr. Phipps: Does the hon. Gentleman accept that the difficulties about a voluntary dual mandate are almost insuperable as both mandates would involve voting in two places at once? I find it difficult to see how someone can be a Member of the European Parliament, which may be subject to three-line Whips, and a Member of the House of Commons, which may also apply a three-line Whip. It was for those reasons that I came to favour the non-voting membership.
      Mr. Dykes: Perhaps the hon. Member and I can agree on this. If we view the isolated case of someone exercising a dual mandate for more than a short-term overlap period, it might look rather esoteric relative to the generality of Members of the European Parliament after the first set of elections. Perhaps we would go along with that, but not with a wild degree of enthusiasm. It would be one of the variations in the different categories of Members. They, as individuals, irrespective of party, would undoubtedly help the private links which the hon. Member had in mind. I agree that these links are important. Other than that case there should be nothing. Any decision of the House of Commons to go beyond that by way of regulations

      1617
      or rules would be a great mistake. Any attempt to ensure that there was a compulsory dual mandate would be a gross intrusion on the privileges and rights of the House although it would seem, prima facie, to be to the advantage of the House.
      Similarly, any attempt to appoint European Members would be an intrusion into the future privileges, yet to be determined, of the European Assembly. I refer to privileges here in the sense of powers. Such an attempt would be wholly undesirable. It would be wrong to relate that to a compulsory value judgment about how the European Parliament will develop in that sense qua individual Members.
      That is not to say that it would not be desirable and welcome to have a Select Committee of the House of Commons considering European legislation and other EEC matters and, subject to the definition of the privileges of the European Parliament, requesting European Parliament Members to come before it to give evidence. To complete the total picture on this issue of contracts, there would be party groupings whereby Labour, Conservative and Liberal Members of the European Parliament—the Liberals have not been much in evidence tonight—could report back to their colleagues. I think that the Committee would regret going further.
      Mr. Wrigglesworth: Like the hon. Member for Harrow, East (Mr. Dykes) I believe that this is an important subject. The Committee should be grateful to my hon. Friend the Member for Dudley, West (Dr. Phipps) for giving us the opportunity of debating the matter. A great deal of discussion has taken place about the dual mandate and the conflicts which may arise and the links which may exist when the European Assembly comes into being. I was interested to hear the comments of the hon. Member for Harrow, East, who has experience of the European Parliament and had a dual mandate, in a way. He illustrated, in the existing situation, the sort of weaknesses which would arise from the dual mandate and gave some of the reasons which I would put forward for opposing the amendment.
      1618
      11.30 p.m.
      It is impossible for a Member of the House of Commons who is also a Member of the European Assembly adequately to discharge his responsibilities to his constituents and to the Assembly. My right hon. Friend the Member for Fulham (Mr. Stewart) and other hon. Members who have been here for much longer than I have will confirm that the burden of work upon hon. Members to-day is much greater than it was some years ago. My right hon. Friend the Member for Middlesbrough (Mr. Bottomley)—my neighbour on Teesside—has told me of the burden and the correspondence he had when he first entered the House in 1945 and of the changes that have taken place since then. Committee work and work in the Chamber, coupled with the growth of surgeries and one's constituents' desires to have matters pursued with Ministers or with other bodies, now impose a much greater burden on Members.
      It is now proposed that, on top of all that, responsibilities should be assumed for a Community of nine nations stretching from Naples to John o'Groats. It will be a question of responsibility not only to one's constituency but to the whole of Europe. The problems involved in flying from a United Kingdom constituency to Brussels, Luxembourg and Strasbourg will impose enormous strains on the Members involved. On those grounds alone the burden will be too great for any Member to bear, except where a Member of this House might want to go to the European Assembly, whilst at the same time serving out his term here.
      Mr. Roper: My hon. Friend has described the growing burden on Members of this House. Is it not likely that a directly elected European Parliament will be, if anything, busier than the European Assembly is at present, and is it not likely that that will make it even more difficult to combine the two tasks?
      Mr. Wrigglesworth: I intended to come to that point. At present there is a very unreal situation. I have sympathy for Members serving in the European Parliament. It is difficult for them to define what their constituency is. They do not have a constituency. They are selected

      1619
      in a rather peculiar way by both sides of the House. They go off to the Assembly by appointment. The electorate has no contact with its Member. There is no constituency for the Members of the Assembly. Although they do a very good job in the European Parliament, the Members have no direct contact with constituents in the way in which Members of Parliament have and, indeed, as in the future Members of the European Assembly will have.
      I can speak only for my own area, but I assume that the same will apply to other areas. In future a Member of the Assembly from our area will have contact with his constituents through Tyne Tees Television, Radio Tees, Radio Metro and all the other media in the area, but that contact is not there at present. Such contact in the region will inevitably impose extra burdens on the Member and lead to an increased interest in his activities in the Assembly.
      Dr. Phipps: Does my hon. Friend agree that one of the most important things in the early stages is the contact between this House and the European Parliament. How does he propose to overcome that problem?
      Mr. Wrigglesworth: In replying to my hon. Friend's point, let me draw an analogy with the situation that many of us in this Chamber know well—the relationship between Members of this House and members of county councils and district councils in our areas. Some of the difficulties and problems referred to by my hon. Friend can be overcome. We all know that sometimes we have excellent relationships with our local councillors. But sometimes relationships are strained and rather difficult.
      It depends upon the issue. Each body and each member of that body is trying to serve the best interests of the people represented. Difficulties can arise on an individual issue, but overall members of county councils and district councils and Members of this House are able to cooperate in serving what they consider to be the best interests of their electorates in the best way they can.
      There are conflicts, but the roles of the members of the different bodies are clearly defined. They have different responsibilities, and I see no reason why
      1620
      the sort of creative, democratic, argumentative relationship that exists in this House cannot give rise to the same sort of benefit in the European perspective.
      Some of us will also have experience of the problems that exist with a dual mandate in local councils. Some of my hon. Friends and some hon. Members on the Opposition Benches have colleagues and friends in their local parties who are both district councillors and county councillors. I have observed that on occasions this can give rise to some difficulties. Where do such Members' loyalties lie? At times they are not sure whether they lie with the district council or with the county council. I have seen occasions when councillors have had to abstain on issues when sitting in a county council because those issues conflict with issues that have arisen in their district council.
      This dual mandate can give rise to the most awful conflicts for the Member concerned, and can cause awful confusion among the electorate, which does not know exactly what the Members' role is. I feel—this is why I oppose my hon. Friend's amendment—that it is better that the two functions should be kept quite distinct and should not be confused in the way that they would be under the proposal in the amendment.
      Dr. Phipps: I accept what my hon. Friend says about the conflict as it exists between this House and members of local authorities, but there is a spirit of co-operation as well. This is something that has grown up over a long period. Does my hon. Friend not agree with my suggestion that in the initial stages there are good reasons for a dual mandate in order that things should get off to a good start rather than that we should have a situation in which the two bodies are fighting to estabilsh their positions?
      The First Deputy Chairman: Order. The hon. Member for Thornaby (Mr. Wrigglesworth) already has enough material to keep him going till midnight.
      Mr. Wrigglesworth: I have only just begun to explore some of the areas of conflict and co-operation, and to refer to some of the analogies that we can draw in respect of the dual mandate as proposed in the amendment. But what I do not understand about my hon. Friend's intervention is why it is necessary for a Member to be in both this House and in

      1621
      the Assembly for the sort of co-operation that he refers to in fact to take place. I can co-operate, as I am sure he and other hon. Members can, with members of my county council and of my district council on a friendly and productive basis without being a member of both bodies. Indeed, such a dual role would lead to great confusion and conflicting responsibility.
      In my area I can co-operate with my county councillors and district councillors. I have as much access to them as they have to me. Many of them come down here regularly for meetings with me and my colleagues from Teesside. We have the most harmonious relationship without our being members of more than one body.
      Therefore, I do not thing that it is necessary in the future to have people in this House in the Assembly in order to get the sort of co-operation my hon. Friend seeks. What we want is clearly defined roles for the Members of each assembly. I thing we have to accept that inevitably at times conflict will occurr. That is part of the democratic process, and it will have to be resolved by democratic means.
      We shall have to see how the parties develop their programmes during the election, and then, going on into the second election, we shall have had the opporttunity to experiment in the way suggested by my hon. Friend and we shall have seen what conflicts arise. Then we certainly the Labour Party—can come forward with proposals for the second election—I look forward to that—and can include in our manifesto any which are neeeded to overcome points of conflict between this Parliament and the European Assembly.
      The hon. Member for Harrow, East (Mr. Dykes) referred to the Scrutiny Committee, of which I have the honour to be a member. I want to say a word about the role of that body. It has a very difficult job, and I do not think that it will help the relationship between—
      The First Deputy Chairman: Order. I do not remember the hon. Member for Harrow, East (Mr. Dykes) saying anything on this amendment about the Select Committee, and it is not in order to do so. We are on the question of disqualification, not of Select Committees.
      Mr. Wrigglesworth: I apologise, Sir Myer. When you intervened, I was about to come off that subject and go on to say something about how the relationship between this House and the Assembly might be affected by the work of the Scrutiny Committee in future unless we are very cautious about the role it perceives for itself.
      I think that if the Scrutiny Committee attempts to do the job of the European Assembly from this House it inevitably will give rise to conflict. There is a whole range of activities which will be the legitimate interest of Members of the Assembly, and I thing that the Scrutiny Committee of this House going through and taking an interest in a whole range of instruments and documents which, frankly, in other circumstances the House would not waste time on, would give rise to the most profound irritation and therefore conflict with the Assembly, and that might do enormous damage to the relationship between the House and the Assembly.
      Mr. Dykes: As you implied, Sir Myer, the hon. Gentleman has misrepresented what I said. I was thinking not of the existing Scrutiny Committee but of a future Select Committee considering European instruments and legislation, and receiving European Members to give evidence and discuss European matters with it. I hope that the hon. Gentleman will agree that, contrary to what he was implying, a large number of people keen on the Community and direct elections would hope that the role of the House of Commons in also scrutinising, in a wider sense than the existing scrutiny arrangements, would persist in the future, and that this House would take a major interest in European legislation even if it did not have the central legislative function.
      11.45 p.m.
      Mr. Wrigglesworth: That is a most helpful clarification of what the hon. Member was saying. I accept what he proposes. I can envisage members of the Assembly coming to a committee of that type and being most helpful. That would result in close co-operation and a better understanding of the problems so that we could work together in the interests of the country. I accept the hon. Member's point.

      1623
      It would be wrong to press the amendment because, instead of leading to the close co-operation that my hon. Friend envisages, it could lead to even greater conflict. That is one of the drawbacks to which hon. Members have referred.
      I see no reason why there should not be close co-operation and discussion between the two assemblies but I do not believe that a dual mandate is necessary. I hope that the amendement will be opposed.
      Mr. Channon: I suspect that the Committee would like short speeches, so I shall detain it only briefly, perhaps not quite as long as the hon. Member for Thornaby (Mr. Wrigglesworth).
      This is an extremely important topic which will be of continuing interest to hon. Members, whatever they think about the Bill or about a directly elected European Assembly. By an unlucky chance, some of us have not read the Socialist Commentary and are not subscribers to it. I am sure that it is too expensive, so perhaps the hon. Member for Dudley, West (Dr. Phipps) will send it to us.
      Anyone who has examined seriously the idea that there should be a compulsory dual mandate whereby one must be a Member of the House of Commons to be eligible to be elected to the European Parliament must think that it is a preposterous idea. There will be 81 Members of the European Parliament. I presume that there will be candidates in all those constituencies. If there were two candidates for each European constituency, 162 Members of the House of Commons would be involved—unless it is seriously suggested that Members of the House of Lords should be eligible. One or two hon. Members who support the amendment are not noticeable in their support for the House of Lords. Is it suggested that all the candidates should come from the House of Commons? The idea is ridiculous.
      That does not mean that there is not a serious point about the relationship between Members of the Assembly of Members of the House of Commons. I cannot agree with the suggestion that Members of the Assembly should be non-voting Members here. That is not appropriate.
      My hon. Friend the Member for Harrow, East (Mr. Dykes) spoke of a per
      1624
      manent Select Committee on which Members of the House of Commons and Members of the Assembly could meet and discuss matters of common interest. That is a valuable idea. We must experiment as we go on, because no one has come up with a satisfactory solution today.
      I was not clear what my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) meant when he spoke of sanctions available to the House of Commons against Members of the European Parliament who transgressed in some way. Surely, the sanction against anyone who transgresses is the sanction to which we are all subject—that is, dismissal by the electors in due course at a General Election.
      Mr. Budgen: There is no sanction against us.
      Mr. Channon: Yes, there is. The sanction against us, if the electors do not like what we do, is dismissal at a General Election, and, presumably, the sanction of dismissal at an election would apply also to Members of the European Parliament.
      I shall not detain the Committee much longer. In my view, the idea of a dual mandate is, frankly, not workable. I cannot believe that anyone who gives it much thought can imagine that it is seriously possible that the 81 elected Members to the new Parliament and all the candidates should be Members of the House of Commons. It would make a mockery of this place and a mockery of the new directly elected European Parliament.
      Mr. John Mendelson: I know that the hon. Gentleman is serious about this. If he so categorically turns down in principle the idea enshrined in the amendment, must he not admit that it will be impossible to maintain any significant contact between the new European directly elected Parliament and the House of Commons?
      Mr. Channon: This is a difficult matter. I agree that hon. Members have put their finger on an important question to which no one has found a satisfactory answer. I think that my hon. Friend the Member for Harrow, East has put up the best idea so far, though I cannot regard that as particularly satisfactory. As I

      1625
      say, no one knows the answer yet. We shall have to experiment as time goes on. But I should start with my hon. Friend's suggestion.
      I do not think that even the hon. Member for Penistone (Mr. Mendelson), who at one stage, I think, was keen on the dual mandate, can seriously imagine that a compulsory dual mandate would work. I see his name against Amendment No. 196, but I should be surprised to hear him advance arguments which could intellectually sustain a demonstration of how it would work. I hope, therefore, that the Committee will reject the amendment if it is put to a vote.
      Mr. MacFarquhar: it is no secret that my right hon. Friend the Member for Battersea, North (Mr. Jay), whose name heads the list against Amendment No. 196, and the hon. Member for Banbury (Mr. Marten) often see eye to eye on the subject of Europe. That is why I thought it regrettable that both were absent from the Chamber earlier and that neither seemed anxious to move the two amendments in their names. I think that my hon. Friend the Member for Dudley, West (Dr. Phipps) deserves a vote of thanks for moving Amendment No. 196.
      Mr. Marten: If one does not move an amendment, one can bring it back again or seek to bring it up on Report. I regard the later amendment on salaries as far more important.
      Mr. MacFarquhar: In my view this is a vital issue, and I think that the hon. Gentleman—
      Mr. Marten: The hon. Gentleman must not forget the guillotine.
      Mr. MacFarquhar:—whose views on this matter I approach more closely than I do those of my right hon. Friend, deserves a vote of thanks for having put his amendment down.
      If we were to reserve the job as Member of the European Parliament only to Members of the House of Commons, the question of salaries, to which the hon. Member for Banbury is anxious to come, would certainly be an overwhelming consideration in the public mind. Plainly it would look like "jobs for the boys", with Members of Parliament not only reserving to themselves the salary, which perhaps, by the standard of many people,
      1626
      is very reasonable, but also assigning to at least 81 of their number the much greater salary of a Member of the European Parliament. On those grounds alone, therefore, there would be an immense credibility gap if we not only tried to exclude people outside the House who wished to stand but reserved everything to Members of Parliament.
      Clearly, there is a problem here. The hon. Member for Southend, West (Mr. Channon) attempted to grapple with it, and my hon. Friend the Member for Dudley, West addressed himself to it, too. I thought it unfair to suggest that my hon. Friend was thinking aloud. It is difficult to reach a solution, and we have to recognise that, as in the case of county councils and Members of Parliament, there will be relatively little contact.
      If we are realistic and we put aside for the moment the pious hopes that both pro-Europeans and anti-Europeans express on these occasions, we see that Members of the House of Commons and of the European Assembly will be far too busy to pay any great attention to the work of the other House.
      Directly elected members of the European Assembly will be wanting to prove themselves, to find out exactly what the job entails and to justify—[Laughter.] My hon. Friend the Member for Newham, South (Mr. Spearing) laughs because he does not want to see a directly elected Assembly at all. I see no reason why it should seem strange that the many people elected to the Assembly who have never been to the Assembly before and are not even Members of Parliament—because this amendment will not be passed—should take time to find their feet. Once they find their feet, they will want to prove themselves to the electorate. They will want to do a good job. There will be a danger, or perhaps a tendency, that constituents of Westminster and European constituencies will regard a European MP as the more important of the two. In fact he will not be, because his powers will be very limited.
      Mr. Spearing: I am grateful to my hon. Friend for giving way. Does he not agree that the problem to which he has drawn attention is a problem inherent in approval of direct elections? As a federalist, does he agree with Lord Thomson, the former Commissioner,

      1627
      when he wrote in Lloyds Bank Review last summer that from the moment of election directly elected Assemblymen would be deadly rivals of Members of the House of Commons?
      Mr. MacFarquhar: My hon. Friend has far more catholic reading tastes than some Conservatives who read Socialist Commentary. The noble Lord's adjective was somewhat extreme, but I have used much the same adjective in this House and my hon. Friend has probably heard me do so. There is no question but that there will be rivalry, and we must face and admit it. For people to express pious hopes to the Select Committee that by having people put in the House of Lords we shall get rid of that rivalry is to deceive themselves or to attempt to deceive others.
      The way to proceed is not to suggest a committee in which Members of the House of Commons and of the Assembly will sit but rather to think on lines which prevail already with the party machines of the two main parties and elected representatives at various levels. It is the party machines that bring together Members of Parliament, county councillors, district councillors and even parish councillors when they are elected on party
      labels. It will be even more imperative for party machines to bring together members of the European Assembly and all other directly elected representatives in this country.
      To return to a subject about which my hon. Friend the Member for Newham, South and I were arguing earlier, that is why I think that the elections will be fought by parties and not by pro- and anti-Europeans. It will be the party mettle that will be tested in an attempt to mould out of the new representatives an integral part of the new party structure. The Labour Party has as good a chance—or, perhaps, a better chance—to do that as has the Conservative Party.
      It being Midnight, The CHAIRMAN proceeded, pursuant to Order [26th January], to put forthwith the Question already proposed from the Chair.
      Amendment negatived.
      The CHAIRMAN then proceeded to put forthwith the Questions necessary for the disposal of the business to be concluded at Midnight.
      Question put, That this schedule be the First Schedule to the Bill:
      The Committee divided: Ayes 86, Noes 38.

      Division No. 104]

      AYES

      [12 midnight

      Archer, Rt Hon Peter

      Hamilton, James (Bothwell)

      Rhodes, James R.

      Atkins, Rt Hon H. (Spelthorne)

      Harrison, Rt Hon Walter

      Roper, John

      Bagier, Gordon A. T.

      Hooley, Frank

      Ryman, John

      Bates, Alf

      Horam, John

      Sandelson, Neville

      Blenkinsop, Arthur

      Howell, David (Guildford)

      Sever, John

      Booth, Rt Hon Albert

      Hunter, Adam

      Shaw, Giles (Pudsey)

      Bray, Dr Jeremy

      John, Brynmor

      Smith, John (N Lanarkshire)

      Brooke, Peter

      Johnson, James (Hull West)

      Snape, Peter

      Brown, Hugh D. (Provan)

      Jones, Barry (East Flint)

      Stallard, A. W.

      Campbell, Ian

      Judd, Frank

      Stewart, Rt Hon M. (Fulham)

      Channon, Paul

      Lambie, David

      Stott, Roger

      Cocks, Rt Hon Michael (Bristol S)

      Lester, Jim (Beeston)

      Stradling Thomas, J.

      Conlan, Bernard

      Luard, Evan

      Summerskill, Hon Dr Shirley

      Cox, Thomas (Tooting)

      McCartney, Hugh

      Taylor, Mrs Ann (Bolton W)

      Crawshaw, Richard

      MacFarquhar, Roderick

      Tinn, James

      Cunningham, Dr J. (Whiteh)

      MacGregor, John

      Wainwright, Edwin (Dearne V)

      Dempsey, James

      Mallalieu, J. P. W.

      Walker, Rt Hon P. (Worcester)

      Dormand, J. D.

      Marshall, Dr Edmund (Goole)

      Walker, Terry (Kingswood)

      Dykes, Hugh

      Marshall, Jim (Leicester S)

      Watkinson, John

      English, Michael

      Mather, Carol

      Weatherill, Bernard

      Ennals, Rt Hon David

      Millan, Rt Hon Bruce

      Whitlock, William

      Eyre, Reginald

      Newton, Tony

      Wilson, Alexander (Hamilton)

      Faulds, Andrew

      Noble, Mike

      Woodall, Alec

      Foot, Rt Hon Michael

      Oakes, Gordon

      Woof, Robert

      Ford, Ben

      Owen, Rt Hon Dr David

      Wrigglesworth, Ian

      Gilbert, Dr John

      Palmer, Arthur

      Glyn, Dr Alan

      Parry, Robert

      TELLERS FOR THE AYES:

      Golding, John

      Penhallgon, David

      Mr. Joseph Harper and

      Graham, Ted

      Phipps, Dr Colin

      Mr. Donald Coleman

      Grant, John (Islington C)

      Price, William (Rugby)

      NOES

      Biffen, John

      Callaghan, Jim (Middleton & P)

      Dean, Joseph (Leeds West)

      Bradford, Rev Robert

      Carson, John

      Dunlop, John

      Budgen, Nick

      Cook, Robin F. (Edin C)

      Evans, Gwynfor (Carmarthen)

      Fernyhough, Rt Hon E.

      Marten, Neil

      Spearing, Nigel

      Flannery, Martin

      Mendelson, John

      Stoddart, David

      Gould, Bryan

      Molyneaux, James

      Thomas, Ron (Bristol NW)

      Henderson, Douglas

      Paisley, Rev Ian

      Wigley, Dafydd

      Jay, Rt Hon Douglas

      Pendry, Tom

      Wilson, Alexander (Hamilton)

      Lamond, James

      Powell, Rt Hon J. Enoch

      Wilson. Gordon (Dundee E)

      Latham, Arthur (Paddington)

      Richardson, Miss Jo

      Wise, Mrs Audrey

      Lee, John

      Robinson, Geoffrey

      Loyden, Eddie

      Rodgers, George (Chorley)

      TELLERS FOR THE NOES:

      McCusker, H.

      Ross, William (Londonderry)

      Mr. Roger Moate and

      Madden, Max

      Skinner, Dennis

      Mr. John Ellis

      Question accordingly agreed to.
      Schedule 1 agreed to.
      Schedule 2 agreed to.
      Clauses 12 and 13 ordered to stand part of the Bill.

      Division No. 105]

      AYES

      [12.12 a.m.

      Archer, Rt Hon Peter

      Golding, John

      Penhaligon, David

      Atkins, Rt Hon H. (Spelthorne)

      Graham, Ted

      Phipps, Dr Colin

      Bagier, Gordon A. T.

      Grant, John (Islington C)

      Price, William (Rugby)

      Bates, Alf

      Harrison, Rt Hon Walter

      Rhodes James, R.

      Blenkinsop, Arthur

      Hooley, Frank

      Roper, John

      Booth, Rt Hon Albert

      Horam, John

      Ryman, John

      Bray, Dr Jeremy

      Howell, David (Guildford)

      Sandelson, Neville

      Brooke, Peter

      Hunter, Adam

      Sever, John

      Brown, Hugh D (Provan)

      Hurd, Douglas

      Shaw, Giles (Pudsey)

      Campbell, Ian

      John, Brynmor

      Smith, John (N Lanarkshire)

      Channon, Paul

      Johnson, James (Hull West)

      Snape, Peter

      Cocks, Rt Hon Michael (Bristol S)

      Jones, Barry (East Flint)

      Stallard, A. W.

      Coleman, Donald

      Judd, Frank

      Stewart, Rt Hon M. (Fulham)

      Conian, Bernard

      Lambie, David

      Stott, Roger

      Cope, John

      Lester, Jim (Beeston)

      Stradling Thomas, J.

      Cox, Thomas (Tooting)

      Luard, Evan

      Summerskill, Hon Dr Shirley

      Craigen, Jim (Maryhill)

      McCartney, Hugh

      Taylor, Mrs Ann (Bolton W)

      Crawshaw, Richard

      MacFarquhar, Roderick

      Tinn, James

      Cunningham, Dr J. (Whiteh)

      MacGregor, John

      Wainwright, Edwin (Dearne V)

      Dempsey, James

      Mallalieu, J. P. W.

      Walker, Terry (Kingswood)

      Dormand, J. D.

      Marshall, Dr Edmund (Goole)

      Watkinson, John

      Dykes, Hugh

      Marshall, Jim (Leicester S)

      Weatherill, Bernard

      English, Michael

      Mather, Carol

      Whillock, William

      Ennals, Rt Hon David

      Millan, Rt Hon Bruce

      Woodall, Alec

      Eyre, Reginald

      Newton, Tony

      Wrigglesworth, Ian

      Faulds, Andrew

      Oakes, Gordon

      Foot, Rt Hon Michael

      Owen, Rt Hon Dr David

      TELLERS FOR THE AYES:

      Gilbert, Rt Hon Dr John

      Palmer, Arthur

      Mr. James Hamilton and

      Glyn, Dr Alan

      Parry, Robert

      Mr. Joseph Harper

      NOES

      Biffen, John

      Latham, Arthur (Paddington)

      Ross, William (Londonderry)

      Bradford, Rev Robert

      Lee, John

      Skinner, Dennis

      Budgen, Nick

      Loyden, Eddie

      Spearing, Nigel

      Carson, John

      McCusker, H.

      Stoddart, David

      Cook, Robin F. (Edin C)

      Madden, Max

      Thomas, Ron (Bristol NW)

      Dean, Joseph (Leeds West)

      Marten, Neil

      Wigley, Dafydd

      Dunlop, John

      Mendelson, John

      Wilson, Alexander (Hamilton)

      Evans, Gwynfor (Carmarthen)

      Molyneaux, James

      Wilson, Gordon (Dundee E)

      Fernyhough, Rt Hon E.

      Paisley, Rev Ian

      Wise, Mrs Audrey

      Flannery, Martin

      Pendry, Tom

      Woof, Robert

      Gould, Bryan

      Powell, Rt Hon J. Enoch

      Henderson, Douglas

      Richardson, Miss Jo

      TELLERS FOR THE NOES:

      Jay, Rt Hon Douglas

      Robinson, Geoffrey

      Mr. John Ellis and

      Lamond, James

      Rodgers, George (Chorley)

      Mr. Roger Moate

      Question accordingly agreed to.
      Clause 14 ordered to stand part of the Bill.

    Clause 14

      EXPENSES
      Question put, That the clause stand part of the Bill:—
      The Committee divided: Ayes 83, Noes
      Clause 15 and 16 ordered to stand part of the Bill.
      Clauses 4 to 11 disagreed to.
      Schedules 3 to 5 disagreed to.

  Title
  Amendment made: No. 191, in line 3, at end add
  ', and to prevent any treaty providing for any increase in the powers of the Assembly from being ratified by the United Kingdom unless approved by Acts of Parliament '.—[Mr. Graham.]
  Whereupon The CHAIRMAN left the Chair to report the Bill, as amended, to the House, pursuant to Order [26th January].
  Bill reported, with amendments; as amended, to be considered this day and to be printed. [Bill 63].

OPPOSITION PARTIES (FINANCIAL ASSISTANCE)
Motion made,
That the Resolution of the House of 20th March 1975 shall have effect from 1st January 1978 with the substitution of the following paragraph for paragraph 2 of that Resolution:—
'That for the purpose of determining the annual maxima of such assistance the following formula shall apply:
£550 for each seat won by the party concerned plus £1·10 for every 200 votes cast for it at the preceding General Election, provided that the maximum payable to any party shall not exceed £165,000.'—[Mr. Graham.]
Hon. Members: Object.

MR. GEORGE HENDRY
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Graham.]
12.25 a.m.
Mr. Douglas Henderson: After several unsuccessful attempts in the Ballot for the Adjournment, I am pleased to have this opportunity of raising the case of my constituent Mr. George Hendry, of Fraserburgh. The Minister knows that I have been pressing for nearly three years for justice for Mr. Hendry, and it is only because there has been a blank and consistent wall of bureaucratic refusal that I have had to seek this opportunity to raise the matter on the Floor of the House. Mr. Hendry did not want to court pub
1632
licity for his affairs, but he has been left with no alternative.
I hope to present the facts as precisely and as fairly as I can. Mr. Hendry joined the staff of National Carriers Ltd. in May 1971 as a van driver, and until the end of 1973 he carried out his duties conscientiously and faithfully. I do not think that this is in dispute.
At the end of 1973 Mr. Hendry suffered from chest pains for about a day and a half. Since he had not had occasion to consult his doctor in the previous 22 years, he was sent to Fraserburgh Hospital for a check-up. The doctor there could find nothing wrong with him. After a further absence due to influenza, he returned to his duties on 18th January 1974. His employers then referred him to the company doctor for an examination. I am not here to argue that that was unreasonable, nor do I suggest that the firm was seeking to find a way to dismiss him, though it is natural that what followed should raise such suspicions.
Mr. Hendry was given a medical examination which lasted about five minutes. He removed his jacket, rolled up his sleeves, had his blood pressure taken and, after the doctor had sounded his chest with a stethoscope, was told that his driving days with NCL were over. He was immediately sent on three weeks' holiday. Hon. Members can imagine that. with a clean bill of health for 22 years, it came as a considerable shock to Mr. Hendry to find that he was suffering from an ailment so serious that he could no longer continue in the employment to which he was accustomed.
Mr. Hendry therefore consulted his own medical practitioner, who referred him to Dr. A. C. F. Kenmure at Aberdeen Royal Infirmary who is, I am advised, one of the leading heart specialists in Scotland, if not in Europe. Dr. Kenmure graduated as BSc with honours at Glasgow in 1955, MD with honours in 1971 and MB. ChB in 1959, and was admitted as FRCP Glasgow in 1974, MRCP Edinburgh in 1964 and MRCP London in 1965. He is consultant cardiologist at Aberdeen Royal Infirmary and the author of a number of distinguished papers on his subject. I mention his qualifications in detail because they have a considerable bearing on the weight that must be given to his conclusions.

1633
Dr. Kenmure's examination was, as one might expect, extremely thorough—not for him a perfunctory five-minute examination involving the taking of blood pressure and the sounding of a chest with a stethoscope. He gave Mr. Hendry a full and searching examination, and his report to Mr. Hendry's family doctor on 12th March 1974 contained the following conclusions:
"He has no chest pain and is not unduly dyspnoeic."
I think that means he is quite well—
"He has no ankle swelling. He has no palpitations. He has no dyspeptic symptoms. He has no urinary upset. His weight is steady. There is no past history of note. There was no evidence of congestive cardiac failure. Pulse was regular. His blood pressure was 164/98. Heart sounds normal. Chest and abdominal examination was negative. Blood examination was normal. Chest X-ray was within normal limits."
Before going on to the last point, I pause to suggest that that is not a bad bill of health for a man of 59. Many hon. Members of that age would be delighted to have that bill of health after such a thorough examination from a specialist of such eminence.
The last feature that Dr. Kenmure mentioned in his report was that an ECG showed
"minimal evidence of myocardial ischaemia."
In explaining that, he stated:
"I think there is no doubt that this patient has ischaemic heart disease but this seems very mild and no therapy is required. I was disturbed to note that the patient has apparently lost his job on account of his recent symptoms. In my opinion, there is no reason whatsoever why he should not continue to drive a light van and I see no reason to discontinue his employment on medical grounds."
An impressive and thorough examination by one of Scotland's leading heart specialists produced that report. However, Dr. Kenmure's opinion was unavailing and Mr. Hendry was dismissed. His solicitors, A. P. Brown & Macrae, of Fraser-burgh, tried their best to have him reinstated.
At a medical examination held in the clinic at Peterhead on 31st October 1974, Dr. W. Buchan, a regional medical officer with the Scottish Home and Health Department, reported on Mr. Hendry. He reported:
"Blood pressure 136/80, pulse 72 regular. No signs of heart failure. I consider him fit for his job."
1634
The doctor noted that Mr. Hendry had been occupied previous to the examination in carrying and laying substantial cement slabs without any effort that caused pain. Therefore, we have not only Dr. Kenmure but Dr. Buchan, a doctor employed on contract with the Government, coming to the same conclusion about Mr. Hendry after they had separately given him fairly searching examinations.
Mr. Hendry was offered redundancy money of about £180 by National Carriers Ltd. and the refund of his pension contributions. He has steadfastly refused to accept any of the cheques that National Carriers has sent him. I have the un-cashed cheques. Mr. Hendry feels that if he cashed them or presented them for payment, it would be an admission on his part that his dismissal was regular and appropriate. Consequently, he feels that his prospects of reinstatement or of alternative employment would be impaired.
I have been fighting Mr. Hendry's case for almost three years. In August 1976 I succeeded in persuading National Carriers to arrange for a further medical examination. I had assumed that it would be carried out by an independent specialist, but when Mr. Hendry presented himself for the examination he was examined by the same doctor who examined him in the first place. I am sorry to say that he was given just as superficial and perfunctory an examination as on the previous occasion and that the result was the same as before.
As the Minister knows, I have taken up the case with him and with Sir Dan Pettit, the chairman of the National Freight Corporation. On each occasion I have come up against a brick wall.
Before I come to my appeal to the Minister, I draw attention to an interesting case which was reported in The Times on 26th April 1977. I refer to the case of East Lindsey District Council v. Daubney. It is an English case but I suspect that it has some relevance to the situation in Scotland.
Mr. Daubney, who was dismissed by the council on health grounds, had his appeal that he had been unfairly dismissed upheld by Lincoln Industrial Tribunal, whose decision was confirmed by the appeal tribunal. I shall quote one

1635
or two extracts from the judgment of Mr. Justice Phillips. The report reads:
"The employers appealed on the grounds that the industrial tribunal had erred in finding that they ought to have inquired further into their medical advisers' decision and in holding that they ought to have given Mr. Daubney the opportunity to seek an independent medical opinion."
Mr. Justice Phillips said:
"While employers could not be expected to set themselves up as medical experts, the decision to dismiss or not to dismiss was not a medical question but a question to be answered by the employers in the light of the available medical advice."
He went on to say:
"The employee had to be consulted and the matter discussed with him. If employers took such steps as were sensible, according to the circumstances to consult the employee and to inform themselves upon the true medical position, it would be found in practice that all that was necessary had been done."
I stress the importance of two phrases from that judgment. The first is "available medical advice" and the second is "The employee had to be consulted". No note, as far as I can gather, was taken by National Carriers of Dr. Kenmure's opinion, based as it was on a searching examination, and Mr. Hendry tells me that no genuine consultations took place with him. In effect, the company pulled up the drawbridge marked "Our doctor's report" and laughed at any onslaughts from Mr. Hendry, his solicitors or his Member of Parliament.
It may be said that Mr. Hendry's proper course was to seek a remedy at an industrial tribunal. Unfortunately, his dismissal came during the days of the old and unlamented Industrial Relations Act, which required that a person in Mr. Hendry's position should make an application within four weeks of the termination of his employment. Mr. Hendry tells me that he was not advised of this when he registered at the employment exchange in Fraserburgh and that no forms for making an appeal to the tribunal were available at that time.
The Minister of State, Department of Employment, in a recent letter to me on 3rd November 1977, pointed out that Mr. Hendry could still apply to a tribunal, even now, although in that event he would be liable to meet the employer's costs if he was unsuccessful. I do not believe that that is a fair or reasonable situa
1636
tion. Mr. Hendry has, by now, a somewhat jaundiced view of Government Departments, nationalised industries and all officialdom. I can understand that and I believe that the Minister will be able to do so, too.
Mr. Hendry is ready and anxious to return to work. He is prepared to be examined by any independent medical practitioner appointed by the Minister or jointly with National Carriers. I believe that he has had rough justice and now deserves a break. I hope that the Minister will give him that tonight by announcing that he will ask National Carriers to arrange for such an independent examination.
12.37 a.m.
The Under-Secretary of State for Transport (Mr. John Horam): I am grateful to the hon. Member for Aberdeenshire. East (Mr. Henderson) for raising this case, because it is a matter of importance. I know the care and concern which the hon. Member has shown over it. I understand and sympathise with him in his concern for his constituent, Mr. Hendry. It is unfortunate when someone has to cease employment as a result of a medical condition. As the hon. Gentleman stressed, there is no blame at all attached to Mr. Hendry, and his conduct while working for National Carriers is in no way to blame for his subsequent situation.
It is also right that the management should give proper consideration to the circumstances of the case. When an employer is a responsible public corporation such as the National Freight Corporation, one can expect proper consideration. The normal response in such a situation would be to refer the matter to the National Freight Corporation to be dealt with by its management. This case has already been fully examined by the Corporation but, nevertheless, the hon. Member asks me to intervene. In those circumstances, I can consider intervening. to ask the NFC to look at this issue again only if I have reason to believe that, through some extraordinary circumstances, the NFC management has been unaware of some relevant fact or had not given proper consideration to the case.
Before I say what my view on the matter is, I shall go briefly through the history of the case. Mr. Henry was employed by NCL on British Rail parcels

1637
contract work. He was off duty from 21st December 1973 suffering from cardiac franchaensa. On 14th January 1974 he said that he intended to resume work. NCL decided, in view of the nature of the illness, that it was sensible for him to be medically examined by the company's doctor before being allowed to resume work.
Mr. Hendry was duly examined at Aberdeen on 23rd January 1974. The doctor noted that he had been in hospital two weeks, reported him fit to return to duty, but stated:
"as his condition has been attributed to myocardial ischaemia, however, he must not be employed as a motor driver. He will require other duties which are not over-strenuous. Unfortunately, this restriction is likely to be permanent."
The depot manager at Aberdeen informed Mr. Hendry in writing on 29th January 1974 that, as no post was available commensurate with the doctor's restriction, it was unfortunately necessary to stand him off, which is the usual company practice. Mr. Hendry had paid leave until 23rd February 1974.
On 8th March 1974 Mr. Hendry's general practitioner—Dr. Ross of Fraserburgh—wrote to the depot manager in Aberdeen saying that in his opinion and in the opinion of Dr. Kenmure, a cardiologist at Aberdeen Royal Infirmary, there was no medical reason why Mr. Hendry should be removed from his present job.
The NCL's company doctor was again contacted. He replied on 26th March 1974 in these terms:
"I have received a copy of Dr. Kenmure's report on this man"—that is, Mr. Hendry.
"It does not, however, change my view that he is unfit to resume motor driving. I have been in touch with Dr. Ross and informed him accordingly."
It is noteworthy that Dr. Kenmure, in his letter to Dr. Ross of 20th June 1974, thought that there was no doubt that Mr. Hendry did, indeed, have mild ischaemic heart disease. He recognised that patients with ischaemic heart disease were likely to be barred from holding a heavy goods vehicle licence or a passenger service vehicle licence and presumed that it was at the discretion of his employer whether Mr. Hendry should be allowed to continue driving a parcels delivery van.
I disagree somewhat with the hon. Member for Aberdeenshire, East in that
1638
it appears on the facts of the case that Dr. Kenmure was not in essence disagreeing with the report of the NCL company doctor on the medical facts.
Eventually, on 10th September 1974, Mr. Hendry wrote to the depot manager applying to leave the service under the arrangements agreed with the unions for ill-health cases. Incidentally, that was approximately nine months after the incident, but he was kept on the books by the company for that time and would have been kept on the books for a further year and three months. It is the practice of NCL in such circumstances to keep an employee on the books for two years to see whether during that period a job crops up which will allow him to be employed in a way commensurate with his state of health.
However, Mr. Hendry did not choose to take up that option. At least, he did not do so after the nine-month period. In October 1974 he was again examined by the medical officer, who confirmed that Mr. Hendry was
"permanently unfit for his normal duties".
NCL wrote to Mr. Hendry and interviewed him on 31st October 1974. He was told that he would be allowed to leave the company's employ on 1st November 1974 in accordance with his application. A cheque for £183·60 was offered to him as payment of the amount due under the resettlement arrangements operating inside the company. As the hon. Member said, Mr. Hendry refused the cheque, and he has not cashed the cheque or any part of it. He said that he would refer to his lawyer and that he would claim unfair dismissal. The Aberdeen depot manager and the lawyer met on 3rd December 1974, and Mr. Hendry still refused to accept a cheque because he wanted to reserve his position.
There the matter rested. On 7th April 1977, however, the hon. Member wrote to the depot manager asking him to reconsider the matter. The managing director of National Carriers Ltd., Mr. Brian Hayward, replied on 11th May 1977. The hon. Member wrote again on 25th May and Mr. Hayward replied on 3rd June. In this correspondence he made clear the considerations leading to the company's decision. He said that it was
"always difficult when professionals disagree, and in view of the onerous duties placed on

1639
employers under legislation for the health, safety and welfare of its employees the Company always acts on the advice of its Medical Officer who, after long industrial experience, fully understands the exact nature or the duties involved in any particular case."
It is important to bear in mind, first, that the medical officer knows the problems facing a worker in a particular job. He has industrial experience, which is particularly relevant in this case.
Mr. Henderson: Did not the medical officer qualify in 1967, so that he could not have had more than four or five years' experience?
Mr. Horam: I am not aware of that fact. That is new to me. I do not have those facts at my disposal. I am glad to know, if that is the case. But certainly the medical officer had six or seven years' industrial experience. Whether that is a long or a short time in this situation I am not competent to judge. Certainly he has relevant industrial experience and is used to considering cases against the background of the normal duties of the person concerned, as against the simple medical facts. But one should not make too much of that distinction, perhaps. The job involved lifting and carrying heavy packages and on many occasions climbing flights of stairs.
Mr. Hayward also made it clear that there had been full consultation with Mr. Hendry there had been
"a number of discussions between him and his manager"
before the decision was taken.
Perhaps I may comment on the hon. Member's point about the court case involving the East Lindsey District Council. In that case, in our view the two main principles which were shown to be relevant to the decision of the appeal tribunal were that when dismissing a man on medical evidence employers should ensure that they have sufficient information on which to take a decision whether to dismiss him and should take sensible steps to consult the employee before doing so. NCL feels that in that respect it behaved properly. First, there were two investigations by the medical officer in addition to the advice given by Dr. Kenmure, the
1640
consultant, who does not disagree with the medical facts of the case.
Secondly, the firm did talk to the employee on a number of occasions about his position before finally he left the company, about nine months after the incident that we are talking about. In both instances, therefore, NCL feels that it has obeyed the letter and the spirit of the law.
On 12th July the hon. Member wrote direct to Sir Daniel Pettit arguing that there was a
"strong case for an independent examination",
meaning a medical examination. Sir Daniel replied on 26th July 1977 saying:
"we would be in a completely indefensible position if we were to disregard the advice of the Company's Medical Officer in this matter and Mr. Hendy was subsequently to have an accident because of his medical condition."
Mr. Gordon Wilson: The normal rule in damages cases is that there shall be corroborative medical evidence. In other words, there should be two medical examiners carrying out two medical examinations, one confirming the other. In this instance there were two medical examinations, but both were by the same medical practitioner. In this case, therefore, there is no corroborative evidence at all which shows that this gentleman was in a state that would require him to be dismissed.
Mr. Horam: Again, I must bow to an hon. Gentleman's knowledge of the Scottish situation. I did not know that there had been corroborative evidence in Scottish cases of damages. Nevertheless, as I understand it, NCL is saying that in this case it behaved in accordance with the procedures of the law and of industrial relations practice. I do not think that it would be the case that the situation was different in Scotland in this respect, although obviously the hon. Gentleman is drawing an analogy from another field. The facts are that NCL behaved properly according to the law as it applies both in England and Scotland in this respect.
As the hon. Gentleman said, Mr. Hendry then took up the case with the Under-Secretary of State for Employment, who brought out the point that unfortunately the relevant Act was the Industrial Relations Act 1971 and not the

1641
Employment Protection Act, under which Mr. Hendry's position would have been better as regards the proceedings that he would have been able to draw upon once he decided to take the course of action he did. He has been unfortunate in that respect.
Having carefully considered the matter, and having listened with great care to the points made by the hon. Gentleman, which have been basically that there should have been an independent examination of Mr. Hendry, who must feel some degree of bitterness for the situation that has emerged, I nevertheless feel that NCL has demonstrated by its handling of the case from beginning to end—when Mr. Hendry got right to the top of the company and received a reply from the chairman himself—that it has behaved reasonably.
In addition, both the hon. Gentleman and, if he reads Hansard, Mr. Hendry must bear in mind that the company has to pay attention to the public interest. It is a matter of grave concern that it should not employ someone who may, because of the condition of his health, suffer an effect which could lead him in some way to mishandle a vehicle, for example, with consequences for the general public. That must be a matter of grave concern to the company and is something that it must take into account. I am sure that Mr. Hendry himself acknowledges that to be a correct attitude.
Mr. Hendry behaved properly in the three years that he was employed by the company, and it is unfortunate that he has suffered this problem at the age he has. It is also unfortunate that the company was unable to offer him alternative employment at that time. It was not the case, although I understand that Mr. Hendry may feel it to be, that the company was wishing to secure grounds for his dismissal.
1642
What I have said demonstrates that the company did all it could to keep Mr. Hendry on, but there was no suitable alternative employment available at that time or for the few months following. It was his choice, after a period of nine months or so, to seek to end his relationship with the company and take the course he did. NCL has looked carefully at the case. It has twice asked its company doctor to look at it. It has taken a view of Dr. Kenmure's independent evidence. It has made its decision in full knowledge of the facts.
Mr. Henderson: Dr. Kenmure was specific that there was no reason why Mr. Hendry should not go back to being a van driver with the company. If there is doubt in the company's mind about Dr. Kenmure's view, would it not be possible for it to arrange for him to examine Mr. Hendry and to say that it will be bound, as Mr. Hendry would be, by Dr. Kenmure's opinion now?
Mr. Horam: If the facts that I have are correct, Dr. Kenmure basically said that Mr. Hendry had a mild ischaemic heart disease and was likely to be barred from driving a heavy goods vehicle, for example, and presumably, therefore, it was at the discretion of his employer to consider whether he should be driving a van. That is the ground on which Dr. Kenmure rests, and it does not seem to me that there is a fundamental difference between the medical facts as diagnosed by the company doctor—
The Question having been proposed after Ten o'clock on Wednesday evening and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at five minutes to One o'clock.

  COURTS (WALES AND CHESHIRE)
  COURTS (WALES AND CHESHIRE)
CIVIL SERVICE
  Armed Forces Pay Review Body
  Armed Forces Pay Review Body
  Public Appointments
  Public Appointments
EDUCATION AND SCIENCE
  Sutton Centre School, Sutton-in- Ashfield
  Sutton Centre School, Sutton-in- Ashfield
  Nursery Education
  Nursery Education
  Immigrants (Children)
  Immigrants (Children)
ENERGY
  Nuclear Power Stations
  Nuclear Power Stations
  Petrol (Pricing)
  Petrol (Pricing)
  LORD ADVOCATE
  LORD ADVOCATE
HOME DEPARTMENT
  Falkland Islands
  Falkland Islands
  Immigrants
  Immigrants
  Pornography
  Pornography
  Immigration
  Immigration
  Drug Addicts
  Drug Addicts
  Chileans
  Chileans
  One World Crusade
  One World Crusade
  Alcoholic Liquor (Sales to Juveniles)
  Alcoholic Liquor (Sales to Juveniles)
  Electoral Registration
  Electoral Registration
  Police Constable David Coldman
  Police Constable David Coldman
  Blasphemy
  Blasphemy
  Illegal Immigrants
  Illegal Immigrants
EMPLOYMENT
  Youth Opportunities Programme
  Youth Opportunities Programme
  Cheshire
  Cheshire
  Social Fund
  Social Fund
  Unemployed Persons
  Unemployed Persons
  Staffordshire
  Staffordshire
  Disabled Persons
  Disabled Persons
  Birmingham
  Birmingham
SOCIAL SERVICES
  Derelict Land (Heath Authorities)
  Derelict Land (Heath Authorities)
  Supplementary Benefits (Polygamous Marriages)
  Supplementary Benefits (Polygamous Marriages)
  Retirement Age
  Retirement Age
  Abortion
  Abortion
  Research
  Research
  Community Health Councils
  Community Health Councils
  Proplex
  Proplex
  One-parent Families
  One-parent Families
  Supplementary Benefit
  Supplementary Benefit
  Benefit Claims (Time Limit)
  Benefit Claims (Time Limit)
  Contraceptive Pills
  Contraceptive Pills
OVERSEAS DEVELOPMENT
  Land Rovers
  Land Rovers
WALES
  A55, Bangor-Conway
  A55, Bangor-Conway
  National Museum of Wales
  National Museum of Wales
TRANSPORT
  A Roads (Development Restrictions)
  A Roads (Development Restrictions)
  Road Safety
  Road Safety
  Highway Code
  Highway Code
  M1-A1 Link Road
  M1-A1 Link Road
  Concessionary Fares
  Concessionary Fares
  Plutonium (Carriage by Air)
  Plutonium (Carriage by Air)
  Driving Instructors and Examiners
  Driving Instructors and Examiners
  Driving Standards and Licences
  Driving Standards and Licences
  Highway Agency Arrangements
  Highway Agency Arrangements
NATIONAL FINANCE
  Income Tax
  Income Tax
  Personal Allowances
  Personal Allowances
  Value Added Tax
  Value Added Tax
  Pay Settlements (Government Action)
  Pay Settlements (Government Action)
  Dividends (Control)
  Dividends (Control)
  Transport (Expenditure)
  Transport (Expenditure)
  Balance of Payments
  Balance of Payments
AGRICULTURE, FISHERIES AND FOOD
  Research
  Research
INDUSTRY
  Industrial Strategy
  Industrial Strategy
PRICES AND CONSUMER PROTECTION
  House Purchase Contracts
  House Purchase Contracts
  Hire Purchase
  Hire Purchase
  Ivory and Skins (Imports)
  Ivory and Skins (Imports)
TRADE
  Republic of Ireland and Denmark
  Republic of Ireland and Denmark
  Performing Rights
  Performing Rights
  Plutonium (Carriage by Air)
  Plutonium (Carriage by Air)
DEFENCE
  Service Men (Housing Possession)
  Service Men (Housing Possession)
  European Programme Group
  European Programme Group
  Tank Guns
  Tank Guns
EUROPEAN COMMUNITY
  Council of Ministers
  Council of Ministers
FOREIGN AND COMMONWEALTH AFFAIRS
  Indonesia
  Indonesia
  Rhodesia
  Rhodesia
  Belize
  Belize
  Falkland Islands
  Falkland Islands
  Immigration Applications (Pakistan)
  Immigration Applications (Pakistan)
ENVIRONMENT
  Bushy and Hampton Court
  Bushy and Hampton Court
  Mortgages
  Mortgages
  Thermal Insulation
  Thermal Insulation
  Research
  Research
  Industrial Development Land
  Industrial Development Land
  Derelict Land
  Derelict Land
  Twyford Orchards (Gipsy Caravan Proposal)
  Twyford Orchards (Gipsy Caravan Proposal)
  Green Belt Land
  Green Belt Land
  Council House Sales
  Council House Sales
  Council House Tenants (Security of Tenure)
  Council House Tenants (Security of Tenure)
  Caravan Owners (Harassment)
  Caravan Owners (Harassment)
  Stanley Barracks, Hong Kong
  Stanley Barracks, Hong Kong
  Housing (Bedfordshire)
  Housing (Bedfordshire)
  Waste Land
  Waste Land
  Rate Support Grant
  Rate Support Grant
  East London (Partnership Schemes)
  East London (Partnership Schemes)
  Orbit Housing Association
  Orbit Housing Association
  Leeds-Bradford Airport
  Leeds-Bradford Airport
  Construction Industry
  Construction Industry
  Sand and Gravel Extraction
  Sand and Gravel Extraction
  Community Land (Disposals and Acquisitions)
  Community Land (Disposals and Acquisitions)
  Canals
  Canals
  Urban Programme
  Urban Programme
  Owner-Occupiers (Property Rehabilitation)
  Owner-Occupiers (Property Rehabilitation)
  Pop Festivals
  Pop Festivals
  Anti-Social Families
  Anti-Social Families
  Home Loss Payments
  Home Loss Payments
  Windscale (Inquiry)
  Windscale (Inquiry)
  Local Government Councillors (Surcharges)
  Local Government Councillors (Surcharges)
  Housing Services Advisory Unit
  Housing Services Advisory Unit
  Planning Appeals (District Councils)
  Planning Appeals (District Councils)
  Royal Palaces (Departmental Responsibility)
  Royal Palaces (Departmental Responsibility)
  Ordnance Survey Review Committee
  Ordnance Survey Review Committee
  Ancient Monuments (Custodians)
  Ancient Monuments (Custodians)
NORTHERN IRELAND
  Stratheam Audio Ltd.
  Stratheam Audio Ltd.
  Disabled Persons
  Disabled Persons
  Concessionary Fares
  Concessionary Fares
  Belfast (Building Programme)
  Belfast (Building Programme)
  Housing Executive and Council
  Housing Executive and Council
SCOTLAND
  Herring Fishing
  Herring Fishing
  Police (Resignations)
  Police (Resignations)
  Loganair (Financial Assistance)
  Loganair (Financial Assistance)
  Pay Settlements (Government Action)
  Pay Settlements (Government Action)
  Youth and Community Service
  Youth and Community Service
  Highlands (Blizzard Damage)
  Highlands (Blizzard Damage)
  INDUSTRIAL POLICY (PRIME MINISTER'S SPEECH)
  INDUSTRIAL POLICY (PRIME MINISTER'S SPEECH)
  TUC
  TUC

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Chelmsford

CROSS-CHANNEL ELECTRICITY CABLE
The Earl of LAUDERDALE: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how the United Kingdom share of the proposed 2,000 megawatt cross-channel electricity cable link is to be funded.
Lord STRABOLGI: My Lords, the capital cost of about £250 million will be shared equally between the Central Electricity Generating Board and Electricité de France. The financing of the CEGB's share would be for consideration in the light of the electricity supply industry's overall financial requirements during the construction period.
The Earl of LAUDERDALE: My Lords, I thank the noble Lord for that reply. Are we to take it that, quite possibly, the Government will find it worth while to give to the CEGB some kind of subsidy towards the British share? Can he also tell us whether there is any expectation of Community finance towards this, in that the Community's energy policy is bound to result from this very splendid and imaginative enterprise?
Lord STRABOLGI: My Lords, no such subsidy has been sought by the Generating Board from the Government, nor is this likely. There has been no formal indication as to whether the link would qualify for EEC finance. A decision to use any facility that became available would depend on several factors, including the availability and the cost of other forms of finance.
The Earl of LAUDERDALE: My Lords, may we take it from that that the Government will not miss the opportunity of getting something back from the Community for a very constructive contribution to its energy needs in this proposal?
Lord STRABOLGI: Yes, my Lords, certainly. But the finance is, of course, a different matter. The Government have, as yet, taken no firm decision on the link, but it was discussed during the French President's visit to London last December. My right honourable friend the Prime Minister told another place that he and the French President had noted that the generating authorities in our two countries are in negotiation towards an agreement, and expressed the Government's support for this.
Lord HANKEY: My Lords, while greatly welcoming this development, may I ask the noble Lord whether the cable will be well buried to protect it against trawling and anchors? Will some measure be taken to prevent it from affecting ships' compasses?
Lord STRABOLGI: Yes, my Lords. There is, of course, if I may remind the House, a cable at present. There is a 160 megawatt link which was constructed in 1961, but this has been found to be vulnerable to ships' anchors. It is intended that the 2,000 megawatt cable will be embedded to a depth of two metres throughout its length. Trials are taking place and these are not yet complete, but no insuperable obstacles are foreseen.
Lord PARGITER: My Lords, may I ask my noble friend whether or not this will affect the programme for power production in this country?
Lord STRABOLGI: Yes, my Lords; it should, of course, bring great benefit to both this country and France. Even the smaller cable which is there meant that during the severe winter of 1962–63 French electricity was able to help the United Kingdom's grid system, and in the long summer of 1976 we were able to reciprocate and export supplies to make up for loss of capacity in France's hydroelectric stations.
Lord HANKEY: My Lords, may I ask for an answer to my second question? Presumably, such a high-powered direct current cable will affect ships' compasses, and is this being guarded against?
Lord STRABOLGI: My Lords, I am afraid that I could not possibly answer that question. But I will go into it and let the noble Lord know.
Lord FERRIER: My Lords, will the noble Lord accept the congratulations of somebody on this side of the House, who is not ignorant of these matters, on the way in which he has handled these most fascinating questions?
2.40 p.m.
The Earl of LAUDERDALE: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government on what principles they will judge whether the proposed cross-channel electricity cable is likely to be viable economically and when they expect construction to start.
Lord STRABOLGI: My Lords, the Government will consider the forecast costs in relation to the anticipated benefit from electricity trading between the Central Electricity Generating Board and Electricité de France, including prospects for the export of coal-generated electricity to France; and the contribution which the link would make towards meeting demand in this country. The CEGB expect that construction, which would be subject to Government investment approval, would not start before 1979.
The Earl of LAUDERDALE: My Lords, while thanking the noble Lord for that reply, may I ask him whether it seems likely that this link will make it certainly prudent, if not necessary, to have extra energy storage capacity on hand? Also, can he tell us whether the French will be entirely free to resell elsewhere in Europe the energy that they import from us?
Lord STRABOLGI: My Lords, I understand that there is no associated
1036
storage requirement. With regard to the French, negotiations are continuing between the French and British electricity boards. The link would, of course, have some effect on the opportunity for energy trading between France and neighbouring Continental countries.
The Earl of LAUDERDALE: My Lords, may we take it from that answer that the feasibility studies do not suggest that there might be a need for extra storage capacity, in order that the link can be put to the best possible use? Can the noble Lord also add to his reply to an earlier question about the depth at which the cable is to be buried? He said just now that it would be buried to a depth of two metres. Is he not aware that oil and gas pipelines buried to that depth in the North Sea have been subsequently exposed by the scouring action of water on the seabed?
Lord STRABOLGI: My Lords, with regard to the second question, I understand from the Central Electricity Generating Board that further embedding and disembedding trials in the Channel will be undertaken this summer, and I am sure that the point which the noble Earl has made will be borne in mind. The noble Lord asked me whether the link would affect the board's requirements for pumped storage stations. As I said before, I understand that there are no associated storage requirements.
Lord ELTON: My Lords, is the noble Lord aware that in Norway they are currently researching and about to produce a means of covering oil pipelines with an eight metre wide carpet of concrete which is said to be more proof against the scouring action and also cheaper than burying? Will the noble Lord's Department be in touch with them to consider this method?
Lord STRABOLGI: Yes, certainly, my Lords. We shall take note of what the noble Lord has said. There is a 130 kilometre long twin electric power cable under the Skagerrak between Norway and Denmark. There are other cables of this kind all over the world. There is one between the North and South Islands of New Zealand, and there are two connecting some of the Canadian islands with the mainland.
Lord BOWDEN: My Lords, may I ask my noble friend whether it has been decided who is to make the cable? Is the cable to be made in this country or elsewhere? Also, who is to make the terminal equipment which is so necessary?
Lord STRABOLGI: My Lords, it is a little premature to answer that question. First we have to decide whether or not to go ahead with the project.

INCOME TAX: HIGHER RATES
2.45 p.m.
Lord BOYD-CARPENTER: 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, calculated to the most recent convenient date, would be the annual amount of revenue lost as the result of a provision that no part of an individual's earned income should be taxed at a rate exceeding 70 per cent.; and what proportion this figure would represent of the total yield of direct personal taxation.
The SOLICITOR-GENERAL for SCOTLAND (Lord McCluskey): My Lords, on the assumption that tax on investment income were to remain unchanged, the annual amount of revenue lost as a result of such a provision would be about £60 million, or approximately 0·3 per cent. of the estimated yield of income tax for the year 1977–78.
Lord BOYD-CARPENTER: My Lords, I thank the noble and learned Lord for those figures. Since the amount involved is well within the normal doubts involved in the calculation of revenue in any Budget, does it not follow from those figures that the reasons for imposing these confiscatory rates of tax on higher earnings are political and social rather than in order to raise revenue?
Lord McCLUSKEY: No, my Lords.
Lord HARMAR-NICHOLLS: My Lords, is the noble and learned Lord
1038
aware that, even if my noble friend's 70 per cent. figure were accepted, it would still leave us among the very highest taxed nations in the world, a fact which can only encourage the emigration of investment and personnel at a time when we want both of them in this country if we are to deal successfully with our production and unemployment problems?
Lord McCLUSKEY: My Lords, international comparisons have to be made with great care. Many other factors are involved—for example, local taxes, social benefits, various allowances and a great many complicated matters. For the noble Lord just to say that our tax rates are among the highest in the civilised world is to mislead us.
Lord BOYD-CARPENTER: My Lords, will the noble and learned Lord amplify his admirably terse reply to my supplementary question? If the reasons are not political and social, can he give any other reason for imposing taxation at this level for the sake of raising this derisory amount of revenue?
Lord McCLUSKEY: My Lords, we are accustomed to graduated taxes. Governments of all colours have introduced taxes of this kind. Let us turn to the future rather than rake through the embers of the past. In the course of the next few weeks my right honourable friend the Chancellor of the Exchequer hopes to look at the whole burden of taxation with a view to avoiding the kind of mischief which the noble Lord has in mind.

THE SVALBARD ARCHIPELAGO
2.47 p.m.
Lord KENNET: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are aware of the discussions being carried on between Norway, the relevant sovereign Power, and the Soviet Union, one of many Contracting Parties to the 1920 Treaty of Paris, on the subject of the Spitzbergen Archipelago; and whether they

1039
are satisfied that they in no way breach the principle of "absolute equality" established by that treaty, and that nothing is being done in or over the Islands or their adjacent waters by the Soviet Union, or any other State party to the treaty, in breach of Article IX thereof, which precludes the Islands from being "used for warlike purposes."
The MINISTER of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): My Lords, the only discussions between Norway and the USSR about Svalbard Archipelago of which the British Government are aware are the day-to-day contacts between the Norwegian Governor of Svalbard and the Soviet Consul on the island. Talks between the Fisheries Ministers of the two countries are due to take place soon over the administrative provisions of an extended fisheries protection zone established around Svalbard by the Norwegian Government in June 1977. The British Government are satisfied that the day-to-day contacts between the Norwegian Governor and the Soviet Consul are in no way in breach of the principle of "absolute equality" established by the 1920 Treaty of Paris. The applicability of the treaty to an extended fisheries zone around the archipelago is the subject of continuing discussions between Norway and a number of treaty signatories. The British Government are satisfied that nothing is being done by any signatory which breaches Article IX of the treaty.
Lord KENNET: My Lords, I thank my noble friend for his informative Answer. May I ask him whether this country is included in the conversations about the fisheries zone which are being held between Norway and the other signatories? May I also ask him whether our Government, who have equal rights in Spitzbergen with eight or nine other countries, including the Soviet Union, are accustomed to exercising those rights, particularly the right to land and to use the place for various purposes, and, if not, whether or not it would be good that from time to time we should do so?
Lord GORONWY-ROBERTS: My Lords, the answer to the first point
1040
which has been made by my noble friend is, yes. That is also the answer to the second point which he has made. May I refer my noble friend to the 1920 Treaty of Paris, a copy of which I have here—no doubt he has one but, if not, I will gladly lend him mine. He will find that the points he has raised in the second part of his supplementary question are fully provided for in the terms of that treaty.

SHIPBUILDING (REDUNDANCY PAYMENTS) BILL
Brought from the Commons; read 1a, and to be printed.

NORTH SEA RESOURCES AND THE ECONOMY
2.50 p.m.
Lord SELSDON Lord SELSDON rose to call attention to the opportunities now available for the rebuilding of the United Kingdom economy following the successful development of the oil and gas resources of the North Sea; and to move for Papers. The noble Lord said: My Lords, with a somewhat heavy heart, I rise to move the Motion standing in my name on the Order Paper. As I move from the hopefulness of youth to the cold reality of middle age, I ask myself daily whether those of my generation and the generation to come after me will have any hope at all of improving the standards and the way of their lives. I think it is a question that every family man asks himself regularly. I clutch at straws, and one straw I clutch at, as I believe many other people do today, is the North Sea. But knowing relatively little about the North Sea, other than from my time in the Navy, I view it with fear and suspicion; and my suspicion is directed more to what Government policy may be towards the North Sea and the fruits that it holds rather than to the technical, financial and other difficulties related to it.
I remind myself, and I would remind your Lordships, that we have been faced with successive Governments who have tried, often against overwhelming odds, to promise the British people rising living standards, while the cake has been getting smaller and smaller. At the same time,

1041
successive Governments have camouflaged, despite the trappings of the consumer society, the real decline that has taken place in worldwide economic influence, in domestic standards of living and other elements. Today I should like, in moving this Motion, briefly to remind your Lordships and myself of what the North Sea can offer, and to suggest ways in which these benefits could perhaps best be utilised.
On the second point, the utilisation of whatever benefits may come out of the North Sea, there will be considerable differences of opinion, and now is perhaps an appropriate time to debate these. But, on the first point, on what exactly the North Sea offers, there is also a considerable difference of opinion. Preparing for this debate, I sought the advice of people in the private sector, friends in the public sector, and others, to try to determine what was the value of this thing called the North Sea, and what would come out of it. The figures and information which I will now quote are not my own views but a distillation of the views of others.
We are faced on one side with the private sector trying to keep from Government profitable information, and, equally, Government trying to keep from the private sector what their intentions are. Above all, we must remember that the situation in the North Sea started relatively recently. I have put down my Motion in terms of gas and oil so that we should not forget that it was gas that started the whole thing off. Back in 1959 there was this discovery of the Slochteren field off Holland. That seems a long time ago, but it was not until 1965, just 12 years ago, that any real exploration got under way in the British sector, when BP found gas in the West Sole field. There were other finds off the Norwegian coast, and from the Dutch again.
Today we should remember that the whole of the British Gas Corporation network is now fed by the North Sea with supplies in excess of 3,600 million cubic feet a day. I cannot envisage 3,600 million feet of gas, but I can envisage its equivalent of about 130,000 tons of coal. New supplies from the Frigg and Brent fields will increase this to some 6,000 million cubic feet a day by the 1980s—that is,
1042
within two years—and we shall have sufficient natural gas to meet the estimated requirements of industry and the consumer; all this in a relatively short period of time.
Furthermore, there are other developments in the gas area which are not so much related to gas itself but to oil, where opportunities exist for utilising resources of natural gas which are related to oilfields. Unlike dry natural gas, this type contains substantial quantities of heavier petroleum gases, ethane and prothane, which have a value to the petrochemical industry. What I am trying to say is that it seems that by using the resources of gas we can be reasonably self-sufficient for a period of between 25 and 50 years; this is the gap involved. We are talking of 51 trillion cubic feet. That is the estimated reserves of natural gas in the North Sea, with possibly more to be obtained. If, as is suggested, there may be pipelines linking the oilfields for extracting natural gas, it being often uneconomic to have a single pipeline going to an oilfield, then this could even increase, and there are such proposals being made at the moment.
Half of our natural gas is in the North Sea and half in the Northern basin off Liverpool Bay. Exactly what would the position be if we had not had that natural gas? In theory, we have adequate reserves of coal and we could, in theory, have utilised that coal. But somehow the productivity of the coal industry has not been as great or as effective as that of the gas industry, and I will ask this question and try to answer it later. Despite the 1¾ billion tons of coal, the equivalent of gas in the North Sea, it is not gas that has captured the imaginatior, but oil. Although oil deposits were first found in the Norwegian and Danish sectors, it was not until 1969 that AMOCO found the Montrose field, and the BP Forties Field came a year later. The most significant finds took place only five years ago. We must remember that it is only in the last two years that oil has actually come ashore.
I think it is right to point out that, had this operation been under a single Government, of whichever Party, it could never have financed, nor would it have attempted to finance, the development that has taken

1043
place. In all, expenditure on North Sea development could be in excess of £15 billion, of which 7 per cent. would have come from Government, 40 per cent. from American and 40 per cent. from British corporations. When these companies first started their development oil prices were low. The risks were considerable. We were all suspicious and doubtful whether oil would come on stream on time. The Department of Energy were often fairly cynical about this. But, at the end of the day, people achieved what it was they had set out to achieve, despite considerable difficulties, despite danger and loss of life, despite the risks and political pressure involved, and as a result we are in a position where we could exploit in our own territory approximately 4 per cent. of the world's oil reserves.
It has only been recently that Government have taken a hand and become involved, and, in my view, quite rightly so. The way in which Government are involved, and continue to be involved, may be a matter for discussion, but it is fair to point out that, where Government have been overinvolved in these developments, things have not gone well, there have been problems and ultimately relatively little profit. It seems that any developments in the North Sea can be reasonably financed, that money is no longer a problem; and more than that, the mere existence of it, and the emotion going with it, has increased international confidence, strengthened sterling, and provides us with a chance to take certain economic steps which would have been denied to previous Governments because of constraints on the balance of payments et cetera. We are currently running at a production rate of 800,000 barrels a day, roughly 43 per cent. of the United Kingdom total requirements.
This will rise to some 1.4 million barrels a day during this year and some 2.2 million barrels a day by 1980, when it is estimated we shall be self-sufficient in oil. We should bear in mind, of course, that the quality of our oil is very high, and therefore we shall be exporting some and importing others of lower quality, so complete self-sufficiency in the true meaning of the word does not necessarily apply. What is the value of these reserves?— because cubic feet, tonnes and barrels do
1044
not mean much to me and, maybe, to many others. At current prices, roughly 14 dollars a barrel, we could assess that amount at £300 billion, roughly £20,000 for each household in the United Kingdom.
Coming back to a more practical point, what comes out of it in real terms, in monetary terms? We are faced with the knowledge that the development costs are so high—many times those of any other part of the world—that it often costs something like £5,000 per barrel a day; thus, it will take two years or so to recover the costs of producing one barrel. However, the revenue that is estimated to come out of it is best looked at in terms of what we believe would come to the Government rather than to the oil companies themselves.
I am advised that the current structure is such that in 1978 40 per cent. of the total revenue from oil and gas in the North Sea would accrue to the United Kingdom authorities, which would be of the order of some £600 million rising to £2·2 billion by 1980 when the Government will be taking 80 per cent. of the total revenue. There may be arguments between the developers and the Government as to exactly what is a fair cut of the cake, but I have reason to believe that although oil companies and others may complain bitterly, they are risk-takers and have taken the risks and would not feel too put out if that were the pattern that developed.
However, that £2·2 billion a year starting in 1980 is not new money, for we have already consumed and spent much of the resources of the North Sea. The Government may try to persuade us otherwise, because often that is a valuable course to take; but we should bear in mind that the public sector borrowing requirement is some £8 billion at present, perhaps falling to £6 billion this year. These deficits were obviously opposed by many people on all sides of the House, for perhaps in real terms we should have taken a dive in living standards and had very high unemployment, although for various reasons that did not come about.
Therefore, I raise the following question: If the oil is to come ashore—and I am assured that it is coming ashore on time, with remarkable efficiency and with good co-operation with the technical aspects of Government, the Department of Energy—

1045
what does it mean? Many of us would say that there should be direct cuts in taxation and that we should give the benefit back to the British people. There are considerable fears that the Government, for one reason or another, will squander and waste in consumption the benefits of the North Sea, that our reserves will run out by 1990 and that we shall be back in a stop-go cycle probably stopping long before then. We should bear in mind that that need not happen.
For the first time in economic history since the War, the Government need no longer be quite so concerned about the constraints of the balance of payments. It would be as well to point out that the impact of North Sea oil—the gas, of course, not being exported and with insufficient quantities to export—could have a positive contribution to the balance of payments of some £2·75 billion this year, rising to £5 billion in the 1980s. If we consider the "oil surplus", as it may be called, plus the invisible surplus which, although falling at present, as more people may go abroad as tourists and as the pound strengthens, could still remain constant at £1·5 billion, we are faced with one factor: the balance of payments account so far as visibles, and in particular manufactures, is concerned.
We have never really had a surplus on visible exports—I think only three in 50 years. We have ceased in real terms to be a major competitive manufacturing nation. We have, however, had a tremendous shift away from manufacturing. The question that I should like to ask is, whether we should continue to try to be a manufacturing nation, except perhaps in those specific areas where we have greatest competence and greatest competitive ability.
Many people have tried to point out to me when doing my research for this debate—sociologists in particular—that people always look at their own job and position in relation to their parents and their grandparents. They have reminded me that we started our industrialisation 40 years before many other countries, when it was hard and unpleasant, and the sons of those who worked in the mills wanted to improve their situation. Improvement was sought by their sons, and gradually people fought against the idea of repetitive work in manufacturing
1046
industry. Yet repetitive work is what provides the jobs.
We are advised that while the Bank of England estimates that there could be a £2·25 billion surplus on current account this year, it seems probable that this could be very much on the high side because we might estimate some form of reflation by the Government and with that a rather serious position on the visible balance of payments, as inevitably in these events manufactures are sucked in from abroad as consumer booms are created. Therefore while one says to the Government, "Perhaps you need not worry so much about balance of payments," that is only one aspect. The strength of sterling need not necessarily be related to balance of payments. At the moment it seems probable that we are almost back with a strong currency, for two reasons: the possible benefits of the North Sea and the constraints of policies which have been imposed by the IMF.
If a middle-of-the-road course is pursued and moderation is shown on consumption from the North Sea, it is probable that sterling could remain strong for a period. However, that does not solve the major problem which I think confronts this Government and any Government that succeeds it; namely, unemployment. Politically a high level of unemployment will always be unacceptable and is to be condemned. However, one of the biggest worries has been the shift in the balance of employment by different sectors. Over the five-year period between 1971 and 1976 employment in the private sector fell by 350,000 and employment in the non-productive public sector rose by 800,000. In the same period 800,000 people left manufacturing industry. They would not necessarily be the same people who moved over to Government employment, but that was the shift. But while that number of people left manufacturing industry, the service industries took on 1,200,000 more. The question I ask is whether perhaps greater emphasis should not be given to service industries if we are to be a manufacturing nation again.
Of the total workforce of some 25 million, approximately 30 per cent. are employed by the Government sector and 70 per cent. by the private sector. The CBI and others are urging reflation and reduced taxation, on the basis that such action will stimulate industry and could

1047
create employment. I think that that is true. However, a point to be borne in mind is that major capital investment in British industry at present would be more likely to create unemployment or increase unemployment than to create jobs. I would suggest, therefore, that we should concentrate from the grass roots upwards.
There are people who have pointed out that if, tomorrow, every small business took on one person there would be no unemployment. The small businesses advise that the Employment Protection Act is tantamount to banning increased employment. I have often looked at other companies around the world and marvelled at the way the British can work abroad; at their ingenuity; their ability to work long hours right through the night; and their ability to be creative and full of ingenuity when there is no plant and machinery available to make a spare, and I wonder why that does not happen back in the United Kingdom. I come back, I am afraid, to the simple question: Why should they? It is a question of incentive. The noble Lord, Lord Boyd-Carpenter, pointed out that it might be taxation. It is not necessarily taxation. It is more than that. There must be a reason.
We all hate shirkers. There have been examples of companies having started to work "flexi-hours" or people have used punch-cards. Surprisingly enough, the shirkers get caught out and everyone supports the idea. The British genuinely want to work, and the level of moonlighting is such that I am very much encouraged to believe that they do. There must be many noble Lords who have supported the aspect of moonlighting and have made cash payments to assist people to do jobs in their own time. However, it is taxation that needs a rethink and the Government will, I know, do that.
To me it seems odd, speaking as a Conservative too, that, of the total receipts from taxation by the Government, 50 per cent. come from income tax. Therefore, one asks the question: How much of that is company tax? What comes from profits? Under 8 per cent. comes from companies because of stock relief assistance and so on. If one asks every company: "Would you rather pay more tax to the Government and let your
1048
employees have a higher take-home pay?" they would all agree with the idea, because it is an argument they could not fault. The Government say historically: "We cannot alter a tax system". Experts point out that it is extremely difficult.
At the end of the day, the British only want to know that if they do work they may be rewarded. I remember that when I was a small boy my great-uncle Stafford Cripps, to whom I think the noble Lord, Lord Lee, was PPS, told me that if one worked hard at school and educated oneself one could get a good job, and that if one worked hard at one's job one could improve one's standard of living and save. I believe that that was Socialist philosophy. I do not believe that today the Conservative philosophy is any different, but I do not see any signs of it coming from the Benches opposite. My Lords, I beg to move for Papers.
3.10 p.m.
Lord SHEPHERD: My Lords, it is a customary courtesy of your Lordships' House to congratulate the mover of a Motion and I think that on this occasion we should offer our very sincere congratulations. The quality of the noble Lord's speech is something that we shall remember. It is not the first occasion on which the noble Lord has intervened and certainly we on this side of the House have listened and, to a large measure, agreed with him.
If I were to express two disagreements with the noble Lord's Motion, it would not be in a critical sense. First, this debate, which is broadly an economic debate drawing attention to the possible opportunities to be gained from North Sea oil and gas, is one that we should have held many weeks, if not months, ago, when what would have been said might perhaps have influenced the Government, because the Government are obviously giving great consideration to this matter. My understanding is that a White Paper or a Government Statement is shortly to be issued.
Therefore, my first question, which must be to my noble friend the Minister, is: When can we expect this Statement? I say to my noble friend that this is now a matter of great urgency. We have already wasted some of the opportunities. If we had not had the great need to exploit the North Sea in the way in which we have,

1049
incurring great expenditure overseas to the cost of our balance of payments, we should not have lost the opportunities of using our own industries for that particular development. Therefore, time is of the very essence in this matter.
My second criticism really arises from what the noble Lord, Lord Selsdon, said at the very beginning of his remarks about his and future generations, when he wondered whether there was hope for a higher and better standard of living. My criticism concerns the word "rebuilding" in relation to the British economy. From that remark, it sounds as though the British economy is flat on its face. I accept that it compares unfavourably with our major competitors, but, taking the world as a whole, we are still a strong economy and we have a strong manufacturing base. As I have said on many occasions from the Dispatch Box, many of our problems have arisen over very many years. We can always debate whether they stemmed from the beginning of this century or from the middle of the last century. However, our gradual decline has taken place over a long period.
Although North Sea oil and gas provide us with certain opportunities, they will not in any way rectify or change the decline of the last 50 or 100 years. They give us an opportunity, but, if we are to see the changes which the noble Lord himself wishes to see, it lies in Governments, industry, trade unions and everyone in the United Kingdom—and I shall return to that later—to make a fundamental change not only in our structures, but in our basic attitudes.
I believe that a change in attitude has already taken place. I believe that 1976 was a landmark: we looked down into the abyss of the possible collapse as a consequence of inflation of all that we in this country understood. We have made great changes. I think it was in October last year that we spoke in rather euphoric terms about a major change in our financial situation, saying that we had been able to move out of deficit on current account into a small surplus. I believe that the British people recognise the dangers and that many of the financial achievements have been due to the recognition and co-operation of the CBI, the TUC and the Government.
1050
Despite all the difficulties and pressures, I hope that the Government will maintain their stand in the fight against inflation, because, unless we deal with that over a period, whatever opportunities may arise or steps may be taken in other directions, there is little or no hope for this country. I believe that the mass of the people will stand with the Government and will stay within the guidelines. It is no credit to management or to those who negotiate with management who break the guidelines. I hope that this House, with its semi/non-political hat, will maintain its support of the Government in the fight against inflation.
Great changes have taken place in the financial field. I believe that we can also see some successes in the manufacturing and economic fields. In volume, our exports rose by some 8 per cent. during 1977—twice the rate of the increase in world trade. Let us give credit to our manufacturers and exporters for what they have done. I believe that North Sea oil and gas give us the opportunity to give help and assistance to those companies which have made a major contribution to the change during 1977. But I think that the Government need to walk with a degree of caution. There is a degree of uncertainty as to what contribution North Sea oil and gas make to the economy.
One figure given is that it represents some 3 per cent. of our gross national product. That figure of 3 per cent. is miniscule in relation to opportunity and growth. Taken as an average to the middle of the 1980s, I think it represents some 10 per cent. of our exports—that is, visibles and invisibles combined. One could say that those are significant figures, but they are not figures which can in any way allow us to relax. The noble Lord, Lord Selsdon, was right in saying that they give us time to adopt economic policies which can foster and develop, in particular, our manufacturing base. But, as the noble Lord said, if we do not seize these opportunities—whether they be available for five years or 30 years—this country's situation will indeed be dire. They give us time in which to change, develop and go for growth.
The noble Lord was quite right in saying that we can have a debate on how we can use those opportunities. Apart from the fight against inflation, the basic need is

1051
to deal with the unemployment situation. I do not believe—and I share the view of the Secretary of State for Employment—that we can look to the manufacturing industries for any significant employment prospects. I believe that we have to find that employment within the service sector or the public sector. Therefore, of the resources that become available from North Sea oil and gas, I hope that a part—not a large part, but a part—will be used with some discrimination within the public sector so as to have the greatest effect upon employment. Perhaps the construction industry is one that stands uppermost in most people's minds.
However, I suppose that one could put the opportunities into two categories. What does one do with the revenue? I have touched on this in one aspect of the public sector. I have no doubt at all that, if this country is to play its part and if it is to make inroads into its competitors' markets, it will have to be much more engineering-orientated. I believe that what we are doing in training and retraining in the field of engineering and production is pathetic in relation to the needs of this country. I have no doubt at all that, if we were to move to a 4 per cent. or 5 per cent. growth next year, we should have a great overheating in tile economy because of bottlenecks and shortages of skilled operatives.
With so many young men and women unemployed we have an opportunity now that we have some resources with which to play, and I hope that the Government will not only redouble their efforts in the field of retraining but will go out and see how they can improve and direct the whole general educational system towards young men and women going into the field of manufacture and production.
Retraining is essential, but I also think—and here I may be slightly provocative—that the Government ought to look seriously at the proposals for bringing about earlier retirement. I do not say compulsory early retirement, but they should provide companies with an opportunity to do it within their organisations. There are today so many young people on whom the future will depend, who cannot get into industry or commerce because there are men who are nearly at the end of their working career.
1052
I think that the nation would gain a great deal if their departure were expedited and we were to bring in some of the younger people who are looking for work.
There are many other ways in which we could spend the revenues. I think that this is something that we should debate on another occasion. I have read with care the CBI proposals as to what one should be able to do for the balance of payments. I am attracted to the CBI proposal that one should ease the restrictions on overseas investment. I believe that there is a good case to be made that exports follow investment, but I cannot help feeling that, in the present political climate, it would be unacceptable for the Government to do this at a time of such large unemployment and when there is a belief in the need to invest within our own industry. This was touched on by the noble Lord, Lord Selsdon.
There is a great deal of money lying around this country waiting for investment. Much of the problem is that the return appears to be inadequate. This touches on one factor to which I was going to refer earlier. While our trade may develop next year, it will only develop if we can increase our competitiveness, because the value of the pound sterling has undoubtedly moved against the exporters and therefore they can only recoup that situation by increasing their competitiveness.
May I come back to the balance of payments? The noble Lord's suggestion is worthy of consideration, but the timing is not right. During the course of 1978, I should like to see a considerable repayment of our overseas debts, particularly those of the nationalised industries and local authorities which were taken on at a time of relatively high interest rates. I would hesitate to recommend paying the IMF loan back because that is at a very favourable rate, but I would seek to repay those overseas debts on which there is a very high interest rate.
In conclusion—and it has been, I fear, rather a rambling speech—I come back to something I said at the end of last year in regard to investment. When one looks at the countries within the EEC and compares their improvements in productivity and world trade, one thing comes out clearly indeed. It is that what they have been able to achieve has been largely due

1053
to consistency of policy. They have known fairly well what the policy was likely to be for 3 years, 5 years, 10 years. All the political Parties assembled in your Lordships' Rouse have some responsibility in this matter. I well remember one of the first actions of the Conversative Party when it returned to power in 1970 was to sweep away the Industrial Re-organisation Corporation. On reflection they knew they were wrong.
I hope that the various agencies which we have set up will be allowed to continue, not necessarily because they are right or because they have all the resources available to them, but because they provide some means by which, particularly, the Scottish Development Agency and the Welsh Development Agency can deal with regional problems. I come back to the need for consistency. We have to create—and I believe that we are now in fact in the course of creating—far greater consultation and participation at factory level. I believe that there is now far greater agreement between workforces and management. There may be exceptions, but, by and large, I believe that this has taken place.
There is a greater understanding and spirit of co-operation between the little "Neddies" and the various bodies that have been set up by industry, Government and the trade unions—the 40 Industrial Groups, I think. I hope that that will be fostered. But I would hope that in the next 12 or 18 months there could be a greater identification of view between the two major political Parties in the field of the economic needs and economic demands and developments of this country. At least we could identify our intentions and the means of achieving them. I believe that that would be the greatest step forward, giving industry the confidence, first, to invest and, second, for the workforce to support its management.
3.30 p.m.
Viscount SIMON: My Lords, after two such speeches as we have just listened to I rise with great diffidence to address your Lordships. I should like to start by echoing what the noble Lord, Lord Shepherd, said about the extremely thoughtful and interesting speech with which the noble Lord, Lord Selsdon, opened our discussion. I do not think
1054
anybody could doubt that the discovery of oil and gas under the North Sea, and its successful but costly extraction, has brought considerable benefits to this country and will bring more for some years to come. For how many years is a matter upon which we cannot be certain, but most authorities seem to agree that it is of the order of 20 to 25 years. But even over this short period it would be a mistake to exaggerate the benefits.
I suggest it is worth remembering that, when our needs for oil are fully met from the North Sea—this point has perhaps already been made in a certain sense—we shall be spending, or shall have spent, in obtaining that oil, real resources far greater than the resources that we used to spend in manufacturing and exporting enough to buy oil at pre-1973 prices. In other words, as a result of the oil coming from our own North Sea we are not going to get it any cheaper: in fact, I think it has been suggested that it may well be more expensive in real terms than the oil we are buying now.
Of course we get the advantage in the balance of payments, and this is an important advantage which helps the Government and the country in what has been one of the constraints upon our working for many years. But we shall still have to adjust ourselves—both industry and the private consumer—to a high price for energy. We are not going to get it any cheaper. As I say, the balance of payments improvement may well ease the restraints which have been working on us, but in themselves they do not do anything to improve industrial performance. As the noble Lord, Lord Shepherd, put so clearly, that surely is our crying need at the present time.
To turn to the financial benefits to the Government—and I am here referring to oil—this is a different matter. What we want to discuss—and we believe the Government are going to produce a White Paper on this—is how we can best make use of the very substantial increase in Government revenue which will arise from oil during the next 20 years. I think the figures have already been given—at any rate, they are quite well known. In the simplest possible terms the increased revenue can be used either to increase expenditure or to reduce taxation—and I include in the increase of expenditure what the noble Lord, Lord Shepherd,

1055
said about repaying debts. Of course, this is a form of expenditure. My own feeling is that, subject to the overall requirement to contain inflation—and, as both noble Lords have said, it is perfectly clear that that must be our first requirement—the first claim upon the revenues should be to encourage in whatever way the Government can the modernisation and expansion of industry.
I was disappointed to hear the noble Lord, Lord Selsdon, saying he thought that as an industrial nation we were reaching the end of the road. Undoubtedly we have to redeploy resources out of some of the older established industries, which are fading, into new ones, but I agree with the noble Lord, Lord Shepherd, that we are still a major industrial country, and we can be a greater one still if we do the right things about it. Speaking from these Benches, I would hope that the development and expansion of industry would be mainly in the private sector, but even in the public sector there are industries which could be expanded and brought more up to date to help us in our industrial future.
How then from these revenues can the Government best encourage the modernisation and expansion of industry? May I, in parenthesis, add that I would include among industry, agriculture, because I believe there is much that could be done to develop our agriculture so that we become more and more self-sufficient in the production of what we need. The first thing that occurs to anyone is tax reduction. There is little doubt that this would improve the situation. What we have to get over is the feeling among industrialists that it is not worth investing further. Of course, there is a temporary position in which existing plant is under-utilised. I certainly hope that over the next few years that will not deter industrialists from going for expansion if they are given the right incentives. Apart from tax reduction it is very desirable that there should be some encouragement, through the tax system or otherwise, for small businesses. They can contribute an enormous amount to our economic prosperity. I think that in recent years they have been clobbered—that is certainly what they feel—and some encouragement to small industries would be of immense help.
1056
There is still the question of the industries that for historical reasons are in a permanent state of decline. The noble Lord, Lord Shepherd, touched upon that position. It seems to me that in the short term decisions may be forced upon any Government to give temporary help to what have been called "lame ducks", but I suggest that whatever is done should be accompanied by positive steps to prepare for the fundamental changes in the pattern of industry which we need. And I support most firmly what the noble Lord, Lord Shepherd, said about training. Nothing like enough has been done about retraining, and with revenue available for the purpose it seems to me that important improvements could be made. This change in the pattern of industry is unavoidable if we are to survive as an industrial nation, and in spite of what the noble Lord, Lord Selsdon, said, it is difficult to see how we can survive as anything else.
I mentioned before that, above all, we must keep inflation under control. This means that we should not encourage too rapid an expansion of industry. That in turn will mean that in the early years we shall have more funds available from oil revenue for other purposes. I suggest that there are two other purposes which we might consider. If we are to become self-sufficient in energy for 20 years, must we not prepare ourselves for something near self-sufficiency after 20 years? Last week we had a debate about alternative sources of energy, and it seems to me that some of these revenues could well be applied both to research into alternative sources of energy and to their development. Noble Lords who were here for that debate will remember that it was agreed that energy conservation is just as much an alternative source of energy as anything else. The Government have now put a certain amount of money at the disposal of local authorities and one wonders whether it will not be possible, with the oil revenues flowing in, to increase that in some way.
The other alternative use for these revenues I have touched on and it was mentioned by the noble Lord, Lord Shepherd; namely, some repayment of our debt, and I am sure he was right to say that we want to repay the high interest debts as early as we can. I do not know the details and perhaps the Minister,

1057
when she replies, will be able to say whether what Lord Shepherd suggested is practicable. In my experience, people who lend large sums of money at high rates of interest usually say they do not want it paid back before a certain length of time, I therefore do not know how far we could pre-empt the repayment of those loans.
There is one other possible claimant on these revenues to whom I must refer. The exaggerated publicity that has been given to oil and its benefits will make it difficult—dare I say, particularly in an Election year?—to resist public expectation of an age of boundless affluence. Yet to use this bonus—for that is what it is—to jack up indiscriminately the support which the community rightly gives to the disadvantaged could be both unwise and wrong. We can all think of anomalies in the social services which could be ironed out at relatively little cost, and if some money could be found to do that there would be a welcome in many quarters. But any general improvement of benefits must, I suggest, wait until the economy really gets going again, and then we shall soon find additional revenue coming in sufficient to provide, on a continuing basis, improved social services.
I come back to what I believe to be the first claim on the oil revenues, and that is the objective of the regeneration of industry. To this end, fiscal methods made possible by the oil revenues will help, but I agree with Lord Shepherd that much else is required, and that does not necessarily come from Government; it comes from employers, workers and the people. Unfortunately, people do not always react to a fiscal stimulus as economists think they will or as they think they ought to. I am sure our fundamental problem is the feeling of uncertainty among industrialists, and again I find myself saying almost exactly what Lord Shepherd said so much better than I could say it. One of the principal causes of a lack of confidence is the uncertainty which arises from our present political system or the manner in which it is worked. Every few years a General Election comes along and the unfortunate industrialist knows that the ground rules may be changed.
Your Lordships know that from these Benches we believe that electoral reform would help to damp down these violent
1058
oscillations, and I know there are noble Lords in all parts of the House who share that view. But even before we are able to get this very necessary reform—and surely we shall get it in time—cannot an effort be made to reach a consensus on these important decisions which will affect the life of the country for 20 or 30 years? Is not the essence of democracy the search for common ground rather than a pitched battle between conflicting views with one Party gaining a transient majority and enforcing its policy on the minority, or indeed in many cases what is not even a minority, of voters? I feel that action of this kind—searching for a common policy—would do far more to put confidence into industry than any adjustments that could be made in taxation.
3.46 p.m.
Lord BOYD-CARPENTER: My Lords, I agree very much with both the noble Lords who preceded me in saying that the House is greatly indebted to my noble friend Lord Selsdon both for introducing this debate—if he will allow me to say so, with admirable timing—and for the wholly admirable speech with which he introduced it. I cannot hope to match his obvious expertise in respect of the technicalities of the North Sea oil industry, but I did have a small opportunity to see something of it when I was chairman of the Civil Aviation Authority, since I was responsible for the airports which perform the important rôle of servicing the oil rigs, and I took the opportunity of going out to see some of them in operation. No doubt many noble Lords have had this experience, but to those who have not I must warn them that as you sit in the helicopter approaching the rig, the pad on which you are to land looks very small indeed while the North Sea looks very large, very cold and very green. That only strengthens one's admiration for those who, in the process of earning their daily bread, make these journeys with continued regularity and subject themselves to the most appalling climatic conditions existing in any oilfield in the world.
The situation in which we have to consider this matter is a curious and, perhaps for a Labour Government particularly, a paradoxical one. We have a financial recovery for which the Chancellor of the Exchequer is taking all the credit

1059
to which he is entitled, and perhaps even a soupcon more. On the whole, the financial recovery which we all welcome is, as we know, due above all the to fact that many eons ago Providence, foreseeing that in the late 1970s we should have a Labour Government in this country, provided oil in the North Sea by way of compensation. Add to that the salutary discipline of the International Monetary Fund.
We have a financial recovery which perhaps in some people's minds, or at any rate in their speeches, has blinded us to the very different picture of British industry, with no growth, lagging investment and a failure in productivity. I do not know whether other noble Lords were as shocked as I was by the figures embodied in Mr. Rees-Mogg's article in The Times on the 6th of this month in which he showed that, over the period 1974 to 1976, whereas the productivity per worker in all our rival countries had risen, in many cases by very substantial amounts, that in this country had actually marginally fallen. In a country which lives by industry, and which will have to live by industry when the North Sea oil has run dry, this is the crucial matter.
I agree very much with what the noble Lord, Lord Shepherd, said, as did my noble friend, that the bounty of Providence in the North Sea has given us and given the British Government an opportunity, almost certainly our last opportunity, to get things right. It has given a welcome easement to the balance of payments and thereby reduced very much the need for restriction to be imposed for balance-of-payments purposes and so on. It has provided substantial funds—and this House, like the other place, is not lacking in those who suggest agreeable ways of spending them—and it has also given us a pause and an opportunity to try to get right the industrial and commercial system by which we live, have lived and always will have to live.
I hope I shall not seem to be introducing a partisan note, or indeed to be offensive to noble Lords opposite, if I say that there is a fairly wide apprehension outside as to whether the present British Government really are going to seize this opportunity. If one reviews the history of Labour Governments in this country,
1060
one sees that they have a very creditable record indeed in social advance, for which they are fully entitled to take great credit. But the obverse of that has been, as a matter of history, that their record of financial and economic management has been bad, and they have had to face, or attempt to face, a series of crises which have turned up with a regularity and punctuality which, in these days, British Rail might well envy. I think there is a reason for this. Labour Governments, in their heart of hearts, have not much enthusiasm for the dynamic that makes what is still basically a free enterprise society "tick"—the pursuit of profit, the pursuit of individual earnings, the desire of the individual to provide well for his family and perhaps for his children.
There is a resistance to it; and the trouble, I think, is this. If one looks round the world, one sees that there are basically two methods by which a complex industrial and commercial society can be run. One is the carrot and the other is the stick. The Communist world uses the stick; and, to be fair, however brutal its methods may seem to those of us brought up in the liberal traditions of this country (and I would add, my Lords, "liberal" with a small "I", for the benefit of the noble Viscount), it uses it in such a way that it works. Indeed, we have seen in the Communist part of the world notable advances under that system which it would be foolish for those of us who disagree with it to deny.
The other method is the carrot, and the carrot is profit. The carrot that stimulates energy and gives the incentive to which the noble Viscount referred is the desire for profit; the reasonable and proper desire to earn and keep to oneself a reasonable proportion of one's earnings. I think the failure of Labour Governments—and, if one looks at it historically, every Labour Government except the first in fact ended in a financial crisis, and as the first lasted only 10 months it is perhaps unfair to blame them for failing to show the form of their successors—is due to the fact that they really are too liberal and generous to use the stick (at least, I thought so until last week, and I shall say a word about that in a moment) while not having the enthusiasm for incentive.
I want to say a word about those two things, and I hasten to assure my noble

1061
friend Lord Selsdon,in view of his reference to me, that the fact I am going to say a word or two about personal taxation does not mean that I am under the illusion that getting that right is a panacea for all our ills. Of course it is not. If I or any of us were to attempt to give our views on what needs to be done to restore the economy of this country, we would need to make a speech as long, as discursive and as inconclusive as is the normal Budget speech in another place. I am going to pick out only those two things, not because I think they are the only things but because, with respect, they are the two points which I should like to urge upon the House. The first is the incidence of a system of progressive personal taxation which successive Governments have failed to adopt and adapt to the development of inflation, with the result that very high rates of personal taxation are now being imposed, particularly on high earners.
I asked a Question for Written Answer of the noble Baroness on the 22nd November last as to what proportion of his income was kept by a married man with two children under 11, at various relatively high income levels in this country, and for comparisons with the same man in the countries of one or two of our Western European friends and in North Amreica. The noble Baroness, with her habitual courtesy, furnished this information and, out of the generosity of her heart, added another set of figures, which are most helpful and for which I thank her, showing what is left after, on top of taxation, social security contributions have also been deducted. I prefer, for my own purpose, the figures relating to taxation, for this reason. As one who was once Minister of Pensions and National Insurance, I still cherish the pathetic illusion, perhaps, that people feel they are getting something for their social security contribution, although I am sorry to say that the link of a contributory system and the strength which it gave to our social security in this country has been very much eroded in recent years, and I regret it. Still, people feel that they get something for it, as compared with the ordinary man's reaction to the demands of the Inland Revenue.
The figures which the noble Baroness gave me—and, if my eyesight is as good as it normally is, I think she has them there—
1062
are really startling. If you start at the level of £5,000 a year (which in these days includes a number of skilled industrial workers on overtime, et cetera), the man in this country on £5,000 a year retains, after taxation, only 78.4 per cent. of what he has earned. In all the other countries in the group they retain over 90 per cent. except in the case of Italy, where it happens, irritatingly, to be 88.7 per cent. before social security; and all except Germany and Italy retain that 90 per cent. after social security. At the other end of the scale which I put to the noble Baroness, the £25,000-a-year man, in this country he retains only 45.1 per cent., whereas among all the other countries the lowest figure of retention was 64 per cent.
So, despite the total figures for the burden of taxation which Ministers have used in this House and another place from time to time to suggest that, as a nation, we are not out of line in the burden of taxation that we bear as compared with our rivals, it is clear that in the higher brackets we are completely out of line. I can only make the comment that, whether or not there be a connection between them, it is perhaps significant that, while we are out of line completely in the way we penalise the higher earners, we are also, alas!, from the figures I have already quoted, out of line from the angle of productivity, growth, investment and all the rest of it. It may well be that there is a certain significance, and indeed a link, between those two sets of figures.
Indeed, the answers to both the Question I asked in this House today and that which I asked of the noble Baroness on 7th February indicate that the actual revenues obtained from these higher rates of taxation are negligible. Both the figure I asked for today, and was courteously given, and the figure in respect of investment income for which I asked on 7th February show that the yield at these higher levels of taxation is so small as to be within the margin of error which any Chancellor has to accept in drafting his Budget, anyhow. It is therefore clear—and this is the point I want to make to the House—as indeed I suggested at Question Time, that the purpose of these high rates of taxation cannot be the raising of revenue, because the revenue is derisory. It must therefore be something of a political or social nature; indeed, not

1063
perhaps without some connection with what have been so well described as the politics of envy.
Envy is the most corrosive factor in the world. It can ruin a family, it can ruin an individual, and perhaps it can ruin a nation. I would beg the Government—and I had a helpful Answer from the Minister on the Front Bench, perhaps the most helpful so far, at Question Time—not to persist in rates of taxation of this sort which may well have a quite disproportionately damaging effect on the whole enterprise of those who conduct the private sector, and indeed the public sector, enterprises of this country, for the sake of a revenue which cannot be a material factor and is therefore, perhaps, simply for the appeasement of those who envy the more successful and more active of their fellow countrymen. That was one point I wanted to make on taxation.
I want to follow it up with a reference to the matter of the guidelines which was just touched upon by the noble Lord, Lord Shepherd. I agree with the noble Lord that it is plainly in the national interest that we should all, to the greatest of our capacities, seek to abide by these guidelines. I remember arguing in another place when I was a Treasury Minister that high increases in wages produced inflation. This observation was greeted as apparently humorous by the noble Lords, then honourable friends who were present on the then Opposition Benches in the Commons. It is only in recent years that noble Lords opposite have accepted that there is a close connection between the two; and I welcome them as St. Paul was welcomed on another occasion after a conversion hardly more complete.
The Government risk losing that goodwill by the methods they are seeking to adopt to enforce it. I thought that The Times had it very well when it described it as lawless, secret and undefined. It was attempting to say that the Government view of what is the national interest is law. Charles I could not have put it more strongly. I sincerely hope that the noble Lord opposite will not suffer the fate of his very late and most sacred Majesty. But this was what our forbears fought against at the time of the Stuarts:
1064
the doctrine that the will of the ruler, the will of the Executive, is law. The guidelines are not law. They are the policy of the Government.
Does the House reflect on where this can lead? If a company is to be blacklisted, if a company is to be denied Government contracts because it does something which, though lawful, displeases the Government of the day, where is that going to end? It is possible to displease the Government of the day in many ways. It may well be that I am doing so at this moment. If the fact of the guidelines, which are not law, being departed from is a reason for abandoning all the normal rules about Government contracts, may not the handling by a company of its trade unions, or the politics of its chairman, equally be grounds for penalising a company, once this principle is accepted?
I beg the Government to get back to the position where either you must have—if you must have; and it is for them to judge—a compulsory wages policy backed by law and by the decision of Parliament, or you must really have a free and collective system. But to move secretly behind the backs of the companies, and sometimes without informing them, is an exercise in arbitrary power which is repulsive to the British people. And it is arbitrary power, one sees from the arbitrary way it is used. It is not used on everybody. It is used on small companies. What about Ford's who granted an increase, I think, of 13 per cent? And what about the agricultural industry which granted an increase which again appears to breach the guidelines? Not a squeak from the Government about that. But if it is a small company—Holliday Hall or somebody like that—then the full force of Government displeasure is displayed against them. It seems—and this is one of the aspects of arbitrary rule—that the Government are applying the principle that the noble Lord, Lord Thorneycroft, once quoted in the other place: And first of all we fall upon the weak, mainly because they do not squeak so loudly when they die. I hope that the Government will abandon this policy. The concept, as we were told in another place last night, of putting it into Government contracts but not leaving that term of the contract to be construed (as every

1065
other term of the contract must be) by the courts, but leaving it to be construed at the whim, unfettered and without appeal, of the Government, seems, even for so good a cause, to be quite intolerable.
May I say one thing more as one who was chairman of the Public Accounts Committee in the other place for six years. We did our best, and I think we succeeded, in securing that Government contracts were awarded, without arbitrariness, simply on the basis of the lowest tender of someone who could satisfactorily do the work. If you depart from that—and this was our experience on the Public Accounts Committee—you not only get inefficiency and waste, but you get, in due course, corruption. Therefore, I ask the Government, in the interests of goodwill in this situation, to drop this approach and rely on the powerful persuasive argument that they have. I do not underrate it. In their place I would seek to expound it. In all honesty, even in my place now, I support it wherever I can. But please do not tarnish the whole thing with procedure of this sort which must, taking up again what the noble Lord, Lord Shepherd, has said, divide us as a nation on one of the crucial issues for our economic recovery.
Lord SHEPHERD: My Lords, would the noble Lord not agree that there is a touch of fairness. There are very many companies, a vast number of companies, and trade unions, who have accepted the Government guidelines. There are others who seek to break it. There is, therefore, advantage to those who break it. Is it not right that the Government should find all ways open to them—and I agree it should not be done secretly; it should be done publicly—to say, as buyers: "We will not do business with you if you break these particular guidelines"?
Lord BOYD-CARPENTER: My Lords, it is just that argument which illustrates the danger of what is being done, because when liberty is attacked, when sound principles are broken, they are always, to begin with, broken in a good cause. I am sure that the noble Lord, with his peat experience, knows well that once you start tinkering with the way that Government contracts are allotted, and do not allot them because someone has done something, wholly lawful, which annoys or is contrary to the policy of the
1066
Government of the day, then you are opening the door to every sort of abuse. I say this to the noble Lord. If it is essential to bring these other companies into line—and it may be that it is—then it is up to the Government to come to Parliament and ask for powers. If it be essential for the Government to have these powers, no doubt Parliament will give them. But I beg the noble Lord from his own experience and the skill with which he managed this House—and many of us have grateful memories of his management—not to allow himself to be led into that most dangerous of all arguments which he put to me a moment ago: that because a thing is, on merits, virtuous, and because those who are against its being applied are less than virtuous, then the method does not matter, nor the legality.
I have only touched on these two matters. I know that there are many others which noble Lords will produce. I want, finally, to say that the North Sea has given us the sort of opportunity which comes to a nation only once, perhaps, in many centuries. It ranks perhaps with the storm of 1588 which routed the Armada or with the calm weather of June 1940 which saved the BEF. It is of that order of magnitude. I say with all humility to the Government that a Government which betrays that opportunity, for any reason whatever, whether it be envy, whether it be ill-will or whether it be incompetence, will never be forgiven by the British people.
4.10 p.m.
Lord GREGSON: My Lords, may I add my congratulations, first, to the noble Lord, Lord Selsdon, for the excellence of the Motion and the admirable way in which he proposed it, and, secondly, on the contributions which have been made by subsequent speakers, especially when they bear a relationship to the Motion. When I listened to the opening remarks of the noble Lord, Lord Selsdon, I nearly tore up my notes and crossed my name off the list of speakers because of the many points that he made. However, some of the points are worth restating. First, I should like to make a little further projection than the noble Lord, Lord Selsdon, did in saying what the figures might be by the middle of the 1980s when North Sea oil is in full production.

1067
We could be talking of a source of new revenue to the Government of about £3½ billion. At the same time, we have the economic effects, which could be giving us a benefit of around £7½ billion in relief on balance of payments arising partly because we do not have to buy oil from abroad, and partly because, within that figure, there is some percentage for export.
The revenue figure of £3½ billion must be considered in relation to the total Government expenditure. We must get it in perspective. In the recent White Paper, the figure projected for Government expenditure in 1978/1979 was £58.5 billion. The figure of £3½ billion I have just given is for the height of the North Sea advantage at present day worth, so we are not dealing with a very large figure. Nevetheless, there is a quantum of money arising from this operation. It has been questioned whether this relatively small amount should be considered at all for special treatment. On the other hand, it is identified in the public mind as arising from an identifiable separate source, and it could be useful and justified to treat it as an additional source of expenditure. This is, of course, only true if it is applied as an additional expenditure and not as a substitute for planned and required expenditure in the main bulk of Government spending.
Turning to the aspect of the economic effect, in many ways the effect of saving on the balance of payments will have more impact and, at the same time, will be loaded with much more danger. This is especially so if we take into account the problems that are facing the Dutch nation from its previous handling of the benefits of North Sea gas. Despite our membership of the Common Market, the United Kingdom is still an island community which does not have sufficient resources of either food or raw materials to support its population and which is therefore completely dependent on the value added by manufacturing to pay for the imports of food and raw materials required to maintain the population at even a minimum standard of living. I recognise that I have not taken into account the net credit of invisible earnings and spending, but whatever this net benefit may be in the future—and I add the comment that this is at the present time a falling figure—it is completely
1068
and utterly swamped by the value of United Kingdom North Sea gas at the present extraction rate. This has been completely absorbed into the economic structure of the country with hardly a sight to be seen of its benefits in terms of reference to our balance of payments. It is patently obvious that the United Kingdom manufacturing industry is failing or has failed in the task of providing this added value which is so essential to the economic well-being and standard of living of the population in this country.
In 1950, imports of manufactured goods were barely one quarter of our exports. This year—or, at the latest, next year—imports will equal exports. That decline is steady and is irrespective of Governments or political Parties in government. The noble Lord, Lord Boyd-Carpenter, quoted productivity figures from The Times from 1974 to near the present date. I suggest that he might look at the figures from 1970 to 1974. I think he would be surprised that the slope of the curve does not change.
Lord BOYD-CARPENTER: My Lords, will the noble Lord allow me to intervene? If he will look at the figures in that same article in The Times, he will see that Mr. Rees-Mogg also gave the figures for the preceding four years. They show a productivity figure which, though smaller than that of some of our rivals, represented an increase.
Lord GREGSON: My Lords, I thank the noble Lord for that correction. The figures relating the import/export performance for the years from 1950 to the present are taken over a period where we have comparatively reliable statistical data. There are people who claim that the decline in the United Kingdom's manufacturing industry, measured on a world trade basis, has been identifiable for at least 100 years. It is absolutely essential that, within this context of our view of the benefits of North Sea oil, we should note the living example across the Channel and should recognise the danger of not taking into account the effect British industry is having on our trade balances.
It would be regrettable if the effect of North Sea oil on the balance of payments were allowed to mask this critical underlying problem of the import/export balance of manufactured goods. I would

1069
make a plea to the Government that, in the future and relative to our trade statistics, the oil account should be treated as a separate figure so that the trend of performance of industry and the effects of import/export figures will be patently obvious. Only in that way do I believe that we can avoid falling into the easy trap that has affected the Dutch people in dealing with the advantages of North Sea gas. The direct effect of the economic well-being of the United Kingdom on the state of our manufacturing industry is serious enough. But, when the related effect on unemployment is taken into account, the social and economic result is clearly shown to be the critical problem of our time.
There is good reason to believe that the decline in manufacturing industry is accelerating, and changes in civilian employment quoted by the noble Lord, Lord Selsdon, give an indication of the rate at which people are leaving manufacturing industry and are being taken into employment elsewhere, or are appearing on the unemployment lists. If I might just take, I think from the same source, the complete figures for that period and add to them the loss of employment in the other wealth-producing areas, such as agriculture, mining, forestry and so on, in the same period we have actually lost over 1 million workpeople from wealth-producing activity into either service activity or on to the unemployment register.
To these changes in the employment pattern must be added, in addition to the trend of unemployment, a combination of the birth-bulge and the changing employment requirements of married women. The 1977 total for the labour force was projected as 26,053,000. That is expected to increase by 1981 to 26,734,000, and by 1986 to 27,781,000. That means that by the time North Sea oil is in full flow, and taking into account our totally unacceptable unemployment levels, about 2·5 million jobs have to be created. That does not take into account the replacement of existing jobs which will become obsolescent during that period. One has only to look further at the birthrate statistics to see that this continuing increase in the labour potential of the United Kingdom will go on at least to the year 1990. That, to me, is a very real and serious economic and social problem.
1070
While it is recognised that manufacturing industry cannot provide the employment levels that are necessary in the longer term, manufacturing industry must provide the wealth that supports acceptable unemployment levels. It is quite apparent that private industry and commerce have failed consistently over a long period of time to provide the base for United Kingdom economic well-being. You have to consider that in this wealth-creating area of activity the overwhelming percentage of the activity is in private hands. Recognising the failure of this situation, it is imperative that an extra injection of effort has to be put into manufacturing industry. It is also apparent that the present impetus has to be drastically increased and a considerably expanded programme of effort through public agencies, whether in being or to be created, is critical to improving the performance of private manufacturing industry.
Like another speaker in this debate, I think it would be catastrophic if, following peak-out and decline of North Sea oil, the United Kingdom were forced to purchase oil in the world market at the then ruling prices, considering that the sources by that time could well be the tar sands of the Athabasco or the Orinoco or the shale sands of the United States. I think that projections of the cost of that type of extraction have been widespread in the Press. And to think forward to the point where North Sea oil has peaked out and we are on the world market for oil in that sort of cost-atmosphere is an almost incredible task.
Since there is no way, in addition to reversing the trend, that manufacturing industry could support such a massive overseas financial drain, therefore in parallel to improving the performance of manufacturing industry, financial resources must be applied to both the conservation of energy and the replacement of fuel sources, particularly coal, as a portable fuel both liquid and gaseous, as a direct oil/natural gas replacement. For basic electrical power generation I cal see no alternative to a steady increase in investment in nuclear power. That, of course, assumes a continuing programme of replaceable energy resources.
We are already receiving the benefits of North Sea oil, and additional programmes relative to manufacturing industry and

1071
energy conservation and replacement will take some considerable time to build up to the levels required. In the meantime, North Sea oil revenue should be applied directly, in addition to existing schemes, to job creation, with emphasis in the manufacturing sector; but not exclusively, since there is no way that manufacturing industry could absorb the employment levels that are required to eradicate this social evil. Indirect job creation, in my opinion, by stimulating the economy, carries the very grave danger of having a negative effect by sucking in imports; and, when considering the present state of United Kingdom industry, I believe that danger is real. The increased value of the pound against other currencies also considerably increases the danger, since it reduces the export potential and makes import costs more attractive. Therefore, I believe that we have an opportunity, with the advent of North Sea oil, as no other nation in the Western world has, to tackle the problem which I believe to be endemic within Western countries at the present time; that is, the very grave social evil of our massive unemployment potential.
Viscount MASSEREENE and FERRARD: My Lords, before the noble Lord sits down, may I ask him this question: As he appeared to be disappointed that private enterprise had not been able to employ all the people in this country, does he therefore agree with the policy on which the Government have been embarking in taking money from private enterprise and from the wealth created by private industry and giving it to customers to buy our goods—for instance, in connection with the various shipbuilding orders that we have read about lately? Does he agree that that is the way to create wealth?
The PARLIAMENTARY UNDERSECRETARY OF STATE, DEPARTMENT OF THE ENVIRONMENT (Baroness Birk): My Lords, I think the noble Viscount should confine his intervention to a short question, because that is usually the practice in these matters.
Lord GREGSON: My Lords, if I may be permitted, first I never said that manufacturing industry had failed to provide the employment: I said they had
1072
failed to provide the money to provide the employment. In any case, I think that the sheer economics, and the position of shipbuilding throughout the world—including the so-called "economic miracle" countries—is such that it would be completely wrong to sit back and watch our shipbuilding industry disintegrate before our eyes and to lose the skill and the employment of those people. I believe that, beyond the present state of world depression, there will be a requirement for their skills.
4.30 p.m.
Viscount TRENCHARD: My Lords, may I add my humble thanks and congratulations to my noble friend Lord Selsdon for providing this opportunity at this time. When I mulled the words of his Motion, I found myself wondering whether this great wealth that has come our way would help us to rebuild the economy, or might even be a slight deterrent to our doing so. The noble Lord, Lord Shepherd, mentioned the importance of attitude and I believe, from an industrial viewpoint, that in the last two to three years there has been a welcome return to an attitude of realism over a great part of British manufacturing industry. I believe that this has been largely due to the fact that, for the first time in the last two years, the real standard of living of this country has reduced, and this has reminded us all of the importance of first making the national cake before discussing its distribution.
While thinking along those lines, one thought of Germany, Japan and Holland and realised that more than one generation of the population of those countries still has it firmly in mind that they had totally to rebuild their economy, or their national cake, after the war—and how well they did it! One remembers that the population of the USA, with the dramatised enormous growth of that great country over a century, believes that the cake can always be made bigger. The tragedy, perhaps, in the British situation is that we have been relatively more static, and that people have come to regard the cake as being of fixed size. This thought, together with the fact that stronger sterling would make it harder for our manufacturing industries to increase their exports, as has been mentioned, led me to wonder whether the opportunities that we were seeing were

1073
like those of the man who saw a light at the end of the tunnel, until he realised that it was an engine coming the other way!
But, leaving flippancy on one side, clearly the enormous opportunity of this huge sum of money—yet, relatively, a small proportion of the GNP—cannot afford to be missed, and we have a duty to make sure that attitudes do not again become complacent. It provides us with a breathing space, as has been said. I believe that in that breathing space, if we are to rebuild the economy we really have to diagnose what has gone wrong with the economy, in what section, when and why. I shall not repeat the statistics of how badly we have done in productivity and in shares of world markets. They have led to the fact that whereas, at the end of the war, we had incomes and wages above all levels of the Nine in the EEC, there are now many countries with wages which are, in real terms, double ours. Although it is true that there are elements of decline in some areas of our manufacturing performance dating from the last century, we need to keep our minds on the period since the war and on the accelerating decline of recent years.
The first point of diagnosis that I should like to make is to consider those parts of the economy that have not declined—the City, agriculture and much of the distributive trades and service industries. All of these areas, so far as comparisons have been made, are at least as efficient and productive as their counterparts overseas. Without their successes, the general standard of living would be lower than it is now. It is a commercial policy, very often, that the reinforcement of success is easier than the turning round of failure. Therefore, I believe, first, that in a plan to rebuild we should give every incentive to the successful areas to continue to expand. I do not accept that service industries, which the noble Lord, Lord Gregson, mentioned, or the distributive industries do not make a real contribution to national productivity and to our standard of living.
Are we helping these successful areas at the present time? I doubt whether the City would say that our tax system, our exchange control and the fluctuations of our currency in the last decade have been helpful. I doubt whether our farmers
1074
would regard capital transfer tax—and we have larger and more efficient units than our competitors in Europe—the threat of wealth tax or a 25 per cent. subsidy to their competitors to ship temperate foods into this country through the green pound, as encouraging success. I hope that we can really reinforce success and give it some encouragement.
To return to diagnosis for a moment, not all of our manufacturing industry has had a poor record. A lot of our industry has records which are as good as those of our competitors in any of the more successful industrial countries. Of course, standards of performance and quality vary in all countries, always. But I feel that commentators have not looked closely enough at the areas within manufacturing industry where our competitivity and our productivity have declined. They tend, I believe, if one looks at various factors, to be the areas of large labour employment and labour-intensive industries.
Then, if we look for culprits so that we can make a plan to rebuild, I think that the groups of people who can affect the performance in this fairly selective, though very large, area of our economy are the Government, the shareholders and investors, management and, finally, labour. Government bashing is great fun. It goes on all over the world—industrialists love doing it—and it would be a bonus if our Government were blameless. But let me keep my remarks to only two aspects of the performance of our Governments in recent years which have had quite a major bearing on our performance and will certainly influence our recovery; that is, tax and price control.
Tax has been well mentioned by my noble friend Lord Boyd-Carpenter, and there is little need for me to go into it to any extent again. Some of your Lordships may have read the survey on the demoralisation of management, particularly senior management, which was entitled The Motivation of Management and was conducted by the ORC very recently. It validates all the points that my noble friend Lord Boyd-Carpenter has made and, while there is a lot of argument about how to interpret the various reports of the Donovan Commission and other comparisons about our

1075
tax level, there really is no doubt that 83 per cent., reached in exchange rate terms at not very high levels comparatively, is unequalled in the industrial world. It is also true that there is a severe disincentive right at the other end of the scale. Our standard rate starts at a relatively low level and, therefore, at skilled worker level, if one considers the other benefits of our social security system there is, in some cases, a disincentive to work.
As regards price control, I feel that a visitor—perhaps a judge from outer space—studying the figures of the fall of profitability in manufacturing industry, in inflation-proof terms—and they have been reviewed by the Bank of England, by Lloyds Bank and by many other reputable sources—showing a decline from a 15 per cent. or more return on capital before tax in the 'fifties to 2 or 3 per cent. in recent years, would ask, "Why do you control prices?" The truthful answer to that question would be, "Because we are trying to make an incomes policy stick and get the trade unions to accept it". However, the trade unions are among those who criticise industry for not investing. Two writers from the left of the political spectrum, which is often demanding stricter price controls, Sutcliffe & Glyn, say in their book British Capitalism, Workers and the Profit Squeeze.
Between 1964 and 1970 the share of profits was almost halved … The steady fall has become an avalanche".
Possible culprit No. 2 is the City and investors. There is no lack of funds. All of the up to date evidence has made this clear. Also, there is no lack of will by would-be investors to use those funds, provided that they can earn profit. There is one important problem area when one considers growth and the reduction of unemployment. It is clear that where private individuals have played a major part either through the banks or directly in investment in small businesses, the changes brought about by the egalitarian influence of our tax have left the small entrepreneur less well supported than he ought to be.
Before turning to management generally, may I point out that management recommend investment. One of the factors that they take into account in deciding
1076
whether to recommend new machinery and new methods in order that Britain may become competitive is their assessment of the share of any extra profit that will accrue to those who have paid for the investment rather than to those who will operate it. My experience, which covers a good many countries, is that this assessment is nearly always found to be more discouraging in Britain than it is in other countries.
The question one has to ask is whether our management in general is inferior to that found in other countries. First may I repeat the point that I have already made: That large areas of our economy are well run and successful. One must think also of the management of events like the Jubilee firework display! Could there be a better example of British management at its finest? There is nothing wrong with the British. My international experience has included the moving of British managers to many foreign countries and the moving of foreign managers to this country to do precisely the same jobs. No country has a monopoly of any one quality of management. I believe that it was the noble Lord, Lord Shepherd, who mentioned technology. I agree that our universities have not always encouraged our technical graduates to regard industry as providing a challenging and satisfying career. In any plan for rebuilding the economy a great deal of attention must be given to changing that attitude.
If I may make a final comment on the standard of management generally, in industry it is not fashionable to mention the Services. However, when the nation was at war I do not think that our overall leadership and management was inferior to that displayed by other countries. Of course we must do everything that we can to improve management standards, and we must start by improving the incentives.
May I now turn to labour and begin by saying that I believe that exactly the same things can be said about the average British employee in relation to employees in competitor countries as I have said about management. He is as calm, solid, reliable and reasonable as any foreign employee, and, in the case of some nationalities, more so. At times, members of any nationality can move into a mood of apathy or antipathy. I believe

1077
that the structure and atmosphere to be found within our larger factories is quite different from that which can be found in the factories of most of our competitor countries.
I believe that our collective bargaining systems and our trade union organisation are totally different, and here lies one of the biggest keys to the rebuilding of the economy. I hope that in the not too distant future the House will find the opportunity to allot a debate to this key area. If we were prepared not to copy but to parallel the kind of balanced bargaining positions in many other countries, I believe that we could double the real wages of the average employee in this country in little more than a decade. Because our wages are so low and because North Sea oil will be of such benefit, I feel that we could grow and reduce unemployment to a far greater degree than other speakers have thought possible. We might even be able to stop arguing about incomes and prices. We might also be able to relieve inflation, allow for flexibility and stop trying to judge exactly how much should be paid to individual employees in different firms.
We avoid this subject because we are a little frightened of it. It is a "hot" subject and we tend to tiptoe around it. The emotional struggles of our heartrending history live on. One has only to look at Northern Ireland. We had the Industrial Revolution first and we made the most mistakes. The systems, or perhaps the lack of systems, in the area of collective bargaining which have evolved since those days are unique in the world. We need to take a look at them and we should not be too proud to look at the systems evolved by other countries.
If is comforting for us to say that we need a good, modern manager and that then there will be no problem about raising productivity and moving forward the efficiency of our big industries. We say that we need a manager who not only knows his trade and does all the things that the old-fashioned manager did, but who is also the kind of man who is able to explain everything to everybody. I doubt whether the pressures today on factory managers in particular are widely enough understood. Even in past days it required a very good and well ordered manager to spare up to 15 per cent. of his
1078
time in order to change things and move them forward, as opposed to just keeping the ball on the island and attending to routine affairs.
We have added one thing and another to the requirements for this manager. We have used not only 15 per cent. of his time but far more, and when we use far more the show not only does not move forward but actually moves backwards. We start exchanging comments over the luncheon table about how incompetent the servicing of our motor-car, or any other personal experience of industry we have, has been, and we say how bad the management must be. But we have added duty after duty. They have to negotiate with everyone, with many levels of trade unionists in many unions, on every question. We have added the pressures of consumer lobbies and environmental lobbies, of price control and of legislation in a profusion which has never been seen before. I believe this should have high priority.
In summary, I should like to reinforce success, the successful areas, where we are seeing that the British can in fact still do it. I should like to remotivate and provide real incentives. I would like us to get together, forget the history of the Industrial Revolution, and put together a structure and an atmosphere surrounding collective bargaining and the trades unions which could transform the areas of large-scale employment, which are the areas which have let this country down.
4.52 p.m.
Lord LEE of NEWTON: My Lords, may I pay a very sincere tribute to the noble Lord, Lord Selsdon, for choosing such a vital subject as this and for the way in which he introduced it, and thank him for his kindly reference to my close association with my old very dear friend Sir Stafford Cripps. Those days were hard and difficult. He, I think, in the end sacrificed his life for the work which he held so dear. It is a strange thing that the noble Lord should have opened this debate today, because the general argument and discussion around what we do with the bonus of North Sea oil reminds me so deeply of the arguments which were deployed in Stafford Cripps's days when the Marshall Plan became operative.

1079
Stafford was utterly and completely determined to use it to build up the capital of this nation, while others called him "austerity Cripps" because he would not deploy it on consumer goods. Today we have practically the same kind of thing happening again. Read Mrs. Thatcher's speech to the overseas bankers yesterday—all based on reducing taxation, a thing we all want to do, giving the impression that if only we can achieve that kind of thing all will be well. As I was saying, it reminded me of those days when Stafford had to conduct a great battle—which, thank God, he won—to give the nation the opportunity of a new springboard following the losses of the war period.
The financial matters connected with North Sea oil are not, I think, as clear as they might be. Again, strangely enough, the noble Lord, Lord Selsdon, mentioned that North Sea gas came on stream in 1965. I happen to have been the Minister of Power at that time. He mentioned the BP strike of gas. I remember going out to the Sea Gem, which, unfortunately, afterwards foundered with grave loss of life. The noble Lord, Lord Boyd-Carpenter, was so right in telling us that when you go down in a helicopter the landing pad looks about two inches square. I kept my fingers crossed. Coming back I had a remarkable experience. The helicopter landed. I got out of my Mae West and earpads and so on; I was so relieved to do so that when I saw a number of journalists about I put up my thumb in exaltation, and BP shares went up half a crown in after-hours dealing. I have often wondered what would have happened if I had put my thumb down. There is a need for clarity on how we propose to deal with the structure of financial matters pertaining to the North Sea.
The way the discussion has gone, not only in this debate but in the Press and so on, it would seem that a number of people are advocating the setting up of a separate fund, to which, I suppose, net proceeds from the North Sea—once you have looked at the expense side—would go. In some magical way this great sum would then be allocated to various goodies and so on. Is that indeed the idea the Government have? It may well be that
1080
one could perhaps look more closely at the financial affairs of BNOC than the others. My noble friend Lord Balogh will be able to tell us something about that in a moment.
However, it seems to me that this idea of a specific fund composed of the finances from the operations of the North Sea would fly completely in the face of the Consolidation Act and all the things we have done for so long. Perhaps it would be a good thing if we could be informed as to whether the Government have as yet come to any determination on that kind of problem. I myself would have thought that, given the structure of our taxation system, it would be far better if the money simply went into the revenues, and then Government proposed ways of using it, and Parliament either assented or did not, rather than to have a specific fund in the way we are now hearing suggested.
It is agreed on all sides that this great boon cannot survive perhaps the next 30 or 40 years, and at that stage we shall not only have had to make up our minds on the kind of energy which is to replace North Sea oil and gas, but have had to do a simply mammoth investment job to ensure that whatever capital equipment we had decided upon is not only in contemplation but is in fact available to us at a given moment. I know that Plan for Coal for the end of the century speaks in terms of 170 million tons. Perhaps I could be excused for being something of a cynic. That was the figure I gave for 1970, if only people had not decimated the industry afterwards. To get the facility to produce the 170 million tons by the end of the century we really must have decided in what form we are going to use that coal; whether it would be gasification, experiments in oil or other ways, I do not know. I think that it will also be necessary to decide on the structure of many of the new housing estates which are being created without chimneys. Those are vital matters which we cannot possibly leave until the end of the period of availability of North Sea oil. If we do so, we shall have a hiatus which will be fatal to our aspirations.
There have been references to how we should look at the possibilities of developing our manufacturing industries. I thought that the noble Lord, Lord

1081
Selsdon, was a little too fatalistic in the way in which he looked at this problem. Of course it is the case that huge industries which were utterly labour-intensive years ago will never again be labour-intensive. Of course it is essential that we should apply the new technologies and the new products of the scientific revolution, but that will lessen the number of jobs available for that period.
On two or three occasions I have suggested to the Government that no one Government can face the problems of unemployment which the new dispensation has brought about. I believe that only by international agreements on lessening the working week, on perhaps reducing not only the hours of work but the age at which we retire, and on pension facilities, can the problem be solved. No one manufacturing nation dare face that problem alone. If it did so, it would give a huge edge to its competitors. However, as the problem is now common to all manufacturing nations, why cannot it be solved by them collectively? It could have been done, as I first suggested, through the International Labour Office, until the Americans did a silly thing and resigned from it. However, I hope that the Government will take the lead in bringing together all the great manufacturing nations to decide on the best course to take. We should say that we have all entered a period of "automation"—that is the word that was used—in which this is now the order of the day in methods of industrial production. We cannot do that and at the same time bring millions of women into industry and also preserve full employment. We cannot possibly do it, no matter how hard we try, unless we look at how we can reduce the number of hours worked and the retiring age.
I believe that we are now in a position where we should accept the four-day week. I should like to see three eight-hour shifts and the three-day weekend. In that way we would encourage employers to use capital investment because their new capital would be worked 24 hours a day. We would encourage employees by the fact that they would obtain the three-day weekend. It would cut out a great deal of the stupid and inefficient overtime which is now looked upon as a very ordinary concomitant of going to work.
Viscount TRENCHARD: My Lords, would the noble Lord, Lord Lee of Newton, not prefer a system whereby we tried to devise a plan which could double, as I said before, the manufacturing output of this country in little over a decade and solve the employment problem in that way?
Lord LEE of NEWTON: My Lords, it depends on whether we can find a market for that which we produce at the end of the day. There could be a very considerable argument as to whether the lack of capital development in our industries is causing more of our unemployment than the world slump which, of its very nature, negatives our chances of increasing our exports. Therefore, I would not demur from the suggestion of the noble Viscount, Lord Trenchard. When all is said and done, increasing wealth production is the answer to all our problems, especially with a Third World which is hungry for all these commodities if only it had the finance to buy them. However, while we are in the throes of a world slump it is difficult to decide which of these problems is causing us the greater concern.
First, I hope that the Government can tell us shortly how they propose that the finances of the North Sea shall be organised. I should also like to know about the great programmes for the vast increase in coal production, along with the very essential developments and decisions in atomic energy both of which will cost huge investment. When we get them going we shall hear the very necessary argument about how we cannot do much more because of the inflationary tendencies of these great programmes. These are enormous economic problems. I think that the Government have done a first-class job up till now in the way that they have handled this matter, but I suggest that we are now reaching a point where decisions of a very onerous and serious nature in this area must be taken.
I should like to make a reference to the remarks of the noble Lord, Lord Boyd-Carpenter. He and I have terrific agreement on Gibraltar, but in very little else. The noble Lord told us that Labour Governments have done a great job—he did not use the word "great"; I am using it—in the social field, but their economic policies have been pretty disastrous.

1083
I do not believe that there has ever been a Government more successful in economic policies than the Labour Government of 1945 to 1951. They took over an economy which was broken and which, in Churchill's words, was bankrupt. There was never a pocket of unemployment during that period. That Government brought this nation through the most dangerous economic crisis which we have ever known since the Industrial Revolution. I am proud that I happened to be a Member of that Parliament. The 1945 Parliament was the greatest in our history. I do not believe that it does any good for the noble Lord, Lord Boyd-Carpenter—I enjoy his humour and so on—to suggest that Labour Governments have had no success in the economic field, implying that any success that we have had has been with the Conservative Government.
The Governor of the Bank of England made a speech the other day saying that in 1973 we faced the danger of a complete collapse of our finances. I do not want to go into detail about the Barber boom. However, quite frankly, against that kind of background I believe that the present Government have done a first-class job of work and I do not think that we, on this side of the House, could stand for denigration of the kind we heard from the noble Lord, Lord Boyd-Carpenter.
Lord BOYD-CARPENTER: My Lords, as the noble Lord, Lord Lee of Newton, has quoted the 1945 Government of which he was an ornament, does he recall the following series of events? In 1947, the convertibility crisis and the enforced abandonment of our obligations on convertibility; in 1949, devaluation—the first for very many years; in 1951, a balance of payments crisis so bad that Lord Attlee went into an Election which he knew he must lose and wanted to lose.
Lord LEE of NEWTON: My Lords, Lord Attleee did not go into an Election in 1951 for that reason at all. The noble Lord, Lord Boyd-Carpenter, may have forgotten that three or four men died. We had a majority of four. The noble Lord was a Member of the "nights" who was never seen until 10 o'clock at night and who came to pray all night in order to keep the Government Members on the Front Bench. In any event, the fact is that
1084
we could bring Britain through to the days of devaluation—I know that the Tories thought that they could never devalue, but of course, we found out later that they had to devalue as well. I do not know whether this has a great deal to do with North sea oil or gas. However, the noble Lord and I have argued these matters for the last 32 years and I hope that we shall go on arguing them for the next 32 years.
5.9 p.m.
Lord BALOGH: My Lords, before launch myself into the debate, I must declare an interest. I was the Minister who piloted two Bills through this House which, as your Lordships know, were initiated on this side but which did not receive a very enthusiastic majority reception here. I subsequently became deputy chairman of the BNOC and I am now economic adviser, having retired for the fourth time. This debate and the debates on this topic which we have had in the past few weeks show that if there is one thing we can learn about history it is that we cannot learn from history.
First, we had "Selsdon Man "—Mr. Heath, mark I—before his conversion. Then we had the "Selsdon Woman" who wants to take us back to 1970, or perhaps even 1951. Then, lo and behold! here is the noble Lord, Lord Selsdon. However, having listened to his speech, I must call him "demi-Selsdon" only; he was not altogether "Selsdon In all and every situation the Conservative speeches really present a sort of horrid feeling of déjà vu or rather déjà entendu. They go back again and again to incentives, taxation and the terrible problem of the managers, who, after all, only have Rolls-Royces paid for by the firms—no incentives!
First, there seems to be a tendency to count our chickens before they are hatched. There was very great resistance to appreciating the magnitude of the North Sea gas and oil from 1965 onwards. Now there seems to be a sort of euphoria, which in my opinion is not totally justified. Secondly, we must use whatever we shall derive from the sea purposefully and discreetly, lest we should let slip from our feeble grasp this last possibility for industrial revival—the only lasting guarantee for the survival of a gentle and compassionate

1085
society which we find in this country.
When the present Government came to power, they were confronted with an all but impossible situation as regards the North Sea. The 1972 fourth round of licensing—and I must say this because it is forgotten nowadays—had given away two-thirds of the reserves to foreigners; so far as taxation was concerned, we had only corporation tax, which was nominally 50 per cent. but which also contained possibilities for tax avoidance on a huge scale. There was an accumulated tax credit of £2,500 million and that was accumulating at the rate of £450 million per annum even when the oil price was only about £10 a ton, and now it is about £60 a ton.
There was no control over the operations of firms. The noble Lord, Lord Drumalbyn and the noble Earl, Lord Limerick, with whom I had a great many fights, can testify to my efforts to call attention to these anomalies and secure estimates of costs, prices, investment and return. For four years the previous régime did nothing about that. Through the two Acts which we passed we remedied that weakness. Noble Lords opposite now have the nerve to complain that it is this Government which is holding back development. The colossal inflation of costs, far beyond the general increases in price levels, testifies to the shortage of resources. It is not the willingness that is lacking; it is the means that are lacking for a speed-up of production. When noble Lords opposite complain about the slowing down of development they show themselves to be totally ignorant of that fact.
Moreover, there has been no recession of development of the North Sea; it has stabilised at its maximum level. So long as we cannot produce experts, we shall be unable to speed-up further, even if that speed-up would be justified from a geological and saving point of view. We are working at the limits of capacity even though we have probably experienced the worst weather in Scotland for the last 30 years.
Profits and the tax-take are vital for the capacity to fulfill our general aims. Ninety per cent. of any increase in costs is borne by the Exchequer and thus diminishes our capacity to manoeuvre and speed-up progress in other directions.
1086
Thus the monitoring of costs and prices is needed and close and expert monitoring is not possible without actually being in the business. The Inland Revenue is in the tax business, not in the oil business. That was my conviction as a Minister and I have no doubt that that is why every single country except America has established a State-owned corporation. In America, they are now contemplating the possibility of such a corporation. Already, we hear reports from Norway complaining of tax avoidance, if not evasion. The same uncertainties apply to prices in this complicated market, where two giant oligopolies are facing each other and making pricing extremely volatile.
All that grumbling and the wild suggestions which emanate from Mr. King, the Opposition spokesman on energy in the other place, if taken seriously—which I hope will not be the case—are a grievous menace to our future prosperity. I discern here a somewhat desperate desire on the part of the Opposition to decry the Government's record, as the noble Lord, Lord Boyd-Carpenter, has done in every direction, however impossible. In view of the history of the handling of the gas and oil situation during the previous Government's Administration, I find this all but incredible. On the Opposition Benches we see the futile remnants of the Government of 1972 which gave away over two-thirds of our oil and gas wealth to foreigners, and which had not prepared new legislation either for control or for taxation purposes. Now they are going to reproach us for this.
What are they doing now? They are trying to ensure that our efforts to secure our rightful share of that wealth are frustrated. Even in recent debates, voices were heard advocating substantial concessions to the private oil sector. Fears were expressed lest the Government's strong-arm tactics should upset the companies and they might pull out, or at least postpone development. Of course, nothing of the sort has happened. All that talk is nonsense, and pernicious nonsense at that.
As any oil man would admit in private—but not in public—Britain is the most hospitable of all countries in the world for oil companies. It has one of the lowest, if not the lowest, tax-take and the most advantageous depreciation rules, and it

1087
does not interfere with domestic prices. What else do they want? Of course, the oilmen complain about our brutality. That is their duty as trustees of their shareholders. We must not take them too seriously; they will not go away. They are panting for more rounds; indeed, for a speed-up in licensing. These demands will have to be closely scrutinised from a national point of view, lest we produce at more than the optimum rate of exhaustion of those fields. The least contested conservation policy is through the limitation of licensing. It would be a tragedy if the deterioration either in the tax-take or in our current balance of payments should force us to an eventually detrimental speed-up in development.
Now, I turn to the problem of utilisation of the wealth. Before I do that, however, I should like to enlighten the noble Viscount, Lord Trenchard, that the British post-war increase in productivity was higher than the American. In fact the American was the lowest. Of course it was from a very high level, but we are talking about the speed-up.
Viscount TRENCHARD: My Lords, can the noble Lord tell me over what period he is quoting? I am aware that, in recent years, from the very high level that the Americans have achieved, their rate of increase has been no more than fractionally different from ours, but it is at a very much higher level. In mentioning the American economy, I mentioned the last 100 years.
Lord BALOGH: My Lords, in the last 100 years it is quite true. That, however, contains 50 years of total laisser faire in Britain; such laisser faire as has never been seen in the world before or after. Free trade; incentives galore. What happened? Our progress then was much less than it was after the war. That is one of the things which the noble Lord, Lord Boyd-Carpenter, ought to read up a little.
Lord BOYD-CARPENTER: My Lords, if the noble Lord is advising me to read up, would he, on his own part, read up Mr. Rees Mogg's figures on 6th February which he must have seen and which show that, over the period 1974–1976, United States productivity rose
1088
5·8 per cent. and United Kingdom productivity declined by 0·1 of 1 per cent. Does he dispute those figures?
Lord BALOGH: Yes, my Lords, they have. The explanation is that they are recovering from a depression. For one or two years you can always produce 5 per cent. increases, but not in the long run. Rees-Mogg never contemplated the long run at all.
Lord BOYD-CARPENTER: My Lords, does the noble Lord then dispute a similar table of figures for earlier years, when the United States figure was somewhat better than ours, though by a margin?
Lord BALOGH: My Lords, point 3 against 2·6. If you do not choose Friedmanite sort of periods.
Lord BOYD-CARPENTER: My Lords, if the noble Lord accepts those figures, does that not destroy the argument that he has just addressed to us?
Lord BALOGH: My Lords, it does not. If you choose the top of the nearest period and the lowest figure for the distant period, then, over a long period of time, you can get all sorts of interesting results. We could do it too. I am sure that Mr. Heath could very proudly announce that, in the Barber boom, the figure went up by 8 per cent. Much good that did to him. Figures must be carefully weighed.
Several noble Lords: Hear, hear.
Lord BALOGH: I agree. There are a number of ways in which the temporary relief which we are receiving, and shall receive, from oil and gas can be utilised. At this point, and in parenthesis, I must focus on the fact which the noble Lord, Lord Selsdon, also emphasised, and which was emphasised by other noble Lords, that we have spent the whole of the relief which we got from gas without changing anything at all in our industrial structure; without being more competitive, or anything at all. A portion of the oil has gone the same way. If you look at the non-oil balance of payments current account, you will see that part of the oil has already disappeared. If we go on in the way that I shall point out, we might lose the whole benefit.

1089
What the gas did was to enable us to import more and lose some of our share in the world's export market of manufactures. This must not happen with oil. The oil shot in our arm can be exhausted by allowing sterling to rise. Secondly, we could use it to accumulate reserves; thirdly, we could use it to repay debt, or, fourthly, we could use it to allow an increase in foreign investment, as was proposed by one noble Lord. Alternatively, we could cut taxation partly on individual incomes and partly on corporations. Fifthly we could restore the cuts made in Government expenditure, especially that on education and health, which contributes to our future competitiveness. Finally, but not at all least, we could ensure an increase in private investment by selective reorganisation and injection of capital into the private sector so that we should, within a measurable period, achieve a balance in our non-oil current account. To my mind, that is the most important point. Without it, I do not think we can go anywhere.
Noble Lords opposite, and, I am sorry to say, the Bank of England, wish to use the benefit for the first four of these possibilities. No one would rule out some relaxation in taxation after all the speechifyings which have been made about the relief which is to come, particularly if it were accompanied by such reforms, especially of the corporation tax, as would act as an impetus to spontaneous industrial restructuring rather than increased dividends. However, I must warn noble Lords and the Government that our present propensity to import is so high that any increase in national income, and more especially in disposable private income, would result in an increase of half as much in imports, thus violently limiting our freedom of action.
The Government at first resisted the revaluation of sterling and the relaxation of exchange controls. Then they gave in, at least partially, on both. The pound appreciated against the dollar and recently against the French franc by over 10 per cent. A combination of this appreciation with sizeable cuts of taxes on higher incomes and with the relaxation of exchange controls would, in my humble opinion, be pernicious. It would lead to a repetition of the Butler/Maudling/Barber affair. We shall exhaust our accrual of wealth in driblets.
1090
To allow the first appreciation was a most regrettable decision. It was explained by reference to the need to keep the increase in the money supply within the (totally artificial) limit fixed last year. This argument discloses a completely false basic economic philosophy. There is no strict connection between the increase in reserves and the so-called money supply and inflation. The influx could of course increase bank liquidity and thus menace the policy of the Government, but that contingency could have been dealt more easily by direct financial controls.
After the disasters of 1972/1973, there is surely no one in the Bank of England who would want to be bound by the delusions of "credit control through competition". In addition, or alternatively, the inflow could have been taxed, as in Switzerland, or sterilised, as in Germany. What actually was done was further to undermine our already ailing competitive position. A considerable relaxation of the exchange control on capital exports would be really the last blow for the budding hopes for our future. We are between the hammer of foreign competition and the anvil of our cost increases, especially because our capital equipment per head is totally insufficient.
It is shocking to see some Conservatives wishing to tear down the incomes policy which is the dam against inflation, and indeed the only effective dam. The behaviour of the Opposition and some trade unionists represents the most grievous possible menace to our being able to escape from this pernicious circle of having our booms ending prematurely in enforced cuts. We have already had news this morning that the market in gilt-edged securities is beginning to tighten up because they expect an increase in the rate of interest. An increase in the rate of interest in a period when we want to increase investment is all but suicidal. Moreover, there is a terrible problem. We have an idle capacity in equipment of at least 20 per cent., yet most of that idle capacity and much more of that in use is obsolescent. This is not mentioned by the CBI propaganda sheet, though they ought to know economic history does not know a case in which a country in the present situation

1091
of industrial inferiority of Britain has succeeded in escaping from it and regenerating its industry without first securing a protected home market. Such recovery as we made after the Great Depression, which was stronger and faster than that in any other country, was mainly due to tariffs and imperial preference.
I beg the Government not to close their mind against approaching the competent international fora to secure exemption from the restrictive integuments of certain of our international commitments. The post-war generation knew what they were talking about when they laid down rules for the protection of key industries in weak countries. They also provided for protection in general such as under the Bretton Woods scarce currency clause, which was unfortunately never implemented. It could deal as nothing else can with the cynical export of unemployment by Germany and Japan. This debate highlights the importance and the difficulties in the way of our industrial and general economic recovery from the secular sluggishness from which we are suffering and have been suffering for almost a century.
I think that the apology which had recently to be tendered by my right honourable friend to a foreign Government emphasises the correctness of the appreciation in the Berrill Report of the consequences of our economic weakness on our international influence. That report was almost unanimously rejected by your Lordships' House. I do not in any way blame my right honourable friend for what he has done. Palmerston could be Palmerstonian only because he had the strongest fleet and the strongest ecomonic, industrial and financial machine at his disposal. Had he suffered from our present circumstances, no doubt he would have been realistic enough to act precisely as my right honourable friend has done. Only let us not pretend that diplomacy is a substitute for strength nor indulge in dreams about the efficacy of measures which have time and again proved futile and forced reluctant Governments to retreat.
5.33 p.m.
The Earl of GOWRIE: My Lords, this is a very large room and it takes
1092
genius of a kind to raise the temperature in it. I congratulate the noble Lord. Lord Balogh, on what might, in the context of this debate, be called a formidable feat of energy conversion, because some moments ago we saw a little Parliamentary tennis of a kind which, in this churchlike atmosphere, we all too seldom enjoy. I certainly enjoyed it although I did not entirely follow it.
We expect the highest standards from my noble friend Lord Selsdon, and we get them. He has an admirable, and indeed enviable, gift of combining passion with clarity, and he brings experience of the real world to our sometimes rather theoretical councils. Unfortunately, he is an hereditary Peer and may not therefore get quite as wide a hearing as he deserves, but I certainly hope that another erstwhile hereditary Peer, also a man of ability, the present Secretary of State for Energy, will read that speech and attend to it. After all, in these days we are not supposed to hold a man's background against him. I hope the noble Baroness, whom we all know to be extremely persuasive, will see that the Secretary of State does in fact read it.
Except for getting the inflation rate much lower—and of course we have considerable disagreements about how this may be achieved—there is surely no more important national issue than this incredible stroke of good fortune, this perhaps last chance to arrest our long slide from being one of the healthiest industrial economies to one of the weakest. To make a brief debating point, I must contest what I understood to be the opinion of the noble Lord, Lord Balogh, that most successful economies are in some way uncompassionate or uncaring. Look at the present situation of chaos in the National Health Service as an incentive to improve our position now on compassionate as well as on economic grounds.
Mention of the noble Baroness brings me to something which I want to say before coming to the Motion directly, though the point is connected with the Motion. I want to say this very carefully because I do not want to cause her or anyone on the Government Front Bench personally the smallest particle of offence. We really must have a full economic Minister in this House. The economic Departments of State are the Treasury,

1093
the Department of Employment, the Department of Trade, the Department of Industry and the Department of Energy, not one Minister with executive duties and responsibilities, with the ear of the Secretary of State so to speak, from these commanding heights of a modern economy is represented here. Yet this House—reformed, unreformed or abolished—while it is here should perform its assigned constitutional task. It contains men and women with more varied and practical expertise in wealth creation as well as in economic theory than may be found in the House of Commons. No wonder a debate as important as this is relatively poorly attended and that the range of expert contribution, excellent so far as it has gone this afternoon, has proved relatively narrow. No wonder that the reporting of real issues consistently gives way to cynical accounts of day-to-day Party bickering in another place.
I do not wish to be misunderstood here and I repeat that it is no reflection on the noble Baroness—we know her to be an admirable Minister in the Department of the Environment and no doubt she would make an admirable Minister in one of the economic Ministries—but we need, and I think we deserve a full Minister from at least one of these Departments; I think it should be from two out of the four. My noble friend's Motion and the way he handled it proves as much, and so do the concerned contributions of the noble Lord, Lord Shepherd, and my noble friend Lord Boyd-Carpenter. When we on this side left Office the Secretary of State for Energy sat on these Benches and I look forward to it being not too long before he does so again.
Having got that off my chest, let me say that I think the moral of the debate is that North Sea oil is an opportunity and not a remedy, and I think my noble friend Lord Boyd-Carpenter used the word "opportunity". It cannot cure our economic difficulties but it provides a relatively short period of time—and I think my noble friend Lord Trenchard used the phrase "a breathing space"— in which we cannot claim that the fault is in our stars, but must ourselves buckle down and do something about the way we earn our living in the world. If I am correct in this interpretation of the debate—and I must say that I agree with it—it cannot be said too often that the oil
1094
is not a kind of celestial, or rather subterranean, football pool enabling us to spend huge sums of money—whether unwisely or wisely—whether on the much touted nostrum of industrial investment programmes, or on package tours or consumer goods. We cannot spend in the way of those small countries with colossal oil reserves such as exist among the Gulf States.
Put brutally, the effect of North Sea oil, always given the present world price of oil, is surely just to put our clock back to 1973, before the terms of trade in this area changed against us by as much as 20 per cent. I would be the first to argue that things were better in 1973 than they are now. At one level only I prefer Pugin's decoration in this House when viewed from that side rather than from this; it always seems to shine with a greater glow. But at a rather more profound level, there was then little more than one-third of present-day real unemployment. Even the most benighted Tory, however, would hardly argue that in 1973 we were living in Utopia. So we are hardly in Utopia now.
Some economists argue that we are worse off than we were, following the OPEC price rise and consequent development of North Sea oil, by about 1 per cent. of gross national product. My view is a little more optimistic than that, assuming—and we have no guarantees of the assumption—that international oil prices remain high. But optimists and pessimists agree that there is little fundamental change in the position of our economy; we are simply moving from problems associated with balance of payments deficits and cash shortages to those problems associated with relative surpluses and capital inflows. As a jazz fan, my favourite jazz singer said, "I been rich and I been poor and believe me rich is better". But we know, nevertheless, that there do exist problems of our relative and perhaps short-lived success. There is the inflation of money supply through capital inflows and there is the pound appreciating far beyond our battered industrial export sector's ability to cope. This is not perhaps quite Mr. Wynn Godley's nightmare, but it is nasty enough to jolt us out of any daydreams of riches.
The important message today, therefore, is that the problems of our real economy

1095
remain. It is to my mind incredible, and even rather disgraceful, that Mr. Roy Hattersley appears to think that inflation dipping under 10 per cent. should be the occasion for a kind of Parliamentary knees-up. The figure that surely counts is the figure that compares our inflation rate with that of our industrial competitors. We are still way above them. We are above the Dutch, with all their problems, as the noble Lord, Lord Gregson, mentioned; we are above the Swedes, the French, the United States and West Germany.

If we add to that imbalance the troubles of British Leyland and the tragi-farce of Swan Hunter, in which, as my noble friend Lord Massereene and Ferrard said in an intervention, we pay people to buy ships from us and offer to lend them money to run the ships and, having done all that, still cannot deliver the ships on time or even at all, we still find ourselves in a very poor state. I would say to the noble Viscount, Lord Simon, that I hope that any allocation of oil resources for industrial regeneration does not follow that disastrous pattern.
We are still living off the invisible sector, notably the City of London, and while I admire this sector—after all, I work in it—it surely cannot sustain what I think of as our industrial mezzo-giorno. I use the term because we are in almost the exact reverse position of Italy, where a relatively successful manufacturing sector tries to support a very large and very decrepit agricultural sector in the South. Our invisible sector cannot sustain the levels of employment that on all sides of politics we find politically and morally acceptable. Nor can the oil.
The only disagreement I have with my noble friend Lord Selsdon, if I understood him right, is that he thought we may in some way have to move away from thinking of ourselves as an industrial economy. We cannot afford to do that. I agree with my noble friend Lord Boyd-Carpenter that we are a country that lives by industry and will have to continue to live by it after the oil has gone.
It has been said in this debate and elsewhere that North Sea oil is not employment-generating. I do not wholly share that view. I am a "no-incomes policy, high wage man", rather, if I understood
1096
him aright, along the lines of my noble friend Lord Trenchard, and I should like to take up some of those points with him and some of the points raised by the noble Lord, Lord Balogh. However, that will have to wait for another debate, it not being directly connected with the oil. Nevertheless in the meantime, while I do not wish to make Party points, it would seem to me to be wrong not to stress general political differences of opinion and interpretation. I believe that the Government, most notably in the person of the Secretary of State for Energy, in the actions of Mr. Benn himself and the decisions that he and his Department have taken, are passing up really incredible opportunities for industrial regeneration, for the kind of spin-off from the oil which helps industrial regeneration and the employment it brings. I would say to the noble Lord, Lord Balogh, straight away, that the Government in which I was a Whip passed up such opportunities as well, but surely one of the points of a free Parliamentary system is that we should learn from each other's as well as from our own mistakes. But where employment is concerned let me cite an example. A Treasury economic progress report put out nearly two years ago, in July 1976—less than six months after the oil started flowing in any quantity—pointed out very fairly that the oil development programme had swollen the current account deficit in recent years, possibly by up to as much as £2,000 million. The report went on to say:
"The dominant item has been imports of goods and services connected with exploration and development—steel pipe, drilling rigs, hiring charges and so on. These imports cannot be directly identified from the trade statistics, but they are tentatively estimated to have amounted to between £¾ billion and £1 billion in 1975 alone"
My Lords, £1,000 million or, over two years, even £2,000 million worth of genuine old-fashioned pre-Keynesian demand is surely not negligible in employment terms. Can we really imagine the Japanese, had they discovered offshore oil in the early 'sixties or earlier, draining reserves by importing men and material to exploit it? They would have considered the chance to build a home-based oil exploitation industry, which later they could even use abroad—perhaps even in the North Sea to our own cost—virtually as important as having the use of the oil itself.

1097
Very well, that chance has been lost and maybe we are all at fault. But look at what is happening now. Look at the chances that are still being lost and will go on being lost.
What is Mr. Benn up to where the allocation of blocks for development are concerned? He has consistently preferred transatlantic to home-based companies and has consistently preferred to deal directly himself with their executives rather than use the City of London's desire to finance new British exploration and development. What on earth is Mr. Benn, of all people, doing waltzing hand in hand into the sunset, usually I think by private Lear jet, with such legendary socialist figures as Dr. Armand Hammer of Occidental Oil?
Lord BALOGH: My Lords, Dr. Hammer and Occidental Oil came into the picture in 1972, of course, so I think the noble Earl's reflections on the Secretary of State are both unjust and incorrect.
The Earl of GOWRIE: My Lords, I conceded that point earlier. The point I am not conceding, and which the noble Lord has not faced, is the fact that, every year, British applications for development blocks are made which Mr. Benn continues to hand over to Dr. Hammer and his colleagues. I am not saying that they are not worthy of them, but over the whole sector there surely is a considerable imbalance here.
Lord BALOGH: My Lords, I am terribly sorry, but that is just not correct. Much the greatest number of licences have been given to single, individual firms; for example, to BP, which, after all, is still a little British-owned. So far as the others are concerned they are given only to those who have proved themselves, and in this sector there is not very much large-scale industry which is totally British.
The Earl of GOWRIE: My Lords, the noble Lord, Lord Balogh, has not been listening, as I have, to the great chorus of disquiet on this. That is all I can say. To use my Japanese analogy once more, can one imagine the Japanese pulling in the "Seven Sisters" to develop oil off their shores? And they, the Japanese, with all their sophistication, have less
1098
sophisticated capital markets than exist right here, on our doorstep, in London.
Mr. Benn is an apostle of open government as well as of the need to encourage British technology. Yet he is worryingly uncommunicative about why particular blocks are allocated to particular companies. He has never, so far as I can ascertain, given a single explanation as to why an application from a native company has been turned down in favour of large American corporations.
Lord SHEPHERD: My Lords, would the noble Earl permit me to interrupt him? This is a very serious statement—I will not say, accusation—that he is making. I wonder whether the noble Earl, for the benefit of the House, would put down a Question as soon as possible to elucidate this type of information. I think it would be of great value to the House.
The Earl of GOWRIE: My Lords, am perfectly prepared to do so. What I am complaining about is that, as my noble friend Lord Selsdon said, there is no lack of capitalisation prospects within this country for year-on-year applications for development grants. Indeed, it would cause many on this side of the House great delight if Mr. Benn and the Government were to utilise, or were to suggest the utilisation of, union funds or pension funds in this respect. But, so far as I can ascertain—I shall be delighted to put down a Question, as I have done some research on this—nothing of this kind has been forthcoming.
Lord SHEPHERD: My Lords, I will not exactly say that the noble Earl has made accusations, but his words give me a twinge by suggesting that there is something sinister going on between Mr. Benn and American companies.
The Earl of GOWRIE: No—
Lord SHEPHERD: Perhaps the noble Earl will forgive me. All I would ask the noble Earl is whether, for the benefit of the House, and as soon as possible, he would put down a Question for oral Answer, very much on the lines on which he has been speaking, so that the appropriate Minister can make the proper reply.
The Earl of GOWRIE: My Lords, I go back to my earlier point: Would we have the appropriate Minister? But I shall do what I can.
My Lords, this brings me, briefly, to the role of the BNOC. It is, regrettably—but I think there can be no shirking this—in dispute between the two major political Parties. We on this side acknowledge the need for a regulatory body, but we are very uncomfortable at the ability of the referee himself, so to speak, in this all-important game, to take shots at the goal. I think we should need to be very powerfully persuaded, in office, that the BNOC, in its entrepreneurial role, was not actively preventing the native private sector from developing as it should in this region. I think that many people on all sides agree that the record of State entrepreneurism in this country is pretty bad, and, to us, there seems no clear case that the confusion between wealth-creation and the provision of services should continue indefinitely in this area. Whoever is in office, I think there is now something of a new consensus of opinion here.
Two final points. There is the issue of depletion, which I am a little surprised that more noble Lords did not raise. I understand that the Prime Minister is on record as saying that in his view—and I think he made it clear that it was a personal view rather than a Government view as such—it was the most important issue. I am, myself, something of a maverick on depletion. I would argue that if our economy is healthy, if we pay our way in the world, there is no reason why we should not be able to purchase energy, or, rather, a proportion of our energy needs—and remember, as noble Lords have said, we still have the coal and the miners—on world markets in the future, just as we have done in the past. Of course, we have a duty and an interest to help the world, and therefore ourselves, to develop alternative energy resources. That is important, but a subject perhaps for another debate.
Some commentators, notably and persuasively Mr. Samuel 13rittan, have argued that abolishing exchange controls and allowing us to plant the seeds of capital round the world now, as we have fruitfully done in the past, would not only help us ensure enough dividends to make future energy purchases possible, but would
1100
also ease the harm to exports and employment of the upward movement of the pound. I happen to share that view, but I would gratefully receive suggestions as to how it might be put across to our still rather xenophobic labour unions. I think the noble Lord, Lord Shepherd, shared that concern when he said that in his view exports follow investment, but he thought that it was not politically "on" at the present time.
Then there is the issue of foreign debt repayment, to which, again, the noble Lord, Lord Shepherd, referred. This seems to me to be not only morally and psychologically desirable but also practical, in that even where there are opportunities for the rolling over of debt repayment may be a saving in high rates of interest.
My Lords, this debate will not end this evening—and nor should it—but I hope that what will end is the feeling that somewhere over the rainbow there is a Government policy which can allocate North Sea oil resources in some special, magical way so that we can rebuild our economy on them alone. We can rebuild our economy, but only in the time-honoured ways: by working hard; by finding it worth while to work hard; and, as the noble Lord, Lord Lee of Newton, said, by producing goods and services which we can sell to others as well as to ourselves. There is no bonanza and no short-cut. What North Sea oil can do is to ease the national import bill in such a way as to allow Governments a chance to get off our backs, and to let us get on with it. What it can do is to provide some alternative revenue in real terms with which Governments may ease the tax burden on our individual selves and enterprises. If our situation is eased in these ways we shall, in my view, recover, with or without the oil. If not, not.
5.58 p.m.
Baroness BIRK: My Lords, perhaps I may first add my tribute to those already paid to the way in which the noble Lord, Lord Selsdon, opened this debate. It sounds rather as though he made another maiden speech from what we are all saying; but he opened this debate in such a moderate and thoughtful way that I must say I think he set the tone for something which, like the noble Earl

1101
opposite, I was expecting to be rather more abrasive. This lead was followed by my noble friend Lord Shepherd, who I think made an extremely constructive and statesmanlike speech. I think that those two speeches, followed by that of the noble Viscount, really set the temperature this afternoon.
I must say right away that I do not take the noble Earl's comments as being offensive in any way. I appreciate that he is trying to lighten my burden. But, as he is very well aware, the composition of the Front Bench does not rest with me. I would only say that there is one advantage: one of the hazards of being in Government is that you get not only very departmentalised but very compartmentalised. Having to work in this way certainly makes one not only know, but have to work hard in, the various policy areas right across Government. I take his point.
In this debate this afternoon, we have naturally had a number of suggestions for the use of our North Sea revenue and a number of fears expressed of what might or might not happen. We heard ideas from using the revenue mainly for cutting income tax to using it—although we have not heard this taken to extremes today—to increase public expenditure. The Government will shortly be publishing a White Paper. I am afraid that one of the other things which always seems to fall to me is that I seem to have to reply to a debate almost on the eve of a White Paper. Before anybody says anything about that, I agree we produce a lot of White Papers and Green Papers so that it is difficult to pick out a day when one of them is not soon coming up. In answer to my noble friend, Lord Shepherd, I hope and expect publication will be very soon indeed. I cannot anticipate the White Paper. But what I can say is how far we feel that North Sea oil will improve the chances for our economy, and the choices we must make, and get right, if we are not to burn up the oil without deriving a permanent benefit from it. The extent of our opportunities and the number of choices are both finite. This is appreciated all round. But the benefits of North Sea oil can be measured in three ways.
First, there will be a relatively small increase in our total national resources.
1102
This will be equivalent by 1985 to about 5 per cent. of our present national income To put this in perspective, the Government are hoping for a growth rate of at least 3½ per cent. over the next few years. So the extra resources flowing from the North Sea will be less than the increase in resources from two years' normal economic growth.
A noble Lord: We hope!
Baroness BIRK: My Lords, we have to live on hope as well as on bread. Secondly, there will be a sizeable increase in Government revenue; and it is largely due to my noble friend Lord Balogh that the present Government tightened up the corporation tax régime for North Sea oil companies and introduced the petroleum revenue tax. This has secured for the country the greater part of the North Sea revenues which would otherwise have gone to private companies—many of them multinational companies based abroad—and thus exactly the things that the noble Lords have been arguing for would have been made impossible by events for which they were responsible. Lastly, and probably most important, North Sea oil will be of substantial benefit to our balance of payments. It will give us the opportunity to expand the economy and create extra jobs at a faster rate than would otherwise be possible.
My Lords, I think that from this I can draw two broad conclusions. First, the national income and Government revenues coming directly from the North Sea, although large, will not be enough by themselves—as, I think, every speaker in this debate has pointed out—to allow a substantial increase in either private consumption or public expenditure. Our policy must be to ensure that all resources are used effectively to strengthen the economy. This means that we must contain inflation. North Sea oil, if used wisely, can give us a breathing space to achieve industrial renewal; for it is on this renewal that higher living standards ultimately depend.
Secondly, and this reinforces my first point, North Sea oil, as almost every noble Lord has said, is only a temporary windfall. On present forecasts North Sea output will be on the decline by 1990 and demand for oil and gas will have increased

1103
in the intervening years; so that we can expect to become net oil importers again in the 1990s. Real oil prices will be higher and oil supplies will be scarce: the world will seem a very cruel place if we have not used the North Sea fat years to become industrially competitive. To do this will mean sustained investment in industry. If we fritter away the North Sea resources on a consumption boom, as my noble friend pointed out we did with gas, we will find suddenly that the oil has gone and there is nothing to show for it.
Our experience with North Sea gas is a classic cautionary tale. Things would probably have been worse without the gas, but looking back over the last 10 years—and this is something I hope my noble friend will agree that we should learn from history—it is difficult to say that we have used our opportunities single-mindedly enough or well enough to strengthen the economy.
Before I discuss how the oil revenues might be used, I think I must refer briefly to a point raised by my noble friends Lord Gregson and Lord Lee of Newton that an oil fund should be set up in order to separate the accounting of North Sea oil. This is something that the Government are currently considering and on which they have not yet reached a final view. What has been said in this debate will be fed into the Government consideration.
How do the proposals that have been made today look? Some noble Lords have proposed—and it was interesting that they were very few—that the North Sea revenues should be devoted largely to reducing direct taxation. I believe frankly that this betrays a complete lack of understanding of what the North Sea oil debate should be about. The noble Lord, Lord Selsdon, set the pattern at the beginning when he rejected this. What we have to do is to agree a policy framework to guide our detailed decisions for the next 10 or 15 years but not to lay down a rigid formula for the use of the revenue and then forget about the real problems.
The noble Lord, Lord Boyd-Carpenter, has been showering me with difficult tax questions; I was quite sure that they were going to come out in the wash when I gave my careful answers. I say immediately that we accept that tax rates
1104
are too high at all levels of income and should be reduced. In particular, the Chancellor's long-term aim is to lift tax allowances well above the main social benefits and take people out of the "poverty trap". I do not think that it is any secret that he hopes to reduce the burden of income tax in the coming Budget. I should like to feel, that, since the most sensible on both sides of either House, now accept the concept and the being of a mixed economy, we could perhaps get away from these cries and counter-cries of "Envy!" I think we are in a more sophisticated era now. We have seen in this debate a very strong feeling, an undergrowth, of a wish to co-operate and make sure that by arguing on Party political grounds we do not throw out the oil baby with the bath water.
Lord BOYD-CARPENTER: My Lords the noble Baroness has referred to my, argument. I agree with her approach; but would she, herself, take account of the fact that if tax rates on higher earnings are maintained at these phenomenally high levels, with such a really derisory yield, then some explanation must be required? If the one that I have given is not accurate, it is up to the Government to provide another.
Baroness BIRK: My Lords, there he goes at it again! Here I am holding out an olive branch to him—and I could take up a lot of time to quote exactly the words of my right honourable friend the Chancellor of the Exchequer—and the noble Lord comes back to this again. One has got to get this very difficult balance right. He knows this well. In a society like ours, we have to balance the economic, social and financial factors. I cannot see that it would help anyone if one pursued policies which brought the economy almost to an end. The noble Lord's Party did that in 1974. That is the last word on that at the moment.
I would point out to the noble Lord something, which came to my mind while he was speaking from my days at the London School of Economics and from reading economic history at the time. I remember that one of the worst periods of British economic growth was between 1873 and 1910. With production stagnant and large emigration, due to tremendous unemployment here, there was no progressive

1105
taxation at all. Yet in relation to Germany, the United States and other countries, we performed much worse in the post World War II period than we did then. This is one thing across which one can keep on drawing these red herrings.
Of course tax reductions are valuable because they keep down the cost of living by increasing take-home pay without inflationary pay increases—there is nothing between us on that—because they strengthen incentives to work at all levels, and because they will provide the increased consumer demand which will be needed to expand the economy. But, above all, what we want is sustained growth and investment, not a short-lived consumer spree. Experience—and we all remember the "Barber boom"—shows that massive increases in demand tend to benefit our overseas competitors without leading to lasting increases in domestic investment. Imports come flooding in and the boom quickly breaks down because of balance of payments difficulties.
That is why we reject any rigid commitment to spend all our North Sea revenues on tax reductions—quite apart from the social and economic need to put aside some revenue for public expenditure. It is on where we put it, and how much, that there would be differences of opinion between us. What we have to do is to strike a balance between increased consumer demand and the investment needed to satisfy that demand, and a balance between tax reductions and extra public expenditure.
North Sea oil offers the possibility of a sustained growth and a more stable economic environment. More than anything else, stability—I think my noble friend Lord Shepherd used the word "consistency", but we are talking about the same thing—will help give industry the confidence to invest much more freely than in recent years. Confidence is essential. My noble friend was absolutely right when he pointed to the lack of confidence in industry due not only to changes between Governments but to changes of policy within the period of the same Government. It is this that we have to crack right across the board.
The Government will continue giving industry all the encouragement they sensibly can. As the noble Lord, Lord
1106
Selsdon, has made clear, development of the North Sea oilfields themselves shows that the money and effort can be found if the prospects are right. The Government will want to continue to encourage industry through general investment incentives, both at the national and regional level, and also through continued selective assistance to specific industries, which will include successful industries of the future—for example, the Government propose to allocate substantial funds to a growth sector: micro-electronics, and microprocessors. All will agree that one needs to put money into success to get future success as well as putting it into industries that are limping along.
My noble friend Lord Shepherd mentioned the great need for training and retraining and education in this field. I entirely agree with him. The Government have recently announced a further year of special training measures, are keeping up apprenticeship training, and also have recently announced a new "training for skills" programme due to start next autumn. The universities are now more orientated to industry, and there are now industrial scholarships. The noble Viscount, Lord Trenchard, is right, that the universities took quite a time to catch up with what was going on in society.
Government and industry need to understand each other's motivations as well as their mutual problems. Dialogue, unless it is based on deep understanding which leads to action, will be unproductive and sterile. Achieving this is what the industrial strategy is all about. The industrial strategy cannot deliver the goods unless the rate of inflation is brought down to the level of our industrial competitors. Progress in the past year or so has been enormously encouraging, and we are well on the way to single figure inflation. I thought it was, if not exactly mean, just a little teasing of the noble Lord, Lord Boyd-Carpenter, to rap my right honourable friend Roy Hattersley for showing pleasure last night in the fact that in about two weeks we will be down to single figure inflation.
Lord BOYD-CARPENTER: My Lords, it was not I that did so.
The Earl of GOWRIE: My Lords, I was the guilty party.
Baroness BIRK: My Lords, I beg the noble Lord's pardon, and perhaps the noble Earl, Lord Gowrie, will accept my observation as addressed to him. Of course it is not the end of the road that we want to reach, but at least let us be less grudging when we are making some progress down the right road.
Only today the National Union of Mineworkers have agreed to accept the principle of basic wage rises within the Government guidelines. I am sure we will see the reaction to that in the Stock Exchange and foreign exchange markets. These show all the time that the City supports the Government's policy, even if noble Lords opposite do not. Directly there is a whisper of a possible Election, what happens? Down go the values on the stock market and foreign exchange markets. The City may not always come out so overtly; but I have many friends in the City and I can assure your Lordships that they prefer the Government in power at the present time. All this slow progress could be frustrated if the general level of settlements breach the guidelines.
There has been a change in work patterns. This was referred to by the noble Lord, Lord Selsdon, and by my noble friends Lord Gregson and Lord Lee of Newton. It is true that in many ways we are moving in some respects towards service industries. Where this helps our invisible exports—as it does in the tremendous leaps and bounds of tourism—it helps our balance of payments and also gives employment. As pointed out by my noble friends Lord Shepherd and Lord Gregson, it is essential that we improve our manufacturing industry in order to provide the wealth on which we can build anything else.
The noble Lord, Lord Boyd-Carpenter—and on this I am sure I am right—was very passionate on the subject of the alleged blacklist. I do not wish to weary the House on something which is now a matter of record and has been gone over at great length in the other place. Our position is that we are absolutely free. It would be wrong if we did not use our discretion not to subsidise with public funds those companies which threaten to refuel inflation by excessive pay settlements. My noble friend Lord Shepherd was absolutely right when he said that. We are not saying: "This is illegal; you
1108
have to shut up shop". We are saying: "You cannot have the benefit of Government aid—whether it be by grants through the Industry Act, or whatever it is—if you are going to do that". The people who are prepared to deplore this action are exactly the people who make a terrible fuss if a group of workers want a wage increase. This is something in regard to which, if we are going to try and hold a strong line—and the Social Contract has worked fairly well and so has the counter-inflationary policy—then it has to work for both sides of industry. Most sensible, reasonable people think so.
My noble friend Lord Balogh has urged the Government not to close their mind against seeking more protection for our industries. I was not surprised that he said that because he has said it on many occasions. We have a strong interest, however, in the continuation of an open trading system. We export more manufactured goods than we import. The Government have made it clear that they will not stand by and watch otherwise viable industries damaged by unreasonable levels of imports. What I find worrying in the suggestions put forward by the noble Lord and other people is that a "tit for tat" arrangement could damage us enormously.
Most recently, the United Kingdom has achieved—through the EEC—a much improved Multi-Fibre Agreement which should greatly benefit our textile industry. The Government have also expressed their anxiety that countries like Japan and Germany should expand their economies as fast as possible and get their imports and exports into better balance. So it is a case not only of being aware of the problem but of trying to do something about it.
As well as assisting investment in private industry, the Government will continue to be a substantial investor in its own right. Through the nationalised industries, the NEB and the Development Agencies, industries in declining areas will be modernised and new job opportunities provided. The industrial infrastructure will be improved—that is, our transport system and the public utilities—but there is no question of public sector investment replacing investment in private industry. As I have already stressed, and must

1109
stress again, our aim is to mobilise all the country's resources right across our mixed economy.
My noble friend Lord Shepherd raised the very vexing question of the construction industry. It is certainly true that in recent years this industry has had a very tough time. This was largely due to the fall in private sector demand, and there have also been cuts in public sector demand; but these have to be seen in the context of the need to cut back public expenditure generally. The prospects for the industry, as I think we are all aware, are now better. Private sector demand has already begun to recover; and, as a result of all the construction measures announced during 1977 (which added an extra £800 million to expenditure in the period 1977–80), public expenditure on construction will now run at a steady £4½ billion a year up to 1982.
That is the whole lot, including inner city areas, home improvements, allocated departmental programmes, a larger share for housing and the allocation made last November for 1979/1980, which has still to be split between programmes. This does show that a tremendous boost has been put into construction, and the latest inquiry by the National Federation of Building Trades Employers, which was quoted in yesterday's Financial Times, confirms that they believe that recovery is on the way. If they feel that way, it will probably carry more weight with your Lordships than my saying it to you.
The Government want to do all they can to create greater stability in the industry, and I am confident that the industry will be able to respond to the demands which will be placed on it. But it must be ready to recognise and respond to changes in these demands, for, at the end of the day, we can only spend what we can afford. This applies to public expenditure generally—we do not want again a certain kind of "boom and crash" in the construction industry, with all the terrible unemployment that is involved.
Public investment will also he needed for energy—and my noble friend Lord Gregson pointed that out very succintly—— since the conventional energy sources will have to be greatly expanded as the existing North Sea fields run down if we are to secure an adequate supply. The new
1110
energy sources such as wind, solar and wave power, are currently at an early stage of development but we can expect an increasing commitment to bridge the "energy gap" left by North Sea oil when it runs out.
Conservation—on which historically we have a dreadfully slothful record—is essential. Measures taken over the last four years (and we started very late) have already saved us considerable amounts of energy and, as real energy prices increase, further conservation efforts will play an increasingly important part.
So far I have concentrated—and as quickly as I could—on the use of North Sea oil in strengthening the domestic economy, because this is the central issue which must determine our approach to any other issues which arise. The use of the North Sea benefits to finance issue. Some noble Lords on the Opposi-increased investment overseas is one such tion Benches have argued or implied that exchange controls can and should be abolished, now that North Sea oil has come to the rescue of the balance of payments. My noble friend Lord Balogh, on the other hand, has argued that the controls have already been relaxed too far. These two different views, which have been expressed in the other place and among experts outside, perhaps suggest that the Government's present policy is not too far off course as it seems to strike a balance between them.
The home economy could be held back if heavy outflows on investment account weaken our balance of payments so that the economy has to run at a lower level of demand than would otherwise be possible. Therefore, the Government will keep exchange control restrictions under continuing review: any relaxations will depend on the strength of our current account position at the time. We have already relaxed exchange controls a little, but it is right for the Government to be cautious about further relaxation. The turn-around in our current account position is a very new phenomenon and, therefore, more experience is needed before we can be confident enough to place further burdens on the balance of payments.
The repayment of overseas debt, which has been mentioned by several noble

1111
Lords, is of course, another claim on our balance of payments. There is a considerable hump in our payment obligations of about 20 billion dollars between 1979 and 1984—that is, while North Sea oil production is building up to its peak. The Government's policy is to spread this hump by early repayment and by new borrowing. The programme of early repayment has already begun: on 26th January, the Chancellor announced the repayment of 1 billion dollars due to the IMF, and the nationalised industries are also repaying about 750 million dollars of overseas loans early. I think that was something that the noble Viscount, Lord Simon, and my noble friend Lord Shepherd stressed.
Turning to the exchange rate, I recognise that my noble friend Lord Balogh, who is a most distinguished economist, has expressed very strong views about the exchange rate. He quite rightly and frankly points out his views are different from those of the Government. I do not think that now is the time for a long debate on exchange rate policy, so I will leave that as a disagreement between friends or something that we can perhaps discuss later à deux.
Everything I have mentioned is designed to create the right climate for the regeneration of British industry—but this is not an end in itself. The great hope of North Sea oil, is that, if properly employed, it will give everyone an increased standard of living. The working population will gain directly from economic expansion through higher real incomes and increased employment opportunities—and when I talk of "the working population" I am including management, which, as I am sure noble Lords will agree, also needs increased skills in many areas, in the same way as other workers. But there are other equally important groups in the community, to which my noble friends Lord Balogh and Lord Shepherd referred—the old, the sick, one-parent families and those living in a wretched environment. All those, and many other groups which are unfortunately too numerous to itemise at this moment, are also entitled to a fair share of the benefits—because that is what we mean when we talk of a compassionate society and our social obligations as well as our financial and
1112
economic obligations. They will only get this through greater public provision. In the farther future, I would say that there are cultural and artistic areas where, given the resources, it would be marvellous to increase public expenditure and public enjoyment.
The latest public expenditure White Paper shows a steady increase running at about 2 per cent. a year up to 1982. That is designed to be well within the growth of the economy as a whole over this period. I make no apologies for this, because the Government will continue to make sure that public expenditure grows no faster than the economy can afford. Again, it is a question of balance—North Sea resources are no excuse for prodigality and we cannot afford to expand public expenditure too much or too soon.
I would just say finally that the converse of exaggerated euphoria, which I join with everybody in denigrating, is not desperate despair. While I think we should show, as has been said by every speaker today, the need to take careful decisions, and the need for co-operation and for dialogue based on something firm, we have during 1977 seen a balance-of-payments surplus, inflation brought down, the general financial position strengthened, and we have also seen interest rates come down. So we have something to build on, together with the oil. Nevertheless, I come back to the fundamental issue which this debate has raised—the urgent importance of using North Sea oil opportunity to strenghten the economy. My noble friend Lord Shepherd felt that the White Paper should be issued as quickly as possible, and I agree with him. But, even without the White Paper, there is no time to be lost in trying to change attitudes, as we have heard from both sides of the House this afternoon. It will not be easy, but the opportunity is certainly there. If we fail to use it, our grandchildren will not forgive us, for we shall have failed them.
6.31 p.m.
Lord SELSDON: My Lords, I do not think that I am very good at summing-up noble Baronesses. I might be a little hesitant in what I try to say in these remaining few minutes. To me this has been a most interesting debate, remarkable in that it did not go in any way in the direction in which I intended it to go.

1113
The comments from Benches opposite were comments which I might well have made myself. Inevitably, we had the usual history lesson on the economic failures of previous British Governments, but I suppose that that is a fact of political life. As a hereditary Peer, something that I value above all is the privilege of being able to listen at first hand in your Lordships' House to people who have been through many things before. Equally, I always enjoy the extremely cultural and elegant way in which my noble friend Lord Gowrie manages to speak on a wide range of subjects, and to make some fairly perceptive points with remarkable charm, but with certain barbs beneath.
May I first thank all those who have spoken today for the kind remarks which they have made about my contribution, which, as I pointed out, was not really my own contribution but a distillation of the wide range of views and advice that I sought before this debate. It is a debate which should be widened and should continue, because there is no doubt, after listening to noble Lords today, that the many issues which have been raised cannot be quickly and easily solved. The noble Baroness pointed out that I did not emphasise or suggest a reduction in taxation. I think that that is what I intended to emphasise more than anything else, from both personal and other points of view—not perhaps a dramatic overall reduction in taxation, but a shift in the emphasis, because the emphasis has gone too far. I was encouraged to hear that the Government have stopped encroaching further in the mixed economy moves, perhaps because they have realised how easy it is to burn your fingers in areas of activity about which you know very little.
The prospects for this nation, despite the depressing way in which I sought to start, are quite remarkable. Those who do not understand the social and internal political problems must, if they are required to write, point out that, of all the nations in the free world, this is one that has a greater opportunity than it has had since the end of the last war, and probably since the start of the Industrial Revolution. The direction in which we go will inevitably have to be a new direction. Maybe it is best that we go by consensus, but I think that the greatest way is to say to the
1114
British "Look, you have now got a chance. It is up to you to do something about it, and we are going to create a climate in which this is possible". My Lords, I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

THE FIREMEN'S STRIKE: REVIEW
6.34 p.m.
Lord CLIFFORD of CHUDLEIGH Lord CLIFFORD of CHUDLEIGH rose to ask Her Majesty's Government what lessons they have learned from the firemen's strike. The noble Lord said: My Lords, in asking the Question which stands in my name on the Order Paper, I should first like to explain why it was put down. I was having a meeting with one or two Members of your Lordships' House just after we returned from the Recess, and the view was expressed that the Government would heave a sigh of relief, chuck the file into the corner and forget all about the strike. Therefore, I thought that it might be a good idea just to try to remind the House of some of the points that seem to have come out of the recent firemen's strike, and see what encouragement we can get from the Government about preventing such a dangerous situation from occurring again.
I begin by saying that I am one of those who think that, in the public service and especially where people's lives and property are at stake, the right to strike should perhaps be forgone, in return for some guarantee that the standard of living of those concerned will always be regulated so that their rate is a little above the normal, in order to make things worthwhile. Apart from that, going back to my days in the Territorial Army in the South-West, where half of our exercises were with the Civil Defence and where most Civil Defence exercises included a very large proportion of firemen, both regular and part-time volunteers, I was not at all surprised when I saw that the South-West area voted against going on strike. I was also not surprised that quite a few refused to strike; and that we had no trouble in the rural areas, where the volunteers went on as usual. And, of course, in our part of the world the Service mainly concerned was the Navy who themselves have plenty of experience in fire-fighting.
While speaking on that subject, the very first point that needs to be brought out is how much we in the country owe to the loyalty of the fire officers who did not strike, and I hope that the Government will make it clear to the country, and to the individuals concerned, how much we owe to them and how much we appreciate them. That brings me to a point which will, I am sure, arise again and again this evening. It must be seen that there is no "anti" feeling by the unions against those who carried on working, now that people have gone back to work. Another point in regard to firemen in my part of the world is that it has again and again been pointed out how important is the volunteer element in our national life.
An important lesson which should be learned is that there is now public awareness of the fire danger, which the Government very rightly stressed through the media at the outset. The Government should not now let everyone get back into the old laisser-faire way of carrying on, as they did before. I am sure that in the South-West they do not want to strike again, but, if the right to strike is not forgone, may I suggest to the Government that, in whatever arrangements are made for the future, there should be provision for a ballot before a strike takes place.
I feel that the Government must now work overtime in order to restore the morale that has been so damaged by the strike. In the last five years, there have been progressive disputes leading to the "emergency calls only" type of go-slow, or whatever one likes to call it, and these were building up towards the all-out strike that we have just had. If I may quote the words of a very senior fire officer who is a friend of mine, he said in referring to what happened,
"It is the worst example of creeping industrial disease causing loss of morale and discipline".
To my way of thinking, morale and discipline amount to the same thing. We must not allow this kind of thing to happen again, and I am hoping that the noble Lord who is to reply for the Government will give us some encouragement in regard to what they, together with the National Joint Council for local authorities' fire brigades, will do to see that this does not happen again.
Next I should like to deal with the intervention by Servicemen. The Services
1116
—overstrained by Ulster, Belize, Bermuda and now this, so much so that they cannot cope with our NATO commitments—did, as has been generally recognised, a very good job. They would do a very good job, of course. In my discussions with various Servicemen about their experiences, the first point that was made by them all was that the Fire Services in this country are grossly overmanned. For example, in London only 100 green goddesses coped with the same number of fires in an area that is normally covered by 600 modern appliances. In the Wood Green area of Glasgow, four green goddesses and one military fire station coped with an area covered by five normal fire stations, each of which had two or more modern appliances.
The next point that was made by every Serviceman who was engaged in firefighting related to pay. I am not saying that the firemen should not get any increase in pay. I opened the debate by pointing out my position so far as pay is concerned. However, I believe that it was wrong to expect Servicemen, on their pay, to do so much when their pay has to be compared with that of firemen even before the strike, quite apart from what has been awarded to them since.
We have all read in the Press about the pay of the private soldier. I will tell your Lordships about an officer friend of mine. Having been on leave for three days after returning from the worst part of Northern Ireland, he was called back for fire duty. He was on fire duty during the whole of the Christmas period. He told me that on Christmas Day the fire officer who was on duty at the same station received £100, including holiday pay, overtime and all the rest, whereas my friend got £12 a day as an army captain. One of my informants told me that in Glasgow the night rate is time plus one half and that when the night shift goes on duty, the men do a couple of hours' work at the most, cleaning up and training, and then go to bed, unless called out by a fire. However, there was no alteration in pay for the unfortunate Serviceman when he was on night duty.
It is this kind of thing which makes Servicemen say time and time again they are being used as slave labour. That is a lesson which I hope the Government will take to heart, and I hope they will correct

1117
the position fairly soon. In one part of the country they were complaining of petty nuisances—of sabotage, dustbin fires and so on—which did not make life any easier for them. At the Grosvenor Hotel fire, the striking firemen turned out to heckle the Servicemen who were trying to do their jobs.
I do not believe that the media were all that helpful. Noble Lords will probably remember the case of a disastrous fire at which a senior NCO broke down under the strain, having been asked about what had happened. The television chap then interviewed the striking firemen who said, "Of course, if we had done it, we should have saved those lives". However, the television people did not bother to ask them why they had not done it. This was all designed to put Servicemen in a bad light.
One interesting point is that a certain NCO had left the Services and joined the Fire Service. Then he found that he was so bored with not having enough to do that he rejoined the Services, was promoted and found himself back in the same area where he had been a fireman. His information was very revealing.
It is also a scandal that the Government would not allow the Servicemen to use modern equipment. I have spoken to several officers who said that they could have trained their men in a matter of three of four days at the most to operate these complicated modern machines, though they are complicated only when compared with green goddesses. My son-in-law, who is a submariner, tells me that all submariners are trained in the use of far more sophisticated breathing apparatus than firemen ever have to use.
I spoke to another officer at the military fire fighting headquarters in London and asked him what was the truth about the official signal from the Home Office to the military fire service that strikers—he could not remember where—had loosened the bolts on green goddesses. I should like to know whether what they all say is true; namely, that the firemen were paid bonuses for all of these hoax calls. I should also like to know whether it is true, as they said, that the firemen made arrangements for their wives or others to put through those hoax calls.
I feel that the Government must show that they stand by the officers in particular
1118
and by the others who did not strike. Before the strike ended, I know that some of my friends in the Services were told by the strikers that they were not going to go back unless those who did not strike got the sack. Noble Lords probably saw the leader in yesterday's Telegraph on that very subject. In the Press over the weekend there was a report of poison having been put into the coffee of one of the non-strikers.
I should like now to turn to another important lesson to be learned from the subversive elements that were evident not only in this strike but in others. I am sure that all noble Lords realise that the Trotskyist and Marxist groups carried in all their publications the headline: "Smash the Government and the 10 per cent.". The main operator is the Socialist Workers' Party, which used to be called the International Socialists, and its subsidiary, wholly controlled the rank and file movement. They produced the Daily Strike News for the rank and file firemen, and I am sure that the Government know how inflammatory were those organs. Strathclyde, Liverpool, South Yorkshire and parts of London were the areas which were most affected.
The Socialist Workers' Party—Yigal Gluckstein, Paul Foot and others—referred to the troops in all their issues as "scabs". Another group, the International Marxist Group—Tariq Ali and his boys—had a picture in the Socialist Challenge of the noble Lord's right honourable friend, and underneath the caption "Rees wanted for arson and murder". People like Jim Fitzpatrick, of the Fire Brigades Union, from Battersea, and Paul Macdonald from Strathclyde were both very prominent at the rank and file meeting on 26th November. We are used to "rentamobs" nowadays, demonstrations. We see pictures of the same ones at Grunwick and outside TUC headquarters, and, of course, at Bridlington where Terry Parry was knocked to the ground. I came across this little jingle about that in a fortnightly rag:
"They acted just like animals, cried Parry;
Come off it Terry, for a moment Terry.
Tell me what animals would yell and spit, and punch and kick,
Just for the hell of it.
The savagery that you're referring to
Is done by members of the human zoo."

1119
It is a matter of regret that this Government have not taken more action against these subversive groups, who, after all, only want to turn us into an East European State. They might have paid attention to my noble friend Lord Chalfont's debate on the subject a couple of years ago.
To my mind, the main lesson from a national point of view is that the Civil Defence organisation should never have been abolished. It was abolished by the present Prime Minister when he was Home Secretary. From that day they destroyed or got rid of some equipment. Other equipment they put into mothballs, like the green godesses. What has happened to the green godesses now? Have they gone back into mothballs? What is going to happen if and when you have another firemen's strike? Are you still going to depend on those vehicles? If you had not abolished the Civil Defence organisation, those vehicles would have been kept up to date, as would have been a sufficient number of the Auxiliary Fire Services, ready for any emergency. They abolished at the same time the Civil Defence Staff College. I happen to be a graduate of that. They have now turned it into a college for civil servants, a sure growth industry under the present Government.
In those days the Territorial Army was an integral part of Civil Defence. As I said earlier, half our exercises were with the Civil Defence organisation. They abolished that, and what happened?—I will give your Lordships one example. We had a territorial unit of sappers in the county I come from, and every year they built a Bailey bridge over the railway for the county show. That was abolished, and of course the Bailey bridge went elsewhere. When two years later floods destroyed the bridge on the main London to South-West road, the A.303, to get a Bailey bridge they had to send to the nearest regular depot, which was up in Essex. That is one example of how those Civil Defence operations have been ruined by the stupidity of abolishing Civil Defence. We saw in the Highland blizzard the other day one TAVR officer—that is all that is left of the truncated TA—prodding in the snow. If you had kept the TA and the Civil Defence organisation, half your troubles would have been over.
Perhaps some noble Lords can remember a debate we had in this House when the Government were abolishing Civil Defence. The Opposition was led by the noble Earl, Lord Jellicoe. I think the noble Viscount, Lord Long, made his maiden speech on that occasion. I know that my contribution on that occasion was duplicated by the head of the Civil Defence in the county and sent round to the Civil Defence workers to try to boost their morale. I make no comment on whether or not it did, but their morale was pretty low because they were abolished anyway.
If we had not done that, we would have had plenty of people trained to deal with radioactive sputniks if they landed in London or Birmingham instead of the Arctic wastes. But, No, everything of that kind is tied up. I think we ought to reintroduce that, or make some arrangements; otherwise we are going to be in a very poor state if any real calamity affects this country. After all, in Norway every male between the ages of 16 and 50 does something towards the defence or civil defence of his country. I do not see why we should not do at least as much as a small country like that. That is the biggest lesson that I hope the Government will learn, though I hope they will also learn some of the lessons from the actual mechanics of the strike and the way the Servicemen were treated during it.
6.57 p.m.
Viscount LONG: My Lords, first, I am sure all of your Lordships who are taking part in this debate would like to congratulate the noble Lord, Lord Clifford of Chudleigh, for raising it. Important as is it, there must be many lessons of our internal security that can and must come to light this evening. I should like to say to the Government, through the noble Lord, Lord Harris, that I hope this debate will have some "whys" and "know-hows" that will help the Home Office and the Government, and Governments in the future, when such emergencies arise. Never have any one of us, within your Lordships' House or among the public, had any reason to criticise the Fire Service. Their bravery is phenomenal. Their training and experience throughout has always been an inspiration to any of us who have ever experienced the horror of a fire.

1121
I think at this moment it is important to name the jobs that this man has to do. No longer is he just a fireman; he is a man of many trades in the world of rescue and safety. He is a man now having to live with the new chemicals which are coming on the market, which have to be learned about overnight, and are vicious and very dangerous. He has to do such jobs as rescuing cattle from rivers, dealing with very serious car or lorry crashes, with the latter sometimes involving dangerous chemicals. Today, he has to be a very experienced man. Equally, his equipment is sometimes only a few hours out of date because of the new chemicals and the gases that they release; even his oxygen apparatus may not be of help. Let us be quite clear in our minds that these are men who have to deal with serious problems that occur every day throughout this country.
My Lords, at this moment I should like to thank those experts outside the House who have been able to give me a new look into the fire brigade system as a whole and of their problems. I am most grateful to those who have contributed towards helping me this evening. We in this House, together with the public, have witnessed a very tragic moment, one of our senior public services coming out on strike, something that we never imagined would happen. I will speak for a moment, if I may, personally. I believe—and it may well be that many of your Lordships think the same—that as it was a question of money, or pay, the Government got their priorities wrong. It was when at the introduction of the pay freeze that all men who were earning wages had them frozen at whatever sum the Government wanted at that moment. However, the priority that I believe was wrong was that of comparing a fireman, a policeman, or a Serviceman with the industrial working man.
We are living in a very sophisticated society. That society demands to be protected by the police through law and order. It demands that Her Majesty's Armed Servicemen protect our shores—Northern Ireland is one such case. It demands of the Fire Service help, immediately, if any emergency should arise. I cannot for a moment understand how the advice was given to the Government—or the Government were weak enough at that moment to accept it—to cut across
1122
the whole spectrum of pay and people and allow the top priorities to be governed like the whole body of industry, especially as the Government demand of these services 100 per cent. at all times.
Therefore, when the wage freeze was brought into being it brought the important services into difficulties. We saw it happen in one case after the other. At present we are looking at the Army which, because of pay, is losing numbers so quickly. A few months or a year ago we looked at the police who were finding it difficult to recruit because of pay. We are looking at the young people who come into the Fire Service; they too now are suspicious that they will not get the money that others are getting. Therefore we are living in a society that must surely demand the best pay in order to protect itself at all times.
During the strike the firemen went through a traumatic experience quite unknown to the English race as a whole and quite unknown to themselves. They experienced bitterness, squabbles within the union and between friend against friend. We have witnessed all of that, and it was referred to by the noble Lord, Lord Clifford of Chudleigh. When firemen go out to an emergency they are all part of a team, whether it be three, four or six, each having to trust the other when faced with an ugly situation. They are the men we expect to rescue us. They are the men paid by the Government, through the local authorities, to protect society and to help it in one way or another.
Now we are looking at a situation that could well be as ugly as anything we have seen. They are the fringe benefits of a society which believes in destruction. There is wheeling and dealing into important protective parts of our society, breaking them up, breaking their morale and breaking their pride and their sense of duty. We have witnessed that situation for the first time. How horrifying it would be if it were to happen to more than one group of people. I am sure that all of us recognising the firemen's job, hope and pray in every way that the wounds and scars created by the strike will heal very quickly, so that man working with man within the Fire Service can again be friends, otherwise the one becomes a danger to all in his Service.

1123
I turn briefly to what the general emergency was about, how it was looked at and whether there are any lessons to be learned. The Fire Service, quite apart from a fire-fighting role, has in recent years tended naturally to assume the function of a general rescue and relief from distress unit, mainly arising from the general development of pressures in the form of heavy traffic, motorways, rapid means of transport by rail, sea and air, together with the change in style of buildings, such as the high-rise buildings or the high-rise flats, commercial premises, with the consequent problem of people being trapped in buildings, vehicles, lifts, et cetera. Probably 25 per cent. of the firemen's activities involve that type of work at the present day. On face value, it would appear that the provision of military assistance during the strike period covered reasonably adequately the responsibilities and activities of the Service.
However, when examined in depth, it is now becoming clear that the success of the fire and emergency cover arrangements during the strike were due primarily to two factors. I have named the first one: the tremendous response by local authorities, public bodies, industry and commerce, in providing at very heavy expense, extra fire patrols, inspection and security arrangements during the strike period, coupled with the exceptional zeal and service provided by the police force in arranging for instant response to every emergency call, including incidents other than fire, by either the local mobile police units or arrangements with private organisations.
The second point that I should like to make is that the military provision of heavy mobile fire fighting units, while being most desirable and necessary from the point of view of preventing complete conflagration and relieving public anxiety, proved non-effective in coping with larger fires, notwithstanding the availability, as advisers, of almost the normal complement of senior fire officers. Most of the major incidents in the London area in which a fire had any sort of hold ended in the buildings being destroyed by the time a call was received. On that aspect even the regular battalions of a fire brigade would probably have had to leave very heavy fires when they got out of control. I am not an expert fireman but I should
1124
think that they would have found the situation equally difficult.
There is one clear point that I should like to make. The first lesson to be learned from the strike is the value, from a pure fire-fighting and rescue point of view, of the professionalism of a regular fire brigade. Therefore, we have learned the lesson that we really cannot do without our regular services and, as I have already said, they must be paid properly.
The other point that I should like to raise is about communications. It was here that the dual arrangements between the police and the military, together with the joint use of communications, proved how necessary it is that the emergency services should develop communications on a joint basis, in the form of a land-line, radio and other sophisticated material in this field, so that, in times of national or even local emergency, there is compatibility. Without doubt, such an arrangement would lead to some sort of economy in the purchasing and development arrangements for the future.
That leads me to the future. It looks very much as though those great men in the Services who manned the green goddesses proved that they could do the job as economically as the regular Fire Service. Surely a lesson can be learnt from the use of the heavy, sophisticated and expensive equipment which is operated today. Can we not produce or design a smaller vehicle which would go out first? I understand that the arrangement is that two fire engines have to go out on every call. Therefore, could we not look at the possibility of developing a smaller vehicle such as the green goddess which could be sent out first? If the fire was bad, the crew could radio back to the fire station for heavy equipment? I believe that we should now be thinking of less expensive equipment to send out first. Of course, there is the matter of hoaxes. In those circumstances, two fire engines go out, arrive at the scene and find nothing happening.
I turn briefly to the standards of manning and fire cover. Using the experience of the combined police, military and local authority arrangements during the strike, it is possible to reconsider the arrangements for the manning and

1125
deployment of fire appliances in respect of all purposes in order to assess whether there is scope for altering the manpower requirement, and whether or not any part of the service provided by the Fire Service can be better dealt with by other arrangements.
I believe that it was the noble Lord, Lord Clifford of Chudleigh, who reminded me of my maiden speech. I would remind the noble Lord that I was not a member of the Civil Defence Corps; I was called in as a volunteer at that moment to make up the numbers. I well remember him saying that the Civil Defence Corps should come back into being. At this moment I am not sure whether that would be the right answer, or whether the Government are considering training members of Her Majesty's Armed Forces to deal with this in the future. In the firemen's strike the Servicemen were not trained; they came straight to the job without knowing how to fight fires.
At first sight, it appears that other arrangements are unlikely because of traffic conditions and the development of traffic-free precincts, together with large industrial, commercial and shopping complexes, which to a great degree inhibit access from a single point and tend to militate against reducing the number of appliances available for response to various areas and risks. It appears that, without very careful analysis of risk and of further developments and trends, it would be very unwise to make quick and possibly dangerous judgments regarding Fire Service cost-effectiveness purely on the basis of the peculiar circumstances of an all-round strike of the professional Fire Brigade.
I believe that we should proceed slowly from this debate and from what we have learned, rather than making up our minds quickly what to do for the future. This has been a useful debate. A catastrophe such as a strike always brings out the best in people: they start talking and getting interesting points together. I welcome the debate and hope that I have been able to contribute to it somewhat. This is a complicated and expensive matter, but the slower we go over it, the better the result is likely to be.
7.15 p.m.
Lord LEE of NEWTON: My Lords, the one matter upon which we shall all agree is that we cannot speak too highly of the manner in which the soldiers took over the onerous task which faced them. Looking at the situation again, one wonders how they would have fared had they not had the advice and assistance of the fire officers who worked with them.
One of the first lessons that we should learn from the firemen's strike is that we have now reached a position where those workers who have no real economic or industrial power and, indeed, no record of strike activity—including the fact that they do not even have a strike fund—are now prepared to attempt to emulate the activities of those who do possess such industrial power. Indeed, we have seen similar developments among very many of the professions and among people with very differing degrees of economic power.
Therefore, I think it is true to say that the public bodies, which, in the main, are the employers of such workpeople, are not attuned to the possibility that the negotiations in which they engage could well end in strike action. It is a completely new atmosphere for them. The sooner they learn that the days of a paternal approach to these matters are over and adapt themselves to the new conditions, the better. It may well be that we shall have to look closely at the efficiency of the very organisation which they have used for so many years for discussing wages, salaries and matters of that kind.
No matter how well-intentioned either side or both sides of a negotiation maybe, unless the machinery is right, the negotiation could very well stumble because of a deficiency there. For instance, at one period I thought that for people who quite obviously were used to industrial negotiating they had both reached a dead end, yet the strike went on week after week. There did not seem to be a part of the machinery—for example, compulsory arbitration—which could have brought out the point that they were at a dead end, that there does not seem to be any body or vehicle that can step in and assist in the matter. So there may well be a machinery problem in this kind of dispute.

1127
I believe it was the noble Viscount, Lord Long, who said that the Government should not have applied the criteria to this Service that they apply to industry. The noble Viscount suggested that the firemen should receive higher pay for their services. I do not believe that the firemen were in any way the victims of Government policy. We cannot very well differentiate when we impose a freeze or a norm; we cannot begin to differentiate other than on the time factor and on the norm that we impose. The fact which must be looked at squarely in the face is that all low paid workers—and the firemen are by no means at the bottom of the ladder—are the victims of a system of collective bargaining which relies utterly and entirely upon the amount of industrial muscle you possess. If you do not possess industrial muscle but try to pretend that you do, you are going to get hurt. Mr. Tom Jackson found that out two or three years ago.
It may well be that the Government must look again at their norm and the way they implement it. I found out in the days when I ran an incomes policy that, no matter what norm you state, the negotiators then say, "That is in the bag. We now start to negotiate over and above the norm". The only norm which is safe is a "nil" norm, if you use that kind of an incomes policy.
I hope that we can get to a more refined incomes policy from now on. I am one of the people who, for 30 years, have advocated incomes policies, and I do not intend to change now. There is a way in which we can begin to differentiate on a number of grounds. Instead of a flat increase of 10 per cent., which simply widens the gap between highly-paid workers and lower paid workers, we have to begin to introduce such ingredients as skill, danger, responsibility, dirt. To me these are essential ingredients in an incomes policy which is going to get rid of the injustices which a collective bargaining system have left behind it
When the noble Viscount, Lord Long, was speaking, I thought that he was going to suggest that there should be a time lag in which you could try to get rid of those injustices. I would agree about that kind of thing. If you judge merely by the stupid old business of how much industrial
1128
muscle you have got, you will never iron out the injustices which we all know obtain in certain types of employment. I would therefore suggest to the Government that, in looking at their Phase Four, they begin to try to apply that kind of refinement. I am afraid that, although I admire the firmness and the decision with which the Government have handled their incomes policy, including what they have done about contracts with firms, and so on, a lot of people are treating that as though it is something entirely new. Some of us who were in Parliaments long gone by, remember the fair wages clause which stipulated that employers must be paying a given trade union negotiated rate, otherwise they would not get a contract. What is the difference between that and what the Government are now doing?
If you are not really serious in wanting to eliminate the inflation—and if a number of people who are talking loudly on this are not serious then they are hypocrites—which has been a curse for so many years, then you make excuses as to why Governments should not do this, that or the other. I was appalled at what I read from the CBI. They say, on the one hand, "We thoroughly agree with the Government's 10 per cent., but if they try to implement it, my God! we will oppose them tooth and nail". Where, in Heaven's name, does one get with that kind of thing.
The noble Lord, Lord Clifford of Chudleigh, gave a few instances where firemen were sneering at soldiers about their work. I read some of that, but I also read of far more instances where the firemen's pickets left the picket line to go and assist the soldiers in putting fires out. He mentioned the activities of Trotskyites, and so on. I would ask him to consider that that was not peculiar to the firemen's strike. I know he wants to analyse the firemen's strike, and so do I. I want to find out what are the lessons. With great respect, I suggest to him that one should not confuse what was a specific issue which concerns us all with every single strike one can think of in the last three years. I care not whether it was the miners, or who it was; there have been professional demonstrators of every type trying to latch on to any particular strike.
I remember going to a meeting when the miners' problem was on. I was going

1129
to say a few words to them. While I was sitting waiting for my turn to talk, I listened to three or four young men sitting there. First of all, I thought that from their accents they did not sound like miners. I live among miners. I said to them, "Which pit do you come from"? They said, "Pit? We have never seen a pit in our lives, and we don't intend to". But they were the loudest at the meeting. This is not peculiar to the firemen. It is a canker which has grown into all our industrial disputes, and frankly I do not know how you handle it. But do not let us put that down as anything peculiar to the firemen's strike itself.
It was said that there are too many firemen. I do not pretend to be expert in that kind of thing, but I should have thought that whether or not there are too many firemen depends on whether or not there are too many fires. One cannot simply say that, given an average of whatever it is, three fires a night, all you need is 30 people, because averages have nasty habits of going haywire. If you have half-a-dozen fires where life is at stake and property may burn, you cannot have too many firemen. We must allow a substantially higher margin so that we can ensure that, if on a specific occasion there is a far greater than average number of fires, we can deal with the matter without, as it were, having to form a queue, and so on.
I shall not detain your Lordships any longer. I hope that it is recognised that Governments who are trying their hardest to eliminate a great curse, such as inflation, cannot perfect their policies in a short period of time. I think that the time is now ripe for the Government to go ahead in the way I have tried to suggest. But also, arising from this dispute, we must begin to look at whether in the areas of the professions, or industries which have no strike record, the machinery is sufficiently versed in the new atmosphere in which they have to work. I have a feeling that it is not. In heavy industry, from which I come, it took us many years to find out just which kind of negotiating machinery suited our purposes best. I hope that an effective and efficient incomes policy will minimise the number of strikes, but in the meantime we should look very closely at the efficiency of machinery which was produced at a
1130
time when strikes were the last thing to be contemplated.
7.29 p.m.
Lord GISBOROUGH: My Lords, I should like to start by thanking the noble Lord, Lord Clifford of Chudleigh, for getting this debate off the ground. I am sure that it will be most useful. Everybody has nothing but praise for the way the soldiers and the police collectively got together and ran the fire service during the strike. It was noticeable how quickly they learned the job, dealt with all the 999 calls and operated an extremely efficient service. I should also like to say that I have nothing but praise for the maintenance staff, presumably from the Home Office—I do not think they have yet been mentioned—who have been maintaining the green goddesses for the last 30 years. It was interesting that, had they been military vehicles, it would have been expected when they were taken out of their depots that, on average, out of every hundred that drove off, 10 would break down. In fact, only three broke down, which was an extremely good average. I hope this will be passed on to the maintenance staff. I should also like to add a word of praise to the designer of those green goddesses. They were designed 35 years ago and have been in mothballs ever since, and they are still not only efficient but highly efficient, and were found to be extremely good. There was very little criticism of them. The person who was able to design something which lasted efficiently for so long did a remarkably good job.
It has been mentioned that public reaction during the strike was good. There was a marked reduction in the number of calls; even hoax calls went down by about 30 per cent.—they constitute about 10 per cent. of the total of calls. Altogether, I think there were 25 per cent. to 50 per cent. less calls. In my part of the world, which is one of the highest fire risk areas in Europe, the green goddesses proved surprisingly adequate to deal with most of the fires. They were particularly adequate in view of the lower level of expertise of the soldiers; they were fairly easy to work and, when used in conjunction with the Royal Air Force fire tenders with their foam, it was possible for the Army and the Air Force to deal with all hazardous

1131
fires, even—which the RAF were able to do—life-saving in smoke filled premises. It was estimated that, by the end of the strike, the expertise gained by the Army had reached something like 75 per cent. of the level of expertise of regular firemen. The exception for the Army was the lack of skill in searching in smoke-filled areas. Of course this required training with apparatus which was not available to the Army, although the RAF were trained for this.
The main point I should like to make concerns the control rooms where the calls were logged and from which the engines were controlled. In one county the control room, which is normally manned in eight-hour shifts by 25 civilian firemen, was manned in eight-hour shifts by only nine police and soldiers. Even taking into account the fact that there were fewer calls, it was quite evident that nine men could run that control centre perfectly well—perhaps needing one or two more if the calls increased vastly. Certainly, 25 were not necessary, and one must ask why so many civilians are needed when the centres could be operated by fewer servicemen with less training. One cannot deny that the regular firemen have periods of great activity and often face considerable danger, and, when there are fires—I am thinking particularly of 1976, when there were so many dry weather fires, of which I had some experience—they work very long hours and have very little rest. As the noble Viscount, Lord Long, mentioned they also have to deal with different kinds of chemicals, with accidents and so on and nobody can pretend that they do not have hazardous work to do.
Those who have had the misfortune to need the firemen have never been other than full of praise for the efforts they have made. However, having said that, I believe it is true—one has heard this over and over again—that they have equally long periods of inactivity and boredom and it is claimed that very many regular firemen do day jobs because, if they are on night shift, they can usually reckon that they will be unlucky if they are called out. Maybe they do the day jobs because they need the extra pay, or perhaps because they estimate that they are going to be inactive overnight. Perhaps this is not true. It would be interesting to find out in order to put it into proportion.
1132
This leads one to wonder whether the Fire Service is not overmanned, and whether it could not be better and more economically manned with less regular firemen and more part-timers who would be able to come in at peak periods. In particular, it highlights the overmanning of the control rooms where soldiers proved that it was possible to manage with many fewer people. I hope that the Government will be able to look into these points and perhaps recommend to local authorities that reductions might be made in control rooms, and even in the Service itself, perhaps going into the question whether the numbers of regular firemen could be reduced and those of part-timers increased to cope with peak periods.
7.36 p.m.
Lord HOUGHTON of SOWERBY: My Lords, when I said that I should like to intervene briefly in this debate I had not realised that shortly my noble friend Lord McCarthy would be speaking to a broader reference on the fixing of public service pay. It is that theme which concerns me most. I suppose the main lesson to be learned from any strike is how to avoid another. One of the features of this strike which we must always bear in mind is that this was a soldier's battle, not a general's battle. This strike was the result of a revolt of the conference of the Fire Brigades Union against the moderate leadership, which they were not prepared to accept. That is an unusual situation. We usually attribute strikes to the manoeuvrings of power policies of leaders, of trade union bosses who call people out, who stop newspapers and so on, who say, "They shall not go back until we say". The authoritarian approach is often attributed to the system of government in trade unions; but here we had an example of the expression of the democratic will, and the fact that the strike was responded to as it was is an indication that it had the wholehearted support, at least to begin with, of those whom it concerned most.
I think the main lesson to be learned from the firemen's strike is that if Government intervention in the complex pattern of pay and conditions of employment is prolonged the political and economic consequences may become serious. This is especially so in the public services where

1133
the Government, quite naturally, resolved to set an inflexible example to all other employers. At one time, in the Civil Service at any rate, there was an attempt to break or curb the authority of Government, to decide in their own judgment what conditions of service should be imposed upon sections of their employees. That was why the Priestley Commission many years ago interposed into the whole system of fixing public service pay the principle of fair comparability, and the machinery for applying it, and of fair warning to the Government to observe the principles which they accepted, and not to interfere with the fair operation of the principle of fair comparability, even in conditions of economic difficulty.
That broke down under the stress of the battle against inflation. The principle of fair comparability, so long established, means that if adjustments are deferred, then the subsequent effort to catch up and make the necessary adjustments will be extremely tiresome; I have had experience of that. If it is left too long it is almost too frightening, economically and politically, to face the consequences of what has been done.
When I was chairman of the Teachers' Pay Review Committee I made one of the last awards in the catching up process in the public sector before curbs and restraints were accepted, if not imposed, on the whole level of remuneration. I shudder when I look back on that because that involved a 30 per cent. increase. Hundreds of millions of pounds were added to the educational budget of this country in one go, flowing probably and mainly from the miners' settlement earlier in the same year; I am talking about four years ago.
That rod is in pickle again in the public sector. The grievance grows stronger with the passage of time and then, when the doors are opened, as I said, there is this great difficulty in meeting the consequences of the prolonged deferment of adjustments. Tensions are mounting again. They came out in the case of the police and serious trouble there was narrowly averted. It was almost a miracle; I do not know how it happened, but it did. There is a committee looking at police pay at the present time. Hope has been deferred in the Police Service and the Government do not have to face the music just yet. But the band will play
1134
in due course, and I am afraid that that is a deferred situation.
It is not only a matter of being held back in relative terms. The curbs and restraints, the guiding lights, the guidelines and the plateaux—all the euphemisms for telling the troops that they cannot have the money—defer the reappraisal of the value of services rendered to the community in particular sectors of the public service. You cannot do anything for the police no matter how strong the case, because if you do it for the police you will have to do it for others. You cannot do anything for the firemen because if you do it for them the sluice gates will be opened and the flood will run right down the public sector. The result is that they are all huddled together with one firm Government hand on the lot. Something is bound to happen if that situation continues for too long.
This is a personal opinion, but I believe that the present pay policy is costing the country an enormous amount in economic lethargy and a dispirited workforce. Whether that cost is greater than the benefit in the battle against inflation I would not venture to say, because it is very difficult to strike that balance. Nevertheless, I remember—it is within the recollection of us all—that both political and trade union opinion united in declaring that high wages were not the cause of inflation. What has happened to that economic doctrine today? Probably they are a contributory factor, but who knows really and truly the full extent?
Lord LEE of NEWTON: My Lords, would my noble friend agree that they all looked into the abyss in 1974 and 1975 and changed their minds?
Lord HOUGHTON of SOWERBY: My noble friend and I have together been off beam more than once on this issue in another place, my Lords. One cannot be off beam in your Lordships' House because so many of us are off beam one way or another. I have made a serious point, and I conclude by saying this arising out of the firemen's strike and related to the position of the police and to the claims that are now gathering strength all over the public sector. The Civil Service unions are all putting their claims in now; they are, all of them, over the so-called guidelines. The teachers

1135
want to recover their lost ground. I view the developing situation with considerable apprehension.
I hope the Government will have the courage, as well as the wisdom, shortly to try to reassess the pay situation in Britain in relation to the general economic strategy. Have we got into a rut of conventional belief that pay must be held down as a vital factor in the battle against inflation, so vital indeed that all the consequences of depression have to be faced rather than allow greater flexibility? My noble friend Lord Lee of Newton referred to norms. It is said that nothing must exceed 10 per cent.; but everybody then says that 10 per cent. is the starting point. There are rows over what is claimed or granted over 10 per cent., and all efforts to stop the avoidance of the general principle are viewed with dismay and annoyance by the Government. You cannot even remunerate people for long and sustained overtime throughout a whole year, for example to deal with unprecedented tax changes in 1977; you cannot even reward people for the productivity you want out of them because it is alleged that to do so would infringe the guidelines. That is the sort of absurd situation we get into. I think that is enough as a curtain raiser to the speech I hope to make on a subsequent occasion.
7.49 p.m.
Lord SKELMERSDALE: My Lords, I hope the noble Lord, Lord Houghton of Sowerby, was not thinking of me when he used the phrase "off beam". I agree that in daring to offer a few thoughts on the subject of the firemen's strike I am talking on slightly different matters from those I normally address myself to in your Lordships' House, but sooner or later, after one has been in this august Chamber for some time, one must broaden one's field, so to speak, and I hope I shall be excused this opportunity of doing so.
Most, in fact all, of the general points I had intended to make tonight have already been made, as I suspected, but there are two particular points which I hope the noble Lord, Lord Harris of Greenwich, will take up, though I am convinced he will not be able to answer them tonight. Just about every noble
1136
Lord who has spoken so far has, quite rightly, praised the efficiency and the good will of all the troops who took part, at the Government's behest, in lieu of the firemen who were on strike. My first point is to question whether they were given all the aid which in fact they could have been given; whether they were given sufficient training, sufficient instruction, to carry out the jobs, which could perhaps have been done just that little bit better. In looking at the lessons of the strike, this is something which we should certainly consider.
The next point I should like to mention was raised almost weekly here while the House was sitting—that is, both before and after the Christmas Recess—and also by the noble Lord, Lord Clifford of Chudleigh, when he opened this debate this evening. I refer to the subject of issuing breathing equipment to servicemen and training them to use it—an old chestnut, your Lordships may say. The last occasion on which we discussed this matter was only a fortnight ago, on the 25th January, when my noble friend Lord Orr-Ewing asked a Starred Question. In answer to his supplementary, the noble Lord, Lord Winterbottom—and I am sorry he is not here this evening—said this in column 337 of the Official Report:
"…consultations did take place and the decision was that the timescale did not permit training in fire fighting apparatus for the ordinary soldier who was not already a specialist.".
My Lords, previous Questions on other days—as I have already said, there was a whole series of them—had already elicited the information that, while it took only a matter of hours to train a Serviceman to use the breathing apparatus, it took several weeks for the operators to have sufficient training not to run out of oxygen by, for example, breathing too fast in a smoke-filled atmosphere. That is fair enough. But the firemen's strike lasted for seven weeks, and might well have continued longer. My question to the noble Lord therefore is: At what stage were the consultations held? Also, what was the attitude at those consultations?—as the background against which they were held, if you like. Was it thought that the strike could not possibly go on any longer; or was it thought, perhaps, that if this unfortunate circumstance should occur and it should go on any longer, what could be done about it?

1137
No matter what causes a strike, I venture to suggest that the history of this particular one and of the miners' strike has shown that where a matter of principle is at stake that strike will be prolonged. Decisions have to be made immediately; and if there is even the faintest suggestion of a strike in the public sector, is this not the time when we should be thinking of how to deal with it should the occasion arise? In other words, could not the training have started before the firemen actually went on strike? After all, there is no great difficulty, I would think, as a military exercise, in filling a building with smoke with the use of smokebombs or whatever, and to have, as the object of that military exercise, not only the using of the breathing equipment but also, say, the firing of the smokebomb or whatever. This would have given the training which was quite obviously necessary.
My final theme is rather different. From time to time we debate the Post Office in this Chamber. It is not my object particularly to "knock" the Post Office this evening, but on the 4th December 1977 the Sunday Express had on its front page a couple of paragraphs stating that postmen were being paid up to double their normal overtime for firewatching out of their normal working hours. Perhaps the noble Lord has heard of this and can say whether in fact it is true. I am, in general, a very strong supporter of the Post Office, coping, as it always has to, with enormous problems of labour and capital requirements. But what were the postmen supposed to be doing? It was not anything, surely, that the firemen would have been doing had they been working normally and not on strike. In a very small way I am an employer of labour, and I would regard it, as I am sure would many other employers, as a normal part of one's working agreement that one keeps a general watch-out for the possibility of fires. Is this not also the case in the Post Office? What was so special about the circumstances at the time which made it necessary to spend all this extra money? Was it a new departure? Is it happening in other nationalised industries? What did the postmen hope to achieve? Most important of all, perhaps, is it still continuing? If so—this is a rather flippant point, but I hope it sums up the situation—is this sort of extra expenditure going to put a yet
1138
heavier burden on the rate for the postage stamp?
7.56 p.m.
Earl GREY: My Lords, I must apologise for not having put my name down earlier, but I was not sure that I should be able to attend this debate. Most strikes are regrettable, but the firemen's strike was more so because it affected our national safety. It resulted in the use of valuable members of our Armed Forces, who were taken from their vital rôle of protecting our country. At this point I should like to say how indebted we are to Her Majesty's Forces for the wonderful way in which they carried out their dangerous and hazardous duties. One can also remember when, some years ago, during the dustmen's strike in Glasgow, they were called upon, and by their actions prevented what might have been a serious outbreak of any one of a number of refuse-borne diseases. The problems the soldiers had to contend with in the recent strike were increased by the fact that the equipment used was inferior by present-day standards. The men were not as experienced in civilian firefighting as are the firemen. I think credit must also be given to the numerous fire officers who gave valuable advice and assistance, which was badly needed.
My Lords, many Questions were asked in this House about training the Army in the use of breathing and other appliances, and the answer given by the Government was that it takes six weeks' training. As has already been pointed out this evening, the strike lasted much longer than that. I should like to suggest to the Government that if a similar occasion arises again—and we all hope it does not—then a standby force, experienced and trained, is ready to step into the shoes of the firemen immediately, thereby minimising the loss of life and damage to buildings. In conclusion, I should like to say that it is extremely regrettable that there still remains a feeling of bitterness between the strikers and their officers. For the sake of the efficiency of the Fire Service, which up until now has been beyond reproach, one can only hope that this state of affairs does not continue.
7.58 p.m.
The MINISTER of STATE, HOME OFFICE (Lord Harris of Greenwich):

1139
My Lords, I think all those who have participated in this debate, and indeed all those who have listened to it, would agree that it has been an interesting occasion. Not least, of course, we have had the benefit of some very interesting thoughts on incomes policy, and a developing incomes policy, from my noble friend Lord Houghton of Sowerby and my noble friend Lord Lee of Newton. My noble friend Lord Lee said during his speech that he has always been a firm supporter of incomes policy, and that is indeed true. He was a firm supporter of incomes policy when it sometimes was not a very fashionable thing to be, if I may say so. It required some fairly substantial political courage to take the line he did, and it is right to say that on an occasion such as this.
I always hesitate to cross swords with my noble friend Lord Houghton, all the more so on an occasion such as this, when he has indicated that this is something of an aperitif to a speech which he is going to deliver to us, no doubt within the next few weeks, in which he will develop his thoughts on incomes policy. I would say one thing to him and to one or two others who have spoken in this debate. My noble friend said that there was a danger of too much Government intervention in public sector pay settlements, and that there was a risk—a substantial one—involved. He said that there was a danger of creating a "dispirited workforce"—I think that was his phrase. He said that there were undoubtedly other compensating advantages. I would say to him—and he will hardly be surprised to hear it—that I do not myself believe that there is a real alternative to the policy which the Government are pursuing at the moment. I think there are undoubtedly risks involved. Certainly, anybody who has been involved, as I have been, in the police pay negotiations will be aware of the substantial problems which arise from standing firmly by one's position on a particular figure, as we did.
But I believe that there is overwhelming public support for the posture of the Government. I have absolutely no doubt about that—and that includes some of the members of the dispirited workforce; because the dispirited workforce are also consumers and their wives are also going to be affected by rising prices. The
1140
trouble in the past has been—and my I noble friend pointed this out in his speech—that it is very easy—only too easy—to find reasons why one particular group should get preferential treatment over the others and it is much more difficult to take a firm line consistently on all pay settlements in the way that the Government have taken it over the last few months.
I would say one thing before I turn to the subject of this debate. The noble Viscount, Lord Long, spoke, as always, agreeably and with moderation; but I fear that I detected—no doubt because he was speaking from the Bench opposite—some slight implication of criticism. No doubt I was wholly mistaken; but, just in case I was right in that assumption, I am quite sure that he would join with me in welcoming the statement made on 15th July, 1977, by Sir Geoffrey Howe, a gentleman with whom he no doubt has more than a nodding acquaintance, who asked:
Does the Chancellor understand that if he and his colleagues stick as firmly as he has said to their duty of exercising their authority and influence to secure pay settlements in the public sector, if they are in line with the target that the Chancellor has outlined, he will receive our full support?—[Official Report, Commons, col. 995; 15/7/77.]
I welcome that. It is always a delight to find some degree of bi-partisanship. Once or twice in recent weeks, I have had slight doubts as to whether the Opposition were wholly with us in dealing with the more sensitive pay negotiations. On one or two occasions, they appeared to be straying from the path of rectitude. Nevertheless, I welcome the fact that, apparently, there is such a high degree of agreement on this matter.
Viscount LONG: My Lords, I have a nodding agreement with the noble Lord over my right honourable friend; but I added that these were personal views and not from the Front Bench in the other place.
Lord HARRIS of GREENWICH: My Lords, I note that and I am sure that the noble Viscount—like a person speaking from this Bench—sometimes finds it difficult to separate personal views from those of Party. Nevertheless, as he spoke from that Bench, I did not think it inappropriate to draw his attention to

1141
what the Shadow Chancellor had said on this extremely important matter.
The noble Lord, Lord Clifford of Chudleigh, who opened this debate said that, with the return of the firemen to normal working, which took place on 16th January and which brought an end to the emergency fire situation, it was right to take stock of the situation. That is, generally, what we have done today. There are certainly a number of lessons to be learned from this. Obviously, the principal concern of my right honourable friend the Home Secretary and the fire authorities in the aftermath of the dispute has been to get the Fire Service back to normal working.
During the strike, some bitter things were said and done. That is true. But, against this background, I think it is reassuring that the return to work has gone as well as it has. As the House will know, Service assistance was withdrawn, from each brigade as quickly as possible—that is as soon as the firemen had reported back for duty and the regular fire appliances and equipment had been checked. Understandably, there have been some local difficulties. I would not seek to deny that. But, in general, these are being resolved.
I think that it would be right to begin my speech with an analysis of the situation which confronted us and then to deal with a number of points that have been raised in this debate. When, in November, it became clear to the Government that strike action would take place, we made a number of preparations to carry out our duty to do all we could to protect life and property in the situation which confronted the country. Plans were prepared by central Government and by the lire authorities and, in the event, these plans involved the activation of 1,060 green goddesses and the deployment of a total of some 20,000 Servicemen drawn from the Armed Services. In addition, 40 teams of trained firefighters equipped with breathing apparatus were also available. The police, in addition, played an important part, not least in verifying that, in fact, emergency calls were emergency calls. I know from a number of chief constables with whom I discussed this, that this was another burden on their already over-taxed resources. I think that it is only right on an occasion like
1142
this to pay tribute to the work which the police did so splendidly. So, too, I may say, did the fire officers, as the noble Lord who initiated the debate has said.
I take this opportunity to join with my noble friend, Lord Gisborough, in paying tribute to one group of people who have not really been recognised. They are the Home Office maintenance men who were responsible for keeping the green goddesses in such a state that they could be brought out at very short notice, and used in an operational situation. I am glad to confirm what he has said about them and I shall certainly make sure that what he has said is passed on to them.
The green goddesses were deployed in urban areas approximately on the basis of one for every two regular pumping appliances. In the main, the needs of rural areas were met by part-time firemen who played a crucial rôle during this dispute. In addition, guidance was issued through Government Departments and the fire authorities on the precautions to be taken in factories, schools, hospitals, old people's homes and so on, and advice was given to the public about precautions that they should take in the home through advertising campaigns in the Press and so on.
The response of all concerned was outstanding. I want to pay tribute to their dedication, determination and courage in a situation which imposed considerable demands on them all. For those members of the Armed Services engaged on emergency fire-fighting duties, this was a difficult and unfamiliar rôle; but they rightly earned the admiration and thanks of the entire country. During these difficult days for the fire-fighting force it became clear that the standards of serviceability of the green goddesses were much better than might have been expected. These appliances had proved their worth during the drought situation in the summer of 1976 and were to do so again during this dispute. These, and some other items of emergency fire equipment, will be retained.
During the nine weeks of the dispute, about 40,500 fires were reported. These gave rise to some 203 reported fatalities among members of the public and about 850 non-fatal casualties. From an analysis of data for previous years, the number

1143
of fires, fatalities and non-fatalities during the strike was about the same as might have been expected had the strike not taken place at all. The number of reported fatalities was, in fact, some 30 or so fewer than in the corresponding period in 1976–77. But, without far more detailed analysis than has yet been possible, the reduction, though gratifying, is small enough to have occurred by chance. It cannot, with certainty, be attributed to the additional publicity on precautionary measures or greater public vigilance during the strike, though I hope very much that these played a part.
As regards financial losses from fire, details are not collated by the Home Office or any other Government Department. The British Insurance Association publishes monthly estimates of direct fire losses. The figures published by the Association show that the estimated cost of fire damage in Great Britain in November was £42·7 million, and in December was £33·8 million. This compared with a monthly average for the whole year of £18·5 million and for 1976 of £19·3 million. Although the November and December losses were therefore undoubtedly and not of course unexpectedly, higher, the increases are impossible to quantify accurately because even in normal circumstances, fire losses vary unpredictably from month to month.
As I told the House in my Statement on 9th November, with the best that could be done by way of the emergency planning, the Government were under no illusion that the precautions which we took could match the fire cover provided by the regular fire service. I said this at the time in the knowledge of the sophisticated equipment which exists within the fire service to provide adequate fire cover throughout the country, the intensive training which firemen have to undergo in order to use the equipment safely, and the additional tasks, including fire precautions and other station duties, which are performed by firemen on a continuing basis.
Perhaps I may say a few words about breathing apparatus. As the noble Lord, Lord Skelmersdale, said, this has become something of an old chestnut, but old though it may be, I think it appropriate to deal with it—I hope finally. The
1144
matter has certainly been raised on a number of occasions. I remember exchanging words on this particular matter with the noble Lord, Lord Orr-Ewing—whom I am saddened to see is not with us—who rather mysteriously raised the question of the Suez Canal pilots in relation to this matter just before Christmas. It was raised also by the noble and learned Lord, Lord Hailsham of Saint Marylebone, and by question at that time by the noble Lord, Lord Clifford of Chudleigh; and, indeed, by him again tonight.
The unanimous—I repeat, unanimous—advice of the Fire Service was that this apparatus could not be used by troops. This was because it was not just a question of teaching a person how to wear a particular set of breathing apparatus. Obviously, that can be done. The real problem arose from the need to ensure the protection of the soldier concerned, bearing in mind the long, special training required in the Fire Service in firefighting techniques and safety procedures when using this equipment.
The advice that this equipment should not be distributed to the Armed Services was that of Her Majesty's Chief Inspector of the Fire Service. It was also a view which was endorsed by the National Association of Fire Officers when they met my right honourable friend the Prime Minister at the beginning of this dispute. This is a group of people to whom, quite rightly, the noble Lord, Lord Clifford of Chudleigh, paid particular tribute for their spectacular services during the dispute.
On the basis of advice of this kind, it seems to me, with great respect, to be a very extreme proposition indeed to suggest that one would push this advice on one side and ignore it. I do not think that would be right. What we did was to make a number of specialised Naval and Air Force units available who had experience in this particular area. They were added to the number of Servicemen who were available. It is important to deal with this question because understandably there has been public discussion of it. It is right that this matter should be disposed of once and for all.
Having dealt with this question of specialist equipment, it is all the more

1145
necessary to exercise caution in attempting to make comparisons between what happened before and during the strike in terms of the numbers of personnel and equipment used. Quite understandably, this question has been raised today and, indeed, by others outside this Chamber.
It must be remembered that the majority of regular fire officers were available to direct and assist the Servicemen during the strike. And that, in those parts of the country in which fire cover is provided by part-time retained firemen, some 70 per cent. of those part-time firemen continued to provide fire cover without any assistance whatever from the Armed Services. The police, as I have indicated, played an important role in assisting the Servicemen and dealing with many small fires themselves. Moreover, during the strike fire authorities did not have the resources of the brigades to carry out and enforce their fire prevention responsibilities under the Fire Precautions Act 1971 which is a very important part of the duties of the regular Fire Service. We had a debate on this issue only a few weeks ago.
Any attempt, therefore, to draw precise comparisons must be treated with some caution because the wide variety of factors involved require detailed and careful consideration. The Government intend to examine these closely and we will do this in the light of the fullest information we can obtain about what happened during the strike.
The noble Viscount, Lord Long, raised the question of existing standards of fire cover. These are based on the recommendations of a Joint Committee of the Central Fire Brigades Advisory Councils for England and Wales and for Scotland. Any proposal to change these standards would be a matter for my right honourable friends the Home Secretary and the Secretary of State for Scotland acting on the advice of the Advisory Councils.
These are matters which fire authorities themselves will want to consider. Indeed, they are likely to be raised during the forthcoming negotiations in the National Joint Council between the fire authorities and the Fire Service staff organisations about the reduction in the firemen's working week from 48 to 42 hours. This is an important step forward in improving
1146
the conditions of firemen and must be seen against the trend in industry generally. But the implications for the fire service will undoubtedly be considerable. Both sides of the NJC, having registered in principle as part of the settlement, agreement to introduce a 42 hour working week without loss of pay from November 1978, subject to satisfactory completion of negotiations, fully recognise the many problems associated with the introduction of that shorter working week.
The House will be aware that the fire service has been the subject of a number of inquiries, both of general and particular natures, over recent years. The most wide-ranging one was conducted by the Departmental Committee on the Fire Service under the chairmanship of Sir Ronald Holroyd. This Committee reported in 1970, and many of the aspects of the Fire Service which they looked into have been developed on the lines of the recommendations which they made. The work of that Committee had been preceded by the inquiry carried out in 1967 by the National Board for Prices and Incomes into the structure and levels of remuneration in the Fire Service. And it was followed by the Cunningham Inquiry which reported in 1971 on the work of the fire service and on an appropriate evaluation of that work. The Cunningham Inquiry made a number of specific recommendations about the pay of firemen, and these were implemented in the pay agreement of 1971.
The Cunningham Inquiry also recommended that a further evaluation of the work of the Fire Service should be carried out within two years. For a number of reasons, it was not possible for the NJC to make rapid progress on this matter. Last year, however, both sides of the NJC agreed on a job description of the fully-qualified fireman, which formed the basis of the work of the Inquiry which they subsequently set up under the chairmanship of my noble friend Lord McCarthy, to examine the firemen's job in relation to other occupations and their remuneration. My noble friend reported last September and recommended that against a broad benchmark of comparison with the generality of jobs in the community, discussions should continue in the NJC on the remuneration of the qualified fireman. The outcome of this has now borne fruit in the agreement for a new

1147
formula for fixing firemen's pay whereby the average earnings for firemen are to be equated with those of the upper quartile of adult male workers. This agreement is to be introduced in two approximately equal stages in November 1978 and November 1979.
I should like to say this in conclusion: the Home Departments conducted an Inquiry into the feasibility of a 40-hour week in the Fire Service which reported in September 1977. The Inquiry's conclusions have been remitted to the NJC and will be considered in the context of their negotiations on a reduction in the firemen's working week.
During recent years, as I have indicated, the Fire Service has been the subject of a substantial number of Inquiries. These have proved valuable in promoting the skills of the fireman and consequently the service which he gives to the community and in improving his pay and conditions. We should hesitate long before responding to suggestions that any further wide-ranging Inquiry should be imposed in the Fire Service at the present time. I sometimes think that we all have a habit of setting up rather too many Inquiries, which are in themselves a factor which, on occasions, can cause some disturbance and which can be extremely costly. What the Fire Service most needs at the moment is a period of stability during which fire authorities and members of their brigades can work together to restore the damage which has undoubtedly been done by the strike, and to build a better Service for the future.

REFUSE (DISPOSAL) BILL [H.L.]
Reported from the Joint Committee with Amendments, and recommitted to a Committee of the Whole House; Bill to be printed as amended.
  CORPORATION TAX: ADMINISTRATION COSTS
  CORPORATION TAX: ADMINISTRATION COSTS
  FARMHOUSE CIDER PRODUCTION
  FARMHOUSE CIDER PRODUCTION
  EUROPEAN INVESTMENT BANK: LOANS AND INTEREST RATES
  EUROPEAN INVESTMENT BANK: LOANS AND INTEREST RATES
  CORPORATION TAX YIELD
  CORPORATION TAX YIELD
  MOZAMBIQUE: BRITISH-OWNED ASSETS
  MOZAMBIQUE: BRITISH-OWNED ASSETS
  CONVENTIONAL WEAPONS: CONTROL OF INTERNATIONAL TRADE
  CONVENTIONAL WEAPONS: CONTROL OF INTERNATIONAL TRADE
  UNITED NATIONS SPECIAL SESSION ON DISARMAMENT
  UNITED NATIONS SPECIAL SESSION ON DISARMAMENT
  UNITED NATIONS SPECIAL SESSION ON DISARMAMENT AND BRITISH ARMY EXHIBITION
  UNITED NATIONS SPECIAL SESSION ON DISARMAMENT AND BRITISH ARMY EXHIBITION
  INTERNATIONAL ARMS EXHIBITION, MIAMI
  INTERNATIONAL ARMS EXHIBITION, MIAMI
  EL SALVADOR: ARMOURED VEHICLE SALE
  EL SALVADOR: ARMOURED VEHICLE SALE
  ST. GEORGE'S HOSPITAL, HYDE PARK CORNER
  ST. GEORGE'S HOSPITAL, HYDE PARK CORNER
  FREE PARDONS
  FREE PARDONS
  OFFENCES AGAINST THE PERSON: LEGISLATION
  OFFENCES AGAINST THE PERSON: LEGISLATION
  EXPORTS AND NON-TARIFF BARRIERS
  EXPORTS AND NON-TARIFF BARRIERS
  PRIVILEGES AND IMMUNITIES
  PRIVILEGES AND IMMUNITIES
  THE ORDNANCE SURVEY REVIEW COMMITTEE
  THE ORDNANCE SURVEY REVIEW COMMITTEE