Sitting of 9 February 1978

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

    Terrorist Activity
    Mr. Biggs-Davisonasked the Secretary of State for Northern Ireland if he will make a statement on terrorism in the new year to date.
    Mr. Molyneauxasked the Secretary of State for Northern Ireland if he will make a statement on the resurgence of anarchist and revolutionary activities in Northern Ireland.
    Mr. Michael McNair-Wilsonasked the Secretary of State for Northern Ireland if he will make a statement about the operation of the security forces in the Province.
    The Secretary of State for Northern Ireland (Mr. Roy Mason): Terrorist activity has recently concentrated on the use of blast incendiary devices and on attacks on the security forces. In the last few days the terrorists have murdered not only two part-time members of the Ulster Defence Regiment but also an elderly lady and a young schoolgirl. I am sure the House will share my own anger and deep regret at these tragic events. The present upturn in activity started towards the end of the year, though the current level of violence is significantly lower than in the corresponding period in 1977 or previous years.
    The security forces continue to concentrate on the prevention of violence and the apprehension of criminals. This year, 75 have been charged with serious terrorist type offences, including five with murder, eight with attempted murder,
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    and 17 with explosive offences. The police and Army are alert to any shift in tactics.
    Terrorists of all kinds are anxious to demonstrate that they can still inflict injury and damage; but they will win no encouragement from responsible politicians anywhere.
    Mr. Biggs-Davison: In view of the introduction of the M60 machine-gun, the recent atrocities by terrorists, who must have been emboldened by the irresponsible talk of an amnesty which has been denounced by both sides of the House, and something of a repudiation by Irish Ministers of Dublin's Sunningdale commitments, is the Secretary of State satisfied with the cross-border co-operation at present and with NATO vigilance, especially in the light of the appearance of the machine-gun?
    Mr. Mason: The hon. Gentleman is right. The M60 machine-gun has introduced a new dimension, and the security forces are very alert to it. They have recently found three belts each containing 100 rounds of the type of ammunition used for the machine-gun.
    Since the change of Government in the South, there has been no lessening of cross-border co-operation. Indeed, during the recent Forkhill incident the Garda set up vehicle check points in the South to help us.
    Mr. Molyneaux: Is the Secretary of State aware that the objectives of these murderers are vocally supported by public figures, some of whom are threatening to organise street violence if decisions of this Parliament are not to their liking?
    Mr. Mason: I would be very sorry if that happened in Northern Ireland. The hon. Member is aware that, when a highly emotive incident occurs and there is a dastardly and cowardly attack which kills innocent women and children, it sends a wave of revulsion through the Province. I appeal to Church and political leaders to calm the emotion. I respect their feelings, but we do not want sectarian violence breaking out again.
    Mr. McNair-Wilson: In December's debate on the emergency provisions, the Secretary of State said that the strength of the security forces would be related to

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    the level of violence. Is it still his intention to reduce the number of major operational units in Northern Ireland from 14 to 13, in view of the upturn in violence?
    Mr. Mason: I have already reduced the number to 13. One unit moved out over the Christmas period. I warn the House that we still have 13,500 British troops in the Province. We still have an Ulster Defence Regiment of 7,850 and my recruiting for the professional element has been going ahead, so that we now have 2,050 professionals in the UDR. The Royal Ulster Constabulary and the RUC Reserve have a strength of 10,381. The total forces amount to 31,731 people in Northern Ireland for the purpose of law and order. That means one for every 45 persons in the Province.
    Mr. Fitt: Does not the Secretary of State agree that the level of violence perpetuated by the IRA in Northern Ireland in no way relates to the opinions of the Dublin Government? With reference to what Opposition Members have just said, there were 22 points of agreement in the Sunningdale Agreement and 21 of these were overthrown by the Northern Ireland loyalists in their strike of May 1974. How can the Secretary of State expect the other party to that agreement to stand solidly by its commitment of that time?
    Mr. Mason: I hope that my hon. Friend and others with responsibilities in Northern Ireland will recognise that any utterance that gives aid and succour to any terrorist organisation in Northern Ireland makes my job and that of the Government much more difficult. I only regret that the floating of the amnesty call came through. That did not do us any good whatsoever. I am pleased that later the Taoiseach tried to withdraw it.
    Rev. Ian Paisley: Is the Minister aware that on the Shankill Road part of the Springfield Road there is great concern about the incursion of the IRA into that area? Is he aware that, at a recent security conference held at the RUC headquarters in Belfast, the people of that area were told that there was only one police Land Rover for more than 30,000 of the population and that the UDR was not permitted to act on the Springfield Road? Is he now prepared to release the UDR on the Springfield Road?
    Mr. Mason: I should be sorry if those facts were absolutely correct. I shall
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    have them checked and see whether there is sufficient security in the area. The Ulster Defence Regiment is now being used more often by the British Army. I decided, because of the problem in South Londonderry, that two companies would be called out and put on station for as long as the security forces required them. I shall see how far we can deploy particularly the professional element of the UDR as the security situation develops.
    Mr. Freud: Will the Secretary of State comment on how useful to the security situation in Northern Ireland has been the recent speech by the hon. Member for Abingdon (Mr. Neave) about the breakdown in power sharing?
    Mr. Mason: What the hon. Gentleman said about power sharing no longer being practical politics, if I may quote the phrase, certainly upset some of the minority parties of Northern Ireland. I appreciate the hon. Gentleman's problem. The Opposition, the Liberal Party and ourselves try to work amicably together so that we do not bestir the emotions, especially among the political parties.
    Mr. Neave: Is the right hon. Gentleman aware that we agree with what he said on 3rd February at Doncaster that politicians and commentators should not be hung up on the term "power sharing" and that he was not creating a power-sharing Executive on the 1974 model? Therefore, we were saying exactly the same thing—that bipartisanship should remain.
    Mr. Mason: I am pleased to hear the hon. Gentleman say that the bipartisan policy of Northern Ireland should remain firm. I am pleased that he has reiterated that point. It is quite true that in Northern Ireland people get hung up on emotive phrases. That is why I have purposely never used the words "power sharing".
    Mr. McNamara: Does my right hon. Friend agree that it is still the policy of the Labour Party to try to ensure that we have within the Six Counties a system of devolved government which has the overwhelming support of the majority of the population and with which both communities agree? Does he agree that, whatever rose it is, it has still to smell as sweet as power sharing?
    Mr. Mason: Yes, my hon. Friend is on exactly the point. I have tried to explain to the House that we sincerely believe that the ultimate objective for devolution in Northern Ireland shall be a legislative Assembly with all the transferred powers going back. From our past experience, however, the House knows that it must be a partnership Administration and that the rights of the minority must be safeguarded.

    Housing Executive Board
    Mr. Wm. Rossasked the Secretary of State for Northern Ireland on how many occasions since it was set up the Board of the Housing Executive has sought the advice of the Housing Council; and on how many of those occasions that advice has been accepted and acted upon.
    The Under-Secretary of State for Northern Ireland (Mr. Ray Carter): The Housing Council provides a valuable forum for the regular and frequent consultation on housing policies and problems between local elected representatives and the Housing Executive. It would be for them rather than the Government to provide details of the consultations that take place.
    Mr. Ross: Is not the Minister aware that such consultations take place only very rarely? Is he further aware that the Housing Executive Board does not have to accept any recommendations made by the Housing Council? Does not this highlight the undemocratic nature of the board? Will he now take steps to increase the elected representation on the Housing Executive Board with a view to increasing the participation of people in the country in the Housing Executive Board?
    Mr. Carter: Consultation means consultation. No other interpretation can be put on the relationship between the Housing Council and the Housing Executive Board. I must remind the hon. Member that the Housing Council has three representatives on the Housing Executive Board. I have not been led to believe that there is any difficulty. There is a good relationship between the Housing Council and the Housing Executive Board.
    Mr. Kilfedder: What action does the hon. Gentleman intend to take to ensure fair play and civil rights for the Protestant communities in Northern Ireland who have been allocated only 34 per cent. of Housing Executive tenancies despite the fact that thousands of them are on waiting lists desperately seeking homes, particularly young people and especially in my constituency?
    Mr. Carter: It is difficult to know how to respond to a question such as that which contains so much misleading information. Everybody in Northern Ireland—Protestant, Catholic or any other denomination—is treated fairly by the Housing Executive. The Housing Executive comes in for far more praise than criticism in Northern Ireland on that score.

    Criminal Injuries Compensation Awards
    Mr. David Huntasked the Secretary of State for Northern Ireland how many awards he has made under the Criminal Injuries (Compensation) (Northern Ireland) Order; what has been the average amount awarded; how many applications are still outstanding; and whether he is satisfied with the progress made.
    The Minister of State, Northern Ireland Office (Mr. J. D. Concannon): 428 applications for compensation have been received in the period between 9th August 1977, the date on which the order came into effect, and 27th January 1978. None of these claims has yet been finalised but offers of compensation have been made in 12 cases; an interim payment of £1,000 has been made in one case; and three claims have been refused. I am satisfied that my Department is dealing with all claims as quickly as possible, but I should be happier if information could be supplied more quickly by applicants in support of their claims.
    Mr. Hunt: Is the Minister satisfied that all potential claimants are coming forward? Will he take steps to publicise further the availability of this additional compensation so that people can be made aware of the procedures to be followed? Is he satisfied that the amount of compensation within his discretion is enough to meet the many tragic cases that exist, including that of my constituent Mrs. Pasarek?
    Mr. Concannon: In reply to the last question about the hon. Member's constituent, I think that that has been settled, finalised and agreed. The type of details required include details of the accident in which the injury was caused, with full medical reports, plus information about the financial loss and expenses. It is my intention in the next few months to publish an explanatory booklet which will explain in some detail how claims should be presented.
    Mr. John Ellisasked the Secretary of State for Northern Ireland how many widows have received discretionary payments under the Criminal Injuries (Compensation) (Northern Ireland) Order 1977; and if he will make a statement.
    Mr. Concannon: From 9th August 1977 to 13th January 1978, payments amounting to £248,221 have been made under article 8 of the order to 98 widows.
    I am generally satisfied that this provision is meeting a need, but, strictly interpreted, it has proved impracticable to operate as drafted in respect of joint claims by a widow and children. Extra-statutory arrangements have been made, therefore, to ensure that, where the amount payable to such families is reduced by the deduction of benefits, the compensation awarded can be brought up as intended by Parliament either to £5,000 plus £500 for each child or to the gross amount if less.
    Mr. Ellis: Will my right hon. Friend tell the House the percentage of people who are coming forward under this legislation and who might benefit under it? He will have in mind recent correspondence between us which involved lawyers. Therefore, will he have a word or two with the legal profession in Northern Ireland? My right hon. Friend's Department often gets blamed because lawyers are not processing cases fast enough in Northern Ireland.
    Mr. Concannon: I thank my hon. Friend for his comments. I have been pressurised at times, but I think everyone knows that the fault cannot be laid at my door. As to whether all claimants are being identified, the answer is "As far as possible". We have checked the Army and police records as well as our own records, and advertisements have been placed in national and in Ulster news
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    papers. If anyone has any doubts about a case under Section 8, perhaps he will inform my office and I shall have it speedily checked.

    Shipping Routes
    Mr. Powellasked the Secretary of State for Northern Ireland whether he is satisfied with the present range and capacity of the surface routes between Northern Ireland and Great Britain.
    Mr. Carter: While I am not aware of any major gap between supply and demand for these services at present, I would naturally welcome any commercially viable improvement or expansion of services which are so vital to the Northern Ireland economy.
    Mr. Powell: Is the hon. Gentleman aware that this is one of those cases in which demand waits upon supply and that very often the provision of a route opens up an entirely new market? Does he agree that it would be a mistake to concentrate attention and investment upon one route to the disadvantage of others?
    Mr. Carter: I am aware of what the right hon. Gentleman has said about a hovercraft service from Warren Point to Heysham and the novel suggestion, from his point of view, that we should look to demand rather than supply for improvement in these services. But we would have to be convinced, as I suggested in my answer, that any improvement was based on commercial viability.
    Mr. Thomson: Has the Minister made any representations to the Scottish Office with a view to getting an improvement of the A75 road up to a real Euro route to serve the needs of the traffic to Ireland? Has he had conversations with British Rail about the possibility of reinstating the rail link between Dumfries and Stranraer so as to obviate the very roundabout route through Mauchline?
    Mr. Carter: I am aware of some of the criticisms that have been made about the road routes to which the hon. Member refers, although they have not been substantial. I hope some time later this year to go across to Scotland and have a look at the route to which he refers.
    Mr. Skinner: May I take it that my hon. Friend is trying to assist the right

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    hon. Member for Down, South (Mr. Powell) to distort the free market forces in order to help his constituents?
    Mr. Carter: In fact, I said in my original answer that we could consider such assistance only if the proposal was commercially viable. In that, I am sure that I have the support of the right hon. Gentleman.

    Political Talks
    Mr. Flanneryasked the Secretary of of State for Northern Ireland if he has any further plans to meet the leaders of the main political parties in Northern Ireland; and if he will make a statement.
    Mr. van Straubenzeeasked the Secretary of State for Northern Ireland whether he will make a statement on the progress of his talks with the political parties in Northern Ireland to lead to a constitutional settlement there.
    Mr. Canavanasked the Secretary of State for Northern Ireland whether he will make a statement about the progress of his discussions with political leaders in Northern Ireland.
    Mr. Mason: As I said in reply to Questions in the House on 12th January, I believe that my framework for talks with the parties provides the best opportunity to make progress towards the return of substantial power and responsibility to locally elected representatives. The caution of the parties at the moment is understandable and I do not intend to force the pace.
    Mr. Flannery: Will my right hon. Friend accept from me that where a sense of hopelessness prevails, terrorism flourishes? Therefore, as this is one of the few directly political questions, will he address himself very carefully to it? Only in a continuing dialogue will some hope emerge. Will my right hon. Friend also accept that I am trying very hard to do what he said and to guard my words carefully in order not to inflame a very delicate situation, and that I hope that he has noted that in my last contribution on the subject I said that, if the last dialogue failed, inevitably there would be an outbreak of further terrorism? Will my right hon. Friend accept that, unless a continuing dialogue between all the parties in Northern Ireland and the
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    Minister continues, the sense of hopelessness will go on and more terrorism from both sides is bound to follow?
    Mr. Mason: I agree with my hon. Friend that it is essential to try to get the political dialogue under way once again. I have told the House before that my door is not closed. I hope that the political parties will feel it worth while to continue the talks. I was not pessimistic about the outcome of the talks. We had a round of ministerial talks with the four parties. My officials had bilateral talks with the four parties. I was hoping that they could continue. However, because of some external utterances of late, the parties have decided to go back and stand aside for a while.
    Mr. van Straubenzee: Although I am not asking the right hon. Gentleman neessarily to commit himself in principle at the moment, may I ask whether he is really satisfied that he could not attain the objective set out in his interesting speech of 3rd February, with which clearly the majority of the House is in accord, by seeking perhaps to get there by stages, the first stage being the resumption of some effective form of local government, as long as it fulfils the conditions set out in his speech?
    Mr. Mason: Yes. If the hon. Gentleman has read my speech—and from what he said it is obvious that he has—he will see that I am trying to do it in stages. I was talking about a regional authority, but with the devolution of powers. Local government in the British sense does not satisfy that criterion. However, if local government in the British sense were given to Northern Ireland, the SDLP would immediately say that it was the return of a Protestant majority.
    Mr. Fitt: Hear, hear.
    Mr. Mason: The leader of the official Unionist Party, Mr. Harry West, would say that it was a diversion from his ultimate goal because he wanted the devolution of power—that is, Stormont—back again. So I have to find something more than the British style of local government.
    Mr. Canavan: Is not it obvious that there is a degree of schizophrenia on the part of certain Northern Ireland political leaders who want a devolved Assembly

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    for Northern Ireland but who are opposed to such an Assembly for Scotland and want more Northern Irish representation at Westminster but who complain about too much Scottish representation at Westminster? Does not this demonstrate a lamentable lack of logic, especially on the part of a doctor of divinity and former classics professor?
    Mr. Mason: It is not for me to allow Northern Ireland Question Time to devolve into a wrangle between the Scottish and Northern Irish forms of devolution. Suffice it to say that even within the official Unionist elements in the Province there are different types of devolution which they themselves require, and many of them are campaigning for different forms. It makes it difficult for me when there are utterances in this House for one form and utterances from leaders of the official Unionist Party over the water for another.
    Mr. Bradford: When the Secretary of State next meets Mr. West, will he discuss with the leader of our party the proposed development for Poleglass, which has very serious implications for law and order in the Province? Will the right hon. Gentleman accept the result of a by-election in Lisburn Area E which Councillor McAllister is prepared to initiate and to fight on the basis of an anti-Poleglass ticket? Finally, will the right hon. Gentleman accept the democratically expressed wishes of the people in that area in this by-election?
    Mr. Mason: There has been a full inquiry into the future of the Poleglass development. The announcement has been made. I hope that the hon. Member for Belfast, South (Mr. Bradford) will recognise once again that if we are to make progress, especially on the housing front, and to be fair to members of the minority community in the Province, he must prevail upon his friends to allow them their development, which is justly deserved.
    Mr. Fitt: Does not my right hon. Friend agree that the breakdown in the present political talks was brought about by the official Unionist Party, which used as a convenient excuse what was alleged to have been said by the Taoiseach in the Republic? The official Unionist Party never wanted to ensure the success of the talks, and since the breakdown of those
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    talks we have been subjected to almost daily—certainly weekly—utterances by the hon. Member for Abingdon (Mr. Neave), who appears to be giving total and absolute support to the official Unionist Party in its attempt to regain Unionist ascendancy and to make it impossible for any representation from the minority community to engage in discussions.
    Mr. Mason: My hon. Friend indicates how difficult the problem really is. However, I do not want to apportion blame. Now that the turbulence which was created is settling down, I hope that I shall be able to meet the representatives of the parties so that we may carry on the political dialogue once again.
    Mr. Neave: Is the right hon. Gentleman aware that, although the Opposition agree with a great deal of his Doncaster speech on 3rd February about power sharing, the terms of reference for further talks that he set out seem rather too wide? Is there any reason why the SDLP should not put up candidates for a local government body, such as that suggested by the official Unionists? Is there any reason why it should not participate with the rest of the community? Is not that the best solution and the one most likely to succeed?
    Mr. Mason: The only difference is that if I tried to impose a local government solution on the Province it is unlikely that the minority would regard that as satisfactory and, therefore, whatever form it took might ensure that that form of local government did not succeed. It is essential to carry with me the representatives of the minority and the majority communities in Northern Ireland if we are to negotiate the interim stages towards full devolution.

    Disabled Persons (Employment)
    Mr. Carter-Jonesasked the Secretary of State for Northern Ireland what action he is taking to increase the employment of disabled people in Northern Ireland.
    Mr. Concannon: Over the past two years the Department of Manpower Services has increased its staff of trained disablement resettlement officers, published a guide to employers on the subject of disabled people, opened a 100-place

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    employment rehabilitation unit and introduced two grants schemes to encourage employment of the disabled.
    Mr. Carter-Jones: I am grateful for my right hon. Friend's reply. However, the unemployment rate amongst the disabled in Northern Ireland is appallingly high. Does my right hon. Friend realise that the measures which he is taking are not being very successful? Would not it be a good example in terms of relationships if all sides in Northern Ireland co-operated to bring down the rate of unemployment?
    Mr. Concannon: Although the unemployment rate amongst the disabled is high, the unemployment rate generally in Northern Ireland is too high. We are operating now with a rate of about 12 per cent. There are fairly generous grants to encourage employers to look at the situation again. We are doing all that we can. But I hope that my hon. Friend will take it from me that we are operating in a difficult area where unemployment is running at a level of 12 per cent.
    Rev. Ian Paisley: I appreciate what the Minister is doing in this important matter. Will he give the House an idea of the percentage of disabled who could be employed but cannot obtain employment?
    Mr. Concannon: That is a difficult percentage to give because the disabled are disabled in varying degrees. We are talking only of registered disabled, and one wonders how many disabled are not registered. I cannot give a figure because it depends on the degree of disablement and the opportunities that exist.
    Mr. Litteriek: Does the Minister agree that, notwithstanding the fair employment legislation, the greatest disability that a human being can suffer in Northern Ireland in the matter of employment is to be a Catholic?
    Mr. Concannon: I disagree entirely. The whole operation which we are undertaking in the Department is completely alien to that suggestion.

    Borstal Training
    Mr. Hardyasked the Secretary of State for Northern Ireland if he is satisfied with the present arrangements for
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    persons sentenced to borstal training in Northern Ireland.
    Mr. Concannon: Yes, Sir. A new closed borstal was opened at Millisle, Co. Down, in November 1977, on the same site as the open borstal. All borstal boys are now accommodated at Millisle, and the borstal units in Maze and Magilligan Prisons have been closed.
    Mr. Hardy: I am grateful for that reply. Are persons convicted of terrorist activities sent for borstal training?
    Mr. Concannon: It is a matter for the courts to decide, within the age limits laid down between 16 and 20, who shall be sent to borstal. Before imposing a borstal sentence, the courts are required to consider a report on behalf of the Secretary of State as to suitability for borstal training. Some trainees have been convicted of terrorist-type offences. For example, in 1976, of the 131 persons sent for borstal training, 12 were convicted of explosive offences and 34 of firearms offences.

    Comprehensive Education
    Mr. Freudasked the Secretary of State for Northern Ireland what representations he has had regarding recent proposals in respect of comprehensive education in the Province.
    Mr. Carter: The Government have received a number of representations about the decision to eliminate selection at 11-plus through a restructuring of secondary education. Some of these have been in favour of the proposals, including those from the larger teachers' unions and the Association of Education and Library Boards, and some have been against the proposals, particularly those from people who are concerned about the future of grammar schools. Other representations have been directed towards issues of detail and timing.
    Mr. Freud: Will the Minister accept that he has our support on the desirability of ending selection in education? Will he also bear in mind that, as all tertiary education in Northern Ireland is interdenominational, he should keep an open mind to any suggestions aimed at furthering this approach into the secondary sector, even in respect of day release between the two denominations?
    Mr. Carter: I thank the hon. Gentleman for his support, which is in accord with the broad majority of opinion in Northern Ireland. As for his second point, we are proceeding on the basis of voluntary agreement, and in any respect where we can improve interdenominational teaching the Government will lend their support.
    Mr. Flannery: Will the Minister accept that comprehensivisation of education is democratisation of the education system? [HON. MEMBERS: "No."] Opposition protestations show how far their democracy goes. Will the Minister accept that democratisation of education would be a good harbinger for the whole democratisation of Northern Ireland? Does he not agree that the Opposition should think sincerely about this matter.
    Mr. Carter: The Government intend to extend opportunities, and we believe that the abolition of the 11-plus selection system would be a considerable step towards that end.
    Mr. McCusker: Does the Minister agree that the majority of people in Northern Ireland, on both sides of the sectarian divide, are opposed to the proposal? The only explanation is that this is aimed at bringing Northern Ireland into line with Great Britain. If it is possible to treat Northern Ireland as a special case in the elections to the European Assembly, why is it not possible to treat it as a special case in this instance also?
    Mr. Carter: As a member of the teaching profession in Northern Ireland, the hon. Gentleman should know better. He is forgetting history. These proposals are based on the recommendations of the Burgess Committee's report in 1973. Therefore, the matter goes back for a period of five years. We as a Government are doing nothing more in Northern Ireland than putting into practice the report of an indigenous educational body.
    Mr. Biggs-Davison: On what basis does the Minister say that these proposals have broad support? Is he aware that the hon. Member for Armagh (Mr. McCusker) knows a little more than he does about public opinion in the Province? In view of the Secretary of State's appeal to politicians to calm the Province and for a bipartisan approach to Northern
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    Ireland questions, will he put these proposals in the deep freeze?
    Mr. Carter: The simple answer to that proposition is "No". I am prepared to believe that anybody who is an Ulsterman and who lives in Northern Ireland knows rather more about education than I do. The hon. Gentleman heard my response to the hon. Member for Armagh (Mr. McCusker), but he got it wrong. This proposal—the direct rule system of government—stems from the recommendations of the people of Northern Ireland and not from us.

    Seat Belts
    Mr. Gowasked the Secretary of State for Northern Ireland what further representations he has received about the Government's proposal to introduce legislation, by Statutory Instrument, for the compulsory wearing of seat belts in Northern Ireland.
    Mr. Carter: Since receiving support for the proposal for a draft order from the Royal Ulster Constabulary and a group of Northern Ireland surgeons, I have received a favourable response from representatives of the Social Democratic and Labour Party and the Liberal Party. I have also received representations from the Unionist Party of Northern Ireland, the Ulster Democratic Unionist Party, three district councils, a Back-Bench Member of Parliament and four private individuals.
    Mr. Gow: Does the Minister understand that legislation by Statutory Instrument in Northern Ireland is unsatisfactory in any event but is doubly unsatisfactory in regard to legislation of this kind? What possible justification can there be for imposing in Northern Ireland a system of law which does not apply to the rest of the United Kingdom?
    Mr. Carter: It may be unsatisfactory, but that would have been known to the hon. Member's party when in Government when it abolished Stormont. The current system of government is unsatisfactory. Until we can have a devolved system of government in Northern Ireland, we shall have to try to balance the demands of the community of Northern Ireland against the parliamentary system.
    Mr. Fitt: Will the Minister take it that, so far as I can ascertain, the overwhelming majority of people in Northern Ireland favour seat-belt legislation? Any experience of casualty departments in the main hospitals in Belfast and further afield is totally in support of the legislation, and it is the appalling driving record in Northern Ireland which has brought about this situation.
    Mr. Carter: The hon. Gentleman is right and I am pleased to have his support on this issue. As for driving in Northern Ireland and the appalling accident figures, that is what propelled us towards some form of solution. The accident rate in Northern Ireland is double that which exists anywhere else in the United Kingdom.
    Mr. Neave: Does the Minister recollect that, on the last occasion when Questions were asked on this topic, he was asked to separate the part of the order relating to seat belts from the rest of the order, which is non-controversial? Will he give reasons why there cannot be a separate order on seat belts so that the matter can be fully debated in the House?
    Mr. Carter: There are good reasons. [HON. MEMBERS: "What are they?"]. If the hon. Gentleman had followed other political parties in responding to my invitation when the draft order was in being and if he had discussed this matter with me in my office, he might well have been given an answer. This is not a suitable matter for discussion across the Dispatch Box. [HON. MEMBERS: "Why not?"] The hon. Gentleman should have come to that meeting.
    Rev. Ian Paisley: Does the Minister agree that the accident rate in Northern Ireland is attributed by the RUC to excessive drink and not to the non-wearing of seat belts?
    Mr. Carter: That is true, but the interesting point is that, if I were to bring forward legislation to deal with the problem of drink, it would be unique to Northern Ireland and would be met with the same criticisms as hon. Gentlemens direct at us on the wearing of seat belts.

    Fuel Costs (Elderly Persons)
    Sir Nigel Fisherasked the Secretary of State for Northern Ireland whether he
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    will increase the subsidy on fuel for old people who cannot afford to heat their homes because heating costs in Northern Ireland are higher than in the rest of the United Kingdom.
    Mr. Concannon: No, Sir. The supplementary benefits scales of requirements include an element for expenditure on normal heating costs, and in cases of special need an addition can be given for heating. Elderly persons in Northern Ireland who are in receipt of supplementary pension are entitled to assistance under the winter fuel discount scheme. In Northern Ireland this scheme applies to gas as well as to electricity and offers a 40 per cent. discount on bills due at the end of the current winter quarter compared with 25 per cent. in Great Britain. These additional benefits under the winter fuel discount scheme take into account the higher cost of gas and electricity in Northern Ireland.
    Sir N. Fisher: Is the help that is given enough, bearing in mind the discrepancy between costs in the United Kingdom as a whole and costs in Ulster? Will the right hon. Gentleman bear in mind that there are cases of genuine hardship among retired and older people who cannot afford to heat their homes properly in this cold weather?
    Mr. Concannon: That is why benefits in Northern Ireland are better than those in Great Britain. There is also a £5 addition in Northern Ireland which people can use however they wish, whether they have solid fuel heating or any other sort of heating. We have had strict parity in supplementary benefits, but the Supplementary Benefits Commission in Northern has made representations to us on this point and we are considering them.
    Mr. Carter-Jones: I do not wish to sound unkind, but is my right hon. Friend aware that hypothermia among the elderly knows no boundaries?
    Mr. Concannon: Yes, of course I understand that.
    Mr. Wm. Ross: Is the right hon. Gentleman satisfied that, when supplementary benefit is being assessed for old people, sufficient account is taken of the high cost of electricity in the all-electric homes in which many old people live?
    Mr. Concannon: The hon. Gentleman's hon. Friends have always insisted that we should retain strict parity in benefits. I would advise caution on the question whether, in this one area, we should go outside that parity.

    Civil Servants (Payment of Debt Deductions)
    Mr. Litterickasked the Secretary of State for Northern Ireland how many civil servants in each department of his office are now having deductions made from their wages under the terms of the Payment of Debt (Emergency Provisions) Act 1971.
    The Under-Secretary of State for Northern Ireland (Mr. James A. Dunn): At 31st December 1977 there were 157 civil servants in the Northern Ireland Civil Service having deductions made from their wages or salaries. I shall, with permission, circulate a breakdown, by department, in the Official Report.
    Mr. Litterick: I am grateful for that answer, but, in view of a recent answer given by my hon. Friend to the effect that his Department had no idea how many people were or had been engaged in politically-motivated rent and rates strikes, can he tell us how he knows how many, if any, of these 157 victims of unilateral powers were involved in such strikes?
    Mr. Dunn: I regret that I still cannot give that information.
    Following are the particulars:

    Industrial

    Non-industrial

    DOF (Finance)

    Nil

    1

    DANI (Agriculture)

    38

    Nil

    DOC (Commerce)

    Nil

    1

    DENI (Education)

    Nil

    2

    DEO (Environment)

    79

    12

    DHSS (Health and Social Services)

    Nil

    13

    DMS (Manpower Services)

    2

    9

    119

    38

    Roads (Dock Links)
    Mr. Fittasked the Secretary of State for Northern Ireland when work is planned to start on the proposed links between the M1 and M2 motorways and between the M2 and Belfast Docks.
    Mr. Carter: The purpose of these links is to facilitate the heavy flow of
    1662
    freight traffic between the M1 and the docks and the M2 and the docks and to relieve the city centre streets of this traffic.
    It is hoped to announce decisions about the links in about two months' time when the Department of the Environment for Northern Ireland has considered the inspector's report of the public inquiry into the Belfast Transportation Strategy Review held last year.
    Mr. Fitt: Is my hon. Friend aware of the great uncertainty that exists in the area that could be affected, particularly by the linking of the M2 and the docks? Did he realise from his visit the vital importance of expediting the decision on the inquiry report as much as possible?
    Mr. Carter: I am aware of the fears and doubts in that area and I hope that before too much time has elapsed we shall be able to make an announcement to settle those doubts and fears.
    Mr. Bradford: Is the hon. Gentleman aware that, according to a reply from his Department, there is enough room in that area, whether the road is built or not, to provide 1,200 homes for Roman Catholics in West Belfast?
    Mr. Carter: I should like the hon. Gentleman to put his suggestions on paper. I cannot pre-empt the results of the inquiry.

  SECRETARY OF STATE FOR ENERGY (SPEECH)
  Mr. Michael Lathamasked the Prime Minister whether the public speech by the Secretary of State for Energy at the School of Oriental and African Studies, London, on 24th January on public ownership represents the policy of Her Majesty's Government.
  The Prime Minister (Mr. James Callaghan): I refer the hon. Member to the reply which I gave to the hon. Member for St. Marylebone (Mr. Baker) on 26th January.
  Mr. Latham: Since the Secretary of State for Energy has told us that nationalisation is back on the political agenda, can the Prime Minister answer one simple question? Does he support the Labour Party's proposals for the nationalisation of building and building materials companies?
  The Prime Minister: In reply to the first part of the hon. Gentleman's question, nationalisation is never off the agenda. I have only to cast my mind back over the sequence of events that began with Cammell Laird and went on through Rolls-Royce and Upper Clyde Shipbuilders and finished with Leyland to show that, whatever may be the views of the Conservative Party in opposition, when it is in power it has to face the facts of life.
  On the second part of the hon. Gentleman's question, the Labour Party manifesto will be published in due course and I shall hope to satisfy him then. I do not think that anyone feels that the building industry is in a very happy situation or is very well organised at present. There is a case for reorganisation.
  Mr. Skinner: Continuing the theme that my right hon. Friend has started, does he agree that private enterprise can exist across a whole range of consumer durables, such as cars and so on, only on the basis of receiving £11 million a day of taxpayers' money in one form or another?
  As yesterday's decision by the miners was said by the Chancellor of the Exchequer to be wise and sensible, may we take it that the Prime Minister and the Cabinet agree that Mr. Joe Gormley's statements that we must return to free collective bargaining if Labour is to win the next General Election are also wise and sensible words?
  The Prime Minister: I do not think that, in his inscrutable eloquence at the school of oriental studies, my right hon. Friend dealt with that question. Perhaps I could have notice of the profound questions that my hon. Friend has put to me.
  It is clear that the economy of this country will not work properly unless there is a proper balance between the private and the public sectors. This is recognised on nearly all sides, except when the Opposition get into a pre-election mood.
  Mrs. Thatcher: Does the Prime Minister recall that in his speech the Secretary of State used a phrase about limiting unaccountable power? Bearing in mind that phrase, will he look at the report on Statutory Instruments which was published by the Select Committee yesterday? That report spoke of the Government having a cynical disregard
  1664
  for the rights of the subject. What remedies does the Prime Minister propose to apply?
  The Prime Minister: I shall, of course, study that report with care. I do not wish a Government who have very great powers to behave cynically in regard to them. The Government should examine anything said by this small group of hon. Members—I do not disparage the remarks because they were made by a small group—and make a considered reply in due course.
  It is also clear that, because the Government have a big influence on the economy, they must exercise power, be willing to accept the responsibility for so doing and account for themselves to Parliament. This Chamber is the centre piece and must, in the end, uphold the right of the citizen and, if it wishes, remove the Government. That is where I stand and where I have always stood.
  Mrs. Thatcher: Does the Prime Minister not regard it as cynical to use discretion given for limited purposes in an unlimited way and for him to set himself up as the sole judge of the national interest?
  The Prime Minister: The House of Commons gave its answer on that question on Monday. I understand that we shall have the opportunity to return to it on a Supply Day next Monday when the Opposition are proposing to discuss another misuse of Government powers in public contracts. At the end of the day, the House will have to deliver its verdict and judge between various areas. I am totally unrepentant about the powers that are being used and the purposes for which they are being exercised.
  Mr. David Steel: May I return to this rather strange speech at the School of Oriental and African Studies? The Prime Minister knows that the Secretary of State for Energy talked about the limitations imposed by the minority position of the Government in the House and advised against following Liberal policies. Will the Prime Minister inform his right hon. Friend that the Government have become more successful and more popular since these limitations were imposed?
  The Prime Minister: I rather take exception to this morbid interest in the speeches of my right hon. Friend. I am

  1665
  all in favour of my speeches being studied, but if this is the Leader of the Opposition's way of trying to get for himself the post of Secretary of State for Energy I have to disappoint him.
  Mr. Bryan Davies: Would it not be helpful if the Opposition spent less time criticising British Steel—the losses of which are less than those of Bethlehem Steel, a private enterprise company in the United States—and identified those private enterprise companies which have the capacity for profitability demonstrated by British Gas?
  The Prime Minister: Not only did the nationalised British Gas Corporation make a substantial profit but so did British Airways, the Electricity Council and the Post Office. What is more, a number of them have entered into the export field. British Rail, for example, have recently secured a valuable order in Kenya in the face of great and keen competition. As the Opposition have no intention of denationalising these industries if they come to power, they should stop running them down and stand up for British enterprise.

  TWICKENHAM
  Mr. Jesselasked the Prime Minister if he will visit Twickenham.
  The Prime Minister: I have at present no plans to do so, in view of the result last Saturday.
  Mr. Jessel: I was not playing in the game myself. The Prime Minister's constituents and yours, Mr. Speaker, are always welcome in my constituency to watch rugby matches, especially as the crowds are better behaved than the spectators of some other sports. Is the Prime Minister aware that in Twickenham there is an increasing risk and damage every year from the River Thames flooding? Is he aware that Professor Sir Hermann Bondi has warned that if the London Underground flooded it would be out of action for nine months and that the economic devastation of the country would be greater than that caused by the London blitz? Why have the Government delayed completion of the London flood barrier until 1982, thus accelerating the cost to £200 million?
  The Prime Minister: I am aware that the hon. Member for Twickenham (Mr. Jessel) takes a considerable and continuing interest in flooding in his constituency. He has asked a number of Questions about it. [HON. MEMBERS: "Reading."] I came well prepared. The work is progressing according to a phased programme under which the GLC expects to commence building the flood defences for Twickenham in 1980. Flooding of riverside areas on this stretch of the river is well known and can be caused and aggravated by non-tidal factors. This will be taken into account in designing the further defences.
  Mr. Kilroy-Silk: With the time that my right hon. Friend has saved by not going to Twickenham, would he care to reflect that, whilst we talk about cynical attitudes, the best exponent of cynical attitudes is the Leader of the Opposition, who tabled a motion for debate on Tuesday and then, during the course of the debate, said that she disagreed with it?
  Mrs. Thatcher indicated dissent.
  Mr. Kilroy-Silk: It is in Hansard.
  The Prime Minister: I followed with interest the interchange and the motion on the Order Paper. What was more interesting was the speech that the Leader of the Opposition made to the overseas bankers yesterday. She said that she would really prefer to see the Multi-Fibre Arrangement wound up. If that happened, we would have a flood of imports. I understand from the right hon. Lady's speech that she is also against export credits, which would destroy the exports that our firms are making. I understand that she at last agrees with her right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) that all grants and subsidies are harmful.
  Hon. Members: "Oh!"
  Mr. Speaker: Order. I think that the Prime Minister is about to conclude.
  The Prime Minister: I wonder how many millions of jobs would be lost if the Tories got back to power.
  Mr. Walters: The Prime Minister was near Twickenham this morning on his way to London Airport to meet President Sadat. Can he tell the House something about that meeting? Since the President's

  1667
  initiative seems to be faltering as a result of Israel's failure to respond, and bearing in mind the disastrous consequences for Europe if there were a breakdown, did he tell the President that the time had come for the European Community to play an active role?
  The Prime Minister: I should be glad to spend a minute on this subject. President Sadat clearly went to the United States feeling that his initiative was faltering and feeling disappointed about the present position. As a result of discussions with President Carter, he feels that there is now a greater prospect that there was of resuming discussions with Israel. It is the Government's view that Israel should show flexibility in the negotiations but that Israel's security is paramount.
  When I discussed this with President Sadat, I found that he recognised this. I hope that the Government and people of Israel will recognise that President Sadat is in earnest in trying to find a way of allowing Israel to live in peace and security. I propose to indicate that to Prime Minister Begin in a letter which I intend to send to him.
  I discussed the role of Europe with President Sadat. At the moment, although public declarations can be made, I believe that private representations to both sides and a candid expression of opinion of where both sides can move is the best way to help these negotiations forward.

  TUC AND CBI
  Mr. Molloyasked the Prime Minister when he will next meet the TUC and CBI.
  The Prime Minister: I refer my hon. Friend to the reply which I gave to my hon. Friend the Member for Sheffield, Hillsborough (Mr. Flannery) on 2nd February.
  Mr. Molloy: When my right hon. Friend meets the CBI, will he point out to the general secretary and the council that the majority of British people will expect them to act as responsibly as the National Union of Mineworkers when fixing prices and salaries, in particular salaries in the private sector? Will he tell them that they should take a lead from the NUM?
  The Prime Minister: The miners believe that they have a powerful case for a higher figure than 10 per cent. but they intend to accept this view at present. The whole nation will be grateful that responsibility has shown itself, as I always believed it would. I thank the miners of Britain for what they have done.
  Mr. Peter Bottomley: On the question relating to the TUC and the CBI, but especially the TUC, I understand that the activities of the trade unions are very significant to the increase in the future level of earnings. Will the Prime Minister launch a great debate immediately on the future levels of earnings after July, since most trade unions have their conferences in advance of the TUC conference and they cannot wait until July to hear what the Government propose?
  The Prime Minister: There is a difficult problem in deciding how to handle incomes in a free society. It is one upon which, if I thought a substantial statement of policy would succeed, I would not hesitate to make it. But there is a certain coyness about this discussion. At the moment, I do not think I would want to take a public initiative on the matter, but I am in no doubt that the level of incomes next year will influence the level of inflation. I go on saying that privately and publicly.

BUSINESS OF THE HOUSE
Mrs. Thatcher: Will the Leader of the House state the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): The business for next week will be as follows:
MONDAY 13TH FEBRUARY.—Supply [7th Allotted Day]: there will be a debate on public purchasing and the abuse of ministerial power, on an Opposition motion.
Motion on financial assistance to Opposition parties.
TUESDAY 14TH FEBRUARY AND WEDNESDAY 15TH FEBRUARY.—Progress on remaining stages of the Scotland Bill.
At the end on Wednesday, motion relating to the Medicines (Exemptions from

1669
Restrictions on the Retail Sale or Supply of Veterinary Drugs) Order. THURSDAY 16TH FEBRUARY.—Remaining stages of the European Assembly Elections Bill.
FRIDAY 17TH FEBRUARY.—Private Members' Bills.
MONDAY 20TH FEBRUARY.—Second Reading of the Employment Subsidies Bill and of the Home Purchase Assistance and Housing Corporation Guarantee Bill.
Mrs. Thatcher: I have two questions to ask the right hon. Gentleman. Will he indicate when we are to have a debate on the White Paper on public expenditure? Presumably, it will be well in advance of the Budget. Will that be before or after Easter? Secondly, does he intend to provide a day to debate steel before we embark upon the Wales Bill?
Mr. Foot: It is my right hon. Friend the Chancellor's present intention to open his Budget on Tuesday 11th April. Of course, there would be a normal debate about public expenditure at some time before that. On the second question, I cannot say whether the debate on the steel industry will take place before the Committee stage of the Wales Bill. We need to get the Wales Bill in progress through the House in order that it may reach another place for consideration there. There must, however, in due course, be a proper discussion in this place about the steel industry.
Mr. Walter Johnson: May I call my right hon. Friend's attention to Early-Day Motion No. 197, which calls for an amendment to the Price Code regulations to stop, for example, the brewers from taking advantage of a loophole they have found in the regulations? Is he aware that the motion has been signed by 150 hon. Members? Will he find time for a debate on the subject?
[That this House calls upon the Government to amend the price code regulations so that, when the Price Commission decide to carry out an investigation, the price of the commodity concerned is frozen until the Commission's investigation has been completed.]
Mr. Foot: I acknowledge the importance of the subject and the widespread
1670
interest it has aroused in the House, but I cannot promise an early debate. I shall bring the matter, however, to the attention of my right hon. Friend the Secretary of State for Prices and Consumer Protection and see how the House might give its view about it.
Mr. Beith: Are we to understand that the medicines Prayer will not be moved tonight although it appears on the Order Paper? Will the right hon. Gentleman give an assurance that the Services Committee's report on Members' secretaries will be brought before the House in time for its recommendations to be implemented next year?
Mr. Foot: The medicines Prayer will not be moved tonight for reasons concerning the Minister who was to have dealt with it. On the second matter, I repeat the assurance I have given before that, although I have not announced a proposal to discuss the matter in the forthcoming week's business, I hope to be able to do so next week, and certainly in time for implementation to be made at the time I have previously indicated.
Mr. Heffer: Is it not a fact that the construction industry is still suffering greatly? Since we are obviously going to hear a continuous stream of misrepresentation from the Opposition as to what the Labour Party is proposing for the industry and since the Labour Party is not calling for its all-out nationalisation, will my right hon. Friend at the earliest opportunity arrange for a debate on the subject so that the serious problems can be tackled and future organisation properly discussed in a rational and intelligent way?
Mr. Foot: I fully accept all the considerations that my hon. Friend has advanced, and I am sure that it is right that at some stage the House should have a full discussion about the construction industry. Of course, some aspects of it will no doubt come into the discussions of financial matters over the coming weeks. However, I certainly hope that at some stage we shall have the opportunity for a debate along the lines that my hon. Friend mentioned, but I cannot promise it soon.
Mr. Moate: May I draw the attention of the Leader of the House to the First Special Report of the Joint Committee

1671
on Statutory Instruments which contains a number of constructive and important proposals concerning the proper scrutiny and control of secondary legislation? Will the right hon. Gentleman find time in the near future for the House to debate the report?
Mr. Foot: I acknowledge the importance of the report and I pay tribute, in spite of my criticisms of some of the language used in it, to the work that the Chairman of the Committee and its members have done. The best way is for the Government to produce a careful, considered comment on what the Committee said, dealing with some of its criticisms and some of its proposals. I should draw the attention of the House to some parts of the report which indicate that we have already taken into account and acted upon some of the recommendations of the Committee. That fact has been completely ignored in the Press, which has given an entirely distorted account of the whole business.
Mr. Arthur Lewis: May I put particular emphasis on the Lord President's last few words? Does he agree that it is the custom of Ministers to hold a briefing of the Press about next week's business? Will he arrange that whichever Minister meets the Press this week points out that it is essential when journalists report a ruling by Mr. Speaker that they should give the factual ruling and not their interpretation of it? Last week Mr. Speaker rightly, as we know, made a totally impartial statement saying that he would allow hon. Members to put down Questions on the subject of companies, which Questions had been previously banned. Is my right hon. Friend aware that that was reported on the BBC and in the Press as meaning that Mr. Speaker had given the right to Conservative Members to put down Questions? This is not a trivial issue. It is important that Mr. Speaker, whom we know always to be impartial, is properly reported. Will my right hon. Friend emphasise that to the Press?
Mr. Foot: I am all in favour of Mr. Speaker being properly reported, and I am all in favour of the same treatment for the rest of us, too.
Mr. Peter Walker: Is the Lord President aware that 178 hon. Members, in
1672
cluding hon. Members from both sides of the House, have now pressed for a debate on the Windscale inquiry before a decision is made? While perhaps I appreciate the legal difficulties of the Secretary of State for the Environment, I hope that the Leader of the House realises that there will be deep disappointment and very considerable concern in the country if this matter is not debated.
Mr. Foot: I am grateful to the right hon. Gentleman for acknowledging that there are considerable judicial problems—if I may put it in that way—in arranging such a debate. I also acknowledge the widespread concern about this matter led by my hon. Friend the Member for Pontypool (Mr. Abse) and many other hon. Members. I believe that we have to find some way around those judicial difficulties, so I acknowledge what the right hon. Gentleman has said.
Mr. Lipton: In view of the very widespread suspicion in Opposition circles about the Government's intention as regard the future of nationalisation, will my right hon. Friend give a positive assurance that for Monday's business in connection with financial assistance to Opposition parties he does not have up his sleeve any proposal to nationalise the Opposition?
Mr. Foot: I think that the Opposition are doing much too well from our point of view as things stand.
Mr. Ridley: Further to that question, does the fact that the Lord President has brought forward the motion on financial assistance to Opposition parties to next week mean that we may expect an imminent General Election?
Mr. Foot: The proposal is brought forward because of the discussions that have taken place among various parties. We are seeking to carry out and carry forward the agreements and undertakings made on this matter some two or three years ago and to bring them up to date, so there is no such implication in the proposal at all.
Mr. William Hamilton: Will my right hon. Friend provide an early opportunity to debate the coal industry, if only to give a chance to the right hon. Lady the Leader of the Opposition to move a vote of thanks to the patriotic miners? On

1673
the question of financial aid to Opposition parties, will he also consider between now and Monday increasing the amount available to the Tory Party, in view of the Opposition's performance this afternoon and recently in this House?
Mr. Foot: My hon. Friend can urge that view upon me in the debate on Monday.
As for the coal industry, I am afraid that I do not have a special time to offer it, but if the right hon. Lady the Leader of the Opposition wished to make any gracious remarks about it, I am sure that she could easily find the opportunity to do that.
Sir. T. Kitson: Will the Lord President say when his right hon. Friend intends to make a statement on Forces' pay, as the increases are due to take place from 1st April?
Mr. Foot: I cannot give any date for such a statement but at a fairly early date there will be discussion of these matters in the House on the defence White Paper. I cannot give a definite date, but I shall consult my right hon. Friend to see whether further information and indications can be given.
Mr. Buchan: Will my right hon. Friend reconsider the views of the Government on the time given to the Report stage of the Scotland Bill, as we have never really engaged on the basic matter of the referendum and, even in so far as we have done so, the Government have been defeated? Would it not be better to extend the time on Report so that at least that position can be recified and the proper position on the referendum question can be restored?
Mr. Foot: I appreciate my hon. Friend's feelings on the matter. What happened a week or two ago was that the Government suggested at the meeting of the Business Committee that we should make a rearrangement of the timetable precisely in order to ensure that there would be an opportunity to discuss the amendments that had been put down in my hon. Friend's name and in the names of some others. I also agree that when we discuss these matters next week it is desirable that there should be time to discuss the referendum questions which have been put by hon. Members.
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We have made some proposals to the Business Committee, which will be reported to the House in the normal manner, under which time will be allocated for discussion of referendum matters generally. However, I cannot give an absolute guarantee about which parts of the debate and which motions will be called in that time. But under our proposals, if the House accepts them, there will be a guaranteed time for a further discussion on Report of the referendum question.
Sir Bernard Braine: In view of the continuing rise in the toll of death and injury on the roads due to the abuse of alcohol, especially among the young, will the Leader of the House arrange for an early statement to be made, preferably next week, giving some indication of the Government's intentions about the implementation of the sensible recommendations of the Blennerhassett Report?
Mr. Foot: There is considerable interest in this subject in many parts of the House, but I cannot give any guarantee about any statement next week or about early legislation on the matter.
Mr. James Lamond: Will my right hon. Friend bear in mind that the Belgrade Conference is moving to its conclusion and that the United Nations will be meeting in May in special session to discuss disarmament, and that the Government should move ahead with their preparations for that special session? Will he try to arrange some time in the near future for a debate on these important matters?
Mr. Foot: I cannot gratify my hon. Friend by promising an early debate on the matter, though I fully acknowledge the importance of the subject that he raises. This question, like the questions of many others, illustrates the great pressure on time in the House that exists at present. I cannot, therefore, make promises about debates on all these various subjects. But no doubt there are other ways in which the matters can be raised. There is a considerable amount of time available in the House to private Members and to the Opposition, and the Opposition can also choose subjects.
Mr. Geoffrey Finsberg: Reverting to the earlier reply that the right hon. Gentleman gave to my hon. Friend the Member for Richmond, Yorks (Sir T. Kitson),

1675
may I ask the right hon. Gentleman whether he is able to say when the defence White Paper will be available for the House to debate it?
Mr. Foot: I cannot say now, but I shall see whether an indication can be given to the House at an early date.
Mr. Norman Atkinson: In regard to Monday night's business on financial aid to Opposition parties, will my right hon. Friend be prepared, on behalf of the Government, to accept either an amendment or an addendum to his motion which could then include the Government party in the financial assistance, as it now costs £41,000 for the Labour Party to service its Parliamentary Labour Party and both the Prime Ministerial functions in the House and some other Government aides are also provided for by the Labour Party? Will my right hon. Friend consider giving some assistance to the Government party in order that we can have an offset to these enormous costs?
Mr. Foot: I am certainly strongly in favour of the general proposals included in the so-called Houghton Report. I should be very glad if there were a chance of producing and presenting them to the House and of carrying them through, but the indications so far have not been altogether favourable for those proposals. However, I do not believe that it will be possible to deal with that matter in Monday's debate. All that we are doing in Monday's debate is to propose that we carry forward the principle that the House has already accepted in this matter.
Mr. Tebbit: May we have time for a debate, and a statement perhaps, on the severe threat to employment that will be caused in the Cardiff area, notably in the Prime Minister's constituency, if the Government require the Ford Motor Company to sign a statement that it is adhering to the Government's incomes policy before it makes any further Government sales? I am sure that the Lord President would want to do that and to make plain that the Ford Motor Company will be treated no better and no worse than anyone else, despite building a new factory at Cardiff.
Mr. Foot: My right hon. Friend the Prime Minister is perfectly capable of
1676
looking after both his constituency and the country without any assistance from the hon. Gentleman.
Mr. Blenkinsop: Will my right hon. Friend indicate when the House will see the Merchant Shipping Bill, about which a conditional promise was given in the Queen's Speech, because of its very big effect upon seamen and upon shipping companies in regard to safety and to disciplinary matters at sea?
Mr. Foot: I fully accept what my hon. Friend had said about the high desirability of proceeding with the Merchant Shipping Bill. This is one of a number of measures for which we have not yet got time, though it is very high on the list. This is an illusctration of the fact that, far from there being a great lack of legislation that we wish to bring forward, there is a whole series of measures that we want to bring forward. We shall bring forward the Merchant Shipping Bill when we have a chance. I cannot give a guarantee that we shall do it in this Session. Perhaps it will be done in the next Session.
Mr. Michael Morris: May we expect an early debate on the CPRS report on overseas representation?
Mr. Foot: I cannot promise an early debate, but, again, this is a subject that could be chosen by the Opposition for debate.
Mr. Loyden: Will my right hon. Friend consider with my right hon. Friend the Secretary of State for Industry the possibility of a statement about the recent reorganisation of British Leyland? Will he give an early opportunity to debate the matter on the Floor?
Mr. Foot: I have nothing to add to what I said last week, although I fully accept the importance of the subject, and there will, of course, have to be a full statement to the House. When we have had the statement, we might consider how best to proceed. But I withdraw nothing from what I have already said to my hon. Friend about the great significance of the subject, for his area and the whole country.
Mr. Michael Latham: Will the right hon. Gentleman respond more favourably to the request by his hon. Friend the Member for Liverpool, Walton (Mr. Heffer) for a full debate on the Labour

1677
Party's proposals for the construction industry? Even if the Labour Party does not think that it wants to nationalise the industry, the industry thinks that the threat exists and the building material producers are certain of it.
Mr. Foot: I fully accept that it would be highly desirable to have such a debate, but, as the House can tell from the quesions put to me this afternoon, there is a whole crowd of subjects that we wish to debate. One of the ways in which matters can be raised is to have some of them raised by the Opposition.
Several Hon. Members rose—
Mr. Speaker: I shall call the hon. Members who have been rising so far.
Mr. Ioan Evans: As the United Nations has dedicated the next year, starting in March, as a year against apartheid, may we expect a statement by the Government of their intentions, in view of the news from South Africa today that it intends to introduce a Bill that will make black South Africans foreigners in their own country?
Mr. Foot: I agree that the news from South Africa in the past few days has been horrifying, and I believe that it will produce in this country the reaction at which my hon. Friends hints. I do not know whether it is necessary for us to have a debate on the subject. I hope that the whole House would express its horror in the same terms.
Mr. Gow: As the publicly owned steel industry is losing nearly£1½ million a day, will the right hon. Gentleman reconsider the answer he gave my right hon. Friend the Leader of the Opposition? Will not the country think it extraordinary if an industry that it owns, according to Socialist mythology, is losing money at that rate without a debate on the subject taking place in the House?
Mr. Foot: As the hon. Gentleman knows perfectly well, it is not a question of no debate taking place in this House. It is a question of the debate taking place at the most advantageous time for the proper discussion of the subject. The hon. Gentleman seeks to import some prejudice into the matter. The steel industry all over the world faces great
1678
difficulties. That is part of the problem facing the Government and the country.
Mr. Canavan: Will my right hon. Friend support my amendment to the Scotland Bill to throw out the 40 per cent. referendum provision, which is democratically unjustifiable and arithmetically unworkable?
Mr. Foot: I naturally look with favour on my hon. Friend's amendment, not only because of his individual characteristics but because he is seeking to restore the position of principle that the Government sought to maintain in the Bill originally. Therefore, when we come to the debate we shall naturally look with favour on my hon. Friend's amendment. I trust that there will be time for a discussion of all the aspects of the matter in the debate next week.
Mr. Onslow: I should like to revert to the matter of the First Report of the Joint Committee on Statutory Instruments. I concede that it is necessary for the Government to give careful consideration to it, and I leave aside the further damage that would be done to the Government's tarnished reputation if there were any suggestion that they were trying to stifle debate on the matter, but does the right hon. Gentleman accept that it is very important that it should be fully debated in Parliament as soon as possible, and in Government time?
Mr. Foot: It is a matter which of course concerns the whole House. When a report of that nature is produced, the proper course is for the Government to take it seriously, as we do. We shall produce a statement about it. We can then consider what is the best next step. We have had a number of debates on many aspects raised in the report, but not all hon. Members were present when we discussed them. Part of the problem arises from our membership of the EEC, as those who attend the debates will discover.
We have discussed all the matters referring to Northern Ireland. We have had a general discussion and have improved the approach to the debates on such subjects. Therefore, it can be seen that it is not the case that the Government have not already given attention to these matters, but I have already indicated that we shall

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produce a comment on the whole report, and then the House can see what is the best next step.
Mr. Madden: I am sure that my right hon. Friend will have seen Early-Day Motion No. 229, signed by 74 Labour Members urging a debate on the subject of immigration. Will my right hon. Friend give an undertaking that he will give early and full time to any report or reports from the Select Committee on Race Relations and Immigration? Does he share with me the belief that as each week goes by without the Tory Opposition using its time to discuss the matter the Leader of the Opposition will be seen more and more as a most cynical politician seeking to exploit fears and uncertainty and without the courage to explain or defend her policies in this House?
[That this House urges that time be given for a debate on immigration to enable the Leader of the Tory Opposition to explain how the Tory Party would reduce immigration without going back on agreements made by previous Tory Governments; to enable the right honourable and honourable Members for Chesham and Amersham, Chelmsford, Henley and St. Ives, and other members of the Shadow Cabinet, to make clear whether they support or oppose separating families and forced repatriation, and Government Ministers the opportunity to restate the facts, namely, that immigration controls are most stringent, the number of people entering the country is falling, and that channelling resources into improving housing, education and employment, especially in urban areas, is a snore civilised and constructive policy for a multi-racial society to adopt and one which is supported by the great majority of this House and the white and black citizens of Great Britain.]
Mr. Foot: I agree with a great deal of what my hon. Friend said. The sooner the Opposition clarify their attitude on this matter, the better for common decency and the country as a whole. If they wished, they could use time to debate the matter. The responsibility rests on them. We on the Labour Benches are clear on this subject. The lack of clarity comes from the Conservatives.
Mr. Wrigglesworth: Will my right hon. Friend consider providing an opportunity
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for a debate on the way in which the City financial institutions are supervised? Is he aware that many of us on the Labour Benches are disturbed by reports that the Government will agree a voluntary scheme for the supervision of the City institutions? Does he not think that it would be a slight to the House if an opportunity were not provided for a debate on such an important issue before agreement was reached?
Mr. Foot: I fully accept the importance of the subject, but I do not accept the indication that my hon. Friend may have given that any Government conclusions have been reached on the matter. However, it is a subject that can be raised in general discussion. I cannot offer time in the next few weeks for debating this matter especially.
Mr. Flannery: In view of the developing problems in education—the closing of colleges, teacher unemployment and so on—will my right hon. Friend consider allowing time for a debate on education?
Mr. Foot: I must reply to my hon. Friend in the same terms as I have had to use in replying to many other hon. Members. There is great pressure for a large number of debates on very important subjects. I am not minimising the importance of any of them, but the House must make a selection. We must proceed with the legislation before the House as well as having general debates. There are opportunities for these matters to be raised. A large part of the time of the House is available for private Members and the Opposition to choose the subjects for debate.
Mr. Molloy: Will my right hon. Friend seriously consider the suggestion that an opportunity should be given for an appropriate Minister to express appreciation of the highly important decision by the miners? That would give the Leader of the Opposition a chance to join my right hon. Friend the Prime Minister in what he has said. In addition, because of the importance of the decision, the right hon. Lady might wish to make similar exhortations to the private sector to follow that example in the national interest.
Mr. Foot: Hon. Members will have an opportunity on Monday to express their views on the matter.

BUSINESS OF THE HOUSE
  BILL PRESENTED
    CHRONICALLY SICK AND DISABLED PERSONS (NORTHERN IRELAND)
    Mr. Gerard Fitt supported by Mr. Lewis Carter-Jones presented a Bill to make further provision with respect to the welfare of chronically sick and disabled persons in Northern Ireland, and for connected purposes; And the same was read the First time; and ordered to be read a Second time upon Friday 17th February and to be printed. [Bill 60.]

PAY POLICY DEBATE (OFFICIAL REPORT)
Mr. Noble: I wish to draw your attention, Mr. Speaker, and the attention of the House to an error that appeared in the Official Report of 7th February in the report of the speech of the hon. Member for St. Ives (Mr. Nott). As reported in col. 1253 the hon. Gentleman was referring to the attitude of his party to incomes policy. He stated:
"We have made it clear that we are against individual limits."—[Official Report, 7th February 1978; Vol. 943, c. 1253]
I have consulted a number of my hon. Friends and members of the Press Gallery, and it is quite clear that there is an omission and that the hon. Gentleman in fact said,
"We have made it clear for our part that at present we are against individual limits."
If I may crave the indulgence of the House, Mr. Speaker, Andrew Alexander in the Daily Mail reported this matter as follows:
"The question of whether the Tories did believe in an incomes policy soon arose. Mr. Nott did not help himself much by saying that the Tories did not believe in an incomes limit at this time."
This point was picked up by my right hon. Friend the Secretary of State for Prices and Consumer Protection and my hon. Friend the Member for Coventry, South-West (Mrs. Wise.) Indeed, my right hon. Friend the Chief Secretary to the Treasury referred to the fact that the speaker for the Opposition, leading the Opposition, had made the point that the Conservative Party did not wish an incomes policy, or wish to refer to an incomes policy, at this time.
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I draw the attention of the House to this matter for two reasons. The first reason is that this was a statement made by a Front-Bench spokesman of the Opposition and, therefore, presumably carried the weight of the official policy of the Tory Party. The second reason is that we on the Labour side of the House all understand the embarrassment of the Opposition when there are so many points of view about this question of incomes policy. It might have been appropriate if we had given them an opportunity to debate this issue, but I ask whether this error can be rectified in the Official Report.
Mr. Nott: I have just had a note from the hon. Member for Rossendale (Mr. Noble), in which he courteously told me that he would raise this point of order. If we had met each other, I could have explained to him in detail what had happened. If I may quickly refer to it—
Mr. Mike Thomas: You crossed it out.
Mr. Nott: The hon. Member for Newcastle upon Tyne, East (Mr. Thomas) said I crossed it out. When I went upstairs and checked my speech in the Hansard office the words "at the present time", or something of that sort, were not contained in the record that was in front of me. I made no change whatsoever to the text. However, subsequently, having heard in the debate that this was a matter of some consequence for the Labour Party, and knowing—
Mr. John Mendelson: Be serious about it.
Mr. Nott:—that some hon. Members would wish to make mischief about this matter, I went upstairs to the Hansard office and said that, since this had been mentioned, in my opinion the words "at the present time" should be inserted in the text.
I was told by the Hansard editors that they would insert these words in the text. I did it because I imagined that hon. Members would raise this point. The next day when I read Hansard I found that the words which I had asked should be put into the text in order to meet the hon. Gentleman's point had not been put in, so I went back to the Hansard office again, the next morning, and I reported that the words which we had agreed

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should be put in the report had not been put in. The Hansard Editor assured me that they would be put in. It was not my error; I had reported it, and he would put the matter right.
That is where the position stands. If the hon. Gentleman would like to check it, he will find, I am sure, that the Hansard office would be prepared to confirm every word I say.
Mr. Speaker: I should tell the House that the hon. Member for Rossendale (Mr. Noble) gave me notice of the point of order, as he courteously informed the hon. Member for St. Ives (Mr. Nott). I asked the Editor of Hansard for a report, and I shall read it in the exact words that are here. It states:
"Mr. Nott reviewed the transcript of his speech in the Hansard office and then subsequently visited our office to see whether the underlined words were or were not in the transcript he had seen earlier. Since they were not he explained to the Assistant Editor that he had been told that he had used these words and the Assistant Editor said that he would check back with the reporter. The reporter confirmed their use and a correction was sent to the Printers. Unfortunately the Printers failed to make the correction. Mr. Nott contacted our office yesterday about the omission and he agreed that a correction should be made for the Bound Volume. I am also arranging for a corrigendum to be published in today's report."
I think that ends the matter.
Mr. William Hamilton rose—
Mr. Mike Thomas: On a point of order, Mr. Speaker.
Mr. Speaker: Mr. William Hamilton.
Mr. William Hamilton: There seems to be a little more in this than meets the eye, Mr. Speaker. As I understand what you read out, the words that many of us distinctly heard—" we at this time "—were the words that I distinctly recollect. I think that the report that you have read out indicated that the original report upstairs contained these words—[HON. MEMBERS: "No."] If I am mistaken, perhaps—
Mr. Peter Morrison: You silly man.
Mr. Speaker: Order.
Mr. Hamilton: I gather that it was in the shorthand reporter's note. If that is the case, then can somebody please tell you, Mr. Speaker, why the words did
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not appear in the Official Report? Moreover, I understand that when an hon. Member goes to Hansard after he has made a speech he can alter only the grammar and cannot alter anything that changes the content of the speech. That is a well-known rule in the House, for obvious reasons. Why is it that the hon. Gentleman was allowed to alter, and alter—[HON. MEMBERS: "He did not."] He altered it in the sense that he chose to put back something that had been missed out. It is an extremely important point, and no howling from the Opposition Benches will stop me from asking Mr. Speaker to investigate it further.
The hon. Member for St. Ives (Mr. Nott) has said, and I think that the House has gathered, that these words were not put back although they appeared in the official shorthand reporter's note. Why is it that the hon. Gentleman was allowed to reinsert them? I hope, Mr. Speaker, that you will carry this matter further and satisfy suspicions on the Labour side of the Chamber that there is something irregular still about this matter.
Mr. Speaker: I tell the House that I am entirely satisfied with the statement that I have had from the Editor of Hansard. All of us from time to time have asked Hansard to correct something that has been left out—at least, I have—and it has been put right in the Bound Volume, as a rule, or in a corrigendum, to which the Editor refers. The hon. Member for St. Ives could not have done more than he did.
Several Hon. Members rose—
Mr. Speaker: Order. That matter is closed.
Mr. John Mendelson rose—
Mr. Mike Thomas: On another point of order.
Mr. Speaker: Order.
Mr. Mike Thomas rose—
Mr. John Mendelson: On a point of order, Mr. Speaker. In addition to the words that have just been discussed as having been left out, there were a number of us—I think that I was the first—who, immediately on the hon. Member for St. Ives (Mr. Nott) having said "not at present", asked three times "Not at present?". I repeated the phrase. I am

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asking now, Mr. Speaker, whether you could please ask the Editor of Hansard why this intervention was not reported. [HON. MEMBERS: "Sedentary!"] It is within the recollection of the House that these interventions are normally punctiliously reported. Is it not rather strange, Mr. Speaker, that both the original reference that played such a prominent part in the hon. Gentleman's speech and my intervention were not recorded at all?
Mr. Mike Thomas rose
Mr. Speaker: I said that I was not taking any further points of order on this matter. The hon. Member for St. Ives gave a statement to the House that is confirmed by the Editor of Hansard. So far as I am concerned, that is sufficient. The Clerk will now proceed to read the Orders of the Day.
Mr. Mike Thomas rose—
Mr. Speaker: I am not taking another point of order on this subject. The Clerk will now proceed to read the Orders of the Day.
Mr. Mike Thomas: It is a separate point, Mr. Speaker.
Mr. Speaker: Mr. Mike Thomas, on a point of order.
Mr. Mike Thomas: It is simply a personal statement Mr. Speaker. I earlier made a statement accusing the hon. Member for St. Ives (Mr. Nott) of crossing the words out. In the light of your statement, Mr. Speaker, and in view of what the hon. Gentleman has said, which I should accept, I should take the earliest opportunity to withdraw, and I do so.
Mr. Speaker: I am sorry that I did not give the hon. Gentleman an earlier opportunity.

ORDERS OF THE DAY

  INNER URBAN AREAS BILL
  Order for Second Reading read.
  Mr. Speaker: In calling speakers in this debate I shall do my best to ensure that various cities are represented, but I can only do my best.
  4.10 p.m.
  The Secretary of State for the Environment (Mr. Peter Shore): I beg to move, That the Bill be now read a Second time.
  The Bill gives effect to the proposals that we made in our White Paper "Policy for the Inner Cities", published in June last. Extended powers are to be given to local authorities with serious inner area problems to assist industry. Two of the powers dealing with loans for site preparation and rent grants are intended for use only in the partnership areas. I shall return to that aspect later.
  The other two new powers in the Bill would allow designated local authorities to make loans and to set up and give assistance within industrial improvement areas. These two latter powers are intended for use both in the partnership areas and in other areas with serious urban problems. The other major provision in the Bill, Clause 7, simplifies certain planning procedures in inner city areas with the aim of avoiding delay.
  The Bill is only one part, albeit an important one, of our attack on the problems of urban deprivation. Therefore, before I deal with the Bill itself in more detail, I think it would be useful to set its provisions in the wider context of our inner cities policy and industrial strategy.
  The Bill if enacted will give powers to inner city local authorities to support the creation of new employment opportunities and to improve the environment of industrial areas. As such, the Bill is an important development in the role of local authorities in the encouragement of employment. There are some restricted powers in existing legislation, such as Section 137 of the Local Government Act 1972, for authorities to assist useful developments. Then, too, there are some limited powers in local Acts But this

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  Bill for the first time would give authorities, through general legislation, powers to make particular forms of assistance available within specific types of areas.
  There is no disagreement in the House about the seriousness of the social and economic problems facing many of our inner cities. The symptoms of decay and dereliction are only too apparent. Economic decline has been followed by intensified social problems, in unemployment, dereliction, population imbalance, and vandalism. The communities involved have to live in a depresing physical environment and, in some areas, as we all know, racial tension.
  Many hon. Members—particularly and naturally on this side of the House—have taken a strong personal interest in inner city problems, and I recall, too, a number of statements of concern from right hon. and hon. Members opposite, including the right hon. Member for Worcester (Mr. Walker). The hon. Member for Birmingham, Hall Green (Mr. Eyre), in a Conservative Political Centre pamphlet of last July, wrote:
  "The growing squalor and lack of opportunity for people in many urban areas is an unnecessary blight on the lives of hundreds of thousands of our fellow citizens."
  The hon. Member for Aylesbury (Mr. Raison), in a publication of the Centre for Studies in Social Policy last October, said that
  "prolonged inaction could be immoral, many could say is already immoral. What is needed is commitment and this at least the Government has given."
  I assume, therefore, that we shall have broad support from both sides of the House for this measure.
  The Bill is an important element of that new commitment, for which the hon. Member for Aylesbury gives the Government credit, and also is an example of how we are now turning commitment into positive action.
  Since I first drew attention to the need for action on the serious inner city problems in my speech in Manchester in the autumn of 1976, a great deal of progress has been made. Our White Paper of last June set out the aims of our policy and our proposals. First, we stressed the need, and proposed mechanisms, for a co-ordinated approach by central Government and local government to inner
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  city problems. Secondly, we are making more resources available through an increase in the urban programme from just over £30 million a year to £125 million by 1979–80. Thirdly, we made proposals to help strengthen the economies of the inner areas.
  There are thus three main elements to our policy—committed and co-ordinated action, greater resources and priority for the inner city areas, and measures to encourage employment.
  The House knows that the main basis of our approach has been the idea of partnership. This is an expression of a deliberate decision to concentrate effort. Only through concerted and committed action can we make an effective impact on those areas with particularly severe problems.
  The first task was to settle the final list of partnership authorities, and, after studying many representations for partnership status put to us, I am satisfied that the seven areas selected for partnership stood out clearly from the other candidates in the scale and intensity of their problems. All the partnership committees have had at least one formal meeting—the opening meeting for the Newcastle-Gateshead partnership committee is today. Some are a good way advanced in the development of proposals for action.
  Mr. Norman Atkinson: Can my right hon. Friend give some indication of how far consideration has gone into the question of extending the list of partnerships to some other areas perhaps not entitled to full partnership or to full participation within the scheme he has now announced? Can he give some idea of the time scale for the other inner areas that he has promises will be considered for inclusion in a secondary list?
  Mr. Shore: My hon. Friend has for the moment overlooked the fact that we have not merely defined seven partnership areas but have identified a further 15 authority areas to which we think it right to give programme status. One of the purposes of this Bill, of course, is to provide certain powers that could go wider in their application than the two lists of authorities—the partnership authorities and the programme authorities.
  Mr. Andrew Welsh: In the Scottish context, will the right hon. Gentleman clarify what he means by "inner urban area"? Does he mean only cities such as Glasgow, Edinburgh, Aberdeen and Perth? May I call his attention to the problems of some of the large burghs, such as Arbroath, which could benefit from such a programme?
  Mr. Shore: The definition of areas for partnership status or any other kind of status in Scotland is a matter for my right hon. Friend the Secretary of State for Scotland, but I will ensure that the point made by the hon. Gentleman is conveyed to him.
  Each partnership will prepare by the summer a programme of action for an initial period of three years. This will be based on a consideration of the needs of the area and of its particular priorities. It will cover existing central Government and local government programmes, and existing and previously planned capital and current projects and operations. The programme will not be just a bidding document for urban programme resources. It will be an action programme for urban programme resources. It will be an action programme based on a realistic analysis of problems and possible solutions.
  Allocations or urban programme resources for the three years 1979 to 1982, amounting to £200 million in total, or £66 million a year, have been made to help the planning of these programmes. Of course, the partnership areas are already spending their initial allocation from the £100 million construction package announced by my right hon. Friend the Chancellor of the Exchequer in his Budget last March. Much of the value of the programmes will lie in the analyses they make of the needs of their areas and the attention they draw to the scope for improvement in the local economy and environment.
  Mr. Eric S. Heffer: I am grateful to my right hon. Friend for giving way, because this is a very important point. In relation to Clause 3, dealing with industrial improvements, it seems to me that there is a deficiency in the Bill in the sense that it does not seem to provide for new buildings to be built in some of these areas. It talks in terms of landscaping,
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  fencing, walls and conversions. But new development will be among the most important requirements in certain of these areas. Can my right hon. Friend indicate, therefore, that financial aid for new factory development in some of these areas will also be included?
  Mr. Shore: My hon. Friend has somewhat anticipated my arrival at Clause 3. Nevertheless, I tell him that the answer to his question is "No". The inner city area of Liverpool is not merely a partnership area but is also in a development area and a special development area. As he well knows, there are grants and aids, stemming from industrial policy and regional policy, which can assist with new buildings.
  Since three of the partnerships are in London, I should like to say how the Bill will affect London. Up to now, London boroughs have had no specific powers to assist industry. The Bill will give a number of boroughs these powers for the first time. In addition, the Greater London Council's own Bill will remove the pre-war statutory restriction on advertising, which has inhibited industrial development in London.
  I believe also that our offer to consider a Government guarantee, under Section 8 of the Industry Act 1972, for Trammell Crow for the Trade Mart in Southwark will be seen as a constructive contribution to revitalising that part of Dock-lands. Indeed, I am sure that all the powers in the Bill will be very welcome to the local authorities involved, not only in the London partnership areas but in partnership areas generally.
  I have also recognised the needs of a number of authorities outside the partnership areas. Indeed, it was in November that I announced that 15 local authorities would be invited to prepare inner area programmes.
  For those local authorities I announced that I intended to put aside £25 million a year of the enhanced urban programme which, as I mentioned previously, is to be increased from the present figure of £30 million a year to £125 million a year. Each of these 15 local authorities is now preparing a programme which will bring together the whole of the authority's activities devoted to its inner area and with which urban programme grant can be linked. Here again, the

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  powers under Clauses 2 and 3 of the Bill will be of real assistance to the local authorities concerned.
  I now turn to the immediate background to the Bill.
  Mr. Michael Alison: My intervention stems from the question that the hon. Member for Liverpool, Walton (Mr. Heffer) asked when mentioning Clause 2. Clause 2 refers to
  "the carrying out by any person of any works on land"
  and so on. That must surely include building works.
  Mr. Shore: No; it is the preparation of land. It is not an actual building. If there are mysteries in the clauses, I shall try to elucidate them as I proceed.
  I now turn to the immediate background to the Bill, which is local government's role in the support of industry and employment. In July my Department and the Department of Transport stressed in a joint circular—Circular 71/77—the considerable range of assistance that local authorities can give to industry. Through their planning policies they can help industry to grow or to solve problems of location. They can ensure that the infrastructure which industry needs is ready when it is needed, and they can provide the environment and the social facilities which attract employment. They can improve their responsiveness to the problems facing local industry—for example, by appointing industrial development officers, as so many authorities are now doing. They can also improve their liaison with local industry and help school leavers to match their abilities with job opportunities. These are only examples of what can be done often by using existing resources better.
  One of the really serious aspects of the inner city areas is the high rates of unemployment from which they are suffering. We all know that the inner city areas suffer to a greater extent than the surrounding areas from both unemployment and other social problems. Inner Merseyside presents a more serious picture than most other parts of the region. Docklands and the other London partnerships have a more intense and bigger range of problems than London generally or, for that matter, any of the Home
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  Counties. Within regions, therefore, it is important to establish clear priorities in favour of the partnership areas, and this is now being achieved.
  Mr. Ron Thomas: My right hon. Friend continually refers to inner city areas, and we all understand their problems, but I remind him that he has received a very comprehensive report from Bristol, which shows that urban blight is not just simply in the inner city areas. It also exists in other parts of the city, such as Avonmouth, in my constituency.
  Mr. Shore: I am aware of that. I am also aware that there is hardly a town or city in the country in which one could not point to an area and say that there is a serious urban problem there, whether precisely an inner city area or otherwise. Our difficulty throughout, as I think my hon. Friend understands, is that if we are to do anything effective we have to look for the areas where the problems are most intense. That has been the basis on which we have tried to proceed.
  I was referring to the question of industrial priorities. Mobile industrial projects will still be encouraged to consider the assisted areas in the regions, but otherwise, certainly for industrial development certificate purposes, the partnership areas will have the next priority. As our policy develops, greater priority will be given to our partnership areas in many fields of industrial and employment policy.
  We need new investment from both the public and the private sector. The public sector can provide better schools, road improvements, new social facilities, and improve the local environment. These changes will help to provide conditions which will encourage private investment in both the private and public sectors. Many of our leading firms already have a considerable investment in our inner cities—in industrial activities, in shops, property, housing developments, and in markets for their goods. I would certainly like these firms to look again at the extent of their commitment to the inner areas, and to consider how they can channel more work and support to those areas If major firms could push more investment towards these areas, they would be helping to protect their existing interests there. It would be an example which

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  would be most helpful for the return of confidence, which is crucial to the economic recovery of the inner city areas.
  We should not look just to manufacturing industry for increased employment. We also need the service industries. Medium-sized and small firms have a very large contribution to make to the economy of the inner city areas. It really is time to overcome some lingering prejudices against service employment. I can quite understand local people, with a tradition of employment in the heavy industries, such as the railways and the docks, hoping to see new industry being introduced in their areas. We certainly want new industry, but the fact of the matter is that many young people especially are attracted to the idea of working in service industries, in offices and in commerce. These are growing sectors. Therefore, the inner city areas should welcome enterprise of all kinds that is likely to create stable employment.
  Mr. Nick Budgen: Will the right hon. Gentleman, who is making a great panegyric on behalf of commerce and small industry, explain why both the development land tax and the community land tax are rigged in favour of manufacturing industry?
  Mr. Shore: I do not accept what the hon. Gentleman says, and certainly do not think that it is directly relevant to the matter that we are discussing.
  I consider that our policy of concentrating effort on the most difficult areas is the only way of getting things done quickly and effectively. This concentration is reflected in the Bill.
  Clause 1 provides a means of specifying the areas which are to receive some of the powers in the Bill. Subject to being satisfied that need exists in an area and that the Bill's powers would be useful in alleviating the condition giving rise to that need, I am empowered to make an order specifying the district containing the area of need as a "designated district". Each tier of local government for the area, that is, both the county council and the district council in England, then automatically becomes a "designated district authority" in relation to that district. Both councils can then exercise the powers in Clauses 2 and 3 for the benefit of the designated district.
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  No final decision has yet been made on which districts should be designated. As I made clear in my statement on 8th November, all the districts involved in the partnerships, and all the districts where the council has been invited to prepare inner area programmes, will certainly become designated districts. I envisage that a number of other districts with serious problems of urban decay will also be designated, and I intend to make a statement about this further selection of authorities during the later stages of the Bill's passage, when hon. Members will have an opportunity to make their views known.
  Clause 2 contains the first of the new powers. It provides that designated district authorities will be able to offer loans for the acquisition of land or works on land. The loans can be up to 90 per cent. of the value of the security and are to be at commercial rates of interest. This is an extension of the loan powers that all local authorities have. I envisage that this new power will enable the designated district authorities to assist industrialists to acquire and develop land where other sources of finance are not available.
  The concept of improvement areas will be familiar to hon. Members in the context of housing. Two local authorities, Rochdale, and Tyne and Wear, have pioneered the use of industrial improvement areas. The aim of these areas is to arrest the spiral of decline that so often occurs in old industrial areas and to rehabilitate and convert the buildings as well as to make improvements to the amenities and facilities of the area. I have been impressed with what these two authorities have done and Clause 3 will provide all designated district authorities with specific powers to declare industrial improvement areas and make loans and grant within them.
  Sir George Young: In view of what the Secretary of State said about the importance of attracting service industries, why is Clause 3 specifically exclusive in terms of industrial improvement areas? Why are the facilities of Clause 3(3) available only with regard to conversion for industrial buildings?
  Mr. Shore: I think that it is right to reflect our attempt to attract industry and retain it in these areas—and give a general thrust of assistance to industry

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  policy—in the context of this Bill. The case for assistance to commercial and industrial enterprise building has long been argued in many debates in this House. I have no doubt that it will be argued again in Committee. But, as things are now, I believe that we are right to proceed in this way.
  Clause 4 deals with the establishment of partnership arrangements and the delineation of the areas within which the additional partnership powers may be exercised. I have explained the progress which has already been made with them. Even though there is nothing at present to stop Ministers from entering into such arrangements without statutory authority, we thought it right to give them recognition in view of the possibility that the Minister's participation in the development of a programme or partnership might be said to conflict with his statutory responsibilities, for example, those relating to planning or compulsory purchase.
  Clause 5 and 6 provide two powers that are aimed at dealing with problems that arise particularly in inner areas.
  Many vacant or disused sites in inner areas contain the remains of older buildings, or have been used for dumping waste, and the cost of new building on these sites is often considerably greater than the cost of using a green field site.
  Clause 5 therefore provides that in partnership areas—actually within "special areas" defined under Clause 4—the designated district authorities can make loans for site preparation works. Although the loans are to be at commercial rates, the interest on them may be waived for up to two years and this will help compensate to some extent for the extra costs of using these sites as against green field sites.
  I recognise that these additional costs of development are not the only factors that inhibit the development of certain inner areas sites. The question of land values and land holdings is a complex one and I do not propose to go into it at great length now. I am proposing that one of the first tasks of the partnerships ought to be to establish, where they do not know it already, what vacant or unused land exists in their areas and to decide what can be done, in terms of
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  planning or persuasion, to bring those sites back into use. As I told the House yesterday during Question Time, I have recently written to the chairmen of all the nationalised industries about their holdings of unused land.
  Clause 6 deals with another inhibiting cost burden, that of rents. One of the causes of firms closing in inner city areas has been that they often cannot afford the higher rents that they have to pay when forced to move from old low cost premises by redevelopment. Clause 6 will allow designated district authorities in special areas to make grants towards the rents of firms taking new leases. The Bill does not itself prescribe the maximum amount of the grant—this is left to later directions—but we envisage the maximum grant being of the equivalent of between one and two years' rent depending on the particular circumstances.
  Mr. Bruce Douglas-Mann: Before leaving the point about the allocation of funds, can my right hon. Friend clarify the scale of financial assistance that will be given as a consequence of the Bill, which most of us warmly welcome? The Explanatory and Financial Memorandum states that the financial effects
  "will not exceed £80 million in the period up to 1981–82".
  Over a four-year period, that means an average of £20 million a year. We greatly welcome the provisions in the White Paper that expenditure on the urban aid programme will go up from £26 million to £112 million. My right hon. Friend has indicated that it will now be increased to £125 million.
  But it is alarming that the White Paper on public expenditure envisaged that this sum will drop to £97 million in 1979–80, levelling off in subsequent years. Will my right hon. Friend clarify the way in which the money is to be spent and how much extra is envisaged as a consequence of the Bill or any changes in the urban aid programme that he has announced?
  Mr. Shore: My hon. Friend has brought together many different threads of urban policy and has to some extent confused them. There is no question of any drop in the allocations for the urban programme as a whole, which has been established at the level of £125 million from next year.

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  The urban programme, however, covers a whole range of ways in which assistance in different programmes and different forms can be given to inner cities. Because the Bill is new, it is inevitable that we cannot give any precise calculations. The cost relates only to the costs involved in using these powers, which are only a small part of the total powers. The reckoning has been for a three-year period. In the first year it was probably unwise to expect any great increase in expenditure, but in the following years we reckon that the cost will be about £25 million a year.
  Mr. Norman Atkinson: That is chicken feed.
  Mr. Shore: These are some very useful chickens when added together with the inner city programmes and other forms of assistance. My hon. Friend ought to consider that point carefully before talking about chicken feed.
  Mr. Jim Craigen: What about the problem facing some small firms moving into new premises in the initial years? The rental difficulties could be quite considerable. Will the local authorities be given some additional support through the rate support grant, otherwise the poorest local authorities might have to bear the biggest burden with regard to the rent allowances that will be given to those small firms?
  Mr. Shore: That raises a wider question of the general resources that are available to local authorities both in terms of annual rate support grant and capital allocation. As we are now emerging from a period of great economic difficulty, I certainly hope that there will be greater opportunities for assistance to local authorities in the years ahead.
  Mr. Geoffrey Finsberg: Will the right hon. Gentleman clarify the last point that he has made? Local authorities are worried that this is another Bill putting extra duties upon them and it seems that the Secretary of State is not prepared to say whether the Government will finance part of the extra duties that they are putting on them.
  Mr. Shore: With respect to the hon. Gentleman, these are opportunities rather than duties. With regard to the major
  1698
  expenditures in the partnership and programme areas, the financing has already been separately arranged. What the hon. Gentleman has said is not a justifiable charge.
  Clause 7 alters the link between structure plans and local plans in designated districts or districts where partnership arrangements have been made. It will reduce the risk of delay in obtaining an operational local plan where one is needed. In inner urban areas an up-to-date local plan may be needed to replace an out-of-date development plan which may be a prime cause of uncertainty and delay in the exercise of development control. At present local plans, even if they are ready, cannot be carried to the stage where objections are considered at a public local inquiry until the structure plan has been approved.
  It is proposed therefore that, where the Secretary of State directs, local plans in these inner urban areas may be publicised with a view to adoption notwithstanding the absence of an approved structure plan for the area. The full procedure for the consideration of objections at a public local inquiry will be followed, and there is no change to the basic provision in the planning Acts that the local plan must conform generally to the structure plan as itstands for the time being. The Secretary of State will be obliged to consult both county and district planning authorities before issuing a direction.
  Clause 8 is a small consequential provision that ensures that these selected local authorities' general powers under existing legislation to spend will not be restricted by these new powers, as it normally would be.
  Clause 9 corrects a minor flaw in previous legislation dealing with derelict land clearance. Grants of 100 per cent. towards the cost of derelict land clearance are available in the assisted areas and in any area outside Greater London where a derelict land clearance area is declared. This clause provides that if a derelict land clearance area is declared in Greater London it will in future be possible to pay 100 per cent. grants. My right hon. Friend the Secretary of State for Industry is considering the case for parts of London to be declared as derelict land clearance areas.
  Mr. Michael Heseltine: Are any powers being given to local authorities under this Bill which do not already exist, albeit in the hands of the Government?
  Mr. Shore: We have no powers of which I know, for example, to give help for the repair and conversion of old industrial buildings. Many of the powers are limited under the Industry Act 1972 to assisted regions of the country.
  Mr. Heseltine: The Industry Act is of national application, but parts of the Act make provision for enhanced grants for specific areas. Are not the matters for which the Secretary of State is giving local authorities grant-aided powers permissible within the discretion of the Industry Act?
  Mr. Shore: I do not think that is so, except in the more limited regional context to which I have just referred.
  I have described each clause to the House to demonstrate the purpose behind its inclusion in the Bill. However, all the clauses, in their different ways, are directed at one single problem: the economic revival of our inner city areas. Clearly, both the Government and local authorities have a part to play in this revival, as does the private sector. The Government have general economic responsibilities, and success in our main tasks of controlling inflation and reviving industrial investment is fundamental to the prospects of the inner cities.
  But dealing with the immediate local needs of each area is the job of the local authorities, in some cases in partnership with the Government. We see the powers in this Bill as desirable additions to the powers of the local authorities that are dealing with these inner area problems. The loans and grants under these new powers will be made by local authorities but the Government will be providing financial assistance through the increasing scale of the urban programme.
  But the Bill is only part of a larger, continuing drive to improve the condition of our inner cities. It fits in the framework of selective action in partnership between the Government and local authorities. That partnership can now be extended by the use of the Bill's powers to a partnership between local
  1700
  authorities and local industry. I quite accept that few large-scale employment projects will be attracted to inner cities by the exercise of the Bill's powers. It is the medium-sized and smaller firms that will contribute more to increased employment in these areas.
  Additionally, the Government through the Industry Act, will continue to make assistance available in both assisted and non-assisted areas, and will be looking at their own programmes and plans to see what further priority can be given to the inner urban areas.
  Hon. Members may be assured that the Government are deeply committed to their inner city policies. They will back local initiative by direct assistance and by giving a clear priority to the partnership and programme authorities in the management of Government programmes.
  4.45 p.m.
  Mr. Michael Heseltine: I had intended to describe the Bill as modest, but the hon. Member for Tottenham (Mr. Atkinson) went a great deal further than I would have gone in his description of its financial implications as "chicken feed". The scale of the financial commitments can be measured by the expenditure of £80 million in the course of three years, according to the Secretary of State, but it is four years in the Bill. However, I take the point that he made. During that time local authority expenditure will be about £40,000 million. Therefore, this legislation deals with a comparatively small sum.
  It is true that this is a highly selective Bill. As such its impact on all except a negligible number of companies will be nil. It is also true that the Bill broadly deals with companies that are prepared to move. That in itself greatly limits the number of companies that will be involved in the facilities that are to be made available.
  I do not complain about the Bill itself. There is nothing in it that one would not wish to see as a matter of principle made available by way of powers to local authorities. However, I suspect that one of the most significant changes is not to add powers to the partnership arrangements about which the Secretary of State spoke but to make it possible for local authorities to fund the decisions that flow from the partnership agreements as

  1701
  opposed to the Government funding those decisions.
  In certain areas the Industry Acts would not be capable of meeting all the schemes that might be prepared under this kind of proposal. I should have thought that, in the main, Industry Act support would be able to deal with the projects for industrial support that are likely to be considered. If the Industry Act powers are not sufficiently wide, the powers of local authorities to spend up to the product of a 2p rate in the interests of the area would dwarf the expenditure on a national scale that we are dealing with in this legislation.
  The Secretary of State said—and it is right—that the Bill is part of the urban area strategy and has to be seen in the wider strategy. I should like to follow the argument deployed by the Secretary of State in seeing the Bill not as a narrow measure but as part of the strategy. My concern about the strategy is growing. I suspect that the strategy is more a description for a set of policies than a set of policies that will achieve results in the circumstances. I suspect that it is the illusion of a policy. It is to give a definition which the facts of what is happening on the ground will not justify in the results.
  There is wide concern, not only in Britain but across the world, about what is known as the "urban crisis". It is by no means a British phenomenon. It is to be found wherever vast organisations of human society have come into existence. It is beyond question that there are no simple solutions and that there are no solutions based entirely on any dogma or doctrine of one kind or another. There is no way in which the inner city problems will be solved by Socialism, Communism, capitalism or any of the other isms. The fact that everyone in Britain would accept is that we need a range of policies which would create broadly a partnership between the motivations of State ownership and those of the capitalist system.
  Mr. Tom Litterick: The House would entirely agree with this. If it is not entirely a global problem, it is certainly common in the urbanised Northern Hemisphere. Does the hon. Member for Henley (Mr. Heseltine) agree that it is noticeable that in West Germany, where most urban
  1702
  centres were efficiently destroyed by the RAF, the State has very thoroughly intervened to make sure that the familiar Northern Hemisphere urban disease has not arisen. Would he not agree that we might learn something from Germany, and from Eastern Europe as well?
  Mr. Heseltine: That is a tempting line of explanation, but I find it rather difficult to see how we could create the circumstances similar to those applying in West Germany when it began the exciting development of its cities. The hon. Member's point does not seem to offer an option that the House could consider.
  There are two simple questions that we must ask about the crisis. How can we persuade the sort of people who live in these areas to stay there or, even more important, to return to them? Secondly, how can we persuade people to invest in city centres? The Secretary of State has made the point that industry should, as an act of social conscience, inject investment into these areas. But industry cannot be expected on such a significant scale to base its investment judgment on that sort of criterion. We all know that that sort of encouragement from the Dispatch Box does not actually create jobs in one part of the country or another.
  We are asking questions about basic human motivation. In looking at the problems of the inner cities, one realises the daunting scale of the difficulties. We have a vicious circle of decay and decline. The historical reasons for it are easy to find and are numerous.
  Without doubt, the rigidity of rent control practised by one party after another in office has had a cumulative effect which has caused serious problems for city centres. [HON. MEMBERS: "Rubbish".] Hon. Members cannot deny that the rigidity of rent control has denied the motivation of both landlord and tenant to maintain the property and over seven decades this has brought about the creation of slums, which now have to be dealt with by the subsidies of the same people who live in them.
  The next area that can be analysed clearly is that of the consequences of the bulldozer clearance which has laid waste to vast sections of human communities and replaced them with council houses, schools and roads without the warmth

  1703
  of human society and character. These areas are the potential slums of tomorrow; indeed, many are becoming the slums of today.
  They create a one-class society. Broadly, the people who stay in them come from that section of the community in which there is a higher proportion of the elderly, the poor and the sort of people who are unable to help themselves. The younger people, the managers and those with determination to acquire skills and make their way, have tended to look at this background and decide that it is one against which they do not want to live or bring up their children. Therefore, they have set off for the outer suburbs or the smaller towns and villages.
  Mr. Heffer: In certain cities, such as Liverpool, there is no class society because there is nobody there. There is nothing there but waste land which has been bulldozed. We want the redevelopment of such areas, and we want industry and people to be brought back into them. At the moment there is no question of class at all—there is no one there.
  Mr. Heseltine: I have spent a lot of time recently walking around Liverpool; indeed I have visited the city three times in the last month. The position is not as clear as the hon. Member for Liverpool, Walton (Mr. Heffer) would have us believe. There are empty patches but there has been redevelopment. He cannot say that there has been no development of these areas. I admit that the development has been patchy, and this has tended to contain the ability of the planners to introduce variety.
  Mr. Robert Parry: The point made by my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) is quite correct. In the inner areas of Liverpool, particularly my constituency, there are acres and acres of land lying barren. Is the hon. Member for Henley (Mr. Heseltine) aware that we have vast areas in Everton like this, and we want buildings and jobs?
  Mr. Heseltine: I shall say later in my speech what I think should happen to this land. I agree that it is a dispiriting situation. Certain sections of the com
  1704
  munity have gone, and unless we find ways of reversing that trend, we shall maintain the vicious circle of decline.
  We face a difficulty here because we are left only with the public sector solution. That is broadly what Liverpool has had to face. We are rehousing the communities living there and maintaining the society already there, and that is not making the area more attractive to encourage people to return and to bring back the balance, excitement and self-motivation. We have the perpetuation of local government subsidy in these areas which tends to compound the crisis developing over a long period. It is a one-class community. In finding the people to create jobs, run factories, take on voluntary work and shoulder responsibility we are relying on an ever-decreasing number of people who will become involved in that process.
  The situation in these areas is appalling, even where open spaces are created, because the ability of the local community to finance maintenance is increasingly in question. There are no voluntary organisations or tenants' committees to look after the management of blocks of flats, for example, yet these are the areas that would benefit if that sort of community spirit could be created. Without it there will be no solution to transform the characteristics of these areas.
  Mr. Mike Thomas: The hon. Member for Henley (Mr. Heseltine) has based his argument on an objectionable premise involving the words "this sort of people". The sort of people who live in my constituency effectively do all the things that he is suggesting that only the sort of people who live in Henley are able to do.
  Mr. Heseltine: I am saying nothing of the sort. Everyone to whom I have talked in these areas is concerned about the lack of community spirit. They are concerned that more and more people are afraid to go out at night. They are frightened of rising vandalism, and they are worried by the lack of involvement of parents in the quality of education. All these characteristics in these areas are contributing to the atmosphere that is driving people out.
  Mr. Kevin McNamara: The hon. Gentleman

  1705
  expressed anxiety about this matter. Is he not aware of the rents charged by the Humberside County Council for public buildings, such as schools, when organisations which are trying to work with more community spirit and take an interest in their district and in society are being priced out by Tory councils?
  Mr. Heseltine: I do not think that is relevant to the problem.
  Mr. McNamara: These public facilities are being denied to the people.
  Mr. Heseltine: I am trying to find a way—and I believe that this crisis demands an answer—of solving the problem and of persuading those who manage, take investment decisions and wish to create jobs to come to live in the inner city areas. If we do not recognise the need to produce an environment in which they will stay, I believe that the problems which have been growing year after year will continue.
  Iit is naive not to recognise the vital importance of the human commitment to these areas. A classic example of this phenomenon is the destruction of the choice of education in inner city areas. What has happened through the destruction of grammar schools in the centre of our cities is that an increasing number of parents have decided to move from the inner city areas to educate their children in comprehensive schools in the dormitory suburbs or other parts of the country. The people who have suffered are not the parents and children who have moved, but those who have remained behind in the inner urban areas in which the sort of society is immediately identifiable.
  We have the dilemma of how to create a climate in those areas to attract people back voluntarily. If one does not take that course, one is forced to rely on the State, and the State in recent years has shown its inability to create in those areas communities that are sympathetic to the people who live in them.
  Similar answers follow when we examine the subject of investment. It is not enough to say to the industrialist "You must take the problem of the cities on your backs and make decisions favourable to them in your investment programmes". They will not take that course. Their task is to invest for profit. That is what people do if they are making
  1706
  investment decisions. It is no use saying that they should take these decisions if they know that the rate levels for the industrial premises they want to occupy are of the present order.
  We all know that 10 years ago rates were a small part of a company's cost structure. At the moment they are often larger than the rent paid by the company. They are a major factor and a major deterrent. The site values are often artificially maintained by the bureaucratic process, which has paid too much for a site and is reluctant to put in the right amount of capital. We must also consider the lack of environmental features which everybody can identify in these centres because they are a major deterrent to companies whose management is trying to decide whether to persuade managers and skilled workers to live close to the jobs which the company is expected to create. Furthermore, planning constraints in such areas are a major hindrance. They are undoubtedly part of a scene that can be noted throughout the world.
  I am suggsting not that the kinds of problems I have outlined have been created by one party or the other, but that, because we have not had the courage to tackle the fundamental problems which have been with us for a long time, the situation has been made a great deal worse.
  The Labour Government, in their four years of office, have been responsible for a number of features which have significantly worsened the problems of the inner cities. Let me indicate eight areas of activity by the Labour Government in the past four years which have significantly worsened the prospect for jobs and the general climate of inner city areas.
  First, there is the Community Land Act. There is no doubt that the existence of that legislation and the development land tax is a major deterrent to the flow of land for development in our inner cities. When the Minister of Housing yesterday was pressed about the tax, he said that it affected the nationalised industries but that the situation was not as serious as we suggested. He felt that there were ways by which one could get round that situation. In other words, he was saying that it is, or has been, a deterrent but

  1707
  that he will find a way of fixing the matter for the nationalised industries so that the deterrent effect is missing.
  What do the Government intend to do about the private sector? Some of the land in inner cities is owned by private sector owners. Therefore, if it is a deterrent for the nationalised industries, it is an equal deterrent for private owners. How can anybody doubt that a land tax of 83 per cent. makes it a marginal matter for an owner in deciding whether it is worth selling the land he happens to own? I am arguing not that there should be no tax on capital gains flowing from land but that the tax must be pitched at a level at which the owner reckons it to be worth while selling. If the Government want land to come into use they will have to have confiscatory powers—unless a voluntary supply of land is made available in the market.
  Furthermore, the capital transfer tax is a major disincentive for people to create jobs and businesses. If Labour Members speak to the entrepreneurial community about the creation of investment and jobs, they will learn that capital transfer tax has become a major source of concern. All sorts of action flows from this situation. Those people do not invest here; they invest abroad. Therefore, it is a deterrent and it is measured in terms of job losses in inner city areas.
  Let us take capital expenditure cuts. The Labour Government put forward public expenditure reductions and the political decision was made as to where those cuts should be concentrated. Those cuts fell on capital expenditure as opposed to revenue expenditure. Everybody understands politically that that is easier to do, but reduction in capital expenditure cuts, which action has brought the building industry to a parlous state, has contributed massively to the problems of the inner cities because of the sudden way in which expenditure goes up and down.
  The Minister is keen to give direct organisations and local authorities the power to compete with private authorities on a massive scale. Does he ever stop to think of the impact on the small builder and business man? What will be the effect on such a person in deciding whether to remain in business or to ask his son to continue in that business? He
  1708
  will know that one of the first things the Labour Government did on assuming power was to allow unfettered competition by direct labour organisations with the private sector.
  Furthermore, under the Labour Government the reductions in improvement grants as a result of cuts have been enormous. On the subject of the shopping list, the Minister might like to know that in Liverpool virtually half of the improvement grant money has been cut. It must be remembered that £4·5 million out of £11 million is spent in that way. It is an example of the policies of the present Government and is a dramatic example of the effect of the Government's cuts.
  Mr. Heffer: The Tories wanted more cuts. The hon. Gentleman is being hypocritical.
  Mr. Heseltine: The Government's attitude on the sale of council houses is at the centre of the dialogue involving the opportunities given to people who live in city centres. There is no doubt that the vast majority of council tenants in city centres want to own their own homes. That fact has been established in one independent survey after another. If there were more commitment in that respect, more resources would be put into the maintenance and improvement of those houses if people were given the chance to own them. Why was it that only this week Labour Members trooped through the Lobby to deny those people the opportunity to become property-owning democrats? That is one more example of what could be done to change the climate within these great communities.
  The Government came to power in 1974, with a Chancellor of the Exchequer whose attitude to taxation was that he would increase it until the pips squeaked. The fact is that the pips did squeak, the jobs were destroyed, people went bankrupt and companies went into liquidation. How can Labour Members dissociate the reduction in the disposable resources of the private sector from the consequences of unemployment and reduced investment? The two were bound to follow one after the other.
  It is to be seen more glaringly in the inner cities crisis than in any other part of the country. There is no doubt that

  1709
  the Rent Act 1974 has played a part in denying certain people the opportunity to find accommodation for rent in our inner cities. All these characteristics and the responsibility of this Government have done incomparably more to worsen the crisis than any of the cosmetics about which the Secretary of State has talked this afternoon.
  I say a word about the concept of partnership, and I want to press the Secretary of State about it, because he has a deep personal involvement in the problem. I understand well that the first thing to be done by Government in those circumstances is to have a dialogue, to meet the people concerned, and to try to talk through the problems and find solutions.
  Mr. Nigel Spearing: A partnership, it is called. That is what my right hon. Friend is doing.
  Mr. Heseltine: That is exactly what I am saying. It is a sense of commitment which follows precisely from what my right hon. Friend the Member for Worcester (Mr. Walker) was working towards when he set up the first inner cities investigations in 1972.
  The fear is that it is just one great layer of bureaucracy which has not within itself an administrative framework with the capability of achieving results as quickly as one would want. It has highly selective powers. More and more discretion is being concentrated in the hands of central Government.
  It was reported to me—I am sure that other hon. Members will have heard the same argument—that, for example, 46 people, including seven Ministers, attended the first meeting in Hackney and Islington in order to decide how to spend Eli million over the following year. The Minister of Housing does not understand that if we are to take decisions and obtain results 46 people in a room will never do it. Because that sort of pattern is being created all over the country, with these very interesting and important dialogues, without the cutting edge to get results as a consequence, the Secretary of State should consider whether the machinery is as effective as it should be to deal with the problem. I had hoped that he would have said more about whether there was a possibility of fur
  1710
  ther development to create a framework that is more able to take decisions and obtain results more quickly.
  It was interesting to hear the Secretary of State today talk about the need to get service industries back into the inner cities and about the role that they can play. It is probably within the memory of many of us, as it was not very long ago, that the Secretary of State, who was then at the Department of Economic Affairs, introduced the selective employment tax, which had severely prejudicial effects on the service industries.
  The Government are unable to be consistent in the policies that they want to apply. Ten years ago we wanted more manufacturing industry. Therefore, it was reasonable to penalise the service industries. Now we need jobs of any sort. So the Ministers now say that service industries have a crucial role to play. In practice, Governments do not and cannot know those things. It is only the private sector that is capable of playing so sensitive and responsive a part, if it is allowed to, within a climate that entitles it to seek reward and in which its decisions can be taken relatively speedily.
  There are a number of actions that the Secretary of State should add to the initiatives that he is taking. Some of them, I am prepared to say at once, he will not do because they would be against the party politics of the Government. However, within the momentum that he has started, there are many other initiatives that could be added, but there is no substitute for the overall climate of confidence which would encourage the private sector to believe that it will be allowed to invest relatively quickly with a view to earning profits.
  The first thing that he should do is to get rid of the Community Land Act. One of the early purposes of a Conservative Government would be to do precisely that. Secondly, he should put far greater momentum behind the survey that he has now started into the derelict land banks in inner urban areas.
  Yesterday the Secretary of State told the House that he had written to the chairmen of the nationalised industries to find out what land they had. It is years since my hon. Friend the Member for Hornsey (Mr. Rossi) pressed the Minister to do precisely that. My hon.

  1711
  Friend was sitting alongside me with the letters from all the chairmen of the nationalised industries answering the questions in detail about what land they each owned. It is easy to obtain this sort of information. We in the Conservative Party already have it. Yet the Secretary of State responded to the pressures only because we tabled six Questions to try to move him forward on the matter. Unless we know who owns that land and question the owners on what they intend to do with it—largely they are in the public sector—and exert a discipline on them to bring it on to the market, there is not the opportunity for the private sector to become involved in the ownership and development of that land.
  The third area which I believe should be subject to change is the whole question of planning controls and the rigid use of ODPs, which in today's circumstances must be another bureaucratic irrelevance to the process. There must be a faster process within which planning permission can be dealt with.
  The next matter is that I believe, as the Secretary of State knows, that we should reduce the development land tax to a point at which it does not impede the flow of land for development. In the structure of the partnership arrangements there should be a role for the private enterprise companies and for the voluntary organisations. The present balance is centred too much upon the traditional bureaucracies. The record of bureaucracies does not encourage one to believe that they will achieve the results and the much more open-handed balance that the private sector would be able to achieve.
  The next step should be to introduce imaginative and far-ranging schemes to sell council houses. I believe that, as in Liverpool, to take a familiar example, there should be encouragement to local authorities to build for sale and to build a mix of houses to encourage owner-occupation to come much closer into the city centres. Tenants in council houses which they do not wish to buy should be encouraged to play a much more involved role in the management of the estates in which they live. It should be a priority of local housing authorities to hand over
  1712
  much of the management of the estates to the people who live on them.
  It is sad that the bureaucrats who manage the housing estates do not live on them. It must have a daunting impact upon the council tenants who always expect someone else to take the decisions affecting them. I believe that the experiment of the GLC in the introduction of homesteading ought to be taken up across the country.
  I believe that our proposals for the introduction of short-hold tenancies should be considered in order to try to bring back a market in the private rented sector. The concept of using central State power to destroy grammar schools should be abandoned so that there is a choice of education in city centres. There should be a totally different attitude towards small, medium and large companies. There ought to be a genuine acceptance that they will be given a role and allowed to continue to flourish. As long as Labour Members pursue their doctrinal obsessions as set out in the various Labour programmes for 1976 and 1977—the hon. Member for Walton knows of the harm and uncertainty that follows—Ministers should not expect a positive response from the private sector.
  Local authorities as an act of policy, should hand over a certain part of their procurement to the small businesses within the area. It should be part of their deliberate policy to ensure that, where contracts can be placed with the private sector, a given percentage of their expenditure should be placed with companies which therefore have the encouragement and incentive to start up and operate in these areas.
  Finally, the ability of the pension funds and the life assurance companies to play a role in this should be recognised. That could be done by allowing them to acquire assets from the new town corporations, bringing very large sums into various Government agencies, which could then be redeployed in areas which everyone recognises as being much in need of additional resources.
  This is a subject on which there are great areas of consensus. However, there are also areas of consensus about the crisis which exists and about the need for positive and sympathetic Government

  1713
  action. If Government supporters would only be prepared to look at the facts and to recognise that we are looking for not just a public sector solution but a genuine partnership in which the private sector will be given a consistent and permanent opportunity which alone is capable of changing the climate, we should be well on the way to resolving the problem.
  Our inner cities have to become attractive for people to live in and for business to invest in, otherwise the people who have helped to create the problems, simply because bureaucrats are not ideally suited to resolving these economic problems, will be left with the responsibility which the State has proved patently incapable of resolving.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Mr. Oscar Murton): Before I call the next hon. Member to speak, I remind the House that there are many large cities with urban areas and very many hon. Members desirous of discussing them. I appeal for short speeches in the interests of all right hon. and hon. Members.
  5.23 p.m.
  Mr. Douglas Jay: The hon. Member for Henley (Mr. Heseltine) made an extraordinary speech. Seldom have I heard so little said at such length. He described life in a way which bears no resemblance to anything which goes on in my constituency, and he said almost nothing about the Bill. All he said was that the Tories would have liked higher Government expenditure, which does not seem to tie up with what we have heard in the last year or so.
  If I understood the hon. Member correctly he implied that too little would be spent under this Bill. As a matter of fact, the £20 million or so a year that is to be spent is just about the same as the amount allocated annually to this country under the famous Regional Fund of the EEC, and I have never heard that described by the Opposition as "chicken feed". In each case, it is not very much. But it is something and, for that reason, I welcome the Bill, as will most hon. Members who represent London constituencies, and London local authorities.
  Of course, this is a national Bill and, as such, it is applicable not just to development areas or intermediate areas but
  1714
  to any needy urban area in any part of the country. In my view, there can be no doubt any longer that many areas of Inner London have become so industrially and socially deprived—in some cases almost derelict—as to need special help.
  In the first few years after the war, it was national policy to steer industry and special help to the old, intensely depressed areas in the North and West, in Scotland, Wales and Merseyside and on the North-East coast. I was always a champion of that policy at that time, because of the undoubted greater need of those areas. But it is the considerable success of that policy which to my mind has created the need now for a new strategy.
  Industry and employment have been deliberately and to some degree successfully steered out of London—to a very significant extent out of the area which I represent—and the ratio of unemployment between the North and the outlying areas and London has been diminished considerably. Incidentally, though no one says it, this story proves that Government action of this kind can achieve a major effect in influencing the direction and location of industries. It also shows that, if we are not careful, we can go too far and that we must adjust the policy after a period.
  At present, in my view, we do not need to reverse the policy. But I think that we do need to adjust it. There is still some case for firms moving from some parts of the South-East of England to areas which still have greater unemployment in the development areas. But there is no case now for pushing industry out of Inner London into the new towns in the South-East of England. Industrial employment has now become the greatest single need in Inner London, though I agree with my right hon. Friend the Secretary of State that service industries are also desirable. But they are expanding, and the need most acutely felt is now undoubtedly for industrial employment.
  According to my contacts with the London local authorities, what those authorities most require now is power to make loans and grants for the acquisition construction, and extension of premises, for the provision of plant and for the preparation of sites. These powers are included in the Greater London Council Bill, which we have not yet discussed

  1715
  and strictly are not discussing today. I understand that the present GLC, about which I forbear to say very much today, is being pressed by the Government to delete these powers from its Bill. It is the view of the Wandsworth Borough Council, and I understand of most of the London local authorities, that they oppose the deletion of those powers from the Greater London Council Bill, and that they would like to see them included both in the GLC Bill and in the present Bill.
  Secondly, as I understand this Bill, which we are supposed to be discussing, the main powers are to be usable only in certain designated areas and certain secondary special areas which are to be specified by the Minister. This leaves London local authorities—I make no apology about speaking of London, because the need is so great—in a state of considerable uncertainty until the Minister makes up his mind and names the areas. I understood him to say today—and I hope that it is perfectly clear—that he will name the areas in the later stages of the Bill and before it finally receives the Royal Assent. In the area which I represent there are quite a number of promising prospects for employment which are held up by the present uncertainty as to the powers which local authorities will get. I should welcome, therefore, as urgent a statement as we can have.
  Thirdly, as we must all make some reference to the areas which we know best, I must press the Minister to confirm and, if possible, to improve upon the undertaking which he gave in his letter of 29th December to the leader of the Wandsworth Council, which covers my area, that
  "the powers in the forthcoming Inner Urban Areas Bill to make loans and decline industrial improvement areas will be given to the programme authorities, but we have it in mind that they should also be available to a number of other authorities with major inner area problems. While no decisions have yet been made about this, I would certainly accept that Wandsworth has a strong case for inclusion in any longer list."
  I very much hope that the Minister will be able to make the decision soon.
  I would not dream of arguing that the Wandsworth local authority should be treated more favourably than the authorities in Lambeth, Hammersmith, Isling
  1716
  ton, Hackney and Camden. But the Minister has really made a mistake in including all those areas, particularly Lambeth and Hammersmith, which are on either side of Wandsworth, in the partnerships while excluding Wandsworth. This is inexplicable to anyone who has studied the figures. My right hon. Friend has produced no figures to justify his decision, and if he disputes what I am saying, I shall be glad to give him a number of figures to support my case.
  Together with several other authorities, Wandsworth has already embarked on a number of employment schemes, has constructed one industrial estate and is ready to go ahead with an industrial improvement area as soon as powers are available. It has shown itself to be a constructive and practical, as well as a progressive, authority. I hope that my right hon. Friend shares that conclusion.
  I think that I speak for many London Members in saying that, although the total amounts provided for in the Bill are only moderate, it is one of the best chances that we have had for some time to tackle the problems of industrial unemployment and social deprivation in Inner London. I wish the Bill well and I hope that the Minister will carry out his undertakings. For the Bill would be even more welcome if there were greater powers and they were more widely distributed. I hope that my right hon. Friend can give positive and early answers to my questions.
  5.32 p.m.
  Mr. Peter Walker: I agree with the right hon. Member for Battersea, North (Mr. Jay) that the Bill will provide some benefits to some districts of London and other inner city areas. For that reason, I welcome it, but there has not been any sense of the urgency for action in a number of inner city districts.
  I recognise that most hon. Members probably share that feeling. A situation is arising in these areas that is developing at a very fast rate. The Secretary of State said that much progress had been made since he made a speech in April about the inner cities. He meant progress in preparing plans. Since his speech, unemployment in inner cities has become worse, and racial friction has increased; and when, in the coming months, the crime figures for some of our inner city

  1717
  areas are published, they will show alarming increases. What alarms me is that political forces, including the National Front and extreme Left-wing revolutionary organisations, are taking the fullest possible advantage of this situation. The objective of the National Front and the assorted Trotsky groups is to create out of this situation riots, civil commotions and frictions.
  Welcome though it is, the Bill makes only a small contribution and is chicken feed compared with what is needed. It provides an additional £10 million a year for the West Midlands conurbation, which has considerable racial problems and a number of districts of deprivation. The current expenditure by local authorities in that area is £1,253 million. As a result of the Bill, that will become £1,263 million. It will not make a large contribution.
  We are pouring money into the inner cities primarily in unemployment and social security payments. Those who criticise this and claim that pouring money into the cities does not solve the problem suggest that we should look at the United States as proof of this fact. But exactly the same error has been made in the United States where money has been poured in through unemployment, social security and welfare payments without the fundamental problems of the districts being tackled.
  I have to tell my right hon. and hon. Friends that there is no way in which this problem can be solved by easy application of free market forces. Mr. Milton Friedman has only to take a short cab ride from his university in Chicago to see what free market forces have done to some districts of that city. Such forces will not operate in some districts. If firms have a choice, they will not go into areas of high crime where there is a lack of skilled workers and managerial talent and where there are few decent facilities and much bad housing. We either neglect these districts or we put in considerable resources.
  One problem is that all Governments talk of public expenditure in gross terms. The situation in our inner cities provides a classic illustration. We put into Birmingham about £150 million a year in unemployment and social security payments—about £75 million a year more than when the Government came to power
  1718
  —yet under the Bill only another £10 million will be spent.
  We must look at the net effects and not the gross effects. No doubt the Secretary of State would have liked to provide more money in the Bill. I am sure that he argued about that with the Treasury. I have had similar arguments and I know the sort of reply given by the Treasury, which never looks at the gross effect. It makes great announcements about slashing public expenditure by £100 million here and giving an extra £20 million there, but it does not consider the total impact and the effect of those actions.
  I share the desire of my hon. Friends for the minimum amount of public expenditure. We should allow people to have more money, but if we do not put public expenditure into our inner city districts that will cost us much more in public expenditure through unemployment and social security payments or and social services and vastly more in crime.
  The total public expenditure impact of crime is enormous and it can be shown, in my judgment, that crime is linked with high unemployment and bad social conditions. Some people say that young West Indians are muggers and naturally prefer crime. Of course, in an area of high West Indian unemployment, this is true, but in the same way in parts of the North-West and Glasgow, where white unemployment is high, there is a high incidence of crimes carried out by white youngsters.
  We are entering a phase in which a whole crowd of young people are becoming committed to be hostile to society. We are discussing problems that exist in districts with between 40 per cent. and 60 per cent. teenage unemployment, particularly among black youngsters. These youngsters get on the streets and get into trouble. They go into petty crime and get sent to Borstal or the psychiatric units where they are in the hands of people who say that in this society the youngsters have no prospects and who support the idea of revolution. As yet, these young people are not organised by the criminal networks, but they will be if the current situation continues.
  The idea of designated districts and partnerships is right in principle, but restraints on public expenditure and the uncertainties in local government will make this a slow process. My hon.

  1719
  Friend the Member for Henley (Mr. Heseltine) referred to a meeting in Camden. There was a similar meeting in Birmingham where 35 people met to discuss how the money should be used. None of it will be used until the beginning of 1979, by which time the situation will have become somewhat worse.
  We must cut through the red tape of the relationship between the Government and local authorities. We should not decide on a limited number of designated districts as an experiment. We should decide on a whole range of districts where there is desperate need for action.
  We should say that we agree that basic deprivation exists; that there is deprivation in housing, jobs and public transport. We should say that we agree that that situation needs a programme of public expenditure so that in five to seven years those areas move from deprivation to at least the average position of the country. That would be a big commitment for public expenditure.
  Mr. Shore: That is what we are doing.
  Mr. Walker: If the Secretary of state goes ahead with this scheme and he succeeds in it, when we debate the inner cities in two or three years we shall find that the situation is worse and not better, in spite of applying the provisions in the Bill.
  The Bill does not commit enough resources. The Secretary of State will not designate enough districts and the whole procedure will take too long. The matter is far more urgent than that. The commitment has to be made heavily and quickly. What I suggest is not a commitment massively to increase public expenditure because in the short term, the medium term and certainly in the long term it will reduce public expenditure.
  Until we recognise the dramatic dangers that are involved in the depression in our inner city areas we shall not make that commitment. The commitment will come only when we have something like that which happened in Los Angeles, when the whole of Watts district was burned down, and in Detroit, where there were riots, and the country at last recognises that it has ignored a fundamental problem for far too long.
  5.42 p.m.
  Mr. Robert Parry: I welcome the Bill. I am certain that many of my hon. Friends who represent inner city areas will also welcome it. I should declare an interest, because not only do I represent a complete inner area of Liverpool but I was born there, was educated and still live there. I have lived there all my life. I am aware of the great problems that face the people in the inner areas of our cities, particularly in Liverpool.
  A number of issues are raised in the White Paper. One section could have been written about my constituency. A typical example is contained in paragraphs 11 and 12, which deal with physical decay. Paragraph 11 states:
  "The most characteristic single feature of the inner city is the age of its housing. Despite the extensive redevelopment and clearance of slum property since the war, there still remains a great deal of poor quality housing lacking basic amenities, not in good repair and set in a drab environment."
  Paragraph 12 states:
  "In some cities the processes of clearance and redevelopment have got badly out of step. The bulldozers have done their work, but the rebuilding has lagged behind. Sometimes this has been caused by changes of plan as more people left the cities than expected. In other instances it has resulted from reductions in the allocation of resources, central and local Whatever the explanation, there is a wide extent of vacant land in some inner areas, mainly in public ownership; and there is much under-used land and property".
  That was the cause of my earlier intervention. As both I and my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) have said, there are acres and acres of land in Liverpool which have been lying fallow and barren for many years. In the Everton and Scotland Road areas we now see fields, which was unthinkable some years ago.
  Mr. McNamara: My hon. Friend will accept that, although unacceptable in the past, Scotland Road was always green.
  Mr. Parry: And it still is green. It was unthinkable that the Scotland Road and Everton areas should be as they are today.
  Over the years, because of the various structure plans—the creation of inner motorways, the building of flyovers and subways and the new Mersey Tunnel—thousands of people have moved out of

  1721
  the inner areas although they would like to live there. It is tragic to see acres of land not being used when people could be rehoused there.
  The White Paper deals with unemployment in the various inner areas. My information is that in certain parts of my constituency the level of unemployment is higher than 40 per cent. In some areas the figure for young school leavers is a shattering 50 per cent. That is why we need to build small factories.
  My hon. Friend the Member for Walton mentioned Clause 3, which deals with the construction of walls and fences and landscaping, but there is no mention of building. This is what we need. We need factories to create employment, and we need houses and flats in the inner areas of my constituency.
  Paragraph 2 of the annex deals with the problem of council estates and high-rise flats. The local authority in my constituency is considering demolishing many of the pre-war tenement blocks of flats which were built in the 1930s. I recently visited some of them. The environment in which these people are expected to live is disgraceful. If the local council eventually approaches the Secretary of State for powers and funds to assist it in the demolition of these blocks of fiats, I hope that the Government will give their support.
  Mr. Reginald Eyre: When were the flats built?
  Mr. Parry: The majority of the flats were built in the early or middle 1930s. They were built in bad areas. Because of the redevelopment of the city centre, they are now situated in vacant areas. For instance, there is a massive block called Caryl Gardens which was built in 1935. Because of the change in the environment, it is now adjacent to an old railway yard which has not been used for many years. It is next to a hospital which is due to close and a block of flats which has been vacant for a few years.
  Therefore, the conditions in which these people live are absolutely intolerable. I hope that the Government will support the city council if it makes an application to demolish these pre-war tenements, and I hope that they will assist in the building of small houses and bungalows on the
  1722
  vacated sites, thus providing a reasonable environment for the population.
  The money which will be allocated to the inner areas is welcome, but it is not nearly as ambitious a sum as it should be. If the Secretary of State is to achieve his objective, there will clearly need to be an outlay of hundreds of millions of pounds. That is the only way to tackle the problem properly.
  Mr. Shore: The question of resources has been widely misunderstood. The specific urban programme grants are only the smallest part of the total sums made available. I looked up the rate support grant arrangements for Liverpool for only the last two years. Over £200 million a year is going from the Government to help Liverpool, and similar sums are going to our other major cities. The major programmes are being financed in that way, and they will make all the difference. But it is the additional inner city programmes which will enable the cities to do things which the main programmes do not provide for.
  Mr. Parry: I agree with my right hon. Friend, and I am sure that all Liverpool Members are grateful for the money which is being made available by the Government to our city.
  Mr. Heffer: May I point out for the record that £49·25 million is being granted by the Government for various forms of housing in the city of Liverpool? That is not chicken feed.
  Mr. Parry: On the question of further expenditure for the inner areas, I hope that the Government will take into account the revenues that will accrue from North Sea oil and that they will consider spending more on the inner areas, thus making up the money they lost through the public expenditure cuts. Those cuts, which I did not agree were necessary, have led to a further fall in the living standards of the poorer people who live in the inner areas. I hope that the Government will bear that in mind when they are deciding what to do with the profits from North Sea oil.
  The partnership agreements for certain cities are welcome. I had the pleasure of meeting my right hon. Friend the Secretary of State and other Ministers in Liverpool to discuss the city's problems. I

  1723
  hope when the question of partnership is considered the people who live in those areas will not be forgotten.
  The White Paper refers to the voluntary organisations. Those organisations have played and still play a very important part in the running of the city. However, the majority of the chairmen and members of the voluntary organisations live in the plusher areas of Merseyside. Many of them probably do not even live in Liverpool but probably have their homes in the Wirral, Formby or the Southport area.
  The people who should be considered are those in the tenants' associations representing the large blocks of tenements and the multi-storey tower blocks of flats. Note should be taken of the views of the neighbourhood councils. I have two in my constituency—the Southern neighbourhood council, which was recently visited by my right hon. Friend the Member for Huyton (Sir H. Wilson) and the Leader of the Opposition, and the Vauxhall neighbourhood council. Consideration should be given to the views of the various community councils such as the West Everton community council, Shrewsbury House, the Victoria Settlement and other such organisations which deal day in and day out with the people living in their areas. We wish to see that the money that is allocated by the Government is wisely spent for the benefit of the people of these areas.
  Although I congratulate my right hon. Friend on promoting the Bill and reversing the expansion of the new towns—expansion which has been at the expense of people living in the heart of our major cities—he must be aware that the decision is long overdue. I hope that he will bear in mind the extra cash which will be needed to achieve his objectives.
  In conclusion, I mention the point dealt with in paragraph 76 of the White Paper concerning dockland authorities. In Liverpool, the South Liverpool Docks have been lying vacant for many years and have fallen into a state of decay and deterioration. I trust that the Government will at the appropriate time provide funds for assistance to local authorities that wish to acquire dockland areas for the development of offices and small factories to create employment and for the location of housing and leisure amenities.
  5.57 p.m.
  Mr. Geoffrey Finsberg: The hon. Member for Liverpool, Scotland Exchange (Mr. Parry) has said something with which most of us would agree—that the major problems of most of our inner cities can be put down to the discredit of bulldozers and town planners. We have said this before on more than one occasion, and I see no reason to change my view at this stage.
  The Bill can be examined in the light of two questions. First, what will it achieve? Secondly, are there any parallels on which to draw?
  There is an extremely interesting parallel. On 2nd October 1977 President Carter signed into law a $14 billion housing Bill, commenting that the collection of programmes involved would be a giant step forward in improving living conditions in that nation's cities.
  The House should recall the history of that Bill's predecessor. It was the model cities programme of 1966. and the area designated for the experiment was Atlanta, Georgia. It was an area of some 3,000 acres. Its major thoroughfare had been the site of grand and elegant buildings. The area underwent a metamorphosis to shabbiness, truncation into low-income white boarding houses and, a few years ago, racial transition to the point where the six neighbourhoods were 70 per cent. black.
  The initial publication of the model cities programme put the situation simply:
  "Today much of the Model Cities is a festering ghetto".
  That was the situation at the start. What happened? There are now new buildings, new housing units and paved streets, but for the most part—and that means life in general—the situation is about the same, if not a little bit worse. At least, most of the indicators seem to support that conclusion.
  Today, nine years and $170 million later, what remains? Let me quote the author, who was himself the Member of Congress for the area. He said:
  "It is trite but true to say that we learn from experience. I know that almost all the people involved in the programs I have analysed here had nothing but good intentions and worked hard to make the policies set by Congress and the Administration work." The fact is that it did not work.

  1725
  I am a little uncertain whether enough conclusions have been drawn from the only major parallel that I am able to find. Six years and $173 million later, things are worse. Educational deficiencies are wider, unemployment is up, there are fewer houses and crime is up. Therefore, I say to the Secretary of State, do not be quite so sure that this will necessarily work. All the experience that we can find show that it may not work.
  I believe that much more could be achieved if the State would actively encourage instead of indulging, as I fear the Secretary of State is doing, in window dressing and, in many cases, actively discouraging. For example, the threat of industrial development certificate controls deters far more people than the 7 per cent. refusal rate actually represents. It is no good the Minister shaking his head, because that is a fact. If one talks to those who are scared off and do not bother to go through the bureaucratic nonsense of applying, one can see that if we were able to log that number it would not be 7 per cent. but would be nearer 27 per cent.
  What does Shelter think of the Bill? Shelter sums it up very briefly as follows:
  "Our central concern is that the Bill is solely concerned with employment and ignores the million families in the conurbations trapped in substandard houses. A million families … are trapped … as shown by the 1976 English Housing Condition Survey. Yet the Government's house improvement policy is in ruins"
  and Shelter says that the Government are doing absolutely nothing about it. We need to take note of some of these indicators that are given to us.
  I want briefly to see how this problem is being tackled in London by the GLC, with special emphasis on the inner areas. For example, in the years 1978 and 1979, the GLC will be making available £35 million to people who wish to buy their own homes in Inner London but who are unable to obtain a building society mortgage. This is a massive increase on the last two years' lending by the GLC. This concentration of limited funds on lending in the inner city reflects the need to increase home ownershop there. Only 19 per cent. of householders in Inner London are owner-occupiers as compared with 56 per cent. in outer London. Much of the low-cost property which
  1726
  attracts first-time buyers is old and often in a decayed condition and, therefore, would not be good security for a building society mortgage.
  Concerning housing action areas, 39 have already been declared in Inner London by the GLC. The GLC intends to step up its declaration of areas in 1978 to provide assistance to those boroughs without the resources to improve the poor housing in their areas. I think that no one would dissent from those objectives.
  I wish that my own borough of Camden would take note of what so often the Secretary of State has said—forget the bulldozer. Yet it is still going ahead with demolishing sound large houses against the opposition of local people because it does not understand that rehabilitation keeps communities together, instead of the destruction caused by massive redevelopment. Haverstock Hill is the latest example of what Camden is trying to do in defiance of the Minister's sensible policies.
  However, one needs to look at Inner London as a whole. We have had circulated to us the comments of various local authority associations on this subject. I merely want to make one comment that will give some facts to show how deprived London is becoming.
  Between 1961 and 1976, employment in London's manufacturing industries fell by 600,000, representing a loss of 42 per cent., as compared with a loss of 12 per cent. in England and Wales as a whole, with an increase in the rest of the South-East Region of 14 per cent. In 1961 London's share of United Kingdom manufacturing employment was 15 per cent. In 1976 it was 11 per cent.
  In the inner city areas of London, as the Secretary of State and I know very well, resident male unemployment rates are significantly higher than the national average of about 6 per cent.—Poplar 14 per cent., Deptford 13½ per cent.—and the Secretary of State's constituency of Stepney 11½ per cent. In eight other local employment areas there was a rate of 7 per cent. or over.
  I do not think that it is fair for the Secretary of State to try to differentiate between parts of inner London. I really cannot see the justification—I do not think that the Secretary of State's hon. Friends

  1727
  who sit for the other two-thirds of Camden can justify it—for putting Islington and Hackney into a partnership and leaving out Camden, because the proportion of unemployment has risen in Camden in almost exactly the same way as it has in Islangton and Hackney. It has trebled over the same period. It is really serious, and the Secretary of State should not differentiate in this way.
  I want to get a few more facts perfectly clear. Time after time when we have tried to get London moving, the Government have cut the various plans. I take the Jubilee Line as the perfect example. The GLC had earmarked £121 million to start stage 2 of that line. The Government said "No". The GLC has now said "All right, we shall find the first amount from the GLC's £2 billion budget, by savings from that budget". Because this will provide employment, it means that the Government, instead of pouring money into British Leyland and British Steel just to pay wages, could put money into a project that would provide employment. But the Government do not do that. They ignore the problems of London and come to the House with this sort of Bill. I do not think that it is the sort of Bill that Londoners want, and it is not right that the Government should try to do this.
  Mr. Spearing: Does the hon. Gentleman recall that, when the GLC elections were pending and Mr. Cutler said that he was going ahead with the Jubilee Line come what may, I asked the official spokesman of the Opposition whether, if the Conservatives became the Government, they would provide the money? The Conservative spokesman did not answer me then. Perhaps the hon. Gentleman will answer me now.
  Mr. Finsberg: I do not think that we need to give the answer now. Mr. Cutler has said:
  "We have said we would go it alone and we were not bluffing."
  The GLC has called the Government's bluff. The Government do not like their bluff to be called. The Government know that the people who are spending money in London are the ratepayers and not the Government, as I shall indicate.
  However, I should like the Secretary of State to return to my earlier point,
  1728
  which concerned the rate support grant and Clause 6. It is perfectly true that this is a discretionary power. But if a local authority embarks upon payment towards rents in various areas, the Secretary of State has not said whether that would be allowed for in the rate support grant in all circumstances. The local authority, in good faith, will make the payments to which it is committed for a period, because the Secretary of State will give directions, and it does not know whether in the end its ratepayers will pick up the tab.
  I want to look very closely at the figures, because they are important. I should like to look at the construction package, about which we have heard so much. The construction packages for 1977–79 total £28 million and cover the Docklands, Lambeth, Hackney and Islington. It ought to be made perfectly clear that these amounts are not grant but authority to borrow, and that approved projects included in the packages will be considered for urban aid grant at 75 per cent. of capital cost when no other grant is available. Therefore, the Government are not giving in the construction package £28 million, or, indeed, in the urban aid programme for 1978–82 £82 million in the same area. It is not grant. It is approved projects that will be eligible for urban aid grant when no other grant is available. This will probably be at 75 per cent. of revenue cost and not against capital cost.
  What was said by my hon. Friend the Member for Henley (Mr. Heseltine) and my right hon. Friend the Member for Worcester (Mr. Walker) indicates that the Government have had to produce this mouse of a Bill. It really is a mouse of a Bill. No one can object to it, because it does not mean very much. But the publicity, the sheaves of Press statements that come out of Marsham Street saying what a marvellous thing it is, ought not to deceive people.
  The Government may think that the Bill has some justification, but I do not think that we have heard that justification yet. Perhaps the Government think—this is a fair point—that the massive Government backing would provide the psychological backing needed to get the inner cities moving again. If they genuinely believe that, good; I like it. But I have not heard it yet, and I am not certain

  1729
  whether that sort of psychological warfare is part of the Secretary of State's armoury. I would not resent it if it were part of his armoury, but I do not think that he has thought this matter through sufficiently to be able to say that.
  In the end, we need to say that the Bill will encourage the local authorities to do a job themselves. A form of pump-priming is needed, but I am not sure that we needed this massive Bill to do it, this massive Bill of nine clauses. The Secretary of State laughs. It is, alas, his trouble that he laughs before the end of the story. This massive Bill adds up to the chicken feed about which the hon. Member for Tottenham (Mr. Atkinson) spoke. His hon. Friend's remark contained more truth than the right hon. Gentleman cared to hear. If this massive Bill, massive in that context, does nothing else, it will provide the seed corn for people to risk their own money.
  It is the entrepreneur who will bring back to the derelict areas jobs, houses and life. The Government do not bring jobs. They merely close factories and pay dole or redundancy money, as in the latest nonsense at Swan Hunter. That does not revive inner cities. Private enterprise will revive them, given the right conditions, and the right conditions will not exist until, amongst other things, the Under-Secretary of State for Industry now sitting on the Front Bench, the hon. Member for Keighley (Mr. Cryer), is no longer in the Government casting his baleful influence on profit making, which provides jobs.
  6.11 p.m.
  Mr. Joseph Dean: The Bill deals with only one aspect of inner city deprivation, but the Opposition Front Bench spokesman, the hon. Member for Henley (Mr. Heseltine), cast his net very wide. Some of the subjects on which he touched had little to do with inner city deprivation but were more related to local government as a whole.
  I was glad to be able to agree with much of what the right hon. Member for Worcester (Mr. Walker) said. As a political party, the Conservative Opposition are bound to be critical of the Government, but we are entitled to look back to see what was the Conservatives' treatment of the bigger cities.
  1730
  I was born in a deprived area, and until the outbreak of war I was one of a family of six who lived in a two-up and two-down slum house. I went to a school with 50 boys in each class. That may be the type of society the Opposition Front Bench wanted to retain, but I did not want it, and I played a large part in removing it from the city that I later represented at local level. I do not want to talk about the warmth of those communities, because I think it is a good job that most of them have been removed. Some of the things that have been said about the Bill have been completely on the wrong track.
  I am disappointed that Leeds has not been offered a partnership, though it is on the additional list for certain types of assistance, and I have no doubt that discussions are taking place. Some of those cities that have not been able to obtain partnership agreements must look at their whole performance in the provision of some of the basic services and put their own house in order before they talk to the Government.
  Compared with the overall spending of local government, the sum involved in the Bill is very small. The most massive sums are distributed through the rate support grant. I recall what was happening in 1972, when the right hon. Gentleman was Secretary of State for the Environment and I was chairman of the housing committee of the Association of Municipal Councils. The rate support grant was then so appallingly unfairly distributed that where the norm was that the local authority would receive 60 per cent. support, and find the other 40 per cent., the reverse was happening in the six largest authorities outside London and in most of the London boroughs. The Leeds, Manchester and Birminghams of this world were having to find 60 per cent. instead of receiving 60 per cent.
  A deputation went to see the then Prime Minister, the right hon. Member for Sidcup (Mr. Heath). It was led by Bob Thomas, the Manchester leader, and leaders from Leeds, Birmingham, Liverpool, Sheffield and the other big cities. I think that Sir Lou Sherman, representing the London boroughs, was on the deputation, which had a special meeting with the then Prime Minister, who conceded that the cities in question were being shabbily treated and that they were

  1731
  really the deprived areas. The authorities were having to do a job that was being done in some places by authorities that were almost being given new town status, and they were having to do it from their own rate poundage.
  The case was given a sympathetic hearing, but nothing happened. The Government said "We shall discuss it in our current rate support grant negotiations." I believe that this happened in the autumn of 1972. The right hon. Member for Crosby (Mr. Page), the Minister involved, started to make certain movements in favour of the big cities, but then he suddenly discovered, or was made aware, that if he did any such thing as he had in mind it could only be at the expense of the Conservative areas, the shire counties. Apart from a little extra for the needs element for the big cities, the money was all clawed back.
  Just treatment of the six largest authorities and the London boroughs came only after the 1974 General Election, when the late right hon. Member for Grimsby, who unfortunately passed away at probably the peak of his career, made the equalisation order. There was panic on the Conservative Benches, and some of my hon. Friends also panicked, but even with the large percentage increases that were given, those with the highest percentage increases were often still paying the lowest rates, because the rates were so badly distributed at the time.
  Anyone who examines the present structure of rate poundage charged by authorities will inevitably find that the big cities and even the smaller cities, as well as authorities in the conurbations, have to charge in support of their services a far higher rate poundage than some of the areas in the shire counties which are continually moaning. Therefore, although I concede that he initiated the first committee to look into the question, it is not good enough for the right hon. Gentleman to say that we are not doing enough, because the Conservatives did nothing, and they were the Government for four years.
  The whole question of inner urban deprivation has been opened up by hon. Members who have spoken so far. The Bill is a pretty narrow brief, but hon. Members have widened the debate. The
  1732
  debate about inner city deprivation is about the quality of life within the areas concerned and what can be done to improve the position. I have already said that I am sorry that Leeds is not in a partnership, unlike its nearest comparable authorities and the others that were called "the Big Six" before reorganisation. Hon. Members will know the authorities that I am talking about.
  The Conservatives always speak of the city of Leeds as showing what can be done in local government under the Conservatives, with very low rates. They say that they can save money, that they do not need to charge realistic rates, and that everyone is happy. A short time ago the Conservatives did a political broadcast in which the leader of the Conservative group which controlled Leeds was heavily featured. Shortly before Christmas the Leader of the Opposition appeared on "Weekend World" in which she said what a wonderful performance the Conservatives were putting up in Leeds on very low rates.
  Therefore, I decided to ask a series of Questions. I believe that local authorities should always be given responsibility for the administration of some of the major services, such as education, housing and the social services. Lo and behold, I discovered that annual expenditure per child at school by Leeds was £100 less than that of the highest other big city and £40 less than that of its nearest neighbour, Bradford, which is a smaller authority.
  Immediately those figures were were published in the Press the local politicians said "But we are more efficient." That will not wash, because the sums are too considerable to be written off as merely the result of efficiency. If we divide the money that is spent on social services by the population of Leeds, it is clear that Leeds is well down the league. As for Leeds housing record, over the past decade there has been a change from the city being one of the pioneers of local authority house building to its being almost at the bottom of the list of the major housing authorities. It has slumped from a position near the top to fifth place. That is at a time when there has been no restriction on new house building.
  Mr. Heseltine: Would not the hon. Gentleman's argument be more impressive if he were able to show that examination results, the quality of schooling, housing or any of the genuine statistics, are inferior in Leeds? All that he is saying is that Leeds does not spend as much money as some other cities and gets better results.
  Mr. Dean: I did not say that. I do not accept that it is possible merely to write off the fact that Leeds is spending considerably less than other local authorities. The lower expenditure of Leeds cannot be written off by putting forward the argument of efficiency. I imagine that other local authorities, especially Bradford, which is next door, would take a dim view of that argument. If we select any facet of local government, Leeds spending is well below that of other comparable authorities.
  When the Conservatives took control two years ago their first act, which was a popular gimmick, was to reduce the rate by 6p. They did that in readiness for the next local elections. However, now they are approaching the Government cap in hand. They want additional aid. Whenever I table Questions about Leeds spending, the stock answer from the Tory politicians in Leeds is to the effect "It is the Government. We ask them and they do not give."
  Nearly 12 months ago I was lucky to draw first place in the Ballot on Notices of Motion. My motion was on education. The figures showed that the pupil-teacher ratio in Leeds was the poorest in the list, and still has more than its share of slum schools. Once again we had the answer "We are more efficient". That is the theme that runs through a large authority that is charged with providing considerable services on behalf of the people.
  If services in Leeds had to be improved to bring them to about the level of the services provided by other large cities, there would have to be a considerable increase in the rates. It may be that the increase would have to be phased. However, some Conservative Members appear on television, or take part in Supply Day debates, to cite Leeds as an example for other local authorities to follow. I wish that they would visit parts of my constituency.
  1734
  Leeds was specially unlucky as a result of local government reorganisation. I know that all other areas consider that they were unlucky. My constituency has some nice parts, but the inner segment is an extremely deprived area. It is as bad an area as I have seen anywhere. In the reorganisation the boundaries of Leeds were extended quite considerably to include more affluent areas. The centre of Leeds has been somewhat "masked" by the inclusion of those areas.
  The right hon. Member for Worcester has spoken of another tier for local authorities. From my recent experience it is clear that one of the features, blocking decisions on the implementation of the inner city programme, that has been sponsored by the Government, is the disagreement that is arising continually between the new metropolitan county authorities and the metropolitan county districts.
  Where do we go from here? It is not on merely to say that the Government are blocking progress when the biggest mistake made this century was the most recent local government reorganisation, which has swallowed resources without producing any additional facilities or any different services. The reorganisation of the Health Service was also a great mistake. It must be remembered that the Health Service has to be included in any debate on inner city problems.
  The hon. Member for Henley spoke about thousands of people waiting to buy council houses. The hon. Gentleman suggested that they needed only to be given permission and that they would be queueing up with their cheques to pay their deposits. He suggested that it is only the local authorities that are stopping that from happening. Let the hon. Gentleman remember that most of the large housing authorities became Conservative controlled following the previous local elections. The flood gates were then opened. Discounts were offered, in some instances amounting to 30 per cent., but there has been no flood. There has been no more than a trickle.
  From where does the hon. Gentleman get his information? Does he get it from walking round Liverpool three times? I do not know to whom he has spoken but I am sure that Bob Paisley, the manager of Liverpool, or Bill Shankly,

  1735
  the previous manager, could have given him better information. If the hon. Gentleman comes to Leeds, he will find that there has been no flood of applications to buy council houses. That is the position, whether the Opposition like it or not.
  In some circumstances I might support the building for sale of houses by the local authority, but where there is an existing housing shortage, as in Leeds. I would stop such sales immediately. I know that we are not debating the sale of council houses, but it is a fact that if a council house is sold it will cost the local authority twice as much as the sale price to replace it. If the Conservative Party is the party of economics, heaven help us.
  I welcome the Bill as it is a step in the right direction. I hope that as we start to get the benefit of a stronger economy and increased resources from the newfound wealth in the North Sea, the oil revenue, we shall be able to give the highest priority, in a general sense, to the inner city areas. I do not think that there is a simpler way of doing it than by giving very much larger rate support grants. I hope that my right hon. Friend the Secretary of State will find some way to make reactionary local councils accept their responsibilities and to cease playing ducks and drakes with rate poundages for the sake of winning elections in May
  6.28 p.m.
  Mr. Stephen Ross: The hon. Member for Leeds, West (Mr. Dean) may have criticised his colleagues unfairly in 1972–73 by not giving them credit for what they achieved. As far as I know, they were responsible for persuading the Conservative Administration to change the rate support grant formula to one based on regression analysis, for which my constituency has suffered ever since. Perhaps the hon. Gentleman's colleagues had rather greater success than that for which he gives them credit.
  As for the sale of council houses, the contribution of the hon. Member for Hampstead (Mr. Finsberg) was interesting. The hon. Gentleman pointed out that the GLC is now selling vast numbers of its houses. It is entitled to do so. The Conservatives took power on that
  1736
  policy. What I cannot understand is the policy of the hon. Member for Henley (Mr. Heseltine) that the sale of council houses has to be compulsorily forced down the throats of local authorities.
  Do the hon. Gentleman and his right hon. Friends believe in local autonomy? I gather that the right hon. Lady the Leader of the Opposition wants to give local authorities more say in their own affairs. If local Conservatives gain control on the platform of selling council houses, they should be allowed to do so within the reasonable constraints that the Government have set down.
  Local authorities have a right to sell council houses if they wish to do so, but the borough council that has the largest number of council houses in my constituency, and which is certainly not a Liberal council—the housing chairman being a Conservative—has voted once more against selling its council houses. It is probably right in the circumstances that prevail in that area Why do we not leave the matter to the local authorities to decide on merit?
  I acknowledge the powerful and knowledgeable speech by the right hon. Member for Worcester (Mr. Walker), and I want to put on record that it obviously came from the heart.
  The hon. Member for Henley talked about tenant management schemes, leading on from that to tenants looking after their own affairs to a greater extent. As I understand it, some of these schemes are being carried out with some success in Newcastle and with limited success but some failures in Liverpool. He also praised that authority for building for sale. I agree. The hon. Gentleman did not, however, say whose achievement this was. He, and, indeed, the Government, might at least give credit for what has been done in Liverpool, where the Liberals have played so important a part. But I welcome the fact that the Secretary of State has since recommended all local authorities to move more in this direction.
  Our inner urban areas should present an exciting challenge to those interested in reviving lively communities through the provision of satisfying working conditions, decent homes and schools, good recreational facilities and improved transport. In this connection I welcome the

  1737
  decision of the Greater London Council, taken, apparently, against Government wishes, to extend the Jubilee Line. The GLC must get the transport right if it is to develop the dockland area properly.
  Mr. Spearing: The reply given by the hon. Member for Hampstead (Mr. Finsberg) when this point was put to him was clever, but the point is that Mr. Cutler of the GLC has gone ahead with test boring. I do not know whether he has gone further. We have heard nothing from the Conservatives as to whether, if they were in Government, they would make available the money that Mr. Cutler asks for.
  Mr. Ross: I hope that the borings will lead to construction, which is what is needed.
  The Bill also goes some way towards providing the necessary powers and finance to attract industry, which must form the backbone of any successful rehabilitation. It is, therefore, welcome in that respect. But it is limited in its application—indeed, so much so that one wonders whether it will have a genuine impact on these vast problems, which should be looked at in a much wider context, particularly in relation to housing, transport and recreation.
  There are two great facets of inner urban area living—inadequate business activity and psychologically daunting living conditions. To deal with the situation comprehensively we need efficient communications—including, incidentally, for walking and cycling—a full range of housing provision, arranged in clearly identifiable communities and of differing tenures, so that we can get mobility, power to bring land on to the market for development, and good schools and healthy recreational facilities.
  Some of these matters are dealt with by the Government in Circular 71/77, but the Bill can be criticised for the limitations placed on its application. I appreciate that the Secretary of State has already established seven partnership areas and 15 special areas and is likely to announce some more. But surely there is need to co-ordinate to a much greater extent the various bodies and the many grant-aided schemes that, used sensibly together, could make a genuine impact but which at present will inevitably be pulling in different directions. It is all
  1738
  getting far too complicated because of all these different types of area and different forms of grant aid.
  Again, what about the work of the housing associations and producer cooperatives, for example? What sort of role can they play? Where do they fit into the Bill? In its brief to hon. Members, Shelter rightly draws attention to the need to extend the provisions to stimulate the rate of housing improvement. It is doubly important that we should do a great deal more in that direction. The right hon. Gentleman increased the range and scope of improvement grants last autumn, but in the inner urban areas we have to do a great deal more than that. The right hon. Member for Worcester recently pointed out that about 80,000 West Indians in some of our inner urban areas need good housing and decent jobs. I am sure that the improvement grant scheme can play some role in dealing with that situation in parts of inner London.
  The services of housing associations are deeply involved in renovation and modernisation work, and they possess considerable expertise which must be fully employed, whether for the provision of short-life accommodation or of longer-term letting. Why not allow the housing associations to move into such things as the provision of craft centres and small workshops? I believe that this view is beginning to gain credence in the Department of the Environment. We must also make proper use of private initiatives instead of leaving everything to the heavy and often unimaginative hands of central and local government.
  For example, such areas are natural places for experimentation in worker cooperatives. Where is the stimulus and finance to come from? It is not in the Bill, and I wish that it were. I draw attention to the recently published book by the Anglo-German Foundation on the Mondragon achievement. It should be compulsory reading for every hon. Member. There one learns of the revitalising effect of the fantastic increase in employment over the 20-year period from 1956 to 1975. In that time no fewer than 50 industrial enterprises with a combined turnover of over £200 million and a labour force of over 13,000 were created, and more have been launched since 1975. I am sure that

  1739
  Labour Members would go along with this approach in working for industrial and community rehabilitation of inner areas.
  I want to see greater use of voluntary workers in things like tree planting and street maintenance, for example. Of course, we could do that in a wider context. I feel depressed when, in my own constituency, I see trees planted at the roadside blown over or otherwise damaged. Yet many local people are anxious to play a role in preserving or improving their environment. In my area, for example, many retired people would be pleased to go out and put the trees back in order and maintain them. I am sure that such a spirit applies equally to inner urban areas.
  I am not, as hon. Members will appreciate, a regular reader of The Daily Telegraph, but I did read an article by Professor Denman the other day in which he called for the abolition of development land tax on inner urban land. I believe that his proposal merits serious consideration in view of the high costs involved in its redevelopment—for example, through irregular size, suspect foundations and so on. One way, I suggest, could be the replacement of DLT by a site value tax to be collected by the local authority. Once planning consent had been given, a site value tax would be put on and would yield a certain amount of money, based on the annual value of the site. This would have the desired effect of getting the land developed and should prevent hoarding for capital gain purposes.
  The suggestion is not just an old Liberal chestnut but is recommended by no less an authority than the Civic Trust in its admirable publication "Urban Wasteland" three or four months ago. I also support its view that demolition should require planning consent, so preventing the wasteful or premature destruction of useful buildings. I draw that to the right hon. Gentleman's attention. The point should be taken on board.
  In considering the further encouragement to small businesses that we need so desperately to establish, I ask the Government to consider the proposal in The Economist this week that small businesses should be freed from some of the bureaucratic operations which so often stifle their success by registering them in a dif
  1740
  ferent form. The article suggests that they might become incorporated instead of limited liability—but that, I think, is more a matter for the Chancellor of the Duchy of Lancaster, or perhaps rather more for the Chancellor of the Exchequer.
  I remind the Secretary of State that it is not just our inner urban areas that need reviving. Many of our old market towns need it as well. I live in one of them, with a derelict pub on one side and an empty house on the other. Many of our old market towns are facing similar problems, and, indeed, whole villages whose source of employment used to be agriculture or mining are rotting away. It is in these areas that the Development Commission can play such an important role. Given the chance, I am sure that it would succeed. It has a good record already.
  I am sorry that, as became evident yesterday, we are still using depopulation as a basis on which to decide the role of the Development Commission. It is to my sort of constituency that many of the people from the inner urban areas have come to retire. We have an increasing retired population, and it is not contributing to employment in the area. Nearly 25 per cent. of the population in my constituency are retired, and I believe that similar figures could be given for parts of the South Coast and the West Country. Depopulation should not be the criterion for bringing in the Develoment Commission.
  I have today been to the exhibition of international crafts in Birmingham, and I feel very envious of the work of the Development Board for Rural Wales, which has taken a complete train to promote the crafts of Mid-Wales. The Highlands and Islands Development Board has also been very successful in assisting in the sale of craft goods produced in areas which formerly had high unemployment. I wish that we had their money to enable us to do the same sort of thing in my constituency.
  Although I welcome any measure to bring new life to our inner urban areas and meaningful employment to their inhabitants, I do not think that we yet have the right overall structure to coordinate the activities of the many bodies which will be involved. The Mondragon achievement got off the ground through the efforts of Father José Arizmendi; he was the initiator. It is necessary to have

  1741
  some similar powerful person to get these schemes together. We have heard about the counties and the districts falling out. The Secretary of State wishes to make changes in this respect, and I support him, but they will not happen quickly. I wonder whether we should not look to the American system—although not for everything—and certainly to the French, and consider whether we should have an elected mayoral system in this country. Someone will have to knock heads together and get things done, and that might be one way to do it.
  6.42 p.m.
  Mr. Tom Litterick: It might help us to get the Bill into perspective if we reflect that, for example, in the case of Birmingham the amount of money that will be put into Birmingham as a result of the passage of the Bill will be less than the amount of money taken away from Birmingham's budget by the Chancellor of the Exchequer's various cuts, and by those cuts made autonomously by the Tories who have run Birmingham since they took it over.
  As somebody said, it is chicken feed, although it goes some way towards putting right some of the damage that has already been done by the damnable inflationary strategies which have been pursued with dogmatic enthusiasm by the Treasury Bench since we came to power. They have contributed their mite, by their economic policies, to the ongoing destruction of our inner urban areas. Let us not forget that.
  Let us not forget either that that policy is a direct continuation of the policy that was pursued by the mob on the other side of the House when they were in power. They, too, attacked the cities. They, too, used the same bloody-minded dogmatic economic policies which have been applied to us for the last three years by the Government, and the whole country is having to reap the consequences.
  The debate has an unusual dimension to it compared with our usual debates, because it dramatises in an interesting way the fact that in this House we have the town party on the Government side and the country party on the Opposition side. Only a handful of Tories come from urban constituencies. That is one reason why their opening spokesman
  1742
  could be so barbarously and brainlessly irrelevant throughout his speech. Perhaps the fact that he is a director of four property companies has something to do with it.
  I noticed that the hon. Member for Henley (Mr. Heseltine) did not declare his interest, and it is a pound to a penny that the four property companies of which he is a director are very much interested in urban renewal in an old-fashioned way. How much money is in it for him? It may explain why he is so keen on talking to us about capital gains tax, development land tax and so on. He has a personal interest in this and in any Government policy likely to put money into the hands of property speculators. He is a property speculator, and he did not have the guts to tell the House this when he opened the debate in such a disgusting fashion for his own side.
  I had hoped that this subject, above all, would prompt this House into remembering that the problem of urban degeneration is an international problem, one that has been created by urban man and by the urbanisation of society. But not a bit of it. The bon. Gentleman made one reference in passing to that simple fact and then went waltzing off on his dogmatic, self-serving line which did no credit to his party. The right hon. Member for Worcester (Mr. Walker)—the one civilised Tory in the whole regiment—showed him up very dramatically. The right hon. Gentleman is a Tory who is prepared to consider the fact that towns are places for people to live in, not just to work in and make profits for somebody. They are places in which to live, and perhaps to live fulfilled lives, but so far only the right hon. Gentleman has been prepared to think about that. The nut on the Tory Back Benches could only go on about how his local London borough council intended to build a Tube station, or something of that sort, and was wittering on about how much money could be made for somebody if only the free market could be allowed to have its head.
  I wish the House would remember that living in cities is a modern thing, by which I mean that it is a phenomenon only of the past 200 years or 300 years for a significant number of people. With a very small number of exceptions, living in cities has been bloody awful for most

  1743
  of the people who live in them. The novels of Daniel Defoe are mostly about urban life in London, which was a very unpleasant place in which to live. The novels of Dickens show us what London was like in the nineteenth century, and again we discover that for the majority of people it was a hideous place in which to live.
  Jane Austin did not write about people who lived in cities. She described only environments which were intrinsically pleasant, open and sparsely populated. Dickens described a world which is familiar to us—a world in which people live cheek by jowl, on top of one another. Both Dickens and Defoe described urban worlds which had been created by a free market economy in which there was no State intervention at all and in which there was no planning of any sort.
  Indeed, the first beginnings of any kind of town planning at all in this country took place when the owning class, whose representatives filled this House, suddenly discovered that the diseases emanating from the working class in the cities threatened to kill them. They were prepared to vote public moneys to build sewage systems and water systems which made sure that they would not be killed by the diseases of the undernourished working classes. That was the only reason for doing it, and again it was self-serving. This, too, was a reflection of the fact that the free market could not build a city in which people could actually survive. The State, the municipality, had to interfere to prevent the free market quite literally from killing people.
  Mr. Peter Blaker: Has the hon. Member compared the housing situation in the Soviet Union with that in the United States? Is not the Soviet Union perhaps the most striking example of the planned economy?
  Mr. Litterick: I have not the faintest idea. I do not have the hon. Gentleman's familiarity with the Soviet Union or America. What I know is that in America, according to what I have been able to read, there are urban problems which are very similar to our own, and I understand that the Americans have never had a Socialist Government.
  Mr. Blaker: What about the Soviet Union?
  Mr. Litterick: I have never heard of the Soviet Union's urban problems, but I know that in both West Germany and East Germany, as I was trying to tell the idiot who opened for the Opposition—[Interruption.] He proved it at great length. I tried to point out that in both West Germany and East Germany the problems which we are talking about do not exist. The reason is that the State in both West Germany and East Germany took a firm hand in reconstructing the cities in such a way as to make them habitable. The hon. Member for Henley made a joke about it when I intervened, seemingly forgetting that our cities were devastated in the same way as the German cities. But the opportunity to reconstruct and renovate our cities was not taken. That failure is attributable to successive Governments.
  Since the pioneering work in the last century of people like Patrick Geddes and Lewis Mumford, we at least know in theory what we ought to be doing about our cities. Those men produced sensible theoretical works based on the practical experience of working in town planning and so forth. They were the pioneers in town planning.
  It is only recently that this has become fashionable, not because urban life is a new thing but because larger proportions of the developed world's population actually live in cities. We are suffering from the sins of omission of generations of capitalism. We must somehow or other demolish those sins of omission and put something else in their place.
  That something else has to be a set of cities and towns in which people will actually want to live. We know that the normal reaction of people to city life is to flee from it. They flee from it at the weekend, if they have a motor car, or simply flee from it altogether and never want to come back because cities are such unpleasant places. It is a fact that the centres of our cities are now more thinly populated than a decade or 20 years ago simply because people do not wish to live there and because they are such unpleasant places.
  It is hopelessly inadequate for the hon. Member for Henley to blether on about making these places somehow more attractive if local capitalists can be allowed to make more profit. Only two days ago, the Birmingham Tory Party announced

  1745
  through one of its mouthpieces that it would like to create a tax-free zone in the centre of Birmingham and then all would be well. The fool obviously did not realise that Clauses 2, 3, 5 and 6 probably give as much opportunity for the individual capitalist to make money—that is, public money—out of his own operations as would any kind of rates amnesty.
  "Give concessions to capitalism", the Tories keep saying, "and all will be solved." There is no evidence of that in the citadels of capitalism in North America.
  The Bill, of course, is offering inducements in Clauses 2, 3, 5 and 6 to capitalists to come into these areas and create work. It is not a housing Bill. It is a mistake to criticise the Secretary of State for the Environment for the fact that it does not deal with housing. We should remind ourselves that the major components in the quality of city life are housing, transport, education and recreational facilities as well as the opportunity to work.
  These other major aspects are, and should be, the subject of other major pieces of legislation, some of which are already in operation. But if we do not look, for instance, to the quality of housing in cities, I do not see how we can pretend that this Bill matters at all, since houses are where people spend most of their lives.
  While, at the same time as the Secretary of State for the Environment is bringing forward this Bill to inject a little money into certain aspects of city life, the Chancellor is removing money from the housing budgets of the major cities, on balance the cities are not doing very well. Not until housing budgets are significantly increased can we expect to see a major improvement in the quality of town life in this country.
  I should like to be parochial for a moment as other hon. Members have been in respect of their own areas. I mentioned to the Minister of State yesterday that I was somewhat disappointed to see the definition of the partnership area. Moseley, in my constituency, suffers from multiple deprivation. It is included in the partnership area. I must point out again that the omission of the Bournbrook area of Selly Oak is serious
  1746
  because the deprivation there is as serious as Moseley or anything to be found in Small Heath which figures largely in the well-known unequal city report.
  Contrary to the fantasies of the hon. Member for Henley, the people of Selly Oak are actually clamouring at the doors of the local authority to participate, influence and be involved in making decisions about their community. It would be a tragedy if the strategies that are being pursued as a result of the partnership policy resulted in a pre-emption of resources at local level—we know that discrimination in the allocation of resources is involved in the Bill—so that their interests were severely damaged.
  The whole area of Bournbrook has been in decline for well over 20 years for a number of reasons, all of them familiar to people who have examined urban problems. It would be wretched if the usual mechanics of local politics in towns were allowed to operate in such a way that local politicians could syphon off the available resources for very many projects in the middle of the city, which might have politically advantageous consequences. For the people of the Bourn-brook area, however, that would be devastating, because, in effect, they would yet again be consigned to another generation of constant degeneration and hopelessness. That would encourage more people to flee to the periphery of the city, thereby enlarging the area of degeneration throughout the once great city of Birmingham.
  The Minister ought to appreciate that this is an important omission for Birmingham. It would be of great help, and much appreciated in Birmingham, if when replying to the debate he could give the people of Birmingham some assurance that that eventuality is not likely to happen as a consequence of the operation of the policies implicit in the Bill.
  6.57 p.m.
  Mr. Andrew MacKay: I shall not be drawn by some of the red herrings which the hon. Member for Birmingham, Selby Oak (Mr. Litterick) introduced into the debate. It would be tempting to reply to some of his intemperate language and comments about my hon. Friend the Member for Henley (Mr. Heseltine), particularly when he suggested that my hon. Friend

  1747
  knows nothing about industrial areas because he represents a constituency like Henley. If I recollect correctly, the hon. Member for Selly Oak, who represents a seat in Birmingham, has not and never has lived in the metropolitan area or in the city but lives in the lush pastures of Kenilworth, near the castle.
  Mr. Litterick: I was born and brought up in Strathclyde, as it is now called. I spent some of my formative years in Coventry and worked in Birmingham for eight years before I became a Member of this House. I also lived in Coventry for 10 years. I know about city life, which the hon. Gentleman does not.
  Mr. MacKay: Many problems in urban life have developed and become even worse in recent years. It is a pity that the hon. Gentleman still does not live in an urban area. I shall not pursue this matter, because I believe it is important to try to be as non-partisan as possible in this debate.
  I believe that the immense problems in our urban areas are too important for hon. Members to score party political points.
  It is vital that we show to the people of the urban areas our care and concern. We should not allow this debate to degenerate into the sort of debates that have brought politics in this country into disrepute with members of the public, particularly those who are suffering greatest in our inner urban areas.
  I want to return directly to considering the Bill. I have studied it carefully and I certainly do not oppose it. I feel it does no harm for hon. Members on both sides to put questions to the Secretary of State. Indeed, I think that for once the right hon. Gentleman is on the side of the angels. I believe that he should therefore be given backing by hon. Members on both sides of the House, though with certain reservations.
  I give one word of warning to the Secretary of State and to the Minister for Housing and Construction, who, I gather, will be replying to the debate. Their publicity machine has done much to tell the public about what they are going to do for urban areas. Do they not think that they are promising a little too much?
  1748
  Are they not raising hopes a bit too high? Should they not cool it just slightly? The right hon. Gentleman knows that the problems are great and that they will not easily be solved by this Labour Government or by a Conservative Government. The problems will take a long time to solve. Therefore, I ask for moderation in publicity.
  I am mindful that many other hon. Members wish to speak in the debate. Therefore, I shall make three brief points.
  The first is in support of the intervention made by the hon. Member for Liverpool, Walton (Mr. Heffer), who said that the key to the whole problem in the urban areas lay in the derelict land and the lack of houses in city centres. The Bill deals with factories and employment in our cities. I suggest that if we concentrate on building houses in the inner cities the factories and the jobs will come naturally. In this age, when the cost of travel to and from work is so considerable, I believe that companies will be only too pleased to move their factories into the inner cities if they know that there will be a work force willing to work in those factories.
  Yesterday the Minister for Housing and Construction gave me some information about derelict land in Birmingham. He said that there were 1,920 acres of derelict and waste land in that city. That, I am sure he will agree, is a frightening figure. I believe that in other cities the figure is even larger. We must ensure that not only derelict and waste land but unused land is brought into immediate use for house and factory building.
  I congratulate the Birmingham City Council on selling much of the land that it owns to private developers for the building of houses for first-time buyers. In the interests of the House—particularly the hon. Member for Selly Oak—I should declare my interest. I am a consultant to Birmingham Housing Industries Ltd.—a Birmingham-based house building company. If planning authorities act with care when they sell land as Birmingham has done, they can specify, through their planning approvals, that the houses to be built should be of the type and size that first-time buyers will be able to afford. Secondly, they can stipulate that the houses are to be built quickly. That will stop speculators buying and holding the land for gain.

  1749
  I firmly believe, as does the Minister for Housing and Construction and many hon. Members on both sides of the House, that private house building is important. The right for people to buy their own homes is vital. I look forward to the first-time buyers' Bill—the Home Purchase Assistance and Housing Corporation Guarantee Bill—which I understand is to be brought before the House in the not too distant future. I appreciate the efforts being made through the introduction of that Bill and wish it every success. Therefore, we should encourage local authorities to sell land in the inner areas.
  Again, I congratulate the Minister and the Secretary of State on encouraging Government-controlled organisations, nationalised companies, water boards. British Rail and so on, which own land to sell such land. Will the right hon. Gentleman encourage and push them to sell their land as quickly as possible? It will be in the interests of all, because money from the sale of such land will be brought back into use for the public good.
  We are all aware that in inner areas there is land in private ownership, whether by individuals or companies. Many private owners are not prepared to sell their land. I share the view of the hon. Member for the Isle of Wight (Mr. Ross), who made an excellent speech, that development land tax is the reason why private owners are not disposing of their land. I realise that the Minister disagrees with me on this matter, so there is no need for me to pursue it. However, I make one suggestion to the Minister as I am trying to be as bipartisan as possible. Will he consider reducing the rate of development land tax on owners of land in certain inner areas as an inducement to sell? That would be a logical compromise between our views.
  Another area of derelict land is that to be used for bypasses and roads—areas affected by what is loosely termed "planning blight". We must encourage local authorities and, in turn, the Department to make their plans clear. If there is no prospect of a bypass being built in the foreseeable future, I suggest that the plans should be scrapped. That would remove the planning blight and allow the people to develop the areas affected. I
  1750
  should appreciate the Minister's comments on that matter.
  I am sure that the Minister will agree that it is important to ensure that we get the economic factors right and encourage small businesses by cutting as much red tape and taxation as possible.
  Another reason why people do not go back to inner city areas is the problem of law and order. I hope that the Minister will pass on to the Home Secretary the message that we must improve law and order in inner city areas. We can do that by paying the police more and by increasing the punishments for crimes of violence and vandalism.
  There is also the problem of immigration. The majority of immigrants move to inner city areas and create great problems. We must give special aid and encourage them to disperse further out. One reason why immigration should be stopped as quickly as possible—I realise that Labour Members disagree—is that it is not fair to immigrants or to people living in inner city areas to allow further influxes of immigrants because they will invariably go to certain deprived areas, not to areas which are able to cope.
  I am glad that the hon. Member for Bristol, North-West (Mr. Thomas) has returned to the Chamber, because there are not many occasions on which I agree with him. However, I entirely agreed with his intervention when he asked the Secretary of State whether the Bill and the partnership agreements were wise in view of the problems of the inner areas. Those problems are great and have already been described. But there are considerable problems in the outer suburbs—certainly in Stechford and no doubt in Bristol, North-West. We all know about the bulldozers coming in and knocking down houses. That was a great mistake. They merely left the inner cities empty.
  Under both Labour and Conservative Governments large council estates were built in the outer suburbs. The problem was that we did not build the facilities to go with them. Stechford is desperately short of recreational and other services and facilities. The problems for people on these estates are as great, if not greater, than those for people in some inner urban areas. These estates have no soul. Whatever we thought of the slums that we

  1751
  knocked down, they had one asset—community spirit. People had a sense of belonging. These large new estates—certainly in my constituency—do not give that sense of belonging. That is another reason why the bipartisan approach is vital.
  We need to refurbish rather than to knock down houses. It makes sense from a financial point of view, because it is cheaper to refurbish than to knock down and rebuild. It makes sense because it keeps existing communities intact, it does not despoil the green belt and it does not put people in outer suburbs from which they have a long way to travel to work.
  Therefore, I ask the Minister to take account of the problems of the outer suburbs, at the same time in no way decrying the fact that we are considering the inner suburbs.
  That is all I wish to say now, but a lot more can be said in Committee. However, I am aware that many other hon. Members wish to speak in this debate.
  7.10 p.m.
  Mr. Jim Craigen: Along with many other hon. Members, I welcome the attention that the Government seem to be giving to the problem of inner urban areas as expressed first in the White Paper and now in the Bill.
  "Massive" was not the word which came to my mind when I first saw the Bill. I think that it seems rather modest, and I wonder whether it will be successful in seeking to reverse the tide of postwar urban planning history.
  In the last century, the main problem facing urban areas was the influx of people to live and work. Since the war, and in Clydeside particularly, we have been operating overspill programmes so that people would move into new town areas. There has also been another voluntary overspill with people moving into suburbia around the cities.
  I acknowledge the work that the Government are doing in respect of the Glasgow East End Project. It does not affect me directly, but it has come to my attention that there is a certain duplication of effort and resources between the Scottish Special Housing Association and the Scottish Development Agency. It is
  1752
  a case of there being too many cooks in the kitchen and most of them fairly highly paid. There has not always been a concentration on the ground about doing something in the community.
  I hope we shall be more successful in the comparatively mini project on the Maryhill Corridor. I am glad to see the Under-Secretary of State for Scotland, my hon. Friend the Member for Glasgow, Provan (Mr. Brown), in the Chamber. No doubt he will confirm that whereas the East End project is being largely overseen by the SDA and Strathclyde Regional Council, the Maryhill Corridor project, which affects my constituency as well as that of my hon. Friend the Member for Glasgow, Kelvin-grove (Mr. Carmichael), is spearheaded by the district council through its local plan. I hope that the attention of the Scottish Development Department and other agencies will be drawn to the need to offer encouragement to this project.
  One point that has come out in this debate is the fact that urban decay is often associated with the problem of community decay. It has been heartening to see the emergence of greater pride in the communities since the setting up of some community councils in Glasgow. If we are to instil pride in the community obviously both the Government and the local authority must encourage this wherever possible. The absence in many inner city areas and peripheral areas of suitable recreational and adequate community facilities is a major drawback in life in these areas.
  I thought that the White Paper scanned over the urban scene without adequately defining the objectives. How do we envisage our cities in the year 2000, which, after all, is only 22 years away? Will our cities be better or worse places in which to live? I have a great fear that it may prove to be the latter.
  People have been telling us with their feet that they do not like city life as much as they did in the past. They have been moving to the new towns and the suburbs. It has been mainly the skilled element within our society that has been able to move. Will the planners be as unsuccessful in getting "community transplants" as surgeons have been in making suitable heart transplants? There is a problem of rejection

  1753
  in communities which is every bit as great as rejection in the medical sense.
  Another problem within city areas is immobilism. We seem to be running fast here, and often because of the sheer array of agencies dealing with the problems, and yet virtually at a standstill.
  I hope that we shall tackle the yawning gaps that exist in many central areas. These gaps should be highly prized because they are so central. One finds that many of them are owned by British Rail or the British Waterways Board, and the conditions under which they are expected to release their land are those of commercial return.
  Another area which the Scottish Office should examine is the problem of derelict tenements where the people have been rehoused. The tenements stand defiantly, because of the legal problems of tracing the former owners who have long since abandoned their property. I hope that the Scottish Office will look into this and ensure that the planning process is speeded up.
  The White Paper—and to some extent the Bill—is right in saying that the employment factor is the key to doing something towards improving life in inner city areas, by providing more employment opportunities not only for young people but for older workers as well. In doing this, we shall increase the purchasing power within the local community.
  One of the problems is the substantial proportion of unskilled people living in inner city areas. That was brought out in the White Paper. I have already raised the matter of our new skillcentre in the Glasgow area and I hope that this aspect of training policy will be considered.
  The new towns have had a great advantage over the years not only in respect of green field sites for industrial development but also in facilities for housing and in some industrial thrust. If we were able to apply this, we could attract new firms into the inner city areas.
  I have questioned the Secretary of State as to whether it should be the task of local authorities, in effect, to subsidise from rates incoming industry or small firms that are about to move into new premises. This seems to be adding to the
  1754
  rate burden that local authorities already must meet. Moreover, there is evidence that some firms are moonlighting to enjoy the benefits of rental relaxation.
  I am not happy about the way in which the Bill deals with rate support grant in respect of local authorities. What happens in an area such as Glasgow, where the city faces a future of population decline and where the age structure in the city is such that the financial resources of a sizeable section of the community must inevitably diminish as the years pass? There will be a surplus of housing but a shrinking of the economic base. If we are relying totally on rate support grant as a means of trying to encourage firms, I believe that we shall not improve the employment position as effectively as we must.
  We cannot overlook the inter-relationship of services such as transport, recreation, educational and community facilities, employment opportunities and life within our community. I hope that in the work which now appears to be done on the problems of inner city areas the difficulties encountered by people in the use of transport will be given a much higher priority than they have been given in the past. I am referring to the availability of transport and also to the cost of moving about from place to place, particularly moving from home to one's place of employment.
  7.22 p.m.
  Mr. Anthony Steen: We are all agreed that the purpose of the Bill is to improve the quality of life and the quality of work in our cities. Yet it should be made clear that the Bill covers only one paragraph in a White Paper containing 103 paragraphs. In his reply, will the Minister say what is his timetable for bringing into effect some of the recommendations in the other 102 paragraphs because the Bill as drafted has extremely limited consequences?
  The sole result as I see it is to increase the powers of local authorities. Will this not create bigger bureaucracies if the Bill is to be effective? Surely the Government have wide experience of the problem of introducing legislation, namely, that a large number of Bills which have come before the House and which have been

  1755
  passed have been totally ineffectual because the local authorities have not the resources or the manpower to put them into practice. Will the Minister say how the Bill will operate in practice? Will it require much more bureaucracy, and will it be possible to put it into effect?
  It is odd that the Government have chosen the local authority as their work horse. The local authority is the one agency that has an appalling track record in dealing with industry in the cities. City councils have been responsible in the last two decades—and this applies to councils on both sides of the political spectrum—for the demolition of the inner areas. Because of this demolition, jobs, homes and factories have been taken away from those areas. Skilled people left for the new towns and for the greenfield sites beyond. In inner Birmingham 6,000 businesses were displaced as a result of the demolition by the city council of the inner area. Liverpool lost 80,000 jobs in the inner area as a result of the local council's policy.
  It is curious that the Government have chosen city councils, which have a bad track record, to rejuvenate local industry. The most pressing problem in the inner cities lies in how to revive vacant and derelict land and to increase the rate base.
  Mr. Arthur Blenkinsop: Does the hon. Gentleman agree that a great deal of movement in industry came about because of the determination to obtain sites which afforded better transport and other facilities rather than concentrating on old areas in cities? Are we not mistaken in believing that we can bring that kind of industry back to these areas?
  Mr. Steen: The problem is that the rents charged for green field sites outside city centres were more attractive for industrialists starting from scratch than the high land value in inner areas. Therefore, industry pulled out.
  Mr. Mike Thomas: Surely it is clear that most modern large-scale industry cannot exist on inner city sites. There is no room for expansion in the first place. Surely that is the crucial problem rather than the matter of rents.
  Mr. Steen: The hon. Gentleman misses the point of my argument. I was saying that 6,000 small businesses in Birmingham which closed were not large but small businesses. In other words, the 80,000 workers who left Liverpool were in not large but small firms. As a result of demolition in the areas, industry has moved out. An interesting point is that 100,000 jobs have been created on the outskirts of Liverpool. Therefore, the inner city has been derelict and without work.
  The most pressing problem is how to revive vacant and derelict land. We shall lose the rate base so long as we are not bringing that vacant and derelict land into productive use. We are just not obtaining the rate base to provide the resources to run services in inner areas. If one analyses the rates, one sees that the outer owner-occupiers and ratepayers are subsidising the inner area services.
  The first priority of this Bill should have been aimed at involving those who own vacant land in bringing that land into productive use and thus contributing to the wealth of the city. We do not need so many subsidies. The Bill is based on subsidy. We should seek to bring derelict land into general use. In Liverpool the survival of the city depends on the ratepayer in the outer areas rather than in the inner areas. They get bad value for money for the rates they pay. Therefore, we must analyse who owns the land.
  So far as I can see, in most of our major cities the majority of the vacant land is owned as to 60 per cent. by local authorities. The rest is owned by the nationalised industries such as the railways and water authorities. We must build small businesses on those sites.
  The second problem that results from bringing this derelict land into circulation relates to where people are to live. If small businesses are pulled down and vast areas demolished, there is nowhere for people to live. Unless one has a good public transport system, they will not want to live outside the city. They want to live reasonably close to where they work.
  The Bill is deficient in seeking to deal with derelict and vacant land, and the Minister might like to say whether he has plans for future Bills. I should like to

  1757
  see a clause providing that local authorities should not continue to hoard land but should auction it off. If nothing constructive is done by the local authority to deal with that, land, it should be put on the open market for public auction. If that happens, it would bring in a new life force.
  The other more sinister aspect of the Bill is that the poorest local authorities—the partnership authorities—will be asked to borrow money. The local authorities are being given some money only as a carrot. They will have to borrow some money on the market, and I believe that this will store up more problems for those poorer authorities in the coming years.
  The problem of creating new industry and new jobs in the inner cities is one aspect of the Bill. The other aspect is concerned with what is called partnership.
  The word "partnership" is part of a string of what I call weasel words that the Government are very prone and gifted to use. They are words which deceive people into believing that something is being done when nothing is being done at the grass roots. Many of those words are used in the community field. There is the community development project. One thing that it did not do was to develop communities. There is the National Enterprise Board. We are still to see some enterprise from it. There are community projects, quality of life projects, one after another.
  Such words tell one about a scheme which is not happening at the grass roots. "Partnership" is another example. One thing that the partnership does which all other Government measures have done is to say that the Government and local government must work together. That has been happening for a decade or more. The curious thing which is different about the partnership agreement is that it excludes the very people living in the city itself. There is an argument that they will be included.
  In Liverpool a partnership committee has been set up which is chaired by the Minister. There is an officers' steering group. There is an inner area subcommittee made up of councillors. There are policy and finance committees and a working group consisting of all the heads of the local authority departments, but no voluntary community or neigh
  1758
  bourhood organisations are involved in decision making.
  Mr. John Sever: Will the hon. Member take it from me that when I, living in the centre of Birmingham, which is in one of the core area wards, and recognising that I have a seat on the local authority of Birmingham, applied to the Conservative leader of the city council for permission for either myself or one of my colleagues to sit on this committee in order to put into the work of the committee that to which the hon. Member is referring, he flatly refused?
  Mr. Steen: Yes, I sympathise with the hon. Member for Birmingham, Lady-wood (Mr. Sever). The answer that I received from the Secretary of State for the Environment at Question Time about a month ago was that the place for voluntary and community organisations was not the decision-making point. The directive seems to be quite clear from the Government downwards or upwards—whichever way one looks at it—that the people themselves should not be involved in decision making, but they can be consulted. That is the unique part of the partnership agreement. The word "partnership" suggests tremendous togetherness. The one thing that such an agreement excludes is togetherness.
  I sympathise greatly with the hon. Member in his problem. In the last 10 years there has been a string of urban poverty projects. Each one, as hon. Members must know, has pointed to the need to involve people at the point at which decisions are made. It may be very tiresome and tedious and make the process much longer, but at least we are involving the people whose future will be affected.
  I hope that the Minister in his reply will assure partnership areas that the people who live in them will be involved in decision making and not just in consultation. The Government decide the partnership areas. The Minister said yesterday that he could not tell us the extent of those areas; they were a matter for the partnership committees. When I look at who heads the partnership committees, I see that in Liverpool it is the Secretary of State for the Environment. Therefore, perhaps the Minister

  1759
  can explain why the inner city of Liverpool includes an area five miles from the core area, which happens to be the area represented by the hon. Member for Liverpool, Garston (Mr. Loyden). It is a deprived area. There are many other deprived areas. Some of them are in my constituency and there are some in other parts of Liverpool.
  What are the criteria by which the Minister decides that this area five miles from the core should be included in the partnership inner area? I suggest that there must be other considerations. One does not want to suggest that there is a party political motive. It may well be that all the areas represented by Labour Members are the poor areas and they are the partnership areas.
  It is curious that the old housing has been included in the Liverpool partnership area but not the new housing. The Minister has fallen into the trap of thinking that old houses are the ones that need help without actually thinking who lives inside them. In my experience, the most unhappy people in my constituency are not those living in older houses in which there is a strong sense of family community but those on the vast council estates on the edge of the city, where there are no community and social facilities.
  As the Bill progresses, the Minister might like to extend the definition of "partnership" to include the vast tracts of modern council housing which are as seriously deficient as the old ones. The Secretary of State must remember that the people who live on those vast council estates are the people who used to live in the inner urban areas. When their houses were demolished the people were transferred to those peripheral estates. The problems are of the people who are in the inner areas rather than their houses. The Minister may have overlooked that point.
  The Bill should deal with a different category. It should deal not with the age of housing but with the problems of people living in them. That is what the Conservative Party is concerned about. The Minister knows that I have been a critic of the partnership schemes. I see them as a smoke screen. Liverpool is a good example. There have been more
  1760
  urban schemes in Liverpool than in any other city in the country. We have had the urban aid programme, community development projects, an educational area experiment, a neighbourhood project, a quality of life study and an urban deprivation unit that is very interested in what we have been doing. My right hon. Friend the Member for Worcester (Mr. Walker) introduced the inner area study in inner Liverpool, and there is a cornprehensive community programme trial on the Wirral, over the water.
  One would have thought, with all those experiments, that Liverpool would be a very much happier place, better-looking and able to say "Look at what the Government have done". Ten years have passed since those projects were introduced and yet Liverpool looks worse off. The partnership agreement, with the money that it brings in, does little more than make up for the money that we have lost over the last four years, for example, in improvement grants and local authority mortgages. It does not give us very much fresh money. It merely replaces the money which has been withdrawn from us over the years. It is a very suspect Bill if it says that it will give us more money.
  I have a further point about which I should be grateful if the Minister would consult his hon. Friends. This is indicative of how the Government are working. On the one hand, the Government declare a partnership agreement with a city. On the other hand, other Government Departments take things away. Liverpool Airport has been downgraded to a category C airport. There is a possibility of its closing, with a loss of jobs.
  Then there is the freeze put on the building of a new magistrates' court. This resulted in tremendous problems of vacant land not being used. We are now told that, in spite of the partnership, there will be £2½ million worth of cuts in the public bus and railway services of the inner city. Even if people could be persuaded to come back, they would not be able to get about. The Minister should realise that there is no point in declaring partnership arrangements if another Government Department takes away all the benefits.
  The Bill is irrelevant because it does not deal with important issues. It tends to be misleading and suggests that the

  1761
  Minister has not begun to understand that the problems of the cities are about people and not buildings.
  7.40 p.m.
  Mr. Arthur Palmer: In the early part of his speech, the hon. Member for Liverpool, Wavertree (Mr. Steen) described without understanding the causes a number of the symptoms of what happens now in the inner parts of our cities. I think that the fundamental causes are not the wickedness of individuals or the plans—or the lack of them—of local authorities, but technical and technological changes which have taken place over a long period. That is why people no longer live close to their places of work. With the development of the internal combusion engine they can move about easily, and employers can also get electric power anywhere, which means that the exact siting of industry does not matter as it did in the past.
  I represent the old, inner part of a city, and I am surprised that my right hon. Friend the Secretary of State does not rate Bristol's problems as being very great. I put a Question to him fairly recently asking whether Bristol would be included in the arrangements to which this Bill proposes to give statutory force. My right hon. Friend agreed that Bristol had problems, but he said that they were not as great as those of many other parts of the country. He may be right about that, but I wonder how he knows. That is what puzzles me. How can my right hon. Friend or his advisers decide so arbitrarily that Bristol's problems are less than those of other areas?
  I am not necessarily blaming him for it. It is a subjective question. As the White Paper says in paragraph 72:
  "There are no satisfactory objective criteria, comparable between one area and another, covering the whole span of problems—economic decline, physical decay and social stress."
  My St. Paul ward and my Easton ward share all these symptoms—economic decline, physical decay, social stress, and some racial tension as well.
  The first clause of the Bill provides:
  "If the Secretary of State is satisfied—

  (a) that special social need exists in any inner urban area in Great Britain; and

  (b) that the conditions which give rise to the existence of that need could be alleviated
  1762
  by the exercise of the powers conferred by this Act,

  he may by order specify any district ".
  How will my right hon. Friend be satisfied? I should have thought that Bristol met all the criteria for action, but unfortunately, unless there has been a recent change in the attitude of the Department, Bristol is not likely to qualify very easily for assistance under the Bill when it becomes an Act.
  I suggest, therefore, that this first Part of the Bill needs a great deal of new thought and possible alteration, and that it should be looked at in Committee to see whether there could not be some arrangement under which a local authority which found that it did not qualify, in the view of my right hon. Friend, could take advantage of an open appeal mechanism.
  Mr. Ron Thomas: Hear, hear.
  Mr. Palmer: I am glad to have the agreement of my hon. Friend the Member for Bristol, North-West (Mr. Thomas).
  We need to have all the arguments for and against, aid made public. Failing that, I should have thought that a better arrangement would be the older one under which the local authority itself, knowing the detailed needs of an area, could make the decision. Provided that it satisfied other reasonable conditions laid down by the Ministry, the authority should qualify for grant in that way.
  It is wrong for my right hon. Friend to suppose that he can decide from on high that Liverpool requires assistance but that Bristol does not or that a London district qualifies whereas some other more remote part of the country does not. I doubt whether he can do that in a way that will satisfy anyone. Therefore, I think that the first part of the Bill needs a great deal of attention, and I hope that it will get it in Committee.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Sir Myer Galpern): Before I call the next hon. Member, may I say that the winding up speeches will begin at about 9 o'clock? Naturally, I want if possible to accommodate all those hon. Members who are anxious to take part in the debate. That can be done if hon. Members speak for about six minutes apiece.
  7.43 p.m.
  Mr. Arthur Jones: I shall bear in mind what you have said, Mr. Deputy Speaker, and do my best to comply with your request.
  The purposes behind the Bill lie in recognition of the urgency and the need to take action about the dereliction which exists in many of our great cities and towns up and down the country. I welcome its provisions in the knowledge that they are attempts to grapple with an increasingly serious problem and a means of using Government funds which should have as their principal objective the promotion of schemes by local authorities. I agree entirely with hon. Members who have expressed that view. However, I did not agree with the hon. Member for Bristol, North-East (Mr. Palmer) when he said that the problems of the inner cities arose from technical evolution. It is clear that they arise from a misassessment of the speed at which this state of affairs has come about and the inability or unwillingness of local authorities essentially to grapple with it.
  I am critical of the attitude of many local authorities responsible for the proper planning of our towns and cities. The out-of-town development which they have promoted arose from the best of motives—namely, to improve the living standards and environmental circumstances of their citizens. But many authorities appear to have been mindless of the effects that this would have in terms of the inner city areas. For the residents remaining there, to a significant extent the industrial and commercial activities have been quashed or neutralized, with the consequent loss of employment and the destruction of the social fabric of urban neighbourhoods.
  As my hon. Friend the Member for Henley (Mr. Heseltine) said, there is no easy solution. It needs a combination of measures and a determination over a long time. That is why we need to have programmes which can be phased over a quinquennium, a decade, or even longer than that if there is to be any hope of reaching a solution.
  The hon. Member for Glasgow, Mary-hill (Mr. Craigen) asked rhetorically what our city centres would look like in AD 2000. It was a very fair question, and I do not believe that we have any answer
  1764
  to it yet. London's dockland is perhaps an outstanding example, and the Environment Sub-Committee of the Select Committee on Expenditure looked at that carefully some years ago.
  When I was a member of the Select Committee on Immigration and Race Relations about five or six years ago, our journeyings took us to Liverpool, where I was horrified to see the dereliction of District 8, which was a disgrace to the city. I am told that very little has been done in the interim to improve matters significantly.
  The neglect of the problem by local authorities does not apply only in the great cities. In towns up and down the country, perimeter development has been encouraged without adequate plans and resources to ensure the restoration of the inner areas. Many could have been saved by rehabilitation. The worst possible course has been taken in some cases with vast areas being cleared without any plans being prepared for their redevelopment. Central areas were allowed to rot, with the consequences of social unrest for which the planners must carry a heavy share of the blame.
  As permitted development took place and vast assets were created, no long-term plans were made to ensure that they should be utilised for the restoration of areas where redevelopment is essential for the future well-being of our society.
  The Bill arises from the fact that local authorities are now devoid of the resources to develop their inner areas which, I maintain, they could have provided for themselves if proper policies had been followed. In the dual role of planners and developers, under statutory powers that have existed for the whole of the post-war period, local authorities were able, if they so chose, to undertake their proper responsibilities. The great majority have failed to do so.
  Vast acquisitions of land have taken place by local authorities, which are the country's greatest landowners, as a number of hon. Members have mentioned. The reluctance of these authorities to dig pose of land is well known, and some authorities are said to have followed policies under which no freehold sale has ever taken place.
  If there had been a willingness and determination to use their resources to

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  the best advantage, assets created by new development could, in roll-over programmes, have been realised and used elsewhere—for example, in inner city areas—and we need not have been faced with a problem of such a vast scale as we see today.
  The question of the financing of capital expenditure from the sale of assets was referred to in paragraph 5(3) of the Green Paper on local government finance. A register of land and property owned by councils, but not required for operational purposes should be maintained, and such assets should be considered to be part of their resources when financial assistance is being reviewed.
  Development, if and when undertaken, should be planned to maximise its investment value, commensurate with proper planning considerations. In fact, with a view to minimising demands upon the Exchequer, there is a great deal to be said for requiring that assets should be realised as a prerequisite to further borrowing. With the continuing demand for the investment of life and pension funds, a market exists which would make possible a desirable shift of investment from the public to the private sector, releasing the former for re-use. By means such as this, demands upon the public purse, local and central, could be kept to a minimum. Local authorities should be encouraged to think and act along these lines.
  The £100 million of the special capital construction programme available for England and Wales for 1977–78 and 1978–9 could have wider application, as could the urban programme, which is to be expanded to £117 million for 1979–80.
  The great bulk of that money will, I understand go to the seven partnership areas and 15 special areas, only four of which are within non-metropolitan areas, which could well be among those that have considerable assets capable of being realised and releasing capital for redevelopment purposes. A start might be made on early sales of land suitable for private development. This is a cause that I have pressed in the House many times.
  Assets in the new towns created by central Exchequer funding could similarly be realised if the Government were committed to a policy which ensured the optimum use of resources and a roll-over of assets. However, we know that they
  1766
  deny the right of development corporations to sell. Those towns expanding by way of co-operation with the development corporations are an example of the positive advantages of land use planning operated in conjunction with development, both private and public.
  Northampton is going ahead well under such an arrangement. Government funds made available via the development corporation are enabling the Northampton District Council positively to ensure the redevelopment of inner town sites.
  Among local authorities generally there is resistance to the concept of development corporations. Their independence of operation apparently gives cause for concern, and I hope that the so-called partnership agreements will be found to be an effective compromise. They need to be powerfully promoted if they are to succeed. I agree with what my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen) said in this respect.
  The commitments under the Bill, which, we are told, will not exceed £80 million in the period up to 1981–82—a sum referred to as chicken feed, which might be an accurate description—could easily be met by a phased policy of sales of new town assets with no call on public expenditure by way of the ratepayer and taxpayer. The Government, however, are committed to State and municipal ownership and have hitherto rejected such a course.
  I welcome the steps proposed in the Bill to promote the proper renewal of our inner urban areas and I applaud this initiative by the Government. However, the local authorities have the all-important role to play, and my advocacy is that they should be required to use their assets to the full and should not continue to extend their ownership, regardless of the consequences, as some towns and cities have done in the past.
  Much of the responsibility for inner city dereliction lies with the local authorities, and I hope that the Bill will do a great deal to stir them out of their lethargy and point the way to the realities of land use planning and the most effective use of resources.
  7.55 p.m.
  Mr. Mike Thomas: I want to take up three

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  points related to the general question of the Government's inner city and urban area policies of which the Bill is part. First, I shall deal with the overall objectives that the Government are trying to achieve; secondly, with the resources that they are prepared to make available; and, thirdly, with the methods they are seeking to use to achieve those objectives and to use those resources.
  On the objectives, I turn first to the attitude of the Opposition. It is clear from what we heard earlier that we cannot expect any guidance from the hon. Member for Henley (Mr. Heseltine) on the Opposition's policy, if they have one, on this very important topic. We have to turn to what I call the Shadow Opposition to find any shred of policy.
  If there was any hint of consensus this afternoon, it came not from the hon. Member for Henley but from the right hon. Member for Worcester (Mr. Walker), who is the only Conservative Member who has produced any sort of policy for inner urban areas. It was spelt out clearly in an article in The Sunday Times on 31st July last year.
  Even taking into account the fact that, according to some of the things that the right hon. Gentleman said today, he has moved a little since he wrote that article, it is clear that he could have been a little more generous and gracious in what he said about the Bill. In his article, written shortly after the White Paper was published, he listed nine areas in which action was needed. The Government have made major moves in the direction that the right hon. Gentleman and I both favour on almost every one of those points, whether in providing more money for the construction industry or improving educational services and crime prevention in designated areas. But at least the right hon. Gentleman has a policy. It is sad that the official Opposition clearly have no policy, and I hope that people outside the House will note that fact.
  I have two reservations about the overall objectives of Government policy, which the Secretary of State summed up admirably as "the economic revival of inner city areas". The first reservation, which directly affects the Bill, is the emphasis on employment in inner city
  1768
  areas. I have no reservations about the emphasis on employment. No one who comes from the North-East will argue about that, but the emphasis of employment in the inner city areas may be misguided.
  We must consider first the problem of sites. I accept some of the points made by the hon. Member for Liverpool, Wavertree (Mr. Steen) about small businesses. But major industrial development will provide the large number of jobs, and we cannot reasonably expect it to take place on inner city sites. It is not realistic because there is too little room for expansion. That sort of development will inevitably take place on the outskirts or on green field sites.
  Secondly, and more important, it is often the existence of large-scale industry, particularly heavy engineering, which is the primary problem in inner cities and the primary cause of some environmental problems. If we are to make Goverment policy work and regenerate the inner cities, it is necessary for people to want to live there. It is not necessary for them to want to work there. We must not lose sight of the critical point that people must want to live in such areas. Large-scale industry is often inimical to those who live next door to it.
  All this leads me to suppose that we must pay greater attention to supporting existing industries to ensure that they do not disappear. In my area, industry is mainly heavy engineering and shipbuilding. There will be other areas with different products and different names but with the same basic industries. We must emphasise the need for moving industry to green field sites that are near enough to towns to provide employment. If we do that, we must also look at public transport to ensure that people can move from one place to another.
  I beg the Government to remember that in my constituency and in other inner urban constituencies not everyone owns a car. In the United Kingdom two in three households own a car. In my inner area, about eight in 10 households do not have a car. This is the critical importance of public transport.
  My second reservation about the overall policy aims concerns the difficulty of implementation. The policy laid out in the White Paper, particularly in the last

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  annex which deals with what happens in other Departments and with the need for closer collaboration between other organisations, seemed to be full of problems and potential difficulties.
  I have had two personal experiences of dealing with the type of co-ordination that the Government are trying to achieve. The first was unfortunate and occurred when I spent a period of time in Northern Ireland working with the Community Relations Commission. Even when the good will existed, it was almost impossible to persuade Departments of the Northern Ireland Government—who were primarily interested in education, commerce and so on—to treat community relations as a priority. It was impossible, even with a special agency.
  The second experience will be close to the hearts of my hon. Friends from North-East constituencies. It concerns the problem of regional policy. Everyone has failed to impose upon a series of different Government Departments—environment, industry, procurement and defence—a sense of regional priorities. This has led to considerable frustrations in the implementation of an effective regional policy. We even tried a special Minister. The Minister of State was probably right to go for the co-ordination that he is attempting to achieve now, but I beg him not to underrate the difficulties.
  I turn to the question of resources. Are they sufficient? The proposal is for £125 million in 1979 plus expenditure on some main programmes and changes in the rate support grant arrangements. Discounting the Henley revisionist policy on public expenditure, we have to turn to the Shadow Opposition for a policy on this. The Tory Reform Group, in the pamphlet "Cities in Crisis", states:
  "Nevertheless at least £25m should be spent in the first year, which is considerably above the present urban aid grants. But to make any real impact at least £100m a year will have to be spent by the central Government."
  I give my hon. Friends a serious warning about substitution. The question of whether this is additional money or a redirection of existing money is important. There is a danger that the Henley description of "the illusion of a policy" will result. For example, we could find, as some of us did with the European Regional Fund, that the amount of addi
  1770
  tional money is smaller than the apparent amount. As the House knows, I am pro-European. We must have a clear statement from the Government on what extra resources—I use that word with its precise meaning—are to be made available.
  I turn to the question of the method of implementation. We must ask whether the policy of taking seven partnership areas and 15 programme authorities is right. I declare an interest. I believe the policy to be right not only because Newcastle was included because of a late rush of blood to the head of the Secretary of State, but I fear that the Government's approach could be weakened by making powers available to a larger number of authorities. I remind my right hon. Friend the Member for Battersea, North (Mr. Jay) that the unemployment ratio in the North-East may be better when compared with London, but the ratios do not give us much comfort on Tyneside. Unemployment there is higher, remains higher and has been higher as long as most hon. Members can remember than it has ever been in any part of the Greater London area.
  I now turn to the areas to be chosen within the authorities. Clearly, there is a need to select areas. My hon. Friend the Member for Bristol, North-East (Mr. Palmer) did not do the Government justice on this subject. The criteria to be used are moderately useful. They are objective. If anything, they need refining more. In Newcastle there are ward profile arrangements. We have more experience than the Government in deciding on priority areas. We use more sophisticated material than has been used elsewhere, and I hope that the Minister will make good use of it.
  I disagree with the hon. Member for Wavertree. Priority areas are not necessarily all geographically in the centre of cities. As the hon. Gentleman said, there are outlying council estates which are in a bad way. Wards on the outskirts of towns can be just as deprived as those in the centre. In medium-sized cities such as Newcastle and Liverpool, priority areas are not necessarily in the centre. I hope that the Minister will be flexible about that.
  I have a further point to make.
  Mr. Deputy Speaker: The hon. Member's final point?
  Mr. Thomas: I said "a further point". Mr. Deputy Speaker. I have taken a great deal of trouble and time to prepare this speech.
  Mr. Deputy Speaker: There have been several appeals for brevity. If all hon. Members take as long as the hon. Member for Newcastle upon Tyne, East (Mr. Thomas), there will be no time to call others.
  Mr. Thomas: I meant no discourtesy, Mr. Deputy Speaker. I shall finish as quickly as possible. I have three or four points to make.
  Perhaps there needs to be more selection to focus on particular streets and neighbourhoods. I plead for flexibility when decisions are made about the use of funds. Can they be used to encourage employment outside the priority area as long as it is ensured that inner city dwellers benefit? Can they be used to employ more policemen or child minders and to finance things which may not be the responsibility of the authority concerned? Can my right hon. Friend the Minister ensure that money is not taken away from the police authority, the health authority or the social services departments if funds are used in that way? We do not want to find that the police get less money at the end of the day as a result.
  I say to my right hon. Friend the Minister for Housing and Construction that I hope that the Newcastle model of priority areas and the Gateshead comprehensive community programme will provide a base from which he can operate the scheme. I think he is already finding that that is so.
  Let us be quite clear that there is a difference of opinion between the Government Benches and the Opposition Benches about where the ideas should come from. The hon. Member for Henley clearly thinks that they should come down from the top and that a small group of people should tell people what is good for them. I believe quite the opposite—that the ideas should come from the bottom, from the communities themselves. There is a contrast between Henley and Wavertree, if I may put it so. Clearly, the hon. Member for Henley thinks that there ought to be there a "sort of person", as he puts it, who ought to be
  1772
  telling people what they need. I think that community involvement is vital. If the hon. Member thinks that there are no community activists in the inner cities, he ought to go and find them, because there are many. Certainly in my area there are plenty.
  I conclude, Mr. Deputy Speaker—you will be relieved to hear that—by making a quotation from an article that I heartily recommend to the House. It was an article by the leader of Newcastle City Council, Councillor Jeremy Beecham: published in January 1978 in Municipal Review. He finished the article by responding to the rhetorical question in W. H. Auden's poem "Spain", where Auden says:
  "What's your proposal? To build the just City?"
  Jeremy Beecham's reply to that was:
  "That is precisely our proposal in Newcastle; to build as far as we can, a just City, a more equal City, a pleasant and thriving City, a City whose people feel committed to breaking free from the shadow of deprivation and disadvantage which history has bequeathed us."
  I am glad that through the partnership arrangements the Government will give us an opportunity to build on the work we started in Newcastle in 1974 towards that end.
  8.12 p.m.
  Mr. Ian Grist: The hon. Member for Newcastle upon Tyne, East (Mr. Thomas) certainly put his finger on one point of particular concern on the Opposition Benches. We, too, would like to know whether the money involved in the Bill is new money or some form of recirculating money. Equally, we look forward to hearing what the Minister has to say this evening.
  Certainly, the Bill does not go very far. Indeed, it goes only a tiny way towards curing the problems of the inner areas. It has been said time and again, as it was in our last debate on inner city problems, that the problems are multifarious and that they extend way outside the immediate inner areas of cities—the problems of unemployment, vandalism and social isolation.
  Moreover, the Bill does nothing and does not pretend to want to do anything about the problems of housing. The rundown in our housing has been associated already in this debate with the effects of the various Rent Acts or, for instance,

  1773
  the effect in the last three years of the cut-back on house improvement grants. During the next financial year, in Cardiff less money is to be made available for house improvements than has been made available even in the present year, and that heaven knows, was a record low.
  Even if we are to take the Bill within its own very limited terms of reference we cannot be very satisfied. In particular, there is the question of ministerial judgment of what may be the criteria for a designated district. This was a point brought up very briefly by the hon. Member for Bristol, North-East (Mr. Palmer), and fairly cuttingly. The ACC has rightly pointed out that nowhere is there to be found a definition of social need. In arriving at any decision, there is apparently a presupposition that the Secretary of State and his advisers have some God-given power to spot the winners or those in most serious difficulty.
  In any event, the provision or encouragment of industry and employment, which is what the Bill is primarily about, rests on many factors lying quite outside the scope of the Bill, as the Secretary of State said, and in particular the successful running of the entire national economy. However, reverting to authorities with a claim to be treated as "designated". I wish, like other hon. Members, to make a case for that of my own city of Cardiff.
  In employment terms—if this is to be one of the touchstones—matters are extremely serious in Cardiff. Currently we have a male unemployment rate of between 9½ and 10 per cent. In some wards of the city, particularly those in the constituencies of the Prime Minister and Mr. Speaker, the rate ranges upwards to around 20 per cent.
  When the British Steel Corporation's East Moors works closes, as it will do within the relatively near future—we do not know whether it is two months or perhaps 18 months—our unemployment rate is likely to rise by half as much again, so we are already in bad unemployment difficulties and we are heading for worse.
  In Cardiff there is a severe lack of manufacturing employment. Service industry we have. That has been mentioned earlier as taking up unemployment. Of course it does, and we welcome all the
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  service employment that we can get in the city. Nevertheless, we are badly out of gear in the capital. Our manufacturing base is now below that of any comparable city of a comparable size in Britain. As the House will know, we have a fair slice of the Civil Service, universities and councils of various kinds. All this paraphernalia gives us a very fine back-up for service employment. But we are not able to offer young people in our city a chance to use their hands in manufacturing employment.
  The British Steel Corporation has even ceased taking on apprentices. Until very recently, the steelworks provided the major source for apprentices in Cardiff. If it is not employment that should have got us on the original list, and the Welsh Office seems to think that our difficulties are not as great as those of the English cities, let us refer to the 1971 census. If one looks at households with no hot water, one sees that of the households in Cardiff 9 per cent. have no hot water, and in the inner areas it is 19½. per cent. That is a worse position than on Merseyside or in Greater London, Tyneside, the West Midlands and South-East Lancashire.
  Let us look at households with no fixed bath or shower. The figure is 14·2 per cent. in Cardiff, which is worse than that for Tyneside, Merseyside, South-East Lancashire, Greater London and the West Midlands. Furthermore, of the households in the inner areas of Cardiff, 31½ per cent. have no fixed bath or shower. Let us look at households with no inside WC. The figure for Cardiff is 16 per cent. which is worse than Merseyside, the West Midlands and Greater London. In the inner area of Cardiff the figure is 31 per cent. For households sharing a WC, the figure for Cardiff is 5·2 per cent., which is worse than Merseyside, the West Midlands, South-East Lancashire and Tyneside. In the inner areas of Cardiff the figure is 11·3 per cent. If one is looking at those criteria of social need and at that type of problem, I should have thought that Cardiff must qualify on that basis. However, as I have said, the Welsh Office has not so far seen fit to accord Cardiff the same priority as certain English cities.
  I just hope that in winding up the debate the Minister will be able to say whether, when the further English list is announced in the coming weeks by the

  1775
  Secretary of State, his right hon. Friends will be able to announce whether any similar steps are to be taken for Scotland and Wales.
  Moreover, it seems that with Wales two further assumptions are made. One is that our problems can be dealt with through the Welsh Development Agency, which, of course, has little or nothing to do with local democratic initiative, and the other is that our problems can be dealt with through the urban programme. That programme can help to a degree, but the current allocation in Wales on the programme is only £800,000, and that with a maximum of £60,000 per project, so I do not think that that will carry us very far.
  In short, the Bill is too limited. It is too full of ministerial selectivity. It is too full of uncertainties. But if it is to go into action Wales and Cardiff demand their just and fair share.
  8.19 p.m.
  Mr. Frank Hooley: The principle of the Bill is to create a system of priority aid to refurbish the systems of our great cities. This principle is absolutely right, and for that reason I support the Bill, but some of its details need to be looked at closely to make sure that we are going the right way about achieving what we want.
  Clause 1 talks about designated districts. If I correctly understand my right hon. Friend the Secretary of State, he said that if the district were designated it would be designated at both tiers. I am concerned with the metropolitan counties. If Sheffield were designated, the designation would apply equally to the county authority and to the district authority. I beileve that that would be an immediate receipt for confusion and muddle.
  I cannot understand the principle of double, concurrent designation for handling the programme under the Bill. I should like my right hon. Friend the Minister for Housing and Construction to cover this point, which is a matter of considerable concern in the South Yorkshire metropolitan area. It is an important point as regards administration, because clearly if it is the city itself which is concerned it should have control and a direct voice, in partnership with the Government, in whatever programme is put
  1776
  through. I find it hard to understand why the county level should be involved, assuming that I have correctly interpreted what my right hon. Friend said.
  I turn to Clause 2, on the question of land. The Bill gives local authorities power to make loans to persons, which presumably means private individuals or companies, so that those persons can buy land. What has gone wrong with the Community Land Act, the whole purpose of which was surely to put in the hands of the local authority the power to acquire land which it could then lease or sell—it would be more sensible to lease it—to people who wanted to carry out development? Why should we provide another source of public money to local authorities which will then give it to private individuals who want to buy land?
  I do not understand why this second source is necessary, as we already have the admirable legislation of the Community Land Act. Although I accept that there have been complaints from local authorities that the Government are not being as co-operative as they should be in allowing them to use the provisions of that Act, I do not see the need for a double system of providing money for the purchase of land, such as appears to be envisaged in Clause 2.
  The problem of derelict land owned by public corporations has been mentioned. I do not want to elaborate the point, except to say that the Government should have high-powered talks with the major corporations to discover what financial arrangements can be made so that they can realise land that they do not require is lying unused and damaging environmental standards.
  We must keep a wary eye open for speculators. The admirable system of house improvement grants was grossly abused by speculative property owners who took a grant, improved the property and then sold it at a handsome profit. If there is to be another source of funds for the acquisition of land, we must make sure that the speculative interests are watched very carefully in the course of handling this source of money.
  Clause 3 deals with the question of buildings. My hon. Friend the Member for Liverpool, Walton (Mr. Heller) raised an interesting and important point when

  1777
  he said that the clause did not refer to new buildings in any way. We surely do not want a system under which public money will be made available simply to tart up some of the old, Edwardian or even Victorian factories in the centres of our cities. One of the great problems of city centres is environmental improvement. If we are to make money available so that old industrial buildings can be brought back into use, that may be good in a certain sense, but it would be much more sensible to get rid of them and provide money so that the new flatted factories, specially designed modern factories, can be built to accommodate small industries, if it is desirable to have industry in the city centre at all.
  I echo the comment of my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Thomas) that we need to be very cautious about the idea that employment should be established in the centres of cities. We want the city centres to be regenerated for people to live in. However careful one is with industrial development, it creates traffic, noise, rubbish and waste dumps. If in addition there is the problem of shift working, one can create serious social tension between the centre of employment in a city centre and the residential development that might take place.
  This is not idle theory. I have had troubles in my constituency with an industrial belt alongside a residential belt. That creates friction and trouble. I cannot imagine that any local authority will put a great forge, or something stupid like that, in the centre of a city, but even light industry creates certain problems. We shall have to watch carefully the principle of mixed development which appears to be envisaged in Clause 3.
  Clause 4 refers to special social need. I hope that here there is scope for imaginative development. The great problem of the dereliction in our cities is that the young, the wealthier and the skilled do not find them pleasant areas in which to live. Consequently, they have gone away. Those with little or no choice—the poor, the weak, the old and the handicapped—are left. Until we make a serious attack on the environment in the city centre, we shall not make it a place where people will live voluntarily.
  The problem of work, which is separate, was dealt with by my hon. Friend the
  1778
  Member for Bristol, North-East (Mr. Palmer).
  I hope that as the programme progresses we can give our mind to the creation of parks, squares and other areas within our city centres which are recognised as pleasant places for people to walk around, to live in and to look at. Unless we do, the mere process of building factories or whatever in the city centre will be self-defeating. The skilled, the wealthier and the professional people will still get out, as they always have done, and we shall be stuck with the social problems that we have now. Therefore, the programme should have a strong environmental thrust.
  I should like to say a few words about the problem of Sheffield. The city has not been offered a partnership and has been left out of the main stream of the scheme. Sheffield has probably done a better job in city centre development than many other cities. It has considerable achievements to its credit, but it has an ageing population, youth unemployment, the problem of population drift from certain of the central areas and physical dereliction. On the latter point I want to quote briefly from a document produced by the city council:
  "The Canal Basin is in the dual ownership of the City Council and the British Waterways Board and can be accurately described as an environmental desert. The old railway goods yard which forms part of the site has closed down, the Canal itself is virtually unused, other than for a minimal number of pleasure craft and the adjacent areas have little economic value. The goods yards were constructed on an elevated area over arches and this construction, coupled with the presence of the Basin itself, has been the main reason why comprehensive development has not taken place. It is, however, pertinent to mention that this site is within 800 yards of the major shopping locality of the City … The site is, therefore, strategic and its development would be a catalyst for the improvement of the whole Don Valley environment."
  It can be seen that Sheffield has certain of the problems. It has dealt with them much better than many other cities have in the past, but it has problems and deserves to be included in the main stream of the programme.
  I am becoming increasingly concerned about the weird contradictions in my Government's policy. Over the past three financial years public expenditure has been cut by £4 billion—the figures are to be found in the White Paper—with a

  1779
  consequent loss of jobs. At the same time, we are going in for all sorts of gimmicks, such as the job creation and work experience programmes, to fill in what we have destroyed.
  There have also been cuts in local government spending. Sheffield has been disgracefully treated this year on the rate support grant, which creates serious trouble. On the one hand, difficulties are created, but the Government come forward with the urban programme to make up for them, as it were. If we could have a clear, consistent policy on public spending on the basic, essential social necessities, such as education, housing and planning, we would not need so many gimmicky programmes. However, the urban programme deals with a great and historic development that needs tackling as a social priority, and I fully support the Bill.
  8.29 p.m.
  Mr. Michael Morris: The hon. Member for Sheffield, Heeley (Mr. Hooley) made a valid point when he questioned, as did the hon. Member for Newcastle upon Tyne, East (Mr. Thomas), whether it is right to bring industry back into some central areas. There is no simple answer. To do so is the right answer in some areas but totally the wrong answer in others. The tragedy is that the problems can still provide an opportunity to solve the problems.
  The lack of open space that we see in most central areas could still be overcome. This is a simple matter of resources, or the allocation of resources. The excessive housing densities in certain areas could be solved by providing houses with gardens. The problem could be solved if we were to accept lower planning densities and a more sensible attitude towards the housing cost yardstick. Poor facilities for industry, especially for small businesses, could be improved if we could persuade the planners to stop driving out industry because it is a non-conforming user.
  There are local authorities throughout the country, especially in the inner urban areas, that are still driving out non-conforming users without offering them alternative sites on which to start again. When the Secretary of State said that it was the emphasis on the industry that
  1780
  was important, that showed again that there is still great prejudice against commerce. It is commerce which on the fringes of the central areas, certainly of London, will give opportunities to the Islingtons, Hackneys and Tower Hamlets. It is not manufacturing industry that will provide opportunities for those areas.
  I question whether the concept of a partnership will work. I use as evidence one borough that I know about in some detail. The London borough of Islington is one of the partnership areas, or is half of one. The borough had a population of about 500,000 at the turn of the century. That population was halved by 1960 to about 250,000. Over 100,000 people have left the borough in the past 10 years. That is the rate of depopulation that has occurred in Islington. I imagine that the Hackney figures are fairly similar.
  In the borough of Islington nearly half the housing is council housing. It has a fairly modest waiting list of 6,500. There are 3,500 empty council-owned properties. There are 3,000 voids. Therefore, there is possibly not such a major housing problem. In five years the town hall staff has increased by 1,000. The district auditor has commented that someone has lost £2 million, and as a result Coopers & Lybrand has been called in to ascertain what has happened to the money.
  Despite that background, the borough is receiving about £75 million in a capital expenditure allocated to it for the corning year. That is made up of nearly £50 million on housing and a mixture of inner city partnership money, inner city construction money, original urban aid and additional urban aid, totalling £75 million. In addition, it will have its share of GLC money. That will make a total of about £100 million of capital moneys being spent in one year in one borough that has a population of 170,000, or just over 40,000 families. That is going some.
  I question seriously whether on top of that sort of expenditure, with a track record of that sort for Islington, and with the district auditor working overtime, any Government will get a return for their money if they now divert resources into bringing back industry. Surely it would

  1781
  be far better to concentrate on the housing that is required and to lift the present restrictions on commerce. If those restrictions were to be lifted, commerce would come back into the central areas at the bottom end, which would solve part of the problem.
  I am disturbed that the Bill adopts a piecemeal approach. That argument has been raised by several hon. Members. It does not begin to tackle the problems of London's dockland, where the Secretary of State's own constituency is situated. The problems there are on so great a scale, and the resources required so huge, that this sort of Bill cannot possibly help. Something has to be done to get that sort of area moving, for otherwise the deprivation will continue into the foreseeable future.
  As hon. Members have said, all this requires investment in transport. It also requires a degree of policy towards retailing. No one has yet mentioned in the debate the role of modern retailing, of the supermarket and of the hypermarket. I hope that the Department, certainly in some of the major areas, will involve the major retailers.
  What do we do in this terrible dilemma? There is real danger that we are producing too many little budgets for too many different things. As the hon. Member for Heeley said, at the moment there are too many gimmicky budgets around. I urge the Government to go back to the single large budget that people can use to their own discretion.
  It is important that the Government should be involved in these problems. My experience as Member for a new town, having done my traineeship in a central area, is that the new town concept does work. It works in a partnership sense because it can and does work well with the local authorities. The great benefit of a new town corporation which no local authority has is that it can and does work at twice the speed that a local authority can work.
  The Government should not close their eyes to the role of an old town corporation. There may be cities whose existing organisation and infrastructure work well, but in the really crucial areas the case may be different. For example,
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  I do not believe that Liverpool City Council has the ability, the resources, or even the will now to tackle the deprivations of central Liverpool. Nor do I believe that the problems of dockland will be solved by the GLC in combination with the authorities there. That is a personal view, but I think that it will be proved right.
  I ask the Government to make it clear whether these resources are extra, or whether they are just pulling further money out of the rate support grant. Many of us have suffered in that way. No wonder the Secretary of State is cringing. He knows that he has already cut £3½ million off the education budget for Northamptonshire, although it has more children than it had a year ago.
  There is an aspect of training that is desperately important. In our debate on employment on 30th January, my right hon. Friend the Member for Sidcup (Mr. Heath) explained in some depth the rather pathetic response that we have had both from the Conservative Party and the Government in terms of training. One of the greatest problems in the inner city areas is the young people who are coming out of school without skills. We would do far more good if we spent a few more millions of pounds on training these young people in skills to give them a job for the future. I hope that if resources are to be pumped in that direction now, serious consideration will be given to setting up mammoth training programmes in the areas where these young people have no job prospects.
  The concept of a partnership may motivate the local authorities, and I would not wish to criticise the New-castles, the Sheffields, and others, as I do not have sufficient experience of those areas. But from my experience in London, I do not believe that the present partnership boroughs selected have the ability to push through what is necessary.
  My experience in a fair number of visits to Liverpool leaves me with the feeling that the authorities will fail there. If they do—I hope they do not—I trust that the Government will then say "You have had your chance. These problems are too great to be left as they are, and we shall move in an old town corporation to deal with these very old problems."
  8.40 p.m.
  Mr. Iain MacCormick: In the short time available, the consequent necessity for brevity will prevent me from referring to many of the most interesting speeches to which I have listened during the debate.
  I begin by referring to two interesting features of two of the speeches made from the Government Benches. One was the speech of the hon. Member for Glasgow, Maryhill (Mr. Craigen) and the other was the speech of the hon. Member for Birmingham, Selly Oak (Mr. Litterick). They are both Scotsmen, although they do not both represent Scottish seats. I would agree much more with the hon. Member for Maryhill than with the hon. Member for Selly Oak, who, in the course of a rather impassioned oration, tried to imply that there was some basic difference between rural life and town life.
  I do not think that it is justifiable to make such a distinction. Representing, as I do, one of the most rural constituencies in the whole of the United Kingdom, I have found that many of the problems of my constituents are very similar to those of people who live in towns. That explains, I think, why a former Labour Government found it necessary to create the Highlands and Islands Development Board, which fulfils for a very rural area some of the kinds of functions that I fancy the Bill is designed to supply in a more urban setting.
  I am sure that very few hon. Members, if any, would contradict me when I say that there are two reasons why the position in Scotland is particularly relevant in relation to the concepts contained in this measure. There is a basic imbalance in Scotland. The local government region of Strathclyde contains half the population of Scotland, which is concentrated upon the city of Glasgow. On the one hand, there is the fact that in Scotland we have roughly half the population living within a very small geographic area. On the other hand, there is the fact that the part of Scotland in which all these people are concentrated exhibits perhaps the worst form of urban deprivation to be found not only anywhere within the United Kingdom but also anywhere within Western Europe.
  Indeed, I believe that the last proper study to be made showed that 95 per
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  cent. of the 1 per cent. of areas of the worst urban deprivation existed on Clyde-side in Glasgow. At the time when that survey was carried out in 1975, The Economist said:
  "When deprivation is measured at small area level, Scotland and Clydeside have more of it than anywhere else."
  I do not think that it could be put more succinctly than that.
  I move from the acknowledgement of the existence of that problem and ask whether the consideration of it is something new. I doubt whether that is the case. When the hon. Member for Henley (Mr. Heseltine) was opening the debate for the Opposition, the hon. Member for Selly Oak mentioned in an intervention the position in Germany after the war. He referred to both parts of Germany, and he was considering the urban renewal which had to take place there in view of the destruction caused by our bombers in the last war. But surely in this country we also began to think about urban planning at precisely the same period. Was it not in 1947 that the first measures were introduced which were designed to bring about urban improvement? Indeed, if the excellently thought-out and wonderful plans produced for the Clydeside area had been carried out, perhaps we would not be having this discussion tonight.
  In a recent article in New Society, Professor Denman of Cambridge University asks:
  "Where is the fulfilment of the hopes of 1947? Have we unwittingly planned for decay instead of life? Maybe a too rigorous planning regime, a too Calvinistic committal to law and planned order, has killed the spirit of life."
  I suspect that that is exactly what has happened.
  I do not think that it is the object of anyone in the House tonight, or of any hon. Member of the House, to apportion blame too much, but I should not like the Government—least of all the Scottish Members of it, none of whom appears to be present at the moment—to feel too smug about having introduced this measure.
  At the same time as one considers the development of the thought which underlies the Bill, one must remember the failure of the thought which already exists with regard to the commitment made as

  1785
  long ago as a couple of years after the war. Indeed, in 1975 The Economist, when discussing the survey which showed that the urban deprivation in Clydeside was as bad as it was, said:
  "The conurbation's problems are as much the fault of the ageing and uninspiring worthies of the Clydeside Labour Party who have run the Clyde Valley with the iron grip of a one party State for the past 40 years."
  I do not think anyone could deny that. Nor can anyone in Scotland deny the fact that there is a relationship between the Clydeside Labour Party and the Government inasmuch as most Scottish Ministers were members of Clydeside Labour Party or were councillors on Glasgow Corporation or the town and burgh councils in the areas round about Glasgow exactly where the 95 per cent. of the 1 per cent. of worst deprivation exists.
  I do not want to labour that point, but I should like to end my contribution by putting one or two questions to the Government. First, when will the by-election in Glasgow, Garscadden be held? That is probably the best way of deciding who will solve the problems of Glasgow and Clydeside in the future.
  Secondly—this is a question which genuinely interests me—to what extent does the Bill intend to supplant the powers and responsibilities of the Scottish Development Agency? The SNP feels that that Agency does not have enough funds at its disposal, although it is effectively and efficiently led by Sir William Gray, former Lord Provost of Glasgow.
  Lastly, does the Government Front Bench genuinely believe that of the sums mentioned in the Bill—£80 million in total—10 per cent. or £8 million is a proper sum to be expended on eradicating the urban deprivation which exists in Glasgow and to bring about a genuine and lasting revival of industry and housing and all the other things which make up human life in the area? If that sum is not enough, will the Government agree to give the Scottish Development Agency a great deal more, or, indeed, to give the appropriate local authority a great deal more?
  8.48 p.m.
  Mr. Kevin McNamara: I listened to the start of the Garscadden election campaign with interest. It is a pity that the hon. Mem-
  1786
  ber for Argyll (Mr. MacCormick) did not mention the considerable aid given to that area by this Government, particularly through such measures as the Shipbuilding and Aircraft Industries Act, which saved many jobs and the Polish order.
  In the short time available to me I should like to turn my attention to the Bill and to give it a welcome on behalf of the city and council, as well as the people, of Kingston upon Hull. Unfortunately we are a city within a shire county, which means that we are not quite certain about the degree to which we shall be able to exercise and operate all these powers without Big Brother looking over our shoulder.
  If my right hon. Friend had been successful in giving us back the powers that we had in the past, that would have been a more powerful aid to us than many of the measures contained in the Bill. We are not to be one of the partnership areas. I regret that, because our problems are just as acute and desperate and needing of solution as those of the partnership areas. I accept that they may not be equivalent in size, but in degree and intensity they are just as great. Nevertheless, we look forward to the time when perhaps the areas which are not partnership areas will be given the powers contained in Clause 4.
  I should like to deal not with housing in the city centre, with which Kingston upon Hull is going ahead and doing reasonably well, but with the problem at which the Bill is aimed and which did not attract a great deal of attention from hon. Members. I refer to employment in our decaying city centres. We must put it in perspective. We are talking not about a new Ford assembly plant and putting it in the middle of some old city area but about the regeneration of industry which was there.
  Let us consider the type of progress that has been made in our cities. In many areas—for example, the docks, there has been a decline in the service industries serving, in particular, the railways, road transport and the docks. With the rundown of the railways and the revolution in sea transport, many of the service industries which were needed have now gone. That is part of the problem.
  Another part of the problem is that, as the city areas went into decay as people moved out and the areas were

  1787
  cleared, the small one-man, two-man, 10-man and 15-man firms—the jobbing printer, the panel beater and the car repairer—were driven out. Such businesses were essential to the life of the city. As they were driven out, they were faced with problems that they could not properly solve. In many instances, clearance resulted in the disappearance of the small workshops. Many small business proprietors, faced with the difficulties of starting afresh in new premises, were frightened off by the financial implications. They could not face the prospect of moving from low-cost, low-rated business premises into purpose-built factories, even when designed to meet the needs of small firms.
  I want to turn my attention to the solution to these employment problems. We are concerned with the regeneration of jobs—small but important jobs. In the small workshop or engineering plant, one might have the proprietor, two skilled men, an apprentice and a labourer. For example, a printer would do his job employing one apprentice. Such jobs, which kept life alive in inner city areas, have now gone. There were houses and businesses cheek by jowl, but not necessarily hostile to one another in that environment.
  I objected to the sneering tone of the hon. Member for Henley (Mr. Heseltine) when he talked about the people and organisations on our estates, but it is true that many errors were made in the planning of estates. We broke down the nexus of the extended family and put people in areas without the necessary social infrastructure of the club, the corner shop, the pub, the church and the cinema. That is all true, but it came ill from the mouth of the hon. Member for Henley. In public buildings controlled by the Tory Humberside County Council, many social functions were performed in both the old city centres and the modern suburbs, but many of these were curtailed by the Tory council pushing up rents and forcing out tenants. But I am not wearing my party political hat. That is the end of the party political.
  When considering small businesses, I think that the Bill has one major omission. I refer to small business men who have been affected by compulsory purchase orders. I am talking not of the man
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  who drives a Jaguar and smokes a big cigar but of the man who might be lucky if he takes home the average manual wage, but who may run a car. He has pride in working for himself.
  There is no power in the Bill to cover the need for professional advice to smaller businesses involved in compulsory purchase orders. Small businesses so involved sometimes have to face the possibility of either having to go out of business or trying to carry on. In such cases, the availability of professional advice and consultancy services would be invaluable.
  The Hull City Council has considered this proposal and in its opinion this service is necessary and could be supplied. It could be supplied by a general consulting service or by an outside adviser working with the local authority, provided that confidentiality could be kept. The third possibility is that the local authority could set up the service and then look for someone who had retired from business or commerce and offer help to people. This is something which we could consider, and I hope that the Minister will look favourably on such an amendment at Committee stage.
  The second point of vital importance is that the power of equity participation by local authorities to help small businesses and small men has not been given. The Bill does not allow the local authorities to provide grants and loans to secure property and land, but there is no actual risk equity coming forward and in many cases it will not come from the private sector. An extension into the field of risk capital for local authorities should be considered.
  It will be argued that the Bolton Committee's report came out against this because there was the money around. We should remember that that was in the days when the former right hon. Member for Altrincham and Sale, the then Mr. Barber, was printing money. We should now look at this problem more carefully. However, a general power in the Bill would mean that this money could be used in the formation of new companies and the extension of existing companies in inner urban areas and to encourage them to move there with direct help with innovations for individuals.
  What we need locally is what we already have nationally—a mini National

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  Enterprise Board to look at areas and companies. My hon. Friend the Under-Secretary of State for Industry might say that the Department of Industry is doing that through the Small Firms Information Bureau, but, with all due respect to my hon. Friend, whose attributes and qualities I admired long before he came into this House, this is not being done in inner urban areas and areas of decay. Very small firms have not been given encouragement to develop in these areas.
  On page 3 the Bill talks about 30 additional staff, and this is nonsense. It is already difficult for local authorities to carry out their work properly. Clearly, they need substantially more staff. How otherwise can advance factories, access roads, sewers and building refurbishment be considered unless there are a lot more people to deal with them? One simply cannot talk about it in the way that the Bill does.
  One of the real problems that we have in the shire towns is that of locally determined services. Whether they are for a telephone system or other services, we have to share them with other district councils. We do not have a proper say in how the money is allocated. We have had to scrape and to be assisted. Thus we must look at the proposal for an innovation centre.
  We wanted a place in Hull City where people can come forward with ideas. The university had been working with us on this problem to help us to regenerate employment and employment opportunities for ourselves. Without the allocation of LDS, we find that impossible. The innovation centre would have been a significant move. For example, there are companies such as ICI which, because of economies in scale, are unable or unprepared to develop ideas to enable people to build up these things for themselves and on occasion to finance some of their employees. These are some of the things that the innovation centre could do.
  I am afraid that in the time available I have not been able to cover all the points I hoped to make, but I urge the Minister to think carefully about consultative services, equity capital and getting the large shire cities out of the shackles of county councils which are hostile to those cities' intentions and ideas. This will enable us to develop as
  1790
  we have done in the past and to tackle our own problems without the disruption of social, educational, housing, planning and other policies.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Mr. Eyre.
  Mr. Arthur Latham: On a point of order, Mr. Deputy Speaker. I wish to place on record my protest that during this debate only one London Labour Member has been called. In other words, for a total of 10 million inhabitants only one voice has been heard in this debate. I am the chairman of the Labour Party in London and I have an overwhelming constituency interest, but I have not been called to speak in this Session so far.
  9.2 p.m.
  Mr. Reginald Eyre: We have had a realistic debate on this Bill and the surrounding circumstances that much affect its operation. It seems to me that no Member on either side has exaggerated or been overoptimistic about the limited effect of the Bill on what are regarded by hon. Members on both sides of the House as difficult problems requiring solutions which are not entirely clear to any of us.
  We on the Conservative Benches regard the problems of the inner urban areas with great concern, although we see those problems in the context of the city as a whole. Our studies lead us to believe that the problems run across the whole city area. We have had great anxieties that the middle areas and part of the outer areas are deteriorating at the same time as we are making this effort and focusing attention on the problems of the inner areas, serious as they are.
  The hon. Member for Birmingham, Selly Oak (Mr. Litterick) made this point effectively in referring to a localised area of decline in an older housing region of Birmingham. There are points that deserve attention, which are outside the inner area question.
  We see all these problems of the inner, middle and outer areas as being interrelated, and we feel that true long-term solutions can be found only when all these factors are taken into account. That is the first basis on which to judge

  1791
  the adequacy and scope of the Government's measures and of the Bill's provisions in particular.
  We can underline the errors leading to the erosion and bulldozing of the inner area economy. The hon. Member for Kingston upon Hull, Central (Mr. McNamara) gave a vivid account of this process and told the House how it affected small businesses and trades, with all that meant in loss of jobs and reduced living standards for the people. We well understand the shortage of private investment which is essential for the regeneration of the economy of the inner areas.
  Nobody would deny the continuing role of Government and local authorities in providing essential services in health, educational and road work aspects. They are most important. But when we turn to the economy of the inner areas our hope for the future must lie in attracting new private investment. With regard to the inner area economy, the Government and the local authorities have a need to stimulate investment in the private sector—by firms and individuals in industry and commerce. It is on that basis that we must test these provisions and the whole range of Government policies directly relative to the achievement of success in that respect.
  Since everything that is attempted or carried out to ease the problems of the cities and inner areas must be judged against a background of understanding of the needs of people and how best they can be encouraged to play an effective part in recovery, the third test that we would apply is the progress to be made in encouraging social stability, growth in the community and neighbourhood feeling and in improving housing and environmental conditions. All these matters concern people in vital human respects and they affect the contribution of people in their working lives in terms of economic revival.
  In that respect we can say at once that the Government's approach is woefully lacking in understanding the needs of people in densely populated areas. This is an essential element in the battle against urban decline and decay even when we consider the material aspects such as those encompassed in this modest Bill. I shall return to that subject.
  1792
  In assessing the worth of the Bill we must apply as a test the degree to which private investment, which is essential to regeneration, will be attracted. We must express relief that the Government acknowledge the need for private investment to come to the rescue of the inner area economy as set out in the White Paper of June 1977. Indeed, for some years we have been urging on the Government the same policies for the economy as a whole.
  At a time when industrial production is low, and investment on the part of medium and larger industry is not as great as the Government expected or we would have wished, which is understandable in the present climate of economic caution, and unemployment is shockingly high in many inner areas, particularly amongst young people. The hon. Member for Liverpool, Scotland Exchange (Mr. Parry) gave dramatic evidence of this when he said that no less than 50 per cent. of his school leavers were still unemployed. There is great concern felt by both sides of the House about the social aspects of that problem.
  We realise and emphasise that economic improvement and job opportunities in these areas need to be encouraged to ensure the survival, updating and expansion of existing businesses of all sizes and kinds. That means halting the disastrous record run of liquidations and bankruptcies. Secondly, we need to encourage in an effective and sustained way the founding of new small businesses, many of them making new products and providing new services. A great number of new business founders must come forward and be prepared to take risks, to overcome difficulties, to flourish and to grow.
  Our essential need, therefore, is to encourage the development of new wealth creators and new job creators. Paragraph 40 of the White Paper says that the aim must be to encourage changes in the attitude of industry and finance so that they play their full part. That means particularly in the inner area problem. We say, and have said repeatedly, that there must also be a substantial change in the attitude and policies of the Government, including a lessening of the burdens of taxation and legislation, if industry in general and small businesses in particular are to be able to make the contribution that is absolutely essential to the

  1793
  revival of the economies in the inner areas.
  As small businesses could play such a vital part in inner area regeneration and are so much part of the local initiative which comes from the people in the district, it is a pity that the Bill is so restricting in its geographical sense. The new powers in Clauses 2 and 3 are restricted to relatively few designated local authorities. Moreover, the provisions in Clause 4 restrict the exercise of the powers specified in Clauses 5 and 6 to the very small number of partnership authorities.
  Whatever the Secretary of State may be able to say by way of consolation about giving small additional help under the urban aid programme to other local authorities outside his lists, the fact remains that there are large numbers of local authorities with substantial inner area or similar problems which are excluded from operating the powers to be given under the Bill.
  Mr. Jay: Then is it the hon. Gentleman's advice to the Government that they should increase public expenditure and reduce taxation?
  Mr. Eyre: I am trying to emphasise the extreme importance of creating a state of affairs where private investment can play a more effective part in reviving jobs and saying that there is a case for looking at these other towns, in circumstances that I will describe, which have a claim.
  Mr. Jay: Spending more.
  Mr. Eyre: Taking it all into account, within the Government's programme I believe that it could be shown that the economic return would be much more effective than that from a great number of other expenditures on which the Government are at present engaged. That does not mean that there would be a substantial increase in total Government expenditure, but it would mean that it was directed into an area where there was likely to be a much more effective return.
  Mr. Shore: As I understand it, as a result of the intervention of my right hon. Friend the Member for Battersea, North (Mr. Jay), the hon. Gentleman has declared that he would wish the Government to extend territorially the provision of powers under this legislation beyond
  1794
  the partnership and programme authorities. I can tell him that we have every intention of doing so. However, that does not mean that we are making it universal.
  Mr. Eyre: I had realised from the words that the Secretary of State used earlier that he was contemplating some form of extension. I am still not clear from what he said how he will operate in this respect. I appreciate that there is every reason why he should be offering inducements to Government supporters to look forward to the proceedings in Committee when he may be able to make additional offers. However, I hope to establish some principles which should be applied about how the few additional ones will be chosen.
  As I have said, a great many large towns and cities with very similar problems are excluded from operating the powers to be given under the Bill. I believe that that is difficult to justify. Accordingly, great areas of the Black Country, including Dudley, Sandwell and Walsall, are excluded. Anyone who knows those areas will agree that they have massive problems. Also excluded are some towns and areas in the North-West, especially in Lancashire, and in the North-East, Yorkshire, the East Midlands, the West Country, including Bristol and Plymouth, and some of the London boroughs, although the position there is not clear.
  The Secretary of State must say what criteria he has adopted in justifying these decisions, and I think that those criteria have to be examined carefully, especially as the Secretary of State has now said that he intends to extend his lists. A great number of right hon. and hon. Members are concerned and dissatisfied, and I do not think that the right hon. Gentleman will be able to please more than a fraction of them. He will have to demonstrate, therefore, how he has made his decisions and why he has preferred some and deferred the claims of others. If he fails to do that, there will be charges of unfairness. They are bound to arise. It will be thought that there is a kind of reverse black list in operation—a kind of white list. I am glad to note from the Secretary of State's nods that he agrees with this approach and will announce details of the criteria,

  1795
  thereby avoiding the suspicion that political pressure will be the basis upon which this matter is decided.
  The system establishes a league table of local authorities. The first division comprises the partnership areas, the second division includes the designated authorities outside the partnership agreements and the third division includes the also-rans who will get so little benefit from the system.
  There are further restrictions that apply universally. Despite the reference in the White Paper to the need to stimulate industry and commerce, and despite the Secretary of State's remarks about the importance of service industries, which were supported by the right hon. Member for Battersea, North (Mr. Jay), any question of stimulating the development of offices has been left out of the Bill. When one thinks of the range of jobs needed in the inner areas, this is a regrettable omission and I hope that the Secretary of State will reconsider it in Committee.
  Mr. Mike Thomas: Is the hon. Gentleman prepared to join his hon. Friend the Member for Henley (Mr. Heseltine) in talking about the construction industry, which is a side issue to this? Is he also prepared to say that it is now official Opposition policy that public expenditure cuts in the construction industry should be restored and that public expenditure in this area should be increased?
  Mr. Eyre: The hon. Gentleman is obsessed with partisan politics. He speaks well about these problems and it is a pity that he spoils his contributions by the needling tendency that he shows so often.
  Having specified the limitations, the estimated financial effects of the Bill, judged against the background of the needs of our conurbations, towns and cities with inner area problems, show that it is a very modest contribution to the solution of the problems. Expenditure by local authorities throughout the period up to 1981–82 will not exceed £80 million, according to the Government's estimates. That works out at an average of £20 million a year and that is not much compared with, for example, the annual loss of £500 million in the steel industry, especially when that £80 million is being
  1796
  used towards dealing with probably the major social and economic problem affecting so many of the people of this country.
  A substantial share of the resources under the urban aid programme will go to the partnership authorities in the first division. When judging the total economic and social effect of the Government's policies, we must remember that the housing improvement programme—and this is relevant to the point made by the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) about the construction industry—has been severely reduced. The flow of funds to improve older housing in areas such as Sandwell and the Black Country which have been left out of the Bill has considerable social significance in solving problems in those areas. The areas left out of the Bill are suffering twice over. They have lost the benefit of the house improvement programme and they will not have the benefit of their economies being stimulated through this Bill.
  Mr. Mike Thomas: Is the hon. Gentleman saying that we should spend more money?
  Mr. Eyre: Indeed. We have made clear that the balance of the housing programme should be changed. We could reduce a certain element of new housing and increase expenditure on older housing and improvement grants. That would be very much better.
  Major reservations have been expressed in relation to Clause 2(4). The clause allows for the acquisition of land, and the carrying out of works. The proposals for interest rates in Clause 2(4) are totally unsatisfactory and will create a situation which will be as difficult as that which currently exists for house mot-gages provided by local authorities. The provisions must be positive and flexible and enable local authorities to do everything possible to encourage new development.
  One suggestion is that Clause 2(4)(b) should refer to
  "such rates as the local authority may fix in the case of the loan."
  Some stability is desirable. Some small business men have said that possibly these loans would be available to them from the banks on more favourable terms than those in the Bill.

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  The provisions in Clause 3—the amenities clause—could be of considerable importance for the conversion of older industrial and other buildings such as warehouses. But existing businesses in older premises which are seeking to survive by improving their efficiency are unlikely to receive much assistance from the clause, especially from the part which relates to the creation of extra jobs.
  Clause 4 invites comment on the concept of the working of the partnership agreement. The powers in Clauses 5 and 6 should also be mentioned. Clause 5 relates to the land available after the demolition of buildings and land clearance. It is to be welcomed, especially in view of the tremendous importance of land clearance and of bringing unused land into use.
  Would it not be desirable to avoid a discretion and to give a straight two-year remission of loan interest and repayment of capital? A firm which takes on the job of clearing a site normally has enough problems. I suggest that the Secretary of State should consider reducing the number of discretions because they are administratively expensive to operate and there is a danger of certain influences being brought to bear. We regard the rehabilitation of land as important. It would be better if the Secretary of State later considered making automatic a remission of interest and repayment of loans for two years.
  Clause 6 gives a discretion to local authorities to make grants towards the payment of rents. I understand that, and I am pleased about it. But many business men would prefer to know their position for certain. The discretion on rents is difficult to assess and it would be subject to certain pressures. It might be better to have a zero rating system so that everyone would have a clear understanding of their position. It would not be more expensive and people would know where they were. Business men had told me that they would often Prefer a remission of that kind rather than a rent allowance.
  I turn to the subject of partnership agreements. It is important to prevent the development of further bureaucracy. Some local authorities, particularly Birmingham, have a healthy concern for this problem. Most local authorities will
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  soon develop a corporate view of their responsibility under the partnership arrangements, but there will be difficulty in getting the Government Departments to come together in a similar manner. I have been told that some Departments are more keenly interested than others and that there is an uneveness of commitment.
  The decline of the National Health Service, the problems in hospitals and the growing waiting lists mean that we require more information about the role of the area health authorities in the partnership agreements. I hope that the Minister will be able to say something about those matters. Certainly they are of great concern in the inner areas.
  Similarly, because of the concern for law and order and the heavily rising crime rates in the cities, the relationship of the Home Office to the partnership arrangement is a matter of concern and importance. My hon. Friend the Member for Birmingham, Stechford (Mr. MacKay), who stressed the concern about law and order in Birmingham, raised an important point.
  My right hon. Friend the Member for Worcester (Mr. Walker), who, of course, played a tremendous part as Secretary of State in initiating all the studies which led to these programmes, emphasised the problems of the ethnic minorities in the inner areas. The involvement of the Home Office, which has substantial and continuing responsibilities in these matters, should be brought to the fore. I hope that the Minister will be able to say something about the work of the Home Office and its connection with the partnership authorities.
  Undeniably, the Department of the Environment has gained influence and power, and I ask the Secretary of State to consider carefully whether he needs so many powers of intervention in the Bill. On many occasions he is in a position to override local decisions and local discretion, and administratively this means that the papers will be passing back and forth between the local authority and Whitehall. Will the Secretary of State look critically at the Bill in Committee to see whether he can drop some of these powers of intervention and show that he trusts the local authorities, because I believe that the trust will be justified?

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  There is genuine concern about Clause 4 and the arrangements for determination by consultation between the parties to the partnership. The word is "consultation", not "agreement". Therefore, the agreement and its working are ultimately subject to the direction of Ministers. I ask that the Secretary of State and all the Ministers involved should be careful in the exercise of that kind of power. I ask the Secretary of State also, through the centre in Whitehall, not to insist on too much statistical information to justify every small move. There is that tendency.
  I appreciate the feelings of the partnership, and particularly about the need to take action to get things moving, but I ask that in the longer run a system of better consultation and monitoring should be developed. Although there is the need for action and for early decisions, if we do not watch out a climate could develop such as that which led to the clearance of areas and the building of tower blocks. That happened because we did not take sufficient account of people's desires and needs.
  Very soon in the partnership arrangement a monitoring system is desirable, and I should like that to be developed to take more account of the feelings of voluntary bodies, including youth movements, residents' and tenants' associations, and the chambers of commerce, which will have some relevant views on the economic aspect.
  Mr. Jay: Am I not right in thinking that earlier the hon. Member for Henley (Mr. Heseltine) complained that there was a meeting at Hackney at which there were 46 people? Surely if all these other organisations are to be brought in there will be far more.
  Mr. Eyre: I am asking for smaller, more effective meetings of that kind. I appreciate the need for action, but I am saying that in due course there will need to be this monitoring to keep the authorities in touch with patterns of local feeling.
  I turn now to the question of industrial development certificates, which is of concern to Birmingham and London. My hon. Friend the Member for Hampstead (Mr. Finsberg) raised this matter from his considerable knowledge of London. Of course, Birmingham and London are now ahead of the new towns, but they are still
  1800
  behind the assisted areas. There is a case in Birmingham now in which 600 jobs could disappear from the inner area because there are heavy inducements for a company to move to Merseyside. It will need many new businesses to make good that loss of 600 jobs. Will the Secretary of State consider reviewing the assisted area policy in its relationship to the working of the inner areas of Birmingham and London?
  I close with a reference to unused land and the vast areas of derelict land. This problem goes to the nub of the situation. Regular reviews of land holdings by local authorities and nationalised industries are required. It is necessary to enforce the disposal of unwanted land. My hon. Friend the Member for Daventry (Mr. Jones) made a valuable suggestion with regard to the sales of these properties. This matter is very important.
  On all these economic matters, I hope that the Government will pay attention to the many points made in the debate.
  On the question of social stability, on which the hon. Member for Kingston upon Hull, Central raised a number of matters affecting the movement of population from the inner areas to vast council estates, I believe that a great deal of social work needs to be done to stabilise the community on a neighbourhood basis also by way of a tenants' charter and in a great number of other matters involving people more closely in what is going on. So far we are short of thought about that on the part of the Government, but I am sure that these aspects will be raised on a number of occasions in future.
  9.32 p.m.
  The Minister for Housing and Construction (Mr. Reginald Freeson): The debate has demonstrated our deep concern for the problems of our inner cities—the deprivation caused by unemployment, the squalor of derelict land, poor and inadequate choice in housing and a decaying environment. However, I should like to start with the general observation that we must remember, too, that these are areas, as at least one hon. Member has said during the debate, of opportunity, often enhanced by the young migrants and immigrants who have been attracted there. We should not always be talking in terms of problems. There are challenges and opportunities in these

  1801
  areas. It will take years of consistent effort to renew them, but nevertheless challenge and opportunity are there.
  In closing the debate I shall deal with a number of general points which have arisen, implicitly or explicitly, about our urban renewal policy. First, let me deal with at least some of the specific questions raised about the Bill, taking first some of the points raised by the hon. Member for Birmingham, Hall Green (Mr. Eyre). The hon. Member raised a number of detailed points which, without disrespect, I think it would be better to take up as Committee points when we go into Committee. However, there were one or two points that he made which perhaps I can deal with now.
  The hon. Member spoke of too much power of intervention by the Secretary of State and he said that we should give our confidence to the local authority and that in Committee we should delete these powers of intervention. He said that a matter of seconds after he had been pleading with us to remove the power of discretion of local authorities in one or two clauses so far as the issuing of financial aid was concerned. We have to get some consistency here. The hon. Member cannot be pleading for greater discretion while at the same time pleading with us to remove discretion.
  The hon. Member asked a specific question about the set-up of the partnership, which, he seems to suggest, should be smaller and more efficient but with more members. I am not quite sure how we are to achieve that. However, he asked a specific question about the position of the area health authorities. Obviously, that is not for me. I would not be able to say at this stage what would be their precise and detailed input in each of one of the seven areas, or, indeed, in the programme authorities, where one hopes also to get some kind of liaison going. But they are members in the partnership and they bring their appropriate back-up secretariat and resources to bear as part of the partnership. They will be participating in the machinery and in the formulation of programmes in one way or the other according to the different areas' needs.
  The hon. Gentleman asked about the police authorities being brought in. Outside London they are already there by
  1802
  virtue of the local authorities being participating members. In some of the partnership committees there are police representatives—indeed, in one or two instances, chief constables. Certainly the chief constables are represented or are attending at the earlier meetings. The Home Office is not represented, but we have a range of Ministers present. However, we are more concerned to get at these matters in the local context. Issues such as race, education, housing and so on come up in that they will be part of the input of the local authorities, the county and district authorities, as well as the Government in formulating the policies.
  The IDCs are matters which are subject to review, as regional policy is subject to review, by the Department of Industry. But it is my experience, going back even to the time before this initiative on the partnerships was started, that IDCs were not the main problem, if they were a problem at all, in inner city areas, even in cities such as Birmingham and London, except to a degree psychologically. They have been so relaxed in recent times that there is little reason to attach a great deal of importance to them.
  My hon. Friend the Under-Secretary of State for Industry will have heard the observations made in the debate and will no doubt take them on board in his consideration of these matters within his Department. My hon. Friend has been particularly assiduous in attending today because he has a responsibility for small firms. With my right hon. Friend the Chancellor of the Duchy of Lancaster and myself, he has been very active in the conferences we have been sponsoring on this matter.
  Mr. Michael Morris: We shall watch the Under-Secretary's progress.
  Mr. Freeson: If the hon. Gentleman is referring to Committee membership, that is not for me. There are other channels for arranging it.
  The welcome given to the Bill by hon. Members, particularly Conservative Members, was somewhat marred by the tone set by the hon. Member for Henley (Mr. Heseltine) and followed by others. That is unfortunate on such a matter. The hon.

  1803
  Gentleman and other hon. Members commented somewhat contemptuously on certain aspects of the partnership arrangements. The hon. Gentleman was particularly critical of the famous first meeting of the Hackney and Islington partnership, which had 46 members. One of his hon. Friends wanted to increase the number to 146. The right hon. Member for Worcester (Mr. Walker) was critical of the 35 who attended the first meeting in Birmingham.
  Hon. Members' reaction is based on a misunderstanding. The partnerships will not be concerned with the distribution of £1 million, £2 million or £5 million of urban aid money. At the first meetings the issue of distribution was not discussed. They will be concerned increasingly with the full range of public services and expenditure in these areas, which will be helpfully primed to a degree by the enhanced urban aid programme. We are concerned not simply with the distribution of £125 million, or a large part of that £125 million, of urban aid but with main programmes and how they shall develop in these areas.
  Central and local government programmes costing hundreds of millions of pounds a year are involved. In Liverpool the amount is £150 million to £200 million and in Birmingham it is about £300 million of budget per year by the local authority, a large part of which is supplied by the Government through the rate support grant. Various other provisions are being made. These are the programmes that must be viewed in a total way in the development of this policy.
  Let me take one example from the Liverpool case—£49 million of capital expenditure on housing alone in 1978. The sooner these resources are enhanced as the economic situation improves, the more I shall like it, provided that we can use them to improve our housing. To talk of one element that reflects the expenditure that will arise under the Bill as chicken feed, and to do so out of the context of that which we are trying to develop across the board, is totally to misunderstand what we are about.
  I say to my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Thomas) that it is a matter just as much of redistributing or reshaping expenditure as of enhancing, and for quite a long time
  1804
  to come that will be even more important. When we are talking about large parts of about £13,000 million a year being spent in local government services, of which about 60 per cent. is provided by central Government and a large part of that is expenditure already taking place in the old urban areas, we have to ask ourselves about the methods that are being used by the Government, by local government and other agencies in the use of these resources. Can they be better organised to achieve a more consistent and sensitive urban renewal policy in future than in the past? This is an important issue that must be made clear at the outset of our policy.
  Mr. Mike Thomas: Is my right hon. Friend aware—I am sure he is—that associated with this general strand of development there will be considerable concern among local authorities which from time to time argue that they wish to have greater freedom to spend and less influence from the central Government? I do not make a judgment as to whether that is right or wrong in certain instances, but the pursuit of the policy of redistribution will have to be a road carefully trod if the experience of local authorities such as Newcastle, which is extensive, is to be used properly and the best use is to be made of the input. One small additional point is that the Home Office is represented in the Newcastle-Gateshead partnership agreement.
  Mr. Freeson: The Home Office is represented, yes, but the Minister is not likely to be there. All the Departments involved are likely to be represented. I was talking about ministerial representation, but I take my hon. Friend's point.
  What we must do in the Government is what Newcastle and a number of other authorities have been starting to do in recent years. They have begun to redirect their resources and to alter their budgeting systems. That will be a key development in future at local authority and Government levels. It will not be easy. It will have to be done carefully and consistently, and it will be difficult. However, it must be done because we cannot get a total integral approach to urban renewal in these areas, using the phrase in its broadest sense, if we continue with the old compartmental levels that we have had in the past at every level. It is

  1805
  a problem not easy of solution, but that is the direction in which we must proceed.
  Mr. Arthur Jones: The Minister is on an interesting point which I mentioned in my speech. Some of us take the view that the development corporations have played a valuable role in the past. Are we looking now at a form of partnership arrangement whereby the Government will apply the same limited resources and will involve themselves in the chosen areas to promote development by local authorities along the lines that the Government think desirable? I subscribe to that. It is clearly a change of approach. I hope that the right hon. Gentleman is able to assure us that there is recognition of the necessity of that approach.
  Mr. Freeson: Clearly there is a change of approach.
  At this stage I cannot add to the general description in the White Paper. However, if hon. Members are interested in pursuing the matter and obtaining more detail, we can make available to them the background documents that have been used to provide what might be termed guidelines for discussing and setting up the committees and the necessary machinery. That will not be revealing of the details for which the hon. Gentleman is asking, but the documents will provide an indication of the Government's thinking as regards the creation of the professional teams and the partnership arrangements in each of the areas. They will be used as guidelines for the programme authorities and other authorities.
  A number of detailed matters have been raised. My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) asked how far Clause 2 powers could be used. I think that there was a certain amount of confusion in the terminology of the question. At one stage my right hon. Friend was being asked whether there will be grants for new buildings. At a later stage the questioning swung over to the powers to give loans. For the purposes of clarification before we discuss these matters in Committee, we have been asked whether Clause 2 powers could be used for new buildings. The answer to that is "Yes", but that is not a matter of grant aid in that particular case if we look at the terms of the clause. There
  1806
  was a certain amount of confusion which I thought I should dispel.
  I was sorry to hear my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) suggest that co-operation between county and district authorities in his area might be difficult. We are providing concurrent powers against the back ground of wanting to see, in a spirit of partnership, both in the partnership areas and in the programme authorities, close co-operation between county and district authorities. All the indications—I have no reason to think that they are false—are that there will be such cooperation. I have seen those indications in each of the meetings I have attended either as chairman or as a participant in the discussions.
  Mr. Alison: The right hon. Gentleman has pointed out that loans for buildings are available under Clause 2 but that grants are available in relation to Clause 3. As £1,000 is the limit per operation under Clause 3, it is not likely that it will go far in making a building.
  Mr. Freeson: That point can be pursued in greater detail in Committee. I was making a general policy point about the framework of the Bill. Most of the debate has dealt with the general considerations, so I will leave detail to be pursued at greater length in Committee and will now turn to some of the more important issues.
  Mr. McNamara: Will my right hon. Friend answer the general question I put about consultancy? It is of particular interest to people covered by compulsory purchase orders.
  Mr. Freeson: I listened carefully to what my hon. Friend said, because I was interested in the approach to small firms. I was not clear, however, whether he was seeking to establish CPO advisory services or a wider kind of consultancy or advisory service. If the latter is the case, I suspect that the answer is that we are already taking the initiative along those lines. The Department of Industry is soon to embark on the first of these small industry advisory bureaux—I have forgotten the precise title—to do what my hon. Friend wants.
  Mr. McNamara: But after the compulsory purchase orders?
  Mr. Freeson: I do not think that we shall set up a consultancy service merely to advise small firms of their position under compulsory purchase orders. That would be a narrow remit. But the advisory bureau which we are establishing generally to help them can cover questions like compulsory purchase orders, amongst other things. I am sure that my hon. Friend's point will be adequately met. If there are difficulties, no doubt the Department of Industry will go into them.
  Over the last decade, as has been stressed by the hon. Member for Liverpool, Wavertree (Mr. Steen), there has been a variety of initiatives, not just in Liverpool but elsewhere, to deal with urban decay and deprivation on an area basis, but all rather fragmented—housing priority areas, education priority areas, the urban aid programme and several other schemes, some still operating while others have passed into the record.
  The Government decided, especially in the light of the work of the inner area studies, which I chaired for three to four years—they were started by the right hon. Member for Worcester in 1972—that the time was long overdue to draw these efforts at positive discrimination together. Large parts of our cities are in a mess and we have to act speedily, consistently and comprehensively—I use the words advisedly—over a long period, starting from now, to make them worth living in in every possible respect.
  We need to tackle the priority areas, as reflected in the partnerships, in a comprehensive and continuing programme of action on housing, education, employment, the environment, community services and planning, because they are all interrelated and are not separate issues or separate services. This needs close cooperation, co-ordination and integration. I cannot stress enough the words "co-ordination" and "integration", because in my view the chief practical obstacle to advance in the inner urban areas is compartmented and fragmented Government and local authority policies, programmes and budgets. This was already clear to a growing number of people by the mid-1960s. We did not need research to tell us what we had concluded over a decade ago. The corporate methods of developing our new and expanded towns
  1808
  need to be adapted—not aped—and applied to the problems of urban renewal in the old areas.
  Organisation and co-ordination are the essence of our approach to urban renewal. In our deprived and run down inner city areas, there is no one problem to solve. There are many problems. Employment is a major one and has been the central theme of the debate. There are other factors which influence employment, and they have been brought out in the debate. There are matters such as environment, education, health, social services, land management, planning, transport and traffic, and also housing, in type, quality and tenure.
  All these matters are closely related, physically, administratively and policy-wise. They affect customers in all their different ways. By "customers" I mean the people living down on the ground. Hence the partnership approach that we have evolved, which is a formal involvement, co-operation and commitment of all the various Departments of Government, organisations and local authority departments.
  We are advocating this comprehensive approach also to the programme authorities, and, I stress, to any other cities wishing to tackle urban renewal. It is not simply a question of adding small or large sums of money to the urban aid programme, however important that is. It is a question of method and approach. Many lessons will emerge from these initiatives in the partnership areas—lessons for the programme authorities and lessons for other authorities with similar problems.
  Mr. Steen: Why are the Government so insistent that the people themselves in the inner areas should not be part of the decision-making process? Why does the Minister want them to be only consulted but not involved in the decision-making process?
  Mr. Freeson: In relation to the point I was making that is a total non sequitur, but no doubt the hon. Gentleman intended to get it on the record. He is quite wrong about this, and, incidentally, is in contradiction to the remarks of one of his hon. Friends about community involvement and interest.

  1809
  Contrary to what the hon. Member for Wavertree suggests, there is more interest now being created in what we are trying to do among the community groups for Liverpool, Manchester, Birmingham, London and elsewhere around the country than we have seen for a very long time. We are looking at ways, which will vary from one partnership and programme authority to another, in which we can create the right kind of liaison, the right kind of co-ordination and consultation. They are now beginning to be worked out.
  For example, in Manchester the city authority will hold special conferences with the various bodies across the city. In Salford a different method has been adopted, and special channels of communication will be established with the town hall. In Liverpool other methods will be used. The work is now in hand. I do not know what the final outcome will be, but let there be no misunderstanding about it. It is essential—and central to what we are trying to do in this field—to get community bodies involved.
  Mr. Heseltine: I wonder whether the Minister has considered preparing, when all these discussions have taken place, some sort of statement of purpose and objectives, so that we may see what is supposed to be coming out and whether any progress is being made.
  Mr. Freeson: As a matter of fact, in at least one partnership authority that is precisely what has been done. There is a preliminary document and it will be repeated elsewhere. I know about it personally, having been chairman of the group concerned. The document refers to the aims, objectives and problems and it has been circulated for discussion as a preliminary document, by the many bodies to which reference has been made, while we are still formulating the work. But these are not debating societies that we are creating. They are partnerships, groups and committees which are designed to get programmes going. We do not want to spend so much time on consultation as to hold up the programmes. We want to have sufficient consultation to influence action, not to prevent it, and it is an important and difficult balance that has to be struck.
  1810
  In the remaining time available to me I want to try to touch on some of the other ground covered in the course of the debate. In regard to what was said by one or two hon. Members, I stress that central to our policy, not singular to it, is that the decline in the employment base of the inner cities is the biggest single problem now facing us in those areas. It is not the only one but it is the biggest single one. Unemployment and underemployment—also very important—in inner city areas have been exacerbated by but are not products of the present world recession. They were there before. If we are not careful, when times get better generally the problems will still remain in the inner areas.
  The industrial structure of the country has been changing as traditional industries have declined. This has taken place particularly sharply in the central parts of the old urban areas. It is not simply a question of firms dispersing to outer areas. It is a question of the death of firms. The whole character of these areas has changed, partly because of planning changes but also because the changing demographic, social and economic nature of the areas has closed down the outlets of goods and services that were provided in the past.
  In some cases redevelopment has been unavoidable and desirable, and that has astened the decline of small businesses. The way in which development has been carried out, together with the pull of owner-occupation to the more spacious suburbs, has disrupted communities. It was not simply the bulldozer, however significant. It was the cumulative effect of decades of moving out, much of which has been spontaneous.
  If we look at the available figures, we find that the 15 per cent. or at the most 20 per cent. of the industry and population that have moved out of inner city areas have been planned movement out to new towns or planned programmes of development on estates. The rest has been spontaneous with no planning or control. What we must do is check this movement out—which was quite right for the most part—without returning to the inner areas the pressures that were removed from them.

  1811
  As a consequence of that—this is a generality but it is valid—we have had the selective movement out which many hon. Members have referred to today and in previous debates. The old, the unskilled and less well off have predominantly been left behind and the better off, whether working-class or middle-class, and others, have moved out. But that has nothing to do with planned Government policy of any kind, contrary to what the hon. Member for Henley told the House earlier. The problem is more complex than that. We have to look at these things much more sensitively.
  Mr. Heseltine: I do not want there to be any misunderstanding. I did not want to imply that the movement I was talking about was planned. The fact that it is critical does not mean that it was planned. But reversing the process surely depends upon persuading that very 80 per cent. to come back voluntarily.
  Mr. Freeson: No. That is nonsense. It is not our objective to get 2 million people to move back into London so that we again have 8 million people living in London. That is a gross overstatement. What we are concerned about is slowing down the rate of movement out and also to get a better balance of movement out or in so that we do not have a repetition of the sharp cleavages socially and economically that emerged over the past decade or so.
  It is not a question of getting 2 million people to move back into London. That is not the kind of issue we are concerned about. If we are to case the problems that ruined these areas, there must be not less intervention by public authorities but more positive development planning, coordination, public participation and more coherence in the way in which we handle these city centres.
  I reinforce the point made by the right hon. Member for Worcester that we cannot leave this to market forces. There must be public involvement. That is the only way to underpin any renewal of our city centres along the lines that I have been advocating to the House this evening.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  INNER URBAN AREAS BILL

    INNER URBAN AREAS [MONEY]
    Queen's Recommendation having been signified—
    Resolved,
    That, for the purposes of any Act of the present Session to make provision as respects inner urban areas in Great Britain in which there exists special need and to amend section 8 of the Local Employment Act 1972, it is expedient to authorise the payment out of moneys provided by Parliament of any increase attributable to the said Act of the present Session in the sums so payable under any other Act.—[Mr. Walter Harrison.]

    STATUTORY INSTRUMENTS &c.

      POULTRY
      Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments &c.),
      That the draft Slaughter of Poultry Act 1967 Extension Order 1978, which was laid before this House on 24th January, be approved.—[Mr. Tinn.]
      Question agreed to.

    OVERSEAS DEVELOPMENT
    Ordered,
    That the Standing Order of 22nd November 1974 relating to the nomination of the Select Committee on Overseas Development be amended, by leaving out Sir Geoffrey de Freitas and inserting Mr. Frank Hooley.—[Mr. Walter Harrison.]

HOMEWORKERS
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Tinn.]
10.0 p.m.
Mr. Jack Ashley: The scandal of sweated labour—never eliminated in Britain—is quietly hidden behind the faded curtains of the poor, whose homes are their sweat-shops. These prisoners of poverty are mainly women with young children, disabled people or immigrants. They are the

1813
under-privileged of our society who should be generously assisted, whereas they are ruthlessly exploited.
It has been estimated that there are at least 250,000 such people, although the statistical information is inadequate and the real figure may be much higher. They are part of a growing problem which bedevils not only Britain but Western Europe. It has been claimed in the European Parliament that the problem of homeworkers has reached alarming proportions in all countries. Great concern has been expressed about the political, social and human consequences that will follow if we fail to deal with the problem.
In Britain, we have to face the unpleasant fact that thousands of our home-workers are deliberately downtrodden. Earnings vary considerably, but rates of pay have been described by the TUC as "astonishingly low". In some cases, the actual rates paid are a national disgrace reflecting both the frightening vulnerability of homeworkers and the shameless determination of some employers to exploit them.
I have here two wage packets, both from women workers who have been folding income tax returns notices and inserting tax change notifications. They reckon that it takes at least an hour to do 1,000. One of them received £6·65 for 25 hours' work. The other received £2·95 for 12 hours' work. That is a rate of about 25p an hour, which would just about buy a loaf of bread—but no butter, margarine or even dripping. Yet the firm concerned receives £1·92 for each 1,000 forms from Her Majesty's Stationery Office. The Minister can draw his own conclusions about the morality of those figures, but I put it to him that this is a practice which cannot be condoned and which requires immediate Government action.
An even more glaring case has been brought to my attention by a home-worker living in Devon. I have her letter here. She makes gloves, and her rate of pay is 10p an hour, which is reminiscent of the cool system abroad which we used to deplore so self-righteously.
One of the basic reasons for the vulnerability of homeworkers is their status as self-employed. They are thereby
1814
denied the benefits of the Employment Protection Act and other legislation. A few tribunals have decided that individual homeworkers are to be deemed employees for the purpose of the Employment Protection Act, but this case by case approach is both confusing and unsatisfactory. One woman who wrote to me—a homeworker in footwear—said that, although a tribunal had decided that she was an employee of the company, she issue may be subject to an appeal. She was therefore in some considerable doubt as to whether she would be protected or not.
The basic requirement, therefore, is for a new statute which classifies all home-workers as employees so that they can secure the legislative protection accorded to workers in industry. They would then benefit from the Employment Protection Act, Redundancy Payments Act, Contracts of Employment Act and Trade Union and Labour Relations Act.
Some homeworkers have a degree of protection from the Wages Council Act, but only 25,000 out of the estimated 250,000 are covered. Even so, the inspectorate is woefully inadequate because in 1975, only 3,440 out of these 25,000 homeworkers had their wages examined—and in 1976 the number had actually fallen to 1,134. The meshes of a very loose net are allowing bigger sharks to slip through.
A further weakness is that if employers infringe wages council regulations the maximum fine is a mere £100. This means that employers can flout the regulations with only the risk of a financial slap on the wrist. It is therefore not surprising that thousands of pounds have been filched from homeworkers by crooked employers in recent years. Far heavier maximum penalties are necessary to deter employers from disregarding wages council regulations, with fines of £500 for each offence.
Employers in specified trades have an obligation, under the Factories Act 1961, to send lists of their homeworkers to local authorities twice a year. This is of little value since the list of trades is a restricted one and in any case local authorities do not publish their lists. Perhaps this is because many employers do not bother to notify them of the lists.
The Health and Safety Commission is currently considering proposals for new

1815
registration provisions and it is important that effective methods should be devised and implemented.
I believe that a duty should be imposed on all employers to notify local authorities. the Department of Employment and trade unions of full lists of all their homeworkers, rates of pay, the materials they use and the type of jobs allocated. These lists should also be open to inspection by homeworkers themselves.
It will ultimately be the homeworkers themselves who will transform their own standards, but they will need all the assistance they can get. Already the TUC has acted with a powerful, well documented report which will be very influential. Various individual trade unions have been making bold efforts to organise homeworkers and I am particularly glad that my own union, the General and Municipal Workers Union, has played such an active role—one which has been fuelled by the enthusiasm of one of its officials, Mrs. Helen Eadie.
I think all of them would want to express appreciation to the pioneering work of the Low Pay Unit and the London Homeworking Campaign. Together they have dug out much valuable evidence.
However, all of these efforts must be supplemented by strong Government action. I know that the Under-Secretary has been actively concerned about these problems for some time and I should like to pay tribute to his work—although the pace at which he can move on this complex issue is probably not as fast as the one at which he would wish to go. I know that he has been looking abroad at the way other countries deal with homeworkers, and I personally believe we have a lot to learn from the Germans, although obviously we could not simply graft their legislation on to ours.
Nevertheless, comprehensive Government action is needed and I want to suggest the following 10-point plan as a basis of a charter for homeworkers.
First, a special Select Committee should be set up to investigate the wages and conditions of all homeworkers, and to make recommendations for their improvements. Secondly, a minimum rate of pay for all homeworkers should be statu
1816
torily established, and it should be linked to the index of average wage rates. Thirdly, the numbers of homeworkers should be established by the Office of Population Census and Surveys. Fourthly, a standing committee of Government, TUC and CBI should be established to scrutinise and evaluate the wages and conditions of homeworkers.
Fifthly, the Government should make legal provision for all homeworkers to be classified as "employees" so that they benefit from the legislative provisions made for factory workers. Sixthly, all employers should be required to provide Government, local authorities, trade unions and homeworkers themselves with rates of pay and types of job. Seventhly, special inspectors, should be appointed by the Health and Safety Commission to ensure that the provisions of the Health and Safety at Work, etc. Act are consistently applied to all homeworkers. Eightly, a special group of wages council inspectors, specialising in homeworkers, conditions, should be appointed to investigate the problems of homeworkers. Ninthly, a permanent working party of Department of Employment, Department of Health and Social Security and home-workers themselves be set up to keep under continuous review the relationship between rates of pay of homeworkers and matters of social security, because they are all interlinked. Tenth, that a special training scheme be established for home-workers to assist them to find more skilled employment.
I appreciate that this plan cannot be implemented overnight and that many difficulties will have to be overcome by the Government. Nevertheless, I know that my hon. Friend the Under-Secretary will give it careful consideration, and I hope that the Government will act as speedily and comprehensively as possible.
10.14 p.m.
The Under-Secretary of State for Employment (Mr. John Grant): I am grateful to my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) for drawing attention to this serious problem, and for the thoughtful way in which he has dealt with it. There need be no doubt that we are 100 per cent. together in our concern to ensure that home-workers should not be exploited. We should have reached the end of the era of cheap, sweated labour.

1817
I am grateful for what my hon. Friend said about me. I hope that he will not think me churlish if I say that I am a little ahead of him, although I regard him as valuable and vigorous ally. Although I do not rule it out, I do not think that I want to see a committee of inquiry, as my hon. Friend suggests, into home working. I think that it might add to our knowledge of the problem. There are considerable gaps, but that knowledge is steadily, if slowly, increasing. What I want now is action rather than words. The first steps have been taken.
My hon. Friend the Member for Stoke on Trent, South rightly said that I cannot move too fast. In particular, I cannot move until I have received the two reports of the inquiries conducted by ACAS into two particular industries with a high incidence of home working. I have already had the first of those reports, on button manufacturing, and I expect the second, on toy manufacturing, quite soon. But I am not waiting for those reports before I get down to serious discussion.
A week ago I received the TUC statement on home working that my hon. Friend mentioned. It contained valuable proposals and information. I have already written to Len Murray, the TUC general secretary, to indicate that I welcome early talks on the basis of that document.
I have also arranged for an analysis of overseas practice in this field, and because of the relevance of health and safety requirements I have asked the Chairman of the Health and Safety Commission to discuss with me what might be done to speed up consideration by the commission of that aspect. There are real problems to overcome. I remind my hon. Friend that in a foreword to the TUC statement Mr. Murray pointed out that the problem had been with us for over a century
"but little has been done to remedy it".
I do not think that it is unfair to suggest that there is now more recognition of the problem, not least by me but also in my Department generally, and more activity on this front than there has been probably since 1910 when the first trade boards—predecessors of the wages councils—were set up to combat sweated labour in industries which were predominantly those in which outworking and subcontracting work were common.
1818
Since then successive Governments, the trade unions and employers have all largely ignored the problems except for the development of the wages council system, which has taken in a good many homeworkers. It may well be that the very protection given in that way has tended to obscure the needs of those still outside wages councils in a whole miscellany of trades.
The way that the problem has been overlooked is underlined again by the statement of the TUC accepting that one of the major difficulties in tackling the problem
"is the complete lack of information on the subject."
During the passage of the Employment Protection Bill a general inquiry by ACAS into home working was considered. But ACAS did not see an overall inquiry of this kind as just an industrial relations matter. Instead, in late 1976, ACAS was asked by the Government to consider specifically toy and button manufacturing.
The report on button manufacturing does not help very much, but I understand that in toy manufacturing the ACAS investigators have managed to interview a considerable number of homewkorkers. That is no easy achievement. I hope that this report will come up with useful evidence.
It is worth while remembering that the general policy of successive Governments has been to work towards the replacement of statutory wage regulation by voluntary arrangements but always to keep the wages councils where their continued existence was necessary. Therefore, it is appropriate that the TUC proposes a number of courses of action for trade unions on homeworking as well as some sort of legal protection.
Trade unions have been understandably cool towards homeworkers because they take work out of the factory, they are a potential, if not an actual, source of cheap labour and are notoriously difficult to organise. The experience of the General and Municipal Workers Union in Torrington, referred to in the TUC report, which I very much applaud—incidentally, may I join with my hon. Friend in paying a tribute to the work of Mrs. Eadie—shows that, given the will on both sides, something can be done.

1819
That brings me to a brief mention of the income tax forms raised by my hon. Friend tonight and on an earlier occasion. The procedure followed by Departments for many years is to get an undertaking that a contractor has complied with the requirements of the Fair Wages Resolution for at least the previous three months before putting the contractor on the list of firms who may be invited to tender for Government contracts. When a contract is awarded, the terms of the resolution are incorporated in the contract. There is then a contractual obligation to observe the requirements of the resolution. In the particular case of the two firms on Her Majesty's Stationery Office contracts, both are on the Stationery Office list of approved contractors and have signed declarations that they observe the Fair Wages Resolution. Their current contracts contain the resolution and now a claim is being made under that resolution on behalf of these homeworkers by the General and Municipal Workers Union which has some members among those home-workers. Claims under the Fair Wages Resolution are not too common, so my Department has advised the union about the making of the claim and has offered advice about the finer points of the Fair Wages Resolution. The claim will test whether there has been a breach of the Fair Wages Resolution provisions and, if there has been, it will be dealt with. I am very pleased that we have been able to help in that way.
As I said, I shall be discussing the TUC document with the TUC, and sooner than later, because it contains, as well as the proposals I mentioned as regards the trade unions, a number of proposals for Government action. These are primarily the enforcement of the Health and Safety at Work, etc. Act, the strengthening of the Wages Inspectorate, giving home-workers employee status and giving them some form of legal protection on pay. I shall say a few words on each of those subjects in that order.
I am satisfied that the current legislation is generally adequate to deal with any hazards faced by these workers and that the enforcing authorities, principally at present the Factory Inspectorate, have sufficient powers to deal with any breaches of the law or with any danger
1820
ous situations which come to their attention. I am not, however, satisfied with the current arrangements for bringing hazards to the notice of the authorities. The major problem that we face in this area is inadequate information. At present, we simply do not know how many homeworkers exist, the nature of their work, or the hazards involved. The need for change is not to improve the legislation which protects homeworkers—because that is satisfactory—but to detect any breaches so that the legislation can be enforced and to acquire sufficient information to identify problem areas.
At present, under the Factories Act, anyone giving out work in a number of specified trades has to send lists of home-workers to local authorities twice a year. This requirement is not well observed and no longer provides an adequate source of information. The list of trades covered has not been significantly changed for more then 60 years and no longer reflects accurately the sort of work currently put out to homeworkers. It was these problems that the Health and Safety Commission considered in its consultative document published in 1976.
The commission's proposals in that document were generally welcomed, although differences of view emerged on a number of issues, especially over the routine provision of names and addresses and over access to those names and addresses by bodies like the trade unions and local authorities for reasons not connected directly with health and safety. These problems are not proving easy to resolve, partly because conflicting arguments are put forward on the merits of the issues and partly because of some legal complexities which have yet to be unravelled.
But the commission has these issues under consideration, and I think that it is right to await its proposals before deciding what action to take. But, as I said, we want to deal with this matter without undue delay.
Secondly, it is often put to me that the Wages Inspectorate is under-staffed. I think that it is and, although I do not accept that more inspection would solve all the problems of low pay in wages councils trades, I have always acknowledged that more wages inspectors are needed, especially if we intend to ask the

1821
inspectorate to undertake more investigations into homeworkers' earnings. I am currently arguing for an increase in the Wages Inspectorate, not for the first time. There are public expenditure constraints here. There can be no huge increase, but there has already been some additional help. The Manpower Services Commission took over the responsibility for enforcing the disablement quota regulations from the Wages Inspectorate in January 1977, and this released some inspectors for wages council work. Additional staff have been authorised for implementing Section 95 of the Employment Protection Act where the inspectorate sends questionnaires to employers so that wages inspectors' visits are directed to establishments where they are most needed.
My hon. Friend referred to the reduction in inspections, especially in 1976. I have already explained this to him in reply to a parliamentary Question. Briefly, the reasons are connected with the blitz which our inspectorate carried out in selective trades and, in the main, in trades where home working was not very much involved. That is the explanation for the drop in figures.
I now want to say a word on protection and status. There are no easy answers to how homeworkers can be given protection. Declaring that all home workers should be treated as employees would conflict with the common law of contract. Again, I have not time to deal with this now. It is an extremely complex matter. The discussions that I intend to have with the TUC and other interested organisations should clarify the need for legislation in this area. Certainly I am not ruling out anything. The TUC states that there is a strong argument that homeworkers generally should have some form of legal minimum terms and conditions of employment.
I have also mentioned overseas practice in this field. We are looking particularly at West Germany and there is a good deal of information on the position in Italy, Japan and France. We are
1822
analysing that information to see what we can gain from it.
We shall want to discuss all this not only with the TUC but with the trade unions most closely concerned. The co-operation of trade unions is essential, with or without any form of legal protection for homeworkers, first, because the greater the extent to which homeworkers are included in collective agreements the less will be the need for coverage by a statutory system, and, secondly, because I shall need to look to trade unions to represent homeworkers on whatever form of wage fixing is arranged.
My hon. Friend raised the question of statistics on homeworking. I understand that the information obtained from the 1971 census does not distinguish the type of homeworkers we are talking about from other workers who work at home. but the suggestion that information could be obtained from the 1981 census is under consideration.
I shall certainly look carefully at all my hon. Friend's suggestions, many of which, as I am sure he knows, relate closely to those of the TUC. I hope that I have said enough in the short time available to me to demonstrate the Government's concern and my concern, because of my responsibilities for the area of low pay, for what is certainly a very live issue and one on which we, like my hon. Friend. are genuinely anxious to make progress.
Question put and agreed to.
Adjourned accordingly at twenty-seven minutes past Ten o'clock.

HOMEWORKERS

  CORRIGENDUM
  Official Report, 7th February 1978,Vol. 943
  In col. 1253, the first sentence in the second paragraph of Mr. Nott's speech should read:
  "We have made it clear for our part that at present we are against individual limits".

HOUSE OF COMMONS
  "Erskine May"
  "Erskine May"
  PRIME MINISTER (ENGAGEMENTS)
  PRIME MINISTER (ENGAGEMENTS)
  TUC AND CBI
  TUC AND CBI
  PAY POLICY
  PAY POLICY
  SECRETARY OF STATE FOR ENERGY (SPEECH)
  SECRETARY OF STATE FOR ENERGY (SPEECH)
  LEYLAND
  LEYLAND
  PRESIDENT OF FRANCE
  PRESIDENT OF FRANCE
  IMMIGRATION
  IMMIGRATION
  GREECE
  GREECE
  GOVERNMENT PROGRAMME
  GOVERNMENT PROGRAMME
  ISLE OF ELY
  ISLE OF ELY
  ARGENTINA
  ARGENTINA
  PAY SETTLEMENTS (GOVERNMENT ACTION)
  PAY SETTLEMENTS (GOVERNMENT ACTION)
AGRICULTURE, FISHERIES AND FOOD
  Ministerial Powers
  Ministerial Powers
  Lamb
  Lamb
  Employment
  Employment
  Farms
  Farms
  Monetary Compensatory Amounts
  Monetary Compensatory Amounts
  Production
  Production
ENERGY
  Gas Explosion (Brentford)
  Gas Explosion (Brentford)
  Oil (Sales)
  Oil (Sales)
  Dungeness B Power Station
  Dungeness B Power Station
  Ministerial Powers
  Ministerial Powers
  Pay Settlements (Government Action)
  Pay Settlements (Government Action)
CIVIL SERVICE
  Gibraltar
  Gibraltar
HOME DEPARTMENT
  Migration Statistics
  Migration Statistics
  Indo-Chinese Refugees
  Indo-Chinese Refugees
  Crime Statistics
  Crime Statistics
  Ministerial Powers
  Ministerial Powers
  Police (Motor Car Purchases)
  Police (Motor Car Purchases)
  Immigrants
  Immigrants
EDUCATION AND SCIENCE
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  Mathematics
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  Ministerial Powers
WALES
  Infant and Perinatal Mortality
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DEFENCE
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  Ministerial Powers
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PRICES AND CONSUMER PROTECTION
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  Food Prices
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INDUSTRY
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  Postal Charges
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  Ministerial Appointments and Government Organisations
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FOREIGN AND COMMONWEALTH AFFAIRS
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EUROPEAN COMMUNITY
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OVERSEAS DEVELOPMENT
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  PRIME MINISTER (POWERS)
  PRIME MINISTER (POWERS)
TRADE
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  Sun Alliance and London Insurance Group
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  Uganda
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  Ministerial Powers
  Motor Cars (Exports)
  Motor Cars (Exports)
EMPLOYMENT
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  Electricity Prices
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  Wages Regulations (Enforcement)
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  Youth Community Service
  Youth Community Service
  London
  London
TRANSPORT
  A1-M1 Link Road
  A1-M1 Link Road
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  Road Construction
  M25
  M25
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  Public Expenditure
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  Mr. W. G. Forbes
  Mr. W. G. Forbes
  Ministerial Powers
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  Road Haulage Firms (Public Contracts)
  Road Haulage Firms (Public Contracts)
  A74
  A74
  Highway Code
  Highway Code
NATIONAL FINANCE
  Income Tax
  Income Tax
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  Farms
  Employment
  Employment
  Public Expenditure
  Public Expenditure
  Company Gifts (Political Parties)
  Company Gifts (Political Parties)
  Dividend Control
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  Developing Countries
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  Capital Gains Tax
  Capital Gains Tax
  European Community Budget
  European Community Budget
  Members of Parliament
  Members of Parliament
  Ministerial Powers
  Ministerial Powers
  Pay Settlements (Government Action)
  Pay Settlements (Government Action)
SOCIAL SERVICES
  Midwives
  Midwives
  Rainhill Hospital
  Rainhill Hospital
  Mentally Handicapped Persons
  Mentally Handicapped Persons
  Births (Nottingham Hospitals)
  Births (Nottingham Hospitals)
  Infant and Perinatal Mortality
  Infant and Perinatal Mortality
  Hospital Services (Essex)
  Hospital Services (Essex)
  Mobility Allowance
  Mobility Allowance
  One-parent Families
  One-parent Families
  X-rays (Norfolk)
  X-rays (Norfolk)
  Dr. Collis Browne's Mixture
  Dr. Collis Browne's Mixture
  Hospitals and Waiting Lists
  Hospitals and Waiting Lists
  Ministerial Powers
  Ministerial Powers
  Elderly Persons
  Elderly Persons
  Medical Professional Councils
  Medical Professional Councils
ENVIRONMENT
  Local Authorities (Accounts)
  Local Authorities (Accounts)
  Ennerdale Lake
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  Skate boarding
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  Ministerial Powers
  Ford Motor Cars
  Ford Motor Cars
  Local Government Finance
  Local Government Finance
  Pay Settlements (Government Action)
  Pay Settlements (Government Action)
NORTHERN IRELAND
  Trades Union Congress
  Trades Union Congress
  Nursery Education
  Nursery Education
  Industrial Policy
  Industrial Policy
  Security Forces (South Armagh)
  Security Forces (South Armagh)
  Mobility Allowance
  Mobility Allowance
  Education Standards
  Education Standards
  Housing Maintenance
  Housing Maintenance
  Workers' Co-operatives
  Workers' Co-operatives
  Housing Executive and Council
  Housing Executive and Council
  Mental Health Services
  Mental Health Services
  Government Services (District Councils' Representation)
  Government Services (District Councils' Representation)
  Labour Relations Agency
  Labour Relations Agency
  Handicapped Persons
  Handicapped Persons
  Infant and Perinatal Mortality
  Infant and Perinatal Mortality
  Ministerial Powers
  Ministerial Powers
  Strathearn Audio Ltd.
  Strathearn Audio Ltd.
  Disabled Persons
  Disabled Persons
  Belfast (Building Programme)
  Belfast (Building Programme)
SCOTLAND
  Regional Employment Premium
  Regional Employment Premium
  Building Trades
  Building Trades
  Crime Statistics
  Crime Statistics
  Roads (Construction Costs)
  Roads (Construction Costs)
  Speed Limits (Breaches)
  Speed Limits (Breaches)
  Infant and Perinatal Mortality
  Infant and Perinatal Mortality
  Road Accidents
  Road Accidents
  Caravans
  Caravans
  Carrutherstown (Speed Limit)
  Carrutherstown (Speed Limit)
  A75
  A75
  Ayrshire—A74 (Link Road)
  Ayrshire—A74 (Link Road)
  A74 (Road Signs)
  A74 (Road Signs)

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Chelmsford
The Lord Norrie—Sat first in Parliament after the death of his father.

PURCHASE PRICES AND TAXATION
Lord KINGS NORTON: 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, when called upon to approve the purchase either of some article manufactured abroad or of a competitive article manufactured in the United Kingdom, they take into account when comparing costs the fact that in the case of the home article, and not in the case of the other, those concerned in its manufacture pay United Kingdom income tax.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk): No, my Lords.
Lord KINGS NORTON: My Lords, may I ask the Minister whether or not she agrees that if, to take an example, British Airways were faced with the choice of buying an aeroplane either from France or from this country and the purchase prices were the same, the cost to the taxpayer if the United Kingdom aircraft were bought would be less than the other by the amount which those concerned paid to the Inland Revenue?
Baroness BIRK: My Lords, that may be so, I doubt not. Even if, however, the principle that the noble Lord has put forward were acceptable, which it is not, it would involve an unbelievable amount of calculation and volume of assumptions by contract officers in the purchasing department, and it would be quite contrary to our international obligations.
Lord HAWKE: My Lords, is it not time that Her Majesty's Government did more to protect British industry from foreign imports?—something which is in the tradition of the Conservative Party and, I believe, the Labour Party, too.
Baroness BIRK: My Lords, the way to try to improve our economy in competition with other countries is to try to increase our competitiveness, which is what the Government are doing.
Lord DRUMALBYN: My Lords, however much we increase our competitiveness, would it not still be very hard to sell our cars in Japan? What will the noble Baroness do about that?
Baroness BIRK: My Lords, I shall not do anything about it by taking into account United Kingdom income tax, which is the subject of the Question.

RAIL BREAKDOWNS: LONDON-INVERNESS
3.8 p.m.
Lord MACPHERSON of DRUMOCHTER: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many breakdowns there have been on the railway between London and Inverness, with particular reference to breakdowns between Perth and Inverness, during October, November and December last year; and what plans are being put into operation to give a better service.
Baroness STEDMAN: My Lords, I regret that this information is not immediately available, but I do know that the time-keeping generally of trains on the Perth-Inverness section of the route has suffered owing to engineering works on the line and, more recently, from exceptionally severe weather conditions. British Rail expect punctuality to improve when the dualling of the track between Blair Atholl and Dalwhinnie is completed.
Lord MACPHERSON of DRUMOCHTER: My Lords, while thanking the Minister for her reply, perhaps I may ask

1167
one supplementary question. In the Highland region British Rail are spending millions of pounds upon introducing a very sophisticated signalling system which, when operative, will throw a number of excellent personnel out of work in an area which has an unemployment problem. Would it not be more appropriate to delay this new system and spend the money on new rolling stock, which is the problem, rather than the Answer that the noble Baroness gave?
Baroness STEDMAN: My Lords, the way in which the British Railways Board spend their money, and decide their priorities, is a matter for the Board and for their commercial judgment. They are carrying out engineering works in order to introduce track dualling which ought to improve the speed and punctuality of trains. So far as the signalling system is concerned, I regret that that is another question which I cannot answer today.
Lord CAMPBELL of CROY: My Lords, is the noble Baroness aware that the dualling which is now taking place is restoring a second track which was taken up between 1966 and 1969 as a result of a very unwise decision, and that it is this single track which causes delays to other trains when there is a breakdown? Is the noble Baroness further aware that the work which was carried out between 1966 and 1969 was contrary to the Beeching Report, since this is not a branch line, and that considerable expenditure is now unnecessarily being incurred upon restoring it?
Baroness STEDMAN: My Lords, the works that are being done at the moment are necessary for safety reasons. It is expected that the dualling of the track will be completed by April of this year, when we hope that there will be a considerable improvement in the services.
Lord KENNET: My Lords, may I ask my noble friend whether the Government would get British Rail to call providing a double track "doubling" rather than "dualling", which sounds a little dangerous?
Lord TREFGARNE: My Lords, is the noble Baroness aware that before Christ-
1168
mas I had the misfortune to be travelling in a train just North of Perth which broke down and the breakdown was said to be due to failure of the engine? Is the noble Baroness satisfied that the engines in use in that area are in sufficiently good condition?
Baroness STEDMAN: My Lords, British Rail assure me that the service which they provide on the line referred to by the noble Lord opposite is no worse than that anywhere else. On the line which I use frequently there seems to be a fairly regular announcement that British Rail apologise for breakdown of services because of engine failure. Occasionally I am asked to stand at this Box and say why the stock excuse is shortage of staff. The reason varies from place to place. Engines break down all over the country, not only in Scotland.
Lord GAINFORD: My Lords, is the noble Baroness aware that, according to information which I received by telephone from Scotland a few days ago, delays on the Perth to Inverness line are so long and so frequent that a delay of two hours is considered to be mild?
Baroness STEDMAN: My Lords, I was not aware of that. If the noble Lord will let me have the details I shall look into it.
Viscount DAVIDSON: My Lords, is the noble Baroness aware that this morning my train was 10 minutes early?
Baroness STEDMAN: My Lords, I am sure that the noble Viscount would like me to pass his compliments to British Rail.

AIRLINE OVERBOOKING: WARNING NOTICES
3.12 p.m.
Baroness BURTON of COVENTRY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are aware that BARUK (Board of Airline Representatives in the United Kingdom) is asking its

1169
76 member airlines to display notices on airline counters warning passengers that airline flights may be overbooked and whether they will recommend similar action to all travel agents issuing air tickets.
Lord ORAM: Yes, my Lords. I am advised that at a meeting on 19th January, which I understand my noble friend attended, the Board of Airline Representatives in the United Kingdom agreed that a notice about over-booking should be printed and distributed not only to airline offices and to airport counters but also to travel agents. The Government welcome this initiative.
Baroness BURTON of COVENTRY: My Lords, that is an extraordinary reply. While I believe that my noble friend himself is glad that we have had this breakthrough, may I ask whether, on the publicity point, he recalls that since July 1976 I have been asking the Government to encourage such action and that, throughout, they accepted the opinion of the Civil Aviation Authority, which was against the adoption of such a procedure in this country? As BARUK told me on the particular date referred to that they thought the customer had a right to know, may we take it that the Government now share this viewpoint?
Lord ORAM: My Lords, this indeed has a long history, as your Lordships will recognise. I hoped that my noble friend would have used some other adjective than "extraordinary" when I announced that she had got what her Question really asks for. I think the exchanges that we have had on this question of publicity for the compensation scheme have concerned whose responsibility it is, and I have explained on many occasions that the responsibility is that of the airlines and the Civil Aviation Authority. Having in this respect reached a very satisfactory conclusion, I hope that my noble friend will acknowledge that.
Baroness BURTON of COVENTRY: Yes, my Lords; but is my noble friend aware that I have had no help at all from the Government, and that I have reached this myself by doing the work they should have done? In the general euphoria I forgot to ask my noble friend a question
1170
that I wanted to ask him. If I gave him a photostat of this notice which is to be issued by BARUK, which is very brief, would it be possible for it to be published in the Official Report together with this Question?
On another point, may I ask my noble friend whether he is aware that BARUK informed me that this could apply only to their own members; that is, the 76 airlines? It could not apply to the travel agents. So do I take it that the Government are lending their support in asking all agents who sell air tickets to show such notices on their counters?
Lord ORAM: My Lords, I have indicated that the Government welcome the fact that these notices are being distributed to travel agents, and obviously they are distributed so that they should be shown. So my noble friend can take it that we are urging travel agents to display them. On the question of whether a photostat of the notice can be included in the Official Report, I am afraid I am not expert in these matters. I will certainly find our whether an arrangement can be reached whereby that can be done.

TAVR: DEPENDANTS' COMPENSATION
3.16 p.m.
Lord ELTON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government why the compensation payable to the surviving dependants of members of the Territorial Army Volunteer Reserve killed on duty is less than that payable to the surviving dependants of members of the Regular Army killed under similar circumstances.
Lord WINTERBOTTOM: My Lords, I have already given, in my Answers on 10th December 1975 and 3rd March 1976, the reasons why the compensation paid to dependants of TAVR members varies from that paid to dependants of members of the Regular Army killed in similar circumstances. The war widow's pension payable by the Department of Health and Social Security represents the industrial

1171
injury benefit, and it is the same for dependants of Regular Servicemen and reservists alike. Under a scheme introduced in April 1974, the Ministry of Defence pays to the widow of a reservist killed in the course of peacetime exercises or training, and whose death is attributable to service, an additional pension in recognition of hazards not normally encountered in civilian life.
The Ministry of Defence scheme also allows for pensions or gratuities to be paid to reservists who are injured attributably. These payments are not, however, as high as those made to Regular Servicemen or their widows and dependants whose awards, in the event of death or disability, are part of the occupational pension scheme of the Armed Forces, which is the full-time employment of the Regular Serviceman.
Lord ELTON: My Lords, in thanking the noble Lord for that fairly detailed reply, may I ask him whether he is aware that he has told us very largely what happens, but not why it happens? What I am asking, and what your Lordships would like to know, is why it is assumed that those who survive somebody who has died in part-time employment need less support, or indeed sympathy, than those who survive those who have died similarly in full-time employment?
Lord WINTERBOTTOM: My Lords, the reason is this. It is quite possible under the present system for the widow of a reservist killed attributably to receive a war widow's pension from the Department of Health and Social Security, an attributable benefit for reservist's pension from the Ministry of Defence, and a pension from her late husband's civilian employment. The right to receive an occupational pension from one's main employer applies no less to the Regular Serviceman than to his reservist counterpart. Comparisons of Regular Army and reservist benefits are, therefore, neither accurate nor meaningful.
Lord PAGET of NORTHAMPTON: My Lords, could the noble Lord tell us how the compensation paid to soldiers who die in Her Majesty's Service compares with the compensation paid to IRA men who do not die under interrogation?
Lord ELTON: My Lords, does the noble Lord agree that, however valid his arguments about the pension may be, there is also the matter of a lump sum payment, which for a private soldier in the Regular Army is £3,810 and for a private in the TAVR is nothing; similarly for a subaltern in the Regular Army it is £6,768 and for a subaltern in the reserve it is nothing? Does the noble Lord's Answer cover that?
Lord WINTERBOTTOM: My Lords, this is really an extremely technical matter. I think it would be better debated at greater length than at Question Time. I do not think the noble Lord is quite right. He was good enough to give me advance notice of the question, and it seems to me that, in answer to the second part of the question he sent to me, based on the number of TAVR men who have died attributably since April 1974–32 men—the cost in the first year of applying Regular Army rules would be in excess of £60,000, and about £11,000 in pensions for each subsequent year.
Lord SHEPHERD: My Lords, I am sure the House would agree that this is a very difficult and complex subject. However, a number of Servicemen volunteers are killed in the course of carrying out the orders of superior officers. As this matter is extremely complicated, would the noble Lord be willing, instead of pursuing this matter across the Floor of the House, to meet a number of Members of the House who have an interest so that the matter can be explored further?
Lord WINTERBOTTOM: My Lords, I am certain that the Secretary of State would be only too glad to receive a deputation on the matter.
Baroness WARD of NORTH TYNESIDE: My Lords, is the noble Lord aware that at any rate I support my noble friend Lord Elton and think it very important to have a full debate on the subject? In the part of the world which I represented in another place I happen to have a special position in the Territorials. It is extremely important that the Territorials as well as the full-time Services should have everything they possibly can, and I see no reason why there should be a division. I do not agree with the Answer given by the noble

1173
Lord, Lord Winterbottom. Will he give a better one? May I have an answer to that?
Lord WINTERBOTTOM: My Lords, I am certain that the noble Baroness, Lady Ward of North Tyneside, will be included in any deputation to the Secretary of State.
Lord MACKIE of BENSHIE: My Lords, will the noble Lord give the House an assurance that the Government would be concerned to put this anomaly right in the future, and, in spite of the regulations today, they would like to see a position where a Territorial dependant would be no worse off than a Regular Serviceman's?
Lord WINTERBOTTOM: My Lords, on three occasions I have tried to convince your Lordships' House that it is not an anomaly. However, a longer debate and discussion on the matter would be of value.

EDUCATION (NORTHERN IRELAND) BILL [H.L.]
3.23 p.m.
Report received.
Clause 1 [Controlled integrated schools.]:
Lord KILBRACKEN Lord KILBRACKEN moved Amendment No. 1:
Page 1, line 6, leave out ("or cultural traditions")
The noble Lord said: My Lords, the Bill seeks, as is set out in line 6 and in the Title, to facilitate the establishment of schools attended by pupils of different religious affiliations or cultural traditions. I am moving to delete the words, "or cultural traditions", both here and in the Title. It is certainly the case that there are pupils in Northern Ireland of very different cultural traditions. However, I suppose that in 95 per cent. of cases these are the same as their differing religious affiliations. I believe that the inclusion of these words clouds the issue and is unnecessary and, in any case, emphasises the different cultural traditions between those pupils. Therefore, the words should be deleted. I should be very glad to hear what the noble Lord, Lord Dunleath, has to say on this matter and to conform to his wishes. I beg to move.
Lord DUNLEATH: My Lords, these words were inserted quite deliberately and I am grateful to the noble Lord, Lord Kilbracken, for raising the matter and giving me an opportunity for explaining the reason for them. Cultural traditions are not entirely synonymous with religious affiliation. In particular, one finds that there are many on both sides of the community who feel a sense of deprivation that they in their schooldays and their children who are perhaps at school now have not been enriched by cross-fertilisation with the other culture. One finds Protestants who so aspire to benefit from the native Irish cultural tradition and Roman Catholics who so aspire to benefit from the more British cultural tradition.
In considering the Bill, we did not want to keep this purely as a religious issue; we wanted it on a much wider basis. I would respectfully ask the noble Lord, Lord Kilbracken, whether he would consider withdrawing the Amendment, because I think it is fairly important to the whole rationale behind the Bill and would go a considerable way to bring forward what both he and. I want—that is, to see integrated education—if it was not merely the religious aspect that was considered but the aspect of cultural traditions as well.
Lord KILBRACKEN: My Lords, I am very glad to accept what the noble Lord, Lord Dunleath, has said, and in view of that I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord KILBRACKEN Lord KILBRACKEN moved Amendment No. 2:
Page 1, line 14, leave out ("three-quarters") and insert ("two-thirds").
The noble Lord said: My Lords, this is the compromise suggested during the Committee stage by the noble Lord, Lord Monson, and supported by the noble Lord, Lord Beaumont of Whitley, and agreed to in principle by the noble Lord, Lord Dunleath; that is, that it should require only two-thirds rather than three-quarters of the management committee of a controlled school to agree to that controlled school becoming a controlled integrated school. The noble Lord, Lord Dunleath, expressed some anxiety at that time that it might be said subsequently that some

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members of the committee had unavoidably been unable to attend and otherwise it would never have become a controlled integrated school. I think those fears are groundless, because if a member of the committee is absent owing to an accident, it in fact counts as a vote against the school becoming a controlled integrated school, as it would require two-thirds of all members of that committee for the decision to be made. Therefore, I hope that he will agree that two-thirds is a safe and better figure to use in this case. I beg to move.
Lord DUNLEATH: My Lords, during the Committee stage I gave an undertaking that I would accept this Amendment and I have pleasure in honouring that undertaking today.
On Question, Amendment agreed to.
3.28 p.m.
Lord KILBRACKEN Lord KILBRACKEN moved Amendments Nos. 3 to 5:
Page 2, line 5, leave out ("the Department shall request").
line 6, leave out ("to") and insert ("shall")
line 8, leave out from ("is") to ("in") in tine 10 and insert ("required under subsections (2) or (3) above to ascertain the views of parents, it shall do so").
The noble Lord said: My Lords, I beg leave to move Amendment No. 3 as well as Amendments Nos. 4 and 5 which are consequential. I should point out at this stage that there are two misprints in the Bill. In line 8 the reference to subsection (4) should be to subsection (2) and in line 35 or 36 the reference to subsection (7) should be to subsection (6). Those changes should have been made as a result of Amendments that were made during the Committee stage. Under subsection (3), in the case of a voluntary school, the Bill as drafted at present merely states that the Department shall request the Board for the area in which the school is situated to ascertain the view of parents. However, in the case of controlled schools in the preceding subsection, it is required to do so. It seems to me indisputable that the same language should be used in both cases—it should be a requirement rather than a request. That will be effected by Amendments Nos. 3 and 4 and it will also have the effect of enabling Amendment No. 5 to simplify greatly the language of subsection (4).
Lord DUNLEATH: My Lords, again I am grateful to the noble Lord, Lord Kilbracken. As long as the noble Lord, Lord Melchett, is satisfied that these Amendments conform with the principal order, I have no objection.
The MINISTER of STATE: NORTHERN IRELAND OFFICE (Lord Melchett): My Lords, certainly my advice is that in practice the Amendments are not likely to affect what happens when the Bill becomes law. As my noble friend Lord Kilbracken has said, they certainly make the Bill a little neater and tidier. I would see no objection to your Lordships accepting the Amendments, if that is your wish.
On Question, Amendments agreed to.
Lord KILBRACKEN Lord KILBRACKEN moved Amendment No. 6:
Page 2, line 12, leave out ("may") and insert ("shall").
The noble Lord said: My Lords, we are still on subsection (4) which states that a scheme devised by the Department may make certain very important provisions. Here again, I think it is important that it should be compulsory. The word "may" has to be changed to the word "shall" so that such a scheme has to be prepared by the Department. I beg to move.
Lord DUNLEATH: My Lords, I am quite happy about that. Indeed, I think it is an improvement, provided that there is no objection that I have not thought of.
On Question, Amendment agreed to.
Lord KILBRACKEN Lord KILBRACKEN moved Amendment No. 7:
Page 2, line 32, leave out from ("ascertained") to end of subsection and insert ("would be prepared to send their children to the school if it became a controlled integrated school").
The noble Lord said: My Lords, I raised this point during the Committee stage. It was then agreed that it was desirable that the language used in what is now subsection (7) should conform with that which is used in subsection (4), which is slightly different. This Amendment would have that effect.
Lord DUNLEATH: My Lords, I think that the noble Lord, Lord Kilbracken, had a good point in Committee:

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that the language ought to be consistent in the two subsections; and I think he has now selected the right form of language for both subsections. I am entirely in accord with him on this.
Lord MELCHETT: My Lords, may I just add that from the Government's point of view this is certainly the preferable of the two versions which were originally in the Bill. I should certainly strongly support the Amendment.
On Question, Amendment agreed to.
Clause 2 [Management of controlled integrated schools]:
Lord DUNLEATH Lord DUNLEATH moved Amendment No. 8:
Page 3, line 9, after ("Article 8(2)") insert ("of the principal Order").
The noble Lord said: My Lords, this is purely a drafting point to make it clear that the article referred to is part of the Education and Libraries Order 1972, being the principal Order. I beg to move.
On Question, Amendment agreed to.
In the Schedule [Schedule to be inserted in principal Order—SCHEDULE 4A Membership of School Management Committees of controlled integrated schools]:
3.34 p.m.
Lord KILBRACKEN Lord KILBRACKEN moved Amendment No. 9:
Page 4, line 9, leave out ("one or more than one") and insert ("a").
The noble Lord said: My Lords, this is a paving Amendment leading to Amendment No. 11. I wish to refer to both Amendments simultaneously. We now move to the Schedule which is to be inserted in the principal Order. This sets forth the manner in which the school management committees of the new schools will be chosen. It is a matter of some importance. But this is a rather technical point in that at present paragraph 2(a) makes it possible for one or more controlled integrated schools, which in the past have been controlled schools, to continue to have the same management committee in the future. In other words, they will be grouped under the same management committee.
But as the enabling Order stands at present, this is in point of fact not possible
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because the relevant article—Article 8(1) in the principal Order—talks about how committees will be appointed for the different sorts of controlled schools, which are controlled primary schools, other than nursery schools, controlled intermediate schools, controlled nursery schools, controlled grammar schools and controlled special schools. Under Clause 2(1) of the Bill controlled integrated schools are added to that list.
Article 8(1) of the enabling Order makes it possible for schools to be grouped under one school management committee only in the case of primary schools, intermediate schools and nursery schools. When controlled integrated schools are added to that list the enabling Order, as it is worded (unless it is further amended), will not permit them to be grouped in the way suggested under one school management committee. Therefore, it seems to me that unless the enabling Order is further amended—and I do not believe that it is intended to do so—Amendments Nos. 9 and 11 are necessary.
Lord MELCHETT: My Lords, before my noble friend sits down, would it be in order for me to ask him a question while he is continuing his speech? Could he elaborate a little on exactly why he thinks it would not be possible for controlled integrated schools to be grouped as he has suggested?
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, perhaps it would be more orderly if I put the Question?
Lord MELCHETT: My Lords, but my noble friend would not then be able to make another speech.
The LORD CHANCELLOR: My Lords, I should have thought that on Report the mover of the Amendment may be permitted to do so. I shall put the Question. Amendment proposed:
In the Schedule, page 4, line 9, leave out ("one or more than one") and insert ("a").
Lord MELCHETT: My Lords, I hope that the House will give my noble friend a chance to speak twice more if that turns out to be necessary, because I confess that I am a little unclear about the

1179
point he is trying to make. He is making this point on Amendments which I suggested to the sponsors of the Bill should be included, and which were not included when the Bill was first introduced in your Lordships' House. The important point which is covered, both by paragraph 2(a) of the Schedule and, indeed, also by Clause 2(1)(a), as my noble friend has pointed out, is that there are some schools in Northern Ireland—particularly primary schools—which are grouped together under a single management committee. I was told by my advisers that as originally drafted the Bill made it impossible for schools that were grouped under a single management committee to become controlled integrated schools under the Bill as it was first introduced; and that it was necessary to include a reference to controlled integrated schools being grouped under management committees for schools of that sort to become integrated under the procedures in the Bill.
I confess that from what my noble friend has said I am still not clear exactly why he feels it is not possible—given the Amendments which are made to the principal Order in Clause 2(1)(a) of the Bill, and the principal Order is amended in Clause 2(1)(a)—for grouped schools to become controlled integrated schools, either singly or collectively. My advice certainly is that it is possible and that it is necessary, unless grouped schools are to be excluded altogether from the provisions of the Bill, which I believe would be very undesirable.
3.40 p.m.
Lord KILBRACKEN: My Lords, if I am in order as the mover of the Amendment, may I reply? I should be glad to try to elucidate the point of my noble friend the Minister of State. To make it as clear as possible, the best thing I can do is to read out paragraph 8(1) of the enabling Order as it will read when it has been amended by Clause 2(1)(a) of the present Bill. It will read as follows:
"A board shall make provision by means of a committee (in this Order referred to as 'a school management committee') to be appointed by the board for the management of each—

(a) controlled primary school other than a nursery school;

(aa) controlled integrated school;

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(b) controlled intermediate school other than a technical intermediate school;

(c) controlled nursery school;

(d) controlled grammar school;

(e) controlled special school;

under its management"—
and this is the nub of the matter—
"and two or more such primary schools other than nursery schools or two or more such intermediate schools or two or more such nursery schools"—
and only those, I add—
"may, if the board so determines and the Ministry approves, be grouped under one school management committee".
So, the paragraph allows only the primary schools, the intermediate schools, and the nursery schools, of those listed above, to come under one school management committee. Would the Minister now care to interrupt me?
Lord MELCHETT: My Lords, I should be delighted to interrupt my noble friend. I should imagine that the reference to the three types of school refers back to all the different categories which my noble friend gave, including technical colleges, and the rest of it. It will also now include a reference to controlled integrated schools. Under the Amendment, that will be included in the list.
There is a reference to primary, nursery and intermediate schools. Those refer back to the different categories listed. The different categories listed include controlled integrated schools. The controlled integrated schools can be primary, secondary or intermediate, and I should have thought that my noble friend's point was covered because the list of the types of school—primary, secondary, intermediate—refers back to the various categories, which include controlled integrated schools as provided for in the Bill. To finish this brief interruption, could I give an undertaking to my noble friend to consider the point again with my advisers? If I am incorrect, I shall take steps to have the Bill amended at the next stage.
Lord KILBRACKEN: My Lords, obviously I can do nothing but bow, if not to my noble friend, to his legal advisers who have assured him that my Amendment is unnecessary. Clearly, I am not going to press the matter any further in view of the undertaking that he has given. I am sure that his advisers

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will look into it very carefully. In the meantime, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
3.44 p.m.
Lord KILBRACKEN Lord KILBRACKEN moved Amendment No. 10:
Page 4, line 11, leave out ("not more than").
The noble Lord said: My Lords, I beg to move Amendment No. 10, and at the same time to refer to Amendments Nos. 12 and 14, which raise exactly the same point. These Amendments are all connected with the manner in which the committees of these controlled integrated schools will be constituted. As the wording stands at present, we are told that not more than one-third of the members of the committee should be nominated by the parents, more or less; not more than one-sixth shall be appointed in accordance with regulations made by the Department as persons representative of the transferors and superseded manager; and not more than one-sixth shall be appointed, in accordance with regulations made by the Department, as persons representative of nominating trustees.
It is very important indeed that these committees should reflect as far and as accurately as possible—and the Amendment proposed by the noble Lord, Lord Beaumont of Whitley, will help to bring this about—the composition of each controlled integrated school. The present wording leaves that composition very indefinite. For instance, if there are 11 members on the management committee, all we are told is that not more than one-third shall be representatives of the parents. This means that, in that case, not more than three would represent the parents, but it could be two or it could be one, and we do not know what the required figure will be in each case.
I therefore propose that, at the start of each of these sub-paragraphs, the numbers concerned should be one-third, one-sixth, and one-sixth rather than not more than one-third, et cetera. I am informed that, if these Amendments were accepted, it would automatically follow that the number of members on a management committee would have to be a number divisible by six, so that one would not have to deal with fractions of a person. If these Amendments are accepted, then
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we know exactly how many representatives from each of the four different categories will be present on each committee.
Lord SOMERS: My Lords, I see some little difficulty here, taking the number that the noble Lord quoted; that is, 11. If it is to be one-third, presumably it is to be the nearest figure to 11, because one could hardly have two-thirds of a person. Therefore, is it to be three or four?
Lord MELCHETT: My Lords, if I could help your Lordships, my advice is quite clearly that if the Bill specifies that the management committee must be divisible by six, then it must be appointed in such numbers as are capable of being divided exactly by six, and the problems of one-third or two-thirds, or whatever, of people will not arise.
Lord DUNLEATH: My Lords, from the start it was my intention, if possible, that the numbers on the management committee should be in multiples of six, but I think we were advised at some stage that this might not always be practicable. It was for that reason that the Bill was worded in the way that it was. In view of what noble Lords have said, and particularly the noble Lord, Lord Melchett, I think that if this is so it would be the ideal solution, and I would entirely accord with it.
On Question, Amendment agreed to.
[Amendment No. 11 not moved.]
Lord KILBRACKEN Lord KILBRACKEN moved Amendment No. 12:
Page 4, line 21, leave out ("not more than").
The noble Lord said: My Lords, I suppose that this Amendment is, in a way, consequential on Amendment No. 11. I beg to move.
On Question, Amendment agreed to.
Lord KILBRACKEN Lord KILBRACKEN moved Amendment No. 13:
Page 4, line 24, leave out ("manager") and insert ("managers").
The noble Lord said: My Lords, this is a drafting Amendment to such an extent that it is practically a typographical Amendment. I beg to move.
On Question, Amendment agreed to.
Lord KILBRACKEN Lord KILBRACKEN moved Amendment No. 14:
Page 4, line 25, leave out ("not more than").
On Question, Amendment agreed to.
3.50 p.m.
Lord KILBRACKEN Lord KILBRACKEN moved Amendment No. 15:
Line 32, leave out ("so far as practicable").
The noble Lord said: This paragraph of the Schedule states that regulations "shall ensure so far as practicable" that votes cast by the parents shall be by secret ballot and, if the Amendment in the name of the noble Lord, Lord Beaumont of Whitley, is accepted, that they shall be by the method of the single transferable vote. I am moving to delete the words "so far as practicable" because I consider it essential that the vote should be secret; and if Lord Beaumont's Amendment is accepted, then that method will be used and there will be no question whether or not it is practicable. In particular, therefore, in order to ensure that the vote is always secret—something which can always be ensured—I wish to delete "so far as practicable".
Lord MELCHETT: My Lords, I am not sure that I make a very strong point when I put it to the House that it would be possible to have a meeting of parents at which representatives were to be elected where such a small number of parents were present that it would not be practicable to have a secret ballot, and in such a case the duty laid on the meeting under the Schedule would be difficult to fulfil. It is clear from the wording currently in the Bill that there should always be a secret ballot where that is practicable. I would simply worry that, where there were practical difficulties or obstacles which were impossible to overcome—as an extreme case, where only one or two parents turned up to vote in their representatives—there might be some legal difficulty in that those appointed or elected as a result of only a couple of people having come to vote might have their position questioned if there was subsequently a problem with the management committee. Therefore, it might be desirable to leave these words in the provision to cater for that eventuality.
Lord BELSTEAD: My Lords, I quite understand what the noble Lord, Lord
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Melchett, is saying, but, when we have agreed, as we now have, that paragraph 2(a) shall provide that one-third, but not more than one-third, of the committee of managers of a controlled integrated school shall be the nominees of parents, I should have thought there was every reason for accepting this Amendment. In other words, let us bring pressure on parents to turn up in sufficient numbers to have a proper vote, and, if they are to have a proper vote, then that vote must be by secret ballot. I therefore support the Amendment.
Lord KILBRACKEN: My Lords, I am grateful to the noble Lord, Lord Belstead, for his support. On the other hand, I am grateful to the Minister for drawing my attention to a case that had not occurred to me, and, in my view of what he said, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
3.54 p.m.
Lord BEAUMONT of WHITLEY Lord BEAUMONT of WHITLEY moved Amendment No. 16:
Page 4, line 35, at end insert ("and by the method of the single transferable vote.").
The noble Lord said: My Lords, this Amendment is also concerned with the election of representatives of the parents to the school management committee. What we are dealing with is the production as far as possible of the maximum confidence of everyone in embarking on these experiments. I am sure that all noble Lords bear goodwill towards the Bill and we therefore want to give it as fair a wind as possible so that it has a good chance of success.
At the last stage of the Bill the noble Baroness, Lady Phillips—I regret that she is not in her place, but I will continue with what I intended to say because on that occasion I was perhaps not so sympathetic as I should have been to the point she was making—said, and I entirely agree, that if one ever gets to the point where people feel they must cast their votes entirely according to block, the experiment will be in very great danger of failing. However, that is not what we are talking about; we are not talking about what happens when it reaches that stage. We are talking about writing conditions into the Bill so that people embarking on this scheme can see that

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their own interests and position will, in the result, be looked after and be absolutely fairly protected. It is therefore extremely important that there should be fair representation on the management committee.
I rather sympathise with the noble Lord, Lord Kilbracken, and the noble Lord, Lord Belstead, in relation to the point raised by the last Amendment, and perhaps that point can be considered again before Third Reading because to write in the necessity for a secret ballot without any side qualifications might be of psychological help. Leaving that aside, we must make certain that people feel that minorities will be represented on the management board. I will not go through the difficulties that exist in that respect; at the last stage Lord Kilbracken pointed out, as reported at column 260 in Hansard, how an overwhelming majority of the board of management could be from one community. Indeed, I do not think he went far enough. I feel that one could have a situation where, unless an Amendment such as the one I was moving is accepted, it might be an almost, if not a completely, monochrome board.
I can think of only two ways to safeguard against that. The first is by nominating a certain minimum number from particular communities; but that has serious drawbacks, one being that, wherever possible, one always prefers election to nomination. If people are nominated, one is encapsulating the whole thing; one is nominating the representatives of a group, whereas we want to make things as fluid as possible, though in such a way that all groups can be represented. The second alternative is the one I have put forward; namely, for some form of representational electoral system which makes certain that a certain number of representatives of each community will, in the normal course of events, be able to be elected.
At a previous stage the noble Lord, Lord Dunleath, said, or I understood him to say, that this would not be so important because in the majority of places where that would happen to begin with, there would not be a question of a very large majority and a very small minority. Lord Kilbracken has actually suggested to me that that is not necessarily so; but I would point out that, whether or not it
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is so, the situation is the same with a straight ordinary method of election such as would normally be used if we did not make this alteration. A majority of 51 per cent. as against 49 per cent. could still get a whole block of managers without any minority representation at all.
I believe, therefore, that this is the way to overcome the problem. There is only one serious possible objection to which I concede; namely, that it is certainly true that in some places in the United Kingdom this would be an unduly troublesome way of setting about things. But I do not believe that is so in the conditions of Northern Ireland, and I say that for two reasons. First, it is worth taking trouble to make certain that this works and that people have confidence in it. Secondly, owing to the recent history of Northern Ireland, the people there now have considerable experience of voting by the single transferable vote in public elections of various kinds, and I am informed by the Electoral Reform Society that there are so many trained single transferable vote counters in Northern Ireland that they are practically coming out of their ears. No doubt they would like to keep in practice. I do not think there are any of those normal practical objections which one would otherwise expect. I beg to move Amendment No. 16.
Lord KILBRACKEN: My Lords, I should like to support the noble Lord, Lord Beaumont of Whitley, in this Amendment. We have to be a little realistic and to recognise that if this Bill reaches the Statute Book, as I very much hope it will, it is quite unlikely that there will be more than two or three, or at the most half a dozen, of these controlled integrated schools in the near future. As the voluntary schools are so much under the control of the Catholic hierarchy, I think these are almost certain to arise, in probably every case, because the controlled school decides to become a controlled integrated school and succeeds in attracting a number of Catholic pupils from the area. The set-up frequently will be that there will be perhaps 15 per cent., or 20 per cent., or 25 per cent., of Catholic children in a controlled integrated school which had previously been a controlled school.

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I think it is important to do our best to ensure that an adequate number of the committee are acceptable to the Catholic parents. We may say that we hope everything will be air and light, that there will be no disputes and that we will be all friends together, but I am afraid we cannot take it for granted, and an Amendment such as the noble Lord proposes, which would tend to ensure, in the kinds of schools I have envisaged, a higher percentage of Catholic representatives or representatives who are elected by or are the choice of Catholic parents, is to be welcomed. I do not think there is much danger of there being many complications in arriving at the result when, instead of having the huge numbers that one would have at a General Election, there is the very small number of parents who have a vote at such an election.
Lord DUNLEATH: My Lords, I am entirely at one with the noble Lord, Lord Beaumont of Whitley, in his advocacy of the single transferable vote as the most democratic way of conducting elections. In principle I have nothing against that, but I think one must be aware that it is a deviation from normal practice, and it is a question of fine judgment as to whether or not such a deviation from normal practice would be of advantage in the way that the noble Lord, Lord Beaumont, and also the noble Lord, Lord Kilbracken, suggest; or whether by picking out a very small number of schools from the whole academic field in Northern Ireland and saying that these are different and here the management boards are going to be elected by proportional representation, the advantages are going to be greater than the possible disadvantages of making it so self-consciously different that it might generate some fear or suspicion.
In principle I am in favour of it but, as I say, it is a deviation from normal practice. I also had doubts at one stage whether or not this might transcend the framework of the principal Order; but I have been advised that this would not be the case, so I would certainly not oppose the Amendment. I know that it has been suggested in the spirit of supporting this Bill and I am grateful to the noble Lord for having done so.
Lord BELSTEAD: My Lords, I am not saying that I am opposed to the
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Amendment, but before we agree to it I think we ought to bear in mind that the provisions of the Bill are that before the ball can be started rolling for a controlled integrated school to be set up the parents shall give their views, and the Department of the noble Lord, Lord Melchett has to take their views into account under Clause 1(5). Therefore one starts from the assumption that the parents want a controlled integrated school. I think it is worth bearing that in mind before reaching the conclusion, definitely and irrevocably, that one must have a proportional representation system.
The only other thing I cannot resist saying is that, if the Government are right that it is dangerous to put into the Bill an absolute requirement that there shall be secret ballots—dangerous because there might be not enough parents present to vote—there may not be a great many votes to transfer. That is for the House to decide.
I have one question which I should like to ask the noble Lord, Lord Dunleath. I should have found the answer to this myself. I am not absolutely certain, but I think the noble Lord said that as far as he knew the Amendment did not in any way contravene the principal Order. What happens when managers or governing bodies of controlled integrated schools come either to resign or retire? Will they then again be elected to the management committees of these schools by the single transferable vote? I should like to be absolutely clear about that before I agree that the Amendment is right.
Lord MELCHETT: My Lords, it might be helpful if I did my best to answer the noble Lord's question. My understanding is that the management committees would fall, in the same way as management committees of other schools in Northern Ireland do, generally in line with the term of office of the education and library boards. If the Bill makes a specific provision about the way in which the management committee of a controlled integrated school should be appointed and the people who should be appointed to it, as it does in the Bill as it stands, that is the process which will be followed each time a management committee is reconstituted.
Lord BEAUMONT of WHITLEY: My Lords, I am grateful to the House for the way it has received this Amendment. There are two points which I ought to answer. The noble Lord, Lord Dunleath, asked if we were right to make this a rather self-consciously different process. I entirely see his point but these are going to be different schools; we all know that. In a way, the eyes of the community are going to be on them, and a very good thing too. They are going to be an experiment, and I think for this kind of experiment one is justified in making new and specific arrangements.
The point raised by the noble Lord, Lord Belstead, about the casual vacancies was answered by the Minister. I think the point which the noble Lord, Lord Belstead made, that of course the parents will already have been consulted, is a valid one; but we are dealing in what we now have to call an ongoing situation, and the time will come when it is will not be those parents, but other parents, and if there is to be confidence, which is the keynote of this Amendment, that everything is to be done fairly, it would be a good thing to have this in. I thank noble Lords for their support.
On Question, Amendment agreed to.
Lord KILBRACKEN Lord KILBRACKEN moved Amendment No. 17:
Line 2, after ("schools") insert ("likely").
The noble Lord said: My Lords, the purpose of this Amendment is simply to bring the language of the Title into line with the language of Clause 1. I beg to move.
On Question, Amendment agreed to.
[Amendment No. 18 not moved.]

SLAUGHTER OF POULTRY ACT 1967 EXTENSION ORDER 1978
4.10 p.m.
Lord WALLACE of COSLANY Lord WALLACE of COSLANY rose to move, That the draft Slaughter of Poultry Act 1967 Extension Order 1978, laid before the House on 24th January, be approved. The noble Lord said: My Lords, the draft order before the House is in fact a straightforward and, I hope noble
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Lords will agree, desirable extension of the Slaughter of Poultry Act 1967. In presenting it, therefore, there is no need for a lengthy explanation.
The 1967 Act, which applies throughout Great Britain, is concerned with the welfare of poultry at the time of their slaughter for sale for human consumption. It requires stunning prior to slaughter, but permits as alternatives instantaneous slaughter by neckwringing, decapitation or other approved methods. The Act originally applied solely to domestic fowl and turkeys, but in Section 7 provided powers for its application to be extended to other species of birds kept in captivity. My right honourable friends the Minister of Agriculture, Fisheries and Food and the Secretary of State for Scotland now propose to use those powers, subject to Parliamentary approval, to apply the Act to guinea fowl, ducks and geese, the other species commonly kept in captivity for slaughter for sale for human food. In accordance with the policies of successive Governments, the Act, in Section 1(2), provides an exemption for Jewish and Moslem slaughter carried out without the infliction of unnecessary suffering. This exemption will be unaffected by the extension order.
Species other than chickens and turkeys were not included in the original Act because there were technical problems over stunning them by electrical means, but since the Act was brought into operation in 1970 these former problems have been overcome and effective stunning equipment for these other species is already in use in slaughterhouses. The proposed extension of the Act would recognise, therefore, progress in the poultry slaughtering industry and, in doing so, would bring our legislation in line with the requirements of EEC Directive 71/118, as amended, in relation to pre-slaughter stunning. It is proposed that the extension order should take effect on 1st March 1978. The extension of the Act by this proposed order will enable my right honourable friends, at a future date, to provide further, by subordinate legislation and other appropriate consultation, for the humane treatment of guinea fowl, ducks and geese in slaughterhouses, using the powers provided in Section 3 of the Act. Such provision has already been made for domestic fowl and turkeys.
As required by the Act, the laying of this draft order before Parliament was preceded by consultation with a wide range of organisations representative of the interests concerned. There was no expression of dissent. I commend the draft order to your Lordships' House, and beg to move.
Moved, That the draft Slaughter of Poultry Act 1967 Extension Order 1978, laid before the House on 24th January, be approved.—(Lord Wallace of Coslany.)
Lord SANDYS: My Lords, the House will be grateful to the noble Lord, Lord Wallace of Coslany, for explaining this extension order in such detail. There is only one question I should like to ask the noble Lord, and it is in regard to penalties. Section 1(3) and Section 2 of the 1967 Act allow penalties in the sums of, respectively, £50 and £20 to be imposed. I should like to ask the noble Lord whether, in view of the problem of inflation, any consideration is being given to these sums being updated.
Lord WALLACE of COSLANY: My Lords, I am very grateful to the noble Lord for giving me advance indication that we has going to ask this question. It is true that the penalty prescribed in Section 4(2) of the 1967 Act is £20, and that in 1978 this sum represents a far less financial penalty than at the time the Act was passed. Noble Lords will realise that this provision of the Act cannot be amended by means of subordinate legislation. However, penalties of this kind are reviewed from time to time, and I can assure the noble Lord that this particular penalty will not be overlooked at the appropriate time. Apart from that, it would appear that there is general approval of the order, and I therefore hope your Lordships will agree to it.
On Question, Motion agreed to.

THE HELICOPTER INDUSTRY
4.16 p.m.
The Earl of KINNOULL The Earl of KINNOULL rose to ask Her Majesty's Government what potential they foresee in the civil and military application of helicopters, and what support they are proposing to give to the British helicopter industry to develop its
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competitiveness in the world markets of the future. The noble Earl said: My Lords, while we all recover from that major poultry extension order, I rise to say what a privilege it is to move an Unstarred Question at this early hour and to have such an early lift-off. I am sure that other noble Lords who have indicated that they are going to take part in this debate are delighted by this, and I hope that that delight will be enhanced when eventually we hear the winding-up speech of the noble Lord, Lord Winter-bottom, and what he has to say, whether it be inside or outside his brief.
I should say at the start that I regret I cannot claim to have any special expertise in the use of helicopters, such as that possessed by other noble Lords who are to follow me in this debate—notably, of course, my noble friend Lord Glenarthur, who, as the House knows, is an experienced helicopter pilot and is in fact involved in the North Seal oil operations. As I shall not have a chance to welcome him at the end of the debate, I should like to say at the beginning how delighted I am that he has chosen this occasion on which to make his maiden speech, and I wish him well.
The purpose of my Question today falls into three parts. The first is to ask the Government whether they recognise and accept that the helicopter market has become a major growth area in aviation. The second is to ask whether they accept that, in certain key areas of this growth, British industry has currently nothing to offer, and indeed has no funded projects for the future with which to compete in some of these markets—as we see from recent orders won by the French, the German, the Italian and, of course, the American industries. The third purpose, and perhaps most vital of all, is to ask the Government what their national helicopter policy is and whether they intend to assist the industry to recover its competitive capability.
I think it is true to say that for many years helicopters have been the poor relation of aviation. In some ways their development teething problems have run parallel to those in the hovercraft industry, although perhaps not with such severe toothache. Both offered enormous opportunities in a multiplicity of applications, and both suffered from that inherent ailment that civil transport carrying operations

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were not, in their original form, viable. The helicopter, of course, has gone a long way further than the hovercraft. We know that on the military side it was largely enhanced by the operational experience in Vietnam; its military strategic value is now without question.
On the civil side, we learn that helicopters have developed in a number of areas. We know that their use in agricultural crop-spraying is increasing, particularly in Third World countries; we know of their use in the police service and in the lighthouse service; and we know of their increased use in inter-city communications and, indeed, in inter-airport communications. We know of one scheduled passenger service, from Penzance to the Scilly Isles, which British Airways' helicopter division has run so successfully. I am sure that there are many grateful passengers who have been on that trip and who have successfully avoided the somewhat inclement weather on the sea that separates the islands from the mainland.
However, perhaps the most dramatic role of the helicopter is its search and rescue rôle; almost every week one reads headlines about rescues, whether it be of a snowbound train in the Highlands or the lifting off of the crew of a trawler or a drifting oil-rig. One never ceases to admire the bravery and skill of both the civilian and the military crews who patrol our shores and who perform such marvellous work in search and rescue.
In the development and growth of the helicopter, I have left out the rôle in which it has been most influential—that is, in connection with North Sea oil. Paradoxically, one of the key factors in the speed of development of our rich national asset has been the invaluable and unique service which helicopters have been able to provide. Where would the development of the North Sea be today without the vital communication services provided by British helicopter operators?
All these rôles of the helicopter have helped to provide a dramatic upsurge in world demand. At a recent international helicopter conference in San Diego there was uniform agreement on the forecast for the future potential market. In Europe, there is likely to be a demand for 300 to 500 helicopters in the next two
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years, compared to the existing 1,450—an increse of 30 per cent. In the world market, the forecast demand for the next decade is, I understand, somewhere near 20,000 new helicopters: 8,000 military and 12,000 civil.
How does the British industry stand ready to compete for this vast potential market? The House will know that, effectively, Britain has one private sector company, Westland, which was formed from an original amalgamation of five companies in, I believe, 1959. My noble friend Lord Duncan-Sandys was the instigator of that amalgamation. Westland has survived well in what is, undoubtedly a high-risk industry. It is a company which devotes three quarters of its efforts to helicopters; and, perhaps wisely, its policy has been to concentrate on the design and development of military projects while, on the civil side, concentration is on production under licence from the American Sikorski Company. If I may say so, the choice of the American company was a good one. Westland has produced very successful helicopters under licence, including the civil S 61, the Wessex, the Whirlwind and the Sea King; but perhaps the company's most notable achievement in the past ten years—and it is a welcome one—has been the highly successful collaborative partnership with the French which was instigated in 1967, and which was set up to produce jointly the design and production of three military helicopters, the Lynx, the Gazelle and the Puma. I am advised that all these designs have proved highly successful in performance, production and sales; and no doubt the noble Lord will give us some figures at a later stage. Clearly, it is to be hoped that these three projects will be the forerunners of further European collaboration. Indeed, I believe that Westland regards its future as very much a part of the European industry.
All that is good news, and I do not intend to detract from Westland's achievements or to criticise our single manufacturing company for the gaps that the industry is at present unable to fill. That company is primarily geared to military design. It has a high engineering specification and, of course, very high costs. It is not at the present time geared to the simpler commercial version. Having said that, if we look at our industry, I think it

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a very poor reflection on its present state, and on Government policy for the industry to allow a situation where, out of something like 80 helicopters operating in the North Sea, only two are British; where, in the demand for the larger, next-generation civil helicopter for the North Sea, the British industry apparently cannot compete; where our Army, seeking a new, larger, heavy-lift helicopter—and they have been seeking it for over 10 years—has eventually had to place a £100 million order with America; where British Airways, seeking the next generation of the larger civil helicopter, have had to (or are about to) place a £30 million order with America; and where even our lighthouses are serviced by French, German and Italian helicopters. These are the gaps; and, while we drift along, our competitors, French, German, Italian and American, are grabbing these markets.
Turning briefly to a happier note—that is, on the operating side—the North Sea, as the House will know, is operated entirely by British operators. I think that theirs is a success story without equal. They are fiercely competitive, but their record on the North Sea for reliability and safety, often in horrific conditions, is a proud one. They make an enormous contribution to North Sea oil and to our balance of payments—a contribution which is difficult to assess and which often goes unrecognised. I hope that the noble Lord will be able to give some recognition to this in his reply today.
On the scale of movement in the North Sea, I understand that some 25,000 people a month are moved on to and off oil rigs and that there are over 400 movements a day, often to 150 miles out at sea. The House will know that the largest British operators are Bristows, an independent and vigorous company. It is interesting to note that, out of their gross turnover of £50 million, half is earned abroad—and, of course, they also have the responsibility of training many of our military pilots. British Airways, too, are very successful operators and do a splendid job on the North Sea. Of course, they pioneered the first civil transport service to the Scilly Isles. There are now a host of other smaller operators.
We hear of complaints from the operators. We hear of their having to face
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increasing charges. I should like to ask the noble Lord whether, for instance, he can confirm that since 1975, the landing charges at Aberdeen have risen from £4.50 per landing to £77 today; and whether the air operators' certificate has risen from £2,000 in 1975 to £40,000 today. It is a very large increase. How can it be justified? Finally, is it true that, if a helicopter contract is operated abroad for over three years, the operator is liable to suffer import duty? I have given notice to the noble Lord beforehand of all these questions.
Turning to two general questions, can the noble Lord advise us what progress has been made on the inter-airport service between Heathrow and Gatwick and who is to operate the service? Are Her Majesty's Government aware that the existing London heliport at Battersea is now too small to accommodate the growing demand for commercial use? Would the Government support a larger site in London in, say, Surrey Docks, if planning considerations made it viable and acceptable?
Finally, I should like to ask the noble Lord whether British industry will have any rôle at all in the £300 million order for the military Chinook? All these questions—and I am sure that there will be many more from other noble Lords—are important. Perhaps the most important message which I hope the noble Lord will be able to give today is that the Government recognise this industry, recognise the need for a national policy and intend to support the industry. Yesterday's debate, which was so ably moved by my noble friend Lord Selsdon, posed one major question among many, and that was how, as a nation, we could best invest our oil revenues flowing from the North Sea. I can see no better or more appropriate way to use some of that revenue than for it to be re-invested in an industry which has played a major rôle in the North Sea. I hope that the Government will see to it that in the future British industry is able to supply British helicopters to British operators in the North Sea.
4.31 p.m.
The Earl of KIMBERLEY: My Lords, I am sure all noble Lords will once again be indebted to my noble friend Lord

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Kinnoull for asking a Question of this nature, as he has done on numerous occasions before, and I hope he will do so again in the future. It is worth while taking a brief look at the operations of British Airways, as they have had 30 years of experience in operating helicopters, and, as the noble Earl said, they have operated for 12 years over the North Sea. As has also been said, the noble Lord, Lord Glenarthur, who is going to speak after me, knows far more about the subject than those of us here—certainly myself—as he is one of the people who fly helicopters over the North Sea to the oil rigs. I would not dream of trying to tread on his toes as he is a far greater expert than I am. I look forward to his speech with great interest.
The North Sea operations have given cause for a lot of satisfaction; but we must not forget that this scheduled service which has been mentioned is probably the only one in the world of its type that is operated at a profit. While it is not possible to compare North Sea work with the Penzance/Isles of Scilly operations, because one is of national importance and the other may not be considered so, we must consider that the largely unheralded success of the Penzance/Isles of Scilly route not only shows, but proves, the economic viability of a scheduled helicopter service. I am afraid that far too often in the past this has been ignored. One must also bear in mind that the board of British Airways helicopter division are both dedicated and enthusiastic, as well as knowledgeable, advocates for rotary wings.
When British Airways started, life was not very easy; but with a little help from the Government in the way of a small investment with single-engined helicopters, after a short while that investment was repaid many times over. A simple example is when Lands End airport was shut there was a saving, in one small instance—it may not appear to be very large—of £120,000 a year. So, like all things, the single engine paved the way for the multi-engine. Also, while this was going on and people are inclined to forget this—way back in 1949–1950 British Airways pioneered a night mail service. It ran for quite a long period of time every night, whatever the weather, from Peterborough to Norwich. This of course was one way to prove and to ensure
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that the navigation and approach aids were suitable and adequate. Since then these aids have become much more sophisticated and have been improved in many ways.
Briefly, I should like to return to the Penzance/Isles of Scilly service which was inaugurated in 1964. The few figures I am going to quote are of great interest. When a fixed-wing aircraft was operated, the annual passenger figures amounted to about 28,000. Two years ago, the figure for helicopter passengers was 84,000. Last year the figure was about 90,000; and it is anticipated that it will be in excess of 90,000 this year. These are absolutely astonishing figures because they were achieved with one—I repeat "one"—helicopter. The regularity and punctuality of the fixed-wing aircraft was about 78 per cent.; with the helicopter in the past six years it has been nearly 98 per cent.
In addition to this, passenger-handling costs—it is a small heliport, I know it well—amount to 40p per passenger, whereas on a major airline at London Airport the passenger handling costs are something like £6 per passenger. There are obvious reasons for this: far less staff is required; large fire tenders and trucks are not required, and runways do not have to be maintained. I agree that this would not work on long routes; but on short routes there is what is known as "block time". For those noble Lords who do not know this, block time on a short route is extremely important. It is a percentage of the aircraft's cruising speed, and on a short run like that from Penzance to the Isles of Scilly the block time is 83 per cent., whereas on a jet from London to Paris it is only about 50 per cent. This is due to the fact that the aeroplane has to taxi around the airport and often has to be stacked up waiting to land.
Virtually all the civil helicopters in service today have been developed from the military versions. Therefore with the civil helicopter there has usually been some form of compromise; but the scheduled service to the Isles of Scilly has proved conclusively that, even with the existing compromise equipment, profits are possible. Therefore I say that if we have some new, even more advanced machines, British Airways will have an even larger profit. The design effort should be

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concentrated on a compound helicopter. By this I mean a helicopter from which a large portion of the flight load can be—for want of a better word—off-loaded on to aerofoils when the machine is in cruising flights. This has several advantages: it leads to a higher cruising speed; it leads to considerably fewer stresses being placed on the rotor system, thus greatly prolonging the life of the rotor; it also makes considerable cuts in expensive maintenance systems on the gear boxes and other mechanical parts.
With modern technology today there is no earthly reason why a compound helicopter or rotor craft carrying 100 or 120 passengers, cruising at 280 knots, with a range of 500 nautical miles, could not be built. All that is needed is the initiative to proceed. The civil requirement is here now, and I should like to ask the noble Lord whether there is a similar military requirement which could be the catalyst to get this project moving. It is true that helicopters make a certain amount of noise, and it is a noise which is slightly different—because most of it comes from the rotor—from that of a fixed-wing aircraft. I am sure Westlands, who are undertaking research on rotor tip design and on other aspects, are doing something about this. But research and development in these things is again extremely expensive and, as the noble Earl said, any money that could come from the North Sea and might be put into research and development would be money well spent.
It is slightly incongruous, in one way, to think that about a year ago British Airways celebrated the silver jubilee of the jet age. Twenty-six years ago the Cornet first went into service and, if my memory serves me right, it is about a year and a half ago since British Airways initiated the first supersonic transport service to America; so I think we could say that British Airways is probably the only airline in the world to operate through a speed spectrum of zero to mach 2.2.
Let us look back over the last 25 years and compare the progress that has been made in rotor flight: it is, alas! rather sad and pathetic. In fact, the general lack of progress throughout the world in vertical take-off and landing aircraft, other than for the Harrier, is abysmal.
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I have been given to understand that the British Airways Board has not so far asked for any detailed consideration, much less a decision, on utilising helicopters as distinct from, or in addition to, fixed-wing aircraft on short-haul and high density routes.
I have also been given to understand that British Airways for some time have been encouraging Westlands to take a more positive attitude in the civil helicopter field. Furthermore, I believe that Westlands are trying to do that but, as with many other projects, very often their hands are tied because of the high research and development costs, particularly if there is no prospect of a reasonably-sized firm order at the end of the exercise. I think the same problem is occurring with Rolls-Royce about getting their Gnome engine certified for civil use. I do not want anybody to think that to say this is in any way implying criticism of Westlands or Rolls-Royce. It is merely trying to show that I believe British Airways are not irrevocably committed to American aircraft and would welcome a new British helicopter.
We have not properly explored, let alone reached, the full capacity of helicopters in aviation, either civil or military. If only a percentage of the enthusiasm, the drive and technical know-how that went into Concorde could be directed to research and development into vertical take-off and landing aircraft, we in this country—through Westlands and with the co-operation that Westlands have in France with Aerospatiale—could make Europe the leaders of the world in vertical take-off and landing transport. So, my Lords, I say: "Let us be pioneers, through British Airways and Westlands, by showing the world how to do it." The export market for a new generation of a compound helicopter or rotor-craft is vast, and instead of pouring money down the drain, as we so often do on some of the lame ducks, may I ask the Government whether they would consider subsidising British Airways in respect of orders for a new helicopter and that Westlands could be given a loan with which to build it, as the project today is completely viable and feasible?
4.44 p.m.
Lord GLENARTHUR: My Lords, it is with much humility that I rise to make my

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maiden speech in your Lordships' House this afternoon. I am very grateful for the kind remarks made by my noble friend Lord Kinnoull and by the noble Earl, Lord Kimberley. For two reasons I am particularly grateful for this opportunity to discuss the British helicopter industry. I think this debate has already shown what a vitally important part helicopters have played in so many areas, and I am sure it will highlight the need for constant and continued development in this country both in manufacture and operation. Secondly, it is customary to make a maiden speech on a subject with which one is familiar; and I must declare an interest. As you have already heard, my Lords, I am a professional helicopter pilot, flying for British Airways in Aberdeenshire; so to a large extent I am talking from my own experience of the helicopter world.
I do not intend to go into a detailed history of the helicopter. Suffice it to say that these complex machines reached a point in their development in the late 1930s which corresponded to the position of fixed-wing aircraft before the First World War. Of course, enormous progress has been made since then, but the fact remains that, in comparative terms, helicopter development is still some 20 or so years behind.
The key characteristic of the helicopter is its flexibility of operation. It is uniquely versatile and, because of this, it is commercially attractive in so many different roles. It does, of course, require specialised engineering and servicing skill, but it does not need—and, indeed, this was pointed out earlier—the cumbersome and expensive airports and the complex support to which we have become so accustomed.
This afternoon I should like to develop two themes: first, the potential in the growth of the helicopter industry generally, which I hope will highlight two areas open to the British helicopter manufacturing industry, and, secondly, the future use of helicopters to replace fixed-wing aircraft in some areas. It is anticipated that over the next 10 years some 20,000 helicopters will be required worldwide and, as we have heard, 12,000 of them will be civil. That is interesting, because it is the first time that we have seen the civil requirement outstripping the military. There are various reasons for that civil growth. But the main reasons are that
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the military have demonstrated the versatility of the helicopter, that there has been considerable technological spin-off from the military to the civil element, that we have seen a widespread use of helicopters to support offshore energy exploration and that there has also been an increase in the use of helicopters to increase agricultural efficiency by spraying crops to cope with the food requirements of an expanding world population. In addition, the introduction of the gas turbine engine has vastly improved the performance and the power-to-weight ratio of the helicopter. Last but not least, there is a continuing need for door-to-door transport for the executive and others in the age of saturated surface transport.
The two existing areas which show the greatest growth potential are, first, what is known as aerial work, which includes activities such as crop spraying, inspecting power lines and aerial crane-work and, secondly, offshore work. On the United Kingdom civil register at the moment there are about 350 helicopters, 30 per cent. of which are used in the aerial work category. The British Helicopter Advisory Board, a non-profit-making organisation which seeks to promote the use of helicopters in this country, estimates that by 1985 63 per cent. of all helicopters worldwide will be committed to aerial work, largely as a result of the expanding need for helicopters to meet the food requirements of a world population which is expected to double by the year 2000.
Opportunities have already arisen for British specialist companies to tender for contracts in many parts of the world to aid agriculture; but at present the agricultural helicopter operators use a number of small and unspecialised helicopters, such as the ex-military Bell 47, a very small aircraft, which they convert to civil standard for a very small price—£20,000 or so apiece. Of course, the insurers do not like crop spraying, and so on, because the very nature of the job calls for Very low and accurate flying, and I am afraid that aircraft become damaged not infrequently. The hourly cost of a spraying helicopter is about the same nowadays as its fixed-wing counterpart; but the advantages of a helicopter's "down wash"—the thrust of the blades to assist the spread of whatever agent is being administered—and the agility of the helicopter are an enormous asset. The big drawback is its lack of

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capacity to carry enough of whatever it is it is spreading, in order to avoid frequent topping-up; this is time-wasting and expensive.
What is required is a very basic and simple specialist agricultural helicopter. There is no need for any sophisticated electronic gadgetry. Yet no manufacturer that I know of is developing such a machine, although the operators are crying out for one. It seems such a suitable opportunity now to encourage development in this field, so that in years to come advantage can be taken by the experts in this field of the opportunities already arising, using specialist tools for a specialist job.
The exploration for and development of offshore oil and gasfields has already given a very significant boost, as we have heard, to worldwide helicopter use. There is no doubt whatever that, without the helicopter, it would have been quite impossible to develop the resources with anything like the speed which has actually been achieved. Not only is the helicopter the only practical vehicle by which to carry out rig crew changes, and to shuttle people from rig to rig and from oilfield to oilfield, but it has proved invaluable in the commercial emergency situation; for example, when a rig has been threatened with shut down of either exploration or production because of lack of a spare part or suitably qualified knowledge to sort out a problem on site.
Furthermore, the helicopter has been a valuable source of confidence to those working offshore, who know that in the event of injury, or the need of evacuation, either individually or of an entire rig, this can be carried out effectively by helicopter under the most appalling weather conditions. I am sure that your Lordships will have read—indeed, we heard about it this afternoon—of the oil rig "Orion" which went ashore off Guernsey last week, and the part played by helicopters in that emergency. And, of course, contracts exist to use commercial helicopters in a search and rescue rôle.
One hopes that those responsible will look closely at the very cheap and effective service supplied by civilian organisations in recent years to supplement either the existing or any future service responsibility,
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both at extreme range offshore and on land as well, and will acknowledge the experience and willingness on the part of crews—and I should like to point out that I have not contributed in this respect myself—to set about this work the whole time. It is a very cheap and valuable source of confidence both to those offshore and, for example, those in the mountains of Scotland, and I hope that we shall continue to be able to provide it.
Offshore work accounts for some 20 per cent. of today's helicopters, although it accounts for a much greater proportion of flying hours, and it is predicted that by 1985 the oil support operations will account for 22 per cent., while the number of rigs increases from about 270 at the moment, to perhaps, as much as 700 worldwide. The large United States manufacturer, Sikorsky, has estimated that by the early 1980s some 50,000 passenger trips per week, as opposed to 25,000 now, will be required on the North Sea oil alone. It is also anticipated that the helicopter's share of drilling, exploration and development costs, which is about 1½ per cent. of the operations worldwide and 2 per cent. on the North Sea, will increase as development moves to the tougher areas. It is also expected that the oil industry will buy between £750 million and £1,000 million worth of helicopters throughout the 1980s.
It is perhaps a sad reflection on Great Britain's participation in this field that, as we have heard, a recent survey in December showed that some 77 individual machines were operating over the North Sea, and that only two of these were British. Of course, the Sikorsky S.61, which is the work horse of the North Sea, has proved to be a thoroughly satisfactory machine. But it seems a shame that, because of decisions taken by successive Governments, and, I think, a lack of interest and foresight within the United Kingdom helicopter manufacturing industry, no British civil contender has been available, and even now nothing is on the books. Despite that, much pioneering and development work has been done on the job by the companies taking part, and I particularly refer to the development of full instrument flying capability and flight in icy conditions, which is one of the more serious hazards with which we have to contend.

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An article in one of the papers, some few weeks ago, put forward a very strong case for using some of the North Sea oil revenue to exploit the lead gained by Concorde in aircraft development. Indeed, only yesterday your Lordships were discussing what to do with some of the revenue from North Sea oil. I applaud the idea floated by this article and by my noble friend Lord Kinnoull, especially at a time when the British aircraft industry looks as though it could have a tough patch ahead. But I think that it misses one important point. There seems to be every reason to use some of the revenue to exploit that field of aviation which has made possible the production of this saviour of the British economy, and to try to close the development gap which exists between helicopters and fixed wing.
This leads me to my second point, which is the use of helicopters to replace fixed wing in certain areas. Commercial passenger services were tried throughout the 1950s but they all failed, not through want of trying, but because the economics were wrong. The helicopters were unable to carry a sufficient load and they were not economical. The opportunity in this country to develop potentially viable helicopters in this role was sadly lost in the 1950s and early 1960s, when development of two Westland projects—the Westland Westminster and the Fairey Rotodyne, which was subsequently taken over by Westland—was abandoned.
At the time of the Rotodyne cancellation, the American Boeing Chinook was under consideration to fill the medium-lift helicopter requirement of the Air Force. An order was placed, spares were contracted for and very expensive equipment design modifications were put in hand. In 1967, the order was cancelled, so we lost both operational development in our own industry and also the use of the American aircraft. But now, as we have heard, some 15 years after the original idea, we have ordered 30 of these machines for the Air Force. I think that this speaks for itself. So much opportunity has been wasted and time lost.
The built-in delay factors in fixed-wing flying over distances such as that from London to Paris lie in the time it takes to get to the airport, to be processed, to board the aircraft, to taxi around for some time and, after a comparatively
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short flight, to repeat the process in reverse at the other end. Four and a half hours is about the average door to door time from central London to central Paris now. A helicopter may fly more slowly, but it does not need acres of concrete, and by operating from city centres it cuts out the need to crawl in traffic from a city centre to the outlying airport. There is no time wasted in taxi-ing, and helicopters can be established in the cruise and on track very quickly. A suitable helicopter would halve the time it takes to get from central London to central Paris, door to door. And it is very pertinent, as the noble Earl, Lord Kimberley, said, that processing costs at Heathrow are about £6 a head and at Penzance 40p or 50p.
The pioneers of trials in the early 'fifties saw the advantages of helicopters in this role. But only now are we beginning to see suitable aircraft appear which are viable and which could make their dream come true. It looks as though the shuttle between Gatwick and Heathrow will begin in the summer. I am sure that this trial will give confidence to the public at large, to those co-ordinating fixed-wing and helicopter traffic and to the supporting ground services, which have not so far been involved in this kind of operation. I believe that, in due course, the service will probably be expanded to take into account the other London airports, which we now hear are to be developed and, I hope, the centre of London as well.
The aircraft to be used has been proven on the North Sea. It is utterly safe, and is a very suitable vehicle with which to start the operation. But I am sure that, if we are to capitalise on the expanding market, we must concentrate on developing a helicopter of 120 or, maybe, 200 seats—a kind of mini-Jumbo with vertical take-off. And, of course, we do not necessarily need to bear the entire burden ourselves on our own industrial companies' shoulders. It could be clone in conjunction with other countries, as we have done in the past, although we could no doubt give a lead.
It has been suggested that the Highlands and Islands airports, which lose about £1 million or £1½ million a year, should be done away with in their present form, and that a helicopter should replace the fixed wing on this service. Such a suggestion

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has enormous merit, particularly if the scheme is expanded to include small isolated towns and villages between which surface transport, particularly in the winter—and two weeks ago we saw what happened in the North of Scotland—is slow and impossible. We now see suitable medium sized aircraft coming on to the market, cheaper to operate than the present range, much more sophisticated and with passenger appeal. They need a clear area the size of only about half a football pitch to operate from—indeed, half a football pitch would do admirably.
Of course, in the entire field of commercial operations the environmentalists will, very rightly, have their say. At the moment helicopters are fairly noisy machines. There are few bodies better qualified to judge than your Lordships, who have one of the few permanent helicopter lanes in this country going up the river past the windows of the Palace of Westminster. I have not been in your Lordships' House for very long, and I hope that I shall be forgiven for being an enthusiast, but certainly I do not find that the noise of helicopters flying overhead is any more intrusive than that of fixed wing traffic. Helicopter noise is, indeed, often masked by the noise of the big jets.
I have already spoken for too long, and I am grateful for your Lordships' patience. However, my experience of operating helicopters leads me to believe that there is enormous scope to make use of their versatility and flexibility. Opportunities have been missed in the past; there is no doubt about that. But let us now get things moving within the civil side of our own helicopter industry. Let us be progressive, and not over-cautious, and give the kind of lead that we as a country have customarily given to the successful development of aviation and the timely introduction of helicopters into commercial helicopter services within the United Kingdom and Europe.
5.2 p.m.
Lord BALFOUR of INCHRYE: My Lords, I feel sure that all your Lordships will be grateful to the noble Earl, Lord Kinnoull, for two reasons: first for giving us the opportunity to discuss this important subject, and secondly for giving us the opportunity to hear the fascinating,
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knowledgeable and much appreciated maiden speech of the noble Lord, Lord Glenarthur—a man who is doing the job that we are discussing tonight. I feel particularly glad to be allowed to follow the noble Lord, because I played a small part in lifting him out of the Army Helicopter Unit and getting him into a position where his services would be at the disposal of British Airways.
I wish to touch briefly on only three points; they have been touched on to some extent by other noble Lords. First, I regret that there is not one single civil aviation helicopter project on the drawing boards of our aircarft industry; nor has there been for many years past. When we look at the developments that have taken place and are taking place in the helicopter world in the United States, France and Germany, it is a lost opportunity for this country. We must admit our error of omission.
My second point is that no country is more suitable for helicopter operation than the United Kingdom. It is an ideal short-haul country. Noble Lords have already touched upon the Penzance to Isles of Scilly short-haul service. I was chairman of British European Airways Helicopters at the time that we started the service. We knew that we were bound to lose money for a year or two. That did not matter at the time because we wished to find out whether a regular helicopter service could be developed. In its first year, the service carried 27,000 people, and last year it carried 88,000 people. It has been a viable service for the last five years, making profits formerly for British European Airways, and now for British Airways, which proves that a well run and well organised short-haul helicopter service is today a viable proposition.
My third point, which relates to Scotland, has also been touched on by the noble Lord, Lord Glenarthur. There is much controversy in Scotland about the Highlands and Islands airports being taken over by the British Airports Authority. There is very understandable resistance from local authorities because they foresee higher costs, higher standards of manning and higher charges all around than have been the case for several years past. I believe that the Government should consider scrapping those airports

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and, if necessary, devoting the money saved to supporting financially inter-town and inter-city helicopter services in Scotland.
I should dearly like no fixed-wing aircraft to fly North of Glasgow, Edinburgh, Aberdeen or Inverness. I should like each of those centres to have instead what may be termed bus-stop helicopters, radiating out to serve quite large communities that have no effective communications. That would be imaginative action on the part of Her Majesty's Government.
Such action could not be taken at once, but it could be the objective. It could be worked on gradually so that the helicopter becomes the standard method of transportation in the remote and far distant areas of Scotland and replaces the expensive airports and the expensive maintenance of fixed-wing aircraft. That is the picture in my mind which I hope other noble Lords will share with me. By doing that, we should not only develop the operation of helicopters; we should also encourage our industry to serve those needs.
5.7 p.m.
Lord GISBOROUGH: My Lords, first may I congratulate the noble Lord, Lord Glenarthur, upon his maiden speech. Not only did he make a most able and uniquely well-informed speech; he delivered it like a veteran, and possibly rather better than many a veteran of this House.
At present, the major use of helicopters seems to be for military purposes. I understand that the Puma and the Wessex are due to be replaced fairly soon by a machine that is produced as a result of a collaborative agreement between the United Kingdom, France, Italy and Germany. I understand that the United Kingdom will play a big part in the new design and that we are seeking to lead the design. I should be interested to hear from the noble Lord who is to reply whether the United Kingdom will be taking the lead.
On the military side, at present the heavy-lift helicopters are American. They seem to be highly satisfactory and are liked by the Services. The military demand is probably not sufficient for this
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country to embark upon the production of heavy-lift helicopters. The civilian market, however, appears to be another story. It has already been mentioned that the forecast is that 20,000 helicopters will be produced in the next 10 years and that the majority of them will be for civilian rather than military purposes.
There is a very strong, rising demand, as all speakers have mentioned, for helicopters. For example, one firm that I know of had one helicopter on charter in 1969; now they have no fewer than eight on charter. That is excellent. Also, they are finding that there are increasing sales to be made abroad. This point has also been mentioned by two speakers. Those sales are largely for on-going projects such as crop spraying which will, if anything, increase as countries become better able to improve their agricultural standards.
While Westlands have had a success story with the Commando—20 of them have been sold to Egypt and another 10 are going there—it seems that the British industry has treated the civilian market with disdain and has ignored the greater civilian demand with their present generation of rotary wing helicopters. For example, just two or three Pumas are operating in the North Sea, and I understand that only two Gazelles are operating as civil helicopters in the United Kingdom. While there was a suggestion that the Lynx should be converted to play a civil role, I gather that this project has also been deferred. This is a great pity. The Italian Jet Rangers, with their United States engines, are used instead; and I am told that their maintenance cost is about half that of the British aircraft, the Gazelle. So, of course, the United Kingdom operators are using the American plane for their executive charter market particularly—that is, four seats plus—because of the Gazelle having poor and expensive maintenance, and also lacking comfort compared with the Jet Ranger.
I understand the United States and the French and Italians are now working to produce a medium heavy-lift machine for the corporate market, of six to 12 seats, and the United Kingdom operators are likely to have to buy this in future. I also understand that the RAF will have a requirement for these sort of machines, and in spite of the fact that this EEC

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machine is going to be on the market at some stage in the future they are going to be supplied with the 30 Chinooks rather than the EEC machines.
It has already been suggested that the Government should support and give incentive to the United Kingdom manufacturers to produce more comfortable and economic civilian charter machines and to take advantage of this increasing growth which is quite apparent, particularly for the corporate charter market and for the agricultural market. They should encourage developers to try to make certain that the Puma Wessex replacement is fully developable for civil use. Secondly, even the Italian Jet Rangers have United States engines. I was always brought up to believe that Rolls-Royce made the best engines in the world. Surely they should be able to produce a suitable small turbine for helicopters, which could then be sold to the Italians, if not used in our own machines.
Thirdly, I think it is essential that much more suitable helicopter facilities should be developed. Battersea is not good enough for the long term. It is no good looking 10 years, or any short number of years, ahead; one has to look a long time ahead. We have to realise that the situation in the long term is that there will be more and better sites, not only in London but also in other cities, and these should be planned for the future. There is a large environmental lobby and there must be a compromise with them. Of course, if there are more sites available, then the amount of noise on any one particular site would be much less because the use would be dispersed over greater areas.
My Lords, I believe the United Kingdom has the skill to produce helicopters. They should be able to design, they should be able to build, and there is no reason why they should not sell, not only the machines but also the engines. It is a very high growth industry, and there would be an increase in employment if more were to be built in this country. We have the opportunity, with the good things from oil, to create this investment. I hope we shall meet this challenge which is coming to us in the future.
5.14 p.m.
Lord TREFGARNE: My Lords, I think I can do no better in my opening
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remarks than echo the words of the noble Lord, Lord Balfour of Inchrye, who said most succinctly that we had two reasons for thanking my noble friend Lord Kinnoull tonight; first, for raising this most important matter in a debate so appropriately timed after our debate yesterday, and secondly, for creating an opportunity for my noble friend Lord Glenarthur to make his most excellent maiden speech. I believe we were all impressed by the most clearly expressed and deep knowledge of the noble Lord's observations and by his very clear and forthright delivery. I hope that he will speak again in your Lordships' House both soon and often.
I do not want to go in any depth into the manufacture of helicopters. My remarks will be directed more towards the operations in the North Sea. But I should like to sound a caveat. I think all the noble Lords who have spoken so far have regretted, as indeed I do, the absence of a British civil contender for the major orders which are likely to come in the near and medium term. It is indeed the case that British Airways Helicopters are in the process of taking decisions for the re-equipment of their fleet, and no doubt the same applies to Bristow, the other major civil helicopter operators. Of course, as several noble Lords have mentioned, there is likely to be a substantial market outside the United Kingdom in the years to come.
My caveat is that the costs and, indeed, the risks of launching a new civil project are very substantial. It is unhappily the case that the military and civil certification codes are not the same; indeed, they are very different. A helicopter duly certificated for military use is by no means automatically acceptable to the civil authorities. The manufacturer, even when he is considering a virtually identical machine, must run two parallel development and test programmes if he is to achieve both military and civil certification at the same time or on a similar time-scale.
It appears that the directors of Westland take the view that the risks of embarking upon a civil programme at present are too great for them to justify to their shareholders. It seems that British Airways are only prepared to place an order for two or three helicopters at this time. Indeed, one must say in parenthesis

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that their existing fleet, although almost entirely consisting of S.61 helicopters, was brought in penny numbers; they did not buy all 22 machines at the same time. Thus, if the suppliers of those machines had started their production on the assumption that they would sell 20 or more helicopters to British Airways, they might, at the outset anyway, have been disappointed.
I think it follows from this that the launching of a single helicopter project could only he done with the aid of public money, and Parliament, as guardian of the public purse, would, I feel sure, wish to be satisfied that that money was prudently invested. I hope and believe that, if Westland were to be granted money to assist in the development of a civil variant of one of its existing designs, that would be a successful project and I think that the Government or whoever advanced the money could look for a proper return in due course, But the directors of Westland clearly do not take that view, and surely they are at least as expert as we are. Thus, if it were to be suggested that public money be used for this purpose, I believe that the Government would need to be satisfied that that money was being prudently invested. Indeed, they would need to be satisfied, for example, that British Airways would be able to purchase the aeroplane proposed in sufficient numbers. At the moment British Airways are thinking of buying only two or three new helicopters, certainly in the first instance. Thus, at least at present, I feel that the fundamental requirements of such a project are not met.
Let me repeat that, from the figures that we have heard tonight and from the knowledge that the various expert noble Lords who have spoken have conveyed to us, there seems to be a major world market for these machines. I would certainly agree that the possibility of public money to support the launch of a new civil project is worthy of examination, but it should be criticial and not simply a euphoric examination based upon the alleged future of the North Sea and other markets. As I have said, the cost of producing these civil helicopters is very great and it is for that reason that the orders that the British manufacturers—namely, Westland—will require must amount to at least 20 helicopters. The
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present proposals for British Airways Helicopters and others really do not meet the requirements.
I turn to the question of operations in the North Sea. I am somewhat concerned about the facilities provided in the North Sea for the helicopters. There are some points that I should like to put to the noble Lord, Lord Winterbottom. I regret that I have not given the noble Lord prior notice of these questions and he may not, therefore, be able to answer them tonight, but perhaps he can write to me in due course or let me have the information in some other way. As we have heard, the North Sea operations have grown at a very considerable rate. I suspect that the rate of growth, particularly at Aberdeen, somewhat took the authorities by surprise. It may have been very difficult to predict the precise rate at which the operations would grow and I do not, therefore, necessarily criticise them for failing to see in advance the size of the operation that would grow up on their doorsteps in a short period.
As we have heard, there are now 80 or so helicopters operating regularly in the North Sea. Those helicopters have to share their airspace with many other users including, of course, the military. The Under-Secretary of State announced the other day that a new Tactical Weapons Unit (TWU) is to be opened at Lossie-mouth. That will involve a significant increase in the number of military aircraft operating at low level in that part of the world. Already, of course, the military operate in that part of the world in respect to fishery protection operations and, to some extent, in high level interdiction operations. In themselves, those operations do not, of course, conflict with those of the helicopters, but the aircraft so operating are required to take off and land at their airfields and, in so doing, they of course operate through the helicopter zones. There is, of course, the additional requirement for the physical protection of the rigs in the North Sea.
I suspect—indeed, I believe—that all this needs absolutely first-rate radio communication facilities. The only perfect solution would be a form of stationary satellite, but I fully recognise that that would be beyond the cost resources, certainly of the United Kingdom. Thus, we must rely on three primary methods of

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communication: first, the forward relay systems; secondly, the high frequency link systems; and, thirdly, the VHF facilities already existing on the rigs themselves. None of those systems by itself provides an answer. Indeed, I think that all parties have now eliminated the high frequency link as any form of answer to this difficulty. Therefore, we have at present forward relay stations and rig facilities.
The forward relay stations, which are by and large operated by the national air traffic service—part of the Civil Aviation Authority—have been chosen as the primary solution to the problem. I would accept that that is the right decision in all the circumstances. However, I am concerned that the installation of these relay stations has proceeded very slowly. Indeed, as of today, there are still three relay stations required to complete the coverage, despite the fact that additional relay stations were opened only recently. I am informed that the funding for these additional three stations has not yet been provided for. I am quite persuaded that the Government ought, as a matter of urgency, to take steps to ensure that these facilities are brought into service as soon as possible. The funding of the Civil Aviation Authority and national air traffic facilities has always been something of a delicate matter. Therefore, I believe that on this occasion the Department of Energy ought to produce some of the mony required. I believe that it is in the region of £1 million initially for the three facilities, plus an annual charge to keep the stations operating. So much for communications.
The other problem is the question of navigation facilities in the region. There are three systems which can be used. I need not bother your Lordships with the details. Two of them are already in existence and operating satisfactorily, but there is a third system which, I suggest to the noble Lord, is really not proceeding as swiftly as it should. It is the use of secondary radar to supplement the very difficult primary radar situation which eixsts in that part of the world.
Your Lordships will know that primary radar is not a very happy facility used at low level. Thus, a secondary radar facility has been in existence in Scotland
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for some years. I understand that the Civil Aviation Authority is considering the installation of new secondary radar in parts of Scotland, but it has not yet been completed or even, I think, started. I recognise that, for its efficient operation, secondary radar requires the aircraft to be equipped with a certain device called a transponder. I ask the noble Lord—this is, perhaps the most important question that I must put to him today—why it is that British Airways Helicopters has been so slow in fitting transponders into its fleet of helicopters. I understand that, out of the fleet of 24 only two are fitted with this device. It is quite a simple matter to install it and not as expensive as many of the other modifications which are often required to be carried out. I hope that the noble Lord will convey to BAH my view, at least, that this is a facility that they ought to install at the very earliest opportunity. Indeed, pre-sure could perhaps be brought to bear through the medium of the CAA because, of course, it would be right that all the helicopters in the region—not just the British Airways ones—should be fitted with this equipment.
There is another matter which gives me some cause for concern and that is the safety of some of the landing pads on the rigs themselves. I cannot pretend that I have ever operated on to a North Sea oil rig in a helicopter, but I understand that there is considerable disquiet about the safety of some of the pads. I make it clear that this by no means applies to all of them. There are a few pads which are, I think, quite well known to all concerned, and which are really very hazardous, largely because of the obstructions very close to them. That means that the helicopters can operate only from a certain direction, and such an exercise becomes very dangerous when the wind is not in the most appropriate quarter. The CAA is not, it seems, required to approve these pads as such—that is to say, they are not required to be licensed airfields because the legislation does not insist upon that in this sort of facility. However, I hope that the noble Lord can give me an assurance that the Authority does in fact inspect all these pads and insists upon whatever changes are necessary to ensure that the risks are minimised.
Recently there has been considerable correspondence in the trade press and

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elsewhere about the need for the carriage of cabin attendants. Indeed, the CAA granted a number of dispensations from the requirements in all sorts of circum stances. The purpose of attendants on these routes is not, of course, to serve the coffee, but to help the passengers out in the event of an accident, to facilitate the use of the emergency equipment, to open the exits and so on. I should have thought that, in the larger helicopters, there was really no case for allowing the operators not to carry these attendants. I understand that these dispensations are being progressively run down, but I would express the view that the sooner that is achieved the better.
Finally, I should like to look briefly into the future. Perhaps I may touch on the question of civil routes—city-centre to city-centre operations—which have been mentioned by so many noble Lords this afternoon. I am all in favour of such operations when they can be shown to be viable, but the truth of the matter is that, thus far at least, the economic development of the helicopter has not, in general, reached the point where there is any likelihood of economic operation in these circumstances. I feel sure that British Airways Helicopters stands ready to mount such operations when, and if, they can be shown to be viable and, above all, when suitable helicopters are available.
I should have thought that the only scope was on certain specialised routes like that to the Scilly Isles, which has been mentioned. Many noble Lords have explained how rapidly that service has grown in recent years, but perhaps I may add in parenthesis that, although that is, indeed, the case—and I am sure that the figures we have heard are accurate—that service is a dead loss in the winter, and only in the summer can it be regarded as viable. We have had an interesting and useful debate. I believe that the noble Lord, Lord Winterbottom, has been given considerable fuel for his reply, and I look forward to hearing it.
5.32 p.m.
Lord WINTERBOTTOM: My Lords, before I attempt to reply to this extremely interesting debate—and I say that in all sincerity because this is a subject in which I am genuinely interested—first may I convey my congratulations to the noble Lord, Lord Glenarthur, on his
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excellent maiden speech. He spoke with clarity and authority about a subject which he knew, which is something your Lordships' House deeply appreciates. As he was courteous enough to indicate to me in advance a somewhat searching question which he was going to ask me, I also think he was practising another virtue—namely, he was watching the clock in front of him. The question that he has put to me today will be answered in writing.
I say quite sincerely that I welcome this opportunity of discussing the British helicopter industry. The House has already expressed its gratitude to the noble Earl, Lord Kinnoull, for initiating this debate and I join with the House in those congratulations.
It is particularly timely that this matter should be raised now, as we have been vividly reminded recently of the immense value of helicopters in emergencies—oddly enough, noble Lords did not touch on this—both in the operations following the terrible blizzards in Scotland, and also in the rescue of men from the oil rig which ran aground off Guernsey. In all these crises helicopters played an invaluable role, and we can be proud that British helicopters, manned by highly skilled British pilots and crew, were in the forefront of the action.
These recent incidents provide just two examples of the wide variety of uses to which both military and civil helicopters are now put, and I shall talk about some of the major applications a little later, as well as describing the ways in which Her Majesty's Government have supported, and, indeed, expect to continue to support, the British helicopter industry. First, however, I think it is useful to be clear what we mean by the British helicopter industry. In this country the only helicopter manufacturer is Westland Helicopters. This private firm is the principal operating company of Westland Aircraft, a group which has a number of other subsidiaries, including, of course, British Hovercraft. Westlands has specialised in military helicopters, normally developed initially for Ministry of Defence requirements, but which lead to very substantial export business with foreign customers.
As has been pointed out, Westlands are at present engaged in the manufacture of

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the Puma, Gazelle, Lynx and Sea King helicopters. Of these, the first three have been produced under the Anglo-French collaborative agreement of 1967. As noble Lords know, design leadership on the Puma, whose development was financed by France before the package was agreed, and on the Gazelle, rests with Aerospatiale and, on the Lynx, with Westlands. Production of all three aircraft is divided between the United Kingdom and France. The Anglo-French helicopters have been enthusiastically received by the United Kingdom Services. They incorporate a number of technical innovations. West-lands, for example, received the MacRobert award of the Council of Engineers Institutions for design features incorporated in the Lynx, the British-designed member of the family.
Equally important, the aircraft have already sold or promised to sell well in export markets, with the active assistance of the Defence Sales organisation. Export of the Puma and Gazelle, which came into service in 1969 and 1972 respectively, exceed sales to the United Kingdom and French Governments, while export orders of the Lynx already exceed 35, even though the aircraft has only just entered operational service. The prospects of further substantial export business are promising, particularly in the Middle East. As regards the Sea King, this is basically a Sikorsky design in which United Kingdom equipment fit for both the air-sea warfare and sea-air rescue roles has been installed. Again, it has achieved considerable success overseas in competition with Sikorsky. About 40 per cent. of sales to countries outside the United States and the United Kingdom have been from Westlands' sources. These are fine achievements, recognised by the company's receipt of the Queen's Award to Industry for both technological and export achievement, for which, as I am certain noble Lords will agree, the company can be justly proud. If, therefore, I may revert to the Question on the Order Paper, the United Kingdom has supported the industry through its defence procurement policies, and the industry has demonstrated its competitiveness in world markets.
As far as the military uses of helicopters are concerned, these, of course, fall into
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a number of broad categories, each of which requires helicopters with differing characteristics, although even within these categories quite a wide range of helicopter types can be used depending on the operation environment. The United Kingdom Armed Services operate a range of helicopter types, which complement each other in providing a broad and flexible airborne capability. The Ministry of Defence intends to maintain and improve this capability by procurement of new helicopter types as those in service are phased out, and by a programme of improving the weapons and sensors carried. This policy might best be illustrated by a brief listing of the main categories.
An important function of military helicopters is reconnaissance. The second important function is anti-submarine operations. In the battle area helicopters are widely used for rapid movement of troops and equipment. Helicopters can also contribute directly to the battle by mounting direct fire weapons. At the moment, the Army's Scouts are fitted with the SS11 anti-tank rocket and the Royal Navy's Wasps, Wessex and Lynx can be armed with the AS12 rocket. The Army's Lynx will be fitted with the TOW anti-tank missile as soon as these are available and the naval version will carry the Sea Skua missile which is currently under development.
The capability to lift heavy military stores to forward areas by helicopter is of course, an important aspect of Army logistic support. Up till the present the United Kingdom, forces have lacked this capability, which is, however, now being filled by the order, mentioned by a number of noble Lords, placed for Boeing Chinook medium-lift helicopters. I shall return to the point about the equipment of these helicopters in the course of my speech. As was said earlier, the Armed Services also use helicopters to a very great degree for search and rescue.
It is clear from this short description of the main applications of helicopters that all three Services will continue to need helicopter support for the foreseeable future. To maintain our technical base, the Ministry of Defence is continuing to place research and demonstrator programmes on industry in the key areas of helicopter technology. The present generation of United Kingdom military

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helicopters will require replacement from the late 1980s onwards and we see United Kingdom industry playing a major part in meeting these requirements, and initial studies on the first of these requirements, the Sea King replacement, have already been placed on industry.
New helicopter development programmes of course involve considerable expenditure on design and experimental engineering and other forms of investment. It is natural, therefore, that many of the helicopters of the future will be designed and produced on a collaborative basis. We are discussing the scope for such collaboration with our European allies. The noble Lord, Lord Gisborough, I think realised the need for this collaborative effort in order to lessen the national burden on development expenditure.
The Anglo-French programme has proved successful, and we see advantage in continuing, and if possible extending, this collaboration in the future. Collaboration avoids wasteful duplication of resources, and in particular, and in addition, assists the efforts of NATO towards increased standardisation in equipment procurement. We also see collaboration as a means of strengthening both United Kingdom and European capability on helicopters, so that the industry is better able to compete in world markets. Last year the IEPG (which is a development of Eurogroup) nations provided outline details of their probable helicopter requirements up to the year 2,000. It has now been left with Europe's four helicopter manufacturing nations—the United Kingdom, France, Germany and Italy—at both Government and industrial level to consider procurement options. Westlands are playing an active part in the industrial discussions. The road to collaboration is never an easy one and agreements cannot be expected to be reached overnight. None the less, I am pleased to see from the recent statement made by the Westlands chairman that the United Kingdom industry also strongly endorsed the search for closer co-operation in Europe.
The EARL of KINNOULL: My Lords, could the noble Lord say whether these negotiations cover civil projects as well as military projects?
Lord WINTERBOTTOM: My Lords, I am going to touch on civil projects in a moment. Obviously, the two must go together, since I believe there are now on the drawing board civil versions of the Gazelle, and I believe also the Lynx. May I turn for a moment to the 30 Chinook helicopters being ordered from Boeing Vertol. This in no way conflicts with our policy of closer links with Europe, as neither the United Kingdom nor Europe has ever sought to develop a helicopter in this class. European requirements have traditionally been met either by direct purchases from the United States or by licensed manufacture. In this case, the limited United Kingdom requirement for 30 Chinooks would not have justified setting up manufacturing facilities in this country. Agusta, Boeing's European licensee, were approached but were unable to meet the United Kingdom requirements. There was, therefore, no option but to purchase from the United States if this requirement, strongly supported by the all-party Defence and External Affairs Sub-Committee in another place, was to be met. None the less, the terms agreed with Boeing Vertol provide for substantial offset work to be placed in the United Kingdom, subject only to our industry being competitive. We have also made it clear that we attach importance to as much of the offset as possible being placed with the major helicopter firms. Extensive discussions between Boeing Vertol and Westlands have already taken place.
May I now turn to the civil market. As noble Lords have pointed out, while there has been a growth market throughout the world, which noble Lords believe will continue, it is dominated by the United States of America. Nearly 60 per cent. of the world's civil helicopter fleet is in the USA, and this has provided US helicopter manufacturers with a vital base to develop and produce aircraft, not only for their domestic market, but for overseas requirements. The noble Earl, Lord Kinnoull, touched on this. The sheer scale of the American business presents very considerable difficulties to manufacturers from other countries who wish to compete with US suppliers and try to secure a share of the world civil market. I mentioned earlier that West-lands have concentrated on military helicopters; this has inevitably meant that

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most of the United Kingdom civil requirements—such as oil rig servicing, et cetera—have been met by overseas suppliers, particularly American, as the United Kingdom does not produce models which compete in such markets. Noble Lords pointed out that only two British helicopters are operating in this North Sea area. I understand that Westlands have recently said that they will need to look increasingly at civil helicopter markets in the future. This is understandable and welcome, because if they are successful it would further help to secure Westland's future as a major helicopter manufacturer.
If Westlands were to propose launching a new civil project, the Department of Industry would naturally be prepared to consider a request from the company for financial assistance. However, in the light of the US pre-eminence in the civil market, it would clearly be necessary for us to give careful consideration to the likely financial and commercial viability of such a project. Some preliminary discussions have already taken place between Westlands and Department of Industry officials concerning the various forms of Government assistance which might be available to the company. This, I think, will meet the points made by the two noble Earls, and also by the noble Lord, Lord Trefgarne, in his winding-up speech. He properly pointed out the need to apply proper commercial caution before launching a project in this new area of helicopter manufacture, but it is something which, provided that the necessary commercial safeguards can be met, is desired both by Westlands and by the Department.
Lord TREFGARNE: My Lords, I am grateful to the noble Lord for giving way. Following on this, can the noble Lord say which of the various legislative opportunities will be used to provide this launching aid? If my memory serves me aright, there are at least two Acts under which aid could be granted; namely, the Civil Aviation Act and the Industry Act 1972. Are there any others, or which has been decided?
Lord WINTERBOTTOM: My Lords, I am afraid that I cannot answer that. It is one of the regrettable facts of life that if a Government want to spend money they usually find ways of doing so. I am cer-
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tain that if this was considered to be in the national interest, funds would be found from one source or another. After all, in its time NRDC has provided substantial funds for technological development.
I trust that I have said enough to reassure your Lordships that Her Majesty's Government are firmly convinced of the need to maintain a strong British helicopter capability. However, I would add that the future of the industry does not rest solely in the hands of Government. The industry itself has a major rôle to perform. Until the next generation of military helicopters begins to enter service in about ten years' time, export and civil sales are bound to play an increasingly important part in the health of the industry. In these areas the initiative must come from industry. The Government can, of course, help. The Defence Sales Organisation has offered, and will continue to offer, industry support in the military export market. The Department of Industry is always prepared to consider supporting promising civil projects. But success will, in each case, depend primarily on the industry remaining competitive in terms of cost, delivery and performance. The helicopter industry is highly competitive and for its future health and security there must be a determination by the company, management and others alike to work together to improve its competitive position. Without this determination Government support will count for little.
That is the formal answer to the technical aspect of today's debate. A number of important and interesting points were also made which come outside the responsibility of the Department of Industry, for which I am answering. The noble Lord, Lord Trefgarne, raised three important and interesting points relating to the rising congestion of air traffic in the Scottish area, not only because of North Sea oil developments but also military developments; for example, he mentioned the Tactical Warfare Unit going to Lossie-mouth. I am afraid I cannot give him answers today to those points, though I believe them to be valid, but I assure him that I will bring them to the attention of the appropriate Departments and will attempt to give him a composite answer to the various points he raised in this important area.

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The noble Lord, Lord Balfour of Inchrye, made an interesting point which should be borne in mind during the negotiations taking place for the production of a civil version of existing military helicopters in this country; namely, that the United Kingdom is a most suitable place for helicopter operations. We are not a single island but a flotilla of islands and we must be able to move freely from one to the other. I have flown from island to island in Scotland in light aircraft. Such aircraft carry two or three people and if we wanted to move more than that number at a time then obviously the helicopter in an improved form would be of enormous value.
The various points noble Lords raised outside the ambit of the purely technical will be studied by the Department of Trade, the Civil Aviation Authority and the British Airports Authority, and when I have had time to study in detail what noble Lords have said I will see that the appropriate contributions are drawn to their attention and, where an answer is required, I will attempt to provide one.
The noble Earl, Lord Kinnoull, made a very important point when he drew attention to the rising landing charges at British Airports Authority airports and the cost of certification by the Civil Aviation Authority; that the growth in cost seems to have run faster than inflation. I will be able to give him an informed answer only when I have taken informed advice.
The Earl of KIMBERLEY: My Lords, does the Minister have any information about the compound helicopter; whether any initiative has been or will be shown to develop it, particularly if there was shown to be a military need, which would be the catalyst which would help to produce one with a high cruising speed and larger capacity?
Lord WINTERBOTTOM: I am afraid, my Lords, that I cannot give the noble Earl an answer to that question tonight. I think one noble Lord mentioned the Fairey Rotodyne which was, I believe, a compound helicopter. If there is any likelihood of such an idea being re-born—it is not a new idea, as the noble Earl pointed out—I will let him know. I thank the noble Earl, Lord Kinnoull, for initiating this debate, which I have enjoyed and which I hope will be useful.

THE OPTION MORTGAGE SCHEME
5.54 p.m.
Lord BANKS Lord BANKS rose to ask Her Majesty's Government whether they are now prepared to extend the option mortgage scheme to include elderly non-taxpayers wishing to raise a loan on mortgage for the purpose of buying an annuity income for life. The noble Lord said: My Lords, I must begin by declaring an interest because I am by profession a life and pensions broker and the schemes for helping the elderly to which I wish to draw your Lordships' attention are offered by some leading life offices. Of course, the fact that I am a life broker means that I have practical experience of the working of these schemes.
Your Lordships will be aware that mortgage interest on mortgages effected for house purchase and certain other purposes secures tax relief. In 1967 the option mortgage scheme was introduced which provided an alternative; the intending purchaser could choose between the type of mortgage I have described, where he would get tax relief on the interest, and another scheme where he would forgo the tax relief on the interest but would instead pay a rate of interest which was reduced by a Government subsidy. The option mortgage scheme is in operation now and if, for example, somebody taking out a mortgage were paying interest at the normal current rate of 8·5 per cent.—if 8·5 per cent. were the rate of interest on the particular mortgage—if he had chosen the option mortgage his mortgage would be subsidised so that he paid only 5·6 per cent. In other words, this is a scheme which was introduced to help those people who would not be assisted by tax relief because they did not pay tax at all or who would not be assisted to the full extent by tax relief because they would not have paid tax on the whole of the amount of the interest.
I come to schemes offered by a number of leading life offices, which are called by various names but which I propose to call home income plans. These are designed to help people over 65 years of age who own their own houses but have little income. The elderly person takes out a mortgage and with the proceeds purchases an annuity. The annuity, after paying the fixed rate of interest on the mortgage, provides a valuable addition to

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the elderly person's income, and on death the mortgage is repaid out of the proceeds of the sale of the house.
Where one of these plans is effected, the elderly person continues to live in the house, continues to own the house and enjoys an increased income, and I know from personal experience that this sort of scheme is of great value to many elderly people, particularly elderly women living alone, many of them widows, who have inherited a house but very little income to go with it. They are perfectly capable of living in the community on their own, yet if they sell their house because they can no longer afford to live there, where can they go? Many of these people have no near relatives and do not need to worry about the size of their eventual estate; their problem is to live now. As the Daily Mail said not long ago:
"These annuity-linked mortgage schemes for pensioners, particularly those in their seventies, have filled an enormous social need."
The Government have recognised the role of these schemes by allowing the normal tax relief on the mortgage interest, and that is very important. However, the poorest of those likely to be assisted by these schemes do not of course benefit from tax relief because they are not taxpayers. Take the case of a woman aged 78 who has a house worth £15,000. She raises a mortgage of £10,000, purchases an annuity in the way I have described, and if she is a standard rate taxpayer her spendable income would be increased by £737 per annum. But if she is not a standard rate taxpayer, she pays no tax, then it is increased by only £555 per annum; the non-taxpayer has nearly £200 less.
My Question asks the Government whether, having allowed mortgage interest tax relief on these home income plans, they will extend the option mortgage scheme, which I have described, to cover these schemes. Non-tax paying elderly people would then he able to secure a comparable additional benefit to that now available to elderly people paying tax at the standard rate. What is required to achieve this is an amendment of the Housing Subsidies Act 1967 so as to extend the scope of the option mortgage scheme. This proposal is supported not only by the Life Offices Association but also, significantly, by Help the Aged as well.
It may be argued that to do this would be to extend the scope of the option mortgage scheme beyond matters pertaining purely to housing—beyond housing. I would dispute this. These schemes enable elderly people to remain in the houses where they are and not become an additional burden on the housing resources of the community or in regard to the provision of residential care. The Government's Green Paper on Housing published in June 1977 states:
"The Government policy is to enable elderly people to remain in the community as long as possible and to go on living full and independent lives.".
These schemes that I have described help to bring this about, and I submit that it is a housing matter. Even if it were not, that would be no reason for not introducing this reform. It would smack of bureaucracy at its worst if a valuable reform could not be carried through because officialdom could not find a category to put it in.
It may be argued that every tax relief does not have a matching subsidy. I would not dispute that for a minute but some tax reliefs do, and mortgage interest tax relief on mortgages effected for house purchase does. Therefore it is not a question of principle; it is a question of the merits of each case. It may be argued that elderly owner-occupiers are not a class deserving assistance. For the reasons I have given earlier I would dispute this strongly. But there is no need for me to do so since the Government, by allowing mortgage interest tax relief on home income plans, have conceded that they are worthy of assistance. Surely the Government cannot then deny equivalent help to the neediest within this class. It may be argued by some that the introduction of a tax credit scheme would solve the problem and that we should wait for that. We on these Benches are fully committed to the introduction of a tax credit scheme. In fact, the Liberal Party was the first Party to be so committed. But people need help now.
The option mortgage principle is already established and it would be a simple matter to extend it, and I see no reason at all why this should in any way prejudice the eventual introduction of a tax credit system. After all, the option mortgage scheme is, in effect, a limited application of the tax credit principle, a principle to which we on these Benches are com-

1229
mitted, to which the Conservative Opposition are committed and which, although they are not committed to it, the Government are putting into practice with regard to child benefit.
Finally, it may be argued that the extension of the option mortgage scheme would be too expensive, and of course expense is an important factor these days, but perhaps not quite so important a factor this winter as last. We hear rumours of considerable tax reliefs in the pipeline. We are dealing here with a limited number of people, mainly single and over 70, and since so far only 2,500 taxpayers and non-taxpayers have availed themselves of this particular scheme we might well assume it is unlikely that more than four times that number would be brought within the scope of the scheme if it were extended in the way I have suggested. If that in fact happened the cost of the scheme would be somewhere about £2 million. I very much hope that, in view of all I have said, this proposition, which would be of great assistance to hard-pressed elderly people, will commend itself to the House, and that when the noble Baroness comes to reply on behalf of the Government she will return an encouraging Answer to my Question.
6.5 p.m.
Lord CULLEN of ASHBOURNE: My Lords, the noble Lord, Lord Banks, has presented a moving case for extending the mortgage option scheme to elderly non-taxpayers who wish to raise a loan on mortgage in order to buy an annuity. I am sure that all of us will share with the noble Lord the wish to assist people who have been described by Hambro Provident Assurance, who have been strenuously trying to promote this idea, as being in dire straits. For instance, there must be many elderly widows on low incomes whose one valuable asset is the ownership of a house on which the mortgage has been paid off during the husbands' working life, but owing to inflation their income may be woefully inadequate while the value of their house will have greatly appreciated.
However, at present the home income plan is of little or no use to such people since the option of paying interest after deducting the standard rate of tax is only permitted on mortgages for house purchase and improvements, but not for
1230
the purpose of buying an annuity. So the non-tax paying widow would have to pay the full rate of interest without being able to offset it against taxable income. The effect of this is that there is generally little difference between the mortgage interest paid and the annuity receivable. Accordingly, I am persuaded that we should try to do something to help these people, and the proposed scheme seems logical.
However, to my mind, it has two disadvantages. First, it positively reverses the patient and prudent years during which the mortgage was paid off and full ownership of the house was secured. Though we are not unaccustomed to Government using capital as income, it is scarcely an example which others should be encouraged to follow. Secondly, elderly non-taxpayers who do not own their homes would think it unfair if special assistance were given to the apparently more fortunate few who are property owners unless they received some comparable benefit. Who could blame them for thinking that all retired people should share equally whatever funds are available?
I am told that only a very limited number of people would be concerned. As the noble Lord, Lord Banks, has told us, only 2,500 people have taken up this home income plan, so we are talking about a small minority out of what I believe to be 5½ million pensioner families. I think we should look at some other way of alleviating the lot of these people. As the noble Lord, Lord Banks, said, the Conservative Party is also committed to the introduction of a tax credit scheme, and under such a scheme mortgage interest would be paid net of tax in the same way as life assurance premiums are currently proposed to be paid as from next April. Though completion of the scheme would take several years, pensioners who get the benefit of age relief would have a high priority. The Liberal Party are also in favour of a tax credit and I would suggest to the noble Lord, Lord Banks, that in such time as is available to him he should try with his right honourable friend Mr. Pardoe to influence the Government in this direction. I think he will agree that such a scheme would provide the benefit he is seeking to obtain.
In conclusion, the Conservative Party has a solution to this problem, but until such time as we can put it into operation

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it is for the Government to deal with the matter. It is no solace to a 75-year-old to be told that he or she can sell the house and move to an old people's home. That is just what they want to avoid; and, though it goes against the grain to sell a mortgage-free house to provide income, needs must when the devil of inflation drives. I shall await the views of the Government with interest. This is the sort of problem for which a bipartisan approach is needed, and I believe that agreement by all Parties on the adoption of tax credits could solve not only the problems that we are discussing today but many others.
6.11 p.m.
Baroness BIRK: My Lords, I have listened with great attention to what both noble Lords have had to say. The noble Lord, Lord Banks, who has put this Question to the Government, has, as he himself said, had long experience in the field of pensions and insurance. What he did was to bring his knowledge and authority to the House today in, if I may say so, a very clear and simple manner, so that even the non-expert could understand it quite easily. The noble Lord, Lord Cullen, although taking a rather different view, has similarly used his experience to help to enlighten us on what is a really complicated matter.
The subject to which the Question asked by the noble Lord, Lord Banks, refers, is of great interest to many people, although it is true to say that relatively few retired people have mortgaged their house to take out life annuities in order to increase their incomes. One leading company in the field estimates that there have been perhaps 2,500 such cases since 1972. This was the figure to which the noble Lord, Lord Cullen, referred, and I know of no reason to dispute it. As we are both agreed on it, that is an even better reason for accepting it. But, if present numbers are small, the potential market is large. It is estimated that over 4 million people over retirement age are owner-occupiers, and, of these, perhaps as many as 1¼ million do not have incomes large enough to pay tax. The Question which the noble Lord has asked is one which has been put to the Government from a number of quarters recently, and I can assure the House that, as I think
1232
the noble Lord is aware, it has been given very careful consideration.
Perhaps I may deal first with the option mortgage aspect. As noble Lords will know, and as the noble Lord, Lord Banks, explained, the option mortgage scheme was introduced in 1968 to give a subsidy for people who are buying or improving their homes and whose taxable earnings are insufficient to allow them the full benefit of tax relief on mortgage interest payments. I think there is nothing between us on those facts. This is a valuable way of helping less well-off people to become home owners. We estimate that there are now about three-quarters of a million option mortgagors. The rate of option mortgage subsidy, which lenders deduct from their interest charges and reclaim from the Government, is roughly equivalent to the basic rate of income tax.
Option mortgages are available only on loans taken out for house purchase or improvement. The noble Lord proposes—and he set it out very clearly—that the scheme should be extended to cover mortgages taken out in order to buy life annuities by people who already own their own house. As he himself readily admitted, this would need new legislation. Perhaps I can just underline that and make it quite clear, in case there are any doubts harboured by other noble Lords, that there is no question that this could be accomplished by administrative arrangements.
As the noble Lord explained, this type of life annuity is to increase the income of retired people by converting the "frozen value" of their house; it has nothing to do with house purchase or improvement. Therefore, at that point there is a basic difference between what the noble Lord is proposing and the existing option mortgage scheme. I think that the noble Lord, Lord Cullen, pointed that out. The present option mortgage scheme, however, is a housing subsidy which costs about £150 million a year, which is paid out of the Housing Vote and is specifically designed to help people into home ownership. So there is not really a complete analogy here.
What is proposed is therefore not really a housing matter at all. It is a means of boosting the income of one group of the elderly. After looking at this closely, the Government have decided that it would not be appropriate to use the option mortgage scheme in this way. This is

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not because we are relying on any bureaucratic sleights to knock it down, nor because (and I shall show this) we are not as concerned about the living conditions of the elderly as is the noble Lord and as, I think, are most other noble Lords present tonight. But we believe that the correct approach lies in policies for meeting the income needs of all the elderly, and not just those of the home-owners. Nor do we believe that the measure that the noble Lord, Lord Banks, has proposed—and, to be fair, he did not himself justify it on these grounds—can be justified simply as a matter of consistency in taxation.
Lord BANKS: My Lords, I wonder whether the noble Baroness would allow me to interrupt her? I am very grateful to her for doing so. I wonder whether she would explain, in that case, why the Government extend the income tax relief to mortgage interest in the case of home income plans? Why are some people who effect this scheme assisted by the Government while there is a refusal to help the others?
Baroness BIRK: My Lords, if I may continue with what I was saying, I think the noble Lord will find that I deal with that in my speech. If I do not, I shall come back to it at the end, but perhaps I may continue on the tax point at the moment. It is not automatic for a tax relief to be matched by a subsidy for non-taxpayers. Before 1969, as the noble Lord pointed out, tax relief was generally available for the interest paid on all loans. In 1969 it was restricted to loans for certain qualifying purposes, the main ones being the purchase or improvement of houses. The restrictions were lifted in 1972 but were reimposed in 1974. This time, we agreed to include life annuity schemes as one of the qualifying purposes. The question of an alternative subsidy for non-taxpayers was not considered either by the Opposition or by the Government. This was still reserved to people within the taxpaying brackets.
It is suggested that, because tax relief is available to one group of elderly owner-occupiers, an equivalent subsidy should be available for those who pay no tax. The noble Lord, Lord Banks, did not put it in that way. In fact, I think I am right in saying that he said he would not put this forward as a general proposition, but
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that he was putting it forward in this particular case. But the comparison is still selective. It is right to talk about fairness and justice, but at the same time, while I readily agree that his scheme has certain social attractions, the trouble is that it is, as I said, selective; and when we ask, "Fair for whom?" we find ourselves in the position of having to say that we feel we have to consider all elderly people and not just two groups who happen to be owner-occupiers. If this were done, it might not automatically be the people in the greatest need who would benefit from it, and I think this point was underlined by the noble Lord, Lord Cullen.
I do not want to go too deeply or seriously into a numbers game over the question of take-up of money. One can throw figures about; but one knows—and I am sure that the noble Lord, Lord Banks, is aware of it from his experience—that one can do a projection for something which is not happening at the time and that when it comes to fruition it can be quite different. If, on the basis of the figures on which I am sure we roughly agree—of some 1¼ million eligible house-owners—there were a 10 per cent. take up, that would cost £20 million and not £5 million. So it is not necessarily cheap and it is also open-ended. But it is not on the question of cost that I am making a stand: although I think I must point out—and this came up strongly in the debate yesterday on the use of North Sea oil resources—the great problem we have as a Government, a problem which any Government has—and particularly a Labour Government who put so much into the social side of public expenditure—of trying to ensure, as far as one can when one has choices before one, that the money one is spending does the greatest possible good. It is on these criteria that one has to look at the case put forward for any particular benefit.
We believe that any really fair proposal to use public expenditure to augment the incomes of the elderly should also help those who are not home owners. Special help is already available for the elderly who need extra income, whatever their housing tenure. There are rate rebates, the supplementary pensions scheme and also rent rebates. The noble Lord, Lord Banks, knows that supplementary pensions are available to help the elderly meet essential needs over and above what their

1235
retirement pensions and other income can be expected to meet. For owner-occupiers, they can cover the cost of rates, insurance, essential maintenance and emergency repairs. A life annuity income is not directly related to an elderly home owner's specific expenditure. It cannot, and rightly should not, be earmarked; so the question of whether it should be used for the maintenance or upkeep of the house is something which would be entirely up to the person who received it. I think that this is right in a free society.
We are concerned about all elderly people who find their household expenses a burden, and I am sure that it is fairer to devote resources to needs-related benefits than to concentrate special help on those fortunate enough to have a home to mortgage. I am thinking of old people who live in rented accommodation—they may be in a council house which they do not own and on which they pay rent; they may be living with the family; but they would give anything to have their own roof over their heads even if it were not in as good a condition as they would like.
My Lords, at present, perhaps only 300,000 elderly owner-occupiers receive supplementary pensions. On average, they get about £5.50 per week each, which is about £280 a year. Since it has been suggested that the value of a special life annuity subsidy might be worth about £200 a year, I may say that the supplementary pension is, on average, already worth more than this. The noble Lord, Lord Banks, did not himself mention this point but I think that I must do so. One of the things that he might have said (and it probably is said) in favour of this or other similar schemes is that people do not like to take up these benefits due to them; they consider it a charity rather than a right. I think that it is very important that all of us—and this would apply even where we disagree on this particular scheme—should do all that we can to encourage people to take up what is their right and is not charity. It is their right as much as any other scheme where there is any form of tax allowance or rebate. It is no less a right than the claiming of allowances when paying tax.
The noble Lord asked me the reason for the 1974 tax concession and why, at the
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moment, we do that but will not agree to his proposal. That was to safeguard the existing life annuity commitments, but it was never suggested that the scheme should be widened in the way the noble Lord has proposed. It was not then suggested that the benefit should be extended to the non-taxpayer by an equivalent subsidy, and there does not seem to be any added reason why it should be better to do this now rather than to use any money that we have for social purposes right across the board. In that way the elderly people can choose how they want to use it.
The noble Lord, Lord Cullen of Ashbourne, proposed rather than this scheme, the tax credit scheme which is supported by the Opposition. On that, we cannot know until we see the details whether it would help in the case of life annuities. The Government certainly, at present, do not intend to introduce tax credits. We think that this would be a very expensive way to deal with this problem. Again, we think there are better ways of helping those in need.
My Lords, the Government are aware of and sympathetic to the problems of the elderly. There is nothing between us on that. We are always ready to look for ways of improving our provision for old people and of trying to stretch resources in order to do so. The Department of Health and Social Security is currently carrying out a review of the needs of the elderly and a consultation document will be published in the spring.
At this stage, I think I must point out that the Government have already done a great deal to improve their living standards. We have increased the real value of pensions: between October 1973 and November 1977 pensions went up by 126 per cent. Prices went up by 95 per cent. in the same period. We have increased tax allowances; we have improved arrangements for concessionary travel fares; we have encouraged the provision of special housing in the public and private sectors. Therefore, I think it is clear that we differ from the noble Lord, Lord Banks, on this question only as to which are the best means to achieve ends which are both fair and compassionate. While he believes that an extension of the option mortgage scheme is the way, we, I am afraid, do not.

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